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164: How To Use Instagram To Create A 7 Figure Ecommerce Business In Under A Year

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How To Use Instagram To Create A 7 Figure Ecommerce Business In Under A Year

Today I’m happy to have Bishoi Khella on the show. Bishoi and his partner Ibrahim started MyTruwood.com which is an affordable and stylish wooden watch company. Now what’s cool about their company is that they managed to generate 1 million dollar in sales in their first year using only Instagram as their marketing channel.

And as you all know, Instagram is a great way to market your ecommerce store if you know what you are doing. Clearly Ibrahim and Bishoi know what they are doing and today, we’re going to find out their strategies and tactics.

What You’ll Learn

  • How they discovered their niche
  • How they manufacture their watches.
  • How he found his vendors
  • The price differential between the US vs China
  • How long it took to get his first product to market
  • How much he invested to get started.
  • Why he picked Instagram and not another platform.
  • How to leverage Instagram for sales

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Ignite.Sellerlabs.com – If you are selling on Amazon and running Amazon Sponsored Ads campaigns, then Ignite from Seller Labs is a must have tool. Click here and get a FREE 30 Day Trial.
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ReferralCandy.com – If you’re already getting steady orders every month, adding a refer-a-friend program to your store can give you a new sales channel. And ReferralCandy is the best in the business. Click here and get a FREE $50 credit towards your account.
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SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
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Transcript

Steve: You are listening to the My Wife Quit her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not with their businesses.

Today I’m thrilled to have Bishoi Khella on the show, and what’s unique about Bishoi is that he used Instagram to turn his wooden watch company mytruwood.com into a seven figure business in under a year, and today we’re going to talk about exactly how he did it.

Now before we begin I want to give a quick shout out to Seller Labs who is a sponsor of the show, and specifically I want to talk about their brand new tool Ignite which helps sellers manage their Amazon sponsored ads. Right now I’m using this tool to manage my Amazon sponsored ad campaigns, and it makes things a heck of a lot more convenient.

So number one I’ve always found it a major pain to generate my PPC reports on Amazon, cut and paste the data over to an excel spreadsheet and use pivot tables before I’m able do any analysis. Now Ignite pulls all that info for you automatically and allows you to easily see what keywords are working and what are not immediately, so there is no need to manually create reports or play with excel.

Second of all unless you’re a data geek, Amazon campaign data can be hard to understand, and what’s cool is that Ignite makes keyword and bidding recommendations on the fly that can be applied with a couple of clicks.

So let’s say one of my hankie keywords is bleeding money, well Ignite will alert me of that fact, and I can reduce the bid immediately. So bottom line Ignite makes managing your Amazon sponsored ads much, much easier and the fact that they provide me with alerts means that I no longer have to monitor my campaigns like a hawk.

If there are keywords that are doing well, Ignite tells me to add them to my exact match campaigns, if my keywords are losing money, well Ignite tells me to either remove the keyword or to reduce the bid. So head on over to sellerlabs.com/steve where you’ll find some awesome tutorials on PPC and the opportunity to try Ignite for 30 days for free. Once again that’s sellerlabs.com/steve.

I also want to give a shout out to Klaviyo who is also a sponsor of the show. Now I’m always super excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on Klaviyo for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another provider. Well Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here’s why it’s so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send an email to everyone who purchased a red handkerchief in the last week, well that’s easy. Let’s say I want to set up a special autoresponder sequence to my customers depending on what they purchased, piece of cake, and there is full revenue tracking on every single email.

Now Klaviyo is the most powerful email platform that I’ve ever used and you can try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/K-L-A-V-I-Y-O. And if you’re interested in starting your own ecommerce store go to mywifequitherjob.com and sign up for my free six day mini course. Just head on over to the front page, enter your email and I’ll send you the mini course right away via email. Now on the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit her Job podcast; today I’m happy to have Bishoi Khella on the show. Now normally I actually don’t interview anyone on the show that I haven’t actually met personally, but they put together a great pitch that just happened to coincide with material that I was looking for.

Now it’s a two person company, Ibrahim and Bishoi, they started mytruwood.com which is a company that sells affordable and stylish wooden watches. Now what’s cool about their company is that they managed to generate almost a million dollars in sales in their first year using only Instagram as their primary marketing channel.

As you all know Instagram is a great way to market your ecommerce store if you know what you’re doing, and clearly Ibrahim and Bishoi know what they’re doing and today we’re going to find out their strategies and their tactics and kind of break it down for you. And with that welcome to the show Bishoi, how are you doing today man?

Bishoi: Great Steve, thanks for having me man, appreciated.

Steve: Yeah so Bishoi why wooden watches and how did you get into the ecommerce?

Bishoi: So me and my partner Ibrahim we started our company in our last semester in university, and we just saw tried and we just thought we should try something, we might as well try it in our last semester and if it doesn’t work out we just end up going on jobs that we had lined up. So we started it and it ended up taking off and we didn’t take our full time offers and we just continued working on this ever since.

So the reason why we started wooden watches is because we’ve been looking at products to sell, we’ve always had like some entrepreneurial mindset, we’ve always been looking at products that we could sell and try to make some money off of it, but it transitioned into so much more than that like we’re so deeply rooted in this company and our mission and we just ended up coming across a few watches and a few sunglasses that were made out of wood.

We were like wow, these are beautiful and we wanted to buy them ourselves but as students we have a debt and we have student loans and stuff like that, and so we couldn’t justify paying like $300 to $400 for a nice wooden watch. So we were like, hey let’s try to make it ourselves, maybe make one or two for ourselves and see how it goes, and then we were able to get our costs pretty low. So we were like, hey let’s actually start this as a business because we were trying to do ecommerce anyway, so then it transitioned into something like that.

Steve: Where did you find these wooden watches?

Bishoi: Just on the internet, so as I was like goggling I think you know you see a ton of ads as you’re like scrapping the internet and we just saw another company, I’m not going to mention who they are but…

Steve: Sure of course.

Bishoi: We saw another company and then we were taken back, we were like, wow this is so beautiful but we click on the link and we see that like it’s like literally 300 bucks and we were like we can’t afford a watch that much, we were trying to search for the company with like something that’s more affordable for the masses and more of like an everyday watch, and that’s why we set out to create Truwood.

Steve: Okay and did you have like a process of researching your niche, or is this just something that you came across because you wanted one of these and so you decide to sell them?

Bishoi: Well it started like that, it started because we wanted it and we kind of assumed that a lot of people were in the same boat as well as that it’s such a unique product, not many people have even seen one before, and so you kind of want it, but at the same time you can’t justify spending X amount of dollars on such a new product that you don’t even really know about, like you don’t know how it’s going to look or something like that, because it’s so new, you don’t see this often.

So we wanted to set out to create something that’s affordable for everyone, and we kind of take our vibe of our company a lot differently than our competitors, so they more market it like a premium luxury product while we try to be like that friendly show company. We put smiley faces on our emails, we connect with our customers like that, and we try to stay away from like the professional – that type of company.

Steve: Okay, I guess what I was trying to get out was like was it like a quantitative analysis like did you judge the market size or were you just really interested in the product and you kind of knew that there was demand for it?

Bishoi: Well we definitely, it’s a mixture of both. So we did know that the product had demand based on our competitors and at that time we saw that they were getting some fairly good traction, people were like, wow I’ve never seen something like that. So in terms of that, but then we did a ton of research like to figure out who we can market this to and how we can get it out at different angle then what’s currently out there in the market, because we believe that to be able to come in and compete in an industry you have to either be significantly different, your product has to be significantly different, or you can market it to a different type of niche or a different type of person than what’s currently out there in the market.

We couldn’t find anything that was for the low end – not really, I wouldn’t say our products are necessarily cheap, cheap in terms of cost but they’re definitely one of the cheaper options out there, and we didn’t want to sacrifice on quality either. So we set out to make a really good watch for an affordable price and maybe take a hit on the margins, but at the end of the day it helps us with planting more trees in the end because more people are going to be drawn to it.

Steve: Yeah let’s talk about that a little bit because you’re positioned kind of uniquely, so first of all you are not going for the high end, right?

Bishoi: No right now we focus on the low end market, not even low end just the average medium size and medium consumer, but we’re definitely transitioning into having some higher end models just so we can capture a wide range of the market, but right now we’re primarily focused on the affordability of our product.

Steve: And then you also plant, is it ten trees I can’t remember for every sale?

Bishoi: Yeah it’s ten trees for every order definitely.

Steve: Can you talk about like how that has affected your sales or do you have any correlation?

Bishoi: Yeah definitely, so planting the trees was something we were very adamant about and we want to do that for sure because our products are made of wood, and so we’re taking away from the environment in that aspect, but we wanted to give back like ten times more than we were taking or hundreds of times more than what we were taking.

So like one watch can probably – one tree can probably make thousands of watches, and so we plant ten trees for every watch or every order, and so we give back thousands of times in return just because we don’t want to be taking from the environment.

Our whole goal here was to create a sustainable business and also it does resonate well with our customers, but our focus here was our product first and then having a social aspect associated with the business is definitely a bonus, and is something that people can get behind easier. But I’d say that the primary focus for us was creating a great product and then having a social aspect actually just adds to the benefit of the whole purchasing process.

Steve: How have you leverage that social process, like do you have like a fan page that kind of emphasizes trees and protecting them?

Bishoi: No we actually don’t have like a specific separate page for that, we try to push the story through our website and through our Instagram page, and through any marketing channel we do we always push the fact that we plant ten trees. But our focus here is that we want our customers to love the product itself and fall in love with the actual product, and then the mission behind our company just adds value to the whole experience rather than being a company that, hey we plant trees but we also give you a wooden watch.

So our focus was more we sell watches but we also plant ten trees at the same time, rather than it being a focus on the trees and then you also get a watch, because anyone can go out there and plant ten trees for much cheaper than they would for buying a watch, and so our primary focus has to be on the products.

Steve: No of course yeah and it’s actually for the people who are listening out there, it’s always great to have some sort of story behind your product and the fact that you plant trees kind of lends a nice back story for your company.

Bishoi: Yeah definitely, we think so too.

Steve: So where do you get your watches manufactured, is it in the US, Asia?

Bishoi: Yeah our watches are made in Asia right now.

Steve: Okay and how did you find your vendors, because you mentioned before there is not a lot of people doing this right now?

Bishoi: Yeah so we started on Alibaba, I’m sure a lot of people who are in the ecommerce world would know about this. So Alibaba is a great company that connects suppliers with people who are looking to supply something or is looking to manufacture something. So we just started searching and we did endless searches on Alibaba for someone who would make a wooden watch for us, and we started hitting up not even wooden watch manufacturers but regular watch manufacturers.

Some people would say they couldn’t do it, so we did do quite a bit of search to find a good one and we went through a ton of prototypes with a ton of different manufacturing companies until we found the one company that we were really happy to be working with, and we’re confident in the quality of the products that they make for us.

Steve: So when it comes to designing a wooden watch, none of you guys have a design background, do you?

Bishoi: No we don’t.

Steve: Okay, so how do you convey – I imagine you have to have a factory that works with wood, right?

Bishoi: Yeah definitely of course.

Steve: Okay and then did they already have things that they had already made for other customers at the time, or were you putting out literally a new product from a new manufacturer?

Bishoi: No it was – they have made wooden watches before, so it was easy in that sense that we don’t have to create like a whole new machine or some process that would be able to make the wooden watch, so they already had the process in place, we just had to design the watches.

The great thing about our current manufacturer and the ones we worked with, a lot of these guys actually help you with making the designs so they have their own engineering team, their own design team and you could really put your ideas in words and send them kind of like pictures of other watches and be like I like this part of it but I don’t like that, or I want to add this to it and put it all in words and even try to send them drawings or maybe kind of a mark up on the computer and they’re able to draw it out.

Then once you sign off on the design they end up sending you cut drawings and then you approve those cut drawings and you’re good to go.

Steve: Okay so it’s not like you put together the cut drawings, you found watch styles that you like, picked and matched different pictures that you liked and then had them create the mark ups for you?

Bishoi: Yeah definitely and also in words too like just explaining, so we like this color, and they also have a ton of like what do you call it, just designs of exactly what they have, so like they have maybe a booklet of 5,000 arms like hands for the watch, they have a booklet of 5,000 crowns of the watches they have and then we kind of put together, we went through everything and put together in that sense and also based on other designs we’ve seen in the past.

Steve: In order for them to do work for you, did you have to purchase a lot for your first purchase?

Bishoi: You usually negotiate the terms prior to you ordering a sample just because let’s say you order samples then they just tell you that it’s 500 bucks for a watch and then that’s not the price point you wanted to be at. So we negotiated the terms prior to ordering samples and then once everything is good to go in terms of how low you wanted the cost to be we’d get the samples, but we’ve never had to actually pay out any money for the mass order until we approved the samples.

So you can imagine the samples are pretty expensive compared to the bulk order because they don’t know if they have you in lock yet, you know what I mean?

Steve: Sure, how much did you pay for the samples and how many units was your first order?

Bishoi: It depends on what sample we got, I’d say anywhere from 80 to 150 bucks per watch, yeah it’s somewhere around there, and our first order I think was for maybe 300 watches, something like that.

Steve: Oh okay, so not that high, and then meanwhile they were putting together custom watches for you?

Bishoi: Yeah completely custom, they are completely our designs yeah.

Steve: So let me ask you this, how did you convey to them that you were like a serious player, because I would imagine they get requests like these and it requires significant resources on their part?

Bishoi: Yeah definitely so a lot of these companies they do have minimum order quantities. We got lucky in the one that he kind of is always behind us and he actually believes in our ability to take this where we needed to take it, and so he actually made an exception for us in being able to get the minimum order quantity down to 300 units. Then ever since then our orders have been way larger than that like we just ordered probably over 10,000 watches back in November.

Steve: And when you had to make those orders like do you have to focus on one style or could you mix and match different styles?

Bishoi: Yeah so that’s the thing too is they don’t like to – I can’t tell them I want five watches of 50 different styles, so that’s another thing like we had to really negotiate and tell them, hey don’t worry, just trust us, we’re not looking for just a onetime manufacturer, we want someone that we can partner with and we can build our company with them.

So we were able to sell them on us and then they were able to just let us do lower minimum order quantities on different styles.

Steve: So that first 300 order, was that a single style then?

Bishoi: No that was six styles actually.

Steve: Oh six styles, okay so then you ordered 50 of each?

Bishoi: Yeah that was the lowest, I don’t think you can even – I’m pretty sure that’s unheard of in terms of getting something manufactured, but we did pay a premium for that. Obviously they wouldn’t have done it if they were losing money on it and we did definitely pay a premium compared to what we’re paying right now for our watches.

Steve: Can we talk about the margins for that first order?

Bishoi: They were pretty low; I think it was, gross was probably 50%.

Steve: Really okay and then what are they now on the bulk mark?

Bishoi: They are 70 gross.

Steve: Okay and you had to order like 10,000 in order to get that, get those margins?

Bishoi: Oh yeah definitely.

Steve: Okay and how long did it take you to get your first product to market then?

Bishoi: So what we did was we ordered a ton of samples from different manufacturers and so we got the first – we thought we were going to do it in like a tiered system where we try one manufacturer then see the samples, if we like them we’d go with them, if not we’d go on to the next one. But what we found was that was taking way too long before we could get to market because now we have — the lead time for our watches are two months, so every time we have to wait and start a new guy, that’s a two month waiting period.

So we ended up buying a ton from different manufacturers, comparing them all and then…

Steve: What’s the turn, are we talking about like 10, 20?

Bishoi: Oh year around like eight let’s say.

Steve: Eight okay.

Bishoi: Until we found the one that we are really happy with. The first one we got for example, it was a wooden watch and so it is made out of wood and you touch it and it would give you like splinters and we were like, okay this manufacturer is a right off, yeah that was crazy and we were actually set out to make the thinnest wooden watch in the market.

We tried to do that at least and so that was our goal, and the first manufacturer gives us this like bulky watch that we would not – like it was completely opposite of our vision for the company, and so we had to really like just be like, hey we’re not going to worry about how much we spend on prototypes because at the end of the day once we get it working that money will be insignificant compared to the upside of having a great product.

So we just ended up going all at the same time trying to hit up a ton of manufacturers all at the same time and not worry about, hey let’s not spend an extra couple of a hundred bucks on another manufacturer.

Steve: How much did you invest to get started including that first turn to get an order?

Bishoi: The big part of our success actually was in Canada where we are based out off, there is a grant with the Ontario government, it’s called the starter company program, and what they do is they offer grant money, free money for startups for young entrepreneurs.

So that was huge for us because I went through the program with Ibrahim and we sat down – they actually teach you a ton of stuff, we were business students, so there was a ton of overlap but in the end of the day you get to pitch to a panel of judges…

Steve: Oh cool.

Bishoi: And if they like your idea they give you the grant money, and that really helped us because we were students, we at this point were students and we had a ton of student debt to pay off and rent and food and were not living at home. So we did need the money to start it off with the grant and that really helped us a lot.

Steve: How much was the grant?

Bishoi: It was 5,000.

Steve: Okay, nice, okay so you started for five grand, awesome. So you mentioned that your main sales channel was Instagram, so first of all why did you choose Instagram and not another platform in the beginning?

Bishoi: So Instagram is great just because you could see the picture, you have full occupation of the person’s screen and so for that split second as they are scrolling you kind of have their full undivided attention on that one area, and so that was a big reason. We also have a couple of friends that have also been in the ecommerce businesses and they’ve seen success through Instagram, so it was kind of an easier lead for us to try it out and that’s why we chose Instagram over the other ones.

Also in terms of competition, Facebook is probably one of the bigger advertising platforms out there and there’s just – if you’re trying to compete in the US and Canadian markets there’s so many companies competing for that same space, and so starting out we don’t really have too much money in order to test a lot of stuff which is the type of strategy you have to play with Facebook.

You have to do a lot of testing in order to hit the cost per click that you’re looking for. So we decided to go with Instagram just because it was a good way to start because we didn’t have too much money to invest in testing on it, yeah.

Steve: Okay and just to be clear this is like organic Instagram traffic, right?

Bishoi: Yeah exactly, I’m not talking about paid through Facebook yeah.

Steve: So let’s say you have this Instagram account with zero followers, can you walk me through how you started it up?

Bishoi: Yeah so we have an Instagram page with zero followers and we just started hitting up company — large pages that have a good following in our niche and we just started to hit them up and we tell them, hey do you mind posting a picture of our watch for us for X amount of dollars? We just kept growing our roster that way.

Steve: How many pictures did you have in your account before you started reaching out?

Bishoi: Probably ten, we tried to fill up the page, so like if you are on our main Instagram page like right at the home page of our page, you’d see like the full page of pictures.

Steve: So when you were hitting these Instagramers up, what follower accounts were you looking for, how much does it cost to have them post a picture of yours?

Bishoi: It varies significantly depending on the size of the account and how engaged their follower base is. So we started off with literally the smaller accounts because we couldn’t afford to pay a million follower accounts.

Steve: So how big is a small account in your ads?

Bishoi: Like 50K.

Steve: 50K okay.

Bishoi: Yeah 50K.

Steve: And when you’re measuring engagement what are you looking for?

Bishoi: We are looking at comments, we’re looking at likes and we’re looking at as a percentage of their follower base, and if the comments are real or fake we’d also look at that because a lot of these influencers are part of groups and the groups try to help each other by commenting on the other person’s photo. So that ends up improving the score of the photo and so for us we counted that as fake even though they are real people, they are real followers but we try to go for those real, real accounts at the beginning just so we could have a good return on our money in order to reinvest it.

Steve: What’s a good percentage?

Bishoi: In terms of engagement?

Steve: Yeah comments versus followers.

Bishoi: We try to go for anything over 2% depending on the actual account. So if the account has a million followers you’re typically going to get a lower engagement in terms of percentages because it’s harder to engage a higher percentage of a million people.

Steve: Do likes matter for you or is it just comments?

Bishoi: Likes definitely matter, like if we have a 50K page with 300 likes that’s kind of a red flag to us that, hey this guy is probably not, he doesn’t have real followers.

Steve: What were the percentages of likes look like, like you mentioned 2% for comments, what about for likes?

Bishoi: No I was talking about 2% in total for engagement.

Steve: Oh engagement, okay comments and likes.

Bishoi: Yeah exactly.

Steve: Okay got it, so that 50K person like how much would you pay, let’s say they followed your criteria?

Bishoi: Anywhere from 50 bucks – no actually I’d say anywhere from 30 to 50 bucks for a 50K account.

Steve: Okay so that very first Instagram account that you hit up and they posted a picture, did you get any sales from it?

Bishoi: Yeah we actually did, we got a few sales and we were super stoked and then we ended up continuing with them for a couple more weeks and so we kind of outgrew that size and then continued to the higher follower accounts, and we kept kind of trying to scale up that way in terms of being able to afford more larger accounts yeah.

Steve: So it was profitable immediately?

Bishoi: In terms of marketing side yeah definitely, right away we were able to generate a return.

Steve: Okay, that’s basically one sale right if you’re paying 30 to 50 bucks.

Bishoi: Yeah definitely that’s like one or two sales and we’re good to go.

Steve: Okay and then in terms of finding these people like do you have a specific strategy for it?

Bishoi: Nothing really specific, our strategy has been just to find accounts that are niche and then vet them based on how good the account is.

Steve: Is it just based on hashtags or like how do you find these accounts?

Bishoi: We just search it on Instagram really; we just search whatever like whatever we were trying to target. So if we’re trying to target something that’s for couples, we try to search for couple pages and stuff like that, just hashtags or even in the search bar you just type like anything and it even shows people right away, so yeah.

Steve: Okay can you give me an example of like one of your successful accounts in the watch space or…

Bishoi: Like an actual account?

Steve: Yeah or just something, you don’t have to give the actual name but like give me an idea of an account that actually buys watches that you’ve used.

Bishoi: Oh in terms of a niche, right is how you’re talking?

Steve: Yeah, yes.

Bishoi: Oh yeah definitely, we do a lot of advertising on nature pages because our whole premise is we plant ten trees and so that also engages with those followers highly as well.

Steve: Interesting so those nature followers they are not necessarily looking to buy watches, right?

Bishoi: No, definitely not. They might be and a lot of the times they do want to buy watches too because like the watches are pretty unique and a lot of people like to give them as gifts, so it does help in that sense.

Steve: Okay and so can you just kind of run down like your top three, say nature pages, what else?

Bishoi: Nature pages, probably – I’m trying to think which one would be a second, I’d say probably like animal pages.

Steve: Animal pages okay.

Bishoi: Yeah, so like our goal for us really was just so we could be able to handle large target for a one time with one single post, and so by hitting up any of these pages you’re likely to have someone that’s going to be able to buy your watch. So just having the size of the page being so large you’re definitely going to get a lot of people that are interested in your type of product.

Steve: Okay how do you – animals, that sounds really random, was that just an experimental thing or did you start out going, hey I want to target animal pages?

Bishoi: Yeah it definitely was, it definitely was experimental.

Steve: Okay and in terms of approaching them, one, how do you find their contact info and how do you approach them and what do you write?

Bishoi: We find their contact info on their page, a lot of these people who have a ton of followers they know that their account is good for advertisement and so they have their address on Instagram, or a lot of times you could just DM them, but a lot of times they don’t answer just because of the size of their account, they get a ton of people reaching out to them every day.

Steve: Okay and so you try to – they probably leave an email address or something like that?

Bishoi: Yeah a lot of the times they do, they leave an email address in their bio and you could just hit them up that way.

Steve: And so what would you write to them as an initial contact?

Bishoi: It’s really hey — actually let me try to pull it up if I can.

Steve: Sure.

Bishoi: It’s just basically introducing ourselves and introducing our company and we feel like our product would be great on their page and their followers would probably likely engage with our photo, and we also try to leverage other accounts that we use. So we like check out our post on so and so’s page and see our engagement compared to other ads that they run, and we were able to leverage it like that.

Steve: Okay and in terms of talking prices do you ask them for that upfront?

Bishoi: Yeah straight up we ask right away on probably one of the first messages, we’re like, hey do you mind sending us your pricing for your page and then they send it back and we try and negotiate if we don’t feel like it’s a fair price, but most of the times these guys are pretty aware of what they should be charging for their accounts, so you could end up paying anywhere from like 300, 400 and 500 dollars just for a shout out and I’m not even talking celebrity, I’m talking about like just regular pages.

Steve: So what’s a good ROI for you in order to keep going with an influencer?

Bishoi: For marketing we were aiming to have under 15% just because our margins are so low compared to other watch companies because that was our overall goal, so we really have to be cognizant of how much we’re paying for it.

Steve: So we’re talking like a 6X return on ad spend then?

Bishoi: Yeah around 6X yeah.

Steve: Okay interesting and was that just a number that – like how did you come up with that number?

Bishoi: So we kind of had like a goal for net profit because we don’t even pay ourselves really much right now, and so without having a goal for net profit we kind of worked up that way.

Steve: So let’s say you find someone who is like a 4X ROI, do you just stop working with them?

Bishoi: No, no we don’t try to generate a return on every single account; we try to have it generated on overall return on our portfolio if you would say.

Steve: Okay so that’s like kind of what I was asking then, so if you find someone – like what are your factors for continuing on with them and when do you just outright stop, like what’s the low threshold and the high threshold?

Bishoi: So a lot of the times you could gauge the success of account not even by the sales but by the amount of visits you get right after you post, so let’s say I have a post with them at 3PM and then I’m constantly monitoring the traffic to our website and if we see some sort of a spike, then we know that the account is pretty real and pretty good because really their only job is to drive traffic, it’s our job to make the sale, and so we can’t really judge the quality of the account based on the amount of sales we get, we kind of try to judge it by the amount of traffic we get to a certain extent.

If the traffic is from a country that isn’t likely to purchase, then obviously it’s not as valuable as the traffic from the US or traffic from Canada who are more likely to do purchases online, you know what I mean?

Steve: Yeah, how long does the link stay in their bio?

Bishoi: A lot of these guys don’t do links in bio; we try to push them to our Instagram page which is how we kind of grew our follower base pretty high as well. Just by pushing them through our page and so that gives us the opportunity to get a follow from them and be able to sell later on and provide content as well.

A reason why our Instagram page if you look at it has such great engagement compared to others is because we decided that we’re not just going to be pushing products down our customers’ throats all day long, we’re going to be providing great content that they like to engage with and also push our products. We actually push the great content more than we push our products just because providing value has been key for our success.

Steve: So let’s talk about that, let’s talk about the content that’s actually on your page, like what are some of the photos that you like to post?

Bishoi: We were a nature based company in terms of our social initiative and so number one right off the bat is nature scenic areas like in different areas of the world. Number two would be…

Steve: How do you get those photos?

Bishoi: We actually get them off other pages and they’re kind of happy for us to use their photos because that ends up driving traffic to their pages, because we always put like photo credit so and so. So it ends up driving traffic to the person who posted the photo and it provides great content for our follower base, so it’s kind of a win-win.

Steve: So there’s not a watch in that photo then?

Bishoi: Sorry in the specific photo that we post?

Steve: No I mean you mentioned like you have photos from all over the world, like do they contain watches or they are just nature photos?

Bishoi: Oh no they’re just purely flat nature photos, just regular…

Steve: Okay.

Bishoi: Yeah exactly.

Steve: Got it, got it, but then you do have photos obviously with your product in, right?

Bishoi: Yeah of course, so we try to do like a two to one ratio where for every photo of nature or engaging content that isn’t related to our product, we do one of our own product photos.

Steve: When you say engaging content, are you talking about like your photo linking to a post or literally just the photo?

Bishoi: I’m talking about literally just the photo, like content that people like and engage with in terms of – like so if I were to post a ton of product photos on all my page, our account would not be as valuable in terms of how greatly people are engaging with there just because people tend to engage with product shots rather less than they do with like nature, nice looking pictures, you know what I mean?

Steve: Can you talk about like your highest performing Instagram post and what you wrote in the comment section?

Bishoi: Yeah so probably our highest performing photo has definitely been a nature photo, I’m trying to think which one but I don’t have one right off the top of my head, but usually it’s related to the photo and just like whatever comment we could come up with that’s related to the actual picture.

Steve: Okay so it’s much more about the photo and very little about the comment, like you don’t spend that much time on the comment?

Bishoi: Oh yeah no definitely finding great photos has been our key – definitely been the key for us.

Steve: Okay and so just by paying influencers your account just gradually builds up, so what percentage would you say – okay and you’re guiding people to your account, so they actually have to click twice just to make it to your site, right?

Bishoi: Yeah so usually the thing with Instagram is that they don’t let you put links in the actual comment of a photo but they let you put it in your bio on your page, so they‘re going to have to click twice anyways because if they want to get to the influencer’s bio they’d have to click on the influencer’s profile. So our idea was like we might as well push them through our page, maybe a get a follow out of it and then also drive traffic to our Instagram page as well as the website.

So either way they’re going to be clicking twice and so we’d rather have them click twice through our page rather than through somewhere else.

Steve: So would you say then that almost all your sales are mobile sales?

Bishoi: A lot of them are, a good percentage of them. I think what happens is though and I think that’s true for a lot of ecommerce businesses is the initial view is on mobile and then they come back later on desktop and make the purchase. So there is still kind of a healthy split but I think the initial like viewing of our company is on mobile.

Steve: Okay so you’re paying influencers and you’re putting together good content on your page, what are other factors that you’ve used to build up your account?

Bishoi: On Instagram?

Steve: Yeah.

Bishoi: Those are definitely the two main things, great content and if you know shout outs through bigger pages that gives you more publicity to your page. I think those are the two main things and I don’t think that there may be anything else really other than those two big factors.

Steve: Okay because I noticed on your account that you don’t follow anyone either, so you don’t like follow random companies with hopes that they will follow you back?

Bishoi: No we tried out too, I mean you see a lot of companies doing that, we just try to follow like the one account we follow is our partner in helping us plant these trees and that’s really what we do right now.

Steve: Okay so let’s go back and talk about finding the advertiser spot, like how did you come across the animals one which sounds really random to me?

Bishoi: A lot of these guys actually hit you up; they are looking to make money as well so they’re trying to reach out to people, all day we get probably ten emails a day of influencer accounts trying to ask us…

Steve: Interesting, how did you get on that list because we hardly get hit up for anything on Instagram?

Bishoi: Really, we actually didn’t sign up for any list, we didn’t do anything; it’s just like actual individual accounts that are trying to generate money I guess. I guess how we get noticed is by running shout outs on other pages and then these smaller pages are people who are reaching out to us see our ad on another page and then they are like, oh he must be running ads, let me try to email him, you know what I mean?

Steve: I see, let me ask you this, is there a special way that you search for specific instagrammers that are selling advertising?

Bishoi: There are platforms out there, we haven’t used them ourselves, but I know there is a platform called Shoutcart and there is a ton of other platforms similar to that, [inaudible 00:38:33] I think is another one. So these are influencers who want to have a platform to sell their advertising space on and that’s completely like regulated too, so you pay the company and the company pays the influencer. Those are the people that actually are actively try to seek out business through publishing their page on a website.

Steve: But in your case you are just doing it organically essentially, right?

Bishoi: We’re doing it ourselves just because we like to develop a long term relationship with all our influencers like we have chats with them, it’s not like a strictly business relationship just because that also allows us to get good rates on the pages and it allows us to have like if we wanted to post one another company had a post we’d get precedence.

So it’s definitely value in developing that personal relationship with each and every one of these accounts that you work with because the backbone of your business is kind of based on them being there for you especially it’s like if that’s your main focus starting out. So we try to do it ourselves, also you’d be negotiating better rates just because if you have a third party middle man they are definitely going to be wanting to take a cut as well, and so you just by cutting them you make some extra money or save some extra money.

Steve: Okay and so when you’re reaching out to these influencers then, so you actually hop on Skype and you negotiate with these guys?

Bishoi: No we talk to them just through chat.

Steve: Just through chat?

Bishoi: Just through chat yeah.

Steve: And in terms of analytics you kind of work out when they’re going to post it and then you just look at your analytics for that specific time to see what happens?

Bishoi: Yeah exactly and another thing we do is coupon codes specific to the page just so we can see how well they carry us, but we found out that around 50% of customers don’t even use the coupon code, so we just scale it up that way just so we can get kind of an accurate estimate of how many sales they get, so like if someone got one coupon, they likely have got two sales actually.

Steve: I see so coupon codes is primarily how you track each source?

Bishoi: Yeah exactly definitely.

Steve: Okay and like – because I would imagine you have multiple campaigns going on in any given day, right?

Bishoi: Yeah definitely, we probably run a few, definitely a few ads every day.

Steve: So let’s say something works with an influencer, like how soon do you schedule out another one?

Bishoi: That was a big thing starting out, when we first started we didn’t have a big roster of accounts, so we kind of had to run them every day or every other day, and a lot of the times these pages don’t even like to do that and they flat out reject that offer just because if they’re pushing the same product every day it reduces the quality of their account and they lose a ton of followers every time they post an ad.

So the tradeoff has to be there in terms of how much you’re willing to pay them versus how low their followers are going to go based on the ad.

Steve: So what would you say is like the average frequency that you do in between campaigns for a given influencer?

Bishoi: Right now we do three, four, anywhere from three to five days actually.

Steve: Oh okay.

Bishoi: Yeah we try to give a healthy space just because also you got to keep in mind that these followers have already seen the post like a couple of days ago and pushing them every day, we try to — by spacing it out by like three or five days you end up getting new people to the page as well because these pages grow a lot faster than your typical page, so any of these pages could grow by, within five days it could grow by thousands of followers. So you end up showing it to more new people that way as well.

Steve: And in terms of – I’m trying to think, in terms of finding the average like could you provide some guidelines on like how you do it, not necessarily like what you see in the average but in terms of just doing the research on what pages could be potentially beneficial to your company.

Bishoi: Yeah so it’s tough to say like exactly what I was trying to explain earlier is that we run an ad on a dog page or like an animal page and we’ve seen success from that, so it’s tough to say which is going to get you the success. But I’d say that when you’re first starting out take two things that you think are in your target market and in your niche and then when you have little extra money to try new things out on, try pages that have great engagement that might not even be related to what you’re selling.

Steve: What is your hit rate then?

Bishoi: In terms of?

Steve: In terms of like paying for an Instagram ad and getting a positive ROI, like what portion of your budget is for experimentation versus ones that you actually know generate cash?

Bishoi: At this point we’re not really experimenting in terms of like just trying out accounts that we might already know we’re not really sure of, right now we have a pretty good roster of great accounts that we work with, and so we only take on board new great accounts like our hit rate is pretty good now just because we’ve had so much experience with other accounts over the last year, and so yeah we try to only bring people on board that are actually going to do well for us, so there is less experimentation now rather than when we first started.

Steve: But how do you know someone is going to do well for you?

Bishoi: It’s just how big their account is and how great their engagement is and how much they’re charging, because like I said these influencers are pretty attuned to how great their followers are or how great their engagement is, so for example I think it’s easier to explain with an example. So let’s say like a two million follower account reaches out to you and goes, hey would you like to buy promotions for us $25 a post.

So that means right off the bat I wouldn’t even look at that account just because no two million follower account would be charging only $25 a post unless it was a fake account. So just by the amount of money that they’re charging for their account and they know the value of it, that also is a good significant determinant of how good the account is.

Steve: I guess what I’m trying to ask is like do you get demographic information because I know like for our customers, there is actually a pocket of customers that are over the age of 55, like do you actually look at demographics and everything?

Bishoi: So a lot of times when we hit off these influencers, now a lot of these influencer pages actually change their profiles to business profiles, and so they do have demographics on Instagram where you could ask them for screen shots of the age, the time their followers are mostly engaged. There is a lot of analytics on Instagram now and so that also does help in our decision making process. It tells you the age, the geographic location, and also the times that the posts do much better than others.

Steve: Okay to kind of just sum up what you’ve been saying is you start out small with influencers that are very closely tied to your niche, I guess in your case would you target like people under watches or?

Bishoi: We try to do watches and also nature because those are the two main aspects of our business specifically, and so it’s easier to find a nature page than it is to do a watch page for us, and so that’s kind of why we were hitting the nature pages hard. There is not many watch pages out there and if there are a lot of their engagement isn’t as great because you know most people would love to like a photo of a nature beautiful scenic area rather than like a watch sitting on a table, you know what I mean?

Steve: Of course, of course, okay and in terms of rates can you just kind of give some general guidelines on how much things cost for so many followers?

Bishoi: Yeah so anyone under I’d say 200,000 followers is going to charge you anywhere from $50 to $100. Once we get to the million follower mark you’re paying anywhere from $300 to $500 per post.

Steve: Okay and then 2% guideline in terms of engagement which includes likes and comments?

Bishoi: Yeah, I mean you’re going to get accounts that have way higher than that, but sometimes you’ll even get accounts with lower than that. That’s just based on the size of the account, so if the account has a lot more followers you got to be more lenient in terms of how high you need the engagement rate to be. So when we’re dealing with like million follower accounts we try to aim for anything over 1% is great.

Steve: Okay and then have you ever tried anything larger than that?

Bishoi: More than a million followers?

Steve: Yeah.

Bishoi: When you’re talking about over like a couple of million you’re talking about celebrities and that’s a whole another ball game in terms of how much they charge. So a celebrity who has a couple of million followers would charge you probably a couple of thousand versus what a page with the same amount of followers would charge you.

Steve: One thing I forgot to ask you was the creative that you have them share, is it a unique photo just for them?

Bishoi: No, so we have a great photographer on board and we have a bunch of photos that we think are our best photos and so we send them out to all of them and there is not a unique photo that they’ve taken. A lot of influencers do that actually, they get you to – especially the photographer influencers, they’ll get you to send them a product and they take the photo themselves and they post it on their page and it’s a unique photo to their page and no one has ever seen before, a lot of them do that.

I’d say the only negative aspect to that is you can’t really control how prominent the product is in the photo, so in the influencer’s best interest the product is hidden in the background, in your best interest the product is out in your face just so that people can actually see the product. So there is kind of a mismatch there, so that’s why we try to send them our photos just so we can control the quality of the photo.

Steve: Okay and in terms of your photos then, are they photos that you have posted on your own account or are these unique photos?

Bishoi: They are a mixture of both, so sometimes we get a brand new photo that we’re really hey this is nice, let’s wait before we post it on our page, let’s try it on ads and see.

Steve: Okay but do you ever do a photo that’s already on your account?

Bishoi: Yeah all the time.

Steve: The highest performing one okay.

Bishoi: All the time.

Steve: Okay and do you just choose your highest performing picture than at that point?

Bishoi: Yeah definitely it’s so much easier to choose a photo based on your profile just because you can go through your page and see how well it did on your page and if it did well on yours it’ll probably do well on others as well.

Steve: Okay and Instagram ranks photos based on engagement, and so with the influencers – let’s see what am I getting at here, with the influencers is it really obvious that something that they post is going to get a lot of engagement based on prior engagement?

Bishoi: Yes because that…

Steve: You’re seeing what I’m getting at?

Bishoi: I get exactly where you’re getting at, yeah that’s been a big switch for us, and that’s why we’re kind of trying to explore other marketing mediums just because Instagram now is becoming really tough to do well on versus probably a year back when we first started. So a big change that they did was posts are no longer chronological, they are based on the time, and so when I go, if you had posted first and then someone else had posted second, you’d see your post first then someone else second.

Now the algorithm has changed in terms of what you see on Instagram, it’s based on how you engage with that person’s account. So if I start liking your photos much more often than I like John’s photos, then I’m going to be shown your stuff a lot more than John’s and I might not even see John’s, you know what I mean?

Steve: Right, yeah.

Bishoi: So that’s been tough for us in terms of Instagram just because now obviously a promotional post on a shout out is not going to do anywhere near as well as what the page actually posts, so if it’s a nature account they post nature photos, you’re almost never going to get a good performing ad photo equivalent to a good performing nature photo.

Steve: Right.

Bishoi: So that really hurts in terms of just the reach, just the audience because they don’t show the ad to as many people as they used to because it’s not chronological anymore and they also determine the score of the photo within like ten minutes in their algorithm. So it’s easy actually for Instagram to tell what an ad photo is versus a regular photo on the person’s page just by in the first ten minutes you see how high the engagement is going versus the other posts on my page, and then they could easily tell right off the bat that this photo is kind of a bad photo, let’s not publish it, let’s not show it to as many people.

Steve: So how does that affect you going forward and like your advice for the people listening?

Bishoi: It’s great to start off with Instagram just because you could get a wide reach and start growing your page and getting more social proof to your page, but right now our marketing spend has almost doubled within the last like couple of months just because of this new algorithm and that’s why we’re heavily focused on diversifying our marketing.

Steve: Cool man. Hey Bishoi I really appreciate your thoughts on Instagram, if anyone is interested in your watches or wants to get a hold of you where can they find you?

Bishoi: Yeah so we have a website, it’s called www.mytruwood.com, just shoot us an email and we’ll definitely hit you back up within like 24 hours at the very most.

Steve: Yeah and just to be clear it’s spelt T-R-U.

Bishoi: Oh yeah definitely thanks for that, it is a little weird doing the spelling just because we couldn’t get the domain, but yeah it’s good.

Steve: Yeah I’ll link it up in the show notes but just in case like if you want to check it out and his account it would just obviously link to that, it’s very well done. Hey Bishoi thanks a lot for coming on the show man, I really appreciate it.

Bishoi: Awesome man, thank you Steve.

Steve: All right take care.

Bishoi: Take care as well.

Steve: Hope you enjoyed that episode. Now Bishoi’s success with Instagram just goes to show you that there are a bunch of different ways to market an ecommerce business and you start to find out what’s working and then focus on it. For more information about this episode, go to mywifequitherjob.com/episode164.

And once again I want to thank Klaviyo for sponsoring this episode. Klaviyo is my email marketing platform of choice for ecommerce merchants, and you can easily put together automated flows like an abandoned cart sequence, a post purchase sequence, a win back campaign, and basically all of these email sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/ K-L-A-V-I-Y-O.

I also want to thank SellerLabs.com as well. Their tool Ignite is what I use to manage my Amazon PPC campaigns. Instead of the old tedious way of generating reports and analyzing your ad campaigns in excel, Ignite aggregates all that info for you in one place and allows you to quickly visualize your data to make decisions fast.

So not only does it save time, but it also makes managing your Amazon campaigns so much easier too. So head on over to sellerlabs.com/steve and sign up for a free 30 day trial, once again that’s sellerlabs.com/steve.

And if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away via email, thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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163: How To Successfully Sell Products In Saturated Niches With Grant Yuan

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163:  How To Successfully Sell Products In Saturated Niches With Grant Yuan

Today, I’m thrilled to have Grant Yuan on the show. Grant runs the EcomCrew podcast along with Mike Jackness who I had back in episode 119.

Anyway, Grant runs a bunch of different businesses which include a cutting board store at CuttingBoard.com and a few brick and mortar stores like Cinnabon.

But the reason I wanted to have him on the podcast is to show how you can take something simple and saturated like cutting boards and turn it into a thriving ecommerce business.

What You’ll Learn

  • Grant’s strategy for SEO
  • Why your domain is still important
  • How Grant advertises cutting boards online
  • Grant’s greatest source of sales
  • How Grant makes PPC ad campaigns profitable.

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Sponsors

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Transcript

Steve: You are listening to the My Wife Quit her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not with their businesses.

Today I’m thrilled to have Grant Yuan on the show, and Grant runs the ecommerce store cuttingboard.com where he sells cutting boards, and he’s actually going to teach us how to be successful selling saturated products online.

Now before we begin I want to give a quick shout out to Klaviyo who is a sponsor of the show. Now I’m super excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I actually depend on Klaviyo for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another provider. Well Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here’s why it’s so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought which allows you to do many things. So let’s say I want to send an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special autoresponder sequence to my customers depending on what they purchased, piece of cake, and there is full revenue tracking on every single email that I send.

Now Klaviyo is the most powerful email platform that I’ve ever used and you can try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/K-L-A-V-I-Y-O.
I also want to give a shout out to my other sponsor Seller Labs, and specifically I want to talk about their brand new tool Ignite which helps sellers manage their Amazon sponsored ads. Right now I’m actually using this tool to manage my Amazon sponsored ad campaigns, and it makes things a heck of a lot more convenient.

So number one I’ve always found it a major pain to generate my PPC reports on Amazon, cut and paste the data over to an excel spreadsheet and use pivot tables before I’m able do any analysis. But Ignite pulls all that info for you automatically and allows you to easily see what keywords are working and what are not immediately, there is no need to manually create reports or play with excel.

Second of all unless you’re a data geek, Amazon campaign data can be hard to understand, and what’s cool is that Ignite makes keyword and bidding recommendations on the fly that can be applied with just a couple of clicks.

So let’s say one of my hankie keywords is bleeding money, Ignite will alert me of that fact, and I can reduce that bid immediately. So bottom line Ignite makes managing your Amazon sponsored ads so much easier and the fact that they provide me with alerts means that I no longer have to monitor my campaigns like a hawk.

If there are keywords that are doing well, Ignite tells me to add them to my exact match campaigns, if my keywords are losing money, Ignite tells me to either remove the keyword or to reduce the bid. So head on over to sellerlabs.com/steve where you’ll find awesome tutorials on how to run Amazon PPC ads and the opportunity to try Ignite for 30 days for free. Once again that’s sellerlabs.com/steve. Now on the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast, today I’m thrilled to have Grant Yuan on the show. Now if you don’t know who Grant is, he runs the Ecom Crew podcast along with Mike Jackness who I had back in episode 119. Now if you’re a listener of the Ecom Crew podcast, you probably haven’t heard from Grant in a while because well he’s been busy working on his businesses.
Mike has been hamming it up and monopolizing the microphone and going off on color. In fact word on the street is that Grant is the brains behind everything and is the better half of the relationship. My plan is actually arrest this guy away from Ecom Crew to join My Wife Quit her Job.

Anyway Grant runs a bunch of different businesses which include a cutting board store at cuttingboard.com and a brick and mortar store like Cinnabon, but the reason I want to have him on the show today is to show how you can take something simple and somewhat saturated like cutting boards and turn it into a thriving ecommerce business. And with that welcome to the show Grant, how are you doing today?

Grant: Hey Steve, I’m doing great, thank you for having me on the show and thank you for the kind words beforehand, and I mean my goal is closing one another, but it’s very beneficial when we have a third party to help break the dispute. Obviously I am – there’s going to be the better half, I don’t know what to say about that, so now that I’m here now that you’ve said it it’s got to be true, right?

Steve: Of course, yeah I mean it’s always fun to [inaudible 00:04:54] Mike, I mean he’s just so easy.

Grant: Yeah, he just has to like maybe pour out a coloring bag in like his frustrations after he hears this podcast about it.

Steve: So give us the quick background, your background and how you got into ecommerce and maybe touch upon what it’s like working with Mike at the end who knows.

Grant: Yeah so Mike and I we’ve had a very long learning background obviously and of course we’re actually friends not friendenemies sometimes we pretend we are, but we were doing quite a bit of affiliate marketing back in the day, and at one point we realized even though the business was doing really good that we needed to have a lot more value than we were bringing. It really dawned on us after we had a seen a lot of what was happening in the Google side of things that we needed to pull it.

I know that’s almost overused word these days but the reality is the affiliate business is more or less going the way of the turtle [ph] bird, there are things that will stay around but we decided that rather than waiting to see what was going to happen we needed to offer something of value. So rather than just recommending or doing a business where we drive traffic and then unload it to somebody else, we had to take that traffic and then build upon that.

So we decided that ecommerce was going to be what we were going to do since we know how to build traffic and for better or for worse we got into selling fitness equipment as the very first thing which is death by sales and cuts in some ways, but it’s also it was a huge learning experience at the same time.

Steve: So why cutting boards?

Grant: That’s an interesting question as well. I would say it was more an opportunity than anything, and a lot of what Mike and I do is when we go and find ideas, I wouldn’t say we’re so smart as to find a wonderful niche and then go attack it, I think that would be giving us a little bit too much credit. We find domains that are available and we find an idea that we believe that we can capitalize on.

So we take a few things, the cost per acquisition, the competitive niche of the industry and then we kind of factor those two and figure out based on search volume and a bunch of other things whether or not we should go for it and then we just go after it. So it’s a clamor of opportunity really more than anything.

Steve: So you chose to sell cutting boards because of the domain or – what was the primary rationale for going to cutting boards of all things?

Grant: Yeah the domain was available, I know it sounds completely ridiculous, but that’s what it was and it wasn’t exactly available, it was owned by a restaurant owner in North Carolina that sold barbeque and I figured that he probably wasn’t going to put the domain to good use as well as I was. I wouldn’t say that he got a bad deal out of it, he definitely got a fair amount of money, but I’m pretty sure I’ve added a whole lot more value to that domain during the me time.

Beforehand though how much did I know about cutting boards? I would say not too much and now I know a whole lot more, but I do have a fair amount of passion for it. I think it’s a really interesting market, I do a lot of cooking, so it wasn’t that bad for me to jump into, I like what I do and that matters a lot.

Steve: Okay, so in terms of how much you paid for the domain, is it like four figures, five figures, like what are we talking about here?

Grant: It was like low five figures.

Steve: Low figure figures, okay wow. So do you recommend that people do that today, like if there is a good domain, like build a business around that? What I’m trying to ask you is how important is the domain in terms of ranking; I would imagine you got these domains for ranking purposes, right?

Grant: Yeah, Mike and I we get a lot of keyword domains and you can probably find 100 opinions if you ask 100 people in the industry. Our opinion is that keyword domains do matter and if you can find one and if you can build on it, it makes life a lot easier and that really kind of explains our MO.

I would say that there is a lot of people that do just fine without it, I mean you’re look at somebody like Man Crates, I don’t think anybody was ever switching for a Man Crate before that came out or a Modcloth or any number of brandable companies out there. It just so happens that we come from an SEO background and we know how to attack that angle the best.
If you come from a generic marketing background, then Facebook and your other ads could do just as well, but it really depends on your core strength I suppose. If you think that SEO is the way to go then keyword domains are great, if you belief that marketing and branding is the best way to go, then I don’t think it would matter.

Steve: So how much of a difference would it make between getting like cuttingboard.com versus like cuttingboardhq.com or something along those lines?

Grant: Or like mikeswood.com or something like that?

Steve: Well something with cutting board in it but maybe with like a small third word, you know what I’m saying?

Grant: Got it, it’s a pretty big drop off, and based on what we’ve known from previous experience in the industry if you were to put like a numeric scale to it, if you had the keyword domain such as cuttingboard.com, I would assign like a weight of ten, and if you had cuttingboardfactory.com, I’d probably assign anything other than the poorer version down to like a six or a five at best.

Steve: Interesting.

Grant: Once you get into the three word, or anything like that you start losing off on a lot of the main branding ability and also the keyword strength. What I mean by that is for example long tail keywords, for example let’s just say you’re selling bike parts and you could have bikeparts.com, but then you might have twinbikeparts.com, you might have stevesbikeparts.com, the long tail just becomes infinitely bigger once you get to a three factor out there.

So when you have the two factor, just two words of bike parts, then you have a whole lot more broad encompassing search visibility, but it also requires that you do a whole lot more optimization. So a lot of it is requiring that even though you have this great domain, you need to know how to utilize it properly. So yeah even a guy with a million dollars is a great domain it’s not going to do anything unless he knows how to work it properly.

Steve: So in terms of the domain, is this all from your experience buying domains in terms of like your rating factors?

Grant: We’ve had a very long history of doing domains back in the affiliate days, that’s where I really got my experience. I started off in 2003 and I actually had even an academic background in search in some ways and…

Steve: Interesting, okay.

Grant: Yeah I graduated from a program called informatics which meant that I studied data, and at the time people were like you study what, I’m like I study data, and they are like well that
sounds really boring. I’m like it kind of is, but nowadays people are like, oh yeah data cool, big data. So back in the day how do you find data, well you organize it, then you index it and then you put a search engine on top of it.

So I kind of understood what the search engines were looking for especially back then was the computational abilities that was then. There is only so many things that you can do to really be able to filter out and do like in other rankings and everything that Google did, so a lot of the methodology that we used started off from a very engineering focused standpoint where we kind of reversed engineered like why would an engineer do it this way or do it that way.

Most people tend to go by the old lady says that a horse rides throughout the sky and drags like a big ball of fire behind it, and so the old lady says this and that’s kind of how most people do SEO. They go on forums and they read everything, but I really do think that if you have an engineering type of mind and especially software development mind and think about things rationally and try to understand systems and databases, now it’s going to be a whole more complicated but you kind of try to piece it together from almost like the molecular level up until the engine has failed, then you can really truly understand what is going into the search engine optimization.

So that’s like a long way of saying that being there from the very beginning from the early days of SEO, I think I’ve had the benefit of seeing how the theory and application of SEO has developed throughout the entire time to what it is now. This is equivalent of growing up learning how to work on something simple like a 1970s mustang, then now you’ve got like a Tesla.
If you start with a Tesla you’re going to be completely overwhelmed because it is electronic and nobody knows what the hell is going on underneath.

Steve: Okay we’ll get into that in a little bit, but first I want to talk a little bit about the business itself, so first of all are these cutting boards drop shipped or do you store inventory or do you have your own brands or all three?

Grant: We do a little bit of each, I would say that we warehouse most of it, and from our experience in the drop shipping side Mike and I both felt pretty burned in the fitness industry. When you can’t keep a promise to your customer, it makes life very, very difficult and if anything in the ecommerce face, and I’m sure you know this all too given your customer base as well, they don’t react well when you don’t deliver on promises especially for high value items.

If you have a low value item I think that your error ranking get a lot higher, but that said ecommerce is pretty brutal, people make a lot of noise when things go wrong and it gets published prominently, and so you don’t have a lot of room to screw up. So drop shipping I try to avoid it when I can because of those kind of problems, so I tend to inventory.

Steve: Okay and then cutting boards are heavy and so does that imply you have a warehouse like a big warehouse?

Grant: Yup I’ve got multiple warehouses. I use a warehouse in the East Coast and then I serve a warehouse myself and then I use Amazon for different items, but I try not to rely on Amazon for most anything that’s important, which is kind of the opposite of most other people and maybe even Mike.

Steve: Yeah actually Mike has gone all Amazon for fulfillment even, but I’m curious what your rationale is for having both the 3PL and your own warehouse?

Grant: A lot of it is due to the weight factor and the other part is due to the customer experience factor. When your items weigh as much as mine do which is an average of 15 to 20 pounds a piece, then…

Steve: Okay.

Grant: Yeah shipping like zone 7, zone 8 all the way from Seattle and so anybody paying attention UPS and FedEx when they break apart their parcel, shipping they base it on zones and anything local to you is probably a two to three zone, and then for me I’m based in Seattle. So Texas and the mid west would be zone four or five, and then the East Coast and the North East would be a zone seven, eight.

Yeah it got very expensive, when I started off I would ship a package to Texas and it would pass me about $25 to New York or Maine and may end up costing me almost $28, $29. That was with a discount through a consolidator, and without a consolidator I probably would have paid $35 to New York and when you consider my product itself my cost fully, you’re getting to you’re not going to make money margins over at that point. So it was more of I had to get this done rather than I wanted to.

Steve: Why not a 3PL in both places?

Grant: That’s a good question. One of the things that prevents me from getting a 3PL for the west coast is we have a little bit of customization that we do on our products, and that ends up mattering quite a bit for us. That’s kind of the direction that we’re looking to go, so the other issue too is that starting off the business, I’m really, really big on understanding your product more than anything.

The lessons that we learned from shipping ourselves, we applied it to our 3PL, so we reduced our return rate, we reduced our breakage rate, we reduced our dimensional – I mean everything like that. The other thing too is that now after having done it for three years I’ve just renegotiated my small parcel rates, and we’ve got some amazing, amazing deals and a lot of that is just because I understand all the ins and outs of shipping now.

Steve: What are some things that you learned that you actually applied to the 3PL; can you give me an example?

Grant: Yeah absolutely, so just the way that our boxes are being packed and everything, we went through about five different configurations on how we pack our cutting boards. When we first did it we just did a paper and wood and pretty much they would just get beat up especially on a long haul, they just got dropped a lot and who knows what, but they just weren’t being protected.

Then we tried bumble wrapping and then we had other issues, too much time to get it done. Then we finally figured out these custom form quarters that we put in there would work out, and there was quite a few other things that we just kind of realized going in that we had to explain to our 3PL how to do from the get go. Otherwise if they simply did it their own default way which is almost the way Amazon does it, you have a small item thrown in a big box and it gets slumped all over the place, and then you have a lot of damage.

Steve: Okay, I see, it makes sense. Let me ask you this though and this is something I’ve just been thinking about, what’s special about your cutting boards versus me going to like a Bed Bath & Beyond and picking a cutting board, why would I want to pay $40 in shipping or $25 in shipping?

Grant: One thing is that we do have free shipping over 75, I know that’s a pretty high limit compared to what a lot of other people are, and your question is really on point though. If you’re buying something under $50 you most likely are not going to be buying from us, and I don’t really cater to that kind of audience as well because of exactly what you said, you can buy a bamboo or plastic cutting board anywhere, and honestly I don’t really want to compete for two to three dollars, it’s not a good market to be.

So we compete at the higher end, our average order is going to be in the $100 range. The boards that we sell, you can’t really get them at Bed Bath & Beyond. You can probably them at Williams Sonoma or Sur La table or another high end type of place, but in that way our product is pretty niche unless you’re a business and you’re buying just a big volume of cutting boards, and we were pretty competitive on that side.

Steve: Okay, so you basically cater to people who are really in on that cooking I guess so to speak?

Grant: We cater to…

Steve: Or chefs.

Grant: Yeah definitely that crowd, and it’s kind of a interesting mix, we don’t really have a true finger on our audience which is really bothering to me and Mike always keeps telling me, oh man I don’t understand how you’re not on Facebook anymore.

My explanation is that it’s actually really hard, our demographic is all over the place and even a look alike doesn’t always perform that well, and it’s old people, it’s young people, a lot of people buy them as presents, and cooks who like cooking anything from the CEO to a triathlon runner to the guy playing video games to Ali that’s doing [inaudible 00:22:22], it’s really hard to say.

Steve: So you’re not running Facebook ads because of this?

Grant: When we do run them, it gets pretty cost prohibitive at some point unless say a certain time of the year like the holidays. So we run them pretty strategically, but if we run them all the time my feeling is that because it a commodity type item and because the price point is so high, it doesn’t quite make it into the impulse buy type of Facebook kind of golden goose territory that you really need your Facebook ads to be in.

Steve: Okay can we talk about like the commodity part a little bit, you said you sell other people’s products and you have your own line. What is the split in terms of your sales for that?

Grant: Before when we started we were obviously not making our own just because of the risk factor involved, but I would say we went from being 100% of reselling other people’s products and now we’re closer to 50% resale and then the other 50% is our own product. That’s after gross margins like when you start off at 50% cost of goods and then you’ve got another 30% shipping and then add in the 3% merchant fees and everything like that, you kind of wonder what am I doing here? Is this a business or am I running a charity where I hope to get food donated to me?

So we really had to again do something based on necessity of the business more than anything to start getting our own product in. So sourcing was a really, really important part of the business.

Steve: Okay so that was always part of the game plan, right?

Grant: I would love to say that I had a massive game plan in the beginning. The thing that I essentially knew and I’ll be pretty honest about this, we knew that there was a good amount of traffic going there in terms of search terms, and I knew that I would do probably pretty well ranking, but after that I was going to let the customer dictate what I was going to do.

So in the very beginning I just put up a smart [ph] board of everything on to the site to see what stuck, and then once I know what was doing well, then I started trying to source that product.
So in a way it’s kind of reverse engineering and yet I can’t talk, it’s kind of reverse engineering what the customer wants and then going from there.

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Okay so I noticed just today I just typed in cutting board and you are the number one spot for cutting board, so a couple of questions, is SEO your primary source of traffic or do you have other sources – what are your top three sources of traffic and sales?

Grant: Organic traffic is definitely going to be there and then we do PPC ads for sure and…

Steve: AdWords?

Grant: Yup we do AdWords.

Steve: Shopping?

Grant: Yup, and the other source of traffic is just going to be I’d say email marketing.

Steve: Okay, let’s talk about SEO because we kind of started this conversation out that way, how the heck do you get the number one spot for cutting board and how much does the domain have to do with that?

Grant: The domain is going to help a lot, the domain to me is what I call a force multiplier, and based on the amount of work that you put in with the keyword domain it magnifies the amount of work that you get done. What kind of number I can put on there, I’m not really sure but I would say your job gets about 50% easier with a keyword domain, and again that’s just my opinion, I know a lot of people are going to not believe in that, but ranking number one I guess I probably have a little bit…

Steve: Yeah you got proof.

Grant: More way behind what I say, but I don’t want this to be Grant says buy keyword domains so everyone goes to buy keywords domain, it doesn’t quite work as easy as that. I already forgot the other part of your question, I apologize.

Steve: Okay so ranking today still depends a lot on links, so I imagine you achieve that along with your domain by building links, right?

Grant: Links are definitely really good and I don’t think I would ever be in the camp that links are not relevant and a lot of that still comes down to the fact that if we do the engine comparison we’re still running on combustion engines and Google still runs on link as paid link. Anybody that says otherwise simply does not have a fundamental understanding of the technology and pockets like implementation of how Google works.

The page rank algorithm has been there forever, it’s been modified heavily over the years that it’s been around but at the base of everything it comes down to linking. Now anybody that takes that at face value and just goes out and buys a bunch of links is going to get completely monkey hammered because of the granularity that you have to do when you apply that type of strategy.
So links do matter and content of course matters, but I think what people really make a mistake on is that they go for volume versus quality, and I think that’s really been our fundamental approach during all of our time doing SEO.

Steve: So what is your strategy for link building, like can you just kind of walk me through how you get links?

Grant: For one thing I don’t automate anything which puts me probably in the 1% and I think most of – I see people out there automate, a lot of them use other — I would say maybe 30 to 40 – I mean it’s hard to say for sure, but if I had to guess probably at least half of the SEO people out there are using techniques such as just black hat, or they don’t know they are black hat and they’re just going to get them banned.

Steve: Just to be clear, you’re not black hat at all, right or grey hat even, are you like pure white hat?

Grant: I wouldn’t say that I am completely white hat because I go after links and I believe that’s what it takes, but do I spam people for links, like no. Do I go and buy links off people kind of way, no, but do I go after links, I mean I do. So to me links are the thing at the end of the day that really helps you out, so [inaudible 00:30:49] kind of believes that the minute you start going for the link itself as opposed to doing it for the common good of mankind, then that makes me an evil person and so…

Steve: Yeah [inaudible 00:30:58] stepped down too.

Grant: Yeah exactly and he’s kind of has a vested interest in protecting Google and not making his life harder, but all the black hat guys out there play by a whole set of rules and they obviously go for links and they go after a lot of like social media linking.

Steve: Yeah it’s actually amazing like this whole world of buying links was kind of exposed to me relatively recently, within the last couple of years where you can buy links on really high class publications, it’s crazy.

Grant: Oh yeah.

Steve: But you’re not doing that, so let’s talk about like what you do.

Grant: So what I do and this is why I actually think I’m fairly successful at SEO for this whole time is that I’ve always approached it as a humane problem as a opposed to a technology problem, and that’s going to sound really bizarre, but it’s almost like the idea of how many people know their neighbors these days, for example do you know your neighbor Steve?

Steve: I do mainly because I want them to be on the lookout for me like when we go on vacation and stuff.

Grant: Okay, got it. How many of the people down the street do you know?

Steve: Not as many, we know our immediate neighbors the best.

Grant: Okay and I think this is a common answer for just about everybody. I would say most people probably don’t even know their neighbors these days, and to me that’s kind of the difference of SEO by automation versus SEO by manual nature which is that getting to know your neighbor is difficult because you’ve got to go out there, you kind of have to expose yourself and you’ve got to really literally go door to door, knock, say hello, make friends, put effort essentially.

I would say my SEO strategy is really not amazingly strategic, it’s simply that I put effort into actually trying to meet people and do what it takes to just…

Steve: Are you talking about in person or just outreach like email and Skype and that sort of thing?

Grant: Both, I mean I’ve been known to call up people just to introduce myself and obviously if you call up somebody with the whole idea of getting a link, then that’s really scummy in my opinion, that’s like cold calling to do sales, and that’s where I think a lot of SEO guys fail because they don’t have any other objective in life other than to do sales. I think that if you actually have the objective of building a long term relationship or helping somebody out, then I think that is a huge amount of benefit to you both.

Now is that easy, I really don’t think so but…

Steve: Let’s talk about like one of your strongest links that you have built, and talk about how you approached even starting that relationship in the first place.

Grant: Okay yeah sure I would be glad to. This actually goes back to one of my older websites; I actually had a website that was doing food reviews back when Citysearch used to be popular if you remember that website.

Steve: Yeah I do.

Grant: This was before Yelp started up and in the Seattle area I was actually beating Yelp and Citysearch pretty well for quite some time until I actually got a Google penalty which is hiring in all sorts of ways. I know there goes all my…

Steve: Credibility, it’s all gone yeah.

Grant: Yeah exactly. I got penalized, this guy doesn’t know what he’s talking about. To cut the long story short is I actually belief and I still even to this day I’m not totally sure why I got penalized because I was completely white hat on that side, but I actually believe I got penalized because I rose up too fast in the amount of quality links I was getting. So I beat some kind of predetermined velocity profile and I just hit it out of the [inaudible 00:35:15] my pack and they just said no, it can’t be real, and then they just like bully [ph] me.

So part of that, when I was doing that I had a website that catered to just telling people where to go get food, and so naturally I got links from food bloggers and everything like that, but what I really wanted to do was get links from high level authorities like the Seattle city government website, the other major institutions in the area, there is a few like big hospitals and a lot of people flying to Seattle for great medical care, we’ve got very, very good health care over here and doctors.

So when you are in the area you want to find a place for food. Nowadays you can go to Yelp of course but back then you really had to look. So to me hospitals were like a great source of links and you might say, well how on earth do you get a hospital to link to you? My whole approach was just to start calling up people.

Steve: You called people at the hospital?

Grant: More or less, I mean essentially I built like a brochure like a catalog of places to eat and everything like that and put it in a nice little brochure and I called them up I was like, hey I know that you guys offer services to families that are around in the area and you know a lot of them move for a night and they need to place stay, I’ve got a few restaurants over here and they offered coupons specifically for you guys.

I put this brochure together and I’d be happy to put this over here, I’m not getting paid for anything but our whole organization, all we do is we recommend restaurants, that’s all we do and we have a website and you can see it, so would you be interested? I would say 80% of the people said yes, I mean they didn’t say yes immediately, there was a lot of well we got to go check in with their people, and I would say out of that 80% none of them got back to me and then I followed up again.

I never followed up within like two days or anything, I took my time just kind of slowly but surely in this kind of stuff and then eventually I made my way in a whole bunch of ways like that.

Steve: How did that work for cutting board though, like you’re actually selling something on the site, right?

Grant: With cutting board, my link development was quite a bit different, I mean I can’t go into a hospital and say, hey you know…

Steve: Sure yeah exactly.

Grant: I think your cancer patients, a cutting board over here, but the idea is fairly similar. I do things like try to get my name out there for various like do good things. So if I find that there is a program that’s in need of cutting boards or whatever, it’s like a match, we’re going to show up and be like, hey pretty guys need cutting boards and I’ll offer them like a nice package or something like that.

Steve: Like a cooking event or something?

Grant: Yeah or help sponsor for example there is like culinary schools out there and a lot of them do job training programs, so I might give them like a scholarship or something and say, hey here’s something for you guys. If you want to link to me that’ll be great, if not just – if you go send me a picture of something that shows the word summer. Here’s where I differ from a lot of people, I’m willing to put it out there and not get a return, and a lot of people are absolutely completely opposed to that, and they’ll say something like, well I tell you what I’ll give you $50 and you put a link back to me.

To me that just sounds like garbage, I don’t believe in that. I think that’s very low class and I think that’s tasteless, that’s kind of like when I was asking about do you know your neighbors, do you go to your neighbor without knowing him and say, hey I’m leaving for a week to Hawaii, can you watch my house, feed the cats and pet my dogs?
You go to your neighbors and I did this with my neighbors, it sounds like really, really cheesy but I went to a local pastry shop, I got like the nicest cake that I could find. I went to go meet my neighbors, like hey I’m Grant, I’m new to the neighborhood whatever.

Steve: We did that same thing with fruit, we use fruit, but yeah we did the same thing.

Grant: Exactly, so I did that with like my closest like six neighbors. I said hi to all of them, give them a big cake or whatever and now I can like talk to them. The same thing, there is this like a domain for example that I’ve been working on for cheese, it’s probably been three years at this point and every probably four to five months I just contact this guy and I say, hey how is the going blah, blah, blah and he’s trying to sell this domain for like a million dollars or so, and he might be able to get it, I think it’s unrealistic elevation but I just keep in contact with him.

In the event that maybe he decides he wants to sell it one day, but I don’t go up to him and say, hey you’re going to sell, you’re going to sell, you’re going to sell. Obviously if he wants to sell for a price that I want to pay that makes him happy, then I’m happy to transact but otherwise I actually tell him, my advice goes against my own benefit and I’ll say something like, hey this guy got pretty big into the industry, I’d probably approach him to see if he can get you a million. The guy is like really, I’m like yeah, if you get it, good for you, if not I’m still here.

Steve: So your strategy is just like a really long term, it’s more like human engineering so to speak, it’s like a long term strategy, you do good things, and then good things will happen almost?

Grant: Yeah, that’s why I say my – I almost like hate to call it a strategy.

Steve: That’s boring Grant, sorry I know.

Grant: I know it’s called be a good human being and treat other people well, and understand that when you treat a lot of people well, a lot of people are going to treat you well back, but there’s going to be those that do like to be treated well and not treat you well back us too. I think that’s what the SEO world to me it’s like just a complete access pool of human cells because by nature of SEO you’re trying to take, take, take, take and you don’t give.
It’s hard to find somebody that’s willing to give and be okay with the give and the take, so my strategy is not complicated, it just involves like altruism, and no expectations and good things happen.

Steve: I will tell you this, my blog probably didn’t take off until I started going to conferences where I was just meeting a bunch of people making lots of friends in person, and after that started happening we just started kind of helping each other, and that was like a big turning point for both of my ecommerce businesses. So I guess, I mean it kind of is in line with everything that you just said, by becoming friends with other webmasters or business owners you can help each other and be mutually successful.

Grant: Yup exactly, and I apply that to everything, I mean you mentioned Cinnabon. I know almost all of the Cinnabon guys up and down the corridor in Washington, Oregon, I’ve been to conferences. Every time I go there I try to talk to as many guys as I possibly can, and I’m not doing things like, hey how much revenue are you making, what’s your net profit, how much is your rent like, all this kind of stuff; I’m just here to get to know people, do all those kind of stuff. So I guess in a way I’m kind of like the true Chinese business man.

Steve: That’s true.

Grant: We go and get drunk, we eat a bunch of food, and then somehow another like business mix in like a year later and nobody has mentioned anything about pricing, it just kind of shows up at your doorstep.

Steve: Can we talk a little bit about your AdWords real quick. I know you are – for the stuff that isn’t your own I imagine your margins are less and there is probably other people selling that same product. So how do you manage to get Shopping and AdWords profitable for those ads?

Grant: That’s a very good question; the reality is that I think depending on your industry you might not even be able to run AdWords profitably. Cutting board is commodity and there is a lot of people that sell it and unfortunately you’re going to have guys like Amazon, Macy’s, Bed Bath & Beyond and other people that are competing with me on the same product. Now they’re going to have better buying power, they’re going to have better logistics, they’re going to have better everything.

So at the end of the day if they have a higher long time value for their customer, then they can pay a higher acquisition cost, and they also have a much deeper data set on with their buying, so they have a lot more trends that can work for them. In that case what I’ve always found is that if you try to bid for number one or number two spot, you’ll usually get your face ripped off if you’re not careful.

That’s because you’ll get the most amount of clicks, usually the conversion rate isn’t always as good, so you’re willing to pay a premium to get those people, and unless you’ve got like extremely high margin product, you can’t really afford to be playing that tennis game of attrition with your competitor. So the way that I do it is I – it’s almost like the guerilla warfare of PPC, I mean I kind of go in there and like attack when I can, so I do a lot of day partying, I do a lot of hour partying, I go and I select states based on my shipping rate.

If I’m in the North West and I’m shipping to Oregon, California, that’s really good for me and my 3PL, I can attack all those states around there really easily. Texas is a very hard state for me to ship to profitably, there is a number of other states that tend to have people that are in the bunnies and they tend to have like destination surcharges and everything like that like remote delivery, Wyoming would be one like North Dakota.

They are not very populated but it’s one of those like if I’m not bidding 100% to cover California then why am I even bothering to bid Wyoming and other places like that. So it’s a very selective targeting, and when I do it too day partying is also pretty important because depending on your niche, most people generally do buy on a Monday and Tuesday morning and Friday people tend to turn into tire kickers and everything like that, weekends are generally pretty good, but it really depends on your industry too, and so our partying too.

I think the number one mistake people make, they leave their ads running 24 hours, but anybody shopping to buy anything at two o’clock in the morning generally is a tire kicker, and you get lot of those tire kickers that click on just about every ad possible. So people that are bored have nothing better to do at 2:00 AM that are just shopping around, and so you get a lot of people just milking up your PPC cost over there.

So yeah there is very few ways that you can go and attack the big boys because they probably – you just hope that they’re using an agency that groups everything into like one monthly percentage because there is executive up there saying what’s our ROI and somebody just says, oh 3% and he goes, okay.

But that guy is not going to ask what’s our ROI on three o’clock on a Monday, and if they are 50% there, then you can probably go and make a nice little 35% right behind them, but if they are negative 10 on a Friday at 2:00 AM, then you don’t even bother showing up for that Friday, you just let them take it on the chin and then you find another day.
So it’s really just like letting the big guy go down in front of you and you just kind of trail behind, so that’s kind of what I do.

Steve: Okay so basically you run them and then you find out when the most optimal places, times and that sort of thing and then you just pick your battles?

Grant: Yup exactly.

Steve: Okay. I also, we’ve been chatting for quite a while and I did want to touch on this a little bit, why brick and mortar like Cinnabon versus another ecommerce store, what are the pros and cons of each?

Grant: That’s a good question too. I’ve got to say honestly there’s a lot of times I’ve wondered to myself especially when I’m at the Cinnabon store making a roll over there like I wonder…

Steve: Oh you actually go and work there yourself?

Grant: Oh yeah absolutely, I’m probably going to make a lot of enemies by saying this, but I don’t believe in the four hour work week, I think Tim Ferriss is a good guy, but I do think that this idea that we can just outsource all of our labor to a VR – well not a VR but…

Steve: VAs.

Grant: Yeah remote workers and everything and just live a life of managing people, I think it’s more of a fantasy and a dream that we can aspire to, but the reality is that most of us will never be able to work that kind of situation. I say that because brick and mortar is – let’s say it’s been the business model that has been with us forever, physical stuff has been far more prevalent than online and not to say that brick and mortar is better by any means, I mean look at like Macy’s is closing 100 stores and The Limited all closing out.

Retail is having a reckoning and that’s for sure and malls are definitely going to have a reckoning too. In the Seattle area our malls are generally A malls, malls are rated on A, B and C, and most of America is getting malls in the C rating which means that they are on the way to becoming extinct, but in demographics and metro cities they have been doing well, most are doing still very well.

So you look at the Cinnabon which is a very basic operation and it’s a franchise and we make cinnamon rolls and we make people happy, that’s kind of our model, we wow people and it’s a good product, I enjoy making cinnamons and I enjoy selling them and people that come to our store are happy and at the end of the day we close up. At nine o’clock work is done and everybody goes home, then we start over at seven o’clock the next morning.

Ecommerce kind of runs all the time, so the idea that — a brick and mortar is to me much more scalable on a passive kind of income type of objective if you are a people person, because you can hire people that will have your interests and you interact with them and you hire managers. Ecommerce scales rapidly, ecommerce can do a lot of things really good. The trouble with ecommerce though is that you’re competing against the best, the brightest, the smartest, the most overworked people in the world which are hungry young men essentially [inaudible 00:51:29] women.

I mean there is a lot of women entrepreneurs out there so I don’t want to discredit them, but everybody knows that there is like advantages in ecommerce, so you have a lot of smart people coming in to the space and try to attack everything. You also have a lot of guys with a lot of big pockets such as [more mark hims] [ph] on everybody trying to go after a lot of market share. You compare that with Cinnabon which is more of an effort based kind of business and there is certainly nothing that’s going to get very creative, it’s a very standard business that has very set rules that have been applied at the franchise level, but my competition is simply the weather.

Steve: That’s true.

Grant: My long term existential competition is Amazon to take wells and moles [ph] but if my moles are in a metropolitan area that has a high paying demographic and they keep coming to the mall, then I don’t really have an existential risk. Every year I know that my rents are going to be going up by 2% on a steady basis, I know that I’m going to get traffic.
Ecommerce I don’t know what’s going to happen in three years, is Amazon going to destroy everybody, are they going to eat my cake, am I going to get penalized by Google because I said something stupid on this podcast because Steve is so popular. Some of the others are like, oh well Grant is doing some black hat stuff and that’s kind of the crux of it which is that the viability of both models, there is something very, very different about it.

So for me I wouldn’t go so far as saying that one is better from the other, but I would say that it is a good divestment or a good diversity edge. If one thing happens to me on one side, then it’s not going to happen on the other, and for as well as I’m doing on the cutting board side our Cinnabon stores we have multiple, they do more in revenue than I do on cutting board and it’s like that’s a much more simpler business and the margins are acceptable.

They are not like ecommerce margins but they are definitely livable. If I had to do it I could probably run a Cinnabon store for the rest of my life and live my life in comfort, so it’s not a bad thing.

Steve: Okay, interesting, cool. Yeah I think you’re the first person we’ve had on who does both ecommerce and brick and mortar, so it’s pretty interesting to hear. But Grant I’ve had you on for a long time, I really appreciate your time, if anyone wants to find you where can they find you?

Grant: They can find me at EcomCrew.com, and you can find myself and Mike over there, and just look for the good looking guy and…

Steve: The good looking Asian dude.

Grant: Yeah, yeah, and then there’s this other guy named Mike, so that’s my [inaudible 00:54:26] Mike out there, he’s my partner on Ecom Crew and we give each other grief all the time, but Mike’s a good guy. We talk business and we pretty much talk about everything that we do. So we try to be an open book and definitely enjoy being on your show too Steve. I hear nothing but good things from you about Mike, so I’m very happy to be able to have the opportunity to be on your show.

Steve: Cool yeah likewise. I mean I chat with Mike pretty regularly and I just visited him in SD and to see that you guys don’t live closer or you guys could hang out a little bit more but yeah I’ve got nothing but good things about you as well and thank you for coming on the show.

Grant: Yeah I appreciate it.

Steve: All right, take care.

Grant: You too.

Steve: Hope you enjoyed that episode. What I love about Grant is that he’s highly analytical and he knows his stuff. Go check out the Ecom Crew podcast as well. For more information about this episode, go to mywifequitherjob.com/episode163.

And once again I want to thank Seller Labs. Their tool Ignite is what I use to manage my Amazon PPC campaigns. Instead of the old tedious way of generating reports and analyzing your ad campaigns in excel, Ignite aggregates all the info for you in one place and allows you to quickly visualize your data to make decisions fast.
Not only does it save time, but it also makes managing your Amazon campaigns so much easier. So head on over to sellerlabs.com/steve and sign up for a free 30 day trial, once again that’s sellerlabs.com/steve.

I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all of these sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/ K-L-A-V-I-Y-O.

Now I talk about how I use these tools on my blog and if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away via email, thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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162: How To Leverage Influencer Marketing To Grow Your Brand With Jessica Thorpe Of Gen.Video

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How To Leverage Influencer Marketing To Grow Your Brand With Jessica Thorpe Of Gen.Video

Today I am thrilled to have Jessica Thorpe on the show. Jessica is the President of Gen.Video which is a site that matches businesses to influencers especially in the video space.

Now if you’ve been selling anything online, you know that influencer marketing is huge. One of my prior guests Emmanuel Eleyae in episode 57 used You Tube influencers to generate 65K in 4 months and is now making 7 figures.

Anyway, Jessica’s company Gen.video is at the forefront of influencer marketing and we’re going to pick her brain today about the best ways to leverage influencers to promote your business.

What You’ll Learn

  • Why Jessica decided to start Gen.video
  • Which product niches work best for influencer marketing
  • What’s the process for finding an influencer
  • What’s a good click through rate for videos on You Tube
  • What makes for a successful campaign
  • How to measure results of an influencer campaign
  • How a content creator can make money with influencer marketing.

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Ignite.Sellerlabs.com – If you are selling on Amazon and running Amazon Sponsored Ads campaigns, then Ignite from Seller Labs is a must have tool. Click here and get a FREE 30 Day Trial.
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ReferralCandy.com – If you’re already getting steady orders every month, adding a refer-a-friend program to your store can give you a new sales channel. And ReferralCandy is the best in the business. Click here and get a FREE $50 credit towards your account.
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Transcript

Steve: You are listening to the My Wife Quit her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not with their businesses.

Today I’m thrilled to have Jessica Thorpe on the show, and Jessica is the president of Gen.video which is a company that specializes in influencer marketing and ecommerce video. Today we are going to explore how to leverage influencers online to promote your products and ecommerce brands.

Now before we begin I want to give a quick shout out to Seller Labs who is a sponsor of the show, and specifically I want to talk about their brand new tool Ignite which helps sellers manage their Amazon sponsored ads. Now right now I’m actually using this tool to manage my Amazon sponsored ad campaigns, and it makes things a heck of a lot more convenient.

So number one I’ve always found it a major pain to generate my PPC reports on Amazon, cut and paste the data over to an excel spreadsheet and use pivot tables before I’m able do any analysis. Now Ignite pulls all that info for you automatically and allows you to easily see what keywords are working and what are not immediately, no need to manually create reports or play with excel.

Second of all unless you’re a data geek, Amazon campaign data can be hard to understand, and what’s cool is that Ignite makes keyword and bidding recommendations on the fly that can be applied with just a couple of clicks.

So let’s say one of my hankie keywords is bleeding money, well Ignite will alert me of that fact and I can reduce the bid immediately. So bottom line Ignite makes managing your Amazon sponsored ads so much easier and the fact that they provide me with alerts means that I no longer have to monitor my campaigns like a hawk.

So if there are keywords that are doing well, Ignite will tell me to add them to my exact match campaigns, and if my keywords are losing money, Ignite tells me to either remove the keyword or to reduce the bid. So head on over to sellerlabs.com/steve where you’ll find awesome tutorials on how to run Amazon PPC ads and the opportunity to try Ignite for 30 days for free. Once again that’s sellerlabs.com/steve.

Now I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. Now I’m super excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on Klaviyo for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not a different provider. Well Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here’s why it’s so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought which makes it extremely powerful. So let’s say I want to send an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special autoresponder sequence to my customers depending on what they purchased, that’s a piece of cake, and there is full revenue tracking on every single email.

Now Klaviyo is the most powerful email platform that I’ve ever used and you could try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/K-L-A-V-I-Y-O. Now on the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.
Steve: Welcome to the My Wife Quit Her Job Podcast, today I’m thrilled to have Jessica Thorpe on the show. Now Jessica is the president of Gen.video, which is a site that matches businesses to influencers especially in the video space.

Now if you’ve been selling anything online you know that influencer marketing is huge, and if you listen to my podcast one of my prior guests Emanuel Eleyae in episode 57 used You Tube influencers to generate over 65K in four months and his company is actually now making seven figures based on influencer marketing.

Anyways Jessica’s company Gen.video is actually at the forefront of influencer marketing and we are going to pick her brain today about the best ways to leverage influencers to promote your business. And with that welcome to the show, how is the going Jessica?

Jessica: Hi Steve thanks so much for having me, things are going great.

Steve: So Jessica give us a quick background story and tell us why you created Gen.video in the first place.

Jessica: So about two years ago myself and my co-founder Bill Hildebolt saw a need in the marketplace to bring together influencer marketing in ecommerce. Prior to starting Gen Video we had worked together for a number of years in the video space and working with user generated content, and so we were excited to find an opportunity to bridge the gap between influencer and ecommerce.

Steve: So at the time were you guys running any sort of ecommerce businesses yourselves or were you guys influencers yourselves?

Jessica: No, interestingly enough he came from a banking — investment banking background and I came from the media side so I was very familiar with video production and the media landscape. So we saw an opportunity to help brands through the story telling and in the visual nature of video as a medium to help bringing their products and brands to live through video, and then of course as the importance of a rich media experience became important on the ecommerce side, really saw some synergies between those two and again set out to develop a product and a platform that could really unlock that opportunity for brands and sellers of all sizes.

Steve: Interesting, I was just a little curious like when you’re starting a company that manages influencers as well as businesses, this is like a chicken and egg problem in the beginning, so who did you guys go after first, was it the influencers or the businesses, how did you get it done all to come together?

Jessica: Yeah it’s a good question and it’s very much a chicken and an egg situation and it’s still is to some extent in terms of making sure that the network isn’t so large and vast that there is not enough opportunities for them to partner and engage with brands on one side, or if that isn’t necessary to making sure that you’re building enough features and tools and services to allow them to get more value out of things they’re already doing on the social media side.

But then also as brands can come in and across all categories we’re not category Gnostic and so someone who sells a beauty product can come in and two minutes later someone that sells a pet product can come in. It’s making sure that that network of content creatives is always there. So we’ve actually built the team in such a way that we’re constantly focused on both sides of those business opportunities.

But it is something that all social platforms, certainly market places don’t have built technologies to enable the match making if you will, it’s something that everyone I think is trying to balance as best as they can. The last thing you want is to have too many content creators not fully engaged, because when there is something for them they might have checked out or tuned out a little bit if you’re not constantly bringing value to them.

Steve: Sure, actually let’s take a step back, what is Gen Video, why are you guys different, because there are other competing platforms out there, so what do you guys specialize in?

Jessica: We really specialize on bridging the gap between influencer and ecommerce, and so that means something different for the content creators then the brands. So on the content creative side of things we very much appreciate the fact that it’s probably really scary to have all your eggs in the YouTube basket. So we think about other feature sets and monetization opportunities for them that go beyond the walls of YouTube or and in other social platforms.

So we build some technology that helps them automate the creation of affiliate links, and so what we found was not a lot of YouTubers, it certainly wasn’t just getting suddenly necessarily understand the Amazon associate program, and even if they do want, using it actively because it was pretty time consuming, so built some functionality to help ease the ability for influencers to augment, and have them make money off of YouTube.

So the affiliate revenues one we also have made it easy for them to license pre-existing videos, and so a brand can come to the platform and if they see an influencer already made a product video from one of the products that they sell, with a couple of clicks of the button that influencer can make that existing content available, and so again thinking about how to give them other ways to monetize their content.

Then on the brand side what does that mean? Similarly we don’t think that there’s only value to be had publishing a video to YouTube. So when I think about the influencer marketing landscape or the dozens if not hundreds of platforms that say that they can play matchmaker between influencer and brand, a lot of times that’s being looked at from more of a top funnel awareness rich perspective. It’s true YouTube is a fantastic platform, Instagram is a fantastic platform to reach your target audience and get in front of them.

Influencers are a trusted source for product information but why have that video be trapped on YouTube where after a couple of months 80, 90% of the viewership has happened and the value starts to slowly decline over time, when that’s an amazing video, it’s on brand, it’s talking about the product features and benefits.

So what we did is said why don’t we build something that really allows a seller to get more value out of that content and use it on your website, use it in other marketing, use it in advertising and most importantly we focus on the ecommerce angle is getting that video on product pages of retailers where you’re selling products.

Amazon being one of the primary, Wal-Mart a close second and then dozens of others are available, but it’s again unlocking the potential of that social content and bring into the ecommerce environment where it can impact more people than just the audience of that influencer, then also the ability to drive traffic from the social platforms into Amazon to bring more consideration to the product pages. So it’s really finding those opportunities for brands to get more value out of influencer to drive sales.

Steve: So let me just kind of summarize what you just said, so what you’re telling me then is that I can have an influencer record a video that goes on YouTube as well as Amazon as well as Wal-Mart as well as other places like the same exact video is indicated across all those platforms?

Jessica: That’s exactly right.

Steve: Okay, and so traditionally then I guess the usual model is that I would just pay a YouTuber and it would just live on YouTube, but now you’re actually getting more value out of that same piece of content, is that right?
Jessica: Yes, it’s through the way that we’re collecting the content and again for brands that are maybe aren’t looking to post the content on YouTube and it’s really more of ecommerce play, I want to optimize my product page, and I know that having a how to video would really help drive conversion, what we do is we ask all of the influencers for their content only and then someone who may own a part can speak to whatever their product needs are, but you don’t want that video published on YouTube, there is an opportunity to do that as well. So it really allows the seller to cater their campaign based on their needs and only their needs.

Steve: So I could have someone just do a sales video for me essentially is what you’re saying?

Jessica: Yes.

Steve: Okay, all right so let’s make this super practical, like let’s say I am a brand, I’m a brand new business and I want to do influencer marketing. So let’s say I approached you directly Jessica, first of all a couple of questions here, influencer marketing, is there like a certain product or product category that kind of works best for this or can I actually just take any mundane item like a garlic press and make sales through influencer marketing, like what type of products work best for this?

Jessica: You know we could ask that question all the time and I believe this answer to be true but it always seems a little self serving when you first say it. I think any product that could have a story told through a video, through a person, there is a place for influencer marketing. So the example that you gave I was thinking, I’m like oh I wonder what he’s going to say to try to stop me.

A garlic press, I mean there are so many influencers that make amazing recipe content on YouTube, and so you look to the influencers to find that creative connection between your brand and the product so that it can resonate with their audience first and foremost, and then what our platform does is then make that available to anyone who is shopping.

So chances are if you’re buying a garlic press you need garlic for something, for what, a recipe, and so there are very natural applications or ways in which influencers can integrate your product into a piece of content. So it really requires a little sharing of information and understanding the product, but that’s what they’re good at, they a master at their craft making video content and bringing a product to life and in their own words and in their own needs.

So you get kind of a two for one in the sense where you’re getting their review of the product, you’re seeing a product demonstration so you’re getting a little bit of a how to, and what we’re hearing from shoppers online is it is the next best thing to touching and feeling a product in store.

So the more you can remove whatever the barriers are which would prevent someone from buying that specific product online versus feeling the need to go into a store, video really can close that gap a bit because through the words of actual online shoppers, we’re hearing them say just that, it’s great for product comparison but it’s also the next best thing to touching and feeling of product before making that purchase.

Steve: Okay so let’s kind of expand upon that a little bit. I’ve been thinking about this too because we actually used your platform to do an influencer campaign and I was thinking about a lot of these things when I was deciding like what type of campaign to do. What kind of videos tells what the best, like straight off testimonials, kind of like mentions, kind of mixed in with the content so to speak like branded in with some other piece of content, or like just seeing the item in action and then just casually mentioning it, what’s worked the best for the people using your platform?

Jessica: Yeah also we have brands of all sizes using the platform and so I’ll give kind of middle of the road answer, but you painted the right picture in terms of the spectrum of content. So if the primary need is product education and working to help convert people to buy certainly product reviews, unboxing tutorials, how tos, those are all things that are pretty endemic to the shopping experience.

So if you’re watching a video on a page on Amazon, a product detail page, you’re probably looking for more specific information. Either you’re just about to buy or you’re just looking for some final information to validate, yes it is going to solve the problem that I have, those are the types of videos that work well. That being said because you’re tapping into experts in your category and folks that have social presences, you can actually get more value by letting them think about how to creatively integrate your product into their video.

So I’ll use beauty, beauty is actually a really good category, so video and it’s popular on YouTube. Get ready with me videos are very popular, they drive a lot of viewership and they’re the perfect backdrop to integrate a brand and product into it. But those videos are ten, 12 minutes long, I mean she’s doing her hair, her makeup, her clothes, you name it, she’s talking about it in that video.

Getting the influencer to integrate your product into the first minute or two minutes of the video of a 14 minute video is a great way to get in front of her audience and get them to click on the link in her description to drive traffic to your product page, but you probably don’t want or don’t need that 14 minute video on Amazon. I will say that we see like well over 50% completion rate for most of the videos that get syndicated to the related video strip.

So it’s not to say that the shopper doesn’t get value out of it, but for some of our clients we actually even cut out that one minute clip and only put that up on the product pages. So again I think that’s the beauty of working with influencers, they are very accepting of your needs and can find the right way to integrate your product, and that maybe a single two minute video like just as a product review and works on her channel and works on the product pages but maybe not.

Our platform and our services allow you to get the festive both worlds and just requires you to know what you’re looking to get out of it up front and then they’re very eager and happy to collaborate with you, and we make it really easy through our messaging system to have those one on one dialogues with the influencer which helps you enjoy the – you get what you want the first time around.

Steve: Okay so let’s walk through a campaign actually which will probably make it easier. So let’s say I go on the platform, what’s my process, like what will my criteria be for selection?

Jessica: Yeah so depending on your what your product…

Steve: Let’s go with the garlic press example for example.

Jessica: Perfect, okay so you decide the platform and then we’ve got a pretty intuitive, well we call that campaign what’s there, again it’s a five step process where you first would let us know what your distribution needs are. So we’ve got the ability to work with influencers across a number of social platforms not just YouTube, so YouTube, Instagram, Twitter, Facebook, basically any platform that’s been focused on a video experience and has an API we’re working with.

So you can say I want to work with someone who’s both on YouTube and Instagram because I really want to make sure that I can tap into that foodie culture that’s on Instagram, but I really need YouTube because I want someone to be good at creating video content and I want that video to live on Amazon as well. So you check off YouTube, Instagram, and Amazon. If you also sell on Wal-Mart, we’ve got a level of service that includes both Amazon and Wal-Mart distribution.

So you check off what social platforms you want the video or piece of content published to and then you check off Amazon or Amazon or Wal-Mart depending on where you sell, and then from there we start to ask you to fill out some pretty basic information around who your target customer is, age, gender, area of interest. So for this I would say you most likely are picking maybe male and female in a pretty broad age range, but you might type in the word recipe or foodie.

By giving us those types of tags, it filters down the set of influencers that we have in our network, so we can recommend to you people that are already creating this type of content and have an audience that is totally receptive to videos where a garlic press may be integrated in to it.

Steve: Are these, the things that I’m typing in, is that a human looking at that, or are you matching people based on like an algorithm?

Jessica: It’s all data driven by the information in the platform and so because we have everyone connect their YouTube channels, we’re pulling in all their channel audience information, we know their date of birth, we know if they have kids.

Steve: I see okay.

Jessica: They put their types in, so it’s a matching system based on the data in our platform, and then we do then turn it over to you to manually look at each channel and decide who you would want to work with. So after you provide the targeting information which basically says who this product is right for and what type of person you would want making the video, we move in and ask you for some budget parameters or channel size…

Steve: Yeah what are some good guidelines there? So let’s say I put in like I want food or people who create videos about food at that point, so how do I narrow down – like these are all questions I would have if I was doing influencer campaign, how do I narrow people down, what’s some good criteria and how much is it going to cost me based on their audience size, what are things to look for?

Jessica: So what I tell is first and foremost if you’re not looking to get the video published in their social channel you can order a video for as low as $500 and that’s kind of the minimum where we feel the production quality of the influencer is sufficient and high enough quality to stand up to sitting on your product page. It’s one thing to work with influencers on YouTube but another thing to bring that content on to your product page and you spend so much time optimizing that is so much closer to the point of purchase.

So it starts at 500 but then it really scales up infinitely based on the size of the channel, and so I think about a garlic press and again let’s say you want to target a mum blogger who likes to cook and is actively talking about creating meals for her family. You could probably work with an influencer who has 200,000, 300,000 subscribers on YouTube and maybe a relatively similar audience on Instagram and work with them for $4000, $5000.

Steve: Is this for one video then?

Jessica: This is for one video except the thing there is when you start to work with the larger channels, you’re really tapping into their audience, and you would think about it almost the same way you would decide if you’re going to spend some money on Facebook ads or other more traditional advertising. And so it’s not just the cost of the content, it’s the content plus her big an audience.

Steve: Sure of course.

Jessica: And so that video on average could get a round 100,000 plays and I’m just using kind of big general numbers here, but what we see is that any program when you’re working with the right influencer that matches your product in a very organic natural way, we can see click through rates of the link in the description that goes to your product detail page in the 4, 5, 6% range.

Steve: Interesting.

Jessica: We’ve seen some programs that go to 10%, and so you could easily drive a couple thousand people to your product detail page to learn more about your product and hopefully buy. The great thing about the programs are that content will also live on the product page, so you’re not just getting the value from the YouTube publishing and topic but now any other visitor to that page from other marketing you’re viewing, if there is organic search from Amazon, that video sits there too, so you have the second opportunity maybe to help convert people by them watching those videos.

Steve: So I know like I never click on the links below the YouTube videos especially if I’m watching something on mobile, do people really go to the product page by clicking like a large percentage, like 5% sounds like a lot to me.

Jessica: Well so it is a lot especially if you think about it relative to what a typical click through rate is in an immediate campaign. Some good Digital Lab campaigns, a 1% click through rate is super high, sometimes with video or [inaudible 00:24:12] you’re looking at 0.9% click through rate. So it is certainly high relative to other media spending, and then even from a YouTube click through rate perspective I think you’re typically seeing on average maybe around a 3 or 4%.

But again everything that we’re looking at is optimizing around the shopping experience, and so unless someone is using the platform and looking just for rich something just purely entertainment based, we’re always going to recommend and our platform is going to suggest people that do a better job bringing together the social and ecommerce. So we look at people and understand what their click through rate and conversion rates are, and are using that to just get smarter and smarter about our recommendations to you.

So that’s why we’re for sometimes seeing higher click through rates, and the thing is they may not buy immediately after clicking that link, but they’ve watched that piece of content and now you’ve got your brand in their consideration set, and so getting them to come back is where there are other interesting opportunities as a seller to bring them back to the site. A 5% click through rate is actually really high relative to other marketing tactics.

Steve: I want to take a moment to thank ReferralCandy for being a sponsor of the show. Now in this day and age word of mouth is a huge driver of business for most ecommerce stores, and the best way to amplify word of mouth marketing is through a referral program. This is where ReferralCandy shines, with just a couple of clicks to the mouse you could add a referral program to your ecommerce store and reward your customers for telling their friends about your shop.

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And the best part is that ReferralCandy is a set it and forget it service, requires no technical setup and they are giving My Wife Quit Her Job listeners 50 bucks to try them out if you go to promo.referralcandy.com/steve. Once again it’s promo.referralcandy.com/steve to get a $50 credit to try out the service risk free. Now back to the show.

Let me ask you this, so you mentioned subscriber base and then you actually mentioned video views, is that a better way to judge the influencer, like I suppose the number of subscribers they have but I actually consider it based on the actual views they get per video, like what are you paying for here exactly? Are you paying for subscribers, are you paying for views on the scale?

Jessica: Well so what I would say is as you are going through the process and once you fill out all this information and the campaign is live and you’ve got influencers applying, you certainly want to look at the relative views per subscribers, and so we provide some average view data and the user profiles and you want to start to think about it from a cost per view perspective.

There is some hard costs for them in making the video but really if a channel is not driving at least 10% of their subscribers and viewership, so their 100,000 subscriber channel, you’d like to see 10,000 views come out of that. There are some channels like in consumer electronics, there is this guy in particular that I’ve seen counter come through, he’s got close to 400,000 subscribers. Easily his videos get 150,000 to 200,000 views and so he’s really good at engaging his subscriber base.

But as the channels go up, if the engagement rates go down you don’t want to pay a ton of money just because they have a million subscribers. You really want to make sure a good amount of them are actively engaging with their content and watching it or you’re not getting what you paid for.

Steve: So what’s a good guideline for the amount of money that I would want to pay based on the number of views that the videos actually get, like how much would I want to pay per view?

Jessica: Every category is different and it’s kind of like supply and demand. Some categories that are pretty niche in nature, the influencers can charge a little bit more because there is fewer of them, but I like to make sure that the influencers that we’re suggesting brands are working with see 10% in terms of viewership to their subscriber base.

Then relatively speaking an average cost per view it really ranges by vertical and also by size of influencer and so with 30 cent, 25 cent cost per view is good, and then that can go down quite significantly with scale as you work with larger influencers. Then obviously that is capped out or dictated to some extent based on the size of the brand and their marketing budgets in any month, but that’s a good target I think for people looking to get started.

Steve: One of my other concerns like if I were to use a platform is like I pay someone to do a video for me, what if I’m unsatisfied with the video, how are disputes resolved in case they do a job that is like not optimal, and I can’t really end up using their video or they just don’t do a good job on their YouTube channel?

Jessica: That is something that we take really seriously and we always work to make the seller happy, and so if that means finding another creator or stepping in if for some reason the creator goes quiet for a little bit of time, we try to build up enough tools to really make it self-service and the influencers have the ability to collaborate pretty closely with the brands.

But from time to time some things happen, like gets in the way or maybe there was just some miscommunication or just general not satisfied with the content. It’s our job to make sure that the seller has a good experience, and so we get to really work to resolve any of those disputes I mean worth case scenario, refunding any money that would have been put down.

But our priority is to ensure that they get the video they were looking for and so if that means starting over we do that, or we’re engaging a new content creator that meets all of their needs and one that we know because we’ve worked with them directly before are some of the things that we’ve done.

It doesn’t really happen that often and again you know the really interesting thing is influencers, some of them have quit their jobs and this is their job and so as the space evolves and matures you start to see on the other hand that the camera they are looking at it as a business as well, and as that continues to take place there is I think less and less concern –

I mean it will always be there, but the reality of having that kind of that experience should be pretty low if you’ve done your job kind of pre vetting things ahead of time and setting it up for success up front.

Steve: Okay, no that makes sense, yeah if these people are treating it like a business; they’ll probably want to please the brand as well. Okay so here is another concern that I always have with this type of marketing like how do you measure the results?

Jessica: There is two things here, so there is the social component, the distribution there, and so from that perspective it’s understanding what the expectation was in terms of viewership. We share play data engagements rates, and so engagement rates meaning likes, comments and shares, and so that’s another metric for brands to look at in terms of did this piece of content resonate with their audience, and so place and engagement rates are two metrics that we share about.

Then the third from the social side of things that kind of starts to bridge that gap into what does it mean from ROI standpoint is the click through rate, and so we share back in the platform the number of visitors that that video drove to your product page on Amazon. So that probably one of the equation is…

Steve: Is that just for Amazon or that works for your own site as well, do you guys collect data on clicks to the site also?

Jessica: Yes and so there are two options when you’re setting up your campaign, you either can attach the ASIN that you want the traffic driven to, and then that will go to the Amazon product page, or you can put your own custom landing page URL and we track those clicks. And so if you have a direct to consumer website and you would prefer the traffic to go there versus on Amazon, you would provide that URL that would get included in the description and our systems tracks that and it would get reported back on your site.

So there is viewership, there’s the traffic and then the third component and this is the one where right now requires a little help from the seller is really looking at that pre post analysis, and so we’re really good at getting the content up on Amazon and right now the retailers are really good about providing play data and viewership data, so percent watched and the typical metrics that you would associate with video.

However, you would be able to see, you as the seller will be able to look at conversion rates and sales pre video and post video, and what we’re seeing is across a number of different categories on average up to a 30% increase in conversion rates for shoppers that were watching the video and even seeing upwards of 15% increase in spend levels with just the presence of video there. But currently that specific information around your sales or conversion rate growth would be something you would see on your site within whatever analytics [inaudible 00:34:18] you’re looking at the seller central.

Steve: So it sounds like the way I would measure this is I would take like a baseline and then the day the video goes live I would analyze that data and just compare it against the control so to speak, right?

Jessica: Exactly we do a lot of pre post analysis so even for videos that maybe were live for an extended amount of time, some year over year, for a 30 day or for a quarter or something like that but exactly. You guys know best what other promotional activity is going on, and so it allows you to kind of isolate those things and really look at the data, but yes exactly is what were your sales like prior and what were your sales like after enriching the page with a piece of video.

Steve: So it’s important I guess then to not run any of these overlapping so to speak?

Jessica: It certainly makes a lot easier for you to isolate what thing is working, but of course with some of the larger brands and sellers that we work with this is one tactic of many, this is still common side with promotions and so certainly from merchandising events like Mother’s Day is going on right now, Father’s day is right around the corner.

I’d certainly say that ensuring content is up and live before you invest in other traffic driving activities is something I’d recommend because again if you think you manage it from a is it working standpoint, it does make it a little harder to isolate what, but I have seen enough data to know that placing a video does drive up those conversion rates, sales, basket size and just certainly if you’re spending all the dollars to drive more traffic, you’d want to make sure that you have the most optimized page possible.

Steve: What are some video metrics that are good guidelines to follow like how do I know what good engagement really means in your experience?

Jessica: Percent watched is a metric that gets looked at a lot from a peer video perspective, and so if you compare that to whether a traditional 30 seconds pod [ph] is like there is either two things, it’s time watched, and so getting someone to watch for at least 30 seconds or a minute or completion rate per second watch. So what we’re seeing is on Amazon we’re seeing people watching video for on average a minute if not more and from average completion rate standpoint for videos that are under two minute let’s say watching close to 70, 80% of the video.

So I think there is this misconception in the ecommerce environment the video is going to be really short, they’ve got other things they really want to do, but the reality is especially when it’s coming from an influencer, if it’s helpful information and if it’s either answering their questions or providing information on the features and benefits of the product, they’ll tune in and they’ll stay engaged, and it’s because it’s saving them time in the long run like they’ll be more satisfied, they don’t have to shuttle around so much.

So it’s not always about really showing really quick pieces of content, I think it’s about being smart with the information and who’s bringing it to them. Going back to the original question it’s definitely percent watched is one.

Steve: I guess what I’m trying to ask is like I produced the video with you guys, how do I know it’s actually good, like what percentage of people that watch 75% would be like a good metric to judge whether that video was a good one or not?
Jessica: So I think it’s the three things that I intended, the percent watched and if people are watching for more than half of the video, it’s a good indicator to me…

Steve: What percentage would be a good percentage, if like 80% of the people watch 75% of the video?

Jessica: I see, well yeah I think the way that we report the data and sorry I’m probably not answering this correctly, it’s the average completion rate. So we’re saying of the people that watched it they’re watching for more than 50% of it, and so I think the reality is there are very few people that drop off right away. So if you look at it from like a trend line perspective the majority of the people are watching for at least 50% of the video, and then there is a much smaller percentage that are watching for less.

So the benchmark for me and for us is typically around 50% completion rate but I’d say…

Steve: Really?

Jessica: Close to over 80% of them are staying too not that much because once they – there are two things that are happening. The audience of that influencer tunes in to them; they get emails when they publish their videos and so they are wanting to hear what she has to say. Then the other people that get there from search whether from Google or going straight to YouTube searching for – they were looking for a garlic press or they were looking for a recipe and so you’re getting these people that are kind of already leaning in.

So if you pick the right person you know that they are good at what they’re doing and they are great at producing content, you’re not just blasting out a piece of media to this like look alike audience. It’s a tapped in engaged audience, and so therefore you’re seeing a high engagement off of that.

Steve: Let me ask you this question, do the influencers – like can you have them insert your brand or keywords into the video title, is that something that’s typically done?

Jessica: When you’re setting up your campaign, you can provide keywords and you can ask them to include them both in the title and descriptions, so this can help optimize all that video being discovered in search. So that’s absolutely something that you can do and when we’re talking directly to brands, we often suggest a healthy mix of both branded and non branded key terms and then leaving it up to the influencer, because the one thing I‘d say if you try to be too prescriptive on what the video title is, it may not resonate as well.

So you can give them the keywords and then they will find good ways to integrate that both in the title and description, again so that can help optimize for search.

Steve: So Jessica on the tracking side again, like when I ran my own personal campaign using Gen Video, actually very few people I found clicked on the link and most of the sales that I got were actually through type and traffic. So would you say that the before and after method is like the best way to track your campaigns and is there actually a better way to do it?

Jessica: Definitely tracking pre and post video publishing is the preferred path in terms of being able to really monitor the impact of the video content, and so there are two different things. There is the traffic coming from the site and as we talked about a little earlier depending on the size of the influencer’s channel that you’re working with, you’re seeing roughly 3 to 5% click through rate on average. Some campaigns depending on the verticals can be upwards of like 10% in terms of a click through rate.

So if you’re working with smaller influencers, and really testing things out with a smaller budget, the traffic in and of itself isn’t really where you will look in terms of understanding the ROI and the value. What I would recommend is looking at the analytics that you have either on your website if you chose to drive the traffic directly to your brand site or through the data that is provided to you from Amazon and look at what your sales were relatively – I take 30 days or so before the video was published and 30 days after.

If there is a bit seasonality with your product, the other thing that you could do is look at that same time period from the year before. Really what you want to do is understand after placing that video on your product pages on Amazon, were you seeing higher conversion rates than prior, and then the traffic is kind of a secondary component to that. Again that really becomes a little harder to do though unless you’re looking at influencers that are driving more substantial traffic to the site.

Steve: Okay, well let’s switch gears a little bit and talk about this from the perspective of a content creator. So I’m a content creator, I run a blog, so what kind of advantages does your platform provide like how can a content provider make money and what’s the cut that you actually take?

Jessica: So for creators we like to invest in features on the platform that help them monetize all of the content that they’re creating. So some influencers are publishing videos on a weekly basis, sometimes multiple times a week, but not all of those are part of brand sponsorships, and so what we want to do is ensure that there are other ways for them to monetize that content.

So there are three things that we’re doing, we’ve created the tool that made it really easy to create, and place affiliate links from the Amazon associates program directly into the descriptions of videos that are managed through the Gen Video platform. That allows affiliate revenue to be made for any of the viewers of that video that clicks on one of their links and then goes on and shops within that session on Amazon.

So Gen Video doesn’t take a cut of any of that affiliate revenue. We pass through all of that back to the content creator, and for us it’s really how do we create a tool set that enables influencers to leverage us to manage all of their content, not just the brand sponsorship. For us really the value is the ability to understand the dynamics of the traffic coming from social, what shoppers are buying after watching a video and the data that we can then share back with the brands that are leveraging the platform.

So any content creator that would be leveraging the affiliate link service that we provide will earn 100% of the revenue they would have made on their own with just a little ease of use in the creation and placement of those links. Then beyond that we offer creatives the ability to license any pre existing content that they have, and so a good kind for instance would be I know technology influencers spend a lot of time covering the latest iPhone or the Samsung 8 that just came out.

But there are all these peripheries that come around; there is some chargers, cases, things like that. Those are products that get – there are lots of them out there and they receive a lot of coverage in terms of top five cases for under $50, or those types of editorial content. So for a brand that may not have the budget or desire to create something from scratch but found a video on YouTube from an influencer already, as long as that influencer is within our network you can go in and license that content.

So it’s another way for the content creators to get this flat one time video license pre-existing content that they created without any sort of sponsorship behind it, and then of course we make available to them all of the opportunities for sellers and brands like what you did to apply and be considered for a more direct relationship with the brand.

Steve: I’ve always been curious about this, so if I found a YouTube video of someone making a testimonial of my product, I can’t just put that YouTube video on my site?

Jessica: You can embed the video using the YouTube player on your brand’s website, however in order for that video to live on let’s say on Amazon or Wal-Mart page you actually would need the physical asset to then upload it directly into one of the retailers platform.

Steve: I see okay.

Jessica: And so the relationship we have on the creator’s side, we have them upload the content through Gen Video and then publish it to YouTube which allows us to have the asset for other ecommerce distribution as well.

Steve: Okay that makes sense, so it seems to me like one of the things I’d like to buy your service, the main value add in my mind was the ability to put the video underneath the Amazon product, because this is something that you can’t really do on your own, like you need to have some sort of in with Amazon in order to put the video underneath the product?

Jessica: Yeah there is definitely different parts vendor central and vendors are able to get content up in the image block and that’s a service that we provide to some of our larger clients, but the related video shots right now, it’s pretty difficult to get a piece of content in. We invite our programming partner to Amazon video shots which is what is enabling us to put some of this content through.

So we built our platform kind of on top of the Amazon APIs to make it really easy for you to either source your content from influencers and then get them into related shots or take existing content that you may have, let us know what ASINs those videos are for and then get those videos placed on your product pages. But yeah right now it’s not as easy as I think anyone would like it to be which is why we are happy to have built a platform that we think serves two needs, the sourcing of the content and then getting it out there in front of shoppers.

Steve: What has been some of the ROI benefits just kind of editorially from some of your clients regarding those related short videos on Amazon products; do you have any data on that?

Jessica: Yeah it’s a little difficult to share specific data from any of the campaigns that we’ve run, but I will say that all categories are different and when we look at things kind of more broadly in the past, we’ve seen upwards of 30% increase in conversion rate with just the presence of video, and so that’s thinking about a page that had zero videos within that related video strip or anywhere on the product page and then enhancing those pages with videos, and other metrics that we typically see go up when shoppers are watching video is basket size, purchase intent and then of course the conversion rate.

So I’ve seen some categories go upwards in the 50% increase in conversion rate for shoppers that are watching a video, but on average we’re seeing in that 25 to 30% range, and again really looking at that pre post activity and then search for more of the sophisticated brands that maybe sell directly on their site. You can look at hard sales numbers, but that’s a little top for us on the platform to really understand because it’s looking at your own data that we’re not privy to.

Steve: Okay and so these numbers that you quote are just based on like straight before and after so it might not be an exact science, but there is definitely a strong correlation towards those numbers?

Jessica: That’s right and we’re always excited to dig into the data with our clients, and so whether the data that’s available in the Amazon portals or your own analytics, Google analytics, things like that. We are happy to help with the analytics behind it and again we understand that it’s not necessarily the easiest to isolate in any of these ecommerce platforms right now, the presence of video, the number of place the video had.

So certainly for now until we all get a little bit more sophisticated about things as shoppers seek out more video content and video content finds its way into the ecommerce ecosystem a bit more, you definitely need to look at a couple of different data sources, and so we’re always open to partnering with customers to help them understand things and be able to make smart choices and having the best for them.

Steve: Okay, oh hey Jessica we’ve been chatting for quite a while and I want to be respectful of your time, where can people find more about your company and how can they get a hold of you?

Jessica: You can learn more about our company at Gen.video, that site provides a lot of the information on the influencer network and the ecommerce syndication, and then I’d be happy to talk to anyone, and so you can email directly to me at Jessica@gen.video as well.

Steve: All right, well thanks a lot for coming on the show Jessica, I really appreciate it.

Jessica: Yeah thanks Steve, it was great, take care.

Steve: Hope you enjoyed that episode. In light of Amazon’s ban of incentivized reviews, influencer marketing is actually a great way to get real eye balls on your products, and I’ll actually be publishing my experiences with the Gen.video platform on my blog very soon. For more information about this episode, go to mywifequitherjob.com/episode162.
And once again I want to thank Klaviyo.com for sponsoring this episode. Klaviyo is my email marketing platform of choice for ecommerce merchants, and you can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all of these sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/ K-L-A-V-I-Y-O.

I also want to thank Seller Labs as well. Their tool Ignite is what I use to manage my Amazon PPC campaigns. Instead of the old tedious way of generating reports and analyzing your ad campaigns in excel, Ignite aggregates all that info for you in one place and allows you to quickly visualize your data to make decisions fast.

Not only does it save time, but it also makes managing your Amazon campaigns so much easier. So head on over to sellerlabs.com/steve and sign up for a free 30 day trial, once again that’s sellerlabs.com/steve.

And if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away via email, thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

161: How To Ditch Your Average Job And Start An Epic Business With Daniel Dipiazza

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How To Ditch Your Average Job And Start An Epic Business With Daniel Dipiazza

Today I thrilled to have my buddy Daniel DiPiazza back on the show. Now if you don’t remember Daniel, I had him on my podcast back on episode 103 where he talked about how he got 130K Instagram subscribers in 6 months.

He’s the owner of Rich20Something.com where he teaches young people how to start their own freelance businesses. But a lot has happened since we last spoke.

For one thing, he acquired Under30CEO.com which is another huge entrepreneurship site. And he has published his very own book entitled Ditch your average job, start an epic business and score the life you want.

Today we’re going to talk about the best way to make money as quickly as possible. Enjoy!

What You’ll Learn

  • How to make money when you have very little money to invest.
  • The best advice for getting freelance gigs
  • Why Daniel decided to write a book
  • What the heck is the marsupial method?

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Ignite.Sellerlabs.com – If you are selling on Amazon and running Amazon Sponsored Ads campaigns, then Ignite from Seller Labs is a must have tool. Click here and get a FREE 30 Day Trial.
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ReferralCandy.com – If you’re already getting steady orders every month, adding a refer-a-friend program to your store can give you a new sales channel. And ReferralCandy is the best in the business. Click here and get a FREE $50 credit towards your account.
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SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
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Transcript

Steve: You are listening to the My Wife Quit her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not with their businesses. Today I’m thrilled to have Daniel DiPiazza back on the show, and last time I had Daniel on to talk about how he grew his Instagram account to 100K followers, but today we’re going to discuss easy ways to make money when you don’t have a lot of money to invest in a business.

Now before we begin I want to give a quick shout out to Klaviyo who is a sponsor of the show. Now I’m always super excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I actually depend on Klaviyo for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another provider. Well Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here’s why it’s so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought which makes it extremely powerful. So let’s say I want to send an email to everyone who purchased a red handkerchief in my store, easy. Let’s say I want to set up a special autoresponder sequence to my customers depending on what they purchased, piece of cake, and there is full revenue tracking on every single email.

Now Klaviyo is the most powerful email platform that I’ve ever used and you could try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to give a shout out to my other sponsor Seller Labs, and specifically I want to talk about their brand new tool Ignite which helps sellers manage their Amazon sponsored ads. Now right now I’m actually using this tool to manage my own Amazon sponsored ad campaigns, and it makes things a heck of a lot more convenient.

So first of all I’ve always found it a major pain to generate my PPC reports on Amazon, cut and paste the data over to an excel spreadsheet and use pivot tables before I would do any analysis at all. But Ignite pulls out all that info for you automatically and allows you to easily see what keywords are working and what are not immediately, no need to manually create reports or play with excel.
Second of all unless you’re a data geek, Amazon campaign data can be kind of hard to understand, and what’s cool is that Ignite makes keyword and bidding recommendations on the fly that can be applied with a couple of clicks.

So let’s say one of my hankie keywords is bringing money, Ignite will tell me that and I can reduce the bid immediately. So bottom line Ignite makes managing your Amazon sponsored campaigns so much easier and the fact that they provide me with alerts means that I no longer have to monitor my campaigns like a hawk.

If there are keywords that are doing well, Ignite tells me to add them to my exact match campaigns. If my keywords are losing money, well Ignite tells me to either remove the keyword or reduce the bid. So head on over to sellerlabs.com/steve where you’ll find some awesome tutorials on how to run Amazon PPC ads and the opportunity to try Ignite for 30 days free. Once again that’s sellerlabs.com/steve, now on the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast, today I have my buddy Daniel DiPiazza back on the show. Now if you don’t remember Daniel, I actually had him on the podcast way back in episode 103 where we talked about how he got 130,000 Instagram subscribers in six months. He is the owner of rich20something.com where he teaches young people how to start their own freelance businesses, but a lot has actually happened since we last spoke.

For one thing he acquired under30CEO.com which is another huge entrepreneurship site, and he has published his very own book entitled Ditch Your Average Job, Start an Epic Business and Score the Life You Want. Anyways I often get asked what the best way to make money is if you have no money to invest whatsoever.

People come to me and they say hey Steve I want to start a business, I don’t have any money, what should I do, and I often reply to them that starting a business isn’t necessarily the best idea if you have no money, and instead I point those people to freelancing. So today what we’re going to do is we’re going to talk about the best way to make money as quickly as possible which just happens to be Daniel’s specialty. And with that welcome to the show Daniel, how is the going man?

Daniel: It’s going great, you have a great radio voice too, I didn’t realize how much I liked it until I heard my name with your voice without like a back headed now statistic self compliment, that was the word.

Steve: It’s like a humble brag I guess.

Daniel: Sure, I didn’t realize how much I liked it till you talked about me. But thank you, thank you again for having me back, I really appreciate it. And look that’s interesting that you asked that question because I was doing a webinar a couple of days ago and we were going over different ways to set up websites, and I was going over one of these software programs called ClickFunnels.

If anyone doesn’t know ClickFunnels is just a landing page software, it’s a program where you can make different pages so people can find your website and start off your email list. I was telling my audience, I was like look, it’s $97 a month and some people on the webinah were like, oh my God now you said a dollar a month, I can’t do that. Well if you can’t do $97 a month you’re not going to start a business, I’m not trying to be mean but you should…

Steve: No totally.

Daniel: That’s not a moral judgment, it’s just like the facts, but there is something to be said for starting free or cheap, and I think a lot of people would benefit by figuring this out, but I want to pause you a question and we’ll sort around. My question to you would be when you started My Wife Quit Her Job, was there a pain point that you were trying to solve?

Steve: So when I started the blog I already had a successful ecommerce business, and the main pain point that I was trying to solve was everyone was just asking me questions about it and I thought it would just be interesting to document everything. What ended up happening that was funny was none of the people who were my friends read it at all, and I just started getting random people reading it.

Daniel: It always happens like that, no one in my family or my friends has actually read my book yet, it’s only been like random people, but that’s a good, that’s a really good point that you’ve made and the thing that I always tell people when they’re looking to start a business especially when they don’t have a lot of money to start off.

I’ve found is a good thing honestly that they don’t have a lot in the beginning is that you need to identify a problem other people are having before you start thinking about how much money you should be spending or where you should be allocating your time, because often what happens if you don’t start with a pain point or if you don’t focus on solving a problem first that you invest money in things that seem like a good idea but you’re really just copying someone else.

An example might be people see that Snapchat just IPOed for – got off from out of billions dollar and they say, oh well that’s obviously a good business idea, let me try to replicate that, and obviously it’s not going to work. That happens a lot with all these different business models, and so what I tell people to do is I say, look before you go starting a business, stop thinking about you and think more about other people because you’re going to be serving those people.

The first place you can look are places like forums and forums that people are talking about things that are going on with them. One of the places I like to look is Quora, do you go on Quora?

Steve: I have an account there but I just kind of look, I never answer any questions actually.

Daniel: That’s okay, I mean I’m a looker too, but the lookers are good because we can get a good like a 40,000 foot view of what’s going on with other people. So for instance let’s say that you’re into that you’re good at fitness or you’re good at childcare or you’re really good at painting or drawing or you have some other skills.

One thing that you might want to do is you might want to go on a forum like Quora or go on a Facebook group or look to where other people are talking about the types of things that you’re good at and see what problems people are having. One you identify the problems people are having, then you can engineer a service around that, and you can start testing and see if people will pay for it.

Steve: Interesting, I know you have a lot of students in your class, can you just pick like one example that we can kind of go through in depth?

Daniel: Yeah okay so let’s think of an example. Do you want to go through like one of my examples; do you want to go through a student’s example?

Steve: Let’s go through one of your student’s examples, I think that would be interesting.

Daniel: Okay so a student example. Let’s take for instance one of my students, her name is Ali Garcia okay. So Ali is a personal trainer, but she wasn’t really sure how to get work outside of her – she works I think it’s out of the YMCA or [inaudible 00:09:10]. She wasn’t sure how to get clients outside of her existing job and she knew that she wanted to start something on the side, but she didn’t know how to expand and how to use her skills to start a business rather than work inside someone else’s business.

So the first thing that she did was she started looking online to see what — if there was a specific problem she could solve outside of general fitness because being a personal trainer while it’s admirable isn’t something that I would say specific enough to warrant having a business that stands out. So the first thing she did was she looked for a certain group that she could serve with those skills.

So in her case what she did was after doing some research, looking out Quora, looking out – she looked on places like CafeMom, places on mom blog, looking at Facebook groups. She found that a lot of times moms have trouble after they have a kid getting back into shape and getting back to their pre baby weight, or just maybe if it’s not pre baby weight, just a weight they feel comfortable with, they feel good with.

So what she started doing, she started making YouTube videos specifically for moms on how to get back in pre baby shape, and she just started making free content and the good thing about this is that she wasn’t selling anything, she wasn’t pitching anybody, she wasn’t trying to do anything special at first. Honestly a lot of her fitness advice wasn’t something that only moms could benefit from. There aren’t a lot of exercises that are just for moms, these are just basic exercises to tone you up and to keep you in shape.

Bu the way that she positioned herself was say, hey look I’m Ali and I’m here to help busy moms get their body back, and because that was her headline, because that was the way that she described herself and actually people gravitated towards her. She didn’t even do anything special, she had ran ads. So she started doing these YouTube videos and the big thing was she was consistent, she was doing like two or three a week.

Steve: Just curious, what is the production quality of these videos, like was she just filming them on her phone?

Daniel: I think she started off on her phone, but I’d recommend that you get – I’d say a mid grade like what’s called prosumer [ph], it’s like not professional but like a high rank consumer camera after you’ve had some experience with how you want to shoot and what you want to do. So after about three or four months she decided to upgrade herself and she got a nice camera.

Steve: I’m just curious because I get questions like this a lot where people just get stuck in a handle where like they want to do video but then there is the added in part; there is the equipment, so how did she get over those problems?

Daniel: I think that those are like perceived problems because what happens is we look at other YouTube videos that – let’s be honest YouTube now is terribly in cordial, a lot of it is really good.

Steve: Yeah it is yeah.

Daniel: The editing is like never quality, the video itself people are shooting in 10 ABP, I mean we’re shooting our podcast now in 4K. You don’t need to shoot in 4K though, and so what you do is you start with what you have, because at the end of the day a search engine like YouTube is for finding content, and the content that’s ranked in a search engine like YouTube is ranked by the quality of people watching it and the quality of that material not of how it looks.

People care about the information, a lot of the best videos that are viral out there right now aren’t the best looking ones, we’ve seen this over and over again. So she started shooting these videos, she grew a small following and she grew a small niche personal training practice around training moms online by giving them like meal plans and workout plans. And now she has like 40 to 50 students at a time and all paying like $100 a month and she’s able to basically make a side business and then turn it to a fulltime business just by putting out content that attracted the right type of people, not even trying to go big time.

Steve: That’s interesting, so how did she transition from YouTube, like was she just getting YouTube subscribers or did she point those people back to her site, like what were the steps?

Daniel: A couple of things, one there’s lots of different ways you can encourage people to interact with you further, so if you really want to go the basic time tested route it’s always going to be email list at least for now, maybe that’s going to change in the next couple of years. I already see a change and I think what’s happening now is just there are more channels. I think that what people were afraid of is that there will be fewer channels, but now it’s just that there are more channels and a lot of them work.

With her she just set up basic a ClickFunnels to her target, and she’s like, hey this is Ali, I do weekly videos but if you want more information I have a newsletter which is just – a lot of times they were just reposts of her videos with some writing, a newsletter I send out every week and you can go to my email list, and there’s more we can talk about like the simple ways to set that up if you want, but it’s very simple to set that up.

So it’s just a matter of finding little pockets of people who want specific information based on what people are saying in the real world in the while and then just giving them that stuff.

Steve: Yeah so you’re saying that at the end of her video there’s just a call to action to a ClickFunnels page where she gathered emails and then just slowly amassed email subscribers that way?

Daniel: Yeah and you can put that link in your description box. I wish there was like a more complicated thing that I could say that would maybe make a light bulb go and people are like that’s the secret, I didn’t know that but now I get it. Well that’s really it though.

Steve: What about people who can’t afford the $97 a month?

Daniel: First of all the ClickFunnels page isn’t for the software, that’s not even essential, they have a lot of free software out there, but here’s the thing you have to either going to invest time or money. ClickFunnels is a time saver because it has all the stocks set up looking pretty nice so that you can just pay and plug and play and it is $97 a month, and that $97 is really representative of the fact that you don’t need to spend time making them look nice.

Now if you want to do for free there’s a bunch of free things you can do with software like WordPress and there are free ways to collect emails with softwares like MailChimp, all that could be done for free but it’s going to cost time, it’s either time or money. Now if you don’t want to put time or money into your business, then you don’t want to do business.

Steve: Right okay. Let’s talk a little bit more about the research because that’s where people seem to get stuck. So you mentioned Quora, do you just look deep into your own skill set and then just kind of type in stuff on Quora randomly or like what’s your strategy?

Daniel: Well I don’t know, I think one of the things that helped me to identify pain points over the years is I’m just interested in psychology. I like – in a way I kind of take a sick pleasure in hearing people complain, not because I like their pain but because I like to see what makes people mad, and so that’s allowed me to keep my radar on.

When people are angry about something, usually a strong negative emotion is a sign of interested in a solution. So if you look at moms who are so frustrated, and so – I’m just using as an example here – but so frustrated and at their body that they will see if anything has changed and you think, oh there is a solution I can introduce there.

But just like often you don’t even know where to start researching, there are a couple of things you can think about in terms of like how to get ideas going. So the first is what skills you’ve been doing at your job already, so for instance you’re a software engineer correct?

Steve: I was a hardware engineer.

Daniel: Hardware engineer okay hardware engineer. Now there are certainly ways that you can freelance that and you could with consult that, you did not want to do that because your wife quit her job and now you quit your job. But you could certainly find work doing that because you win all that attainable skills, and a lot of people have attainable skills that they’re doing at their job and there is a way to cut the middle man.

An example of this is was when I used to teach as a teen SAT test prep and I was making $18 an hour to do that, and I saw that the agency that I was working for was making $100, it was pretty clear to me that I didn’t really need them but they needed me because I had the skill set, so if I could figure out how to market myself, then I could take the full 100.

Steve: Okay that makes sense.

Daniel: Yeah because they were targeting marketing campaign. The other example of my mom used to do like pre divorce, like pre litigation for people who wanted to get divorced but didn’t want to go to court, these ones like end the thing easily. And I thought to myself and she never ended up doing this, but I thought to myself they are billing these clients like $100 or more dollars an hour, hundreds of dollars sometimes for you to this work and you’re taking a certain amount of dollars per hour away from that.

What would happen if you just set up like a very simple boutique like end it in a weekend service where you could just do all the stuff yourself, because you’re doing all the work but the attorney is billed so much for this?

So I like to think about – that’s the first place, I think about my current job what I’m doing at work, and if there is a middle man that I can cut out, and then it’ll be up to you to figure out how to market that but if you’re listening to this you’re smart because you’re smart so you can figure it out, that’s the first thing.

The second thing is what are people always asking you for? So I call my brother in law, I mean she’s basically my wife we’ll get married soon, but my brother in law – I get a mock at it, I’m young, she’s stronger than me so give me a second okay. My brother in law has this gigantic track and every weekend people are like, Caleb can you help me move my couch, can you help me move me stuff and after a while he’s like yeah I can help you but it’s $60 an hour, that’s his business, because people keep asking him for that.

So I think there is this tendency and if you listening right now the audience right now you’re thinking, oh I can’t think of anything.
I think there is this tendency to think, yeah everyone else has something but I don’t have something, and I think you need to start being a little more aware of what’s going on in the environment around you.

Steve: Let’s talk about your SAT prep thing, that is backed by an organization and you’re just one person, so how did you funnel – did you funnel existing customers away from that service to yourself?

Daniel: [inaudible 00:19:26] oh no, well here is the thing, the interesting thing about those types of organizations; I was working for Kaplan I mean you’ve gone through all the schools if you know about Kaplan. If anyone has taken a Kaplan course before you know that the instructors there are the main points of contact, and that’s one benefit of working at a job like that is that essentially the teachers, the instructors are the representative of the brand.

So actually case in point that’s a good thing of personal training too and other really client focused jobs, usually the trainer, the consultant, the teacher, the person is the face, and so if you do decide to leave a lot of people will go with you, and I certainly did have some students who left and came with me. But what I really found was that the goldmine for me there was finding other people who already had my existing clients and partnering up with them and I call that the marsupial method.

Steve: Okay let’s talk about this marsupial method.

Daniel: Yeah so marsupial, okay so can you name any marsupials?

Steve: Kangaroo right?

Daniel: Yeah that’s the easy one, can you name any more?

Steve: Koala, aren’t those marsupials?

Daniel: Yeah I think so they have a pouch, possums have a pouch, wallabies have a pouch, and I’m going to get into what the method is, but you know some of these pouches are sideways and sometimes the baby falls out.

Steve: I did not know that.

Daniel: Because like the Koala pouch is vertical but I think the possum pouch is like [inaudible 00:20:59] is weird, it’s crazy. But anyway I call it marsupial method because what happened with marsupial baby is the pouch is like this extra womb that it grows up in and it shields it from the elements of being on top and do the same. What I thought of myself as when I was growing in my entrepreneur agency was a little baby.

I thought who can I take, who can I find that will take me into their little pouch under their wing – now I make some animal metaphors – and who can help me grow without me being exposed to the elements. So what I thought was all right who do I already know who has the people that I want to serve but isn’t providing them with the service that I provide? And so I did a little bit of research, again Google is your friend.

I was in Atlanta at the time, I typed in SAT – I typed in a pre college counselor Atlanta because I wanted to see if there are people who were already working with my students, and that’s one question you want to ask yourself, who is already working with my ideal client but isn’t providing the service.

So I found these pre college counselors, and what I learned was they essentially help you prepare these essays, they help you package yourself. If you want to go to Harvard, Stanford, Yale, these places they’ll package you because you have to have a great package, but they don’t teach you the pre-college, you have to go to Kaplan or Princeton Review for that.

So what I did was I came to these people and said, look I have this Kaplan pedigree, you know if I teach for Kaplan I have to be embedded some good at what I do, but what I’ll do for you is I’ll come into your business and you could essentially white label me, or you could essentially take me under your wing and I’ll perform the service for your clients and then I’ll give you 10% of the money that I make.

The benefit is you get to add an additional service on to your business without adding any additional manpower or actual work and you get paid and I immediately get some clients. So I went from having zero clients to approaching my first consultant, his name was Mark, a great guy and he threw me ten clients in the first week and I had a business overnight.

Steve: That’s interesting, and you were young I would imagine, a teenager?

Daniel: No I was like early twenties.

Steve: Early twenties and so you just went up to an organization and said, hey give me your clients – I mean not give me your clients…

Daniel: Give me your clients now.

Steve: Let’s work together. How did you establish trust, like why would they count on you, was it just the Kaplan name that allowed you to get it?

Daniel: I think Kaplan is a big part of it and because they know if I worked for Kaplan that I had to be 90% tried and tested. I knew I was good at it and that I had already been trained which is helpful, but I think there definitely is an element of trust there, and to be fair I think that Mark who I worked with in the beginning was overly trusting, and it worked out because I’m a pretty guy and
[inaudible 00:24:03] guy so it worked out.

But what I recommend to build the trust going forward – and this isn’t just for test prep; this applies to any business relationship. What I would say is look, I’m going to work with a couple of your clients for free and if I do a great job, when I do a great job then we can talk about like what our percentages will be, what it’s going to be and what the deal is moving forward. But make it as low or no risk for them as possible.

Steve: I see that’s good advice. So in the case of your student then did she pursue that route or did she just go straight to YouTube?

Daniel: She went straight to YouTube but you know kids these days, they want to go straight to the end, but I think it could have worked too. So like help me brainstorm, what are some organizations that might be able to pair up with?

Steve: There is a ton of these mothers groups.

Daniel: A ton of them man.

Steve: Yeah.

Daniel: There is a ton of these and there are also a lot of groups that serve her demographic but don’t train the moms.

Steve: Yeah absolutely.

Daniel: And so it’s no brainer.

Steve: Yeah she totally could have gone that route as well, I guess it’s more legwork which is maybe why she just went straight to the YouTube route, right?

Daniel: Yeah and I think also there’s more to it, there’s no wrong way either, it’s just that with the YouTube route now she’s training people online and I think it opens her up to make courses if she wants to do that which is always a good thing. When I was doing the SAT stuff, that was kind of a little bit before – well I could have gotten online courses but I didn’t really understand that route too much, so it seemed more natural for me to teach people in person.

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Okay well actually let’s since you brought that up let’s talk about the transition, so you’re freelancing, you’re making some money on the side, when is the right time to transition and what’s the process?

Daniel: To leave your job?

Steve: Not to leave your job but to transition from your freelance stuff, like for example your SAT prep stuff that still required your time, right?

Daniel: Yeah, yeah, yeah that’s true, that’s very true. Look here is the thing and I was talking about this earlier, there is a difference between freelancing and entrepreneurship, and I didn’t want to believe this. One of my favorite authors and thinkers Seth Godin said this a few years ago and I was so mad at him, it’s like no Seth you don’t understand I am an entrepreneur. He said the difference between freelance and entrepreneurship is that a freelancer trades their time for dollars and an entrepreneur creates systems to get the same results.

I don’t know whether I understood at the time like I do have systems, look I have like excel or whatever. But what I’ve come to realize now is that there is a definite difference between providing a service whether it’s hourly or whether it’s project based or whether there is a certain duration, and then hiring people and designing essentially an ecosystem so that a product is produced and you get paid as a result of that product.

For me the transition came really when I had done several of these freelance businesses and people kept asking me about the freelance business to the point where I became better because they weren’t asking about like how did you start teaching SAT, they were more asking, how did you get people to hire you, and that’s a different question than how do you get SAT clients, right?

Steve: Yeah for sure.

Daniel: So there I started thinking about maybe there is a product here, and then that’s when I had to move from freelancing to building products and doing entrepreneurship.

Steve: But did you stop the freelancing like cold turkey or did you develop the product, sell it first, and then stop the freelancing?

Daniel: That’s actually it’s a good story. I was developing the products on the side like I started doing the freelancing on the side and then I did some job, and then I was starting to develop the products on the side before I did the freelancing. So I always kind of had one foot on one log and the next log and the next log and it got to the point with the products where I had a successful launch, the first launch we did was pretty successful, and then I had too many new customers with the product to even allow me the time to take care of the freelance clients.

So I had to fire some clients, I had to be like look it’s great — and I did it in a nice way to tip it off, I didn’t completely cut them off the same day, but I was like look I’m just not going to be able to do this anymore, and then I had to make the transition. But then once I moved on to entrepreneurship it was completely all heads on deck.

Steve: And then that led to – did rich20something come first or did the product come first and then you created rich20something around that?

Daniel: Rich20something was man it was – you’re going to laugh at me when I say this, but I’ll be 29 in about a month, I’ll be 29 in eight weeks actually, and I only now just realize that this is my career. Within the past six months that I realized, oh man I made a career for myself in this space, I’m like dude this is like the thing that I do, people know me for this.

I only now realize that because rich20 turned up as a blog and it wasn’t even intend to be much more than – this is before MediaMe existed. I wanted something that I could just publish my own personal thoughts and reflect on them later kind of like you were talking about how you want to just track what you were doing, and I started doing that.

I’m like this is pretty fun, and then I started to get more attention, and I think it only got attention because I had a few, not even viral but like pretty well received articles on this bigger site called under30CEO which I eventually ended up buying.
Steve: That’s hilarious, so you got some traffic from under30CEO to get you started?

Daniel: Yeah and then I bought it, it’s very like liking a circle of life stuff. So I got some traffic from under30CEO, started building people, they asked for it. I don’t know who said this but I did hear an interesting quote the other day and they said, “You shouldn’t start a business unless people ask you for it.” I’m not 100% sure if that’s true all the time, but I do know that was the case with me, people kept asking me for it.

So rich20 was there from the beginning, it’s been around since 2012, but it really wasn’t a business until 2015, and that’s when I started taking it more seriously and then only now recently 2017, it’s early 2017 as I recall this I’m like, oh man I have like a major book now in stores, this is my career, that’s pretty cool.

Steve: Wait so did the site come first or the course come first, which is what I was trying to get at?

Daniel: The site came first.

Steve: The site came first, okay and so you launched the course – you already had an audience then?

Daniel: Yeah but it wasn’t that big though, it wasn’t big.

Steve: Okay and when you were doing your SAT prep, was rich20something around?

Daniel: Mm-hmm yeah it was.

Steve: It was okay, so it seems like the whole time you had your hands in different pots, you had the content to build an audience and you were earning freelance income and you were kind of preparing yourself to transition it seemed?

Daniel: Yeah although I’m not 100% sure that was – I think retroactively retrospectively we always look back and we piece the things together to make sense, like we were talking before the call and we were talking about anti fragile [inaudible 00:32:38] celebrities just pick up, and one of the things he talks about is like retrospective piecing together of the events to make them seem logical.

Steve: Sure, even though that wasn’t your intention, right?

Daniel: Right but of course all piece together in a nicely well sequence planned out, but that totally wasn’t the intention you know.

Steve: Okay and so that course that you were talking about, are you still selling it today?

Daniel: Yes for Freelance Domination, you go to freelancedomination.com.

Steve: Oh okay, so is that your primary bread and butter today then?

Daniel: Well we have a few different flagship courses. We have one Freelance Domination which is essentially the step by step hands on approach to how these freelance businesses started for me and how to grow and how to do yourself, so there is that. In the middle a few different other products, one of them is not one of our flagships called Startup From the Bottom, which teaches people how to use content to drive eyeballs and to create a business around things that you care about.

So whereas freelancing is more about providing service, start from the bottom teaches you how to create content whether it is a podcast or a blog or a YouTube channel that drives traffic to products and that’s what we do.

Steve: Let’s talk about that for a minute because a common complaint that I get is that all these platforms are saturated now, blogging, YouTube, podcasting. What is your response to that and how do you get your students to kind of stand out with their platforms?

Daniel: I mean that is correct, it is saturated. I was watching a webinar last night with someone who was giving some stats on how the info product space is growing and how that’s a good thing because it shows that there is so much demand in the world, market share is going up and such and such building to our industry and all that’s true, but there are a few things to remember. There is such a thing as market share in this industry, and I do think that there are in some cases really saturated markets it’s going to be hard to stand out.

But I will tell you this, the reason why it’s hard to stand out is because people start these blogs, these podcasts, these YouTube channels, and they get up to like I think the stat on podcast is 98 from August; I’ll go back to episode six. What we’re seeing is we’re seeing all of this content but not a lot of follow through or consistency, and so there is this illusion of there is over saturation.

But once you get past the scrum at the bottom, really even past the first year or 18 months of creating content consistently, the air kind of thins out, it is kind of leaving the atmosphere, it’s kind of like you’re in a ray and you leave all the smog and at the top – yeah that’s true, it’s clean up there. So the key to standing out really is consistency, I always say this over and over again consistency is clarity and you need a clear message.

Look at a guy like Tony Robbins man, how many people are doing motivational speaking, a lot of them, but he’s been doing this for 30 years, so you can’t get any clearer than that. No you don’t need to wait 30 years to be successful with this, but you have to be consistent enough with the content you’re putting out and consistently are getting better and over time you will rise to the top, it’s just that most people get discouraged.

Steve: Actually that’s my philosophy; I don’t actually start anything content related unless I’m willing to do it for five years.

Daniel: That’s really, that’s boss man because that’s about the amount of effort it’s going to take and seriously rich20 has only been around for about five years now, and well now we have a book coming up, now we have this, now we have that and that’s kind of what it takes and I’m glad that it takes that long, it’s supposed to be hard.

If everyone was able to do this in six months, then it would be a waste of everyone’s time because there would be a lot more inexperienced people leading the pack, and so we need people who will pass some battle scars on.

Steve: So how do you train these people to be that patient though?

Daniel: I think that the patience is something that is like it’s self evident. The thing about the time is it’s going to pass either way, patience is a skill that you develop, but honestly the reality is like it’s a good thing that they’re going to be people around you who can’t stand the wait. You have to develop your patience by falling in love with the craft, and that’s why it’s really good to pick something that you enjoy.

So there are sometimes where it’s smart to go into a market that seems like it’s hot, but if you’re not going to be able to go that five years, you’re not going to enjoy getting good at it enough to want to do it. I was reading another Facebook thread from a friend and I actually think it was Ryan Holiday and he’s like, look you shouldn’t start a podcast unless you’re going to have an interesting different angle or you’re willing to do it for a long time. Are you friends with Jordan from Art of Charm?

Steve: Yeah, we just had lunch the other day actually.

Daniel: Yeah he’s a great dude and Art of Charm has been around for ten years, ten years on a podcast, okay.

Steve: Which is even before it was popular at all actually.

Daniel: Totally and they’ve already pivoted once, they were a pick up podcast which was like a whole different type of podcast. So you’ve got to be willing to go through, there is no secret thing, it’s just this long term consistency, but he loves podcasting because he gets to talk to all these interesting people, he gets to talk to Larry King, he just had Mike Rowe on there.

Yes there are the Tim Ferriss’s of the world who go on there and get a 100 million downloads a year and a half, but Tim Ferriss also had a decade of work buying the books, so we already planned these ten years in. So that’s just what it is and so I would say five years, and if you can really figure out ten years you’re definitely going to make it, you’re 100% going to make it if you last ten years. If you can go five or ten years and you don’t make it, you’ve not been doing anything.

Steve: So that means that the people who take your class you kind of encourage them to start these blogs or content properties with stuff that they’re passionate about?

Daniel: Totally and look the thing is too here are some caveats to that, just because you start to see more success at five and ten years doesn’t mean that you can’t also be successful with that business earlier than that. Rich20 was profitable – well we started – our first product launch was 2014, it was September 2014 and we were profitable from day one and at that point we had only been in existence for like two years and change.

So obviously you can – that’s not a hard and best rule, but if you set your standard up that you’re not going to be disappointed where after two and half years you don’t see the results you want.

Steve: Sure, sure now that makes sense. You’re also Daniel?

Daniel: Yeah but you’re also Steve, we’re just people.

Steve: Okay so I’m curious like how that – because we hadn’t talked for over a year I would say on the podcast, how did the under30CEO acquisition – what was the strategy behind that, were you just trying to instantly tap into a larger audience?

Daniel: Steve I called them up and I said, what’s your number, give me a number, how much are you going to sell it for, and I said I’ll wire over the money. No, you know what Matt and Gerald have become really good friends and they have a new company now called under30experiences now really focused on travelling around the world now.

They take people on these incredible adventures where they go all over the world in different countries and they curate these experiences, and they just didn’t want to do the content game anymore and it just so happened that I love the content game and it was a good fit.

My goal with that was just to broaden my audience instantly with an audience that was a perfect fit, and I knew it was a perfect fit because it was the audience that accepted me.

Steve: Did you inherit his stuff as well or?

Daniel: No, no, no, they only had maybe like three or four people running the site but we inherited the property.

Steve: Okay got it, and the email list and social media and everything?

Daniel: The email list and the social media yeah.

Steve: All right, let’s switch gears a little bit because I do want to talk about your book. It has quite a long title I might add.

Daniel: Well there is actually a story behind that. So the title is Rich20something, the subtitle is ditch your boring day job, build another business, create the life that you love or create the best life forever. The crazy thing and you’ll see this when I send you the book and you could see that on Amazon, you go to rich20something.com, search book, you can see it, the interesting thing about that cover and this is something to keep in mind when you are seen out there and publish your first book in big culture which I know people love.

When you do that you are at the — I would say the mercy of a lot of different people’s opinions as to how you want things to look and feel, and so I actually do – I like the cover now. The idea was we wanted to create an image that looked similar to an Instagram photo because that’s one of the social media platforms I’m strong and we talked about this last time on another podcast that we did.

Steve: Right aha.

Daniel: And so we want to go for that effect and this is like the result, this cover that we have now was a result of a lot of different people’s input, and so I kind of like it now because it represents a lot of people coming together, coming up with what they thought would be cool and then kind of a result of that. And so it’s like this really big funky chunky letters which I haven’t seen before in a cover, and it wasn’t what I had originally envisioned in my head, but now that I look at, it doesn’t look like any other book out there and I think that that’s cool.

Steve: Let me ask you this and I’ve always been curious about people who write books the traditional way. So why a book and why go with a traditional publisher?

Daniel: Because I wanted to be fancy obviously, well no look can I just say point blank that I just right out of the gate that part of it is an ego thing. Part of it is an ego thing because I’ve always wanted to see my book in stores, and I had this dream since I was a kid that I would walk into Barnes & Noble and see my book on the little center table even though Barnes & Noble is becoming increasingly out of lead apparently and [inaudible 00:43:08] is already dead.

I had this dream and it was a big part of my culture growing up, my American culture, it was a big part of my life when I’m at the bookstore. So having a traditional publisher is the only way right now that you get into bookstores, so if I wasn’t going to be in bookstores for me it wasn’t an option.

But then there are also practical benefits of that and the first thing is that one you get much wider immediate distribution with a traditional publisher than you do with a self published book because they have all those mechanisms in place to send your book all over the world. So if you have an audience, when you team up with a good publisher it can multiply that effect which is really good, plus…

Steve: Are you implying like international distribution?

Daniel: Yeah international distribution which is really good and then it also allows you to get into places easier like for instance getting on national press, people take traditional publishers more seriously. We publish with Penguin Random House which is like pretty much the biggest publisher in the world, so we’re going to have access to different opportunities for press, and I’m recording my book with audible.com right now which is kind of a cool thing and it’s a big deal for me.

All those things are like credibility enhancers because whether you see us fortunately or unfortunately the best authors are still publishing traditionally, so that’s the route we want to go, and also to be honest there is a book events and bought and they gave me a good advance on that. So for me it was a kind of a no brainer and I know that there are opportunities to make more money long term by self publishing, but I thought of this first run I wanted to go traditional.

Steve: Interesting, I understand someone just got on Ebony.

Daniel: Take that entire back the whole thing, so you guys can’t see me, but I look Potolican but I’m actually black and Italian, and one of my things growing up was like, man I don’t know where I fit in, I definitely don’t feel black enough, like why can’t I grab the whim, and then a couple of days ago I got profiled in Ebony Magazine which is like the main magazine for black people which is really – it’s an interesting pretty thing, but I thought it was cool but this is another example, not a thing that I couldn’t have done it, self published, but my publisher set that up, so this is not a good example.

Steve: Okay, hey Daniel we need to wrap up here because I’ve been talking to you for quite a long time. For those people I would say who are struggling right now, they don’t have enough money for like ClickFunnels or whatever, what is – if you could just sum up everything we talked about today in like a short paragraph, how would you want these people to proceed?

Daniel: Okay so the first thing is identify the pain point that you want to solve by doing your research and then if you don’t have a lot of money and you want to get started, then you’re going to need to set aside at least a few hours a week to figure out a few of the logistical components for doing this business side.

What this is going to mean is that is that you’re going to have to spend some time, put aside some time for research, put aside some time to figure out how to set up a basic website and go from there. But the most important thing that I want you to remember is that done is better than perfect at this point, and you don’t have to have – I mean look our website is while we’re getting it redone NOB ready for the new book launch, but even our website right now with us being successful is not very impressive.

You don’t have to have the best looking videos, the best sounding podcast, the best looking website in order to get your start, and just know that people care about what it is you have to say and how you deliver it can continually improve over time as I’m sure you felt with your podcast as I know I felt with my writing and all that kind of stuff. So get started now and fall in love with the craft and over time as you get better with your craft, your delivery will also become better.

Steve: Great job Daniel, hey where can people find you online and where can they grab your book?

Daniel: If you go to rich20something.com/book you can grab my book, and if you’re so inclined as to follow me all writings around the web you can just type in a little @ symbol rich20something, I don’t know what I’m going to do in about a year and a half, but that’s another podcast.

Steve: I just want to give Daniel a quick plug here because I actually used to watch him on Periscope, I watch him on Facebook live. The dude is amazing like impromptu speaking. I feel like I could just point a camera on you and you could just talk for like an hour and not run out of stuff to say, I find that talent very amazing actually.

Daniel: You know what the secret is?

Steve: What is the secret?

Daniel: It’s having a great interviewer seriously, seriously.

Steve: Oh look at that, look at that, the praise is coming back in both. All right Daniel, thanks a lot for coming on the show man, really appreciate your time.

Daniel: Much appreciated Steve, thank you.

Steve: Hope you enjoyed that episode. Daniel was one of my favorite entrepreneurs who is both a great writer and a great speaker as well, so go check out his book right now and the link is in the show notes. For more information about this episode, go to mywifequitherjob.com/episode161.

And once again I want to thank Sellerlabs.com for sponsoring this episode. Their tool Ignite is what I use to manage my Amazon PPC campaigns. Instead of the old tedious way of generating reports and analyzing your ad campaigns in excel, Ignite aggregates all that info for you in one place and allows you to quickly visualize your data to make decisions fast.

Not only does it save time, but it also makes managing your Amazon campaigns so much easier. So head on over to sellerlabs.com/steve and sign up for a free 30 day trial, once again that’s sellerlabs.com/steve.

I also want to thank Klaviyo.com for sponsoring this episode. Klaviyo is my email marketing platform of choice for ecommerce merchants, and you can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all of these sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/K-L-A-V-I-Y-O and sign up, once again that’s mywifequitherjob.com/ K-L-A-V-I-Y-O to sign up for free.

And if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away via email, thanks for listening.
Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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160: A Deep Dive Into Running Amazon Sponsored Ads With Jeff Cohen And Brandon Checketts

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A Deep Dive Into Running Amazon Sponsored Ads With Jeff Cohen And Brandon Checketts

Today I’m thrilled to have both Jeff Cohen and Brandon Checketts on the show. Now Jeff has already been on the podcast in episode 120 where we talked about reviews and how to get ranked in Amazon.

But today we are blessed to have Brandon Checketts on the show as well. Brandon is actually the founder of Seller Labs and was the original programmer and developer of Feedback Genius and Ignite.

What I like about Jeff and Brandon is that they are always on the ball when it comes to Amazon and I wanted them on the show to talk about the product launch process especially in regards to Amazon sponsored ads. Enjoy the interview!

What You’ll Learn

  • How the Amazon landscape has changed since last year
  • The best way to run Amazon Sponsored product ads
  • What is a reverse ASIN lookup and how does that help
  • How to find high converting keywords immediately
  • How to run a product launch today.

Other Resources And Books

Sponsors

Ignite.Sellerlabs.com – If you are selling on Amazon and running Amazon Sponsored Ads campaigns, then Ignite from Seller Labs is a must have tool. Click here and get a FREE 30 Day Trial.
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ReferralCandy.com – If you’re already getting steady orders every month, adding a refer-a-friend program to your store can give you a new sales channel. And ReferralCandy is the best in the business. Click here and get a FREE $50 credit towards your account.
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Transcript

Steve: You are listening to the My Wife Quit her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not with their businesses.
Today I’m thrilled to have both Jeff Cohen and Brandon Checketts from Seller Labs on the show, and between the two of these guys they have tremendous experience when it comes to selling on Amazon and they work with so many different companies to formulate their strategies. In today’s episode we delve super deep into how to run profitable Amazon sponsored ads the right way.
Now before we begin I want to give a quick shout out to Seller Labs who is a sponsor of the show, and specifically I want to talk about their brand new tool Ignite which helps sellers, you guessed it manage their Amazon sponsored ads. Now I’m excited to talk about Ignite because I’ve been using this tool to manage my own Amazon sponsored ad campaigns, and it makes things a heck of a lot more convenient.

Number one, I’ve always found it a major pain to generate my PPC reports on Amazon, cut and paste the data over to an excel spreadsheet and use pivot tables before I’m able to do any analysis. Well Ignite allows you to aggregate and visualize your data quickly right within the tool to see what keywords are working and what are not immediately, no need to manually create reports or play with excel.

Second of all unless you’re a data geek, Amazon campaign data can be hard to interpret, and what’s cool is that Ignite makes keyword and bidding recommendations on the fly that can be applied with a couple of clicks.

So let’s say one of my hankie keywords is bringing money, Ignite will alert me of that fact, and I can reduce the bid immediately. So bottom line Ignite makes managing your Amazon sponsored campaigns so much easier and the fact that they provide me with alerts means that I no longer have to monitor my campaigns like a hawk.
If there are keywords that are doing well, Ignite tells me to add them to my exact match campaigns. If my keywords are losing money Ignite tells me to either remove the keyword or to reduce the bid. So head on over to sellerlabs.com/steve where you’ll find awesome tutorials on how to run Amazon PPC ads and the opportunity to try Ignite for 30 days for free. Once again that’s sellerlabs.com/steve, now on the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast, today I’m thrilled to have both Jeff Cohen and Brandon Checketts on the show. Now Jeff has already been on the podcast back in episode 120 where we talked about reviews and how to get ranked on Amazon, but today we are blessed to have Brandon Checketts on the show as well.
Now Brandon is actually the founder of Seller Labs and was the original programmer and developer for Feedback Genius and Ignite. Anyways things have changed dramatically since that first interview that I did with Jeff a while ago, for one thing incentivized reviews are no longer allowed which has forced a lot of people to understand how to launch a product without shortcuts and how to use Amazon sponsored product ads.

Anyways what I like about Jeff and Brandon is that they’re always on the bar when it comes to Amazon, they are the brands over at Seller Labs, and chances are if you’re selling on Amazon you’re probably using one of their awesome tools already. So for example right now I’m using Feedback Genius, and recently I’ve actually been using Scope to peer into what keywords competing products are ranking for, and I’ll probably write a blog post about that soon to report my results.

Anyways I wanted Jeff and Brandon on the show today to talk about the launch process, an up-to-date launch process especially in regards to Amazon sponsored ads. And with that welcome to the show Jeff and Brandon, how are you guys doing today?
Brandon: Great, thanks for having us on.

Jeff: Thanks Steve, thanks for having me back.

Steve: Yeah so Jeff and Brandon why don’t we start off with what has changed relatively recently and how that has affected the launch process?

Jeff: Yeah Steve, so we all know kind of what happened in October and basically for those that are not aware Amazon in October came out and said that if you’re giving products away in exchange for a review it’s now a violation of terms of service, and a lot of sellers were using this technique to get their initial sales and to drive sales to their products and to get reviews for their products.

So it leaves this problem in the world where sellers have to have reviews to get sales but they need sales to get reviews. And so today Amazon sellers have to look for new ways to kind of launch their products.

Steve: Yeah and so how has things changed, I don’t know if you remember our first interview but getting these incentivized reviews was actually a big part of that, and so how has this strategy kind of evolved over time

Jeff: So the way that I kind of describe it is there is black hat tactics, there is grey hat tactics and then there is white hat tactics, and for people that aren’t familiar black hat tactics are those that are going to get you immediately suspended. I typically don’t talk about black hat tactics, but there is a couple that I want to share because I think a lot of sellers are not completely aware of this.

If you’re a seller on Amazon you’re probably getting approached either on Skype or on Facebook or even through your seller central account being asked if you want somebody to rank you for SEO. Typically these people are coming from India and they’re making these big bold claims that they’ll rank you on page one. Most all of their tactics are black hat and are going to get you in trouble, and anything that you do with them is going to be very temporary in what’s done.

To really build a business that’s sustainable over a long period of time you need to look to build tactics in your business that are going to help your business grow and not get your business in trouble. And so I really try to caution people that these might sound very incentivizing and they might sound very attractive the first time you see them, but they’re not worth the effort or the gain that you get from them because Amazon is cracking down on them really hard.

So that kind of leaves us with this big question I like to ask, it’s WWJD, so what would Jeff do? When it all comes down to it we need to have a new way of thinking about our products and about our launch. And so I really break this down into four categories.
I break this down into reviews, sessions, conversions and ranking, and so we can kind of walk through all of this and talk about how all of this kind of builds into the launching of a product. Ultimately Steve it all starts with getting your product ranked and optimizing for that rank.

Steve: Okay, so let’s walk through the process.

Jeff: Great so to make it really simple poor listings equal poor search, and as an Amazon seller you have to look at your listing and understand what your listing is telling the Amazon algorithm. So the Amazon algorithm is a bird that’s going to look at all of the information that you give and it’s going try and match things up and it’s going to – I like to use the example of an apple slicer so I’ll stick with that one.

If I tell Amazon that my product in the title is an apple slicer and somebody searches for apple slicer, Amazon can connect my product with the buyer’s search desires, but if I call my product a fruit corer and somebody searches for an apple slicer then Amazon can’t necessarily connect what the buyer is looking for and my product. So you really have to start with optimizing for search and to keep it really simple poor listings get you poor search and good listings get you good search.

Steve: Okay and specifically what you’re talking about right now are the backend keywords and the title right now not necessarily the quality of the listing, right?

Jeff: Correct, so I like to say that we deal with quality of listing when we get to conversion, so in short if you don’t tell Amazon what your product does, it’ll never rank for that term. So this is kind of what you were alluding to when you were opening that if your product is new on Amazon you can actually use your competitor’s data to determine what keywords you actually need
to use in your listing. So how about I walk you through kind of a really simple example of that.

Steve: Yeah let’s do it.

Jeff: Okay so what I would do if I was listing a new product on Amazon is I would find my competitor and I would pull them up and I would use what’s called a reverse ASIN tool, and so you could use the tool by Scope or there is other tools that are out there, and what these tools are going to do is they are going to tell you what keywords that ASIN is ranking for. And what’s important about that is that the way Amazon’s algorithm works is that if a product is ranking really high for a keyword that means that that keyword is driving sales for that product.

So I want to use that information to help build my listing, so I can take the most important keywords from my competitor’s listings and I can use those keywords to build out my title, my bullet points, my descriptions and my backend keywords. This is feeding the Amazon algorithm all of the important information that’s necessary about my product and I’m no longer guessing what actually my product is going to – I’m not actually guessing how a user is going to describe my product, I’m using actual search terms that are driving conversion.

Steve: Okay yeah that’s really powerful. I think traditionally the way people were doing this is they were using Amazon auto campaigns to kind of mine keywords that they wouldn’t think of. I guess this is where you can kind of jump straight to see what the other competitors are using and just start using those keywords directly and kind of bypass that automated step, is that right?

Jeff: Yeah so the use of sponsored product ad auto campaigns was definitely the way that you would get competitive information in the past, but now you’re actually able to get that information before you start selling, so by being able to use that information before you start selling you can kind of bypass that whole process.
So what I recommend is that when your product sets are coming over or you’re getting ready to list them you’re waiting for Amazon to add them to the warehouse inventory that’s when you want to build your listing for rank, and that’s when you want to use your competitor keywords to build your listing because those are the most rich keywords that you can use at the beginning of your launch cycle.

Steve: Okay and once you have those keywords and assuming that you’ve created your listing correctly what is the next step, like we don’t have incentivized reviews anymore, so do we just let it organically go, or what is your advice there?

Jeff: So the next step is really to follow exactly what you said which is that you can use a tool that Amazon has called Amazon sponsored product ads to start driving traffic to your listing. There is kind of this misconception that you have to have reviews to get sales, but that’s not necessarily true. So I launched a product after October and I wanted to launch the product strictly with sponsored product ads to demonstrate that you could do this.

What I was able to do is I was able to get my first five or ten sales. Now I will be totally honest with you I actually lost money on those products because I wasn’t trying to have a profitable click to conversion ratio with my sponsored product ads, I was just trying to use Amazon’s traffic to drive sales for my products. I then followed up with my follow up sequence and was able to convert a couple of those to reviews.

Steve: Okay so your ACOS was so high that you weren’t profitable?

Jeff: Oh I think it was like 200%.

Steve: Okay, so is that necessary today like when you have no reviews obviously the sponsored ads aren’t going to be as effective, right? So are you suggesting that we should just run sponsored ads with zero reviews just to get those initial five or ten reviews on our product?

Jeff: It’s not the only way for you to launch a product but it’s definitely a way that you can launch your product, and I don’t think that you have to do a 200% ACOS to start driving sales, I think you’ll start driving sales. I don’t think people who look at sponsored products ads and click on the ad are as concerned about reviews as normal shoppers are, and so I think with zero reviews or even just one or two reviews your sponsored product ads start to work.

Steve: Okay so one thing I’ve actually started noticing is that ever since October when they banned incentivized reviews my sponsored product ad costs started increasing, I guess because people started flocking to it, right? And so in my mind at least for me I feel like we have to make more efforts in optimizing these campaigns now because everyone is flocking to these tools, are you guys seeing the same thing?

Jeff: Yeah and I think that’s why we recommend kind of a different way to run a sponsored product ad campaign, so I’m going to kind of walk you through the old way of doing it and then I’ll let Brandon kind of jump in and talk about the new way of doing it and why it’s more effective.

Steve: Okay yeah that sounds good.

Jeff: So the old way of running a campaign was that you would do what Amazon calls an auto campaign. An auto campaign is basically connecting an ASIN to a sponsored product campaign and Amazon just starts to figure out all the different keywords that a product might or might not rank for. And so if we’re using my apple slicer using an auto targeted campaign, Amazon might show my ad for a fruit cutter, they might show it for a kitchen gadget; they might show it for a pineapple slicer.

So Amazon is going to try to throw as big of a net in your auto campaign as possible. The old technique was really that you would run this campaign for seven to ten days, you would then get all of this data back, the impression data, and what’s called search term data which is the actual search term that a seller is looking for, and then you would take that data and you would use that to make your manual campaigns.

In some cases seven to ten days wasn’t enough, you needed up to 21 days to start getting enough data before you could start optimizing your campaigns. So we’ve kind of developed a different methodology that allows you to start on day one and start to run campaigns that matter, so I’ll let Brandon kind of explain that.

Steve: Actually before we jump to that just I had just a quick question about auto campaigns. We know that Amazon like the conversion rate really matters, so do these auto campaigns – sometimes they throw really random keywords, at least that’s what I’ve noticed looking though the spreadsheets. Does that actually hurt the listing by allowing Amazon to run these automated campaigns outside of just wasting money on these keywords?

Brandon: I guess the thing I’ll say rather is just try to find definitive data on whether a wrong conversion rate helps you or hurts you, but there’s definitely a higher conversion rate is definitely going to help you not just on your campaigns but on your products in general.

Steve: I guess what I’m trying to ask is by focusing on those keywords that you know are going to convert, does that help you more than just – does running auto campaigns kind of hurt you because you’re now driving traffic for these keywords that could be irrelevant?

Brandon: It’s definitely going to be more of a waste of money than doing some of those more targeted and like I said it’s hard to find definitive evidence one way or another if like your automated campaigns are using poorly targeted keywords actually hurts your campaign. It’s definitely a waste of money because you’re advertising and people are clicking on things that are not relevant and they are not likely to buy your products, and there is anecdotal evidence there’s people who would say more definitively that it does hurt your campaign or kind in the ball pack like it’s still is a little hard to tell.

Steve: Okay.

Brandon: But I see people definitely saying like yeah they definitely hurt your campaign, and I think there is cases to be made for that.

Steve: Okay so in that case let’s talk about the new methodology that you guys have.

Brandon: Yeah so the thing that we recommend doing now is to – Jeff mentioned earlier these tools are like reverse ASIN tool. Essentially what they do is that they allow you put in an ASIN of either your product or a competitor’s products, and it’ll tell you all the keywords or the user search terms that that product ranks for. So using a tool like that against all [inaudible 00:17:18] one called Scope and there’s other ones out there, but they really tell you like what keywords or what user search terms people are looking for.
If something ranks really well for one of those keywords those are generally will be pretty effective terms for you to use in your advertising, and so you can really just narrow really quickly on what really works.

Steve: Can we talk a little bit about how such a tool would work, like how do you know what people are searching for, for all the different products on there? You guys have a tool, right, so how does it work?

Brandon: Yeah it’s actually really complicated technical challenge because we have to perform searches on like 80 something million keywords, and then go through and find out the results for those and then save all the results then go look backwards in the database, look up a product and see which keywords it ranked for.

Steve: Okay, okay so you guys actually…

Brandon: It’s really technical.

Steve: You guys just actually type in keywords and then make note of what’s ranking for what and then just keep all that in a database, right?

Brandon: Yeah that’s not too hard, if you say like that it doesn’t sound very complicated but try to do that at scale across 80 million keywords it’s a challenging work.

Steve: Oh yeah I was just trying to simplify it for the listeners, if we get too technical then – yeah, okay.

Brandon: It’s not very hard to do, you can arbitrarily you would do it but the problem is like we don’t know where those keywords are ahead of time, so we have to kind of go through all of them.

Jeff: Yeah so a seller – Steve a seller could actually do this manually on their own, they could go to Amazon and type in the keyword and look at what results are coming up, but what we’re able to do is actually by looking at so many keywords we’re able to tell you what keywords are actually being used that you would never think of. So you might not ever think of calling your apple slicer a fruit corer and that’s kind of the advantage that you can get by looking at the data in a whole.

So most sellers are probably used to tracking keywords in their keyword position, that’s a tactic that’s been used by sellers for a very long period of time, but that’s only tracking keywords that you know you want to track. What we’re able to do through our methodology is actually track 80 million plus keywords, and so we’re tracking keywords that you’ve never thought of and actually able to suggest keywords to you that you should be including in your campaigns or in your listings that are actually driving sales for your competitors.

Steve: Okay so once – like assuming that all these tools work really well and I have a set of keywords, then would I just bypass that automated step all together, then the auto campaign?

Brandon: Yeah we’ve seen a lot of people just bypass that all together. In general we recommend you can still run an automatic targeted campaign because they tend to do gather a little bit of data but I would use that as the primary source of things. It’s really easy just to start with those focused keywords that we already know are ranking and they perform a lot better than automatic targeted campaign does.

We see a lot of sellers that do, if you go that automatic targeted route like it can take you 7 to 30 days in some cases to gather some relevant data and costs hundreds of dollars in the meantime just spending money experimenting with keywords. So we really short cut on both time and money by using modern tools.

Steve: So let’s go a little bit more specific now, so let’s say I had these keywords, do you suggest doing phrase match, exact match, like how would you set up your campaign from the start assuming this is like a brand new product?

Jeff: Yes so what I would suggest is that you jump in and you start with a broad match. So you want to use Amazon’s – let me explain broad phrase and exact for people that don’t understand, that’s probably a good place to start. So Amazon has three what we call manual match types, broad, phrase and exact and broad is if you consider broad like on the far left it’s going to be the
most open of all the categories.

And so if I’m using the word apple slicer it’s going to use words like apple cutter, red cutter for slicing apple, slicer for cutting apple, it’s going to look at terms with my keyword before, middle and after. Phrase is going to keep my term apple slicer together, and exact is only going to look at that actual term. It might add a misspelling or a plural or something like that.

So what you want to do is use your competitor’s keywords and one of the tricks that we’ve kind of identified is that you want to make sure the keywords do not overlap, and that’s kind of a big thing that we’ve been sharing with our customers. So when you look at what I call overlapping keywords, if you have an apple cutter and you have an apple slicer, those are not overlapping keywords, but you wouldn’t also want to include the word apple cutter slicer because that’s an overlapping keyword and it’s going to steal impressions.

So you want to take these keywords and you want to put them all in to the broad match type and now you want to start running your campaigns and letting Amazon tell you from there what additional search terms you’re missing and which ones should move to phrase and exact. So you are essentially bypassing the whole first step that you were doing before.

Steve: It’s more like a structured automated campaign so to speak, meaning you’re starting with the baseline?

Jeff: That’s a really good way to explain it and I think what Brandon was trying to explain earlier is that we don’t suggest that you stop doing auto targeting campaigns, but you want to get your broad match campaign really going first and then you want to look at your auto targeted campaign maybe a little bit more down the road to find some additional keywords, because you’re going to keep the bid on that really small at that time.

Steve: Okay and then when you mentioned non overlapping keywords what did it mean by stealing impressions, does that imply that you’re competing against yourself?

Jeff: I’ll let Brandon kind of give a technical explanation to that.

Brandon: Yeah one of the things we see people do is with the advent of these reverse ASIN tools, one of the tactics we saw people using initially was I might have found 400 keywords that my products ranks for, or my competitor’s product ranks for and they just take all those to the sponsored product campaign and then they start running ads on them. But what ends up happening is a lot of these keywords will be specified, only end up getting one or two or five or ten clicks, and so your budget gets spread out among so many keywords that it’s hard to figure out which ones are working and which ones are irrelevant just because there’s not enough density of clicks on any one of them.

Steve: Okay I see.

Brandon: So what we’re trying to do and tell people to use like the non overlapping keywords, what we’re really trying to do is like figure out the more broad keywords that you can get more data and more impressions and more clicks around, so that you can make better data decisions on those things. So instead of saying like I had five clicks on that and one sale, you might roughly think that’s a 20% conversion rate, but mathematically it’s a little bit hard to say that because five clicks is just not enough data to really figure out your conversion rate as on a large scale.

So if you can densify those around broader keywords and you can get keywords that have 15 or 20 or 50 clicks around them, you can make a lot better data driven decisions at that level.

Steve: Does that imply then that the phrases that you should be entering in to Amazon should be like relatively short ones like two or three words at most?

Brandon: That’s probably the case in most things, it depends on the size of your niche, and I like our use case of the word apple slicer in this case because this is part of what comes back to a little bit of art to this. If we want to go very broad we could just say apple but then the human intelligence will tell us apple is going to be a very poor performing keyword because there are so many searches for apple, they are probably intending to buy an apple branded phone or iPad or something.

So you have to figure out how to use your human intelligence along with the data in this case to figure out like apple slicer is probably a good search term, it’s going to have enough velocity without being too niche, but if I start specifying apple slicer red, that’s going to probably drive down – it’s going to make it a lot more specific and get a lot fewer impressions and clicks on that.

Steve: Just to clarify for the listeners, so apple slicer if we bid on that on a broad match whatever Amazon will come up with would contain apple and slicer but in any order in the entire phrase?

Brandon: Yeah that’s correct, that’s kind of the definition of a broad match is that it will take the words you specify in any order along with any other words in there as well.

Jeff: Steve to add, for those that are visual learners we’ll give you a piece that you can attach in to your show notes that’ll give people a kind of a visual representation of auto versus broad versus phrase versus exact, so they can kind of see how all of these kind of work in with one another.

Steve: Okay yeah I’m just trying to clarify all these terms for the listeners just in case they don’t have a strong grasp, but yeah that would be an excellent resource that I’ll attach for sure.

Jeff: Yeah and Steve I think this is where it really comes down to understanding sponsored product ads is really understanding that it’s both an art and a science. Steve was joking before we started hitting the record button and he might throw some of this back end, but Brandon and I play off of each other, because Brandon is much more of the science kind of guy, so he’s looking for the hard science behind something to make a decision.

The whole idea of overlapping keywords is that if you don’t have enough data you can’t make a decision, but there is also a real art to a lot of this which is that everybody has to kind of decide how much data they need to make a decision, because to get statistically correct you need a lot of data, and so a lot of the methodologies that are taught aren’t necessarily based on statistical correctness, they are just based on a little bit of gut and a little bit of science.

So as a seller is learning to master sponsored product ads they really have to realize that this is not a part of Amazon or a part of selling that you can set and forget, so when you’re doing your follow up email reviews, you come in and you set that whole process up and you move on and you deal with something else. Sponsored product ads do require the seller to understand their own product, understand the numbers and to keep checking on them on a somewhat regular basis, so it’s not something that needs daily attention, but it is something that needs to be looked at on a regular basis.

Steve: I think it can be interesting since you guys are kind of yening yang, then we can use the apple slicer example. It would be interesting to see how both you guys approaches would be different for the apple slicer, and where you guys would differ in terms of the gut versus the data. So how would you guys proceed, so which keywords would you bid first on apple slicer, and then what would be like your process for refining the campaign?

Jeff: We’ve probably been working together for too long on the term apple slicer that will be, but I’ll go first and then let Brandon kind of correct me. So I did exactly what Brandon said, the first time I ran a campaign I went and I did a reverse ASIN, look up for ten of my competitors, I did a duplication of all of the lists, I put all the keywords into a broad match campaign and I let them run looking for the data to kind of give me the answer.

I had a lot of overlapping keywords that were stealing impressions from one another and to be quite honest with you I had a frustration point where I basically took the whole campaign and I threw it away because the data wasn’t making any sense to me, and I just didn’t feel like I had the time and the energy to continue to do it. So the idea of the overlapping keywords makes a lot of sense and as I cleaned up my campaign with the removal of overlapping keywords, I was able to get more data.

But it still provides a big hole in my mind because the data is not conclusive, and so I’m willing to take action on things that have a lot less clicks, I’ll take action on something that has between five and ten clicks and choose to move it to a broad or an exact match. I think that’s probably the biggest area where Brandon and I differ.

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I’m just curious like if you could out spend your problem, like if you put more budget on a daily basis, could you bid on more overlapping keywords and still get the data that you need, or does it not work that way?

Brandon: Yeah there is some point to that, you definitely could but you also can’t create impressions on Amazon like there is only so many people searching for things, so just because you spend – you have a higher bid or a higher budget doesn’t mean that you can create 1000 people searching for something in a day, you are limited by actual search line.

Steve: So to kind of redefine these overlapping impressions what it’s basically doing is it is diluting your data set across a bunch of similar keywords so that it is harder to collate the data, right?

Brandon: Yeah so if you go back to – and just examples like a really good case for when I was looking at his campaign he had done all like 200 keywords or something in there and a lot of them would have two clicks three clicks and maybe you have three clicks and one sale, maybe we’d have three clicks and zero sales. Statistically I look at that and I can’t really tell statistically the difference between the two.

And Jeff was more of like I’ll take a look at it, and three clicks and with zero sales might mean I’m going to turn that one off and set it as a negative keyword. When you spread yourself out like among all those keywords you’re kind of forced to either make those decisions early or wait a really long time and spend a bunch of money along the way.

Steve: So there is no upper limit on the number of keywords you would suggest when starting out, just make sure that they aren’t overlapping, right?

Jeff: I think we’ve evolved in our recommendations and I think that when you’re really getting started try to target between 50 – so campaign organization, we’ve defined three areas of success for sponsored ads. Campaign organization is number one, we can talk a little bit about that because we haven’t really mentioned that, keyword selection is number two and then optimization is number three.

So when you’re doing your initial broad match campaign maybe you shoot for like 50 to 100 keywords. I don’t know that today I would go for 200 or 300 or even 1000 keywords because more is not better. Amazon still treats those broad match terms and finds the actual search terms. So there is a difference, there is a keyword which is the term that I’m telling Amazon that I want and there is a search term, that’s the term that the buyer is actually using to find the product.

If I find the right 50 or so keywords and I put them in the broad match I’m still going to get hundreds and hundreds of search terms based on those keywords, and so I would rather let Amazon really define the search term without having the overlap than trying to define all of those myself so that I can get to the optimization faster because that’s where you start to save yourself money.

Steve: Okay so that being said let’s say we do have statistically significant data, what is the next step?

Brandon: I guess we will again set sort of an optimized phase of that, so you got a campaign set up, you got a number of keywords, you’re collecting data. Once you got some good data on there then – I mean the optimization steps…

Steve: Actually let’s define good data, actually let’s define statistical significance first, how do you know when a keyword is good that you want to actually do something about it?

Brandon: This could sound to maybe a mathematical question, there’s a mathematical maybe definition, there’s more of a practical definition. So I think we like to see around 50 to 100 clicks to get started to get you a relevant number of clicks. If you can see 100 clicks and zero sales I would say you would be pretty confident that’s a poor performing keyword, but if you can see 50 clicks with few sales you can have a little bit more confidence than if you had fewer numbers of clicks.

So the more clicks you have on stuff the better confidence you can have in conversion rates and that’s your ACOS and all those other metrics.

Steve: So your data is or your statistical significance metrics are based on clicks and not necessarily conversions, is that correct?

Brandon: Yeah the number of clicks after somebody clicked on something they either convert or not, so if you have say I’ll just use 100 clicks is a nice round number, 100 clicks and ten sales off of that you got a pretty good idea your conversion rate is going to be around 10%, it might be a plus or minus a little bit around there, but it’s probably going to be on that 10% rage.

Jeff: So are you looking at ACOS at this point or are you looking at conversion rate?

Brandon: I would typically make most decisions around ACOS, the nice thing about ACOS is it kind of bundles into there the actual cost for click as well, so some keywords might perform really poorly, but they also might be really, really inexpensive. So the ACOS is kind of a nice metric because it kind of takes into account both your conversion rate and the cost per click.

Jeff: Okay can I stop you guys for a second?

Steve: Yes.

Jeff: You guys are geeking out a little bit, so ACOS is the advertising cost of sale because I don’t think we defined that.

Steve: Yes that’s a good job Jeff, keep us in line man.

Jeff: Yeah and this is kind of where we were talking about Brandon and I ying ying yeng. So one of the challenges is that ACOS is not really defined inside of Amazon, and inside sponsored product ads. It’s not done at the search term level that allows the seller to make quality decisions, am I right Brandon?

Brandon: I think the search term report actually reports ACOS and so that’s data, I don’t know that Amazon kind of defines it in a couple of places. We can get a little specific definition you want to go there but in general it’s just kind of an overall performance of the keyword and you think about [inaudible 00:36:31] like it’s a well rounded one because it takes into account conversion rates and cost per click. It’s a good sort of in metric to look at.

Jeff: Yeah I think what I was trying to say sorry was that it’s a number that you can get to within the report but you have to download those reports; you have to build pivot tables off of those reports to be able to take action off of that data. It’s a little bit challenging in the current interface of sponsored product ads to use ACOS as a metric.
This is also where I differ from Brandon because Brandon is very scientific and he says 50 to 100 clicks and I look at heaven I say I’ve been running my campaign for four months on one of my new products and I still don’t have 50 clicks on some of my search terms. So I’m willing to take action on things with a lot less clicks, I’m willing to take action on things with five to ten clicks and start making decisions because I might not get to a statistical relevance with some of my number. That’s where the art of this comes in and it’s not just a straight science.

Steve: Interesting so you’ll make decisions off of five or ten clicks assuming there is a conversion in there, right?

Jeff: Correct, so if I have ten clicks with no conversions I might lower my bid. If I have ten clicks with one conversion I might move it to a phrase match, if I have ten clicks with three conversions I might move it straight to an exact match. So I’m willing to take less data and make action on it because I can still redefine what I do in those other categories, I’m just trying to kind of pull out broad when I can make a decision.

So if I have ten clicks with no actions I might look at the number of impressions, I might look at the keyword and decide if I need to make it negative or just lower the bid. So that’s really where the art of this comes in because there are so many different things you can do to start optimizing a campaign. You can create negative keywords, you can lower bids, you can increase bids, you can move things from broad to phrase, phrase to exact, those are all the different things that you can start to do when you start looking at campaign optimization.

Steve: So a couple of things I just want to summarize based on what you just said Jeff. I actually have a post that shows you how to extract the reports manually from Amazon, it is quite a tedious process and it does involve excel, but ACOS is the number that I tend to look at. But in terms of what you were just talking about Jeff like making these decisions like let’s say you do find a keyword that is working for you, you mentioned a bunch of things, but what would be your next step, and how would you determine what that next step will be once you find that keyword that works?

Jeff: So if I find a keyword that works and it’s kind of working, then I’m going to move it to a phrase match and I’m going to try to find other phrases that that keyword is on, and when it’s in the phrase match I’m going to bid more. So I’m not going to necessarily remove the keyword, I’m moving the search term, not the keyword, I’m moving the search term from broad to phrase and I could potentially negative that keyword in the broad. But if my phrase match has a higher bid then that will kind of take over the idea of stealing impressions.

So a typical campaign organization is going to have your highest bid with exact and then phrase and then broad. Sometimes you can get cheaper clicks in either phrase or an exact match, and if you start to get cheaper clicks then you want to negative the keyword in broad or negative the search term in broad so that your phrase match is getting the click not your broad match.

Steve: It’s interesting that you say that you don’t negative it right away and you just rely on the higher bid, is that something that you always do?

Jeff: I don’t always – this is where the science — the art comes in. I don’t always do it; some of it is a little bit of a gut and a little bit of a decision. So to be honest we use a system now that has built in some intelligence and can make some recommendations to us so that we don’t have to use the pivot tables, but back in the day of kind of using the excel spreadsheets and the pivot tables, I would probably take a little bit more of a hard line and when I move something from broad to phrase I would negative it in broad just to kind of clear it out and keep my data clean.

Steve: Okay just to summarize this for the listeners, the reason Jeff would put the phrase or the exact match keywords as negatives in the broad campaign is so that you don’t end up bidding on both the broad campaign and the phrase or exact match campaign.

Jeff: Or bid against yourself.

Steve: Or bid against yourself yeah exactly. Brandon I’m curious what your perspective is on this.

Brandon: From my perspective as a software developer I’d say it’s much easier to always do something than just remember what you did and what you didn’t do, so I don’t see any harm in setting it as a negative keyword. So I would suggest every time you move something from broad to phrase you might as well set the phrase as a negative match on the broad campaign, there is no harm and it kind of shows that you do what you intend.

Steve: And when you’re deciding like what to bid, what are some guidelines, like say you found this working keyword like how much do you up the bid?

Brandon: So the bid is just a mathematical decision, besides most people have like some target ACOS for all they’re trying to hit, whether that is 30% or 100% depends on your products, but if you’ve got a goal of 30% and you know the conversion rate is whatever maybe 15%, you can do some math and figure out exactly what the appropriate bid is.

Steve: And like the follow up question to that is you just mentioned a 30% ACOS, let’s just assume that most people on Amazon have a 66% margin, which basically means that 30% ACOS is almost break even right, what is your philosophy on that, do you try to just break even in hopes that Amazon will just bring you more organic sales, or do you actually try to make a significant profit on your Amazon sponsored ads?

Brandon: Well it’s different concepts for different phases of your products, different things, so I would say there’s definitely some sort of halo effect that goes on, it’s pretty well understood I guess if you use sponsored products to drive sales that you will rank better organically and thus sell more organically as well. So that’s a very common strategy is just to at least break even on your sponsored product sales and understand that you’re going to rank better somehow organically for the halo effects. That’s a really common thing we see.

Jeff: What Brandon is saying there is if you’re launching your product that’s where you might want to consider your ACOS even being 100% and being okay, that’s the same as kind of the old incentivized review, you’re giving your product away for free. If you have a mature product and you’re just trying to grow your sales, then you might be looking at whatever profit margin you want from that and if you’re trying to maintain your rank or even increase your rank, then that’s where you might want to go more to that break even. So it kind of depends on what your goals are within your business.

Steve: Okay, we’ve talked a lot about – we’ve gone to a lot of specifics in terms of running the campaign, I’m just curious how often you guys monitor your broad campaigns to pick out these keywords?

Jeff: No more than…

Brandon: Most people do it probably once a week or every other week is kind of a good case or what were you going to say there Jeff?

Jeff: I was going to say no more than once a week, I think that one thing that sellers do is try to over optimize their campaign, and they want to look at it daily and you really have to let the data tell you what the answer is.

Steve: I’m kind of the opposite to be honest with you guys like I don’t look at it very often at all, I peak at it just to make sure the ACOS isn’t out of control, because I find that it is kind of tedious to kind of monitor all the different keywords because of all these different steps. Is that what you guys are finding as well?

Brandon: If you go down to that route of downloading reports and putting it on pivot tables I can see that that will be super tedious to do over and over again.

Steve: I’m just curious I mean you guys talk to a lot of sellers, is that what people do right now?

Jeff: I think a lot of sellers start sponsored product ads, they run it for some period of time, they were probably running an auto targeted campaign, they lost total track of what to do when trying to download their reports. They looked at it from a very, very high level, they determined that it was either profitable or not profitable and they turned it off.
I think there is a next set of people who were learning how the data works and went into some optimization and then there are a small group of people who have learned how to terribly kill it if you will.

Steve: Okay, I’m going to attempt to kind of summarize our entire 40 minute discussion up to this point, and you guys can just poke holes in case I’m saying something wrong. But it sounds like the first step is to use a tool like Scope and do a reverse ASIN, find out what keywords are ranking for some of the best selling products, and then include those search terms in a broad campaign to start out with.

Make sure you’re not using overlapping keywords and then gather some data and depending on whether you’re Jeff or Brandon you can use your gut or go straight on statistical significance, find out the keywords that are converting and then start refining them into phrase or exact match campaigns, increase the bid on those so you dominate those keywords, meanwhile putting those in negatives for your broad campaigns, rinse and repeat.

Jeff: Yes, but I’ll give three things on that. One is that don’t optimize too early, so make sure you get your initial data, don’t over collect and don’t over optimize, and I think that you have to let that data kind of collect and sit and get to some type of level to make a decision. So if you make a decision on a keyword today, you have to basically restart your timer if you will and let more data collect before you make the next decision. You can’t come in tomorrow and change that same keyword or search term.

Steve: Okay and one thing I didn’t touch upon was the increase in bid, what was the methodology there, like let’s say you’ve found a good keyword, like how much would you up your bid for example in the apple slicer case?

Brandon: So I think up it by around 20%, if something is performing really well, 10 to 20% is a nice way to make proper bid. If you raise it by 10 or 20% and it’s still performing well you can keep raising a little bit. At some point it doesn’t make sense to increase, if your bid increases way beyond what your cost for click is you’re probably already behind and increasing your bid more beyond that doesn’t do you much good.

Steve: How often do you check, so at some point like your ACOS might be out of control too, so how long do you wait before checking?

Brandon: At the beginning weekly or biweekly patterns is pretty useful and works well for a lot of people, so checking it once every week or every other week. It’s pretty good to check into – obviously if you’re spending tens of thousands of dollars a month on your campaigns you might want to check into it more frequently, but if you’re spending $100 a month you don’t have to do it as often. So it depends on your business model and your risk tolerance level there, but the more you spend on the product the more often you want to check on it I suppose.

Steve: Okay as I mentioned before like one of the reasons why I don’t monitor that often is because it’s tedious. So I want to give you guys the opportunity, I mean I really thank you guys for coming on the show today, but I did want to give you guys an opportunity to talk about your latest tool that kind of automates the process. So go ahead and describe how it helps and how it simplifies this entire process.

Brandon: So I guess I’ll start off from the sciency side, so from a sciency data driven guy I find it really intriguing to go through and like learn about all this stuff and then make algorithms to help the computer implement it. So that’s essentially what our tool does, it takes most of the best practices that we learn from talking with people, from talking with our sellers, talking with customers who bought it, it takes all those for the best practices I think including all those steps we just talked about earlier in this show, and it kind of makes it so you can organize your campaign center in like the best way and automates and makes suggestions around all these same things that just talked about.

Steve: So by suggestions, that implies that I don’t even have to look at the data for the keyword like it will just tell me what keyword is doing well then I can click a button and move that to an exact or phrase match campaign?

Brandon: Yeah Jeff tell him the specifics, we’ve got the data geek version or the Jeff version or the Brandon version.

Steve: For this question by the way I have not used this tool yet, I plan on using it, I’ll probably report my results on the blog but – sorry Jeff I didn’t mean to interrupt, go for it.

Jeff: No you’re okay, so I think that the way that Ignite works, so the Seller Labs tool is called Ignite, and if you look at it from just a straight Amazon seller experience we connect to either an existing campaign or you can create a new campaign. We attach that campaign to your product, we give you suggestions of keywords, so we can actually help you make the keyword suggestions, we do the duplication for you, and we start running your campaign.

It’s all integrated directly in with Amazon sponsored product ads, so there is no more need to kind of look at something on an excel spreadsheet and then go back in to managing your campaigns. Then all of our managed campaigns, the Ignite managed campaigns have suggestions built in to them. So as the data becomes statistically accurate and you actually have a control over what we call the confidence of our recommendation, we make suggestions to either add a bid, decrease the bid, move something from broad to phrase, broad to exact, add negative keywords, archive a keyword because it’s not performing.

So we look at all of these things and we really optimize your campaign based on the ACOS that you define for your campaigns. So you come in and when you set up the campaign you tell us I’m shooting for a 20% or a 40% ACOS, and then all the suggestions that we make are based on the ACOS that you’ve told us that you’re targeting.

So what sellers really like about our tool is that you don’t have to download search term reports anymore and do all the pivot tables, we actually have all the detailed search term reports in our tool, and if you’re kind of the more data geeky guy you can dive into that data and take action right from those reports inside our tool.

Steve: Okay, I mean one thing that I find extremely tedious about PPC is you’re running these broad campaigns and there is going to be phrases that you want in your negatives and it’s really tedious to go through and add those negatives. Does your tool actually add those negatives or ask me where I just click the button and just throw those into the negatives in the campaign?

Brandon: Yes, so we’d actually paused down those search term reports automatically and you can browse through them and there is a call, there’s an actions button over the left hand side that you can choose to set up those negative keywords just right there.

Steve: Okay yeah that would be profoundly useful for someone who does this. Guys thanks a lot for your time. If anyone wants to find you guys or check out your tools, where can they find you.

Brandon: The best way to do it is just go to sellerlabs.com is our website; we’ve got a bunch of these resources around sponsored products at sellerlabs.com/ppc, it’s got a page on, it’s got some blog posts, some of our videos we’ve done about it and links to some resources about it including a link to sign up for a trial of Ignite.

Steve: Yeah for everyone listening out there I’ve actually used scope and I find that Scope is a tool that allows you to do the reverse ASIN look up on the keywords, and I actually look forward to try Ignite and report on my results.

Jeff: Yeah we would love for you to give it a try and be able to report on what you’re currently doing versus using the tool. Anyone can go to sellerlabs.com/ppc, have a whole host of resources there to learn more, we covered a lot of terminology so if you’re kind of new and you got lost, there is a lot of terminology definitions on that page. We also get into some of the methodology and we break these down into some of the individual components.

I think ultimately this probably wasn’t the most exciting podcast for people to listen to, but sponsored product ads are clearly something that all sellers on the Amazon platform need to understand, and they are becoming more and more important to how you overall run your business and for your overall product success.
If you’re not running product ads and it’s not part of your current vision, then you’re really missing out on a significant potential revenue source in the Amazon platform because they do dedicate a lot of space to the sponsored ads on the mobile side, the application side as well as the desktop side for Amazon.

Steve: Yeah, hey Jeff I’m going to have to disagree with you there, I think the listeners the reason they listen to the podcast is to get like really in-depth and nitty-gritty on the stuff, and I think we did a pretty good job of that today.

Jeff: Yeah I think we did. Sometimes Brandon and I have to – we hang up from these things and we say well did we go too far, did we not explain enough things. So yeah give us feedback, let us know if we didn’t go deep enough and you want us to go deeper, share that and we’ll keep an eye on the blog notes and comments there as well.

Steve: And for sure like I always do these case studies, so I’ll be definitely doing a case study on this just to kind of report on my results at some point, but yeah thanks a lot both to you for coming on the show. I learned a lot and I’m sure the listeners will get a lot of value out of this.

Jeff: Hey Steve, how about I give away a six months free trial of Ignite for people that have listened all the way through to the end and now know about it.

Steve: Yeah that sounds good, when this goes out I will create a contest in fact and that would be great man, that sounds like a great giveaway.

Jeff: Okay so you can kind of decide how to pick the winner and we can have them post or something and pick a winner and we’d be happy to do that.

Steve: Yeah that will sound great. Thanks guys.

Hope you enjoyed that episode. As you can probably tell Jeff and Brandon really know their stuff and we kind of geeeked out on Amazon ads, and if you also couldn’t tell this episode was recorded a while back and I’ve since been using their tool Ignite to manage my campaigns. For more information about this episode, go to mywifequitherjob.com/episode160.

And once again I want to thank Sellerlabs.com for sponsoring this episode. Their tool Ignite is what I use to manage my Amazon PPC campaigns. Instead of the old tedious way of generating reports and analyzing your ad campaigns in excel, Ignite aggregates all that info for you in one place and allows you to quickly visualize your data to make decisions fast.

Not only does it save time, but it also makes managing your Amazon campaigns so much easier too. So head on over to sellerlabs.com/steve and sign up for a free 30 day trial, once again that’s sellerlabs.com/steve.

And if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away via email, thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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159: Larry Kim On How To Run Profitable Google Adwords Campaigns

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Larry Kim On How To Run Profitable Google Adwords Campaigns

Larry is the founder and CTO of Wordstream and Mobile Monkey which is a service that develops online marketing software and helps companies optimize their PPC ad campaigns.

He is considered one of the most influential PPC experts in the world and he’s a frequent blogger for Search Engine Land, MOZ, Search Engine Journal and other top business publications.

In this episode, you will learn about how he started Wordstream and how to run profitable PPC campaigns the right way.

What You’ll Learn

  • How Larry came up with the idea to start Wordstream
  • How to run a brand new PPC campaign for an ecommerce store
  • How Larry leverages content to run profitable ads.
  • The common mistakes that people make with Google Adwords
  • How to raise your quality score
  • How leverage RLSA

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Sponsors

Ignite.Sellerlabs.com – If you are selling on Amazon and running Amazon Sponsored Ads campaigns, then Ignite from Seller Labs is a must have tool. Click here and get a FREE 30 Day Trial.
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ReferralCandy.com – If you’re already getting steady orders every month, adding a refer-a-friend program to your store can give you a new sales channel. And ReferralCandy is the best in the business. Click here and get a FREE $50 credit towards your account.
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Transcript

Steve: You are listening to the My Wife Quit her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not with their businesses.
Today I’m thrilled to have Larry Kim on the show, and if you’ve been doing SEO or any search engine marketing for the past couple of years, chances are you’ve heard of Larry. He is widely regarded as one of the foremost experts in Google PPC, and today we’re going to have him teach us how to run profitable AdWords campaigns.
Now before we begin I want to give a quick shout out to Seller Labs who is a sponsor of the show, and specifically I want to talk about their brand new tool Ignite which helps sellers manage their Amazon sponsored ads. Now I’m excited to talk about Ignite because I’ve actually been using this tool to manage my Amazon sponsored ad campaigns, and it makes things a heck of a lot more convenient.

So number one I’ve always found it a major pain to generate my PPC reports on Amazon, cut and paste the data over to an excel spreadsheet and then use pivot tables before I can do any sort of analysis. Well Ignite allows you to aggregate and visualize your Amazon sponsored ads data quickly right within the tool to see immediately what keywords are working and what is not.
There is no need to manually create reports or play with excel, everything is right there for you right on the interface. And second of all unless you’re a data geek, Amazon campaign data can be hard to understand, and what’s cool is that Ignite makes keyword and bidding recommendations on the fly that can be applied with a single click.

So for example let’s say one of hankie keywords is bringing money, well Ignite will actually alert me of that fact and I can reduce the bid immediately with just a couple of clicks. So bottom line Ignite makes managing your Amazon sponsored ads so much easier and the fact that they provide me with alerts means that I no longer have to monitor my campaigns like a hawk.
So if there are keywords that are doing well, Ignite tells me to add them to my exact match campaigns. If my keywords are losing money well then Ignite tells me to either remove the keyword or to reduce the bid. So head on over to sellerlabs.com/steve where you will find awesome tutorials on how to run Amazon PPC ads and the opportunity to try Ignite for 30 days free. Once again that’s sellerlabs.com/steve, now on the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast, today I’m thrilled to have Larry Kim on the show. Now I had Ryan Deiss on the podcast a couple of weeks ago and I actually met Larry through Ryan’s conference Content and Commerce. Now Larry is the founder and CTO of WordStream which is a service that develops online marketing software and helps companies optimize their PPC ad campaigns.

What I like about Larry is that one is he’s an electrical engineer just like I am and two he’s a family man. Anyway Larry is considered one of the most influential PPC experts in the world and he’s a frequent blogger for Search Engine Land, [inaudible 00:03:05], Search Engine Journal and other top business publications. If you read any of those, chances are you’ve seen his face on there.

He’s also the author of the most shared PPC article of all time which I did not know until I read his bio, and today we’re going to learn about how he started WordStream and how to run profitable PPC campaigns the right way, and with that welcome to the show Larry, how are you doing today?

Larry: Hey doing great thanks Steve, how are you?

Steve: I’m good, I’m good. You know I read your bio but I’m sure like there’s a bunch of people in the audience who do not know about WordStream, so one what gave you the idea to create WordStream and was it your intention to create a software company, or did it kind of happen by accident?

Larry: Well probably like a lot of your listeners I started out just as doing internet marketing consulting, so I used to go one man show, occupy myself with one or two clients, and as you mentioned my background is in electrical engineering, so originally…

Steve: Hardware guy or software guy?

Larry: Well actually they are kind of indistinguishable at this point, like if you’re building geeks or something like it’s all software. But yes basically just wrote some software to make my life easier like the keyword researching and the grouping and all that stuff. So initially it was six, seven years ago, so I was just – I’m lazy so I wanted to not have to do the same stupid things over and over again and just was using that to make my life more efficient.
And then the light bulb went off and like wait a minute if this is so helpful to me maybe I can start the user interface on this thing and sell to companies as opposed to just using it internally for myself just to make my own life easier. So that’s kind of how we got started, I started pitching the idea to venture firms.

To think about software is so competitive, there’s so many other companies, you can’t cut a lifestyle your way into a software business, we’re in a competitive market, you know what I mean. You got to be in it, all in to win, that kind of thing. So I wanted to raise money and then they all said no, but they all gave me good reasons like, oh you need more customers, you need more partners, you need more team that kind of stuff.
So over the next year I bootstrapped the business using just consulting revenues to hire people and some marketers and sales people and engineers and basically finally after a year later went back to all those people who said no and two of them ended up making offers for our company of four million or so give or take, and that’s kind of history like that’s how we got started or I got started.

Steve: It’s interesting that you felt like you needed funding because I’ve had a lot of people on the podcast who’ve kind of bootstrapped their software companies as well, is it because you had much higher aspirations for your revenue numbers I guess?

Larry: Well yeah basically there was – the thing about software is you have to have an interesting like work technology has an infinite lifespan if you know what I mean. There’s enough pain in the market and someone is going to solve that pain, and then at some point it’s going to go away. So I just felt a lot of pressure because there were other companies that were doing PPC management software, they were two or three years ahead of me, and it was kind of like win or take these kind of things for competitive reasons largely.
That process like software is ridiculously expensive to build like I employ 30 engineers right now and so that’s like it’s a lot, so it’s nice to be using someone else’s money.

Steve: Yeah no totally that’s true in the risk perspective. But on the other hand they have higher expectations too.

Larry: Of course, that’s a game you’re playing, there is a lot of pressure too to try to grow the company as fast as you can and you lose all the control over your destiny actually.

Steve: So what does your software do exactly for the benefit of the listeners and how does it differ from just using the AdWords editor for example?

Larry: There is nothing you can’t do in our software as AdWords editor, the difference is in AdWords editor it’s kind of like an expert driven workflow, so you kind of have to know Steve what you want to do, you’re like, oh I’m going to add some keywords now, I’m going to now add some ads. Like you need to be able to know what it is you’re diagnosing and then go in and fix those things.

So WordStream it’s more a machine guided work flow, so it does the analysis for you and just tells you like, look Steve here’s three things I want you to do this week and it will take you like five minutes to do because often times there’s millions of advertisers, not all of them are like full time marketers, a lot of them are like think of other things going on.
So it’s kind of like how millions of Americans use something like trouble tax to prepare their taxes. They don’t really need to know anything; it just tells you what to do.

Steve: So basically it allows a non expert to use AdWords effectively?

Larry: Yes prioritizing the impacts of the workflow they are doing because we just don’t want spending too much time in there, so it’s like search marketing you could spend 80 hours a week on this stuff if you wanted, but we all know that maybe 10 or 20% of the stuff that we do will generate most of the income, most of the leverage.

Steve: Yes and because I teach this stuff I can say that the AdWords interface is probably one of the most complicated ones to explain, because there is like so many switches.

Larry: Yeah it can be intimidating like it’s hard for marketers to understand this, but like if you’re just a business owner and marketing is one of 20 things you need to do, this is intimidating.

Steve: Yeah totally, so it’s rare to have a PPC expert on the podcast, you kind of lose the [inaudible 00:09:22] online ads, so I thought it would be interesting to see Larry how you would actually run a Google PPC ad campaign for a completely brand new ecommerce store that just launched from complete scratch. And so my first question actually is do you believe that most
businesses can profit from AdWords and are there certain companies that just are not cut out for either Shopping or AdWords from ecommerce perspective?

Larry: Well I mean it’s not everyone can be successful; it depends on what it is you are selling, I mean really you want to be in some kind of a niche where the items are a little harder to find, like it’s not something you just pick up and it’s a CBS or something. Ideally there is some margins in there because it is a specialty item and ideally there would be some opportunities for repeat business as opposed to just buying this thing forever and never having to replace it.

So yeah there is definitely niches that would do better than others like I’m thinking off the top of my head there is this one guy I met that we were looking into the account and they were selling like Amish gazebos, like oh my god this is like a high priced item, very specialty thing. So like that’s like the perfect example you know what I mean. So of course it depends on your niche but those are some of the characteristics that I would think of.

Steve: Let me rephrase that question a little bit, so what would you say your margins, general guidelines we need to meet actually even have a chance at AdWords.

Larry: Well generally speaking you cannot spend more than one third of your profit margin on the cost of customer acquisition. So if you’re only making a dollar profit on this thing, if you’re spending more than 33 cents to acquire the customer it’s likely that you’re not going to be able turn a profit because you need to see some margins for running the business or fulfilling the orders or all the other stuff, you see what I’m saying?

Steve: Okay yeah, yeah, so let’s say we’re selling product that has fairly competitive keywords like clothing or jewelry, how would you proceed with an ad campaign with a limited budget, pretend you’re just starting from scratch and you only have like thousands of dollars to invest let’s say. Would you start with Shopping, AdWords, how would you begin?

Larry: So the worst thing you can do is just kind of unbranded keywords on Google AdWords, that really is a suicide mission at this point because you’re competing against all these other ecommerce vendors. I think you need to have some kind of unfair advantage before, you know what I mean.

Steve: Aha, yeah.

Larry: So if you have $50 or some small number of marketing budget, you don’t want to just buy clicks at $2 or a dollar a click, that’s crazy. So you know what there is so much of this – is this a new site like obviously the low hanging fruit of PPC is actually remarketing, so going after all those people who put stuff into the cart but didn’t check out which is like 70, 80% of shoppers. I think one of the challenges is if you’re really new ecommerce vendor you might not even have a good amount of traffic to your site to begin with of people of low hanging fruit to go after.

One of the first things that I would going after is sort of like brand awareness campaigns but in a targeted way. So I would think really hard about who the target market is for this thing, it’s like in the case of Amish gazebos it’s got to be like home owners who live in rural areas, outside of cities who are Amish, that kind of stuff who exhibit like maybe they like the Home Depot or [inaudible 00:13:40] that kind of stuff.

I’d be thinking really hard about who the target market is, and then I would be show casing those unique products in a very memorable inspiring way, so like the most memorable and inspiring thing you could do is a video like show case the products. Create some kind of video and upload that video offering to your target market on things like Facebook just to create some awareness of the market, you see what I’m saying?

Steve: So you’re just trying to get clicks to content essentially?

Larry: Yeah and the cheapest way to do that is with really, really high engagement content, so basically on Facebook the ad prices inversely proportional to the engagement rate, so if you got a 10% engagement rate, that will be maybe 20 cents a click or maybe 10 cents a click, but if you can get that to like 30 or 40% engagement rate, maybe it’s like one penny a click.
So I would just try really hard to come up with a compelling offering – sorry a compelling creative that’s just like wow, a lot of people who see this are blown away by it, and just get that in front of the right people.

Steve: So what you’re saying actually is you wouldn’t actually start with Google Shopping or Google AdWords, you would start by building a remarketing list, is that what I’m hearing?

Larry: I think so because shopping believe it or not Steve people don’t just randomly buy stuff from stores, their purchase decision is a reflection of their underlying tastes and preference for brands that they’ve known and heard of. So especially with shopping where the trust bar is higher up because consumers have taken a cough of their credit card and shipping and all this other personal information.

I think one of the most critical things is to build some brand affinity for your business. Of course it varies by industry but that to me sounds like an interesting approach.

Steve: You know what’s interesting to me is like when I first started my Google Shopping campaigns they were actually profitable right off the bat early on, and I think I attribute the fact that there was my offering and there was the price and so if someone were to click on that ad there was a much higher probability of buying it. And so from what I’m hearing from you right now brand affinity carries a huge part in Google’s Shopping ads as well, is that what you’re saying?

Larry: Sure, customers are two to three times more likely to click on and then two to three times more likely to convert through on ads where they’ve heard of or are familiar with the business. Now there’s some caveats like if the thing you’re selling is such a commodity item like drone propeller blades or something, like I just need that now, I don’t really care where I’m getting from, maybe there’s exceptions. But generally people tend to transact at the companies that they’ve heard of and know and love in terms of their brand preferences.

Like when you started your shopping campaigns was that like – did you have no presence online before and you just like day one did these shopping campaigns, or was there kind of like an ecommerce presence that preexisted and then you layered on top of that on shopping ads?

Steve: Yeah that’s a good question. So I started out with the merchant center which was free back in the day, I can’t even remember what year that was now, was it like three years ago, four years ago, I can’t remember.

Larry: More than that.

Steve: More than that, yeah so I started out with AdWords actually, AdWords was – and this is a while ago, AdWords actually generated like huge portions of my revenue early on and then once the merchant center came out I used that and that started working well. So I guess there was already a little bit of brand affinity, because AdWords came out way before Shopping.

Larry: So just keep in mind the question you asked me was a brand new site…

Steve: That’s correct, yes.

Larry: That never had any affinity at all. Now it’s a completely different scenario if you have like lots of visitors and a preexisting site that has a good amount of traffic. I would go after those sections first like using Google Shopping and remarketing if you had a brand presence.

Steve: Okay so you recommend putting out a compelling piece of content and then using Facebook first to get some traffic over there and gradually building up your remarketing list. So once you have this remarketing list then what do you do next?

Larry: Now you remarket to them but not to every one of them because not everyone who visits your site is a perfect fit for the products and services you’re selling. What you could do is you could filter those audiences, maybe it’s like people who put stuff in the cart, maybe it’s people who had a very, very long session duration or maybe they have certain demographics that are favorable like they are very, very wealthy people or have certain desirable demographics where you just filter out that audience.

Then the ones who do pass through your filter you should be marketing to them very, very hard like showing up in their feeds everyday just to make sure that they finish whatever it was you were hoping for them to buy.

Steve: Do you feel like the Google demographic data is accurate, so one more time I just took context of Google, all those demographics, do you use those to narrow down your marketing list?

Larry: It’s all based on search history, that’s how Google does their stuff so I mean yeah I think it’s reasonably accurate, yeah I think so.

Steve: I guess what I’m trying to ask is with Google remarketing it’s different because they were search intent, and so would you further limit down your remarketing list from those people, whereas Facebook I feel is a little bit different, right?

Larry: Sure, sure, basically if your main traffic source is just from like targeted Facebook ads or targeted search ads, then fine maybe you don’t have to boil it down a lot, but what if like a lot of your traffic is just coming from organic sources that you don’t even know where it’s coming from, you see what I’m saying?

Steve: Yeah sure.

Larry: In that case you would have to kind of boil it down and kind of get to your top 5% of that audience, but you’re right.

Steve: So I mean you do this a lot for a lot of companies and so I was just wondering if you could just kind of comment on what are some of the most common mistakes that you see people make when they’re trying to run their own campaigns?

Larry: The biggest problem of all time is just lack of activity; the greatest thing about these PPC campaigns is that there are very measurable, like they give you a lot of data on what the cost per click is and how many clicks there are to go after. So the biggest mistake people make is they don’t learn and improve from the campaign data that has been provided to them.

Steve: Okay are you referring to like negatives or what are you referring to specifically?

Larry: It could be negatives, it could be looking at say the return on an ad spend for different types of products, maybe that’s very valuable data, like you should be going and expanding your product catalog to those types of niches where it looks great. Like just not unconversely like if you’re like 1% click through rate on some particular products, maybe that’s not a very –
the market is telling you something, maybe that’s not a very interesting product to be offering. So it’s just not taking the data and synthesizing it to make business decisions.

Steve: I guess what I’m trying to ask is so we started out by making content and we’re using remarketing now, when is it time to add Shopping and AdWords to the mix, like how do you dip your toes in the water?

Larry: The low hanging fruit would be things like retargeting based shopping ads and retargeting based Facebook product ads, those really are the low hanging fruit. Like if someone has – now we have your audience of people going to the site, only 2 or 3 or 4% of them are actually going to buy your stuff like on the first shot.
So at that point when you have like a thousand sessions or something like that that meet your filters, that’s kind of a minimum because like it won’t work with fewer than that, but basically that’s when I would be layering and things like Facebook product remarketing and also Google Shopping through remarketing. It’s kind of like Steve you can always exchange quantity and price, it’s like the cheapest conversions are going to be your remarketing stuff.

You can expand those efforts to non remarketing targeted ads and you’ll get more quantity, it’s just that the economics may or may not be as attractive; they probably won’t be as attractive.

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And this tactic works wonders; and in fact it’s not uncommon to get a ridiculous return on investment. So for example Greats Footwear, who is a ReferralCandy customer, is currently seeing a 20X ROI. Referral word of mouth marketing is also useful for building up your social media presence as well, because everyone is talking about your company with their friends on Facebook and Twitter.

And the best part is that ReferralCandy is a set it and forget it service, requires no technical setup and they are giving My Wife Quit Her Job listeners 50 bucks to try them out if you go to promo.referralcandy.com/steve. Once again it’s promo.referralcandy.com/steve to get a $50 credit to try out the service risk free. Now back to the show.
So based on the models that you kind of just presented just now, so one you have content which creates your marketing list and then you have just plain old keyword AdWords campaign where you’re just bidding on keywords outright and of course it’s going to depend on the type of company, but which strategy do you tend to go for more today, the content remarketing strategy or more like the outreach with keywords like very specific keywords?

Larry: Well if you can get just regular keywords to work for you like if you’re running regular keywords with your – I call these vanilla [ph] keywords because it’s just going after people who are searching for these keywords, no additional strings attached. If you can get that to work for you, well then by all means do it.
That’s great because why wouldn’t you, because it’s so measurable and if you’re acquiring customers below a third of your margins so that means there is plenty of margin left to drop to the bottom line kind of thing, then yes you are very lucky, that means you are in a very interesting, not terribly competitive space, but AdWords has been around for like 16 years.

Steve: Yeah forever.

Larry: So there’s 3.5 million advertisers on this thing, so a lot of times the challenges like they try doing this and they’re paying for a $20 product maybe they’re spending $10 on the ad spend, so that’s not going to work. So then it becomes like okay so what do we do now and the answer is like well you can’t just do business as usual, you have to kind of change it up.
So that’s why I’m advocating like a lot of times for those really hyper competitive markets a way to kind of get an unfair advantage is to actually rather than just directly going after people by keywords, you sell to those same people but a little bit more a roundabout way of doing it which is to get them really excited about your products through content and then remarket to them to those who meet your screen after, so it’s kind of like…

Steve: That totally makes sense, that’s how I run all my Facebook ads as well incidentally, it just works out cheaper that way.

Larry: Well yeah I think because the Facebook ads in particular, the way that option works it’s a lot more advertiser friendly than the AdWords option, the AdWords option is people – one idiot can like screw up the bids for everybody, because it’s like the cost you pay it’s directly proportional to the guy who is ahead of you in terms of AdWord.

So when you get these very specific keywords with like 500 queries for a week or something like that, that’s very low inventory, so one idiot can screw it up for everyone, but in Facebook ads you’re going after demographics of people with larger audience sizes, and you can hit this person up for ads like they might be browsing for an hour a day, so that’s like many, many opportunities to get in front of that person.

It’s like kind of supply and demand basically, it’s just Facebook – and plus Facebook there’s just less ads running through there. They only make about a third as much as Google does in terms of AdWord campaign.

Steve: Let’s switch gears a little bit. In terms of running not Shopping campaigns but just AdWords campaigns for example, what does your landing page look like for an ecommerce store, is it a category page, product page, home page or like a lead page to gather leads?

Larry: Wow I mean, this really depends on…

Steve: It does, I’m just giving a scenario, I’m just curious how you would approach the problem.

Larry: You know usually the first try will just be to send them to a category – sorry to the money page like going to the product page. I mean that would be your first try, and then you would just see what the metrics are like and if it’s working, and then you’ve got a conversion rate of like more than 8, 9, 10% then that’s a pretty good signal that you’ve got a pretty good intent like matching the intent with the search.

So anything 8, 9, 10 and above percent conversion rate that’s pretty good. If the conversion rates were closer to like 1 or 2% well then I would shake stuff up a little bit, you know like try those other ideas, like maybe, oh this isn’t exactly what I’m looking for so I’m going to send them to the category page and have them look around and browse from ten different types of [inaudible 00:29:39] or whatever it is that they’re looking for, because maybe it’s such a broad or blue dresses like maybe it’s very hard to know what type they were looking for, so they need to see a selection of them.

So basically the guiding factor is your conversion rate like I was saying anything three or two, you should feel very safe in experimenting and making changes, because there is not a lot of downside risk, but if you’ve got something 8, 9, 10% and above then that’s pretty remarkable and I would stay put kind of thing.

Steve: So in the beginning, let’s say you’re just starting out with the campaign, are you bidding just high to get like the top rank just to check your conversion rate, and then gradually dial it down, like what is your bidding process like and how do you reduce your bids over time?

Larry: Well I mean bids is half of the thing and usually yeah I think you do need to bid a little more just to get some history and some of that quality scourge is flowing through your account. Google likes to favor the accounts that appear to be doing well and the loop hole is that it needs a little bit of a kick to get started, so yeah I would do that.
In terms of pulling back on the bids, one of the things that happens is that as your company builds more brand affinity that raises click through rates, and so you can basically maintain the same ad rank for less cost in theory. So you should be able to pull back a little bit, but of course…

Steve: The reason why I’m asking that question is often times you go on AdWords and you bid on a keyword and for example my keyword like it told me like the minimum bid was like $1.75 per click or something like that. And so when I start out – and this might not be the right strategy, but this is just kind of how I do it. I always bid like to get the top rank and then today I’m paying like 30 cents a click.

Larry: Yeah so those minimum first bids, those minimum bid estimates are usually wrong, they are off by a factor of five times as much, so actually that kind of fits your description where you’re paying 30 cents even though it’s saying the minimum is like a $1.70 so it’s roughly five times. So you don’t – maybe you use those like initially but certainly there is room to go down like a lot.

Steve: Okay I’m just trying to get an idea of your flow, so you got to plan the pump so to speak at first right by paying higher bids just to give Google some data, right?

Larry: Yeah, another way to plan the pump is go for branded keywords, so quality is scored, all these things are computed at the account level as well as at the keyword level. So it’s kind of like how your mid terms and your finals for your course grades is 80% on your final and 20% on your mid-term or something, so there’s an account based component of your score.
So if you have like these branded keywords where you’re spending 5% of your ad budget on the stuff but you’re getting like 60% click through rates, that really will increase the average score for all the other campaigns.

Steve: So that also applies that you should be removing all the keywords that don’t have good click through rates at all from your account all together?

Larry: I mean I would kind of delete the bottom 5%, usually there is a few of account that is kind of draining all the money and it’s like not working at all and people they’re like but I need to give it a chance, but like you’re actually better just counting your losses because it’s a bit like a cancer in that it impacts other keywords and campaigns.

Steve: Here’s the thing though, what if you’re bidding on these keywords but people aren’t buying right away, and then later on you bring them back to like Facebook retargeting but Google AdWords doesn’t get credit for the click, how do you track these conversions?

Larry: So it’s just you, you have to be very skeptical, like very skeptical about – especially when it comes to attribution, Google AdWords is really great at being positioned at a very, very bottom of the funnel here. So they tend to like overestimate their value within the food chain…

Steve: Sure of course

Larry: But just be looking at the relative analysis, so like using the same flat metric comparing like how did it change, forget the absolute number but did it go up or down or doing a comparison between your product A, Product B and product C and then looking at the same metric of bench marketing against each other so that by doing so the level of analysis, the error kind of
cancels itself out, you see what I’m saying?

Steve: Sure. So how do you raise your quality score, because that determines how much you have to pay, so what are some tactics to do that?

Larry: It’s just raising the click through rate and that’s like an 80% of the algorithm right there. The best way to raise your click through rate is actually two things, have more interesting stuff to sell, sometimes if you have this garbage thing that you’re selling it can feel like pushing a rock up a hill, but like who says that you can’t change your product offerings. So like just selling drones instead of picnic pants.

Steve: Does that imply then that you should write your ads in a click biddy sort of way?

Larry: Yeah of course because the higher the click through rate, if you can get people excited about clicking on your ads, that certainly will carry through to purchase, like if you look at doing [inaudible 00:35:57] on all click through rates and conversion rates of the products in your account, yes generally it’s the case that if you can get people excited to click on something, they will be more excited to also buy it.
It may end and you’re like, wait a minute, I don’t want to pay for these damn clicks but like the higher click through rate reduces the cost per click for all of the clicks, you see what I’m saying?

Steve: Aha.

Larry: So it’s a pretty good idea yes.

Steve: That’s interesting, okay yeah because I was just thinking in the exact same thing as what you said, as long as you don’t over promise in your ad, right?

Larry: Yeah like free kittens in there, there is no free puppies to be had, well yeah that’s kind of like really going too far, but yeah up to the line and as far as you can go absolutely.

Steve: Okay and we talked about remarketing a little bit already, but can we talk about RLSA for a little bit, first of define what it is and then are some ways that you use this feature more effectively in both your search and in your shopping ads?

Larry: Sure RLSA remarketing list for search ads is just search ads like keyword based ads, but to people who are searching the keywords you’re interested but who have also recently visited your site. So it’s really a conversion detector so think of your spend Steve, like if you’re spending $1,000 on search ads, on average something like two thirds of those conversions that come out of that are going to be people who have brand affinity and have visited your site recently, do you see what I’m saying?

Steve: Yes.

Larry: And only a third of those conversions are kind of like net new like people who have just stumbled upon you on the first search, and the thing about that is typically what we see is that the remarketing spend, so the spend of the people who have visited you recently is like one tenth of the total spend. So I’m saying like you can generally speaking with RLSA you can get 66% on average of that conversion volume at one tenth of the total spend, so in terms of like the low hanging fruit and all this stuff that’s really where you should be focusing.
For super competitive niches I would be going after RLSA only campaigns, so dumping vanilla search because that really is the most unproductive spend, you see what I mean?

Steve: Yeah.

Larry: It’s like 90% of the spend producing a third of the results and then you start deploying that ad budget elsewhere for example like a radio ad or some other way to get people to know about your brand, that’s more scalable and cheaper.

Steve: So when you have these lists do you end up bidding higher or lower on your remarketing list?

Larry: It’s kind of complicated, so if you have competing kind of non RLSA ads for reasons unknown like it’s something to do with the option like I find that you do have to bid them up a little bit. Even if you’re applying those RLSA audiences as exclusionary, there must be like a million things that this action takes into consideration, like when serving these ads, but if you’re just doing RLSA only and that’s the only opportunity for these ads to run, then I feel like you don’t have to bid them up this much.

Steve: Okay, what is atypical up bid for like RLSA ad?

Larry: Right now for Shopping they could be like 25 cents something like that for USA based stuff, but that’s just the bid that’s not actually what you pay.

Steve: Sure yeah of course.

Larry: Your cost is usually lower than what you’re bidding.

Steve: I think mine is like 20% right now, I don’t know f that is the best practice, or not, that’s just what I’m doing.

Larry: Yeah I think it varies but yeah sure.

Steve: What else was I going to ask, oh one thing that I’m doing personally now is using the look alikes that Google offers, what is your experience been with them and how did they perform?

Larry: So in general look alikes it’s going to do better than no audience targeting associated with the keywords because what you’re saying is that the people who are searching for these things also meet sort of these bio persona characteristics, so it’ll do a little bit better. But the reason why RLSA works so great is because there’s brand affinity, so like they’ve actually visited your site, and they’ve consumed some memorable inspirational video content about why this Amish gazebo is so great, how it’s going to change your life.

So the problem with some audiences is while they have the right demographics interesting behaviors, they don’t have the prior kind of brand affinity experience that is so integral to raising the click through rates, and raising the conversion rates, so it’s kind of like in between. So it’s like you’re going to get more clicks and more conversions because you’re kind of casting a wider net, but that net is more diffuse and it’s not going to result in the same types of conversion metrics and ROI metrics as RLSA.

Steve: So if I could just summarize everything that we kind of talked about, you want to put content out there to get them on a list, and then you want to use remarketing first. Would look alike audiences be your next logical step before doing the just generic AdWords to broad audiences?

Larry: Of course, of course I guess it’s kind of an intermediary step better than nothing and then of course generically targeted vanilla keywords with no associate audiences I think is kind of the least interesting, because generally you’re paying the most there for the least qualified searches.

Steve: Okay and what about the display network, like when does that factor in outside of remarketing?

Larry: There is a lot of interesting developments in display marketing, so I think Google is feeling the pressure to kind of up their game there because Facebook and Google display networks are kind of competing for display ads essentially social ads are kind of like display ads. They’ve recently very quietly changed their targeting for Google display ads so that when you’re doing keyword targeting it used to be largely based on what the content of the page was, but now they’re making it based on search history, you see what I’m saying?

Steve: Okay.

Larry: So I think keyword targeting especially if you’ve got kind of unambiguous keywords that could be really great opportunities for ecommerce display targeting. The other one is they’ve always had customer affinity audiences, so that’s just like based on your search history we think that you’re trying to buy a car, or we think you’re trying to buy a house or something like that. There’s like 2,500 of these affinity markets – customer affinity in market segments sorry and those are very interesting non remarketing ways of getting in front of people who are likely to buy your stuff.

Steve: Okay and one thing I did want to ask you personally because this has been my experience, like I used to sue all the other comparison shopping engines like shopping.com, Shopzilla but just like within the last year and a half I would say I’ve been getting all these bogus scripts to the point where I know it’s all back clicks too because I can track the metrics. So are they effectively dead, like what’s your view on those guys

Larry: I haven’t been using those for like two years, so yeah I mean if you can get it to work great, but it wouldn’t be on my top ten.

Steve: I mean shopping.com used to work so well for me, I don’t know what happened to them in like the last year I would say, but…

Larry: I suspected it’s like Google tweaked their organic algorithm so like less of that valuable Google traffic is getting to them and that means your ads that show there are going to be a little less qualified, that kind of stuff. I think Google is trying to tighten the screws a little bit of all this free value they’re giving away.

Steve: And then my final question for you is you’ve run your store, and you’ve got marketing dollar, do you spend those on SEO or SEM, like how do you make the decision?

Larry: Well I think that SEM works it’s – like if you’ve been following what we’ve been talking about like I’m saying that SEM works at its very best when you’re amplifying your best organic content, do you see what I’m saying. So like if you have this like you unicorn video like the [inaudible 00:44:54] video asset which is kind of an organic asset, and then you promote kind of that, that’s a winning strategy. So I think you need both obviously, otherwise you just won’t have anything great to amplify.

Steve: You keep mentioning video over and over and over again, so it implies that video is like the medium of the future as opposed to just good old text content?

Larry: Yeah because that’s where all the time on the internet is being spent on mobile and just like video is so much of more optimized for delivery for mobile. Like just think about you’re doing other stuff, you’re on the go, this thing is so much more memorable and you can make it so much more information, yeah it sticks.

Steve: Okay is that what you’re doing with like WordStream for example now when you’re running your ads for your own site, like is it all landing pages with video?

Larry: That is our like over the last six months we’ve been investing heavily in that and yes like video. We’re creating like all these video ads and stuff like that yeah.

Steve: Okay, oh cool Larry, we’ve been chatting for quite a while now, it doesn’t feel like it but I want to be respectful of your time, where can people find more about you and the services that you have to offer?

Larry: For me personally the easiest way to get hold of me is on Twitter, this is @larrykim, for my company WordStream obviously just go to wordstream.com and we’ve got thousands of pages and videos of stuff that you can read or browse through.

Steve: Cool, thanks a lot for coming on the show Larry, really appreciated.

Larry: Thanks Steve

Steve: All right take care.

Hope you enjoyed that episode. Larry really knows his stuff, and actually since we recorded this episode he’s actually stepped down from WordStream and has started a brand new company so stay tuned. For more information about this episode, go to mywifequitherjob.com/episode159.
And once again I want to thank Sellerlabs.com for sponsoring this episode. Their tool Ignite is actually what I use to manage my Amazon pay per click campaigns. Instead of the old tedious way of generating reports and analyzing your ads campaigns in excel, Ignite aggregates all the info for you in one place and allows you to quickly visualize your data and make decisions fast.

So not only does it save time but it also makes managing your Amazon campaigns so much easier. So head on over to sellerlabs.com/steve and sign up for a free 30 day trial, once again that’s sellerlabs.com/steve.
And if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away via email, thanks for listening.
Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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158: How Noah Kagan Grew Sumo.com To An 8 Figure Company

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158: How Noah Kagan Grew Sumo.com To An 8 Figure Company

Today, I’m really happy to have Noah Kagan back on the show. Now Noah was actually one of my very first guests way back in episode 7 and he took a chance on coming on a podcast that hadn’t even launched yet.

Anyway since we last spoke, Noah has gone on to create an 8 figure company in the span of 3 years in Sumo.com and today we’re going to find out exactly how he did it. Noah also started a podcast called “Noah Kagan Presents” which you can all check out by clicking here

What You’ll Learn

  • How Noah decides on his yearly goals for his company
  • The intricacies of having a freemium model with your SAAS business
  • Noah’s philosophy on paid advertising
  • What’s worked well for Sumo.com and what hasn’t worked so well
  • Random Actionable Noah-isms

Other Resources And Books

Sponsors

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Transcript

Steve: You are listening to the My Wife Quit her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not with their businesses. Today I’m thrilled to have your boy Noah Kagan aka rhino, aka rabbi [inaudible 00:00:14], aka DJ PB back on the show.

Noah was actually guest number seven on my podcast way back in the day. The guy took a chance on me when I didn’t have an audience at all and I thank him for that. And now he’s actually started his own podcast called Noah Kagan Presents which I highly recommend that you check out. Normally I listen to all my podcasts at 2X speed, but with Noah’s podcast I listen to every single episode straight through from start to finish at 1X speed.

Anyway today Noah and I are going to be talking about sumo.com, and how he took his business to eight figures.
But before we begin I want to give a quick shout out to Klaviyo who is a sponsor of the show. Now I’m super excited to talk about Klaviyo because they are my email marketing provider of choice that I personally use for my ecommerce store, and I depend on Klaviyo for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another provider. Well Klaviyo is the email platform out there that is specifically built for ecommerce stores, and here’s why it’s so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they purchased which makes it extremely powerful. So let’s say I want to send an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special autoresponder sequence to my customers depending on what they purchased, it’s a piece of cake, and there is full revenue tracking on every single email.

Now Klaviyo is the most powerful email platform that I’ve ever used and you could try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to give a quick shout out to Privy who is a sponsor of the show. Now what’s cool is that I also use and rely on Privy for both my blog and my online store. Now what does Privy do? Privy is an email list growth platform, and they actually manage all of my email capture forms, and in fact I use Privy hand in hand with Klaviyo.

Now there is a bunch of companies out there that will manage your email capture forms, but here is why I like and chose Privy. Privy is easily the most powerful platform that I’ve ever used, and you can trigger sign up forms based on any primer that you desire. So let’s say you offer free shipping for orders over 100 bucks, well you can tell Privy to flash a popup when the customer has $90 in their shopping cart to urge them to insert one more item.

Here’s another cool use case, if someone has item A in their shopping cart, I can easily tell Privy to display a coupon code for that item or display a related item or offer. In terms of email capture, I’m showing a different email lead magnet depending on what product a customer is browsing in our shop.

So bottom line Privy allows me to turn visitors into email subs, which I then feed to Klaviyo to close the sale. So head on over to Privy.com/steve and try it for free, and if you decide you need the more advanced features, use coupon code MWQHJ for 15% off, once again that’s P-R-I-V-Y.com/steve. Now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast, today I’m really happy to have Noah Kagan back on the show. Now Noah was actually one of my very first guests way back in episode seven, and he actually took a chance on coming on a podcast that had not even launched yet, and in fact back then we didn’t even know each other at all and I actually conned him to coming on by telling him it was an Asian dating podcast.

Now what’s hilarious about all this is that I told my podcast editor that Noah was coming back on, and she was terrified because the last time I had her edit out all of his F bums and they were a lot of them. Anyway most of you probably know his background already and if you don’t, go check out episode 7 of my podcast.

I’m not going to spend a lot of time going through his background, but last time we talked about his company AppSumo, and today we’re going to talk about sumo.com, and how he’s grown it into an eight figure business. I’m glad to have you on the show man, how are you doing today?

Noah: Better, better, I woke up feeling pretty lousy, I went to therapy and felt lousier, had a great lunch, felt inspired, went to the gym and now I’m on it dude, I’m with you Chou.

Steve: Are you still go on therapy, I thought you stopped that.

Noah: You know a lot of the things that we do that get us successful, you have to keep doing, and I think that’s part of the hard part is that I was reading about it this morning it was really interesting. It was like we get to this level of arrogance or assumption that we think we know everything, and then I don’t need to do this basic stuff anymore. I try to just keep myself in check and so I reflected in the past like therapy was helpful for me so I go every other week.

It’s funny because I think therapy just has a bad phrase to it, it’s more of like a mind coach, it’s my mind coach and I go there and I do all my Jewish complaining, and the guy is like that will be like 125 and then here’s your [inaudible 00:05:10].

Steve: Speaking of therapy I actually had a question for you like I remember a while ago when we were talking about Sumo, you grew it to like 20 something people, right? And you went to India and then you came back and you fired everyone, went back to basics and made it a small quadruple of people again, and now you got like what, 30 people at Sumo group, is that right?

Noah: There is around 43 of us.

Steve: Yeah 43, okay so what’s different this time? Like you grew up Sumo and then you fired everyone, why are you growing Sumo Group?

Noah: Do you think that if I told the team I was going to India again like everyone would be [inaudible 00:05:41]. Like hey guys next week I’m going to India, heads up. No I love everyone at Sumo, what’s different or what are you trying to understand?

Steve: Oh no in AppSumo you brought it back to under a quarter group of people.

Noah: Oh yeah.

Steve: So now you’re trying to grow another company, large it seems, right?

Noah: Yeah, it takes the same amount of effort and this is up here [inaudible 00:06:05] thing he told me. It’s like it takes the same amount of effort to do something small as it does to do something big, like literally the same amount of effort like you’re going to work eight hours a day you might as well try to do something bigger. A lot of the times I think decisions of mine should be like what makes a more interesting story like over the boarder choice, what makes a more interesting story?

So if you’re choosing things you’re like well there’s something kind of really big, I think that would be more interesting for my life and I can look back and have a great story for myself not just for other people. So company wise I think what – I actually had this amazing thought, I thought — that sounds so strange, it sounds so [inaudible 00:06:40], all this is an amazing thought. I had a very interesting thought for myself, it was like what if you couldn’t have a legacy and then how would you behave?

Meaning what if your kids are going to die right after you so you couldn’t have kids as your legacy, or like everything you do gets erased 50 years after you die. So the idea, it’s like oh I’ve got to do this stuff so I’m remembered which I think is what we’re all trying to aim for, that is like not important anymore, and like I wonder how that will change a lot of our behavior?

Steve: That’s a great question, you’ve already got money, right, so what does growing a larger company do for you?

Noah: Well the larger company it’s not time to grow a larger company just for a large company, I think a lot of people could just go hire a bunch of like low wage people then you could have – anyone can hire 20 people off Craig’s list and have a 20% company today. So I’m always kind of cautious when people want to brag about their company.

When I share myself I never try to brag about it, I’m just trying to share like here’s advice of things I’ve learned through my experience, a lot of it is for me to reflect on, it’s like my own therapy. What I’ve done through – or would I say like in terms of our evolution of the business at Sumo Group like appsumo.com or our coupon for gigs and sumo.com, our free marketing tools, it’s more of like creating what you want and then putting yourself in the right place.

So more specifically I call it finding your sweet spot, so finding the thing that you just love doing on this earth and that you’re really interested in and then really sticking around that and growing around that, and then really complementing yourself in your weaknesses and things that you’re less interested.

So specifically with sumo.com which is our free marketing tool software, helps people grow their email list, like I’m really good at starting things, I’m really good at marketing things and I really love that part. I don’t particularly like any meetings at least at this point of my life, maybe when I’m 40 I’ll be, oh yeah it’s like meeting day, I’ll say the F word fun, I know that’s what you’re saying I said in the last episode, but yeah it’s I don’t enjoy that, I don’t enjoy a lot of long term super big planning, it’s just not what I want.

I think I felt guilty about that for a long time and that was like, oh I’m weak at it let me get better. I’ve come to the conclusion in the past – more recent that I was like just go embrace the things you’re great at and improve on those, and then find people who love to do the things that you don’t. So find someone who loves to do recruiting and find someone who loves to do development or loves to do sales and then you go and focus on what you really love doing.

Obviously if you have a family and bills don’t just like quit and leave everything, oh no he said I’ve got to love this and I love you, but go and reflect in the past six months what have you worked that wasn’t work, what have you done in the past six months that you woke up early for, what in the past six months have you been excited to share with others?

And then that’s what really what we’ve done with Sumo where Ayman is amazing, he’s running appsumo.com our group on for gigs and he’s growing it to a larger size because he’s excited about it and there’s a lot of products to promote on AppSumo, and then shared my business partner with my best friends who was our CTO, he is running sumo.com, he has a bigger vision that I do for it.

The idea that I stepped out and I’m more of an advisor, I’m still involved, I’m still helpful, I’m not like 4 hour work week like not do shit. I don’t really respect that in the other people, it’s more of like I’m involved, I actually think distancing myself has actually helped me and helped the business. So specifically if you have ever gotten advice from someone that you’re like, man the advice was really good, why didn’t I give it to myself, have you ever had that happen?

Steve: Where I’ve given out advice that I should follow myself, is that what you’re talking about?

Noah: Yeah someone gives you advice; you’re like dude I feel like I tell other people that advice.

Steve: Yeah, yeah it’s happened to me before.

Noah: Yeah that happens, you’re Steve Chou so like it never happens; you have perfect advice just like your SATs. I mean you’re the perfect Asian child, I wish if I could have a perfect Jewish child that was like you, but Jewish that would be cool.

Steve: Stop, stop it, stop it right now.

Noah: No so in terms of that like I think the fact – like for anyone here who has a company even if you have a small company like you’re making 1000 a month which is amazing, it all starts somewhere, or you have a larger company, I think if you can take and step outside of your company and just give yourself advice in a more unemotional way I think that’s a very easy strategy to create a larger company.

And so for me I’ve stepped out of more the functions that I don’t really enjoy like recruiting I don’t enjoy, doing certain types of marketing I don’t enjoy, and then putting myself in terms of like doing podcast interviews or creating content in certain topics or experimenting with new marketing channels, that’s where I’ve gotten lot of my fulfillment, and so you’ve got to put yourself in that place.

I literally have this quote repeating on my to dos and I see it every day pop up and I’m really resonating with it which is, it’s always your responsibility. So for all this different stuff and creating the company you want and creating the life you want and creating the relationships you want it is your responsibility and I’m not saying you Steve, I’m saying like you, me and the 15,000 people who have this open to their ear lobes.

Steve: You know I remember back actually when you first started – it was SumoMe back then before you spent a ridiculous amount of money on a domain, by the way how is that going?

Noah: The domain?

Steve: Yeah.

Noah: You know I don’t know about you Steve, but I am so freaking, can I say that word freaking is not…

Steve: Yeah freaking is good, freaking is good.

Noah: Freaking happy about it and you know it’s so weird I literally just bought these boots that were like $100 and I’m like yeah the boots are okay, and then I got like – I’m looking over my thing, I got – what else did I get – I got this like coffee table for $300 and I’m like it’s okay, but I bought a $14 belt and I’m like unbelievably happy about this belt, and I’m just it’s not about the money, it’s just about buying and getting things you actually really want and going after them.

The domain is just something I’m so happy with. I know you’ve told me sort of your wife and you’re like you know you went after it and you got it, and obviously I want to go do that in a safe environment. My suggestion though is like with the domain it sounds like a lot of money but number one we structured it over a five year payment plan, so we paid half upfront and the rest over five years, so it’s only actually a few percent of our revenue each month if you break it down that way.

Steve: Well thinking about that way it’s like an expense I guess.

Noah: Yeah it’s literally an expense that’s umber one and number two I’m just so proud of it, like I called someone on the phone last week and I was like no it’s sumo.com and it wasn’t like, oh how do you spell that, because before it was sumome.com, they are like it’s sumo, some of me. And so yeah there’s more to that, it’s a story of persistence.

Like I think in general people need to think about what do they really want and pick things that you like, you’re willing to say like go seven to ten years afterward and I think a lot of that is fun, it’s really damn rewarding when you finally get that.

Steve: I remember you correcting me this morning when I texted you, I think I used SumoMe and you then you said Sumo, its Sumo man.

Noah: I mean $750,000 a word a letter, so yeah I paid a lot for two letters. You know one thing I heard this morning about getting things you want, I was talking to the in a hundred contacts funder Jonathan Koon who runs Wikibuy, it’s a cool chrome extension. He’s insanely impressive, he had this belief and I have to share it because so damn good. He said if you want anything in life I will give you the secret of success, and I was like you’re going to just give it to me, how much?

He’s like it’s free and I was like okay so I put on my seat belt, I was like yeah tell me Jonathan I want to know. He’s like all right, work on anything 80 hours a week for 20 years, and I was like you’re serious, he’s like that’s not even – there’s 168 hours in a week, this is less than half of your week working, but I promise you if you pick anything and you do it for 20 years and you work 80 hours a week on that, you will get the success you want. And I just thought that was kind of an interesting thing.

Steve: I had that philosophy for myself except not the 80 hours part, but like when I start something I plan on doing it forever.

Noah: How do you keep interested in it, so like I’m doing my podcast and I’m still loving it and I’m still interested in it, but like you look at turtles, so how does the turtle like – like how do you keep going with that?

Steve: So I just put it in my schedule and it’s done, so my class I’ve been running since 2011 and every single week I do a webinar for my class and I’ve been doing that for six years now straight. Same with the blog, I started that in 2009, I write one post a week, and I’ve been doing that for eight years now.

Noah: Okay, so you’re simplifying it too much, you’re like I put in the calendar and it just magically comes out like oh like your cousins in China just write it for you or something which is probably not – maybe that’s how you do it, you have like a billion people over there to hook up.

Steve: This you again on my case for this before this interview started right? Okay so go on let it out.

Noah: No, no, no I’m actually just really curious, so how do you actually keep yourself interested, is it just like you’ve built a habit muscle like your discipline habit on like sticking with something is just so strong and like you’ve just worked on that? How do you keep doing it weekly for so long on that and I think that’s impressive, I think that’s – and I do, do that with certain things but not others and I’m trying to learn and improve on that.

Steve: Yeah I mean – so each time how do I come up with content or?

Noah: No I don’t care about how you come up with it, like how do you keep yourself interested so that you can keep doing these webinars every week for the past 500 years.

Steve: I don’t know, there’s just my personality, it’s just like lifting weights. I’ve lifted at least once a week not missing any workouts since I was sophomore in high school maybe or junior in high school, so it’s just my personality, like I pick something and I just say I’m going to do it forever and I rarely drop anything like I’ll pivot, but I’ll rarely drop anything outright.

Noah: Okay so number one, you make it sound too easy but I think you actually had some – you do dude really like you do, you’re like yeah it’s just me, it’s like okay so – I guess what I’m trying to think about for everyone else and myself is that what is it really, and I think maybe it’s a key you’ve promised yourself that you’re going to do it every week and then that like commitment to something helps you stay with it?

Steve: Yeah I’m committed to it.

Noah: Do you have like an end date with that, or is it no I just like hey every week I just do this, this is like I build the habit?

Steve: I don’t have any end date for any of my stuff.

Noah: That’s actually a really interesting point; you’re just like hey I’m really excited about this or interested in this, so it’s not about an end date, this is like a continuous state like when there is no end date?

Steve: There is no end date, in fact I never even plan on selling stuff, like someone told me once that you should go on to every company with the intention of selling it at some point. I don’t have that philosophy, I mean it might happen but I don’t go into anything with the idea of selling it. Like my blog, my face is on there, I don’t think I’m ever going to sell it.

Noah: What’s the last thing you stopped and why?

Steve: What’s the last thing I stopped?

Noah: See I think you’d be great for a wife like to get married to because you know you’re not going to quit on them. I’m sure Jen is like he’s never leaving.

Steve: I don’t know man, maybe this is like…

Noah: No, no dig deep.

Steve: I don’t know, I don’t know if the listeners want to hear about me man, they are here to hear about you, let’s revisit it at the end maybe, is that cool?

Noah: Oh I like how you do it Steven. Whatever you want to do Steve, it’s your show.

Steve: All right, let’s talk about Sumo, the beginning.

Noah: Dot com.

Steve: Sumo.com, sorry. Early days like I remember when we were in Fincon and we were taking a walk, you told me you started SumoMe back then, it’s not sumo.com and you asked me to install SumoMe like 20 times in a single conversation which I eventually complied. But I want to know what your game plan was in the early days to build it up to what it was today, and – see at the time you already had a big audience and a following.

So I want you talk about it from the perspective of not having any of that stuff, and I know you talk about focusing on a single goal a lot; I’ve listened to a bunch of your stuff.

Noah: Yes Steven.

Steve: I do, I follow you man. So how did you design your goals from year to year for SumoMe – Sumo.com?

Noah: So let me just preface this because I think a lot of people were like Noah has AppSumo which is a large mailing list and OkDork.com my personal blog which you should all go subscribe to. Just because you have a large list doesn’t mean they’re going to do what you say and hopefully they do, hopefully they make their decisions and – but hopefully they also trust you and do what you recommend.

So many times in my career I’ve noticed that we’re like, hey we built this, go buy this, and people are like, no not interested. So I think people have to be aware like just having a large mailing list is no point, it’s about the quality of it and then doing things that people actually want. So when we started Sumo our original hypothesis was we would build and app store for the web. There was like the WordPress plug in directory and there is all these other directories like you have Shopify store but what about for every website.

We built that and we kind of literally just built a bunch of random apps, and we used it on our own website like we built this highlighter one, twilighter is what we called it where you could highlight text and then tweet it on your blog. I think the two interesting things that happened in the beginning of it where number one how do you prioritize your work, because everyone has the same amount of time but how prioritize the work so you get the most leverage for your work, and
I’ll say it again, how do you prioritize your work so you get the most leverage?

Let’s say you have a list of ten things, you can get them all done but if you get the first one thing done before another, how much more leverage and growth can you get out of that before you get to number ten? I think that’s where a lot of people miss, so as we did our first step like how can we better prioritize the different apps we’re building.

So we went and looked at different directories and different SaaS products that were paid and cost money and we figured out which ones are the most popular and that’s how we prioritized the different apps we made.

Steve: Okay.

Noah: So that was a really interesting concept just working backwards from like what’s popular, how do we just…

Steve: What was that app, was that the list builder?

Noah: Yeah, list builder the pop up was really popular and then share buttons. It was like we just kind of like those are really popular on other competitors and people were paying for them, I’ll just make it free. And then the second thing…

Steve: Can we talk about that real quick, why just make it free right off the bat, like the other services were paid if I recalled at the time, right?

Noah: Yeah, if I had to do it all over again I’d probably do paid.

Steve: Okay, why?

Noah: Because it tells the truth. I love the freemium model, so I don’t think I would leave the freemium model specifically, I don’t think I would leave that, but what happened is that after the first year and a half we were like man we have all these people using it. Our yearly goal for the first year was to get a billion people, unique people to see a site that had Sumo installed, that was our goal.

Then at the end of the year we were like let’s just see if these sites will pay any money, and then we went to these sites we were like do you want to pay maybe for something and a majority – maybe we didn’t have something great to offer but the majority of them were like nope. I was like we should have just tried to figure that out right away.

Steve: What percentage?

Noah: I mean it’s standard kind of SaaS software percentage which is like somewhere between like 3 and 5% and that’s an impressive number for a freemium SaaS business.

Steve: Okay, actually how much were you charging for that first – the first time you were charging people?

Noah: I’m going to share a story from like MailChimp. If you read MailChimp – I got so excited about MailChimp, my bonner [ph] popped over the microphone.

Steve: I’m going to have to edit that out I’m sorry my friend. Okay go on.

Noah: My junos [ph] knocked over that microphone, I can’t say that either. I knocked over my microphone. So MailChimp put out this blog post that kind of stuck with me that they changed their pricing seven times in like two years or some surprisingly amount of number of times. This is kind of the same thing with our business and I think with every business, and I’m not trying to encourage you, I hate when people do this.

Here’s a great way to grow your business, raise your prices. I feel like that’s like the most generic ass business advice I’ve ever heard and I hate when people say that, but I do have to think people to realize that pricing is a very powerful tool to decide who your customers are and decide how much value you’re creating for those customers. So what we realized is that recurring revenue is a lot better way to grow our company because it’s more predictable and consistent.

It doesn’t grow as fast but it definitely helps and also to make something that people want to subscribe to, like software as a service is a service that you’re giving as a software which I think people miss, but we actually started out just selling like templates for our pop up design. So we had this list builder in sumo.com that you can collect emails and then we sold the templates and it was one off, they are $5 each, and we wanted to do it to see if people would pay and much less people paid than we thought.

Then we charged like $5 to remove the branding and no one paid for that and I thought everyone would pay to get the branding removed.

Steve: Interesting okay.

Noah: So it was super interesting, I was like oh of course you don’t want to see powered by.

Steve: I just had – I interviewed Nathan Latka, I’m pretty sure you know who he is and he said when he branded his stuff, that’s how he got the majority of his traffic, was that the case for you guys too?

Noah: One more time?

Steve: When he added a link to his company Heyo I think it was at the time, he got the majority of his new customer acquisitions through that link.

Noah: Yeah so that part was great, but people actually paying to remove it, no one really cares. I think people are just kind of used to it by now.

Steve: Interesting okay.

Noah: And then so we’ve changed our pricing probably about seven times in the past two years, so what you have to do with pricing is try to – here is the simplest way, this is like the really easiest way to think about it. You should feel that people are stealing from you, like that is the easiest way to figure out your pricing and you are like what do you mean?

The price should be so good you’re like, oh my god these guys are going to go out of business, I can’t believe it’s so affordable. That is the way I love to do pricing like I’m sure we can come up with formulas and stuff, but we basically keep looking at the business and we’re like – so for example we used to sell the templates and we were like there’s got to be other advanced things, so we built advanced things for other tools in Sumo because Sumo is this app store for marketing app store for your website so you need a great website.

And so we had each of the tools had a pro version and then we were like we should make it recurring so it’s better for us and it’s easier instead of charging people for each time we have a new update. And so each app was $20 and it was like if you wanted all the apps it’s like $200 which seemed kind of expensive for all the apps, so we were like what if we had a bundle because that seems a lot fair for everyone and that’s what we would want.

So we were like well all right you can add an extra $100 or you can buy them individually. And then we thought about it and we were like there is small sites and large sites, some sites can afford a lot, some can’t afford a lot at all. So then we were like what if we just made it one price for small guys and one price for big guys, and so then we did that.

And then we realized like wow, people really want to pay for certain things and not other things, so we actually just went and looked in being like we looked in our data and said, what is everyone paying for like when they hit buy what feature are they looking at or what feature are they coming from? And so we left that paid and everything else that they are not using we just made free.

I can promise you in the next year we’ll make other changes that we think just make the product so effective that is great. I think one suggestion for almost any product out there, anybody who’s got ecommerce or anyone who’s got a SaaS business or info business whatever it is like get the people engaged first, get them kind of like I don’t want to use a drug analogy, but basically get them addicted to what you make, get them getting the value.

Steve: I like get them pregnant.

Noah: Oh god man you took it to the next level which I like, but yeah you want to get them kind of hooked on your service and like putting up barriers or like not letting them invite people. So you want to get them engaged and you want to get them to be able to bring people with them to your product. The more I think you can do those things and have it at a price that they’re like, this is such a good price, I just think well you’ll have a business that will be successful.

Steve: Does that imply like a freemium model then or no?

Noah: I don’t think freemium one is the only way to go, there is always [inaudible 00:26:30] to a lot of this stuff, I’m just saying like it works because freemium is basically a marketing strategy. If you don’t do freemium that’s fine, it’s just that you have to do employ – use, employ, what the hell does the word stand for?

Steve: Employ.

Noah: Employ yeah I guess employ other marketing strategies. I like the freemium model in general because it’s like a trial before you buy, like before you buy a car you test drive it. So I think the question then is for people who have like ecommerce may be they are gateway drugs, can they have smaller items for people to get experience, is there something like my buddy does it from fitflyshaker.com. He gets people, the first ones free, all they have to do is pay for shipping.

Steve: That’s what we’re doing right now with hankies believe it or not.

Noah: And what have you noticed with that?

Steve: People buy hankie and then they come back and they buy a big set.

Noah: Really?

Steve: A small percentage yeah, believe it or not there’s people out there who collect handkerchiefs and use them all in the house. Our demographic is 55 years of age or older, I discovered that recently through Facebook.

Noah: How did you discover that, you were like upload your email lists?

Steve: Upload the email lists, look at insights, and then just run a bunch of tests.

Noah: What do you mean run a bunch of tests? This is where I want you to be a little more specific.

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Okay so I would take an ad where I just put together a nice video of all the handkerchiefs, and then I create a look alike audience and then I just send that ad out to all the different age demographics and just kind of split test it across them.

The 55 year old people and up, there was like an overwhelming demand for that demographic and then the younger people didn’t care at all.

Noah: So do you sell like the handkerchief right away or do you give it for free and they just pay for shipping.

Steve: Free plus shipping.

Noah: Oh they just pay for the shipping.

Steve: They just pay for the shipping but after they add the free thing to their cart I kind of up sell them with like something that’s like 40% off and see if they’ll buy, and I do that to just kind of pay for the cost of the ad. It ends up that that little extra up-sell more than pays for the ad and then I have them on my email list in the back end.

Noah: That’s cool.

Steve: That’s how I do it; sorry I interrupted you, go on with your story.

Noah: I don’t remember where we were with it.

Steve: You had a friend who did a free plus shipping model for something.
Noah: Oh yeah Dustin yeah and that’s actually – I mean the point is that for ecommerce people figure a way that if it’s like a bigger purchase like how can you get them on the phone, how can you get them like – I think ultimately with a lot of this is like how do you get people to trust you, to believe what you’re saying will be true.

I think with the product there is number one thing is, is it valuable to that person that you’re trying to target, and then do they believe that what you’re actually offering will give them the satisfaction they are hoping for in a physical product or a digital product or even in a meal. And so that’s really what you’re trying to accomplish, so figure out ways that you can build that trust, like I think about it like a coach.

I have a chess coach and I think more people should get coaches, so if you’re trying to learn anything or improve anything go get a coach, and I don’t have a coaching business so I’m not selling you anything. But if you want to improve go find someone who is already better than you and then they’ll teach you.

Steve: You have a ping pong coach right?

Noah: Ping pong coach, chess coach, Hebrew coach, mind coach.

Steve: I had to say this on the air, Nevel said that he beat you on ping pong, he doesn’t have a coach.

Noah: Oh my god, he like one time it’s like he beat me once and then it’s like I’ll put it on his tombstone I bet.

Steve: All right sorry so let us go back. So I’m curious myself like how did you come up with that goal of one billion people for that first year, like what was the reason for that?

Noah: I think that was incorrect if I had to look back on it. One is like similar goals because I think it unites the company. The thing that I would probably do is have a goal that doesn’t end within a short period of time, like right now we have a five year 2020 goal and I think that kind of helps continue, so at the end of the year — because what happens is we hit our goal like let’s say November, we‘re like what do we do now because we have another month before the next year, do we just like show. No we already know where we’re going in 2020 like keep working towards the longer term goal.

The goal like how do you choose a goal. The way I like to think of it is specifically is like it should be realistically impossible, so what that means is it’s realistic and there is a chance you can do it and it’s impossible, you’re like I may not be able to hit it. So for instance my podcast Noah Kagan Presents, so if they are going to listen in they want to hear more of me, they go check that out. If they like me, they don’t then they should probably listen and they can hate me more but Noah Kagan Presents.

So my goal is 100,000 downloads in episodes. I think putting it out there and having a similar goal helps you prioritize your decisions, so I wonder if I market Facebook and it makes things easier. Like I was working on OkDork.com my blog and I was like, well we need to make a change and I was like which change will help the podcast grow more, it’s like this one, it’s like let’s do more of those.

Steve: What was that change?

Noah: The change was our autoresponder series. It was like do we put a link to YouTube in it, to YouTube videos I’m working on or to the podcast, and I was like what’s the goal, podcast, easy.

Steve: What are you linking to on your podcast, are you linking to the iTunes page or another page that instructs people how to subscribe?

Noah: I’ve listened to the instructions page but I don’t know if that’s really well optimized.

Steve: Okay and are you…

Noah: How do you recommend?

Steve: I’m just curious, are you diverting them, do you just care about iTunes subscribers or do you care about the other ones too?

Noah: I think if everything goes through Libsyn it’s overall.

Steve: Right yeah that’s true.

Noah: Okay the similar goal – and I think the similar goal just like we have a dashboard that you see literally every single day, everyone knows our goal in the company, it just kind of unifies the company. Then there is obviously like key performance indicators or [inaudible 00:33:06] or whatever acronym somebody wants to use that each team is responsible for to help hit that goal. But I just think it unifies people, so I’d say in terms of like how we chose that goal, it was like realistically impossible, so it should be something you should probably do within some set period of time.

And then I would say if immediately you know it’s not even going to be close, change it. So for example our second year we were like let’s try to make $10 million in our first year of charging for things and literally in our first month we made like 50,000. I was like there is no way impossible we were going to make 10 million, like that is just not – it’s never been done which doesn’t mean it can’t be done, but that just seems like way too – that’s like unrealistically impossible.
And so then we shift our goal to a million dollars because like…

Steve: Sorry I want to hear the details on this, so you hit 50,000 in the first month, then how did you…

Noah: Honestly it might have been lower than that, like let me go; I’ll look it up as we’re talking.

Steve: Okay so how did you pivot from there, like what were you doing wrong, what changes did you make?

Noah: Yeah so I think the two things there was — there was two separate things. It’s like one is the product off which is yes and then there was the goal off which was yes. Right so here I’m looking it up, bad all time. I’ll look at our first month, our first month – oh my god it was $17,000 of revenue, so twenty times twelve, it was basically we were going to make a quarter of a million dollars by the end of the year which is not good.

Steve: And your goal was 10 million you said?

Noah: Yeah.

Steve: Okay.

Noah: So it was like that’s just never going to happen, it’s very unrealistic, so that’s number one. Then we were like – then we had to go back into the product and figure out okay what the hell do people actually want to pay for, and that’s where we started making a lot of pricing changes, that’s where we started improving, okay which products are people really using and then let’s go improve those more than other things.

I think that’s something that a lot of people miss out on, they are like let’s just do – it’s like marketing, let’s do all the marketing channels. I’m like if you’re going to do one which one would you do, this one. If you had to stop which one would you stop, that one, okay?

Steve: Can I ask you a question, for the ones that people aren’t using that much, like why even bother having it because it takes engineering resources to maintain it, right?

Noah: Yeah so we started hiding them. Okay, that’s kind of what Brain Dean has been talking about and like what I did on my blog, it’s like I removed all my old blog posts that I just didn’t think were quality, same with my YouTube. Because I think of it like a restaurant, it’s kind of my favorite analogy. You go to a restaurant you have shady meals, you’re not coming back to the restaurant no matter how – if you had a dessert that was good but all the other dishes were [inaudible 00:35:34], you’re like no I’ll try another place.

It doesn’t mean that your old dishes that are classics can’t stay there but maybe you need to refresh them or maybe they are just a classic and you keep it. I just think in general focus on what’s working and then you got call, either like kill it, remove it or improve it, the things that aren’t working or people aren’t using.

And lastly I would say for like ecommerce or any business out there if you try to understand what people will pay for just go talk to them which I know people don’t want to hear this because they’re like, oh no I’m trying to do a passive income business where I can avoid real feelings in people. But I’ve noticed that if you try to grow a larger business you have to get your hands dirty and do some of the bitch work sometimes. Like you have to go either survey people, like hey why didn’t you buy this, just tell me.

Like literally if you guys go ask your customers, hey why didn’t you buy this, they’ll tell you, and the people who bought it you’re like, hey what made you want to buy this, they’ll tell you. And then you can just go fix those two things.

Steve: I can support that, I had to answer phone calls on Cyber Monday for my store and I actually discovered a couple of usability issues with my site by just talking to people who couldn’t really surf the web, like these are like we have an older demographic and so they didn’t know how to actually navigate a web browser, so I would never have found that out if I wasn’t answering phones on Cyber Monday.

Noah: What did you change?

Steve: There were some things where like on our cart people would try and remove something on the cart by making the quantity zero whereas I had this big checkbox to remove the item, people weren’t using that checkbox, they were just entering in quantity zero and expecting the item to go away, so something stupid like that.

Noah: Well I think that’s a really important point, so if anyone who’s got ecommerce either A get them on the phone which some people are like no I don’t like phones, or B get on live chat, or C like an easiest one – so two here’s a stupid one we forgot to do and now we’re doing again is like when someone unsubscribes or someone wants to return something just collect that information.

So we collected and we force it like hey please give us information why you’re unsubscribing or why you’re returning it so that you can go and make your business better, and you can do the same thing to people who are buying and I think that’s a great thing.

Steve: Can I ask you how you’ve used that feedback to improve, like give me an example?

Noah: Yeah so a lot of people, so with Sumo and we look at [inaudible 00:37:43] we have a weekly kind of discussion about why are people returning – you can’t really return it but why are people cancelling it, and then we like rank it and we see some of them is unrealistic like they are just small sites where they have no money. You can’t optimize losers and it’s not like we don’t like everyone, we like most of them, it’s just like you can’t help everybody. What is it help everyone; you help no one kind of thing.

The ones that you can actually fix are the ones that you should be considering, so for us it’s like hey I didn’t use it, okay what happened there? So and going and talking to them, so we started offering now like a concierge service, we’ll go help set up Sumo for people.

Steve: Interesting, okay.

Noah: Hey I didn’t get enough value out of it, so I didn’t get enough value because email is just actually not that important to them or they didn’t know how to set it up correctly, and is there a thing we can improve in the product to really solve that like maybe we need to improve our autoresponder, so once they join they can learn how to use it better.

So I think it’s just more of like, okay make a list of all the different things why people are cancelling or returning something, prioritize it like just sort it by most popular and then see which ones are actually solvable and then go and solve them and then you keep doing that, you’ll have a business that will be successful.

Steve: I’m just curious; do you actually go out and call these people?

Noah: They are talked to by the support and success team, so most afternoons we have a support team that kind of does reactive complaints like people that are now coming in to complain and then there is success which kind of proactive support. So you go into new customers and either answer the questions ahead of time or helping them optimize their current business.

Steve: Okay so the purpose is just to learn, it’s not to actually get them back per say?

Noah: You know I think it’s kind like a relationship with a girl or it’s like building a house. You have to have a good foundation and then by the time someone is churning in a business it’s already too late at that point. So you have to actually – it’s kind of like it’s first impressions that people had of me. If people are listening to me right now on your show, by now they like me.

Steve: They do.

Noah: They do, it’s not alien, but I’m trying to make an example. If they hated it they would be like, I’ve heard Noah before, I hate all the stuff he says, I don’t get anything out of it. It’s already too late, by now they are not here, but the people that are here because I have given enough value and ideally things that they can use in their own live, they are like, man what else is he going to say because I want to keep listening.

That’s the same thing with your business, the more that in the beginning you create a good relationship and you maintain it and you keep delivering on it, the less you have to worry about churn. When they are already at the end it’s too late, like you never go a store and you plan to return something, it’s too late, it’s already too late then. The best you can do is not have them walk away, complain to everybody else and then try to learn something so that you can improve for the other customers.

Someone said this to me once for email businesses, because email has been a big thing in my life, don’t optimize the unsubscribe page. I spent like a month on AppSumo optimizing the unsubscribe page and my friend said to me, so you’re optimizing the people who hate you, why don’t just go optimize more of the people who like you. I was like that’s a good point.

Steve: Interesting I didn’t know that – what does it mean to optimize an unsubscribe page, what does that mean?

Noah: Oh put a picture on it, change – have options for frequency, have options for time of the week, have options for which emails they get, put the Twitter button there, Facebook whatever, RSS. But it’s like why are you trying to cater for the people who don’t like you. The only consideration is that they just don’t want an email and they want to get communicated in the other medium, that’s one consideration, but if someone doesn’t like you get them out the door and focus on the winners.

Focus on the people who already do like you and double down and invest more in them instead of being destructive with all the negativity or the hate of the people who don’t, you can’t make everyone like you.

Steve: Once you started earning down your product what strategy did you use to grow, what worked for you in terms of growing the most?

Noah: Well free is a damn good one, I’d say about a third of our customers come from free.

Steve: But you still have to let people know that it’s free right, and so I know you reached out to me, was influencer marketing kind of your main things or what other things did you do?

Noah: Yeah it’s been a little bit, so it’s been three years at Sumo. I would say number one was free, number two – it’s not just influencer marketing, I think people miss this in business Steve where they forget one by one, and a lot of the stuff I say is simple or cliché but frankly that’s a lot of what the answers are.

It’s that just one by one you go to people, so for my podcast literally I found having lunch with someone and this is no joke, I did it a few days ago, hey do you listen to podcasts, yeah, are you listening to my podcast, no. All right get on your phone and subscribe, I’ll wait. I did it to my friend Muddy and he’s like I don’t listen to podcasts, I’m like well you should start, let’s do it today. But I think a lot of us are just, oh I’ll send an email and kind of hope things happen.

So yeah I would say number one was free, number two one by one, so a lot of people if you have a business – let’s say you have an ecommerce business and it’s not growing really fast, go do this, get out a spreadsheet right now and go spreadsheet and then just make a list of 100 friends that you think should buy your product, or make a list of ten friends, this even could be simple that might know someone that will buy your product and literally you do that today, you’ll make more sales, that is a promise.

I don’t think of any other business or any way possible that you can make more sales by just writing a list and then reaching out. Number three you have to understand who target customer is, so who is your exact customer, and where are they? So our customers have email providers like AWeber and MailChimp, whatever, so we went and guest posted partnerships with them. Who’s our customer, people who send emails, where are they, reading the blogs of the service providers, so we went and worked with the service providers.

Steve: What’s their incentive to work with you?

Noah: We’re helping people grow their email list which is how they get more money, so we went to them and we did a lot of guest posts or we do a joint webinar or we give some discounts back in the day, we don’t discount any more, but we’d give offers just for their people, that worked really well. You have to — directories so like what are complementary products, so if you go to like WordPress, people are looking for social share buttons, okay well we should probably be in these directories where people are looking for complimentary tools.

Another tactic we’ve used more recently is cross promotion, so how can you partner with people that are complimentary but not competitive. So for example with Sumo we help people grow their email lists, it’s really a lot of the value we provide so there are other partners like social media like let’s say Buffer or [inaudible 00:43:57] or MeetEdgar or share this image, whatever different providers that are complimentary but not competitive.

And we would be like, hey why don’t we give away your product for free if people buy Sumo, or why don’t we both email our lists recommending each other’s products or like even podcasting. Hey I’ll interview you on my show to your audience and vice versa to your audience, whatever, you get what I’m saying.

Steve: Yeah, yeah, yeah.

Noah: It’s as easy as like rap, it’s like music. Have you ever noticed that music, everyone always featured on another person’s album, why is that?

Steve: Yeah just like concerts, there is always someone opening for someone else also, right?

Noah: Exactly, it’s a chance to go and expose someone to a new audience and generally on both ways, so yeah cross promotions are really helpful. I generally discourage people spending money on ads because one it’s easy to lose a lot, and two I don’t spend money on ads until I have something that makes profit. So you can actually try to understand the economics of what the hell you’re doing, I think it’s too easy to kind of prematurely just waste a lot of money.

Steve: Interesting, would that be the case for an ecommerce store as well for you?

Noah: Yeah like if you don’t have any sales don’t start spending it, I think that’s the stupidest idea I’ve ever heard, because it’s too easy to blame an ad instead of the actual business. For example I bought Google ads, they went to the landing page, people gave me an email address, I sent out a PayPal thing or I built a Shopify store then, now it’s two months later by the way and now I have a store and then I told these people to go buy and they didn’t do anything.

And I’m like couldn’t you just like called a few people or posted in a Facebook group or gone to your LinkedIn network and found that people didn’t want this right away. No, no I definitely need to Shopify because people couldn’t PayPal me.

Steve: It’s interesting; I grew my ecommerce store based on AdWords way back in the day, so I’m a little surprised.

Noah: Yeah I would say, one you also went to Stanford so you’re intellectually really smart, two it’s kind of getting into Stanford, do you think it’s harder now or before?

Steve: It’s much harder now, yeah for sure.

Noah: Exactly, it’s the same thing with online marketing, you don’t think Google is more expensive and more complicated now, it’s more expensive. So my overall point is that I’m sharing with people the way I get to my destination, I’m not saying it’s the only way.

Steve: Sure, sure, okay.

Noah: I think you can buy a bunch of ads and make it work, but I think you could potentially lose a lot of – you’re more likely to lose on money than other ways you could do it for free, figure it out, and then actually buy ads when it makes sense.

Here’s the problem with it Steve, it’s more fun to buy the ads; it’s more fun and safe and easy and playful to buy ads. You’ll be like, well the ads didn’t work, it’s okay, while you’re just sitting on your ass in your boxers or in your bikini whatever it is that we wear.

But the hard part is going out and finding people who actually want it and then you can go scale the business. I think people put the scale ahead of the business.

Steve: You’re still wearing the underwear that I got you?

Noah: Which one but I wear all your underwear. Which one did you give me?

Steve: I got you the CK one – was it the C — no, no, no it was a Lululemon’s.

Noah: Oh dude I’m actually not wearing it today but for the most part – it’s been interesting with my outfits, it’s kind of like we were talking about with business like do more of what works and less and remove less of what’s not working. I kind of been thinking of the phrase focus on the essentials – no, no it’s not about clothing, it’s about everything, focus on the essentials for everything in life like what are the essential friends that really you love, what is the essential work you really want to do, what’s the essential clothing you really want to wear.

So I literally pretty much have the exact same pair of underwear, so your Lululemons are the only ones I don’t have, but every other pair of my [inaudible 00:47:20] is like very specific type of Saxx underwear, or like right now I’m replacing all my socks with the exact same pair of socks, and my shirts I pretty much just like only wear three types of shirts.

I wear a sumo.com shirt, I wear a Myles shirt which is Myles Apparel, or a pistol like shirt and those are the only three types of shirts I wear. It’s just like makes life simple and it’s like man I don’t wear any of these other clothes, why do I keep it around.

Steve: That’s like the Steve Job’s mindset, right?

Noah: I think it’s actually a bigger concept that people could actually really benefit in all their life like remove decisions from everything except what really matters, like you shouldn’t ever have to think about breakfast, you shouldn’t ever have to think about your clothes, and that frees up – because I do believe we have creativity and will power in a certain allocation of all this of decision juice or decision power. If you’re using it on like stupid crap, then you’re going to basically not have as much for the more important decisions.

I think frankly like for clothing, if you actually took out only the things you really wear like for the month, you’re like I only really wear 20% of it and I keep 80% around for once a year. My belief is just get rid of it and then if you actually need it add it back into your life. So a simple example for anyone listening is like on your our phone, open your phone right now, I’ll do it with you, you can do it with me Steve. Look at your apps on screen two or screen three, which ones are you actually using all time?

Steve: I just did this the other day man; I removed all the stuff that I don’t use.

Noah: Yeah, so like here remove Austin 311 because I don’t really need that, which other ones have I not used in a while, I don’t use zoom on my – I actually do use – I don’t use Plex on my phone, I just delete that. I’m just like removing all the ones – oh 360 cam I don’t use that. Anyway the point being is the way I’ve noticed it is removing things it helps you add things back in, and then you’re like, man these are the things that I really, really love and it just removes the distraction so that my mind is more clear to focus on the things that really matter.

Steve: You do that with friends too?

Noah: I’ve done it with everything, like I had a friend come to town, and I was like I don’t really like getting out with you and so I’m not hanging out with then, we’ll have a lunch next week and I actually don’t mind the guy, I like the guy but I don’t love the guy and I just have other things I want to spend my time on. I think we’re too cheap with our time, meaning that we give out our time way too freely.

The time never comes back and the older you get the more you realize it, and it’s like we’re like oh yeah have lunch, sure I’ll take time to go do these things or yeah I don’t mind. It’s like go pay for things that will save you time, anything you spend your time on, go pay for it if it saves you time. If you can, if you can afford it, go do it.

Secondly if you’re spending time on things like look at your calendar today or tomorrow, look at it one day ahead, is there anything tomorrow that you don’t need to do or you’re not really pumped to do, even if you don’t, if you have to have a job fine, there’s parts of you you’re going to have to give in, but like is there anything else so you can just like I don’t really like that.

Let me give you a crazy example of what happened today Steve. I went to the W Hotel and had lunch with this guy. We literally walked in and I had a table, it’s like we sit at this table, I’m like what do you mean, it’s like we just go to this table, I’m like okay tell me more. He’s like I tip $100 on our meal, I’m like what are you talking about, he’s like I tip $100 on a meal every time and he wasn’t bragging.

He’s like but I just want it to be streamlined, I don’t want to wait, I don’t want to bill, I don’t want to wait for my car. So I come in, the food is basically ordered for me, they know what I like and they bring it to me so everything is streamlined, he removes the friction and that gives him the opportunity to not waste time on things and also spend his mental energy on just with the things he really wants to spend it on.

Steve: Did he order for you also?

Noah: I got the same thing he ordered because he actually he got it really often.

Steve: Okay that’s interesting.

Noah: He does it at the movie theatre too, he actually prepays at the movie theatre so he can just walk in and they text him ahead of time and be like what time are you coming, it’s like here, this time and then they have the food ready when he sits in, as soon as he moves there, so they bring your food in Austin. But anyway I think conceptually it was just an interesting reminder of A, how can you remove friction, B how do you remove non essentials and then C spend energy on the things that really give you excitement.

That’s something I like, I can’t say I’m perfect at it but I can tell you I’m working through it and I’m thinking about it a lot.

Steve: Well let’s talk about it a little because you just decided to a launch a podcast, so what aspect of your life is that fulfilling for you?

Noah: Similar to what you said when we were chatting pre show is like one it gives me a chance to meet people, and two it kind of forces me to create content and be thinking about things on a regular basis. So like today I’m recording an episode about alcohol, I’ve been sober for 55 days which you can’t…

Steve: [crosstalk 00:51:44] town really, I did not know that, oaky.

Noah: You can still be sober without standing like you were an alcoholic and it’s not even about that but I actually think it’s a really interesting topic that I’m trying to have more fun with it and that’s not what we talked about. But I think it’s an interesting topic, it forced me to explore it and I’m grateful for it and so I’m excited to share the story, and the podcast kind of gave me that outlet for it.

Steve: Interesting.

Noah: And I was also kind of as a marketer or something who is curious how things are promoted, I was curious what the medium of podcasting has been like and it’s very different than en email list which is what I spend a lot of my career building and then helping others build.

Steve: Here’s a question that we kind of touched on this before the interview, I should have recorded the before the interview part actually. I just quit my job on October and it looks like you’ve kind of not divorced – maybe divorced isn’t the right word but you have gems working on the different parts of your business now and so we both have free time now. How do you choose to kind of devote your time in terms of fun versus working?

Noah: I think there’s different people with different parts of life so I can’t tell anybody else what to do.

Steve: No I was asking you.

Noah: And even the people at Sumo like I want everyone there doing what they really want to do and I think that’s what it comes down to. I don’t think work should not be fun, I think work should be fun. To keep it simple I think work should be fun, I don’t think it should be this thing that no matter what kind of work like there are people who are nurses that love to be nurse and they should go be a nurse. There are people who love making coffee for people and having tattoos so they should be a barrister and I think that’s where I want to spend my time.

So how I’m likely to spend my time. I really love helping Sumo so wherever it needs help in the business I spend about a day doing that, creating podcasts or videos or blogging, I spend about two days doing that. One day a week I plan nothing, so I’m doing a lot of experiments and challenges with the podcast and Noah Kagan Presents podcast for everyone listening, get it on your phone.

So I did an experiment where is pent like a whole week alone and I spent a whole week with nothing planned and I was like there’s good and bad about it which you can hear in one of the episodes, but what I realized from that was that man I really liked it, it was liberating not to have anyone with me and to be very unplanned for day for that week. So now once a week I have like an unplanned day, there is nothing.

Steve: I hear it works better if you go to India.

Noah: Yes, yes I’m going right to India. No so like yeah one day a week with Sumo, more or less if you look at the time two days a week on like content creation, one day unplanned and one day I’m kind of building side projects that will help Sumo. So like one is a chrome extension that I built, because I’m curious about that and then one is like a recruiting tool because recruiting sacks and try and make it easier for our company.

Steve: Okay hey I know you got an appointment to go to pretty soon so I want to be respectful of your time. Where can people sign up for your podcast and take a look or listen I should say?

Noah: Yeah Noah Kagan Presents just search it the Google store KAGAN or Google or iTunes podcast. It’s also OkDork.com search podcast for I guess if you’re on a desktop, but everyone on the phone just go right now Noah Kagan if you want to hear.

Basically I’ve been on interviews, I’ve been on these really interesting book reports that are like unnormal, and then I’ve been doing kind of like challenges reporting back on that, and then a few case studies where I’ll talk to someone in different types of businesses and then try to relay like one or two action items related to a specific thing like SEO or ecommerce or I had one guy who’s like trying to do freelance video consulting.

Steve: One thing I like about Noah’s podcast a quick plug here is that I never know what to expect, like you don’t have any patterns per say, so every episode is kind of unique in its own way, so I recommend that all you guys go check it out.

Noah: That’s interesting, thanks man. Yeah it’s funny because it’s actually one of the things I struggle with where each week it’s different and it actually causes a lot of mental energy on that, so what we’ve done this week is try to create more of a formula and template where it’s like here’s the types of shows we do and then here’s the order of content we want to do it in, and then line up the podcast and YouTube and blog so that each week it’s like the same thing and it kind of makes it easier for us to operate that.

What’s an interesting thing is old Asian dudes said to me this in breakfast a few days ago maybe it was your uncle, he’s like look around – he said it, I thought it was so powerful, you can do their accent because you’re better than me. But he said, look around and make life easier, and he said this over some — I was literally getting a croissant or something like that, I think a scone and I was like what are you talking about. He’s like look around and make life easier and I thought that was a just a very interesting thing because he was getting a tray and I was trying to carry all the stuff in a plate and he’s like dude just look around and make life easier.

So I think that’s a great word to end the show where it’s like in all aspects of your life, in your friendships, in work, in your health, whatever it is, look around and be like how can I make this better, what are things that I can improve like what’s already working that I like doing or that seems to be working well that I can just work better or make easier, and I thought that was a really good concept to kind of reflect on.

Steve: I think that’s a good way to end this episode man, thanks a lot for coming on.

Noah: Steve Chou every one.

Steve: Take care dude.

Noah: Ah brother, keep it real.

Steve: Right, hope you enjoyed that episode. What I love about Noah is that he’s honest, sincere and always straight up with you, like the guy does not sugar coat anything and he always provides insightful takeaways about his philosophies and his experiences. So go check out his podcast Noah Kagan Presents now. For more information about this episode, go to mywifequitherjob.com/episode158.

And once again I want to thank privy.com for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers, they offer email capture, exit intent, and site targeting tools to make it supper simple as well. I like Privy because it is so powerful and you can basically trigger custom pop ups for any primer that is closely tied to your ecommerce store. So if you want to give it a try it’s free, so head on over to P-R-I-V-Y.com/steve, once again that’s P-R-I-V-Y.com/steve.

I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all of these sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, and once again that’s mywifequitherjob.com/ K-L-A-V-I-Y-O for a free trial.

I talk about how I use these tools on my blog, and if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away via email, thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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157: How To Create An 8 Figure Amazon Business Selling Electronics With Bernie Thompson

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How To Create An 8 Figure Amazon Business Selling Electronics With Bernie Thompson

Today I‘m lucky to have Bernie Thompson on the show. Bernie runs an 8 figure business called Plugable.com which is a company that sells USB and Bluetooth devices online.

Now what’s cool is that his company is global. Plugable sells its products in many different countries all over the world. And what’s also cool is that Bernie built all of his own tools in house to manage his Amazon business named Efficient Era.

Now I’ve actually started using Efficient Era myself to manage the feedback for my shop and the tools are really useful. Anyway, the reason why I have Bernie on the show today is to talk about how to be successful selling electronics on Amazon and the exact processes and tools he uses to make money. Enjoy!

What You’ll Learn

  • How Bernie got into ecommerce and what made him choose to sell electronics.
  • How Bernie comes up with product ideas
  • Bernie’s strategy for going into new markets.
  • Why Bernie decided to sell internationally early on
  • Bernie’s main criteria for selecting products to sell.

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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ReferralCandy.com – If you’re already getting steady orders every month, adding a refer-a-friend program to your store can give you a new sales channel. And ReferralCandy is the best in the business. Click here and get a FREE $50 credit towards your account.
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SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
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Transcript

Steve: You are listening to the My Wife Quit her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not with their businesses. Today I have

Bernie Thompson with me on the show. Now Bernie runs an eight figure Amazon business called Plugable where he sells electronic equipment which is quite possibly the most competitive and the most cut throat niche that you can possibly go into on Amazon.

He also runs a popular Amazon software service called Efficient Era which allows you to match up your product feedback directly to a specific customer on Amazon. Now I actually use this software and as far as I know it is the only software out there that allows you to do this. In any case Bernie is an amazing guy, and enjoy the interview.

But before we begin I want to give a quick shout out to Klaviyo who is a sponsor of the show. Now I’m super excited about Klaviyo because they are the email marketing platform that I use for my ecommerce store, and I depend on Klaviyo for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another provider. Well Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here’s why it’s so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought which makes it extremely powerful. So let’s say I want to send an email out to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special autoresponder sequence to my customers depending on what they purchased, it’s a piece of cake, and there is full revenue tracking on every single email.

Now Klaviyo is the most powerful email platform that I’ve ever used and you could try them for free at mywifequitherjob.com/Klaviyo, once again that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to give a quick shout out to Privy who is also a sponsor of the show. Now what’s also cool is that I use and rely on Privy for both my blog and my online store. Now what does Privy do? Privy is an email list growth platform, and they actually manage all of my email capture forms, and in fact I use Privy hand in hand with Klaviyo.

Now there are a bunch of companies out there that will manage your email capture forms, but here is why I like Privy. Privy is easily the most powerful platform that I’ve ever used, and you can trigger sign up forms based on any primer that you desire. So let’s say you offer free shipping for orders over 100 bucks, well you can tell Privy to flash a popup when the customer has 90 bucks in their shopping cart to urge them to insert one more item.

Here’s another cool use case, if someone has item A in their shopping cart, I can easily tell Privy to display a special coupon code for that item or display a related item. In terms of email capture, I’m showing different email lead magnet depending on what product a customer is browsing in our store.

So bottom line Privy allows me to turn visitors into email subscribers, which I then feed to Klaviyo to close the sale. So head on over to Privy.com/steve, once again that’s P-R-I-V-Y.com/steve, and try it for free, and if you decide that you need some of the more advanced features, then use coupon code MWQHJ for 15% off. Now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast, today I’m lucky to have Bernie Thompson on the show. Now Bernie runs an eight figure business called plugable.com which is a company that sells USB and Bluetooth devices online. So first off those of you who have followed me for a long time know that I generally advice against going into the electronics business.

Not only is there the threat of your products going obsolete but the quality assurance and the [inaudible 00:04:03] required can be very daunting as well. And then you couple that with the fact that China can produce electronic knock offs fairly quickly makes it even tougher as well.

Anyway Bernie has managed to create an incredibly successful Amazon business selling USB and Bluetooth devices, and what’s cool is that his company is global. Plugable sells its products in many different countries all over the world. What’s also cool is that he built all of his own tools in-house to manage his Amazon business, and then he decided to take those tools public and his company is called Efficient Era.

Now I’ve actually already started using these tools myself to manage the feedback for my shop and they are really powerful. Anyway the reason why I have Bernie on the show today is to talk about how to be successful selling electronics on Amazon and the exact processes and tools he uses to make money. And with that welcome to the show Bernie, how are you doing today?
Bernie: Great to see you, great to talk to you.

Steve: Yeah so Bernie I know that from your background you used to be a software engineer, how did you go from software engineer to ecommerce?

Bernie: Yeah I was a software engineer, actually kind of like you Steve I was a low level kind of guy, so I worked on the device driver layer, so all these hardware devices that we use every day, they have a bunch of software that interfaces between that device and the operating system and that’s what I used to work on and I used to then manage the USB and Bluetooth teams at Microsoft, and that led to creating this USB and Bluetooth devices business.

Steve: So why electronics of all things?

Bernie: Yeah I think interestingly Plugable is electronics company first and then Amazon seller second, so it really was because we had to go on building a better device company that when I started Plugable in 2009, the experience buying things like USB and Bluetooth peripherals was pretty dismal. They seemed to work most of the time but when they didn’t work you had horrible information and horrible call center style of support.

So we wanted to go direct using all of these new capabilities that were coming with Amazon and FBA and the ability potentially to sell globally, and do kind of that information and support in a much different, more customer centric online way with fast feedback loops and doing the right things for customers and getting rewarded with good reviews.

So yes Plugable was an electronics business, design is electronics business first and really selling on Amazon was secondary. We really wanted to solve issues that were out there for all the USB and Bluetooth device companies that they really were providing poor support call center style. We saw the opportunity to do it online with better information and a more customer centric approach using all the new tools that were coming in the form of Amazon and the Amazon FBA and it’s worked out pretty well.

Steve: So here is the thing, I looked at some of the products on the Plugable website, so for example you sell like a USB hub, but if I go out there is like – I would say there’s hundreds if not even thousands of those out there. So how did you come up with which particular electronic products to sell, and I guess what was the first product that you launched?

Bernie: The first product we launched actually was trying to take some off the shelf hardware and use it in a different way. We took USB docking stations which were new in 2009, and were turning them into USB thin clients, and I actually because I’m a software engineer I actually did a bunch of unique work in Linux to make that possible. So we did a unique product as our first product and as it turns out it failed.

Steve: Okay and why did it fail?

Bernie: It failed because the USB thin client market never took off. Around the same time you started having less and less expensive Windows laptops and tablets, you started having Chrome books a few years in, and so the benefits that you got from taking a single computer and connecting a bunch of thin clients and turning that one computer into many, you’re really looking at mostly a cost benefit there, and that cost benefit people were getting in different ways so just having their PCs being cheaper.

Steve: So when you decided to sell this product – I guess what I’m trying to get at is like what is your process for figuring out or making sure that a product doesn’t fail when you bring it to market?

Bernie: Yeah, when I first started I thought we would be a single product company. As it turns out that product failed and I faced the choice of, well do I stick with this and keep trying harder in this USB thin client market or do I go wider, and I made the decision to go wider. So at that point it really kind of switched from a mindset of we’re a thin client company to I’ve got to launch a bunch of products in the hopes that one or two of those will be successful. I kind of thought it might be like a five to one ratio or something like that, so almost like a VC mindset.

As it turns out in the early years 2009, 2010, 2011 it actually was more like one out of every two was successful, it was a very high hit rate, and we can talk about maybe why that was. And then over the years that has varied a lot starting in 2012, 2013 a huge influx of sellers often from mainland China where most electronic factories are located, and our hit rate went down significantly.

Also at that time you started having the review gaming which we never participated in, so we really had a lot of head wins against us because our competitors were launching products and having hundreds of reviews within a few weeks, whereas we took months to get hundreds of reviews.

That was a huge disadvantage that we suffered, so recently our hit rate has actually been going up because we’ve continued to refine our processes and now Amazon has cramped down on the fake reviews. So it’s not as good as it was in the early years but we’re probably talking about like a one out of every four products is a hit.

Steve: Okay and just to be clear do you design all of your own stuff in-house or you don’t do any sort of private labeling or white labeling of products that are existing, right?

Bernie: We do the full [inaudible 00:10:44] from basically products that already exist and bringing the model of the Plugable brand to actually getting involved with a little bit of low level PCB design and other things, but most of our products fall in the middle where we kind of do ground up research.

We know what chip sets are coming out from the IC makers and we go out and seek factories that are experienced using those chip sets, and we put in our FQs and try to get them to build a product that uses the chip sets that we’re looking for and has the features that we want.

Steve: Interesting, so do they perform all of the testing and everything for you then?

Bernie: Yeah we do a lot of testing but really it’s mostly kind of from the user perspective and high level testing, so our factory partners are heavily involved with the low level testing also.

Steve: I see so in terms of like schematic design and all that stuff, that’s all handled by your designer?

Bernie: Yes.

Steve: And are most of your products created over in Asia?

Bernie: Yes, the original designs come from all around the world. Most of the designs originally come from the chip set makers; the IC makers from the reference designs and so just as an example of a lot of our products use chips from a company called DisplayLink which is a USB graphics company.

They are located in Cambridge England, so a lot of the original reference designs are coming out of Cambridge and then they get picked up by the factories, they modify them to fit a form factor or adjust the cast or adjust our request for features and that’s how the low level design gets done.

Steve: So to do what you guys do requires some amount of technical knowledge is that accurate?

Bernie: Yeah, I think you said earlier in the call you generally recommend against electronics. Yeah I mean there’s a lot of barriers here, I’ve worked at — and even though I’m a software guy I’ve worked at two chip companies, a chip graphics chip company called S3 in the 1990s.

Steve: Yeah I remember those guys.

Bernie: I worked at DisplayLink themselves, I was a VP at DisplayLink. So I’ve been able to use this knowledge of how these chip companies work and how the supply chain works to not just be a passive actor, but actually to be an active participant in all these choices that ultimately end up determining whether the product is a quality and whether the product is differentiated from other products that are out there in the market.

Steve: Okay and so I’m just curious to achieve your revenues how many product skews do you have and what country are the majority of your sales coming from?

Bernie: So we have over 100 products at this point, we have about 110 and by far our leading market is the US. US is greater than all of our other geographies combined although all the other geographies are growing and they are fairly healthy too.

Steve: And in terms of skews you mentioned you had like a one in four hit rate, what do you do with the three that fail, do you just kind of discontinue them right away?

Bernie: No we don’t discontinue them right away, I mean because we’re doing products that are unique in many cases, will have unique aspects, we’re dealing with relatively large MOQs, minimum order quantities usually 1000 or 3000 at least and so it takes some time. When we do have something that’s not a hit frankly we’re stuck with the inventory for quite a bit of time usually a year or two.

So what we’re trying to do over that year or two is basically try again and again different communication strategies, different emphasis on the feature aspects of the product to try to find a strategy in terms of how we’re marketing or what

we’re saying in our marketing to get that product to take off. It’s funny it’s a lot like starting a campfire or something, sometimes you get a situation where it just fails to light with the few attempts and then just for some reason on the fourth or fifth attempt it lights and that happens with products too.

Steve: Okay and then when did you actually decide to expand overseas to other countries?

Bernie: It was actually pretty early on. When you’re doing unique products that you’re investing a lot in ahead of time, any market that you’re not in is a missed opportunity. You’re giving oxygen to your competitors by giving them a market that you’re not competing with them in. So we try hard to be as aggressive as we can be to reach every market around the world, although that said we tend to focus on Amazon. So we focus most on the markets that Amazon covers but we do also try to reach the other ones.

Steve: Okay so I want to talk a little bit about your product selection process without getting technical at all. What is your main criteria when you decide to bring something to the market, what is your process and what price point and margins do you like to see?

Bernie: I think we do with electronics where the Plugable brand we’re connecting this with that, so the number one issue is compatibility, are we able to make a very broad statement that if you have an HDMI monitor that this product will connect your laptop to it or whatever. Very often in electronics it’s not so simple, the compatibility story is inherently complex.

Maybe let’s say the product is a DisplayLink graphics product and the drivers on Mac just aren’t that good or the operating system support for DisplayLink is not that good. So we spend a lot of time trying to create a product with the maximum compatibility possible, and then whatever is left just is a limitation. We work really hard to try to communicate that accurately and upfront to the consumer so that they know what will work and what won’t.

Steve: So I imagine you have several competitors on Amazon, right?

Bernie: Yeah many, I mean literally it’s electronics so we literally have hundreds of competitors.

Steve: And so how do you stand out?

Bernie: We try to get the little details of compatibility right, and sometimes that’s firmware thing, sometimes that’s a tweet to the hardware, and then we try to get the expectations setting right. Often we have an advantage there because all of our staff is here in the US where actually I used to work in Microsoft here in Washington, and so we got some great technical people around. So we’re able to describe the product more precisely and so we don’t have people for whom the product is not going to work buy it and then write a negative review.

So in addition to compatibility issue it’s features. We’re trying to make sure that when we look at all the products in the market out there that we’ve made at least a few choices that move the feature bar forward. Although we don’t focus on price as much as some other people, we want to make sure that at the feature level we’re on that the price is competitive. So there’s really a lot of market research that goes into every product before we launch it.

Steve: I’m sure.

Bernie: Then if we think we have that right mix of features, compatibility, and price that we’re able to produce something
competitive, then it’s a matter of really doing kind of all of our execution right in terms of selling on Amazon and doing ecommerce so that we can drive the Amazon fly wheel and push that product up in search results through proving to Amazon that when people glance at the product they choose to click on it, when they click on it they choose to buy it, and when they buy it they have a good experience.

Steve: And I’m just kind of curious what the margins – can you kind of give us an idea what the margins are like for electronics?

Bernie: Yeah the margins are really tight for electronics. If you’re able to net out after everything a 5 or 10% that’s probably considered norm.

Steve: Wow, okay I didn’t realize it was that low.

Bernie: Yeah that’s after everything, support and everything.

Steve: Sure of course yeah, and in terms of the time frame from inception to getting a product ready to go to sell what is like a time frame for a typical product of yours.

Bernie: We try to make it as short as possible. When you’re producing custom product that is being manufactured in Mainland China there is just inherently some fairly long latency, some long delays. Even on a product that is settled that we’re just doing a reorder the delay is anywhere between two to four months depending on chip set availability.

So for a new product it can be as long as nine months but we try to get it down to maybe four months or so on a new product.

Steve: Okay and then typically like what’s like a minimum investment for like the first purchase?

Bernie: It depends on the cost of the product.

Steve: Of course.

Bernie: We sell products that are $200 docking stations and we sell products that are $10 cables. So if you kind of multiply out a wholesale cost on that by 1,000 or 3,000 units plus the bunch of time invested, you’re usually talking about a minimum of tens of thousands of dollars on a new product.

Steve: Okay, all right so let’s switch gears away from the actual product design, because I’m pretty sure like the actual product development is probably a little too technical for anyone who is listening even though I would be personally interested in all that stuff.

Bernie: Right yeah you have all the background for this.

Steve: Like trying hard not to ask you those questions right now. All right so you got your product, you’ve sent it over to Amazon, so what is your strategy for getting it visible on Amazon. So let’s start from the beginning like it’s got no reviews, what is your strategy for launch?

Bernie: You know it’s so tough – even when we started and certainly now here in 2017 if you launch a product on Amazon it could be the best product in the world at the best price, and it will sit there at the bottom of search results and no one will buy the damn thing, so strategies are absolutely necessary.

So let’s talk in terms of the funnel because I think that thinking of a funnel is the correct way to think about this. So our first challenge is to get anybody to go look at the product at all regardless of what their reaction will be to it. And so our strategies for doing that are number one is content marketing. Every product has a story, every product has a reason for existing, every product has problems that it’s solving.

There are people out there who are having those problems, who are having those frustrations who if they were aware that there was a solution they would be excited about it, so our job is to reach them, this is marketing. The only thing that’s changed about marketing is video is so much easier now because we can use tools like posting videos on YouTube and posting videos on Facebook and we can use targeted marketing on Amazon, on Facebook, on Twitter, on Google honing in on the searches and the keywords and the interests of customers.

So our first job is to break our product down into what are the problems it solves, what are the customers who would be interested in that kind of problem and solution and then what are the keywords that are relevant to them and what’s the content that would be compelling for them, often the videos, sometimes blog posts, sometimes maybe a cross post or an article on another site and creating hat content.

Steve: So you’re creating content and I think in the case of Plugable you guys do a lot of how to type of videos, or feature videos?

Bernie: Correct.

Steve: Okay.

Bernie: It’s kind of interesting, with electronics it’s hard but there’s a lot to talk about because there’s a lot of how to and a lot of interesting new things that is sometimes possible with technology, so yeah so we use all of those excuses to create some – tend to create some compelling content.

Steve: So you have the content but how do you get people to actually look at it?

Bernie: So a lot of it is patience, that building an audience takes a lot of time, there are so many gigantic problems with ecommerce, we talked about how you launch a product on Amazon and it sits at the bottom of search results and nobody finds it. That is true for your content too; until you’re able to build up an audience, it can be frustrating. You can have a very compelling video sitting out there on YouTube and no one will go view it.

So a lot of it is really about pushing a snowball down hill and having the patience to have that snowball build in size. Today Plugable has over 8,000 YouTube subscribers and we have several million video views on YouTube. It took eight years to get to those numbers, and so there is a bit of that is that planning and setting aside your time and your budget to give yourself enough time to have that snowball build some size and become self reinforcing in the end. Your past content is in a sense creating the audience that is going to be viewing your future content.

Steve: So I’d like you to take me back to your first successful product like when you had nothing, and were you doing content well before the launch of the product?

Bernie: Yeah we had the content strategy from day one, so if I would look back at the plugable.com site right now I could find blog posts from the fall of 2009. At that point we figured we were trying to reach the most dedicated possible audience for our products, so we focused on very tactical blog posts that would really get a core group of people very excited about what we were doing.

I also was speaking at conferences about the product and I was trying to reach that same sort of audience. So I guess there is a lesson there in terms of being realistic about what audience is likely to be excited about you, and even though ultimately you want to reach a wider audience, first focus where you’re strongest and establish some momentum and some credibility where you’re strongest and then kind of build on that and expand on that.

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Okay so you advice anyone who is launching a brand new product from complete scratch to start thinking about their audience and start producing content for that audience?

Bernie: Yeah I would say so. There’s strategies that don’t involve content marketing and certainly actually there’s a lot of successful Amazon businesses that don’t do content marketing. But I think that there is a fragility to that, that the content marketing because it is a snowball that rolls down a hill and grows, it creates a more sustainable momentum for your brand and your products that even though it’s sometimes painful to get that rolling to start with, ultimately it’s what can build a strong, large and sustainable business.

Steve: So in terms of the sales of your first successful product then, was it Amazon customers that were browsing the marketplace, or were they people that you were driving either through email or your content to buy that Amazon product?

Bernie: So on the first product which was a unique USB thin client product, it was mostly us driving people to Amazon and I think even the terms that people would think to search for if they were looking for such a product weren’t very clear. And then as we expanded our product line, we went into very well understood commodity areas like USB hubs and USB keyboards and mice and USB graphics adaptors.

In those areas there was an existing body of people on Amazon already searching for those products, and then we just needed to focus on coming up high for those searches that were already happening.

Steve: Okay so essentially kind of using your terminology like the fly wheel going, right?

Bernie: Exactly, so we talked about kind of filling the top of the funnel with content marketing. So then the next step – and this is somewhat what’s unique about Amazon and powerful about Amazon is Amazon is really using and looking at using all the metrics about your products. Amazon’s philosophy is very customer centric, they want customers to have great experiences on Amazon, and they want to help that to happen through data.

So they want to reward products on Amazon that when somebody is driven to the Amazon site for whatever reason or searches on the Amazon site there is a product that they are attracted enough to click on. Then when they click on it that there is a high percentage of the time that they buy that product, and then when they buy that product that there is a high percentage of the time that they a have a good customer experience.

So Amazon is literally taking those metrics, those conversion metrics for your product and feeding that back into the search results. So it is a fairly beneficial kind of feedback loop of if you do right by customers on Amazon, Amazon will reward you with a higher position in search, and so a lot of the focus of our business has been on making sure that that customer centric feedback loop is spinning the Amazon fly wheel and driving sales.

The final part of it is that when that feedback loop is working and you’re getting pushed up in search, well that results in more sales which results in more statistics which reinforces that hey this product is a good product that is increasing its sales. So that’s how you kind of get this fly wheel effected, and in fact if you can push your product up in the Amazon search to where it is one of the top sellers and people are having good experiences with it, it’s very self reinforcing and it’s actually hard for competitors to knock that product out of that position except by slowly growing there with a better product and better experiences for customers.

Steve: So can we talk about some of your specific processes that you use for Plugable to kind of push this fly wheel and get a positive feedback loop going?

Bernie: Yeah absolutely, so a lot of the really successful sellers who started earlier on the Amazon platform and I have met a bunch of them – it’s interesting a lot of us were software developers, and part of the reason why that happened was Amazon provides a lot of tools for sellers, but they don’t do all of the essential things.

So a big part of making sure that the feedback loop goes well and that the fly wheel is spun is identifying all loop wings in all these things that happen on Amazon where communication with the customer or being very fast to respond to things that are happening with Amazon will help produce better experiences.

So one of the early things that I did in 2010 was begin developing software that for example every time an order shipped from Amazon FBA I would send out an email to the customer that had a bunch of helpful support information, and also establish a rapport with the customer and said that after you have a chance to use the product for a while we’d love to have a product review with your experiences.

So at this point here in 2017 is great because there is actually a lot of services that will do that for you, you don’t need to develop software for it, and we’ve actually now taken all the software that we developed for Plugable and made that available on efficientera.com, so we’re one of those services too. So that was the key thing is establishing contact with the customer.

Steve: Can we talk about your email flow like how many emails are you sending out?

Bernie: Yeah so we’ve had a philosophy from day one that we don’t want to annoy customers by sending them multiple emails, so it was actually interesting when we created Efficient Era and took our internal system and offered it to others because other competitor tools allow you to send multiple emails for a single order.

So we went ahead and did that in Efficient Era, but Plugable still to this day does not use it. We send out a single email that is more about customer service than it is about asking for a review, and we send it out when the item ships so that the email will arrive right before the product does, that’s how Plugable does it.

We have a heavy support component with all of our products because we’re connecting this with that and when something goes wrong, it can get complex about why is something not working. So customer support is a huge part of how we can mitigate negative reviews or avoid negative reviews and encourage positive reviews through good experiences.

Steve: So from what I understand then you are not actually sending out a review link in this email then?

Bernie: We do actually send out review link but we qualify it with after you’ve had a chance to use the product for a few weeks.

Steve: Interesting okay.

Bernie: Yeah it’s an interesting middle ground. I know a lot of our competitors would break those two up, they might send a support email when the product first ships and then send a review request email a few weeks later and our system supports that, but I know we still are sticking to this thing of it’s not in the customer’s interest to receive multiple emails per order and we don’t want to be annoying, so yeah it’s interesting.

Steve: So they actually have to remember to go back to that email then to leave a review, is that right?

Bernie: Yeah that’s right yeah.

Steve: Okay, I know for electronics because one of my friends sells electronics that often times they are quick to a negative review if something doesn’t work.

Bernie: Yes.

Steve: And so when you’re dealing with them on the phone – you have phone support, right?

Bernie: We actually don’t, we only are online support, and that’s one of the reasons why we send that email because we want to say in that email, you can contact us by email just reply to this mail to contact us.

Steve: Okay do you ever – like once a successful support email has been sent out do you send them a review link then?

Bernie: Yeah we may or just generally encourage it, because we do want to treat every customer service incident as an opportunity to avoid a negative review and if we’re able to provide a really positive experience or better experience than maybe they’ve had before we get an opportunity for a positive review.

Steve: Okay, I’m just curious so how do you deal with negative reviews like what is your strategy?

Bernie: Our strategy is just simply to treat them as a customer service incident. I think in electronics that is a little easier to take that philosophy because usually they just have a simple goal of getting two things to work together, and so either that’s working or it’s not. So when somebody writes a negative review and that’s one of the things that is tough that Amazon kind of makes it tough for you, a negative review is usually just kind of a request for help in a sense.

They’ve had a bad experience and at least in our world a lot of times they could have had a good experience if we had had an opportunity to help them. They often jumped to a negative review before they even contacted us for service, but Amazon doesn’t really provide a good way to contact the customer, really the only mechanism you have is to post a comment on their review.

Unfortunately the reviewer is often not notified that that comment is there, and it’s really not an appropriate place to have a customer service interaction where you have to exchange information back and forth. So one of the things our tool does is it digs through all of your orders as a seller and all of the reviews and is able to do a buyer review matching so that when you have an Amazon verified purchase that came from your seller account, we’re actually able to send you an email and we do when you get a negative review, and it has the Amazon order number that that review came from.

So now once you have that you can just take that link to seller central and contact the customer. So we get that notification for every single negative review that happens on any of the Amazon geographies around the world and those go straight into our customer service ticketing system, and we just try to help the customer and turn that situation around.

Steve: So how do you get them to kind of retract their review?

Bernie: Well we’re not pushy about it; in fact Amazon terms are clear that you can’t be pushy about it. We focus first on just trying to – whatever was in the review that caused them to have a bad experience, our focus is very clearly just on trying to solve that problem. Then once we’ve solved that problem we will often say something like, oh that’s great, it’s working now, if you have a chance to update your review we’d really appreciate it, or something like that or if you have a chance to write the full experiences up in review we’d really appreciate it.

We really leave it at that and we don’t do follow up mails, we don’t do pesters, and I think in most cases the person who is angry and created that negative review because they were having a good experience in most cases they are so happy to have that problem solved that they’re really in a mindset at that moment that they do want to have that be reflected in the reviews. So we get a really good response rate even on that light and very customer oriented guidance.

Steve: And incidentally for everyone listening out there, this is actually the main reason why I’m on Efficient Era, the fact that you can actually find out who left the review and then contact them directly is actually a huge boost for customer service, because when I think about how I run my own business like we contact customers who are unhappy right away, and the sooner you do it actually the better because they start fuming and it builds up over time.

Bernie: Yeah and we’re able to get that email to you as a seller that there was a negative review and what order it came from in less than 24 hours from when the review was posted, and then on the Plugable side when we are the users of that ourselves we try to get back to the customer within 24 hours of getting notified. So basically in a relatively short period of time the customer gets contacted back with an apology and an offer to help.

Steve: Okay so it sounds like the way you run Plugable is with a strong focus on customer service, right?

Bernie: Yes.

Steve: Are there any other things that you have done to accelerate your Amazon sales?

Bernie: Well there is a lot of – the main event for interacting with a customer is the post order email and then responding to reviews. There is also a bunch of other smaller but important events. For example one is Amazon will send you an email when you receive a return or question from customers. Very often customers will tend to not write a negative review until they have the money back and then they’ll write a negative review.

So you have a time window there to also treat that as a customer service incident and offer to help solve whatever problem is leading to that return request, so that’s another thing that Efficient Era does is it captures those events and turns those into customer service requests for you.
Steve: Have you had success like turning around a return request?
Bernie: Yeah absolutely, and it’s sometimes in the form of they haven’t actually sent the product in yet and we’re able to get the product working. Other times it’s just simply – well if it’s a product that the reviews are really critical to us right now like let’s say it only has a few reviews, we might actually do something like, well we‘re sorry you had a bad experience, we really want to understand what went wrong here, we’re actually going to send you a free unit and work with you to get that working just so we can understand what happened here.

And of course that’s very much in the customer’s interest, the customer is getting the return and the refund of the product and they are getting the product they originally tried to get working. That happens in our space, sometimes compatibility is complicated and we really are in the dark about why something is going wrong and in a sense that customer is helping us to understand something that may also impact other customers, so in our minds between the review and between learning it’s worth it to us to work with this customer and try to figure out what went wrong.

Steve: I see and then by doing that I would image no negative review is ever left when you’re just giving away units, right?

Bernie: Yeah if the person hasn’t submitted a negative review yet, they want to see how it all resolves. I mean if they have your engagement, very few customers are going to write a negative review while it seems like you’re honestly trying to help them, because it might work out still. There are some people who are just in a negative frame of mind that they’re going to write a negative review no matter what, but that’s the minority of customers.

Steve: And in terms of just boosting your sales, do you guys ever use like discounts or lightening deals or anything along those lines?

Bernie: We do, not heavily though, a lot of our competitors in electronics use like deals and best deals very heavily. We have more of kind of an everyday low pricing and fixed margin model for our products, so if we’re doing a lightening deal we’re probably losing money on each unit. So especially now as of this fall Amazon has moved to a system where lightening deals have to come from an approved list that Amazon reflects back to you, and each lightening deal has a cost associated with it, $150 currently.

There is only a limited number of circumstances for us where lightening deals make sense, so actually it’s really not our primary means of getting the fly wheel started on Amazon.

Steve: Okay and how do you guys manage inventory like how do you know how much product to order, do you systems in place for that.

Bernie: We do, they are actually not part of our Efficient Era tools right now; they might be in the future. There are actually today a massive number of spreadsheets with a lot of scripting between them, so we basically have a custom in-house inventory system that tells us that current run rates, how many weeks of stock do we have left, because it’s hard.

We’re trying to steer a ship that a decision we make today has its impact three or four months from now because basically if we order one product from our suppliers today, it can be that long until we receive it. So it really feels like you’re steering an ocean liner at times, and it’s very hard to make those forward looking decisions, so we have a lot of analysis around that.

Steve: What about tracking your revenues and like your inventory like when Amazon loses some stuff, how do you manage all that stuff?

Bernie: The Efficient Era tools do have a functionality in that area, we basically have time series graphs that allow you in aggregate for your whole account and for each product to be able to see the graph of your sales and your inventory over time so that you can see when inventory has been dropping when you’re making that decision about whether to place a purchase order.

Amazon is kind of good about giving you data in numeric form for right now, but sometimes that data is deceptive. You might have had just in the last week or two this massive sales spike and then you think – and so you’re looking at your stock you’re going, oh no I’m down to five weeks of sales, but if you look at it in a historical context you might realize that that’s way off the normal trend for this product and I need to be careful and wait for a few more weeks of sales data to confirm the new trend.

So we try to use that historical perspective on our sales and our inventory levels to make better decisions.

Steve: Okay and I have to ask this question, I noticed on your site that all links point to Amazon. Is there any reason why you don’t take orders on your own site?

Bernie: Yeah it’s a tough decision because it’s scary to be so dependent on Amazon and even though we’re an electronics company first and an Amazon seller second we are very dependent on Amazon, and it’s because we’re so good at Amazon, we focused on that and Amazon has really been eating everybody else’s lunch.

That said we’ve tried every other ecommerce service, we’re really on Jet, we sell on Wal-Mart, we sell on eBay but basically if you’re trying to do your own sales on your own ecommerce site, the fly wheel has a lot of resistance. Yes you can build a brand and get people to think about your brand first before they buy a product and come to your site, but boy is that hard. Unless you’re a GoPro or you’re a Dell, chances are you’re going to have a very hard time getting that particular fly wheel spinning. More likely people are going to buy past your site and head directly to Amazon and start searching in.

So our philosophy has been to be really stuck about that, that there is too much friction on the fly wheel for us to have people think of Plugable first, so we’re going to focus on driving those sales to Amazon and pushing Amazon fly wheel for our products.

Steve: So in terms of your content marketing efforts, are you gathering customer data, email addresses and that sort of thing?

Bernie: We do a bit; we’re actually not heavily into that and again our philosophy of not pestering customers. We don’t actually have email marketing that goes out other than if people kind of very proactively subscribe to our blog with their email address, yeah so we have not used cold email marketing actually at all.

Steve: Okay interesting and do you do any paid advertising?

Bernie: We do lots of paid advertising and it’s very focused on that breakdown we were talking about earlier of customer segments, why they will buy the product, what they’re searching on, and we spend that marketing money on a mix of Amazon, and Facebook and Google and really a lot of online channels so that when people are searching for something, that our product is a solution for that, that we’re trying to get our product up in front of them.

Steve: So what’s the plan moving forward, I understand that Plugable uses Efficient Era for all of their processes, like you’re eating your own dog food essentially?

Bernie: Exactly.

Steve: And so what is the future, like are you focusing efforts on Efficient Era, are you focusing efforts on Plugable, what is the game plan going forward?

Bernie: So all the tools that are in Efficient Era were originally created just internally for ourselves, in fact let me not — I personally did most of the tools in the early years and then started having to build a team as the tools got more and more complicated. So kind of hit the point where wow this is a huge competitive advantage for us, but if we just keep it to ourselves, we’re investing all this money for just one Amazon business when these tools would be useful for many and we could kind of amortize the costs, pretty large costs of developing these tools across a lot of businesses.

So we made the decision to spread it out and give up our competitive advantage and offer it to other people. And so now at this point they’re really independent businesses, it’s kind of nice because we have a big in-house customer Plugable who helps guide the feature set and make sure that it’s really relevant and that it’s solving problems for Plugable, and that it works every day without fail.

Then on the Efficient Era side we now have over 200 companies that are using it and they are getting all the benefits from it, and we’re able to kind of amortize our cost of keeping the software moving forward across all those businesses.

Steve: Yeah I mean there is a lot of annoying things about selling on Amazon; like I just looked at my listing the other day and I noticed that Amazon inserted a bullet point for me.

Bernie: Yeah.

Steve: Stuff like that happens; does your software monitor that tuff too?

Bernie: It does, those features are actually just coming out right now.
Steve: Oh they are okay.

Bernie: We have a listing monitoring notification service, so we’ll send you emails if any of the key fields of your listing change, we’re calling the Amazon APIs and also looking at the page and notifying you of discrepancies and changes.

We’re also doing a lot of stuff now with sales notifications where if any of your products hit a new record sales for this week we’ll notify you about that, because that might also be interesting or factor your decisions with purchase orders.

So yeah all of those things where Amazon’s own seller central tools are not doing it for you, we’re trying to automate as much of that as possible.

Steve: Cool Bernie, hey I appreciate your time for coming on the podcast today and just giving us a glimpse into what it’s like to sell electronics online. If anyone has any questions for you or maybe just want to check out your tools, where can they find you?

Bernie: Just email me at Bernie@efficientera.com and of course visit efficientera.com, we’ve got a lot of content up there.

Steve: Cool, well hey Bernie thanks a lot for coming on the show, I really appreciate your time.

Bernie: Oh appreciated Steve, thank you, bye.

Steve: All right, take care.

Hope you enjoyed that episode. Bernie is actually one of the few people I know who has been able to make a profit selling electronics, and I love the fact that he developed his own software Efficient Era to help his own Amazon business. So definitely go check out Efficient Era to manage your feedback if you end up selling on Amazon. For more information about this episode, go to mywifequitherjob.com/episode157.

And once again I want to thank privy.com for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers, they offer email capture, exit intent, and site targeting tools to make it supper simple as well. I like Privy because it is so powerful and you can basically trigger custom pop ups for any primer that is closely tied to your ecommerce store. And if you want to give it a try it’s free, so head on over to privy.com/steve, that’s P-R-I-V-Y.com/steve.

I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all of these sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/Klaviyo and sign up for free, once again that’s mywifequitherjob.com/Klaviyo.

Now I talk about how I use these tools on my blog, and if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away via email, thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

156: How My Student Carmen Makes 6 Figures Selling Kaftans Online Without Amazon

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How My Student Carmen Makes 6 Figures Selling Kaftans Online

Today I’m really happy to have Carmen Rivas on the show. And Carmen is actually a student in my Create A Profitable Online Store Course from Australia.

She joined over a year ago and she’s been doing amazing with her business Vizcosa.com. Now I often get questions from listeners whether it’s possible to run a viable ecommerce business outside of the US and the answer is of course.

Carmen sells kaftans and resort wear and what’s cool about her story is that she validated her niche using Facebook before investing a lot of money into her business.

Today, she’s doing very well. She just had a baby and she’s able to run her business while taking care of her child! Enjoy the interview.

Want To Learn How To Start A 6 Figure Ecommerce Store?

Create  A Profitable Online StoreDid you enjoy listening to Jen’s story? If you would like to create your own profitable online store and join a community of like minded entrepreneurs, then sign up for my full blown course on how to create a profitable online store.

My course offers over 100+ hours of video and includes live office hours where you can ask me questions directly.

If you want to learn everything there is to know about ecommerce, be sure to check it out!

What You’ll Learn

  • How Carmen came up with her niche
  • Her motivations for starting her business
  • How Carmen validated her niche before placing a large order
  • Her platform of choice
  • How Carmen generated early sales for her online store.

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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Transcript

Steve: You are listening to the My Wife Quit her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not with their businesses. I’m Steve Chou and today I’m thrilled to have another student in my Create a Profitable Online Store Course on the show.

Carmen Rivas is a student from Australia who is now making a five figure monthly income selling kaftans on her own site, and in fact I don’t believe she has transitioned to Amazon yet, but she’s doing really well and you guys are going to really enjoy her story.

But before we begin I want to give a shout out to Privy who is a sponsor of the show. Now, I’m super excited to talk about Privy, because I use and rely on Privy to build my email list for both my blog and my online store. Now what does Privy do? Privy is an email list growth platform, and they manage all of my email capture forms, and in fact I use Privy hand in hand with my email marketing provider.

Now there are a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in ecommerce. Privy is easily the most powerful platform that I’ve ever used, and you can trigger sign up forms based on any primer that you desire. So for example let’s say you offer free shipping for orders over 100 bucks, well you can have Privy flash a popup when the customer has $90 in their shopping cart to get them to buy one more item.

Here’s another cool use case, if someone has item A in their shopping cart, I can easily tell Privy to display a unique and special coupon code for that item or to display a related item or offer. In terms of email capture, right now I’m showing a different email lead magnet depending on what product a customer is browsing in our shop.

So bottom line Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/steve that’s P-R-I-V-Y.com/steve and try it for free, and if you decide you need the more advanced features, use coupon code MWQHJ for 15% off. Once again that’s privy.com/steve.

I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. Now I’m really blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my ecommerce store, and I actually depend on them for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another email provider. Well Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it’s so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they purchased which makes it extremely powerful. So let’s say I want to send an email to everyone who purchased a red handkerchief in the last week, that is easy. Let’s say I want to set up a special autoresponder sequence to my customers depending on what they purchased, that’s a piece of cake, and there’s full revenue tracking on every single email sent.
Klaviyo is the most powerful email platform that I’ve ever used and you can try them for free at mywifequitherjob.com/Klaviyo, and that’s spelled K-L-A-V-I-Y-O. Once again that’s mywifequitherjob.com/Klaviyo, now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast, today I’m really happy to have Carmen Rivas on the show. Carmen is actually a student in my Create a Profitable Online Store Course and she lives in Australia, she joined over a year ago and she’s been doing amazing with her business vizcosa.com. Now I often get questions from listeners whether it’s possible to run a viable ecommerce business outside of the US and the answer is of course.
Carmen sells kaftans and resort wear, and what’s cool about her story is that she validated her niche using Facebook before investing a lot of money into her business. Today she’s doing very well, she just had a baby, and she is able to run her business while taking care of her child. And with that welcome to the show Carmen, how are you doing today?

Carmen: I’m very good Steve, how are you, thank you so much for having me.

Steve: I know, thanks for coming on, I just still continually find it amazing that I’m in the United States and you are in Australia and we are talking today.

Carmen: I know, it was a bit hard to find the time but here we are.

Steve: So Carmen how did you come up with a niche and the idea for selling kaftans online — first of all what is a kaftan?

Carmen: A kaftan is a very glamorous gown; it’s pretty much a dress that women can wear in summer and you can wear it to a wedding, you can wear – especially something that you take to your holidays, but it’s just pretty much really glamorous, very elegant and it just comes from many years ago.

Men used to wear kaftans and I think men still wear kaftans, but with the evolution of fashion now it’s a very fashionable gown that you just wear for an evening, for a cocktail, for a party and especially it’s really beautiful to wear at the beach during the holiday, because it’s very free flowing, very comfortable, mostly made of silk or luxurious fabrics and they are always decorated with stones, they are very colorful, so it’s something that will bring a very happy feeling when you wear.

Steve: Okay and how did you come up with the idea of selling those?

Carmen: I am a lover of summer and I really love fashion. I knew I wanted to start a business that was pretty much within the fashion industry, and if you see me during summer I will always be wearing a dress, long maxi dresses and anything that has to do with color and with free flowing fabric. So I really had this idea that I wanted something similar, and I actually had another business before, one of them was tape [ph] wear.

It was something similar to spanks [ph] and that didn’t really go very well because it’s something that I love to wear, but I was trying to sell it without really finding what women really wanted. So when I decided that I was going to change my business within the fashion industry and go for something that was clothing, I started to ask around and ask before not necessarily something that I wanted to wear but what they want to wear, what they like, how they feel, what they wear it for.

So I used two medias to validate that idea, one was Facebook and the other one was a survey that I did in Survey Monkey to my friends, and that’s how I came up with specifically kaftans.

Steve: So real quick back in your other business when you were selling spanks like products, why didn’t those work out exactly?

Carmen: I think it was I didn’t have the knowledge. I think if I start again now with that business it’s going to do well because it’s actually a really good product, but back then I didn’t have any mentoring, I didn’t know what I was doing, I was trying to sell wholesale, I was trying to sell online, but I was just trying to do Google AdWords and everything was all over the place.

I wasn’t niching down the product, I wasn’t being specific, I was trying to be a little bit of everything, but I was doing nothing at the end because I wasn’t really targeting anyone in particular.

Steve: Okay can we talk a little bit about the survey that you sent out; you mentioned that you were just trying to validate your niche, what were some of the questions on the survey?

Carmen: It was pretty much, I really wanted to find out who these women were, so I started with age group, with occupation, income and also what they wear like what do you feel beautiful wearing, and also for different occasions because you might wear something to work and something different to a party, so I asked them everything, what do you wear to this and this and this different occasions.

I gathered enough information to sort of – and I also knew that I wanted to go with summer wear and dresses, but I was very open to different opportunities. So at the end of that survey everything really pointed out to the kaftans.

Steve: So who did you send the survey to?

Carmen: I sent it to friends, pretty much to friends, I did it literary because in Survey Market you can actually buy an audience, so I did buy a little more audience but I also sent it to my friends.

Steve: Okay and how many people actually responded to your survey just curious?

Carmen: It was a while ago I don’t remember, I think it might have been no more than 20 people maybe; it wasn’t a lot of people actually.

Steve: Okay and then when you were validating on Facebook, what was the process for that?

Carmen: Okay so listening to – basically when I joined your course that’s when I started to have a lot of direction on what really I needed to do and the first thing was sort of knowing what people were looking for online. So I used a couple of different programs just to see what people were looking out for online, so it was with Google, Terapeak was one of them.

So I decided – there was an interview that you have with Ryan Daniel Moran from Freedom Fast Lane. He was talking about how he started — it was I remember some business selling yoga mats, and that really gave me the idea to start a Facebook page just to start adding value having a little bit of information about clothing just to see what the response was going to be.

That’s how I started the business, I didn’t even have the website yet, but I decided to really communicate with people through that. I started to really get a lot of information from them, what they wanted, what they wanted it for. I was very responsive if I got any questions and all of this was before even I have the website, and that really helped me to validate the idea.

Steve: So you just created a Facebook page from scratch, how did you get early fans of your page?

Carmen: It was with Facebook likes, so it was just the usual Facebook likes, I just would find dollars I remember at the beginning on to the page and people started to like it and every night I remember I will upload a couple of pictures and the pictures were just generic pictures that I took from Google.

So everything was really generic, I was just trying to find out if people – what they like, where did they click like the most or if they put a comment, which pictures they were commenting on and things like that. That’s how I started; I just wanted to know where they were going pretty much.

Steve: Interesting, so when you were posting these pictures, these were kaftan pictures that you just found on Google?

Carmen: I did, some of them were kaftans, some of them were celebrity pictures wearing similar items. So I was posting everything that I wanted to sell, so similar items, they were not only kaftans but they were a little bit of different type of clothing just to still continue to understand what women wanted and what they really like, so pretty much.

Steve: And just curious how big did you build up the space, like how many likes did the page end up having?

Carmen: At the moment it has 10,000, a little bit almost 11,000. April we only had about 100 likes when I decided to start my online store.

Steve: Oh wow okay.

Carmen: It was very soon.

Steve: And so you posted different pictures and then based on the level of engagement, that’s kind of how you chose which ones that you wanted to sell in your store?

Carmen: Exactly because I noticed that it was a very good addition, so everything happened within probably a month. So probably by the time I have 500 likes I was very comfortable. I already felt, okay there is a – because I had a business before I knew that it wasn’t that easy to get even these 500 likes, and I knew with the business that I had before the engagement was really low. With this one even though it was only 500 people, they were very engaged.

So I knew that this was enough for me to start. I made my first sale within that month because of the conversation I was having with customers and they were asking me for advice and I was giving them so much advice until this – I remember one of the women just I really I need this outfit for a wedding I think she was having, I don’t know what to wear and I started to sort of back and forth ask her what her style was, what time was the wedding, every question.

She said, okay I really need that dress and I remember posting a picture of a garment that I thought was beautiful for the occasion and she said, oh I would really like to have that one. I said okay you can have it, and I went and I found it locally, I tried to find that garment everywhere I could and I found something very similar, and I created my website and I told her this is the link, you can buy it.

Steve: Interesting, okay so you just bought it from a retail store and then sold it?

Carmen: Correct yes, I was only at the stage of validating the idea and I saw, okay somebody wants to buy it, I don’t want to miss the opportunity.

Steve: So on your Facebook page you were having conversations with people, did you ever try to pre-sell any of your products?

Carmen: Not at that stage but very soon after but only within another week I started to source the product. I went to look for a supplier overseas and I got a few samples and everything was really quick, it’s really where I had samples on the website and I started to sell them.

Steve: Okay and in terms of your suppliers how did you find them and where did you look?

Carmen: I looked in AliExpress and I looked in Alibaba and I found a couple of suppliers there and there were various endless stages. I didn’t stay with so many of them, the suppliers that I have at the moment I actually asked them and I found them because I was trying to make my own designs, and I was trying to understand how you can make your own prints and how to print in silk and in fabric, and doing those searches I found actually my current supplier.

I goggled him and I found him and I have a couple of suppliers now, but the biggest one was a little bit outside of Alibaba, but you can still find people there for sure.

Steve: Okay but you started out selling other people’s designs first before?

Carmen: Yes for only a couple of weeks, it was a very short time. When I understood that I was on to something, I really wanted to have my own business and I really wanted to have my own label and I wanted to be very original and doing my own things, I really rushed into finding my own brand really early on.

Steve: Okay, I have a couple of questions just related to clothing like how do you decide how many of a certain size to buy and that sort of thing?

Carmen: At first it was a risk, I just had no idea how many I needed, so I started with very small amounts and very small quantities and I just pretty much I will order a little bit of…

Steve: How large was your first order?

Carmen: It was probably just 20 items, it was really small and they actually thankfully they have quite big minimums, but I managed to – on your course you mention all the time you can always sound like you are not exactly the final person they’re talking to, and so I started to sound like a bigger business and I said, look we really need samples to start with. So my first order was a sample order and that sample order sold really fast, and that’s how I started to build up on my bigger orders.

Steve: So your first order was 20 you said, right?

Carmen: Yes.

Steve: Was that different sizes or you did you just go with the common sizes?

Carmen: It was different sizes yes. So obviously I kind of run out of one size and then run out of the other. It was a struggle at the beginning just to get it right when it came to sizes.

Steve: Okay and then after that your orders – what were some of the minimums that you were encountering?

Carmen: I started to order 15 minimum and then they started to have minimums when it came to a particular print, and obviously when you start making your own print, then the minimums are bigger because they need to do a production run for something that they didn’t have, and it’s something that is exclusive to you. So the minimums started to build up a little bit, so at the moment – I mean it was very slow and they were quite flexible at the beginning, so I would order 15 here, 20 there until I stated to build it up on my own prints.

Steve: Okay, I’m just curious did you look locally at all for sourcing or did you go straight overseas?

Carmen: I went straight overseas, however yes at the beginning it was a local supplier the very first ones. Yeah I definitely went overseas and actually I had looked in America back in the day when I first I had this idea, because originally I’m from Colombia so in my way there I actually looked in America for suppliers and there is actually good ones there, but at the moment I’m not working with any American suppliers.

Steve: Okay and I’m just curious what is the price differential from going to China versus like the US or Australia for example?

Carmen: At the moment I’m working with India and I think the prices might be quite similar.

Steve: Oh really?

Carmen: Yes, it probably might be a little bit more expensive than to go to America and a little bit cheaper to go to China I will say, but the prices are not – it’s just not that massive. I think when it comes to silk; silk is not cheap anywhere so I think is very similar regardless, yes.

Steve: Okay, so if that’s the case why are you still going overseas as opposed to going locally?

Carmen: No what I say is similar when it comes to doing America or…

Steve: Okay.

Carmen: Yes, yes.

Steve: Okay got it.

Carmen: Nothing local, at the moment I don’t have anything local, I think the quality one — I haven’t really explored someone that can actually make my own garments locally. You can find local people but obviously they are sourcing it from overseas.

Steve: Okay and when you first got started how many designs – like there is this misconception that you have to have like a huge variety when you launch. I’m just curious how many styles you had when you first launched your store?

Carmen: Yes definitely it doesn’t have to be a lot of styles and like myself and I used to have that belief as well, I have to have a massive store for people to come and buy and they need to have all these options. But no, at the beginning as I said the first time was one dress that one particular lady wanted to purchase, so I had that one on the website, and then I started to upload a couple, so probably when I first launched the website I have five designs and I started to build it from there.

I didn’t have a lot of designs and I don’t think when it comes to someone wanting to buy your product, I don’t think they are very worried about you having a massive amount of choices. I think it is all about offering quality, being trustworthy and offering something that they really want and need and being there for your customer and building that relationship. They don’t really care that you have a lot. At the moment I have somehow many more designs but I didn’t start with that many.

Steve: Okay and then what platform did you ultimately choose to run your store on?

Carmen: At the moment we are on Shopify and I do have experience with having open cart when I had the underwear business and that was very difficult. So I recommend to everyone just go to Shopify, it’s much faster.

Steve: Did you do your own website design on Shopify?

Carmen: Yes I did.

Steve: Okay and just curious how long did it take you to get your store up and running assuming you had all the photos and everything ready to go?

Carmen: It was really quick, I did it probably in a weekend, but I’m not saying that it’s something that is that easy to do. I did it that fast because I spent years before with my other business. So I already made all these mistakes, I already had a little bit of experience with Photoshop, I knew how to sort of the photography, I really knew photography well, I already knew more, I really knew how to organize a photo shoot. I really understood the whole process; I understood a little bit of design because I learnt all of that from my previous business.

So it was very fast when I started this part of the business, just setting up the shop because I had the experience and I also had an open cart website before, so I was involved with a little bit of coding and a little bit of everything. I understood a little bit. Not very technical but I understood.

Steve: Okay and just curious like you mentioned are you designing your own patterns for your kaftans or just the prints?

Carmen: Everything at the moment.

Steve: The patterns too?

Carmen: Yes, yes.

Steve: Okay, does that mean that you know how to design clothing?

Carmen: Well I will say maybe yes.

Steve: Or did you hire someone to design it for you?

Carmen: No at the moment I do the whole design, the whole process.

Steve: Okay.

Carmen: Yeah at the moment I do everything, obviously I’m not a graphic designer, so I do work with graphic designers to help me put it all together, but I do solve everything, the inspiration, how I want it to look, how the sleeves look, how long is it going to be, how wide, all the measurements, all the patterns, everything. I am, different samples everything together and give them the instructions to get it all done.

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So what software do you use to do that, I’m just curious?

Carmen: Photoshop.

Steve: Oh Photoshop okay, so you just lay out the measurements in Photoshop?

Carmen: Exactly yeah.

Steve: Okay so there is nothing special in terms of software or graphic design?

Carmen: There is a bit at the end, when they are going to print it they have other softwares that they need to put it all in to their softwares and then they need to print on to the fabric. So I don’t do the printing because that all is done overseas, but I put together the design and how everything is going to look and what the measurements are and I send it to them, then they need to put it on their own systems just to get it finalized pretty much.

Steve: Okay and in terms of what you’re sending them, is it just like each individual piece of fabric cut out?

Carmen: No they do everything overseas, so what they get from me is the actual designs and the measurements, and if they need something physical I will
send them something physical.

Steve: Oh no that’s not what I meant, I meant like when you’re laying it out in Photoshop, is it on a per piece basis like a kaftan might have different pieces of fabric sown together. When you’re sending them in the Photoshop, are you sending them a design of each individual piece of fabric and then they put it together?

Carmen: Yes correct, so it’s a lot of specifications and a lot of measurements, and I actually do everything at home and I start to try them at home and I try it on. I also have my sewing machine here if I need to put something together. So I try to do as much as I can until I am comfortable with it and then I can tell them, because a lot of things can get lost in translation as well. So I make sure that I understand and they understand what the final is going to look like, and then we just do one sample and they send me the sample, and then it’s a little back and forth until I am happy.

Steve: Okay that’s amazing, so you’re like a one stop shop yourself, like you understand how to design the clothing and you even put together a sample yourself like a prototype?

Carmen: Yes, yes I also I always have loved clothing and that type of clothing, so I had an idea and my family has always been involved in fashion and my mum is very good at sewing and making clothes. So I kind of have a lot of that idea of what is involved making clothing so yeah.

Steve: Okay, all right well let’s shift gears and talk about sales, so you got your first sale off of your Facebook page, how are you making consistent sales today?

Carmen: It’s actually the same, so it has continued to be Facebook but over the times, it’s been about a year that we have been within on the business and it has started to grow a little bit outside the Facebook but it is still a community that we have there. Now that I started to gain regular customers, so I have continued other relationship with them through email as well, and that’s pretty much how we have continued either a little bit of influencer marketing, some couple of bloggers that have been working with us to build the brand, but it’s pretty much still Facebook page.

Steve: Okay can we talk about your Facebook page then, how do you maintain it like how often do you post, what do you post?

Carmen: I post at least three, well sometimes nothing but ideally it is at least three times per day just to continue with the consistency, and I found that my customers really love it. I just make sure that everything is about engaging with them and everything is about having that conversation and everything is about them, and every time somebody comments being there for them straight away.
Even if they say well I love this and this is beautiful always reply thank you so much, thank you for the love, we can’t wait to show you what’s coming. It’s all about staying in touch with the customers.

Steve: How do you decide what to post, are you just posting pictures of products or are you posting content?

Carmen: At the moment well it was pretty much through that but right now we’re posting little bit of content, so slowly started to do a couple of blog posts but even each picture on its own has a little bit of content on it. So it’s not only the photo, but the photo might have a little bit of [inaudible 00:28:08], it might say this particular color will look beautiful with this particular type of shoes or this particular location.

So even that picture has a little bit of information and a little bit of advice and I think that’s what our customers love because it’s not about only telling them buy this, it’s all about what do you need, I’m here to help you and I’m here to give you advice. Are you going to a cruise ship, this is what will be beautiful to wear for thin air, that’s what – this is beautiful for the pool side, so they really respond to that.

Steve: So are you posting these questions on the group as well?

Carmen: Yes, it’s only a Facebook page, we don’t have a group.

Steve: Facebook page, okay so you’re like doing customer service on your Facebook page essentially?

Carmen: Exactly yeah.

Steve: Okay and are you still buying likes at all anymore?

Carmen: No not anymore, so we stopped very – probably we stopped at 3,000 likes I think or less. So all the rest, we have almost 11,000 likes and
everything has been organic.

Steve: Do you remember how much you paid for those 3,000 likes early on?

Carmen: I remember back on the day I was probably investing $5 or $10 a day and getting maybe 20 likes.

Steve: About 25 cents a like?

Carmen: Yes something like that, but very early on I stopped yes.

Steve: Okay and I’m just curious when you’re running a Facebook page now like when you post something the reach is very low, so are you boosting your posts, are you paying for ads?

Carmen: Ads, so at the moment it’s all ads based and that’s how we reach and continue to reach customers, so it’s pretty much ads every day and there’s a combination of ads and a little bit of email marketing, yeah that’s pretty much.

Steve: Okay do you feel comfortable talking about your ads a little bit?

Carmen: Yes let’s talk a little bit.

Steve: Okay all right so what does the ad copy look like and who are you targeting?

Carmen: The target is – do you want to be too specific about the particular target?

Steve: Sure.

Carmen: But I mean a little bit in general, I do different ads for different targets, and then I see which one is going to take off, so it’s a constant trial and error all the time.

Steve: Are you pointing your ads directly to your kaftans or do you point them to like a content page?

Carmen: No it’s actually to the product.

Steve: To the product okay.

Carmen: Yes to the products. I remember you mentioning a lot what you do pointing it to content, no but I do directly to the product. There is something I might explore a little bit of going to the content but people really actually like to see the products really like.

Steve: Okay and then so you’re making more money than you’re spending on these ads obviously?

Carmen: Oh yes they are really profitable yes.

Steve: Okay and are you selling only on your site right now, are you selling on Amazon or anywhere else?

Carmen: No I sell on eBay actually.

Steve: eBay interesting.

Carmen: Yes but not a lot, just a little bit because of the price point. We have an early rush, our cheapest price is $120 so probably eBay, there’s not a lot of people on eBay that will see – they will go and spend that kind of money probably, but I have an eBay page and I have people coming through it and making purchases as well and they are really happy as well, I get beautiful feedback from the people there, yes.

Steve: So I’m just curious why eBay and not Amazon?

Carmen: It’s just been a lack of time probably, Amazon is definitely something that I will be exploring soon, but Amazon is just being probably lack of time, my being just busy with the website and to be honest my original idea was to go on Amazon. That was my objective and I never even wanted to start my website that soon within a week.

What I was going to do is the Facebook page, use it to start my Amazon business, but because I saw that the business has started to not only be an online store but it started to become a little bit of a brand, I decided, okay I might just stay within my website, it’s something that I probably will have more control of. Amazon is a little bit more difficult being in Australia, so it is just at the end even though that was the idea, I think it turned out a little bit better for us to stay within our own website and build our own label in our own realistic rather than being in Amazon.

Steve: I’m just curious, so that means you’re carrying your own inventory, is that correct?

Carmen: Correct yes.

Steve: So where are you storing everything?

Carmen: Everything is at home.

Steve: Really?

Carmen: Yes.

Steve: Okay.

Carmen: There is a lot of stock.

Steve: So does that mean that you do your own shipping and fulfillment as well?

Carmen: Yes I do everything, not for long, I think is we’re getting to the point where it’s just not going to happen for everything to stay here for me to do everything, so yes, so very soon it’s going to change, and we got nothing with fulfillment.

Steve: So I’m just curious how do – I mean you have a new born, so how does your day look?

Carmen: Well I’m very busy; it’s not a lot of sleep. For new mums out there they understand what it is like but I also will say to any new mum in business that it is definitely possible and it is actually a good idea to start before hand before you have the baby, but it doesn’t matter what stage you are at. So it’s pretty much when the bay sleeps I work, that’s how my day is like, and I have a good baby in terms of he’s easy going when he goes to go out.

If I need to go and run errands for the business he’s let me and he’s very good, but pretty much I wake up in the morning, I feed the baby, I get ready to start my day, I put the baby to sleep and I do some work and then it’s all about going back to feed, going back to play for the baby, I’m going back to work for me. So that’s a very busy day.

Steve: Do you get a lot of phone calls?

Carmen: I do but I don’t offer – so pretty much there is no numbers on my website.

Steve: There isn’t, okay.

Carmen: No it’s only when someone contacts us by email and they say they want to talk to someone I will definitely give them the number. I do have a number for the business, so I do give them the number and they’re happy to call where I said to them I’m happy to give you a call back with this number to those and that’s how we do it.

Steve: Okay so here’s a couple of rapid fire questions that I’m just curious about, so how much money did you invest to start this business?

Carmen: It was only pretty much just the cost of the website and the cost of the first garments and it took off from there, so it was probably around $500.

Steve: $500 okay.

Carmen: Yes I will say it’s not a massive investment, and obviously the investment on the course, because I think everything really took off when I started the course with you. So I think that has been my best investment today for sure.

Steve: And how long did it take you to put up your site?

Carmen: Just to get it up and running?

Steve: Aha.

Carmen: It was also it was over the course of a weekend but I’m not saying…

Steve: Like you had experience with it.

Carmen: Exactly.

Steve: Okay.

Carmen: It’s not like it’s something so easy to do, before that I tried having a website and it was on an open cart, it was called PrestaShop, I don’t
know if you heard of it.

Steve: Yes PrestaShop aha.

Carmen: It took me six months to have the website and even after those six months I was literary crying, I had all these developments and people though – please help me because I couldn’t even get it to work. So I learned so much by having that website that now having a Shopify website everything is so much faster and so much easier, and I had the experience just to get it all working.

Steve: Okay and if you had to pick one thing, what would you say your main struggle was in starting out?

Carmen: It was definitely finding the niche, it was finding the niche and obviously connecting to people, and once that happened everything became not on a smooth sail but everything started to make sense. Another struggle is definitely sourcing the product, finding people that you can trust, because you need to understand what quantities you need and you need to take so much risk especially for me because I’m carrying all my inventory and everyday I’m making this business but also everyday I’m buying more and more and more inventory.
You need to really find people that you trust that they want to send you the quality that you really want.

Steve: Can we talk about your vendors a little bit, so are you going with your original vendors, or have you switched a bunch?

Carmen: I do have new ones but I had these ones for months and months at the moment.

Steve: Okay and how did you get them to ship you such small quantities because it sounded like you started out with very low quantities?

Carmen: Yeah I was just lucky I think. When I first contacted them they are very good vendors and the quality is amazing, so they can just be very difficult and say no we only do these minimums, but I was just lucky and I said, look this is a business that is going to be amazing and I said to them, it’s already a big brand but I need to know your products first, and I need to know if your product is the quality that we’re looking for and I really need samples.

So at the beginning that’s how we did it, so they sent me samples and they saw that I was serious because mine is all necessary to be bigger as I promised, and I said mine is all necessary going to be bigger and bigger and that’s what has been happening month after month and I think they trust me and now we have a good relationship.

Steve: Let me ask you this, are the same vendors that you started with early on, are those the same ones that are manufacturing your own designs now?

Carmen: Yes correct. I changed a little bit so I now have a vendor that I stumbled across just trying to find something else and that one is my main vendor at the moment, so that was a bit hard, that was like a lucky strike to find, but I will say Alibaba, AliExpress is still good places to find people.

Steve: Okay and then this other one you just said you found through search or?

Carmen: Yes through search as well yes, so I just been lucky with those ones.

Steve: And when you are approaching someone randomly like on search, how do you vet them, is it the same process you ask for samples and then you just go back and forth?

Carmen: Yes and I really like the fact that there were not very sellsy either, I think they were very private, they are very hard to find and very hard to get in contact with. So to me that sounded like a good thing, and at the same time they were also a little bit skeptical who are you anything, and I think it was a little bit of back and forth to get to know each other and that’s how we got there.

It was a trusting relationship and they started to send me samples and it was all about doing everything. I tried to be very professional, I sent them a questionnaire before anything with every question I can possibly have, and I said to them once you answer these questions to me these are our terms.

So please make sure that everything you answer that’s how you – everything about minimums, everything about privacy, everything, so make sure that you’re happy with that, everything about shipping.

So they will reply and I will reply back and I said I didn’t like this condition what this means, so it like a real contract in between so I did everything — from the beginning everything was so professional, involves but it really works out.

Steve: And in terms of quality control, I mean we do handkerchiefs which is much simpler than kaftans I’m sure and we run into quality problems and I’m just curious if you have run into any quality problems and how you address them.

Carmen: There have been minor quality problems, probably I had one or two products that I had problems with and when that happens I will just say to them, look this happened, please make sure it doesn’t happen again because it’s just not a massive amount, I haven’t had any massive issues.

Steve: Okay does that mean you have inspectors over there or?

Carmen: No, no not at this stage. I definitely want to start working with inspectors just to make sure that as we get bigger everything is going to be okay, but no I’ve been lucky I’ve to say I’ve been quite lucky.

Steve: Wow it’s amazing.

Carmen: Yeah because I always get a sample before anything especially when I’m going to launch a new product. I get the sample, I try it on, I make sure, so obviously the sample is going to be fine. So it’s about trusting that the production run is going to be the same as the sample.

Steve: So Carmen there is a lot of people listening and they are kind of on the sidelines right now, and a lot of them want to know really how hard it was for you to get started, and what sort of advice would you give to people who are kind of waiting on the sidelines today?

Carmen: It is definitely not easy and I understand how everyone out there is feeling. I really want to have my business, I really want to start but I have no idea where. My recommendation is continue to learn and continue to invest on your education, find a mentor. I did your course and that gave me so much direction and also I did benefit so much from your podcast, and that’s why I’m so excited to be here because if in a small way I can tell my story and help other people, I hope that will help them just to push through.

So it’s not easy, it’s not easy to find your niche and it’s not easy to find your product, but it’s also not impossible and it’s also about trial and error. As I said before this business I started another one and that one was not only online, it was a wholesale business and I made so many mistakes but it was all about trying because every mistake that I made really taught me something new.

So don’t be afraid of making the mistakes, just make sure that the risks are calculated, that you are not investing huge amounts of money, that you make a small investments here and there with a little bit of the stock, get a few samples until you find something that will stick pretty much. It does happen and it does happen when you continue to educate yourself for sure.

Steve: One thing I liked about your story Carmen was that in the beginning you didn’t invest any money at all really, like when someone made an order you actually went out and just paid retail prices and shipped it.

Carmen: Yes.

Steve: And you did a lot of research before investing a large sum.

Carmen: Yes because I already made the mistake before, I already had another business and I had a business for a while and I had so much stock that I purchased without knowing exactly which ones were the correct ones, so I bought all this stock and it’s just I think that was the problem just going thinking this is going to be amazing, I’m going to go and buy all this stock.

So you need to find out first if it’s going to be amazing and then do very slowly, and once you’re confident then yes go for it and take a massive risk because you already known this is going to sell eventually at least. But I already made a mistake and I know many people have done it in the past, but yeah you don’t have to buy so much stock at the beginning.

Steve: Okay, hey Carmen I really appreciate you coming on. If anyone is interested in what you have to sell, where can they find you?

Carmen: They can find me on my website which is vizcosa.com, so it’s V-I-Z-C-O-S-A.com, that’s where they can find me, and if they have any questions for me I actually didn’t tell you I have a little of a side project going on which is mentoring for anybody because I get so many people asking me how did you start your business. So if anybody has any questions, they can actually get in touch with me in vizcosa.com/page/mentoring, so they can get to me and stuff.

Steve: Okay and you ship outside of Australia at the present time or just in Australia?

Carmen: Yes I get customers from – I even got a customer from Germany.

Steve: Oh wow.

Carmen: Oh my god, she’s amazing, she’s a regular customer now, and constantly emailing me, what do you have new, so definitely I do ship outside. I ship to America for sure and especially shipping to America, to New Zealand and I have customers in Europe and a little bit in South America. So even though my business is mostly in Australia, I do get customers and sales that come from overseas

Steve: Well that’s good to know, so if anyone needs a kaftan, check out vizcosa.com.

Carmen: Yes I can give you a code for your audience if they want to get a kaftan.

Steve: Well you’re going to be part of my holiday gift card again this year, right?

Carmen: Wonderful of course.

Steve: Okay wonderful. Well so you guys can look forward to a blog post where I outline a bunch of stores that some of my students have put out and obviously Carmen is going to be there.

Carmen: Of course, my pleasure, I will be more than excited to.

Steve: Okay well thanks a lot for coming on the show Carmen, I really appreciate it.

Carmen: Thank you so much for having me Steve, it’s been a pleasure.

Steve: All right take care.

Carmen: Bye, bye.

Steve: Hope you enjoyed that episode. Now I often get questions from readers whether I have any international students who have been successful online, and not only is Carmen doing great but she’s making the majority of her sales on her own website as well. For more information about this episode, go to mywifequitherjob.com/episode156.

Once again I want to thank klaviyo.com for sponsoring this episode. Klaviyo is my email marketing platform of choice for ecommerce merchants, and you can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all of these sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/Klaviyo, once again that’s mywifequitherjob.com/Klaviyo.

I also want to thank privy.com for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers, therefore email capture, exit intent, and site targeting tools to make it supper simple as well. I like Privy because it is so powerful and you can basically trigger custom pop ups for any primer that is closely tied to your ecommerce store. If you want to give it a try it is free, so head on over to privy.com/steve, that’s privy.com/steve.

I talk about how I use all these tools on my blog, so if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away via email, thanks for listening.
Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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155: Jonathan Fields On The Good Life Project And How To Find Meaning As An Entrepreneur

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Jonathan Fields On The Good Life Project And How To Find Meaning As An Entrepreneur

Today, I’ve got an extra special guest on the show. He’s someone who I’ve followed and looked up to every since I started blogging in 2009 and that person is Jonathan Fields.

Jonathan is an amazing writer, speaker, podcaster and he has this incredible ability to build community. What I also like about him is that he’s a family man we share a lot of the same values when it comes to life and business. In other words, he’s very mindful of balance and living a full life.

Today, we are going to talk about the good life project and his latest book how to live a good life.

What You’ll Learn

  • Why many successful entrepreneurs aren’t happy
  • How to find meaning in your work
  • How to make forward progress with your business and life
  • How to cultivate and form meaningful connections
  • Why complexity breeds stress

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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ReferralCandy.com – If you’re already getting steady orders every month, adding a refer-a-friend program to your store can give you a new sales channel. And ReferralCandy is the best in the business. Click here and get a FREE $50 credit towards your account.
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SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
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Transcript

Steve: You are listening to the My Wife Quit her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not with their businesses. Today I have Jonathan Fields with me on the show.

Now Jonathan runs the Good Life Project and he’s actually an entrepreneur that is near and dear to my heart, and in fact when I first started blogging back in 2009, Jonathan actually inspired me to write from a more personal level as opposed to just putting out strange ecommerce tutorials. In any case Jonathan is an amazing guy, so please enjoy the interview.

Now before we begin I want to give a quick shout out to Klaviyo who is a sponsor of the show. Now I’m super excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another email provider. Well Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here’s why it’s so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought which makes it extremely powerful. So let’s say I want to send an email out to everyone who purchased a linen napkin in the last week, piece of cake. Let’s say I want to set up a special autoresponder sequence to my customers depending on what they purchased, easy peasy, and there’s full revenue tracking on every single email.

Klaviyo is the most powerful email platform that I’ve ever used and you can try them for free at mywifequitherjob.com/Klaviyo, once again that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to give a quick shout out to Privy who is also a sponsor of the show. Now what’s also cool is that I use and rely on Privy for both my blog and my online store. And what does Privy do? Privy is an email list growth platform, and they actually manage all of my email capture forms, and in fact I use Privy hand in hand with Klaviyo.

Now there are a bunch of companies out there that will manage your email capture forms, but here is why I like and chose Privy. Privy is easily the most powerful platform that I’ve ever used, and you can trigger sign up forms based on any primer that you desire. So let’s say you offer free shipping for orders over 100 bucks, well you can actually tell Privy to flash a popup when a customer has $90 in their shopping cart to urge them to insert one more item.

Here’s another cool use case, if someone has item A in their shopping cart, I can easily tell Privy to display a special coupon code for that item or display a related offer. In terms of email capture, I’m showing different email lead magnet depending on what product a customer is browsing in our shop.

So bottom line Privy allows me to turn visitors into email subscribers, which I then feed into Klaviyo to close the sale. So head on over to Privy.com/steve, try it for free, and if you decide you need the more advanced features, use coupon code MWQHJ for 15% off. Once again that’s privy.com, P-R-I-V-Y.com/steve, now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast, today I have an extra special guest on the show. He is someone who I have followed and looked up to ever since I started blogging in 2009, and that person is Jonathan Fields. Now Jonathan is an amazing writer, speaker, podcaster and he has this incredible ability to build community.

And what I also like about him is that he’s a family man, we share a lot of the same values when it comes to life and business, and in other words he’s a very mindful person about balance and living a full life. I remember back in 2008/ 2009 I was going through an entrepreneurial crossroads and his blogs at the time Career Renegade and Awake at the Wheel were ones that I read whenever I needed a pick me up.

So just for fun I looked at my email archives and I found an email dated November 4th 2008 where I reached out and wrote him a fairly long email about my story, how my wife wants to quit, how I want to start a business, how I want to spend time with my family yaddi, yaddi, yadda, and he replied with a one liner, thank you for your email.

And I was like yes Jonathan Fields replied to my email, and later on he actually sent me his book Career Renegade as well and I was stocked. Anyway today we’re going to talk about the Good Life Project and his latest book on how to live a good life, and with that welcome to the show Jonathan, how are you doing today man?

Jonathan: I’m doing really well, now I’m feeling so guilty about my liner back in 2008. I’m like it’s fine with me because that was a time I think I remember where I was really – I was just very newly aligned and very newly public and I just – I was like how do I deal with this bandwidth thing and how do I – so I started taking a nod from Seth Godin who basically responds to most emails but generally it’s never long, I think it’s three to five words and look it’s good enough for Seth it’s got to be good enough for me.

Steve: Hey you know I was just happy to hear from you, you know those five words were powerful.

Jonathan: Awesome.

Steve: So Jonathan I know your work well but for the benefit of the listeners can you just tell us what the Good life Project is all about and actually if you won’t mind what happened to Career Renegade, because I must have missed some memo long ago? One day I went there and it was just gone.

Jonathan: Oh the website you mean?

Steve: Yeah the website.

Jonathan: You know it’s interesting, I’m not entirely sure, so there were two things that happened. One is that we launched that site at the same time that the book launched and started to feel that is something separate. Then is realized pretty quickly that I just didn’t have the capacity to be building content on that website and also blogging, this is in the very early days where it was really just me and a desk, I had no help and no team.

Steve: Okay.

Jonathan: So we folded — I made an announcement back then and I said, “Listen, we’re merging the content site of Career Renegade into what was then my blog which I called Awake at the Wheel and we put it all on to my main website at jonathanfields.com and which kind of intervened there. And then I stopped refreshing and updating careerrenegade.com and I didn’t pay attention to it and I noticed, I don’t know but it was either a month or a couple of months, it could even have been a few years later that I just clicked on the site and I noticed that it was somebody else.

Something must have happened where the URL expired, I never got notification, somebody was sitting on it and immediately grabbed it up. I had no idea because I hadn’t launched a long time but they had even stolen some of my graphics and the load on stuff like that I had put up there, but fundamentally it was designed just for the book and when I realized that I really couldn’t store two different properties I folded the main part of that into my personal website at the time.

Steve: But today you have jonathanfields.com and you have goodlifeproject.com as well, right?

Jonathan: I do yes, Jonathan Fields is where I decided to do some of the longer essay sound writing, and it tends to be less frequent, and Good Life Project is really where most of my focus is, most of my energy is since the beginning of 2012, and here you’re asking what in the world is Good Life Project.

There are two ways to look at it, one is sort of on a bigger picture, it’s we’re on a mission to inspire, support and educate people in the quest of living a more connected, more meaningful, more lit up lives. And one layer deeper that takes the form of media and education venture where we produce media video to audio podcasts, where we create and produce courses and events, experiences, everything from centered on our courses to a once a year annual summer camp for adults where 400 people get on plane trips and obviously not allowed to take over [inaudible 00:07:57] and then build the community.

It’s really built around this idea of establishing a clear set of values and beliefs ethos, and then sharing that and other things and saying, hey you see the work of this, when you see it come join us and we’re assisting each other.

Steve: You know what I love about the Good Life Project is that everything you do, the production quality is just always amazing, and then the guests that you have on, they just have so much depth, and what I really like about what I’ve seen so far is that money is never the focus. What I was hoping to do and just to start out with was if you can give the audience an example of one of your favorite guests, and why they particularly resonate with you, that would be great.

Jonathan: Oh man yeah you’re right money is never the focus, it’s an interesting measure, brought so much rejection that is actually not the measure and it’s a [inaudible 00:08:50] indicator and not only an indicator of a life well lived. So many incredible guests over the years, [inaudible 00:08:56] we kind of like it really it just clicked like more of lost friends and she’s such a – so, so awesome and deeply bright, her life is so open and so utterly herself.

What I love I think most about her is that she is unapologetically her; there is no herself that you have to wait, if something is on her mind she will tell you, and she will tell you just so you see her there. She’s also deeply wise, she’s a researcher, she does a lot of theory research and seeing the vulnerability and courage. So I read that she runs a real academic writer with her ideas and she actually loves the world.

And interestingly similarly, but really similar in that she’s also unapologetically herself [inaudible 00:09:49] is the author I deeply love and [inaudible 00:09:51] really just had a fantastic nature of her love treatment on the world, and she’s actually a person with [inaudible 00:10:25] also but instead of deep academic writer, she’s unapologetically like a guru as well. She believes that ideas exist in the ethos and plenty of things and are just looking for people to come and touch reality from out of us.

So I love the sort of like really pull her ox, it lands on so many things but at the same time deep and shared values there and also just a willingness to stand out and say this is who I am.

Steve: Yeah that’s the common theme of all of your guests and then here’s what I always get. The people that tend to be the happiest tend to be those who don’t hold anything back, they just act themselves, and that’s what I love about the guests that you always bring on, it’s just amazing.

Jonathan: Yeah I think that’s true and I think that’s probably one of the things that we keep want to talk to them is because I know that we’re going to have a real conversation, and what’s interesting is most of my guests also are a bit further into life, so very often they’ve been through enough on their struggle, enough challenge that they can shake in some way to starting really looking at what matters on the people that will start to let go some of the posture and position that all of us are journeying on to essential times of our lives and interested in that process of letting go and are interested in how people move into through that to that better place.

Steve: So Jonathan I actually know your back story pretty well, but just for the benefit of the listeners who might not have heard of you before, can you kind of tell us what kind of events led you to create the Good Life Project, and why you think the way that you do today?

Jonathan: Yeah so depends how far back do you want me to go?

Steve: Well you were a lawyer and you – yeah.

Jonathan: So I was a [inaudible 00:11:45] kid. I’m really like an entrepreneur, I took this weird left turn and I went to law school. I had actually barely attended class in college and I just got my first sort of legitimacy in college which I saw at the end and I got really curious about what I was into actually [inaudible 00:12:03] because I knew I hadn’t really tested that in any way in college.

So after taking a little bit of time off I went to law school and with the intention of just really focusing and seeing what [inaudible 00:12:14]. I was very fortunate, I did very well, graduated from my class and then to a great opportunity. So I ended up practicing law first at the security and exchange commission with Federal government which was a whole interesting trip. Now something like 20 years later I’m just finally able to actually start to talk about some of what really happened because we were on this barrel of sequences for a long time.

And then I went to [inaudible 00:12:39] and I went and became a deal lawyer in the securities for a mega firm in New York where we were going to hedge funds and the best being ridiculous and that’s money and doing all this creating this in. Then I ended up basically [inaudible 00:12:54], I was making a ton of money, I had the power, the prestige that so many people often desire to and I was dying inside and literally dying inside, because I ended up in emergency surgery after my system shut down.

A huge infection was munching in the middle of my body, ended up going through many tests and so not believe everything is okay but it was a wakeup call for me and it certainly be that much promotion. I had a lifelong interest both in entrepreneurship and inside of my body conviction and also in the speaker question, once you need to be your life that lived well.

So that took me from being a lawyer to making 12 bucks an hour as a professional trainer because I wanted to learn the health and fitness in this trip [ph] from the ground up. Nothing matters from the middle down but from the ground up what was really happening and where were the gaps that all of a sudden I thought I could solve, and actually did get a whole bunch.

From there I ended up launching my first facility through that, after about two and a half years sold my interests to an investor here to do a little time off to [inaudible 00:13:57]. And then opened the other CDM in Hellskitchen [ph] New York City because I was getting really interested in yoga, and I saw again a gap I saw in me that wasn’t being filled. I at that point was married, I had a home, I had a three month old baby girl, and I signed on a lease specifically on the first floor on the building and actually the day before 9/11.

That led me into quite an odyssey in there and really questioning everything and dealing with the intense feelings that broke within the city. We had gotten to moving forward in launching that center and it became this beautiful solution committee where we ended up with thousands of students from all over the world and training so many teachers to go out into the world [inaudible 00:14:46].

Steve: I vaguely remember that you thought that the yoga studio was just a huge struggle and a mistake early on, was that…

Jonathan: Yeah the first year was brutal and actually there were some really big missteps that I made, everyone talks about their successes, I screwed that left and right. This was the most real atmosphere that you can ever try and open and build a business in, and we identified the fact that entrepreneurship especially to traditional brick and mortal where you have a physical facility, you have inventory, you have employees, you have all these people coming to assess, this is just a really hard and fraught and super challenging.

I remember sitting on a coach probably about a year into it with my hands just beating myself, I just want to know is this going to work or it isn’t going to work. Just give me a sign, I almost there was a window I probably I almost didn’t care if I succeed or fail, I just wanted some certainty.

Every entrepreneur gets through that even the most successful, we all had windows of time where it’s up, up, up, up and then we’re like, okay for me to push to the next level, I’m going to have to sit back and into that sit of uncertainty again and I don’t know what’s going to happen. If you never do that, then you end up going sideways and actually not backing up.

So I went through that in the early days for sure, then later we know the deep emotion on top of that and what we were building and the fact that we were building functionally what I call a business of belonging, a business where we’re building, it was based on a community and inspiration to elevation and providing source of belonging for people and it was really powerful and at the same time very challenging.

Steve: Are you still running that studio today?

Jonathan: No, it ended 2008. So right around the time that you found me actually, so I guess it was at the end of 2007 I started to really become interested in writing, and I decided to sell my first idea for both [inaudible 00:16:54] so it was written on it and I kind of knew at that point that I was starting to be more checked out in this physical business and it wasn’t fair.

I had a great management team, at that point we were really flourishing, we were doing well, we were established for seven years, but I knew it wasn’t my future and I also knew that because it was based largely on community, the community needs somebody who cares as a leader and I was checked out. I cared but I wasn’t really super invested any more, I wasn’t their commitment either.

So I think 2008 I sold the entire company and I started as this small fellow on writing, and speaking and building business in the digital space, which I did and made some different iterations, got enough growth and then actually everything kind of came together. The company and this thing called Good Life project in January 2012 which literary started as an annual refreshing blog post [inaudible 00:17:54] what I want to do.

That turned into a 40 page designed annual report which I kind of released that into the world and that thing kind of took off in its number is 100 times. At the end of it I pieced this thing called my ten commandments of that big business and also this thing called Good Life project which I didn’t honestly know what it was going to be. But I just knew that I want to create something, and I knew that I wanted to produce me at a completely higher level and take my quest to learn from other embodied teachers and turn it into a more mature business in my location, and be able to turn around and share what I was learning.

Steve: You know what’s interesting about your story is that I get emails from readers and listeners that they’re going through the same thing. They start a business and they might be doing really well, but they’re just not happy and on the flip side there is also people that feel stuck at their jobs but they aren’t happy either.

And so I know your latest book kind of covers this and I was hoping we can go through this a little bit, what is missing with these people and how do you figure out what’s going to make you happy?

Jonathan: Yeah, so one, feeling happiness is the wrong nurture. We get our purpose obsessively on happiness and as you can hear in the background by the way I’m near [inaudible 00:19:19] actually so you can hear the occasional siren and this is legit MRC, so you’re getting the full experience.

So happiness is great, happiness is something that we all want to experience, happiness can also – when you focus on like making that a primary metric for your living a good life, it can actually make you less happy, because everything you do you know like I’m happy, I’m not happy, I’m happy. We start to realize that a lot of times you’re not happy but here’s the thing, nobody is happy all the time and try to actually – when you set yourself up for I just want to be happy all the time, you set yourself up for failure.

Happiness is a fleeting space; it snaps on your life, it’s not the movie of your life. When you try to make it the movie of your life, it makes you less happy than happy, you’re are going to try that, we also have genetic settings for happiness. So we’re not entirely in control of our happiness, so you will get somebody next to you who is giggling most of the time and you’re not that way we think well it’s my job, it’s my relationship, it’s something else.

No probably it’s just your wiring and that’s okay. Be as happy as you can be. So I think the much more important metric that I’ve seen is a sense of am I doing something that lights me up, is it allowing me to use my strengths in a way that I feel strongly utilized, is it allowing me to use whatever natural gifts and talents I have in a way that feels like I’m competent and confident. Is it providing me a sense of true legal meaning? We’re in the classic and it’s just central crisis which is really what you’re talking about here. It’s not a crisis of happiness, it’s not a crisis of love, it’s not a crisis of money, it’s a crisis of meaning.

So when you stop asking okay what’s going to make me happy and say how can I add meaning to my life, what happens is a couple of things. One meaning is a metric that you can build and create an enduring business, meaning it’s also something that you can develop and cultivate even when you’re not in your happiest moods, in fact sometimes deep suffering becomes a profound source of meaning.

At the same time when you pursue meaning happiness tends to insulate as a byproduct of that pursuit and that so much help your way to pursue it. So for somebody who is sitting there and saying okay I’ve either built a cage of my own creation as an entrepreneur or I feel stuck in a job, I’m just not happy, part of the expression for me is, okay first feel back inside. There is a really good chance that you actually have no clue who you are, what matters to you, what lights you up, what your strengths are.

So before you actually say okay like just start doing things. The first thing that you could actually do is spend a little bit of time in self discovery, so with my newest book how to live a good life there is a whole section I call contribution just basically about how you bring yourself to the world and what I haven’t said it explicitly, but it is set up, it’s like the first half of that whole section is really a whole bunch of conversations around ideas that are about self discovery, self knowledge.

The second half is okay now that I know a little bit more about myself and who I am and what matters to me, how can I move that on to the world and start to apply this, how can I actually interact with the world. So if you’re stuck at a job, you’re not going to know how to get unstuck until you know who you are, what matters to you and what you care about and then at that point you can start to say, oh now I see why I feel this way and now I have a much clearer picture of where the misalignments are, the lack in fulfillments are and now I understand where the focus of what to do to resolve this.

The truth is that many people actually don’t have to leave a job to feel better, to find more meaning, to get happier. They just have to know all about themselves which is really good news if you’re in the middle of your life and you have responsibilities and a family. People think they have to blow it up, but very often they don’t.

Steve: You said a lot of stuff there and actually it kind of parallels my life. I just actually recently quit my job, I had been extremely happy working my day job in addition to all these side businesses and it was just recently that I realized I want to spend more time with my kids and so I just finally pulled the trigger, but it was just a very gradual process, nothing huge, I didn’t blow anything up.

Jonathan: Yeah and for most – it’s interesting for I tend to be actually a little bit more of a seller than the average seller, so I’ve blown things up in the past, but I also I’m fast to let people know my example should not necessarily be your example, because most people are actually not wired the same way that I am, and also most people over estimate the speed at which they’ll be joined for in their next iteration and how joyful they’ll be, and they underestimate the pain of the disruption that will be caused by blowing things up.

So the big advisory there is you may have to actually do that to go to where you want to be but that may be part of your process. But if you don’t have to I think it’s so much better to take the path of seeing if you can optimize your current reality particularly watching it first before blowing it up.

There is a whole [inaudible 00:24:43] as long as it’s not a job [inaudible 00:24:45] that is actually researched and published and documented that describes how all sorts of things that you can do to potentially redefine the job that you have or redefine the role that you have or redefine the path and make it your own without having to leave it, and sometimes at the end you’re like you said [inaudible 00:25:04] and I optimized it and it was good and it was just time I really know.
At the same time what you did was you built the next step on the side to a point where it was very easy to just kind of transfer laterally into it without having to go through the pain disrupting, and for most people even if you do make a decision that I have to leave, that’s very often serve the most bearable weight there.

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You know here’s the thing, I get a lot of emails also from people who and again this is kind of where you were talking about where people have problems finding their strengths. They’ll say, “Hey Steve I don’t have any particular talents to give to the world, I can’t think of anything that will make money.” What are some of the exercises that you would prescribe to kind of help people figure these things out?

Jonathan: Yeah first separate those two questions like I can’t figure out what are my strengths and what will make money, because if you try and answer that within the same continuum you’re pretty much always going to lose, because if you have a strength where there is a very clear conventional path to make a living doing that, that’s awesome.

But some people do but a lot of people don’t and then what they do is instead of saying, well this is my strength but there is no conventional path to earning a living, so I’m going to try and brainstorm and figure out unconventional paths. They actually tell themselves well this can’t be my strength then because it’s not going to make me money and they invalidate that strength which is massively destructive, because then they will write out themselves and say, I don’t really know what my strengths are or what my gifts and abilities are because they can’t make any money and that’s not a metric.

They are your strengths and capabilities whether they generate money for you or not and may end up being the thing that you can build a career or a company around, and at the same time they may end up not being the thing, they may end up being the thing that you do on the side, and increasingly I feel like that’s okay.

As long as you understand, really understand what they are, they don’t necessarily have to be the thing that earns you, that becomes primary source of income for you. If they are that’s great, that’s really the holy grail, hey I wake up in the morning and the thing that allows me to fully utilize my strengths and abilities and feel lit up is also the thing that allows me to earn everything I need to take care of myself and my family, that’s fantastic, that’s not always possible.

So the question sometimes becomes, okay how do I get so committed to my life in a way that makes me okay – I mean if the thing that lets you earn more than anything on earth is being a parent, we don’t derive a paycheck from that. But if you feel like the god of the universe or whatever is putting you here because you have this astonishing gift in parenting and that’s where you’re feeling lit having reached below this, that’s fantastic and if at the same time you’re somebody who has to generate, who has to contribute to the family income, there may be a way to somehow figure out how to leverage that but there may not.

So having the option of saying okay I’m going to create a way to generate an income that’s fine, it’s okay. That doesn’t empty me out, but it’s also not the thing that makes me utterly lit up but it makes me baseline okay, it makes me feel like I’m not struggling and stuff in my life. I’m not just constantly reacting from a place of scarcity and fear, and that allows me to then go home and be really doing the present in the thing that does light me up and then what I do believe is my greatest contribution which is my role as a parent.

We’ve invalidated that especially in the entrepreneurship world especially in the online world, we’ve invalidated that option, we said that is not okay. I think we do a massive disservice with people who don’t know their lives, ideally not because they do believe that is the best option.

Steve: But it is not [crosstalk 00:30:25] though. It’s hard to separate the two, right because people have needs and often times it’s monetary needs and they want to find something that they would enjoy doing and make money…

Jonathan: Yeah and if you can that’s fantastic, to me that’s the best, the first line, but what I’m saying is allow the possibility that that is not actually going to happen. So I would say like, okay so you guys I mean the original question is how do we figure out our space and my gifts or whatever is my capabilities. So there are a couple of different tools, in the book I talk about two different strength successes. One is called the VIA strengths inventory and the other is something which is more common that people know about which is strengths under [ph].

Those are great tools that you can use where you literary takes you about 20, 30 minutes to take normal assessment. One is [inaudible 00:31:17] and they will give you really good sense for those things that really – you feel like when you contribute to the world, when you live, when you act in the space, you really feel connected, you feel a big sense of meaning and joy. You feel lit up.

At the same time there are sets of ways to live [inaudible 00:31:36], think about it; take yourself back to when you were nine years old. Forget about when you were getting a PHD, we don’t need that. Then just ask yourself what did I do, what did I do that I loved, what did I watch that I just couldn’t get enough of. I talk about in the book these things I call the spots, the five hidden spots, and one of them is what is called things to do is figure out what is your spot or what are your blinded spots.

So the first stops are purely [inaudible 00:32:03] you have a burning question, are you’re willing to solve a problem, what is fascination, is there an interesting topic or field or something you’re deeply fascinated by. Three is – I’m in a blank on this, right?

Steve: No it’s okay.

Jonathan: Three is – so if we go through them, three is immersion, an immersion of an interesting activity that you love to be immersed, it’s like you’re getting to that first state when you do. You don’t do it for any other reason, you’re not trying to solve a problem, you’re not thirsty about how to do it, you just love doing this thing, you feel alive when you do it.

Four is a mastery spot; you are most lit off when you’re pursuing progress, when you’re pursuing mastery in something. You find this as a service spot; you’re most lit up when you’re being in service of some other being even if that being is an animal or nature.

So most of us have a [inaudible 00:32:52], we also have one that’s really struggling to dominate, so ask yourself, go through those five, then say okay what are my spots and what is this spot that really lights me up that I tend to always live by. And then start to dig out, okay is there some conventional way, is there some conventional path to build my living on a business around the ability to be engaged in those spots and my strengths.

For many people there will be an answer, for some there won’t be an answer and then the idea is, okay I’m convinced here and that’s where you just start getting creative and seeing that there is a brainstorming. Not so many people will get all sorts of different opportunities and testing next. So to me that’s more the process, when you allow people to get to where we’re like yeah I had it figured out either conventionally or unconventionally, I was in the dial that in.

But some people will still get to that point and they’re like, you know what I know what lights me up, I know what my strengths are, I know I’m simply being [inaudible 00:33:54], I know all these things and looked at the conventional path, and there is not a path there. I’ve seen a ton of time looking unconventionally and I’m not going to give up on that, but I really just don’t see it yet, and does that mean that I’m just doomed to live a life where I’ll never serve and never light up, there is no meaning?

The answer is no, but the answer is it may not be the thing that is your primary contribution to your livelihood. It may be the thing that you end up doing on the side. There is a fascinating book called Daily Rituals and this is the book that actually mark the Daily Rituals of many of the greatest creators of all time from artists, computers works, painters, across all the different things.

There is a really interesting pattern that emerges in that book which is that many of the greatest writers; artists of all time did it on the side. They had a regular nine to five work a day jobs and they never dreamed of quitting those jobs. And here is the reason why because if they quit the jobs, then that would put an immediate pressure on them to have to figure out a way to make their side in spite of the odds, generate a full [inaudible 00:35:08] living.

And that would start to put a lot of pressure on them to start to commoditize what they’re doing rather than allowing it to be a full and genuine expression of who they are without regard to whether it’s going to generate money for the family, and they didn’t want to unstring themselves by doing that. So when you look at – there are just too many examples of people who have contributed on extraordinary levels lived greatly by being really happy in like making their primary contribution, the primary thing that lit them up, making that happen not during nine to five but five to nine and on the weekends.

Seeing that over and over has really shifted my lens on validating that topic, it may not be the first path that you try to explore, but you may find that that is the path that you’re in, and to me if you asked me five years ago I’d probably say don’t keep pushing. Increasingly I don’t believe that, increasingly I believe that is a viable offer to establish.

Steve: You know one thing about your book which I actually read last night so it’s very fresh in my mind that particularly resonated with me was your emphasis on travelling in the slow lane from time to time. This is actually a revelation that I recently had because I was looking at my ecommerce business and this entire time I’ve been trying to just grow it and grow and grow it.

Whenever you grow something, that comes along with more employees and just more headaches and I asked myself, we make enough money so why do I continue to make my life a lot more complicated. That particular section really resonated with me, what is your way of thinking about it in terms of just travelling the slow lane, and when did you come to that revelation for yourself?

Jonathan: What I realized over the years is that for me on a very personal level complexity deconstructs and stress equals pain, and so probably what I really shifted my value set to do says, how do I scale a path while minimizing complexity? That’s what I’m about right now and it’s not an easy thing to do and it’s an inspiration so deeply in. But for me because I know complexity brings stress and stress is something that is just deeply negative in my life, I’m always trying to figure out, how do I dial that, I always simplify. How do I springboard?

So if we can automate stuff instead of adding inventory or keep talking to a process we’ll do that. If there is a way to take an idea and strengthen around in a way that minimizes complexity we’ll do that. That said, at the same time I’m also deeply aware of the fact that human connection is really, really important and commoditizing knowledge even though it scales really easily often does not have any real impact of bringing people together and creating environments that help develop relationships and that has complexity.

So we’re constantly balancing things out with what we do, we try and say, okay we want to build impact, we want to create engines of impact and engines of connection breathing along and at the same time is there a way that we can do it that minimizes complexity and maximizes simplicity along the way. That doesn’t mean that we’re going end up with something simple but hopefully may end up being simpler.

We mention speed and what I’ve realized also is that speed is very often not – we tend to move really quickly, we know that we can do faster if we move than more productive the more we get done. What I’ve realized is that we tend to all have a threshold where if we start to move faster than that, we create the illusion of getting work done but our error rate as you start to get back to the level, we have to start to re-trend and go back and fix.

That makes us even have to move faster because now we are in — part of the reason we have to move faster is because we are creating errors by our speed that we have to go back and fix which creates a sort of distracted silo. Not only does it not help us create our best work, but it makes it feel really bad along the way because literary we’re just rushing faster and faster and faster making more mistakes, spending more time fixing rather than creating, and we’re not making progress on our primary metrics. That to me, that’s not a business we’ll build or let [inaudible 00:39:53].

Steve: You know that’s funny, that example that you just gave is something that I’ve encountered when I was coding my sites. Like I would just try to get – pump something out and just get it out right away but then later on have to rip it apart entirely when I want to add some sort of new feature. And just by slowing down and just doing things at a deliberate pace and doing it correctly often works out much better in the long run and I’m happy as well.

Jonathan: It’s so much more fun also. I mean dialing is not bad even just 10% very often makes – it’s a leverage to do, because if you’re dialing back 10% your average probably going to make up for the drop in speed, and at the same time the joy you will experience with the process by dialing back just 10% is probably going to double. So this is like a really simple idea that needs [ph] some really big keywords.

Steve: Let’s talk about something else that resonated with me as well which is kind of related to what we’re talking about here which is the notion of prioritizing and saying no, like early on I had lots of problems doing this and it was just recently within the last couple of years where like if something is not floating my boat I will just say no right off the bat. How does one come to this state of being able to say no?

Jonathan: Yeah brutally and fixedly [ph]. After having so like being beaten down a lot by just like being sort of – because we’re taught as kids not to [inaudible 00:41:19] to speak on, you get it like be helpful, be of service which is all awesome and at the same time we know there will come a time where so many people are asking so much of you that to say yes to everyone and to tell them that for every single request means that you have to start to say no to all the stuff which is deeply meaningful to you, and which is the stuff that really matters in your life, whether it’s the relationships or the moments of peace and stillness or the creative project you’re dying to work on or nearly completing that you want to start to do on the side or building your own company, whatever it may be.

The interior starts to gain the ability to say no, you’re essentially saying no to all the stuff that matters to you instead.

Steve: What are your rules for saying yes?

Jonathan: My rules eventually it’s got to be hell yes or it’s no.

Steve: Why did you take this interview today?

Jonathan: Because a mutual friend introduced us and she’s a hell yes to me and I like her. If you’re a friend with her then it’s got to be a hell yes. Plus I was just – I’m really fascinated because I had that statement where I was like should I talk to the student like background 2008/ 2009 and I’d really love to find out what he’s up to and it sounds like it could be a fun conversation.

Steve: Well those five words that you did write back to me were very powerful, so try and freshen your mind. Yeah I know I was just curious so yeah just when you say yes it’s a hell yeah, but there is a lot of times when – I’ll give you an example of my own life.

Just recently someone asked me to coach my daughter’s soccer team with them, and then someone else asked me to coach the basketball team and then the soft ball team as well and I couldn’t say yes to all those things or any of those things without worrying about my son as well and he’s got these three sports teams as well. So how do you figure out, what is your criteria for saying yes to something?

Jonathan: For me it’s largely, it’s kind of funny; it goes back to what we were talking about earlier. It all starts from deepening just self knowledge first, so you can’t be able to say yes or no to them until you actually know what you care about, what matters to you. So like for the example that you gave, like okay so I got two kids, each kid has three sports and for each of those sports I’m being asked to coach so we have six sports that needs a coach.

If I say yes to all of them I’m going to do a terrible job with all of them and then I’m not going to be able to do some of the other work or be there with my wife, I’m going to be really [inaudible 00:43:46] and get to show up on behalf of everything. So in the name of actually being to all of them, honoring my – maybe you have a deeply held value that I want to be present and engaged and positive in the lives of my kids when I’m with them.

If you want to honor that you’re like okay so there is no way I can do that while I’m saying yes to six things. So what’s the maximum number of things that I can say yes to and still honor my values and what I know to be my strengths and the things that let me [inaudible 00:44:15]. You think, well I can say yes to coaching one, being a coach for one of my daughter’s teams, and being coach for one of my son’s teams.

That will allow me to be present and when I’m present I’ll really be there and be entirely focused, and at the same time every week I’m not there, it’s for me to focus on my honor and put relationships and let it be other things that light me up. Or maybe it’s two, maybe it’s whatever it is for you, but for me there are two parts of it. One is actually learning how to say no and with understanding and compassionate and respectful, but the other one is honestly you must say yes and no to, it’s really about understanding who you are and what matters to you.

So it’s like what lights you up, what empties you out, what do you really value, just say to really have values and believes. So like I said if your value is it’s really important for me to be present and engaged in the lives of my children, then that’s going to change the way you answer the question you just told us. If you stated your value around family definitely where if your value around family is to provide financially for the education, university education of my kids, that’s your primary family value.

You’re going to choose very differently when you have this opportunity to coach, because you’re going to say no, probably you must say because you think in your mind, okay to honor that value what I really need to do is make more money so that I know that my kids will go to whatever college they want to go to and just be able to focus on their academics and not the play.

It comes back to again spending some time on understanding who you are and what matters to you. Once you do that then the hell yes and the no is actually pretty easy, because it becomes pretty obvious to you once you really touch down on what matters on you.

Steve: That’s interesting, these decisions are always very difficult for me because I feel like I have overwrapping interests, like I want to be a parent but then on the flip side there is other things that I need to get done as well, and so it’s never black and white for me at least.

Jonathan: Yeah but at least like I know if you really know yourself well, you’ll understand what your big – so it may not be – you may say well [inaudible 00:46:39] you’re supposed to love to do that and at the same time if I do that it shouldn’t be upsetting, I can still spend less hours a week on my business which is going to make my family financially okay, and that actually would have more of a negative than the positive of you being present for that one.

So it’s a tradeoff but at least if you understand what your values are so that you can feel confident in what better place to make more I think much more intentional decisions rather than just [inaudible 00:47:06] after.

Steve: Would you say that a lot of the people that contact you saying that they don’t have enough time to pursue something, would you say that those people just have a problem of prioritization and not understanding what they actually want to get out of something?

Jonathan: I would say a lot of them. I wouldn’t say a universal blanket, but I’ll say a lot of them, there’s a tremendous in other ways, there’s a tremendous amount of creativity in the way that we live our lives and tremendous lack of intentionality. And again I’m saying understanding what to say yes and no to.

But I also want to point out another case which is that there are all sorts of people who are in a point of life where things are just hard, where circumstances are a big part also but they have locked them in a place where they got to work three jobs to take care of their family, and I don’t want to belittle the reality of that person’s life and say, oh that’s just not a priority.

Steve: Sure.

Jonathan: For many people it is, but there are also other people where I was like you know what there are just things that are brutally hard and it is genuinely something that’s just a really, really tough scenario without a lot of really clear easy ways out of them, it will just take a longer 10% of [inaudible 00:48:30].

Steve: Hey Jonathan I want to be respectful of your time, we’ve been chatting for like 45 minutes at this point. I read your book last night and I thought it was fantastic and it’s actually really quick and easy read, where can people find more about your book and more about the Good Life Project, and just more about your back story?

Jonathan: Sure, so if you go to goodlifeproject.com you’ll find details of the book and then the book is available pretty much at book sellers all over the place, online, offline and my back story is probably in there somewhere. But thank you so much for inviting me on this, it’s been so much fun kind of reconnecting with you and to your audience thanks so much for listening in and allowing me the space to share some time with you.

Steve: And right now everyone who is listening the book is 99 cents, I think I got it for 99 cents which is a ridiculous deal.

Jonathan: I know, my publisher really put the eBook version on sale for 99 cents. Right now I’m not entirely sure how long it’s going to be there, but it’s kind of insanity because this is a traditionally published book that usually costs a lot more than that.

Steve: Yeah, no brainer guys, no brainer, it’s How to Live a Good Life by Jonathan Fields. All right Jonathan thanks a lot for coming on the show, I had a blast man.

Jonathan: Thanks a lot for inviting me.

Steve: All right, take care.
Hope you enjoyed that episode. Jonathan is really an amazing guy and you really have to go and actually check out his writing to fully comprehend what I mean. For more information about this episode, go to mywifequitherjob.com/episode155.
And once again I want to thank privy.com for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers, therefore email capture, exit intent, and site targeting tools to make it supper simple as well. I like Privy because it is so powerful and you can basically trigger custom pop ups for any primer that is closely tied to your ecommerce store. And if you want to give it a try it’s free, so head on over to privy.com/steve, and once again that’s P-R-I-V-Y.com/steve.

I also want to thank Klaviyo which is my email marketing provider of choice for ecommerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all these sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/Klaviyo, once again that’s mywifequitherjob.com/Klaviyo.

Now I talk about how I use these tools on my blog, and if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away, thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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154: Darren Rowse On How To Become A Professional Blogger Today

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Darren Rowse On How To Become A Professional Blogger Today

Today I have someone really special on the show. He’s actually someone who I’ve looked up to for a very long time and someone who I never thought I would have access to especially since he lives in Australia. And he’s actually one of the reasons why I got started blogging in the first place back in 2009.

His blog ProBlogger.net started a revolution of professional bloggers all over the world. He’s got close to 8000 posts and he’s influenced millions of people worldwide. If you don’t know who I’m talking about by now, it’s none other than Darren Rowse.

Today Darren runs ProBlogger.net, Digital Photography School, a podcast, an event and has written a bunch of books as well. Enjoy the interview!

What You’ll Learn

  • What web properties Darren focuses on today and how they have evolved over the years.
  • Darren’s biggest money maker today
  • Darren’s traffic levels
  • How to make money with a blog and how it has changed.
  • How to start a successful blog today

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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ReferralCandy.com – If you’re already getting steady orders every month, adding a refer-a-friend program to your store can give you a new sales channel. And ReferralCandy is the best in the business. Click here and get a FREE $50 credit towards your account.
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SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

Steve: You are listening to the My Wife Quit her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not with their businesses. I’m Steve Chou and today I’m thrilled to have the father – no the grandfather of professional blogging on the show with me today, Darren Rowse, and he is going to teach us how to create a profitable blog in this day and age.

But before we begin I want to give a shout out to Privy who is a sponsor of the show. Now, I’m super excited to talk about Privy, because I use and rely on Privy to build my email list for both my blog and my online store. Now what does Privy do? Privy is an email list growth platform, and they manage all of my email capture forms, and in fact I use Privy hand in hand with all my email marketing providers.

Now there are a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in ecommerce stores. Privy is easily the most powerful platform that I’ve ever used, and you can trigger sign up forms based on any primer that you desire. So for example let’s say you want to offer free shipping for orders over 100 bucks, well you can tell Privy to flash a popup when the customer has $90 in their shopping cart to get them to insert one more item.

Here’s another cool use case, if someone has item A in their shopping cart, I can easily tell Privy to display a unique and special coupon code for that item or display a related item or offer. In terms of email capture, right now I’m showing a different email lead magnet depending on what product a customer is browsing on our shop.

So bottom line Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com, that’s P-R-I-V-Y.com/steve, and try it for free, and if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again that’s privy.com/steve.

I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. Now I’m also blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my ecommerce store, and I actually depend on Klaviyo for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another provider. Well Klaviyo once again is the only email platform out there that is specifically built for ecommerce stores, and here is why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought and that makes it extremely powerful. So let’s say I want to send an email out to everyone who purchased a red handkerchief in the last week, that’s easy. Let’s say I want to set up a special autoresponder sequence to my customers depending on what they purchased, and that’s a piece of cake, and there’s full revenue tracking on every single email.

Klaviyo is the most powerful email platform that I’ve ever used and you can actually try them for free at mywifequitherjob.com/Klaviyo, and that’s spelled K-L-A-V-I-Y-O. Once again that’s mywifequitherjob.com/Klaviyo, now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast, today I have someone really special on the show, he is actually someone who I’ve looked up to for a very long time, and someone who I never thought that I would have access to especially since he lives in Australia, and he’s actually one of the reasons why I got started blogging in the first place back in 2009.
His blog ploblogger.net started a revolution of professional bloggers all over the world, he’s got close to 8,000 posts on that blog and he’s influenced millions of people worldwide, and if you don’t know who I’m talking about by now, it’s none other than Darren Rowse.

Today Darren runs ProBlogger, Digital Photography School, a podcast, an event and he’s written a bunch of books as well, and admittedly it’s been a while since I’ve “graduated” from ProBlogger, so I’m really eager to catch up, and with that welcome to the show Darren, how is the going today man?

Darren: Very well, that was a great introduction, I might borrow that, you just summed up that beautifully, so often I had to know how to introduce myself.

Steve: For some of the other guests I usually have them give a brief intro about themselves, but I in your case I’m actually more interested in what you’ve been up to in the last several years, so what web properties are you focusing on today and how have they evolved over the years.

Darren: So my mind to businesses are the ones you mentioned, Digital Photography School which is about ten times bigger than ProBlogger, we do around four million visitors a month to that and that’s a site on how to take better photos with that camera in your pocket or a rare generic. I started that in 2006 really as a site for me to answer my friend’s questions, I used to get a lot of friends who had this new [inaudible 00:05:23] and I would just point and shoot photographers and they wanted to learn how to use them and I was a guy who was a little bit more advanced than them, more of an enthusiast.

So I just started running two or three articles a week on by six like how to hold a camera, what’s [inaudible 00:05:38] really quite basic things. So I didn’t realize that it would be bigger than ProBlogger. At the time I had been blogging on ProBlogger for three years and that was a blog about blogging which I thought would always be too nichy, but it turns that really 2004 was a great time to start blogging on that topic, because there was a grounds for people who had been blogging for a while but didn’t know how to sustain it.

So I really focused on helping people to learn how to make money from their blog, so that’s started 2004. Digital Photography School was 2006 and yeah they’ve grown into businesses of their own and I am in the fortunate position to be able to I could really focus on either one of them and make a living out of each one.

Steve: You know what’s funny I noticed that the events and your podcast, they are all kind of focused on ProBlogger, right? Do you have the equivalent properties for DPS?

Darren: We don’t do a podcast with DPS, we’ve talked about that a lot over the years, but being a visual kind of medium we always come up against how would we in an audio kind of way talk about visual concepts. And I think we can do it but we probably to do it well we need to do a video podcast or a YouTube channel probably would make more sense.
But it’s a tricky one because a lot of what we’re talking about is landscape photography or travel photography and to do videos of those subjects you really need a film crew almost to go out and to do them well. Yeah so we’ve not really progressed to that stage.

Steve: It sounds like a big money also too right, it sounds expensive?

Darren: It does, it sounds expensive, and I’m a bit of a shoe string kind of guy, so a little bit tight.

Steve: So incidentally I just always been curious, so is DPS a bigger money maker than ProBlogger today?

Darren: Yeah for sure. In some ways ProBlogger is my labor of love, it is more of a passion project than anything else and I probably should be spending more time monetizing it, but I just love helping bloggers. So in many ways if it breaks even and makes a little bit of a profit so I can pay my team, I’m happy with that. Digital Photography School is certainly more of a strategic play and where I spend more of my time and my team spends a lot more time.

Steve: I was just going to ask you that next question, so when you allocate your time, is it like 60/40 or is it majority on your money making properties like the biggest one?

Darren: Yeah it changes from month to month. I’ve probably this year have put more time into ProBlogger particularly since I’ve started the podcast, that has taken more of my time and it’s something I’m really enjoying. So I started that in July 2015, 1st of July. So since then ProBlogger has taken more of my time and since our event has grown to the size it has, that’s taken more of my time as well. So I’d say it’s probably 50/50 over the year but it depends on what’s happening, what we’re launching, what we’re working on at any given moment.

Steve: And just for the sake of comparison, like what are the traffic levels like and how they differ between the two properties?

Darren: I need to dig in to the exact sets, but DPS on a good month we do around four million visitors, sometimes a little less. ProBlogger last time I looked I think I remember was about 10% of DPS or maybe a little bit more.

Steve: No way okay.

Darren: Yeah and ProBlogger is what people know me for because it’s a passionately branded site, but DPS you would struggle to find my name in a recent post there, I just don’t write content or hide behind it, and it’s become more of a brand in and of itself. That’s been a strategic move as well, one day I might sell it. I’d love to sell it I guess one day, so I didn’t really want to tie my name up in this at all.

Steve: Right whereas ProBlogger would be a harder site to sell probably?

Darren: Tricky yeah definitely.

Steve: And in terms of income at least I remember back in the old days it was a lot of Adsense and affiliate revenue. Has your revenue sources evolved over time as well?

Darren: Oh yeah, big changes there. So we started out, the first money I made online was Adsense and also my first personal blog way back in the day, and then I experimented a little with Amazon’s affiliate program, that was the two main things, and it was originally a few cents a day in the early days. Half of the day my wife clicked through the ads and I quickly told her not to do that anymore because I would have gotten kicked out of Adsense.

That was the [inaudible 00:10:15] and Adsense certainly become the thing that I made my first full time living from, and then I experimented with some ad networks and it works and a bit of other affiliate. Then back in – I think it was about 2009 I had been experimenting with recommending other people’s eBooks and courses, and I saw that my readers were responding really well to information products, and both my sites being information sites we teach on both of them and they worked quite well, I just didn’t sell products that teach as well.

So 2009 I created an eBook for both sites. On ProBlogger was 31 days to build a better blog which was really just a repurposed series of content that I had done on the blog, and then on Digital Photography School was a portrait photography eBook which again was repurposed content. It was a collection of the best articles I had written on the topic of portrait. And I was really nervous on both fronts, would anyone buy something that’s repurposed that they could get for free, but in both cases I think the photography one made $72,000 in 11 days and that just blew my mind.

Steve: That is crazy.

Darren: That was crazy, and the ProBlogger one did similarly, and so that opened my eyes to this idea of having more products and I think since then we’ve published about 40 eBooks. Not all of them have done that well, some of them have done a lot better than those early ones. We’ve done three courses on Digital Photography School and we’ve also this year started to create some library of our presets, so a library being like Photoshop and you can plug in some plug-ins almost like Instagram filters into the library, and so we’ve been selling those, so it’s almost like a software to our product as well.

Steve: How much do you charge for a course versus an eBook?

Darren: Our eBooks typically range from $20 to $30 depending on the length, we tend to publish quite hefty eBooks, and they are very produced, so we put a lot of time and energy into the design of them. So I know there is a lot of eBooks around for $5 or $3, that type of thing, this is certainly not that type of product. They are all PDFs, we don’t do Kindle, we do not any Amazon store, that is all sold directly through our site. Our courses have I think they are about $50 typically.

Steve: Okay so not expensive?

Darren: They are not super expensive, you’re certainly not paying $300, $400, and a lot of presets are $50 to $60, $70 in that range as well.

Steve: I’m just curious what your rationale is for not putting something on Amazon as well?

Darren: We did one and it was really hard because we had priced it at $20, and every other eBook on Amazon in the Kindle store was $3 in our category, and whereas we thought it was a great product and was much better than those, it just didn’t look right in that category and we’ve always had such success with PDF and we’ve got such a large audience, we really are able to drive a lot of traffic to our own products.

Steve: That’s true, you don’t really need Amazon.

Darren: Well I mean I wouldn’t mind doubling sales but we’ve just not quite found the right model for that. We do have three other smaller eBooks that we have developed under a different brand, we’ve attempted to put those on to Amazon because they are mini eBooks and they’re probably more the $6, $7 range, so that might be something we could experiment with.

Steve: So you have a whole bunch of different projects going on, and I’m just trying to get an idea what is like the one thing that you’re working on right now that you enjoy the most of all the projects that you have.

Darren: Definitely the podcast. My first love in communication was public speaking way back in the day like 2000, that’s while I was working in a church and with young people and so I was speaking every weekend and loved the preparation, loved the idea of taking people on a journey over 45 minutes and not being interrupted and really being able to teach.

So the podcast is very similar to that in many ways and it’s helped me to fall back in love with that speaking, verbal communication. I was going to say I love the feedback as well, I feel like it’s connecting with my audience in ways I’ve never ever, ever seen through a blog, the personal nature of it and just the sense that people would talk to me like we’ve shared time together, not that they’ve read my stuff. They’ve actually sat in their car with their kids listening to me, and I’ve shared an experience of listening to something I’m doing and I really enjoy that.

Steve: I just remembered you characterizing yourself as an introvert; I think I remember some posts like that, but yet you’re doing all this public speaking and the podcasts.

Darren: Yeah one of my [inaudible 00:15:04] you made, I’m much more comfortable on a stage in front of – I think a large one I did was 4500 at World Domination Summit, I loved that. I felt so alive, but I’m much more uncomfortable talking one on one because I don’t know what the person is going to ask and I’m a bit of a slow paced person as well.
So to have prepared a talk is fine because I know what I’m going to say, but to be in this environment just you and me talking now, that’s much more — puts me out of my comfort zone which is a good place for me to be, but it’s not somewhere where I tend to live much of my time to be honest. The podcast I’ve developed is much more about me talking, I’ve interviewed four people in 165 episodes, so it’s all me teaching.

Steve: Wow okay. I remember you were wearing a superman costume, perhaps that’s what gave you the confidence.

Darren: Yes, that was how I finished that World Domination Summit talk which yeah was one of the most fun days I’ve ever had.

Steve: So one thing I did want to talk to you about is that blogging has kind of changed dramatically in like the last five years I would say. Today everyone’s got a blog, content marketing is pretty much a give and play business, so I want to know if you were to start from complete scratch today, how you would proceed and how would it be different from than your story?

Darren: Blogs have changed so much, I think one of the main ways that I’m seeing that they have changed is that they used to be purely written content and now they tend to be more of a home for all your stuff, and so we’re seeing my blog now has a podcast on it and the blog has a video and it’s the home of different total stuff in it. I guess that’s really how I would change, I probably would start with a mix of written and audio instead of just written.

It really comes down to your personality and your experience and style and I guess the topic that you’re talking about as well and what it lends itself to as we said before DPS, the photography is based and really lend itself to audio. So some mix of your style, your audience and what they want and the topic as well. So yeah I would be much more multimedia, I think I would be using live video a lot more. That’s I think where it’s a bit of…

Steve: Are we talking like Facebook live or?

Darren: Yes Facebook live, if I had more time that’s where I’ll be sinking my time at the moment. I think there’s an incredible opportunity in that live interactive space and that’s probably for me the other place that I’ve seen my audience ride up and get very interactive with me and much more personal maybe when I’m sitting in front of a camera just doing Q&A like doing an “ask me anything,” and my audience do really well with that.

It works really well for me because I’ve got an audience already though, so if I was just starting out it might be more tricky although I think on a platform like Periscope there is perhaps opportunity there to be seen in front of new audiences, whereas on Facebook live you’ve got to have had that audience already liking your page.

Steve: Yeah you know I want to get your perspective, do you think like a purely written blog still has a chance to succeed today?

Darren: Definitely if that’s your way you’re most comfortable, that’s where you’re at your best, I think there’s people who that’s all they want, and I say on ProBlogger actually the audience who listen to the podcast are very different to the audience who’re listening to the blog.

There’s certainly some overlap there but I get emails from my blog readers every week saying, stop doing the podcast, I don’t listen to podcasts, and then I get people on the podcast going, stop linking to blog posts because I don’t read, I only listen. So I think there’s certainly an audience demanding just one or the other.

Steve: In terms of people in your class where you teach people how to blog, has your strategy evolved in terms of telling them what to write about even, because back in the day it wasn’t as saturated, but today there’s like tons of every type of blog imaginable?

Darren: Yeah there certainly been a big change from when I started in 2002 blogs were very personal multi topic, and they’ve certainly become much more niche. I’m not someone who says you have to have a niche; I think there’s plenty of examples of people who have written more for a demographic than a niche and talking about multiple topics, but you do really have to work hard at differentiating yourself from others because it’s so saturated at the moment and that way if you can bring a different spin on a niche or look at a niche or a topic through a different lens, then I think that one might stand out.

So if someone like you Steve came with a nerd fitness I think is a brand example, he’s talking about something that there must be tens of thousands of blogs on fitness, but he’s looking at it through the lens of a nerd and in doing so he’s running for a different audience who’ve been ignored in the past. As nerds we want to get fit but no one is speaking our language, so if you can find a way to hit a demographic that’s been ignored I think that’s one way into a saturated niche.

Steve: I notice you said we and I didn’t tell you that I was a nerd but I guess you just assumed.

Darren: I’ll send you a picture, we met, didn’t we meet?

Steve: That’s true we did meet, we did meet very briefly. So along those lines, so let’s say you picked a topic, what would be your strategy just to gain some early traffic to your site when you’re a nobody?

Darren: Yeah really it’s such a frustrating period even though it’s been 14 years almost to the day, I think it’s next week it’s my 14 year anniversary, I still remember that feeling of no one is reading my blog, is there anyone who knows it exists? So I think for me in the early days what I did was comment on other blogs and I started to network and do relationships with other influencers and I had no idea what I was doing, it was purely instinctive but I think today that’s certainly a place that I would be investing on.

The people I see breaking through into niches are usually either just brilliant and there’s not many of us who are brilliant, I certainly wouldn’t classify myself as brilliant in terms of my writing or production or anything like that, so that’s not a way I do it. But for me the way I broke into niches was to get to know people and then niching to become a prolific commenter, to email other bloggers, to suggest things that they could write about, to ask them questions, to really get on their radar on that way.

I think there‘s still is – there is a lot of noise in the space and so it’s hard to get on the radar of the really big bloggers or influencers, but there’s certainly lots of other people who aren’t quite as big who will be able to chatting with you. Guest posting I think still there is opportunity there to create guest content for other blogs or even to be interviewed on other podcasts, those types of things as well. It certainly takes some time to build those relationships, to open up those opportunities, but I think there’s certainly opportunity there to grow your profile through other influencers.

Steve: I do want to tell a quick story, there is this one guy, he tweets every single post that I put out like within a couple of hours after it goes out, and at first I didn’t notice but after like maybe six months of this happening I noticed, and so yeah I don’t know if that’s like something that you could do too that’s worth that many.

Darren: Yeah and look I’ve seen people who’ve become writers on my site who started just leaving really useful comments on our Facebook page and I noticed that. And then I gave them an opportunity to do something bigger and then that gave them a platform within my community and a bigger market if you like to grow their profile. So still being useful in those sorts of involvements can help.
But having said that you really also need to simultaneously be working on what you’re doing on your own blog and to have something really worthwhile being found there, and so there is attention anyone would be putting a lot of great content, adding to other people’s places with guest content and building those relationships, but you’ve simultaneously got to build the brand so as when people do start to trickle over to it that they are impressed and then they begin to share the word for you. So it’s not just do this and it will come, they’ve got to do lots of stuff.

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What would your split be in terms of time, like I know [inaudible 00:24:59] always talks about 80/20, like 20% creation, 80% promotion, how do you split your time or how would you split your time I should say?

Darren: I probably aren’t quite at that level of 80/20, particularly in the early days I think you’ve got to build up your archive of good quality content, so I’d be investing quite a bit into that. The other thing I’d say about creating content, you probably want to be trying to create two types of content.

Firstly you want to create that evergreen cornerstone content that you want to be known for on your site, so you really want to think carefully about that foundational content and get as much of that in place as you can, but then also weave into your publishing sharable content. Usually there are two types of content, usually that cornerstone foundational content is not as sharable and so on Digital Photography School for example I wrote maybe 200 articles over the first couple of years, and it was more the evergreen content, what’s [inaudible 00:25:56], what’s avatar, how to hold the camera.

It wasn’t really sexy content, no one was really going to share that content stuff, but then I started to also weave in things like ten mistakes landscape photographers make. It’s still teaching, it’s still useful but it’s a little more intrigue in there, I guess in some ways some people might say it’s a bit more click buddy, but it’s a top content that people will share.

You don’t want to just do that because then you end up with a sort of fluffy [inaudible 00:26:26] sort of site, sort of sweet and sickly, it’s just a lot. You want the deeper stuff as well but you do weave that in and then that helps you to grow when you start having people come into your site. That’s the kind of content that others will share for you on social media. So I’d be focusing on those two types of content and then spend the other half of my time building relationships, trying to write content for other people’s sites.

Steve: One thing I forgot to ask you was what are your primary traffic sources for both properties that you have right now?

Darren: Google is definitely number one on both sites.

Steve: Okay so search okay.

Darren: Definitely yeah and Facebook would be our biggest social driver of traffic and certainly has become trickier to get that traffic organically, and then email would be number three, and that’s the other part of building your audience. You really want to find a way to hook them in that isn’t just getting them on to your Facebook page because Facebook won’t show them your stuff all the time.

So I grab their email addresses is certainly the big – that’s really why I’m so happy I spent time doing in 2006 is building my list.

Steve: Let me ask you this question, so when you’re writing your posts, are you writing for people to actually share on Facebook, or do you write more for SEO like to get ranked in search?

Darren: Both and sometimes it’s that distinction between those two types of content that I was mentioning before, I’m certainly paying – in the early days I paid a lot of attention to what I felt people would be searching for, but I guess ultimately for me I’m trying to write content that is going to help people to become better photographers, and ultimately that’s the first thing I’m thinking about.

I want to create a blog that changes people’s lives because I know if I do that they will come back, they’ll subscribe, and they will bring their friends. So ultimately that’s what I’m doing but I’m also really aware that certain types of content get shared more, and so I’m doing analysis on sites like BuzzSumo shows you what people are sharing on your site and everyone else’s, and that highlights the type of formula for content that you might want to weave in as well, yeah and so I’m doing both I guess.

Steve: I’m just wondering how deliberate you are when you are picking topics or titles for your posts like do you bust out like a keyword tool, or do you just write and try to make the title compelling from a click perspective?

Darren: I don’t use any keyword tools as such. I guess I’m probably doing partly based on what I know works after 14 years, and what I’ve seen work in the last six months. We like for example that title I gave you before, ten mistakes landscape photographers make, I know for a fact that anytime we use the word mistakes in an article on DPS that it goes ballistic. It may not work on every blog but it works for us, and so we weave that one in, not every day obviously but once a month we’ll do a mistakes top article and pick a different niche within our niche.
I know DIY posts do really well with their audience, so I’m weaving in those sorts of keywords and I guess it’s just based on experience. But ultimately my style of creating titles is more about telling people what’s in the post and which is probably better for SEO.

Steve: Okay and are those posts the ones that are ranking though like your mistakes posts?

Darren: My mistakes posts don’t tend to rank as high; it’s more the how to do this, or solving a problem search that people might do.

Steve: Okay so your pillar posts are the ones that tend to rank and then your more shareable posts are more catered to social platforms like Facebook, is that…?

Darren: That’s right yeah, because I got a little system that I share every post on our site twice a year, and so I know those posts that I title in a way that would be shared that will get a second life at another point down the track.

Steve: Is Pinterest a part of your traffic for the photography site?

Darren: You would think so but it’s never really worked for us, like nothing we have done has seemed to work on Pinterest. We certainly have days where we get a spike of traffic from Pinterest but it’s very little to do with anything we’ve done, it’s just the fact that someone has found that and shared it. Yeah so…

Steve: Interesting, okay.

Darren: We’ve had a Pinterest board where we put a lot of time and effort but it didn’t really seem to make any difference, we kind of let it look after itself these days.

Steve: Are you running any paid ads to any of your content?

Darren: Not any of our blog posts, if we’re launching a product we will do some paid ads to that. It’s an area that I don’t personally feel energized by, I don’t enjoy it, it works to a degree, but I’ve not had spectacular success with it either. So it’s not a massive part of my strategy but it’s something we have experimented with.

Steve: Okay, let’s talk about your podcast since you mentioned that that was something that really excites, like how does your podcast content tie in to the overall blog?

Darren: A lot of the content on the podcast is really just updated blog posts; so things that I’ve written over the years that needed an update I’ve given them a verbal update, that’s been part of it. I did an exercise right at the start of the podcast where I mapped out 100 episodes, and that exercise was based upon the overall change I was trying to bring to my audience.

So I’m a big believer in creating an avatar for your audience of who your audience is which a lot of bloggers do and I think it’s smart but I also created almost like an after avatar, so there is a before and an after of who I want my audience to become. So I’ve got this picture in mind of who I want my readers to be.

And so on ProBlogger the full time blogger spends the after avatar, and so I mapped out, what does someone need to know to get from A to B, to get from their before shot to after shot and then I mapped out 100 things that I thought they needed to know and that became a big part of my first 100 or so episodes on the blog.

So it’s partly a combination of looking at what’s worked on the blog already but also sort of going through that process, and then I do a lot of Q&A podcasts as well. So I recorded a podcast this morning and that was purely based on a question someone asked me on Facebook yesterday.

Steve: I’m just curious, how do you measure the impact of your podcast on your traffic?

Darren: I’m watching Google analytics to see how many people are hitting the show notes, I’m watching my download numbers which are the actual number of people listening obviously, but it gives me an indication of whether a show is relatively successful or not. Then I guess I’m really looking for anecdotal kind of the emails that I get and the tweets that I get from people going wow that one really helped me with this.

Those types of things I think are really what I’m ultimately looking at, and from a conversional perspective I’m looking at how many people attended live this year based upon the podcast or how many people bought a book that we recommended in an episode.

Steve: Is your goal in general to get people on your email list ultimately?

Darren: Yeah for sure.

Steve: What are some things that you’re doing with email, and I imagine your list is probably pretty huge, several hundred thousand people at this point, how do you manage such a large list?

Darren: We use a number of tools, we’re largely on AWeber, we have used MailChimp from time to time as well, and we’ve used ConvertKit as well at times, so we are agnostic toward the tool but we have used them in different parts of the business. We’ve been doing a lot of testing this year with Welcomemat and I don’t know if you’re familiar with those…

Steve: Yeah, yeah.

Darren: But being dropped down from the top and split testing those and they have doubled our subscriber numbers from when we just had a pop up, and when we had the pop up that ten times to our subscriber numbers. So Welcomemat have worked really well, I’m a bit concerned with Google’s announcement that they’re going to penalize people using them on mobile, so we’re also testing at the moment exit pop ups and they’re probably our second highest performers, so we’ll probably replace the Welcomemat January I think it takes over.

So we do a lot of testing around different types. On ProBlogger we found that the most plain Welcomemat works best, no pitches, no video, they’re just like plain. On Digital Photography School they love images being photography, and particularly they love images of people taking photos, so photographers pointing their camera to viewers.

So we do a lot of testing around that, we’ve used some different opt-ins this year, we created a series of opt-ins for ProBlogger, so you would sign up to get six emails, so it’s almost like a mini course and that worked quite well at keeping people on our list. One of the things I didn’t like about opt-ins in previous tries that I’ve used them is that people would subscribe and then unsubscribe once they got the free thing.

And so we created this one where you get six months worth of blog post ideas and that kept people on our list a lot longer, but it got tricky to deliver them all. We found all our providers went — people weren’t getting all the six emails on…

Steve: So what do you do to improve deliverability?

Darren: Well in the end we made that into a single download because we got sick and tired of – the six emails we would get from people. One of the things we did do last year was killed off a large part of our list that wasn’t responsive, and that it seems to help with getting our emails through spam filters a little bit more, I guess we’ve made our list a bit more healthy. So we killed off 200,000 subscribers.

Steve: Oh my goodness, really wow.

Darren: We hit a mean subscribers on Digital Photography School and so we realized a large percentage of them just weren’t opening their emails, and so we gave them a couple of last chances to engage with us and then we killed them off.

Steve: You mentioned three services, ConvertKit, AWeber, MailChimp, do you split your entire list across three services?

Darren: No we typically use MailChimp more for our event type lists, but AWeber is where we keep most of our lists. MailChimp we were doing more for specific campaigns that we might be running just for ease of use to separate them out. So they are quite different parts of the business.

Steve: Okay, I’m just curious like why you would use MailChimp for an event versus just like another list on AWeber?

Darren: I think from memory it was because one worked better with our event sales system.

Steve: Okay that makes sense.

Darren: And so once it was set up on a wink we just kept it there.

Steve: Okay and one thing I did want to touch on also is monetization, so like if you had a new blog, and let’s say you’re starting to develop a following, what would you start with in terms of revenue sources, like what is your main goal in monetizing a blog, like the holy grail so to speak?

Darren: So a starting place for me these days I would start with affiliate. I would go into a niche and thinking ultimately what do I want to do, and ultimately for me my goal would be to create a product, and that’s going to take a lot of work. It’s not going to convert at a high rate till you got some traffic, so I would be looking to find affiliate products that were similar to the product I wanted to create, and I would be testing a lot of those.

In doing so you’re creating a revenue stream but you’re also learning a lot and you begin to see what your audience will respond to in terms of do they like eBooks or do they like courses, I’d be promoting both. Do they like $10 products or do they like $30 products or do they like $200 products. So the more you promote different affiliate products the more you learn about what kind of product that you should be creating, and you’re also earning some income in the mean time.

So that’s probably the strategy I would go to. It probably depends a little on the niche, some niches led themselves to working with brands or doing sponsorships, but I’m moving more and more away from working with brands and advertising.

Steve: Let’s talk about DPS and ProBlogger, like how are the monetization strategies different across both sites?

Darren: Sure, so DPS we do, do advertizing, we have Adsense running on it still to this day. I know a lot of bloggers moved away from it but it still works really well for us, I don’t know why that is, so we run that. And then if we can sell advertising directly to an advertiser at a higher rate than what we can do with Adsense we swop in those ads as well.

Steve: Would you mind sharing the CPMs?

Darren: Oh gosh, I’ll open it up while we’re chatting.

Steve: Okay sure.

Darren: So we do run those top things – here we go, on page PM we’re running $1.25 so it’s not high for Adsense, but we’re doing four million page visitors.

Steve: Yeah that’s true.

Darren: So it kind adds up and if there is nothing else in those spots it kinds of adds up to $20,000, $30,000 a month which I’m not going to say no to. So yeah we do a combination of different advertising and affiliate and then products, and so depending on the month affiliates can actually be more than our products. If we’re launching product usually that then that means our product sales are higher than the affiliate, but yeah data mining comes through [inaudible 00:40:34].

On ProBlogger it is more our products, our event, we have a job board on ProBlogger and that’s been bringing for us, that’s very passive income, I don’t really do any work on it at all, no one does, it just looks after itself. We don’t do any advertising really on ProBlogger at all, I think we did one campaign with an advertiser on the podcast but it’s largely our own products, and occasionally we do an affiliate push as well.

Steve: And I’m just curious did you test like removing the ads versus keeping them on and still having the affiliate offers?

Darren: Yeah we’ve done all that testing, and on DPS obviously the Adsense is just – it doesn’t really make any difference if it’s there in events, if it’s not there it doesn’t and nothing else really earns anymore, so it’s good to get going.

Steve: For DPS do you do a lot of Amazon affiliate revenue?

Darren: Yeah we do probably around $7,000 or $8,000 a month in Amazon and that’s largely through recommending cameras and lenses, those types of things. Probably the best thing I’ve ever done with Amazon in terms of a tip is to create best seller lists. So we look at our reports every quarter and then we basically compile a best seller list based upon what sold in the last quarter and then we report that to our audience.

So those convert like crazy for us and people love to make their purchasing decisions based upon what other people have already bought, so that was clever.

Steve: So in terms of DPS would you say that affiliate revenue generates the bulk of the revenue as opposed to your own products?

Darren: Most months it probably generates the bulk of the profit but not the revenue, and the reason I say that is that our eBooks and courses generate more revenue but we’re splitting that revenue with the creators of those products. So we do revenue share type arrangements with authors of our eBooks and creators of our courses, so profit wise they don’t tend to be as profitable as an affiliate push.

We also do a big 12 days of Christmas campaign; we’re kind of gearing up for that at the moment where we do 12 deals in 12 days and these are a combination of our own products. So we might do 50% off our courses, 50% off our eBooks, and then we also tier up affiliate deals as well. So over the 12 days we send out 12 emails to our full list and say here is the deal of the day, they’ve got 24 hours to work on that. That’s our biggest two weeks of the year, it’s huge.

Steve: Okay, are these your own products or other people’s products as well?

Darren: A combination.

Steve: A combination okay.

Darren: Yeah every second day really, and then all the deals usually come back on the last day as well, so people get their last chance.

Steve: For ProBlogger they are just all blogging related products or internet marketing products?

Darren: Yeah some of them, we do, do information products but we also recommend server polatis [ph], WordPress themes, some more tools type stuff and then more generally businessy type stuff as well. So yeah in the past we have recommended Michael Hyatt’s courses which aren’t really blogging specific but they’re more entrepreneurial, yeah.

Steve: So going back to getting started again, so if you had a brand new blog so what traffic source would you personally focus on more today?

Darren: I’d be optimizing from Google, I think a lot of bloggers have been completely seduced by social media and have ignored SEO, basic SEO principles, and I think in doing so they’re really ignoring a massive source of traffic. So you’ve got to learn the basics of SEO and set your blog up well using the right kind of plug-in like Yoast WordPress plug-in, get set up in the right way, learn the basics, and then write content that will be searched for.

So that’s kind of like a thing that you just need to get right, and then I would be working on identifying who I’m trying to reach and where they’re hanging out. So are they on social media, if so which social network and then building a presence in those types of places, so it might lead you to Instagram or Pinterest or one of the other social networks.

Then I’d also be doing the same exercise with what other blogs are they reading, what podcasts are they listening to, what events are they going to, and I’d be targeting those places as well to build a presence and get to know those influencers in those places. So that would be the three areas…

Steve: It sounds like a lot of your strategies kind of leans on social aspects meaning like getting to know other bloggers and that sort of thing?

Darren: Yeah I’m a fairly relational kind of person, so I think that’s probably where my strength lie and I tend to go that way.

Steve: I did want to ask this as well, like I just had my first event last May, and I was just curious what your motivation was for having your own events?

Darren: Yeah so my first one I don’t really know that I had a motivation; I just thought it was a fun idea and people just loved it so much. And I think from then on I realized that it was probably one of the best ways to have a big impact on readers, because I saw people from first year, second year go full time with their blogs from nowhere, and I was like it was purely by something they learnt or someone they met.

I was like this has a potential to change people’s lives in a really big way and so that hooked me, that alone. There are so many other benefits, they potentially can be quite profitable, we’ve not really driven hard on the profit front because I’m really just passionate about bloggers particularly starting bloggers, and so we’ve kind of kept that cost down to make it as affordable and accessible as we can, but you could make quite a good profit and I’ve got some friends who make great money from events.

The other part for me is that it really energizes me for the rest of the year in my blogging because I’ve got all these conversations in my mind with people I’ve met at the events asking me questions that then inform the content that I’m going to create over the next year. So it really impacts the content for the next year and products as well that I can create, because I’ve started to see you have all these conversations in two days and end up talking to a couple of 100 people and out of that you see themes that you wouldn’t see just blogging away, and so ideas have come out of the event for other products in the last few years particularly.

Steve: By the way this is very non introverted behavior I’m getting from you Darren.

Darren: I suck myself up, and then I go home and I’ll sit in my room in the fetal position for a few days after an event.

Steve: Hey we’ve been chatting for quite a while and I want to be respectful of your time. If anyone wants to get a hold of you today I don’t know if that’s changed, before it used to be Twitter I think, right? But what’s the best way to get a hold of you and what things are you trying to promote right now?

Darren: Yeah so if you want to find out all things ProBlogger, we’ve actually bought and set up problogger.com now, so we’re still on .net with the blog but everything else is living on .com at the moment. So if you go to problogger.com you’ll see all the probloggerish things, we’re ProBlogger on Facebook and Twitter as well.
And then Digital photography School, if you just Google that it’s so much easier than me telling you the URL because it’s got hyphens, so that’s there. And then yeah I guess just search for us on iTunes for the podcast, I’ve just transitioned from twice a week to once a week shows now, and as I said before they’re all teaching, largely me just going through a topic for the week, 20 to 45 minutes of good solid teaching.

Steve: When is your next event?

Darren: We are still trying to work that up, but we typically hold them between August and October in Australia.

Steve: Okay cool. Oh hey Darren thanks a lot for coming on the show, I had a blast, and it was a pleasure to finally have a conversation with you.

Darren: Likewise.

Steve: All right take care.

Darren: Thank you.

Steve: Hope you enjoyed that episode. When I first started blogging I never would have dreamed of having access to a guy like Darren, and he’s a great guy and totally down to earth. For more information about this episode, go to mywifequitherjob.com/episode154.

Once again I want to thank klaviyo.com for sponsoring this episode. Klaviyo is my email marketing platform of choice for ecommerce merchants, and you can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all of these sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/Klaviyo, that’s K-L-A-V-I-Y-O, and once again that’s mywifequitherjob.com/Klaviyo.

I also want to thank privy.com for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers, therefore email capture, exit intent, and site targeting tools to make it supper simple as well. I like Privy because it is so powerful and you can basically trigger custom pop ups for any primer that is closely tied to your ecommerce store. If you want to give it a try it is free, so head on over to privy.com, that’s privy.com/steve, once again that’s privy.com/steve.

I actually talk about how I use these tools on my blog, and if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away via email, thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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153: How To Use Amazon Exclusives To Launch A Successful Product With Chris Boerner

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How To Use Amazon Exclusives To Launch A Successful Product With Chris Boerner

Today I’ve have someone really special on the show, Chris Boerner. Now I met Chris at the Ecommerce Fuel conference in Savannah Georgia a month ago and I’m really glad that we met. She has an amazing story and she runs a successful business called CieloPillHolders.com where she sells premium key chain pill fobs.

She’s done exceptionally well on Amazon, is extremely well connected with the Amazon community and she has a lot of experience with the platform.
In fact, she’s been featured in several videos on the Amazon website including a full blown documentary about her story. Enjoy the episode.

What You’ll Learn

  • How Chris got into ecommerce and what made her decide to sell pill holders.
  • Her process of finding a niche
  • How she gets her pill holders manufactured.
  • Why she manufactures in the US vs China
  • Why you should go with Amazon Exclusives

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Transcript

Steve: You are listening to the My Wife Quit her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not with their businesses. Today I have the Chris Boerner with me on the show, who has made a killing selling high end pill holders on Amazon.

It’s a super random product and the reason why I’m having her on the show is to talk about Amazon exclusives, and how she’s managed to create all of these amazing connections within Amazon while launching a successful product made in the USA. Also I want to apologize upfront for the audio quality on this one. I ended up upgrading Skype just before the call which was a huge mistake. The audio is still passable but if it bothers you, you can always find the transcript on my site at mywifequitherjob.com.

Anyway before we begin I want to give a quick shout out to Klaviyo who is a sponsor of the show. Now I’m always excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on Klaviyo for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another provider. Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here’s why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought which makes it extremely powerful. So let’s say I want to send an email to everyone who purchased a blue handkerchief in the last week, piece of cake. Let’s say I want to set up a special autoresponder sequence to my customers depending on what they purchased, easy peasy, and there’s full revenue tracking on every single email.

Klaviyo is the most powerful email platform that I’ve ever used and you can try them for free at mywifequitherjob.com/Klaviyo, once again that’s mywifequitherjob.com/Klaviyo.
I also want to give a quick shout out to Privy who is also a sponsor of the show. Now what’s cool is I also use and rely on Privy for both my blog and my online store. Now what does Privy do? Privy is an email list growth platform, and they actually manage all of my email capture forms, and in fact I use Privy hand in hand with Klaviyo.

Now there is a bunch of companies out there that will manage your email capture forms, but here is why I like and chose Privy. Privy is easily the most powerful platform that I’ve ever used, and you can trigger sign up forms based on any primer that you desire. So for example let’s say you offer free shipping for orders over 100 bucks on your store, well you can tell Privy to flash a popup when the customer has $90 in their shopping cart to urge them to insert one more item.

Here’s another cool use case, if someone has item A in their shopping cart, I can easily tell Privy to display a special coupon code for that item or to display a related item or offer. In terms of email capture, I’m showing different email lead magnets depending on what product a customer is browsing on our shop.

So bottom line Privy allows me to turn visitors into email subscribers, which I then feed to Klaviyo to close the sale. So head on over to Privy.com/steve and try it for free, and if you decide that you need the more advanced features, use coupon code MWQHJ for 15% off. Once again that’s privy.com, P-R-I-V-Y.com/steve, now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast, today I have someone really special on the show, Chris Boerner. Now I met Chris at Ecommerce Fuel conference in Savannah, Georgia about a month ago and I’m really glad that we met. She’s got an amazing story and she runs a successful business called cielopillholders.com where she sells premium key chain pill fobs.

She’s done exceptionally well on Amazon, she’s extremely well connected with the Amazon community and she has a lot of experience with the platform. In fact she’s been featured in several videos on the Amazon website including a full blown documentary about her story that is going to come out later this year. And with that welcome to the show Chris, how are you doing today?

Chris: I’m doing so great, thanks for having me Steve; I’m excited to be here.

Steve: Yeah and you got a great story, so I want you to definitely tell us how did you get into ecommerce and what made you decide to sell pill holders?

Chris: It’s so random, when I tell people I sell pill holders I get these looks like they just don’t have a clue what I’m talking about and I can understand why. My background is in corporate strategy and brand management.

So I worked for Starbucks for a number of years doing a number of different roles there, and didn’t work for me anymore and that scared the crap out of me because I thought I was going to do it forever and I loved it and I was good at it, and then it just didn’t feel right. So I left and when I left…

Steve: What didn’t feel right about it, I’m just curious because I just quit myself?

Chris: Oh my gosh, congratulations. I was feeling like I wasn’t making a difference in a way that was meaningful to me, that was probably the biggest part and so when I left I actually didn’t know what I was going to do next. My husband Mike is incredibly supportive and let me leave a really great job so that I can have some breathing room to just try to figure out what it was going to be. When I talked about my job at Starbucks to him, I described it as dead, every minute was just jam packed with information and intensity and I needed to just get away from that just to even have a minute to think about what I could do and what I could be excited about, because I wasn’t feeling very excited anymore.

So I left, I was up to two things. I wanted more flexibility in my life, we were down the road going to have a family and now we do with two very little kids and I knew that that was hopefully going to happen someday and so I want more flexibility, and I wanted to connect with people and I wanted to connect with customers in a way that I had when I was a barrister at Starbucks.

I used to be that person handing over the coffee and I loved that moment when I got to say have a good day and make someone smile, and so I really missed that connection. I laugh a little bit when I say it but it’s kind of true, I felt a power point presentations away from the customer at Starbucks, So then I left, to more flexibility and connecting with customer and no idea what that actually meant.

Steve: So in terms of coming up with the actual idea for pill holders, how did that come about because it is like a random product to someone who just hears about it, right?

Chris: Yeah it’s very random, so I started like many of your listeners I would guess, I read the 4-Hour Work Week and the idea of automation really resonated with me and so it sounded kind of like something I wanted to try. I had a lot of experience with business and with building brands, and I thought, uh I could do this, but what’s the thing, I don’t have anything to sell.

So literally one day I was lying in bed a couple of days after I read this book and I was racking my brain and I started thinking about what consumer goods am I part of, what products do I use in my life, and you know what’s really different from everyone else brand. So I was diagnosed with an autoimmune condition called [inaudible 00:07:14] when I was 14 years old, and I’ve taken medicine every couple of hours since I had the diagnosis for 20 years now I’ve been taking medicine.

And so I was lying in bed, I started to think about gosh I take pills and I have a pretty nice pill holder that my dad gave me that it’s been a very important part of my life and lying there thinking everyone who takes medicine must have a nice pill holder and they must be a totally developed category. So that next morning thinking that there wasn’t a whole bunch to this idea, but I searched on Amazon and I searched on Google for a nice pill holder, a quality pill holder, a designer pill holder and there was nothing.

There was like actual total like based on the category for high end premium pill holders, so I decided to give it a try and here we are a couple of years later.

Steve: So you pretty much came up with a product just by brainstorming, did you run the numbers, like was there significant demand for just pill holders, if there was a high end component to it?

Chris: Yeah. Well my hypothesis was – so first I started with just pill holder category in general, like it was clear that there is tons of demand for pill holders out there, because there’s 1000 products from the market that are just junk. And I was digging up some keyword searches and quantified that a little bit, and then I really started to think about that culture that we’re living in and how much it’s changing with how pills and perception means you’ve had a life and I don’t just mean prescription or [inaudible 00:08:39].

Steve: Okay I was like where are you going with this, because then…

Chris: I know like this is not coming up quite how I meant it, but anyway seriously who doesn’t have Ibuprofen [inaudible 00:08:50] in their purse or in their pocket, everyone’s got a vitamin or a supplement. And so I started to think about the expectations that consumers have today, and especially if you’ve got 18 baby boomer population that cares about quality and that cares about nice stuff.

It blew my mind that there wasn’t a product out there already doing it. So I looked at it pill holders as a functional accessory like jewelry, like watches or eye glasses, that was the vision that I had for Cielo Pill Holders.

Steve: Okay and so you basically decided to target the high end, really high quality jewelry like pill holders?

Chris: That’s right.

Steve: So can you talk about how you went from your idea to actually getting a manufacturer?

Chris: Yeah so I was very interested – let me say the most important thing in my brand was quality, and so the way that translated to my product was that I needed to be really, really involved in the manufacturing and the production and the design and ongoing quality control. So from the very beginning I really believed that made in USA was going to be something that mattered to Cielo Pill Holders, and I believed it also mattered to my customers in ways beyond just the quality of the pill holder they were buying from me.

So I started out with a belief that made in USA was the direction I wanted to go, and so pretty quickly actually I found on eBay a couple of products that were a little better than what was in the market and they were good enough for me to test the idea that people would pay more for a better quality pill holder. So I bought some pill holders off of eBay, and then I built my own website and I really tested the marketing messages around made in US that are quality and started to see will people buy this product.

Steve: How did you do those tests?

Chris: I spent about six weeks just building the website and getting some product photography done so that it really was a high quality proposition, and so launched the site and had this great idea that somehow miraculously everyone in the world is going to know that now there are high quality pill holders available and I was going to show out immediately. It turned out I didn’t because nobody cared about Cielo Pill Holders.

So it was within the first couple of weeks of launching my business with very little traffic on my own website that I started to realize Amazon or meeting my customers where they were already buying to be a really interesting and quick way to test. So I launched on Amazon within a month of turning on Cielo Pill Holders.

Steve: Okay I was just curious, the ones that you bought on eBay were those made in the USA?

Chris: They were, yup they were.

Steve: Okay and so when you sold those did you contact the same manufacturer who made those, like how did you find the manufacturer?

Chris: Again I started out with them, but they didn’t really have the capabilities, the really the partnership mentality that I was looking for, so went to the web and I went to ThomasNet, but I also just did a Google search for high quality machine shops. So I had figured out what type of manufacturing I needed to make my own pill holders, and lo and behold in the Seattle area we had a lot of machine shops because there is a really strong aerospace factory there and machine shops and CMC machines to fly a lot of aerospace parts.

So I went to Google and I looked up high quality machine shops, and I found one that actually had a website that was beautiful and that talked about their commitment to the customer and their commitment to quality, and those sentiments were really what I wanted my brand to stand for and so it felt right that I could look for a partner that cared about the same stuff.

So I called him up and I remember sitting outside Safeway, the first time I talked to him I was in my car and I told him I wanted to make pill holders, would you be interested, and I’m sure he must have thought I was crazy to the multimillion dollar business since I was [inaudible 00:12:48] and huge companies. But he said yeah I’d be willing to talk to you and I said, great can I come back to meet you tomorrow.

I went up to his shop and we sat down and talked about it and I remember when I left after that first meeting he said, I think you’re going to be my biggest customer.

Steve: No way, okay.

Chris: And he believed it, he said I think you’re going to be my biggest customer, he said I totally get it and I want to help you figure it out. From then on he just then became a partner and really figuring out how to build it efficiently and in ways that my customers would love the product.

Steve: So you didn’t have any experience with manufacturing at all?

Chris: Not directly, from working at Starbucks I had seen manufacturing and I had managed the process of getting things made, but I didn’t know a lot about manufacturing on my own no, ever so much.

Steve: So in terms of just like designing the actual pill holder, did you use any card sulphur [ph] or was that all your partner?

Chris: He did that for me, so I told him what I wanted and then he designed it, and then I had sort of a few products that I started with, and then my vision really was that there was a really designed for elements to this like jewelry beyond what me or a manufacturer could come up with, and so I engaged a pretty incredible product designer.

She, her name is Flora Handler, she’s out of New York and she’s worked with brands like Carrie and Tom Ford and a few great premium brands, and I could not believe it when I called her and she got the concept too and she was really excited to work on the project.

Steve: Would you say that people agreed to work on this was because of your story or what did you tell these people?

Chris: I think I painted a picture of the opportunity, it was like tens of millions of people take medicine, they have to keep it with them and all there is junk to put it in. So it seemed so clear to me and them as I just told them about it that there was room in the market for this high end product, so they were excited to be part of it.

Steve: With your machine shop partner what was the arrangement like early on, like he wasn’t a partner from the beginning?

Chris: No he wasn’t but he acted like one. I mean I was really, I was just buying products from him but he spent time with me well beyond what the volume of my orders wanted. I think that he saw the potential of what it could be, and so he and my designer and I actually spent a lot of time working together on my more fashion for design for product.

In fact I remember I started the business in June of 2013 and it was August when I started working with Flora Handler my designer. I always remember sitting in my manufacturer’s bed of his pick up track outside of his facility and we had had our stone sitting in the middle of us, and we were on speaker with Laura who is New York and we were starting to talk about the briefs and the project for really making jewelry like pill holders.

Steve: What was the initial investment, I’m just curious like when you first got started?

Chris: Maybe $1000.

Steve: $1000, wow okay and so he was willing to design the pill holder for you at a such a small quantity for you?

Chris: He was yup and it’s really fortunate in the manufacturing process that I use because the upside and downside there is not a ton of efficiency that comes from scale, but there is also not a ton in the way of total cost either, it’s all done on computer, you’re not dealing with molds and such.

Steve: So is manufacturing a pro – so here is a single individual hand making these?

Chris: No, he has a number of machines in his shop and I’ve grown since then in my supply chain, so he has 20 or 30 people who work for him in his shop.

Steve: Okay and then you brought on this designer and you just cold called her?

Chris: It’s the one connection. I never knew the power of a network until I left the place where I worked at Starbucks. It turned out I knew a lot of people that were excited to help out.

Steve: Okay and these were just connections you made through your corporate job?

Chris: Yeah that has been pretty valuable in the product.

Steve: I know you told me that you decided to go made in the USA right off the bat, but I’m just curious did you do any research on the nature and just to see how much this potential would be.

Chris: I did, I definitely did, I wanted some mixture, it was smart business decision besides just a feel good decision, and so I through a different connection had someone was a sourcing agent in China that I worked with to just got quotes to get me a rough ball pack on what I was giving up, and it’s definitely no surprise there is a cost advantage, but I built a model that supported the higher made in US cost.

Man I can’t even tell you the value being turntable value that’s brought to me with the flexibility in partnership I have with my supplier and being able to iterate quickly and bringing the products to market fast and deal with quality control right away. I would have lost my mind if I didn’t have someone in the US; I talk to my supplier almost every day.

Steve: Just curious percentage wise what are we talking about here?

Chris: It’s probably 50% keeper.

Steve: Wow. Okay so but you again you had to work very closely with your manufacturer to make slight tweaks all along the way, right which wouldn’t have…

Chris: Yeah.

Steve: Okay.

Chris: No definitely not and even scale as the product is continuing in its life cycle even my top sellers are making refinements along the way, but my manufacturer is really quick to respond to and get what I’m trying to do.

Steve: Okay so let’s talk about sales now, so you launched a site, you didn’t get any traffic to it and so you decided to launch on Amazon. How did you actually launch your product on Amazon?

Chris: One afternoon right before the 4th of July, I looked up can an individual sell on Amazon and found out that I could and I was sort of shocked by that, and so I went through their seller central support system and I set up my product and I turned it on, and that was the extent of my launch.

Steve: No giveaways, no ads, you just…

Chris: Never actually up until the last year I’ve just started doing fancy products I guess in the last year and a half, but no I was pretty naïve, I just turned it on and that was it. And then I went on vacation and found that I was selling some pill holders, this my cool little seller app tells me how I’m doing.

Steve: Which I’m sure you were not checking at all on vacation?

Chris: No, no definitely and I still don’t check it every ten seconds [inaudible 00:19:42]. My husband and I like to shout out numbers to each other as we get excited, but we were living the dream.

Steve: You product just naturally takes off, so how – so just walk me through this, like how did you start getting featured on videos, your documentary and all that stuff, just walk me through that?

Chris: All right, so let me think of the timeline here. So July of 2013 I launched on Amazon and then…

Steve: Specifically how does a Chinese guy get on a documentary?

Chris: Yeah how do we make it happen? So much of it I think is who you know and chance. Well let me just not say who you know, but it’s just like being open to what can happen, I think that’s a better way of saying that. So since I started there’s never a Cielo pill holder, if I listed for you the 28 things that have happened that seemed so coincidental, you would just go there is absolutely no way that, this is not possible. And yet somehow things are suddenly working when you’re on the right path, I really, really, really believe that.

Amazon and my partnership with them has been probably one of the biggest examples that the series of so called coincidences like holy crap they just, they work and there has to be, and you look in hindsight and you’re like of course that is the way I went. That was theoretically how the Amazon relationship got as strong as it did for me. I guess I’m naturally a person, I just love to meet people, and I love to connect. The Amazon relationship started for me in the peak section at a Home Depot, because I was going to pick my kitchen and I started talking to a girl there because we both had little tiny babies and we started to chat.

She and I hit it off and she said you know I’m having this barbecue; you and your husband should come next weekend. So here is a friend, a person I met at Home Depot and I went to barbecue at her house and she said I want you to meet my friend, he works at Amazon, I think you guys have a lot to talk about. And lo and behold it was his last week there and Amazon had just launched the exclusives program, so this was June of 2015, just a year ago.

It was his last week with Amazon and I talked to him and he said, oh my gosh this product, I think it’s just right, let me email my friend who is in charge of the exclusives program, I think you should do it. So that was a Saturday and on Monday I had an email from the head of Amazon exclusives saying, would you like to join our program, and I’d had a conversation with a pretty big buck retailer in order to partner with Amazon and I think I was the 26th brand that they brought into the exclusives program and it’s now into the many hundreds.
So that was the fortuitous, random, you can’t meet it at Home Depot that lands me on Amazon.

Steve: Lets’ talk about Amazon exclusive, so first of all for the people out there what is it and why did you decide to not go with the big bucks retailer and go with Amazon?

Chris: So Amazon exclusives is awesome, it is perfect if you’re a brand that is really just trying to get off the ground, or if you’re a brand that is bringing a lot of new products to market and wants to get traction fast for them. So the intent behind Amazon exclusives is that Amazon is curating these interesting core products and brands that they can introduce their customers to, and exclusives is actually a store front within Amazon.com, so it’s amazon.com/exclusives.

That really show case all of these brands, and so as a business or brand owner what you give them is exclusivity for starting a six months is the initial commitment you make to them where you’re only going to sell on your own website, so that’s okay and you’re going to sell on amazon.com, and you also pay them a little bit more in fees, so a few more points in fees on your product assortment.

So what made that worth it to me was the additional marketing and merchandising that they give you, it’s incredible for they’re constantly every month refreshing different collections of products that they are featuring for their community, and so you have a chance every month and I’m sure I was being featured right now as a stock in to [inaudible 00:24:05] for example.

Every month your products can be show cased in these different tech gadgets or a gift for him, a gift for her, whatever areas to focus on.
Amazon gives it home page extra marketing, there is access to deals which was a lot more valuable but for other lightening deals where [inaudible 00:24:26] you can do deals a lot more if you’re selling through the exclusives team.

Steve: Can you do a [inaudible 00:24:31] more of their restrictions.

Chris: There are the same restrictions that you have with the frequency of them and so on, but the fees are waived, so now that they started targeting for lightening deals you don’t pay fees on them in the exclusives program, that’s all rolled into what you pay them upfront. They also give you A plus content that you can put on all your product pages, so that’s really a place to show case your brand story, and you can upload videos which isn’t something that just a normal Amazon seller can do.

Steve: Can you [inaudible 00:25:02] A plus content just in case someone doesn’t know what that is?

Chris: Yeah so A plus content is if you scroll through a product listing down to the bottom of the page, and if you looked at one of mine, my frame single chamber pill holder product is probably a good example of it, it’ll show you where you can just tell, there is like extra space to put a picture, then put up copy and put videos and your logo and really use that space to tell more of a story about your brand so you are not just a picture and a price with a couple of bullets. So it helps people really engage with you beyond just a typical Amazon experience.

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And the best part is that ReferralCandy is a set it and forget it service, requires no technical setup and they are giving My Wife Quit Her Job listeners 50 bucks to try them out if you go to promo.referralcandy.com/steve. Once again that’s promo.referralcandy.com/steve to get a $50 credit to try the service. Now back to the show.

Just curious, what is the conversion rate increase from having that A plus content versus not having it?

Chris: I wish I knew, there are so many variables that have changed over time that I don’t actually have a good answer to that. I believe it works though.

Steve: I’m sure it does and I’m sure a lot of…

Chris: I sure want to know.

Steve: I’m sure a lot of people have been curious how some of these listings are so full whereas other listings are just like flat out text, so this is how you do it.

Chris: That’s exactly how you do it, and if you’re not privy to this program I think through AMS you can buy, there is a way you can pay for that extra content if you’re not part of exclusive.

Steve: Right it’s like thousands of dollars I think, right?

Chris: Yes it is, it’s thousands of dollars, yes so and then so many other things that come that are less concrete I guess but can just happen because of the visibility you have on the exclusives platform is PR opportunities. So the Amazon PR team is really interested in what’s going on with third party sellers, and what a third party seller which now make up half of Amazon sales.

The third party sellers with some of the most visibility are on the exclusives program and so when they get a pitch from a reporter or they’re pitched in a story and want to illustrate it with follow up commentary, they call up sellers from the exclusives program. So I think I’ve had some pretty unusual results but I’ve been featured in Forbes, Small Business Journal put in an article about Cielo this week, been on the front page of the Seattle Times. I was in an Amazon fulfillment center on Cyber Monday last year which was awesome, and I ended up in 13 local news segments that day, incredible.

Steve: Do you know what these effects of all those press releases are in sales by any chance, like did you notice any…

Chris: Sales, yes, yes, yes and then they just keep growing.

Steve: So which press release actually had the largest effect, was it your magazine mentions, your newspaper mentions?

Chris: It was the newspaper, so actually it was the local TV where I was able to talk about the product by far, and so I think there a whole bunch of factors that go into that was also Cyber Monday. So people were in a gifting share mind and my product was being featured as a highly giftable stock in [inaudible 00:29:23] item. But I think – go ahead.

Steve: I was going to say in terms of visibility on the Amazon website, it’s not limited to just the exclusives section, they…

Chris: Oh no, no and in fact I should also mention that when you submit your products every month for consideration for different marketing opportunities, the Amazon exclusives team is taking that internally and they are looking at what are the broader promotions within Amazon that are going on, and can we take Cielo pill holders for example and promote them more broadly on Amazon.

So last year they did 12 days of gifting promotion, Amazon exclusives did and they were able to promote that on amazon.com mobile home page, so Cielo had a day last year and Cielo was on amazon.com’s mobile home page.

Steve: Like the front page?

Chris: Yeah like I just drove down, aha once you got to the 12 days of gifting pack it was insane, it was awesome.

Steve: Okay, all right so anything you left out about this awesome exclusives program, it sounds incredible? My next question would be naturally how you get in?

Chris: So the way you get in is pretty easy actually, they have an application process right on their exclusives home page, so amazon.com/exclusives and you can get in right there. I also, I know a bunch of people and I’m always excited to talk to new entrepreneurs and people too, so feel free to send me an email if you have any questions about it.

Steve: Are they really restrictive on who they let in, like I would imagine like you are special because you have this really awesome story and then your product really ties into your background. Is that what they look for or do they just accept a lot of people?

Chris: I think it’s kind of a mix, they are looking for great stories to tell and that is their top priority is to bring really great products and with stories behind them to their customers, and I think they’re trying to balance that with how they also grow the program quickly and maintain the integrity of it.

Steve: Okay and then so today how many people are in the exclusives program, do you happen to know?

Chris: I actually don’t know, it was a few hundred a few months ago I think.

Steve: Okay, so a relatively small number of sellers are getting…

Chris: Yeah.

Steve: Which clearly means that they have a very exclusive criteria to select who they want?

Chris: Yes, definitely.

Steve: What would you say – sorry go on.

Chris: I’ll just add one more thing. One really great benefit has been that I have been invited to strategic seller conferences which clearly I would never be part of as just little tiny Cielo Pill Holders without a connection to exclusives. So exclusives often gets to invite some of its sellers to the bigger top seller conferences that Amazon hosts, so I’ve been there with top, top Amazon sellers and learnt so much from people in Amazon.

Steve: Care to share any of those things that you’ve learnt

Chris: Nothing specific comes to mind right now, I’m sorry.

Steve: It’s okay. Well let me ask you this, what would you say are some disadvantages of doing the exclusives program?

Chris: Well I think that there is a right time in a brands life for the exclusives program, so I think it’s really, really great as you’re just starting to grow. I talked with some people who are close to the program and the idea isn’t that you’re in the exclusives program forever, eventually you should outgrow it. So I think that I’m at the point right now where I’m starting to think about what’s the right distribution strategy for, me and is it staying exclusive with Amazon forever, probably not.

And so I think figuring out the right timing in your life cycle is probably a really important thing to consider.

Steve: So for a launch vehicle, that’s generally when you recommend getting in?

Chris: Yeah I think it’s great for a launch especially now that incentivized reviews have gone away, because I didn’t mention one other part of the program is they’re constantly featuring new products, and there’s a whole new “Look what’s new” in exclusives section. So every time you add a new product, you are automatically on the feet to get show cased there, so you’re getting extra visibility for new products.

Then this is also a group where they are beta testing a lot of the new Amazon programs, and so I know there has been a lot of talk about what are they going to do with the early reviewer program, and I think that with probably some of the exclusives people are getting the chance to try out before maybe the general seller population.

Steve: I see, so I would imagine as part of the exclusives program, you really don’t need to do much marketing it sounds like, right?

Chris: No.

Steve: Like giveaways, even sponsored ads, you mentioned you’ve just started buying them?

Chris: I do and they do great, so it’s not really – all the things that work on Amazon just work even better when you’re part of the exclusives program. It’s like you have this tale win
from the exclusives program that’s just getting you going even faster, and then from there sponsored products and whatever extra marketing you do and giveaways and all of that just rumps up that fly wheel even faster, that’s the word they use all the time internally, the fly wheel.

Steve: When you launch a new product then, do you still just list it or do you do anything special?

Chris: I have been a little bit lazy because of – I’m going to blaming it on having two babies these last two years, but mostly I just listed, and I probably could be doing a heck of a lot more.

Steve: Okay, another question I want to ask and it might be obvious but do you make the majority of your sales on Amazon, like is your site generating sales right now?

Chris: The majority of my sales probably 85% are on Amazon.

Steve: Okay and here’s a question I want to ask you, because you’re part of the exclusives program and you have some internal contacts over there, do you feel a lot more secure putting more of your eggs in Amazon’s basket, like are you immune to like the copy cats and getting your listings suspended and that sort of thing?

Chris: No, I’m not immune to it. I have advocates to help me through when it happens and it has happened, it happened recently and even with really great advocacy and great connections it’s not an overnight step even for me and so that actually scares the heck out of me, so what would it be like if I didn’t have those connections.
And so I’ve seen competition has increased significantly in the pill holder category including the cost to buy product over the last six months or so, and so that’s actually a big part of what really pushed me to think about diversification as well.

Steve: Do you think that has anything to do with being a part of the exclusives program, or do you think it’s just people using Jungle Scout and finding your product?

Chris: I think it’s probably more just the Jungle Scout stuff, because it’s Chinese knock offs.

Steve: So let me ask you this, they can probably undercut you on price, and they are probably not domestically realistic, right?

Chris: No and that’s another thing that they’re really good about in the exclusives program is obviously you’re part of brand registry, but if anyone hijacks your listing they’ll take it down immediately, you just have to email and tell them it’s gone.

Steve: Okay, so we’re talking about copy cats right now that have separate listings, right?

Chris: Yeah.

Steve: So let me ask you this, a lot of sales have to do with price, so how are you emphasizing your listing and still making sales even though your product might be like 30 or 40% more expensive?

Chris: I rely a lot on my imagery to communicate quality and that’s probably besides price the second biggest thing you’ve got there, and so I’m nervous about it to be totally honest, and I’m thinking a lot about innovation and patentable innovation as where I can get my sustainable growth from. The rip off from my core products have been pretty intense.

Steve: And I would imagine that these rip offs look pretty close, right, they’re just…

Chris: Oh they look identical, in fact they look so identical that they steal my images and my bullets and I’m still working on getting those taken down.

Steve: That’s terrible, that’s terrible.

Chris: And the quality is actually pretty good too which is the worst part in my mind.

Steve: Oh my gosh, okay. So you mentioned wanting to go beyond the exclusives program, have you considered going into like retail outlets then, other retail outlets?

Chris: Yeah, I’ve been thinking a lot about what the right path will be if I expand beyond exclusives and online and I do think it’s more wholesale. I think high and independent pharmacy
makes a lot of sense for Cielo, and so that’s an area that I’m very interested in learning more about, but I do think there could be a really strong wholesale business and that’s probably my next attraction.

Steve: One thing I did want to talk to you about as well is you’ve kind of created this philanthropic community around your product as well, how has that contributed to sales and what has that done for your business?

Chris: It’s been awesome. I mean it’s a pill holder but it’s a lot more than that in my mind, and what I mean by that is health is so personal, and matters so much, and so I hope these pill holders are creating an experience for people that’s better than anything else they’ve experienced with pill holders out there. It’s coming to people who have – they have chronic conditions and being sick isn’t the best part of their lives, and I want to help them make it better.

So beyond just the product, I wanted to create a business that mattered and actually helps people, and so I with my autoimmune condition I still pin it back to that with the way I try to really make a difference in terms of choosing, make a difference that is true. I partnered with this incredible organization, generally a research institute, I couldn’t believe it when I found out they were in Seattle.

I was looking at campaigns all around the world that I could work with and they happened to be in my own backyard quite literally, and so they are a leader in global autoimmune disease research and I have been so fortunate to work with them. I’ve been through their facilities and worked with their scientists and spoke at their events and I give money to them, but more than that I’ve just connected with them and they’ve connected me to their patients, and I’ve just met some wonderful people and I know it’s actually making a difference for them.

Steve: So in terms of this, is this something that’s prominent on your Amazon listing as well that you give money to this organization?

Chris: It is, yeah it’s one of my bullets on the key, my five bullets and then it’s also in my A plus content.

Steve: Okay and so that probably all ties in, like that value prop is probably pretty strong that someone may want to pay the extra money for?

Chris: That’s the hope, made in the USA, philanthropic, beautiful and of course great quality.

Steve: And so going forward you mentioned that you’re a little bit nervous about all these knock offs that are coming out, so what are specific things that you are now doing to get more
sales in your own website?

Chris: I’m actually really focused on building an ecommerce business through my own site. It’s funny; you know we met at an Ecommerce Fuel event a couple of weeks ago. I felt like such a novice there because I’ve a great Amazon business, but I feel like I don’t have a clue about building my own website.
So one of my strategic task for this coming year is really to build a strong ecommerce business off of the Amazon, so I’m actually right now migrating off of exclusives on to Shopify so that I have an introduction platform in place that can help with that, and then I really think Facebook ads are going to be a place that I can find the right customers to a pretty specific niche product.

Steve: Yes.

Chris: So once I get the migration done I’m going to focus on Facebook and I think I’m going to focus on really specific groups like I have products geared for people who have had heart attacks. So that’s a really narrow group and I’ll probably try to find them on Facebook and they’ll be some of my testing.

Steve: Okay and then what were some of your key takeaways, like what are your top three things that you’re going to do to take yourself off of Amazon and establish your business, so you mentioned Facebook ads, what else?

Chris: Well I’ll take diversification with the hotel platform is probably the biggest number two, number one for me, so looking at hotel opportunities, number two building my site through Facebook ads, and also I think this is equally as big but a little bit longer term play is this product is something that I can mention is personal, it’s about health and I have done nothing to really raise awareness and promote it and create advocates in the community of people who have chronic conditions, so huge plans for outreach and advocacy to really start to create loyal brand followers.

Recently I was combing Amazon data, it’s 15% repeat customers, and that’s just off of Amazon from people who like the product. So imagine if I can get people that actually know the whole story to start to talk about it and care about it, I think the opportunity is huge.

Steve: That will be cool. One thing I did want to ask you, you mentioned you wanted to branch out into wholesale, that implies that you’re going to be off the exclusives program, right?

Chris: If I go that route, I think that that’s a someday thing, it’s not an immediate thing, so this is more like my long term strategic plan.

Steve: Okay and then in terms of this document that’s coming out, first of what is that coming out and is it going to be like plastered all over the Amazon website?

Chris: I don’t know, that’s such a great question. So Amazon, they’ve just been really excited about my story, I don’t remember if I told you this or not but I’m actually in an ad campaign for Amazon right now in Europe. I think I’m on the side of a bus and maybe some bill board.

Steve: Oh my gosh, that’s crazy.

Chris: They did a photo shoot at my house and I got some great images I get to use, but they did do this video which was not – we filmed it actually a year ago almost to the day, I can’t believe it and we shot six locations, inside my manufacturer’s, inside my high school, kind of like the life story of Chris Boerner that culminates in hero. I don’t know exactly what they’re going to do with it, I got an update recently that it’s very much still under way and they’re getting close to wrapping it.

So I know they’ve invested a lot of time in it and they want to really show case to really tell a story, so my guess is they’re going to promote it maybe someday I’ll be on the Amazon home page, I’d be all right with that.

Steve: That is awesome, well I’ll be looking out for it, and Chris thanks a lot for coming on the show. If anyone wants more information about exclusives or more about your story, where
can they find you?

Chris: You can send me an email, chris@cielopillholders.com. Thank you so much Steve.

Steve: Thanks a lot, it was great hearing your story, and it was a pleasure meeting you a month ago, it was awesome

Chris: I agree.

Steve: All right take care.

Chris: You too.

Hope you enjoyed that episode. Chris has an amazing story and it also goes to show that you don’t necessary have to be importing your goods from China in order to succeed with good margins. For more information about this episode, go to mywifequitherjob.com/episode153.

And once again I want to thank privy.com for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers, therefore email capture, exit intent, and site targeting tools to make it supper simple as well. I like Privy because it is so powerful and you can basically trigger custom pop ups for any primer that is closely tied to your ecommerce store. So if you want to give it a try it’s free, so head on over to privy.com/steve, that’s spelled P-R-I-V-Y.com/steve.

I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all these sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/Klaviyo, that’s spelled K-L-A-V-I-Y-O, and once again that’s mywifequitherjob.com/Klaviyo.

I also talk about how I use these tools on my blog, and if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away via email, thanks for listening.
Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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152: Easy Ways To Boost Sales And The Real Reason You Need To Look Beyond Amazon

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152: Easy Ways To Boost Sales And The Real Reason You Need To Look Beyond Amazon

In this solo podcast episode, I go over the most important reason why you need to expand beyond Amazon. You’ll learn 6 easy to implement strategies on how to sell more to your existing customers and boost your sales significantly.

Enjoy the show!

What You’ll Learn

  • How to find your business customers
  • How to find your best repeat customers
  • How to leverage Facebook lookalike audiences
  • How to cross sell your customers
  • How to implement a referral program
  • Why you need to expand beyond Amazon

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
Klaviyo

Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
Privy

ReferralCandy.com – If you’re already getting steady orders every month, adding a refer-a-friend program to your store can give you a new sales channel. And ReferralCandy is the best in the business. Click here and get a FREE $50 credit towards your account.
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SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

Steve: You are listening to the My Wife Quit her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not with their businesses. I’m Steve Chou and today we’re doing another solo episode where I’m going to discuss six simple ways to grow your business by selling to your existing customers.
But before we begin I want to give a quick shout out to Privy who is a sponsor of the show. Now, I’m super excited to talk about Privy, because I use and rely on Privy to build my email list for both my blog and my online store. Now what does Privy do? Privy is an email list growth platform, and they manage all of my email capture forms, and in fact I use Privy hand in hand with my email marketing provider.

Now there is a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in ecommerce stores. Now Privy is easily the most powerful platform that I’ve ever used, and you can trigger sign up forms based on any primer that you desire. So for example let’s say you offer free shipping for orders over 100 bucks, well you can tell Privy to flash a popup when the customer has $90 in their shopping cart to urge them to insert one more item into their cart.

Here’s another cool use case, if someone has item A in their shopping cart, I can easily tell Privy to display a unique and special coupon code for that item or display a related item or offer. In terms of email capture, right now I’m showing a different email lead magnet depending on what product a customer is browsing in our shop.

So bottom line Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com, that’s P-R-I-V-Y.com/steve, and try it for free, and if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again that’s privy.com/steve.

I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. Now I’m also blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my ecommerce store, and I actually depend on Klaviyo for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another provider. Well Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought which makes it extremely powerful. So let’s say I want to send an email to everyone who purchased a red handkerchief in the last week, well that’s easy. Let’s say I want to set up a special autoresponder sequence to my customers depending on what they purchased, piece of cake, and there’s full revenue tracking on every single email.

Klaviyo is the most powerful email platform that I’ve ever used and you can actually try them for free at mywifequitherjob.com/Klaviyo, and that’s spelled K-L-A-V-I-Y-O. Once again that’s mywifequitherjob.com/Klaviyo. Now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast, today I’m doing another solo episode, and I’m here to discuss the number one reason why you need to be expanding beyond Amazon, beyond eBay, beyond Etsy and one of a third party market place that you happen to be using. I’m going to show you six simple ways to make recurring revenue off of your existing customers which is really something that you can’t do if you’re relying on some of these third party market places, so let’s talk about that for a moment.

In general it is much easier to sell to an existing customer than it is to go out and find a brand new one. They know your brand, they trust you, they like you, and most importantly they’ve already spent money with you, so they’re willing to open their wallets. According to the small business administration, it is 65% easier to convert an existing customer than it is to find a brand new one, and from personal experience I think it’s actually way more than that. It is way easier to convert an existing customer than it is to find a new one.

Just as an example, over the holidays email marketing which is to our existing customers account for over 21% of our revenues, a little under a third of our business are from repeat customers like event planners, hotels, small airlines, etc. All of our pay per click ads like Facebook ads, Google ads to our existing audiences have a ridiculously high ROI, something that like five or 6X return on ad spend.

So if you aren’t doing so already, you really need to be paying more attention to your existing customer base rather than devoting all of your resources to finding new customers out there because it’s a lot more expensive to acquire a brand new customer. And just a quick note, everything that I am going to be talking about today you can’t do on Amazon, you can’t do on eBay, you can’t do on Etsy, because you don’t have customer emails, you can’t easily retarget your customers and bring them back.

If you run ads to like an Amazon listing for example, you have zero conversion information. Now you can try to use Amazon affiliate links for links in your third party ads like Facebook or Google, but technically that’s actually against Amazon terms of service. You are not supposed to be driving affiliate revenue to your own listings online.

So bottom line if you are relying on third party market places like Amazon, you’re actually missing out on a ton of sales. And here’s a funny statistic, for 2016 Amazon accounted for 15% of retail sales which basically means that there is 85% of business out there that is actually off Amazon, that’s actually another reason why you need to get off there as well.
The other thing you also need to remember is that there is very little or no brand recognition on Amazon. So whatever your business that you’re getting now off the Amazon, it could actually disappear tomorrow, and I always like to reference this conversation that I had with my mum last year.

My mum still to this day thinks that when you are shopping at Amazon, you’re actually buying on Amazon, and when I told her that we actually sold on Amazon, she was shocked because this entire time, she thought that Amazon just had every single product under the sun, and if my mum thinks that, chances are there is a lot more people out there that think the exact same way.

All right so let’s switch gears a little bit and talk about some specific tactics on how to sell more to your existing customers. This first one may not apply to all businesses, but for my ecommerce store, we actually surprisingly attract a lot of business customers, and I was actually pretty shocked when I first discovered this. You might be surprised too with your business if you take the time to look.

So the first step is to export all of your customers and all of your transactions to a spreadsheet. A lot of shopping carts like Shopify or BigCommerce allow you to do this right off the bat. If you’re using Klaviyo for your email marketing provider, you don’t even need to do this step because all the transactions it is built in to Klaviyo already.

The next step is to flag customers who buy an abnormally large quantity of your goods. For example let’s say you’re using Klaviyo, I can create a segment of people who have purchased more than three dozen napkins. I’m choosing napkins in my example here because most people who buy napkins from us, they buy one dozen or at most two dozens for their own personal use.

But in general anyone who is going to be buying three dozen or more, chances are those people are either running an event or they are running some sort of business. So these are the customers that I want to single out, the people who have a lot of purchasing power. You also want to scan the emails that you’re filtering out for your customers for signs of a business. So for example we found our first airline customer this way, in the email address was actually the name of the airline, and I recognized this airline name and instantly I knew it was a business customer.

So you’re looking for business customers here, and once you have this list, pick up the phone and call them up. So let’s say I was calling that airline, I would say something like, “Thank you for your order, I just wanted to verify your deadline to make sure we get these linens to you on time.” Then once you have established a conversation, then you want to probe more into their business and establish a relationship.

Mention that you want to be their single point of contact for future orders, and if you have any further questions, feel free to reach out to me directly. Here is my number, call me any time you have any needs, I’ll make sure your linens get to the destination on time, and boom instantly you have large consistent orders for life assuming that business has needs for recurring purchases.

This actually works really well, we’ve gotten a lot of our larger customers this way, it’s amazing what picking up the phone does for business. Now contrast that if you’re buying on Amazon for example, sometimes people like a little bit of hand holding, so all of the event planners who are our customers, sometimes they have last minute requests, they need their stuff delivered on time, and they need that single point of contact to make sure that stuff gets there on time, and as you know for weddings timing is very crucial. That’s’ why it’s important to pick up the phone and actually call these customers on line.

I just want to take a moment to thank ReferralCandy for being a sponsor of the show. Now for any ecommerce store word of mouth is huge, and when a customer is super happy with their purchase they will tell all of their friends. What if there was a way to amplify word of mouth about your company, what if there was a way to reward referrals for your business? This is where ReferralCandy shines, with just a couple of clicks of the mouse you could add a referral program to your ecommerce store and reward your customers for telling their friends about your shop.

And this tactic works wonders; in fact it’s not uncommon to get a ridiculous return on your investment. So for example Greats Footwear, who is a ReferralCandy customer, is seeing a 20X ROI. Referral word of mouth marketing is also useful for building up your social media presence as well, because referrals share with their friends on Facebook and Twitter.

And the best part is that ReferralCandy is a set it and forget it service, requires no technical setup and they are giving My Wife Quit Her Job listeners 50 bucks to try them out if you go to promo.referralcandy.com/steve. Once again that’s promo.referralcandy.com/steve to get a $50 credit to try the service. Now back to the show.

So that’s how you get more business customers. The next step you need to do is to look on that same spreadsheet and isolate out all of your repeat customers online. These people don’t necessarily buy in huge quantities from you, but they buy on a consistent basis. So here is the thing, we’ve targeted the wedding industry for such a long time that we actually didn’t realize that we actually had a repeat customer base, after all unless someone gets divorced, they aren’t coming back to buy more wedding linens.

For years I thought all of our customers were actually one offs, but you can’t actually know unless you look. So once again take your spreadsheet, isolate all the people who have purchased more than once and what you want to do is once you have that list, you want to run special promotions and ads to these people because the conversion rate is going to be sky high. Push them to buy more items, email these customers more often because they are already a customer, they buy more than once, it doesn’t hurt to email them more often and treat them like loyalty.

We actually have this one customer believe it or not who has purchased over 150 times from our store which is crazy. I’ve also met a bunch of people that frequently collect handkerchiefs; I had no idea that there are people out there like this. There are also people out there that use handkerchiefs to decorate their house or for various arts and crafts.

Once you have these two lists, the business customers and the repeat customers, you can leverage the power of Facebook to scale your business by creating look alike audiences. So once again if you don’t have your email addresses and you are relying on Amazon and Etsy for this, you can’t do any of these things.

Now just a recap if you guys aren’t familiar with Facebook ads, a look alike audience is when Facebook goes out and finds people that are within 99% of the people that you’ve uploaded to Facebook. So for example I can email my entire customer list of emails to Facebook, and they’ll find people that are within 99% of the same demographic. These are going to be 100% brand new customers that haven’t bought and are very highly likely to buy from you.

Leveraging look alike audience incidentally is how a lot of companies scale and it works really well. So for example, I recently took my repeat customer list and generated an audience of 2 million people on Facebook that are 99% the same demographic to sell to within ten minute’s time. Right now I’m actually running a free plus shipping offer to two different look alike audiences, and they are converting quite well, because I’m relying on Facebook to find similar customers than the ones that I’ve already had.

Very powerful and once again you can’t do this unless you have an email list. Once you have your customer base, you can easily cross sell them additional products as well. So once again if you go through your spreadsheet and look through your product mix, and you’ll probably find products that are very complimentary to each other. Find people who have purchased item A but have not bought a complimentary item B.

Here is just a quick example from our store. If someone bought dinner napkins from our store, there is a high likelihood that they may want to buy place mats or cocktail napkins, so why not isolate these customers, send them an email, and then show them place mats or cocktail napkins. Why not run an ad to people who only purchase napkins and run them ad to get them to buy cocktail napkins or place mats.

If someone bought a hankie, they might need a box, so why not reach out and see if we can up sell them a box. The customer at this point, they’ve already purchased from you, they trust you, they are willing to open their wallets, they’ve spent money with you and they would easily buy from you again, the friction is gone at that point. That’s another way to leverage your existing customers.
Now you guys are probably listening to this cross selling and all these techniques, and it might sound a little bit tedious to you, but the way I do it, it’s actually fully automated. Once again I use Klaviyo and they are incidentally a sponsor of this podcast. If you’re interested in starting up for free, you can go to mywifequitherjob.com/Klaviyo, but with Klaviyo you can simply create a segment of people who purchased dinner napkins but not cocktail napkins.

They’ll amass all the emails of people who exactly fit those characteristics, and then at that point you can send them emails directly, or you can export these audiences over to Facebook at a click of a button and instantly run Facebook ads to these people. This is very powerful and once again this is fully automated, I don’t really need to do anything about this.
As I mentioned before, the number one problem with our store is that there aren’t enough people getting divorced in this country. I like to see the divorce rate go to up to over 90%, now just kidding but as I mentioned before wedding customers are our primary customers and they aren’t coming back. So what is a way to get these wedding customers to actually come back? Well you can’t really get them to come back, but you can get them to refer their friends.

Here’s how it works, after a purchase you can provide your customer with an additional coupon or a gift card if they refer a friend, and then as a double bonus you could actually give that friend a discount on their next purchase as well. So it’s a win-win, and once again there is an easy way to do this by using a service like ReferralCandy who once again is a sponsor of the show, promo.referralcandy.com/steve if you’re interested in signing up.

This is an easy to just facilitate referrals, because as you’ll discover as you are running your online store, word of mouth is going to be pretty huge, and anything you can do amplify this word of mouth is going to work really well.

So once again if all of these other options that I’ve mentioned so far are tedious as well, well fine, just take your customer list and blast them an email with a coupon or a promotion. Once again you can’t do this on Amazon or eBay or Etsy, because you don’t have the list you can’t blast them an email, but if you’re really lazy and you just want to get some instant business, just send them out an email with a coupon code and it works like game busters.

Here’s the thing I’ve noticed about coupons in general, a lot of times people end up spending the same amount as they were planning to spend regardless of the coupon amount, because they feel like they’re getting something for nothing already, and sometimes they actually even end up spending more than they were planning on spending. But here is the thing about discounts, you don’t want to send the discount to someone who would have purchased anyway, and you don’t want to give a higher discount than it’s necessary to actually get someone to buy.

So here’s what you can do to segment your customers and incidentally this is what I do for mine. So if no one has purchased in two months, I give them a very small coupon. If they’ve purchased in the past and they haven’t purchased in two and a half months, I give them a larger coupon. If they haven’t bought in three months, I give them an even larger coupon, because if they haven’t bought from us in three months, chances are they aren’t coming back anyway, so this is kind of like a last digit effort to get them to come back.

If they bought recently I don’t send them anything, although the people who are repeat customers and very loyal customers, I’ll often send them special promotions just to make them feel better for being a loyal customer. So this is how I run my promotions so that I don’t overspend or over discount anything online.

So here is the thing about your customer list, it is an endless source of repeat business and allows you to lay a foundation for your revenue, and if you think about it this way, having repeat customer is like running a SaaS business. It’s similar to SaaS for software because it’s recurring revenue. Once again if you’re only selling on Amazon, Etsy or eBay then you can’t take advantage of this, you don’t have emails.

You can’t contact your customers, you can’t run good external ads like Facebook ads because you won’t have the conversion data, you have no idea whether a customer is converting or not. You won’t have brand equity, grandmas all over the nation will think that they are shopping at Amazon and not from you, you’re not going to have any brand equity, you can’t establish a foundation for your business.
I’m not saying that you should stop selling on Amazon, Amazon is great for cash flow but you need to start laying a foundation for your business, because your business on Amazon could disappear at any time, people are not going to be loyal to you, Amazon can ban you at any time, there is going to be another listing for your exact same product at half the price, and obviously some people will buy that listing and save yours.

So really the only way to future proof your business is to establish your own brand, your own customer list, and it provides a foundation for your business because those people are going to be buying from you again, again and again.

All right, so I hope you guys found this valuable, just now I’m going to take a peak on Facebook live to see if there are any questions I can answer. Hope you enjoyed that episode, hopefully I demonstrated to you how crucial it is to own your own customers and your own platform. And if you’re relying on Amazon or any other marketplace for that matter as your only source of revenue, then you’re missing out. For more information about this episode, go to mywifequitherjob.com/episode152.

Once again I want to thank klaviyo.com for sponsoring this episode. Klaviyo is my email marketing platform of choice for ecommerce merchants, and you can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all of these sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/Klaviyo, and that’s K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/Klaviyo.

I also want to thank privy.com for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers, therefore email capture, exit intent, and site targeting tools to make it supper simple as well. I like Privy because it is so powerful and you can basically trigger custom pop ups for any primer that is closely tied to your ecommerce store. And if you want to give it a try it is free, so head on over to privy.com/steve. That’s privy.com/steve.

Now I talk about how I use these tools on my blog, and if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away via email, thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

151: How Mike Stelzner Created A Multi Million Dollar Social Media Marketing Site And Conference

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151: How Mike Stelzner Created The Largest Social Media Marketing How To Site Online

Today I’m thrilled to have Michael Stelzner on the show. Now I was introduced to Mike by my friend Darren Rowse of Problogger and I’m really glad that he made the intro.

Mike runs the ridiculously popular site Social Media Examiner which gets an insane amount of traffic. I’m just going to make a rough estimate here but I’m guessing somewhere in the 1.1 million uniques per month range.

He’s got over a half million email subscribers and a half million Facebook fans for his page. Mike also runs the largest social media conference in the world called Social Media Marketing World which is happening from March 22-24.

Enjoy the show!

What You’ll Learn

  • How Social Media Examiner makes money
  • Mike’s leading traffic sources
  • How he built up each traffic source.
  • How he scaled both his site and his conference so quickly
  • How to leverage influencers to write for you and promote your site

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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Transcript

Steve: You are listening to the My Wife Quit her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not with their businesses. Today I have the legendary Michael Stelzner on the show, who runs Social Media Examiner perhaps the most popular social media site around, but before we begin I want to give a quick shout out to Klaviyo who is a sponsor of the show.

Now I’m super excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on Klaviyo for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another email marketing provider. Well Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here’s why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought which makes it extremely powerful. So let’s say I want to send an email out to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special autoresponder sequence to my customers depending on what they purchased, piece of cake, and there’s full revenue tracking on every single email.

Klaviyo is the most powerful email platform that I have ever used and you can try them for free at mywifequitherjob.com/Klaviyo, and that’s spelled K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/Klaviyo for a free trial.

I also want to give a shout out to Privy who is also a sponsor of the show. Now what’s also cool is that I use and rely on Privy for both my blog and my online store. Now what does Privy do? Privy is an email list growth platform, and they actually manage all of my email capture forms, in fact I use Privy hand in hand with Klaviyo.
Now there is a bunch of companies out there that will manage your email capture forms, but here is why I like and chose

Privy. Privy is easily the most powerful platform that I’ve ever used, and you can trigger sign up forms based on any primer you desire. For example let’s say you offer free shipping for orders over $100, well you can tell Privy to flash a popup when the customer has $90 in their shopping cart to urge them to insert one more item.

Here’s another cool use case, if someone has item A in their shopping cart, I can easily tell Privy to display a special coupon code for that item or to display a related item or offer. In terms of email capture, I’m showing different email lead magnets depending on what product a customer is browsing in our shop.

So bottom line Privy allows me to turn visitors into email subscribers, which I then feed to Klaviyo to close the sale. So head on over to Privy.com/steve and try it for free, and that’s spelled P-R-I-V-Y.com/steve, and if you decide that you need the more advanced features, use coupon code MWQHJ for 15% off. So once again that’s privy.com/steve, now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast, today I’m thrilled to have Michael Stelzner on the show. Now I was actually introduced to Mike by my friend Darren Rowse of ProBlogger, and I’m really glad that he actually made the intro. Mike runs the ridiculously popular site Social Media Examiner which gets an insane amount of traffic.

And I’m just going to make a rough estimate here, but I’m guessing somewhere in the one million uniques per month range. He’s got over half a million email subscribers and a half a million Facebook fans for his page. He also runs the largest social media conference in the world called Social Media Marketing World, which is actually happening on March 22nd to the 24th.

Now having run an event myself, I know that the amount of work it takes is tremendous. Mike’s conference is actually 40 times larger than mine, so I can’t even imagine the organization that is required. Anyways I’m actually going to be a speaker there talking about Facebook ads for physical products next month, so if anyone out there listening wants to meet up in sunny San Diego, look me up. And with that welcome to the show Mike, how are you doing today man?

Michael: I’m doing great, thank you so much for having me Steve.

Steve: Yeah Mike you know we met relatively recently, but what is your background and what gave you the idea to create Social Media Examiner?

Michael: Well it’s a great story. I’m a serial entrepreneur; I’m 21 years in this adventure. My background is that before Social Media Examiner I was a writer, I wrote a book called Writing White Papers, and I was hired by lots of well known corporations to help them write these things called white papers which are like informative and persuasive designed to help the marketing department generate leads, sell, and all that fun stuff.

Right around 2009, late 2008, early 2009 a lot of people started talking about social and it was like the buzz. So for my business back then I had a newsletter with about 20,000 people on it all about white papers and white paper marketing. So I started interviewing all these people in my network that seemed to understand Twitter, and Facebook, and LinkedIn which were pretty much the players at the time, and I just started to notice that whenever anybody wrote anything about social it was like exploding on social.

So I got this crazy idea to start a website more as a movement called Social Media Examiner and kind of I didn’t notice any [inaudible 00:05:50], I started searching for domain names and to my great shock Social Media Examiner was available. Back then nobody was using three words, everybody was using two words, so the first thing I did was I registered the trademark, because I thought San Francisco Examiner was going to come sue me, because I just assumed they had a lock on the word examiner, and everything exploded from that point forward.

Steve: So these 20,000 people that you started with, that was just from your white paper business?

Michael: Yeah that was my white paper business, and I kept that going for about two years while I run Social Media Examiner like as a side gig. Not very many of those people moved over to Social Media Examiner. I would say I pretty much started from scratch just like everybody else does, and I did obviously use – because writers aren’t always interested in social, at least they weren’t back then, go ahead.

Steve: And you mentioned interviewing them, was that like in a podcast or was that like a text based interview?

Michael: What I did with the white paper business I would interview and I would change – basically I would do interviews, then I would work into an article and then they would get emailed. So back in the white paper days I would send a monthly email newsletter that was very long and would have four or five articles. It started before blogs were popular, and then eventually I started a blog called Michael Stelzner is writing white papers, because I was coming out with that book.

But yeah interviews were always at the core of what I did. When I started Social Media Examiner actually I went to two different trade shows and I hired a video guy to come with me, and I did on ten minute on camera interviews with all the social luminaries at the time, people like Scott Monty, he used to work for Ford and Chris Brogan, and a number of other people and I just asked the questions that I personally wanted answers to, and that became some of the content we published on Social Media Examiner.

Steve: Interesting, so you what’s funny Mike, I’m looking at your blog right now, I don’t see any ads, I don’t really notice many affiliate links either. I listened to your podcast and you primarily promote your own event, and so what are the main revenue sources for Social Media Examiner?

Michael: It’s a great question, we don’t take advertising, so the way I describe us is we are a product based media company. So we are a true media company in the sense that we have a very big blog, a very big podcast, a live show, video stuff that we do just like any other media company, but our exclusive sponsor is our products, Social Media Marketing World during half the year and Social Media Marketing Society during another portion of the year, and pretty much that’s how we make most of our money.

We have an email newsletter that goes out three days a week to about 560,000 people, and in that newsletter there’s links to our articles and there are also links to offers for eBooks and stuff, and those are paid placements inside of that newsletter. But that’s a small part of our revenue, the bulk really is from our conference and from our society which has kind of gotten monthly ongoing professional development and training.

Steve: So what is the rationale for not including like affiliate links for example?

Michael: So I thought to myself – and by the way a lot of my friends are affiliate marketers. I don’t think that there is anything wrong with affiliate marketing except there are some challenges that come with it and you know this to be true. First of all those affiliates expect that you’re going to promote them, and you do get to this point where you have to decide, do I want to be reliant on selling other people’s products or do I want to actually make my own products.

I realized that there was a lot more money and if I was willing to do the work in creating and selling my own products as you know over actually just being an affiliate for someone else’s products. In early days every one of my friends even to this day, they all have their launches, they all have their products, so about four or five years ago I made the decision, we’re not going to do any affiliates for anyone under any circumstances ever.

We just made the decision that we’re not in the business of doing that, we instead are going to be more like consumer reports, we’re going to be agnostic, and I think by making that decision it’s helped us in a couple of ways. First of all because we’re a pretty big media entity, there is FCC compliance rules, and we don’t want to have to deal with some of these issues.

We have lots of writers that write for us and if we took an equity stake or if we took an affiliate relationship with these products, then there’s all sorts of disclosures that have to happen in the content that we produce. And we just want to be in the business of producing really high quality original content that is unencumbered with affiliate relationships, and allows us to produce our opinion on anything we want without any compliance issues.

For us the money on the affiliate stuff no matter how good it is isn’t enough because we’re making so much more from the products that we sell.

Steve: I notice on your right hand side bar there’s links, those aren’t affiliate links or?

Michael: They’re not, no. We have Social Media Examiner recommends and we have a couple of company logos on the right hand side of our website. These are people that are part of our partner program, and what that means is they are spending at least $30,000 a quarter in our email newsletter, and that’s one of the benefits they get for that kind of commitment is that we will place their logo, and we only have four slots in the partner program.

We’ll place that logo on our website which allows them to get a lot of branding and traffic to their website, but there is no affiliate deal at all, that’s just kind of a special pack we put together to help us sell out of our email newsletter inventory.

Steve: Okay, that’s actually pretty interesting. What is the going rate for advertising in an email?

Michael: $6,000 per day per slot.

Steve: So per email or?

Michael: Per email.

Steve: Per email okay.

Michael: So we can earn up to $12,000 on every email we send and it’s we don’t do direct sends ever, so our email newsletter is like – and by the way it has to do with the size of the email too, so the price used to be a lot less, but it’s like in block number one in the email will be a 70 word blurb which includes a link to our article, then block number two and three are promotions for free offers like eBooks. You know these guys are using us for leads and stuff, and then the next block will be a promotion for whatever we’re selling like the conference Social Media Marketing World, then last block would be another one of our articles.

So we always begin and end with our articles to get the readers to get all the way to the bottom of the newsletter.

Steve: Is it based on open rate or is it based on list size?

Michael: It’s based on clicks.

Steve: Clicks, okay.

Michael: Okay let me rephrase. The way we sell it is everybody wants the clicks because the clicks drive the traffic and then they generate the leads, but the list size is what they’re buying, so they are buying a fast a highly accelerated way to generate leads because when you email as big of an audience as we do three days a week, they could get 1000 leads in 48 hours. So they’re not going to get that anywhere else at that speed for that price, you know what I mean?

Steve: Yeah for sure.

Michael: So that the cost per acquisition depending on the offer can be very economical but they ah veto make the commitment to the slot.

Steve: Here’s a question, when you have like 500K subs, can you still just blast out your entire list?

Michael: Oh yeah we do it three days a week.

Steve: Okay interesting, I was told by – I can’t remember, maybe it was Noah Kagan or Neville Hill like once you get like that many subs you really have to segment is what they told me, because like if you blast too much at once like certain inboxes will just block you with the sudden flood of email that’s coming, but you just blast?

Michael: Well I can tell you that we test this, we use a service called Glock, which is a third party email deliverability testing service and we get into the inboxes of Gmail, Yahoo, all the big ones without a problem.

Steve: Okay and then when you’re blasting out, it’s just the articles that you’ve had for the last couple of days along with these advertisements?

Michael: Yeah it’s kind of part of what we train our audience that you’re going to get three days a week emails from us for our articles. The idea is don’t miss our future content because we are always publishing every day really high quality content.

Steve: You guys publish how many articles per day?

Michael: We used to publish two, now we’re down to one, so we publish six days a week, we take Sunday off, and that allows us to put two of those articles in every one of those three emails that goes out Monday, Wednesday, Friday.

Steve: I just want to take a moment to thank ReferralCandy for being a sponsor of the show. Now for any ecommerce store word of mouth is huge and when a customer is super happy with their purchase they will tell all their friends. What if there was a way to amplify word of mouth about your company, what if there was a way to reward referrals for your business? This is where ReferralCandy shines, with just a couple of clicks of the mouse you could add a referral program to your ecommerce store and reward your customers for telling their friends about your shop.

And this tactic works wonders; in fact it’s not uncommon to get a ridiculous return on your investment. So for example Greats Footwear, who is a ReferralCandy customer, is seeing a 20X ROI. Referral word of mouth marketing is also useful for building up your social media presence as well, because referrals share with their friends on Facebook and Twitter.
And the best part is that ReferralCandy is a set it and forget it service, requires no technical setup and they are giving My Wife Quit Her Job listeners 50 bucks to try them out if you go to promo.referralcandy.com/steve, once again that’s promo.referralcandy.com/steve to get a $50 credit to try the service. Now back to the show.

Let me ask you this recently or in the last couple of years, the way Google has worked was like it’s quality over quantity. Do you find that publishing that often is making a difference versus publishing like one huge mega article every week?
Michael: We have a very diverse audience that’s interested in lots of different topics, and if we just published one article a week, then we would not be as successful as we are because if you think about what we sell which is training on a wide swatch of different social media marketing topics, we have to attract people that are interested in LinkedIn and Pinterest, and Instagram and Facebook and Twitter and Snapchat and Pinterest.

So for us to keep up with all that change that is going on in the space, and along the lines there is also blogging and there is also live video, there’s just so many YouTube, so visual images, there is all these different things. So we have a diverse audience that we’re trying to attract to sell the products that we need to sell and if we only publish once a week, we just wouldn’t draw the audience that we have, and we wouldn’t be able to sell as much as we sell.

Steve: So to put up that much content, does that imply that you have lots and lots of writers?

Michael: We have 52 people on the company and 11 of them are full time, the rest are regular part time contractors, some of them are practicing full time, and we do have a decent swatch of writers. Like every Saturday Social Media Examiner policies are wrap up week in the news in the social media, every Friday is my podcast put in a really rich article, and then Monday through Thursday are what’s left for everything else.

We do have some staff writers, then we have some contributing writers and all that basically – there is always seems to be new writers are popping in, but it’s a lot easier to do now because we are really only talking about four out of six, really more of like two to three out of the six are contributing writers, and all the rest is done internally by staff.

Steve: Has your content gotten like changed over the years?

Michael: Yes but not much because we were always strict from the beginning, we were always 1000 plus words, lots of visuals, lots of sub heads, lots of captions. We’ve always been – to use the words of Michael Hyatt, “The gold standard when it comes to blogging,” but over the years other bloggers like Buffer have gone for the really like 3000 to 5000 word articles. We’ve decided not to do that, we would rather have two or three articles on a topic than one gargantuan one.

I believe that our content is rich enough and our audience loves it enough that if we went that big, I don’t think anybody would read it, I think because we know how much time people spend on our site.

Steve: Sure yeah.

Michael: And we know how fast this space changes, and to produce something like that is a lot more work than just producing a really nice article that’s 1500 words.

Steve: So in terms of your traffic sources, what are your top thee?

Michael: Take a guess at what number one is.

Steve: Social?

Michael: No.

Steve: Google?

Michael: Yes and it’s a huge chunk. Number two is our newsletter, so the second biggest source of traffic is actually the people that are on our newsletter. We track that using UTM primers, so after Google is our newsletter subscribers that are reading our content, and then the third one is Facebook.

Steve: Facebook, okay. Let’s switch gears a little bit and talk about like your early days when you had nothing like no one was reading it, how did you get traffic early on and how did you build up the name?

Michael: In the beginning it was really – pre Social Media Examiner I had been building relationships with marketers for years because of what I did in my writing, my white paper business was called White Paper source. Some of those people, those marketers went into the social world and I asked many of them who had become friends with me, who should I get to know, and many of them suggested people like one of them was Mari Smith who is one of the leading experts in Facebook marketing.

But back then she was new on the scene, and many others like Amy Porterfield, she had left Tony Robbins and she actually came to work part for me, but then she went on to become also another expert. So I believe in developing relationships with people because I know people are having flow, and everybody has their own little networks and everybody seems to take care of each other in the blogging world.

Steve: Yeah for sure.

Michael: So in the beginning there was a couple of high profile writers that wrote for us, Jason Falls who was a big guy back in the day as a social media dude, Chris Garrett who now works full time for Brian Clark. He coauthored ProBlogger with Darren Rowse, Denise Wakeman who was a big time blogger back in the day, myself, and Mari Smith. We each wrote one article, they each wrote one article a month until they bored of it or was no longer interested, and then I leveraged all that star power if you will to persuade others to want to write for us.

I even had a big button on the navigation bar that said write for us, and all this in bulk commerce demand came in because in the beginning we sold nothing. There was no advertising for anything, not even our own products. We also released an industry report which now is entering into its eighth year and that thing got crazy exposure for me and for Social Media Examiner, and a lot of people back then — like I wrote the very first industry report for the Social Media World.

I was one of the first people they would call even in the industry, so a lot of people began looking at my research, looking at the content that we were producing and they just wanted to be part of this movement that I was creating because it wasn’t obviously any commercial objective, I had no desire to be consultant, this is really just a movement I was building.

Steve: That lead magnet is still your main lead magnet today for email?

Michael: Yeah we get somewhere between 20,000 to 30,000 opt-ins a month on that.

Steve: It’s crazy, what was the incentive for the big bloggers to blog on Social Media Examiner?

Michael: They knew my reputation. I didn’t have the huge bloggers, like Brian Clark told me he might write for me but he never did because he never went down that road of social, but I think the incentive was they believed in me, they knew that in the white paper world I was king at that space.

I was an undisputed guy, so they kind of figured well maybe there is a chance that this guy could at least be one of the jokers, but maybe he’ll go somewhere and I think it was my reputation and I think I’m generally a nice guy and they figured what have I got to lose, this guy seems to know what he is doing and I’d love to hitch on and just see where this goes.

Steve: Interesting so they wrote for free essentially?

Michael: Yeah even to this day, everyone that contributes writes for free unless they are on staff, because like it’s usually everybody wants, they all want exposure. This is the secret source of what we do at Social Media Examiner, and by the way speakers at our conference speak for free. We’ve never paid a speaker, and the reason they do it is because when you build something that everybody is talking about and everybody likes and they know that there is quality.

Everybody wants to be part of something that’s exciting and that’s headed in a certain trajectory, and they are willing to do it for nothing in exchange for the hope that maybe they’ll pick up some clients, or maybe they’ll establish themselves as a thought leader and indeed that has happened, so many people have gotten book deals and so many people have gotten famous as a result of them writing for us.

Steve: It is an easy sell now, but in the beginning I guess…

Michael: Let me tell you we added 20,000 email subscribers in 90 days, so it wasn’t hard in the beginning either, we were over 100,000 by our first year.

Steve: That’s crazy and that just came from other people promoting you?

Michael: That just came from the traffic coming to the site back in 2009 and people wanting to learn more about social, the demand was there, everybody wanted to know more about how to market with social. Remember we were coming out of a serious economic problem in 2006 and social was the solution for a lot of these people, they were like I can’t spend money, I’m going to do the social side.

Back then it was a big deal, because it was driving enormous traffic for most businesses, so I was in the right place at the right time I think you could argue.

Steve: Was it Google traffic then early on?

Michael: It was – surprisingly Google was the smallest in the early days, it was Facebook and Twitter and LinkedIn, and really Twitter and Facebook was driving enormous traffic. Now it’s much bigger, it’s gotten bigger and bigger over the years, but in the beginning search was the minority, it was 40%, 60% was social. Now it’s the other way round.

Steve: And it’s just people sharing your posts?

Michael: People would share our posts; it would go crazy viral, we would trend on Digg and all these other sites that nobody even thinks about anymore. Our staff would go crazy viral, on Delicious, I don’t know if you remember them?

Steve: Of course I do yeah.

Michael: We would trend on all those sites all the time and…

Steve: Give me an example of an article that went crazy.

Michael: It’s such a long time ago, but it happened so regularly that honestly it happened almost like once a week, I mean just…

Steve: Wow okay.

Michael: So there wasn’t just any one thing. Part of this because I’ve got a writing background, I taught a lot of these people how to write like Leo the cofounder of Buffer wrote for Social Media Examiner back when he started Buffer and this helped Buffer get on the map, and now Buffer has got a great blog and much of what Leo learnt writing for Social Media Examiner, they apply over their Buffer.

So I just had this insatiable demand for expertise, I mean for quality and in the very beginning we had like four editors working on every article, and they were all volunteers. So I think our quality was just really above what everyone else was doing, and as a result everybody was sharing that because they knew that if you want to learn about the stuff, then this is the place to go.

Steve: Did you write any of your own posts?

Michael: Oh yeah, I was writing one a week for the first probably a year or two because we needed enough content to draw the traffic in, but eventually I stopped doing that probably about two and a half years in because the amount of people that wanted to write for us exceeded the available spots that we had, so I didn’t need to do that and I didn’t need to write any more.

Steve: So back in the early days did you make a conscious effort to scale and did it just kind of happen?

Michael: Yes.

Steve: So what did you do to scale, did it mean like more content?

Michael: Yes it did, in the beginning there was like two or three articles a week, so I was writing one. Well actually in the very beginning there was two articles a week, so I would have high profile people write once a month because that was kind of within reason. I would write once a week and then eventually after a couple of months we scaled that up to three times a week and the goal was to eventually get to like four times a week.

But then we realized, wow every time we add another article we get more traffic, so we scaled to five, and then we scaled to six, then we scaled to seven, then we scaled to eight and then we scaled to nine and we stopped at nine, we never got past nine, and then we eventually scaled back to six because over time we began to realize that were pushing the envelope of our editorial team’s ability to process these articles.

Because we had nine a week, that’s a lot, so we would sometimes publish stuff that wasn’t up to snuff because you want to fill a spot, and then eventually we just decided you know what – I just said to my team I’d rather publish nothing than publish crap, you know what I mean?

Steve: Yeah sure.

Michael: That was a huge relieve to them because they were struggling to keep the editorial calendar filled, but we never missed ever in the history of the company our publication goes, we’ve always been able to deliver.

Steve: If you were to start all over today would you still try to pump out as many quality articles as possible?
Michael: I’ve always measured everything, I’ve always been a Google analytics freak, so if I was starting again today I would want to see whether or not there is a correlation, whether or not the traffic is coming, whether the conversions are coming, that’s the key thing that we started many years in we started saying, okay wait a minute we’re not tracking email conversions.

One example of something was Instagram apps, we trended number one on Google for two and a half years on Instagram apps and they were bringing like a 100,000 page views at least a month for like two years, supporting millions of page views. The problem was it wasn’t converting at all. I’ll take a million plus pages a year if I get a certain number of conversions on it but I wasn’t.

Stuff that was getting a lot less traffic was getting much higher quantities of conversion, so we began saying to ourselves, we don’t want to just develop content for the sake of traffic, we want to develop content that is going to draw somebody that wants to stick around and receive this content on a consistent basis.

Steve: I just want to let you know that tickets for the 2017 Sellers Summit are now on sale at sellerssummit.com. Now what is the Sellers Summit? It is the conference that I hold every year that specifically targets ecommerce entrepreneurs selling physical products online. And unlike other events that focus on inspirational stories and high level BS, mine is a curriculum based conference, where you will leave with practical and actionable strategies specifically for an ecommerce business.

In fact every speaker that I invite is deep in the trenches of their ecommerce business, entrepreneurs who are importing large quantities of physical goods, and not some high level guys who are overseeing their companies at 50,000 feet. The other thing I can also assure you is that the Sellers Summit will be small and intimate. Last year we cut off ticket sales at around 100 people, so this event will sell out quickly.

This event caters to sellers of all levels, and if you’re a beginner, you’ll leave the Sellers Summit with a product to sell, potential vendors and a road map for your business. If you’re an existing shop owner, you’ll learn proven techniques to take your business to the next level whether it be through learning advanced Amazon selling tactics, SEO, social media, pay per click advertising, copy writing, email marketing, you name it. And if you are an ecommerce entrepreneur making more than $250,000 per year, we’re also offering an exclusive mastermind experience with other top sellers.

So the Sellers Summit is going to be held in Fort Lauderdale, Florida from May 18th to May 20th, and for more information you can go to sellersummit.com, once again that’s sellerssummit.com or just Google it, now back to the show.
By conversions do you mean email sign ups?

Michael: Correct.

Steve: Okay so lets’ talk about list building for a sec, what are some ways that you boost email sign ups, is it all organic based on the articles?

Michael: We do a bazillion things over Social Media Examiner. We use OptinMonster as our primary way to capture leads, and we’re pretty aggressive about it, so we have a pop up that comes the very first time someone comes to the site within the first like ten seconds. And then we also have one on the side of every article, and then as you scroll down the article and you get near the bottom we have a scroll in thing that I’ll ask them if they want to get a report, and in the very bottom of the article we also have another one.

Then on the home page we’ve got one and as people leave the site we have a pop up. So we’ve got like if you come in at any particular article you’re going to see at least four or five options, some pretty in your face to get you on our email list.

Steve: Is the lead magnet the same no matter where you are?

Michael: It is but the way that we display it is different in every single case, so at the point of entrance and the point of exit, they look totally different. So it doesn’t look like it’s the same offer, and we put down a lot of – we do almost weekly split testing to try to tweak as much as we can to try to grow that.

Steve: You mentioned that you’re selling ads for your email and I’m just curious like how that’s different than actually selling ads on your site in your mind?

Michael: It’s a lot more money first of all. People are willing to pay a lot of money to have email inbox deliverability of their ads. Display advertising is kind of a dying thing, I mean anybody who takes display ads realizes that they’re making less money now than they did a year ago and they’re making even less than they did two years ago, and it’s partly because of programmatic advertising which is pretty much algorithms deciding the best cheapest way to deliver these ads, so the cost per 1000 is so low right now that there is not a lot of money.

What people are doing is either putting more ads on their website to try to make more money and what does that do, that just sends people away from your site. So the ads inside the email newsletter are only ads that we approve and they are almost always free offers for eBooks and content, so they kind of don’t look like ads because we’re not selling like a product specifically, they are actually offer like here is a free report on this or that and they are lead generation.

So they are quite different, they are text based, there is no graphics, and it kind of looks like an article but it does have the word ad or sponsor next to it, so we disclose that it’s not — so have disclosure on what it is.

Steve: And when you’re sending your emails, it’s primarily just your articles, you’re always sending out content for the most part?

Michael: Yeah.

Steve: Right, okay.

Michael: Three days a week only content. When we have something to promote or send a dedicated blast like if we have a sale on Social Media Marketing World like last week we had a big sale, we do dedicated blasts on those cases.

Steve: And you blast out all 500…

Michael: The whole list.

Steve: That’s crazy okay, so I’m just curious when you send out email that often what do your open rates look like if you don’t mind sharing?

Michael: I can’t disclose to you the actual numbers on air, but I can tell you they’re pretty significant. The open rates for our newsletter and for our dedicated blasts are identical and they are high for a list of our size. But the good news is that we’ve had to work really hard to make sure that we can get that delivery in to the in box and our audience does not unsubscribe when we send promotional emails, or they rarely unsubscribe, they stick with us.

I think part of it comes down to the fact that we have consistently been providing value to their lives for a while. They are high for a list of our size.

Steve: Okay and what are some things that you’re doing to maintain high deliverability rates?

Michael: We don’t send any graphics in our newsletters, pure text and we get to the content almost immediately, we don’t have any kind of fluffy introductions or anything like that. In the subject line of the newsletter we always make sure that the subject line is something that we know our audience would be interested in.

So for example if we’re sending out an email on Wednesday and we’re going to reference on Monday and Tuesday article, we’ll selectively choose which of those two articles is going to get the higher open rate as the subject line, and we make sure that we spread out our editorial so that we have three good subject lines in our newsletter no matter what because we – and we have research from our – we just surveyed 5700 of our email subscribers to understand what they are most interested in learning about, so we take that research and those headlines and couple it together.

We remind everyone when they subscribed, how long they’ve been a subscriber, so that does a little bit of a kind of a…

Steve: Is that at the end of the email?

Michael: Yeah, it’s a little bit of a kind of hey you’ve been with us for this long, kind of makes them think twice before they unsubscribe. In our promotional stuff we give them the option to opt out from receiving promotions instead of just unsubscribing from the whole list.

Steve: Okay, I’m trying to think…

Michael: They can do either one but we always provide that as an option for people, and we also give people an option to transition over to a weekly broadcast instead of three days a week broadcast.

Steve: I see, okay I was just going to ask you that, like how do you prepare people to get blasts three times a week?

Michael: The moment they sign up, we tell them right in the beginning here is what you’re going to expect. We say thank you so much for – the subject is your free gift or something like that and they get the eBook and in the newsletter it says, “Thank you so much for signing up for Social Media Examiner’s newsletter, here is what you can expect. We are going to email you original content three days a week and blah, blah, blah,” so we set that expectation from day one.

Steve: And in terms of the subject lines for your email blasts, do you use like content based subject lines or do you use like catchy ones just to get them to click?

Michael: No we use the actual headlines from the articles, so it might be like in brackets SM Examiner so they know it’s from us, and then it might be like just a headline like I’ll give you a quick example. It might be like three ways to improve your Facebook ads, which happens to be one of our articles from yesterday, so most people are going to be like oh I want to learn that.

Or it might be like how to improve your blog posts with YouTube videos, so we just selectively – or five ways to sell more products on social media. So we just literally pick our headlines right off the articles and we prop that…

Steve: They all sound actionable, so I can see why people will want to click on those.

Michael: Yeah all of our content is highly tactical, so we don’t publish any opinion stuff at all.

Steve: So you got the content, you got this huge audience; you got this huge email list. My question to you now is why conferences, they are not really easily scalable, requires a lot of physical resources, like what’s your rationale for focusing on this large event?

Michael: Well I guess the question is why should someone go to a conference, and I will tell you I started Social Media Examiner by going to a couple of conferences one of which doesn’t exist anymore which is Blog World. For me it was important because I knew everybody in the space was going to be there, and I needed to network with those people if I was going to be able to grow my business.

I remember meeting like Leo from Buffer there and so many people that are now close friends, and well social media is absolutely true that you can develop relationships quite quickly with Twitter and Facebook and stuff. You know this because you go to events and you have your own event, there is nothing like making that face to face human connection. It can accelerate relationships; it can lead to business development.

That’s the reason that I go, but the reason people come to my event because they tell us this is because they want to accelerate their learning, and I would imagine that’s the same reason they go to your event.

Steve: Absolutely.

Michael: They want that professional development, they know that we have hand curiod these speakers and that we only like really high quality people like yourself to present. They think to themselves, all right are there enough topics that I want to learn about, would investing in coming to this conference and the air fare and the hotel and all that stuff, would it allow me to for example dig in to live video and walk away with a total plan on how I could crash live video, because that’s the hot thing right now?

Or would it allow me to really go into Instagram because I’m good on Facebook but I’m not so good on Instagram. I think that’s the reason why 3000 to 4000 people are coming to San Diego to our conference. I found that they come for the content; they come back for the networking and the relationships because they form masterminds, they find customers, or they just find peers that can help them understand, comrades to join in the joint struggle, because this is a struggle.

Steve: Yeah I know. But for you personally though like there is easier ways to make money that are less labor intensive?

Michael: True but I will tell you when we started Social Media Examiner it was all online conferences, so we were one of the very first to do — significant online conferences started in 2008 which was really just many webinars spread over time, multiple times a day, kind of like the conference experience, but it was online.

That was something that we’ve been able to do successfully for many, many years and I just always knew that I wanted to do something in person because I got my start at a conference, and I knew that there was just that magic sauce that happens at a conference. The reason I decided to start it is I was at my good friend Joe Pulizzi’s conference called Content Marketing World, and I just saw how calm he was, and I’m like, why are you so calm, he’s all, because they are event planners that do all the operational nightmare stuff that exist.

I’m all are you kidding me? Oh yeah they exist. I’m like oh my gosh I want to do this. So I just kind of – I saw how calm he was and how cool his conference was because I’ve been to everyone since the first one, and I just said to myself, this is a business that I could execute on and do with excellence because I am all about excellence.

And I just know it’s not easy to do and I know that if I could do with excellence, I wouldn’t really have a lot of competition, and frankly I have no competition, because there is no social media marketing conference that comes anywhere close to my event other than South Bay [ph] but no one would say that’s a social media marketing conference.

Steve: Yeah sure.

Michael: That’s really a music festival that happens to have some interactive stuff in it.

Steve: Actually incidentally that’s why I partnered with my friend Toni in my event, she handles all the logistics, I handle ticket sales and it’s like a great partnership.

Michael: Yeah and it’s like I’ve got a big team now, a big part of my team is on that event side of thing and it’s a significant amount of money, but I will tell you it’s also a significant amount of risk. Like we already have as of this recording like 2500 people coming, and we just broke even like about a week ago.

Steve: It’s crazy.

Michael: It’s a multibillion dollar expense and there is a lot of risk, and that’s why a lot of these guys go out of business. We have something a lot of other people don’t have which is a huge audience and really deep relationships with a lot of these people that kind of reduces a lot of the risks that people would normally have to do a conference of this magnitude.

Steve: That is what I was just about to ask you actually, like how do you know how many people are going to attend year after year, so that when you put that money down you are not like having a heart attack?

Michael: Well it’s a math science kind of stuff; I’m a daily geek. So we track a lot of stuff, the big expense as you know is food. The good news is that’s a variable expense so if you have less people you have less food expense, but the biggest expense really is labor and all the people expenses and stuff. So just like anything you have to make projections and budgets and commitments with hotels and stuff like that, and there is always risk that you won’t fulfill your hotel commitments and you have to pay the hotels, but we’ve never had that happen.

So for us it’s just like we’re constantly monitoring it every day and every week and every month just making sure we’re where we need to go and we have like high and low thresholds, and if it looks like we’re not selling this many then we go back and we say we’re going to have to cut some of these things we were thinking of doing. So it’s like a crazy – it’s like one of those puzzles where you have to move all the pieces in one little square and you have to make a puzzle, those ones are the opinion of others who want it to flop.

Steve: Yes, yes, yes.

Michael: It’s like that and it’s not easy and that’s part of the reason why there is very few people that do bigger conferences because it’s unbelievably complex and it’s not for the faint hearted.

Steve: What is your strategy for selling tickets, is it just email primarily?

Michael: Oh my gosh no, we have like a 70 page marketing plan.

Steve: Oh my goodness okay.

Michael: We do everything, like right now if you go to our Facebook page we do behind the scenes documentaries and we do me appearing on podcasts which is the obvious thing. We have ads all over our website; we have every medium that we own, the podcast, the live show, the blog posts are all sponsored by Social Media Marketing World. We have speakers and affiliates and we have paid search, paid Facebook, paid everything, it’s impossible to not hear about Social Media Marketing World if you are in any way, shape or form a fan or a subscriber.

Steve: It’s been following me around the web for like the past month.

Michael: Yeah we do all that kind of stuff too, we do really sophisticated remarketing campaigns, yeah it’s no one thing. But I will tell you the stuff that delivers the most sales is obviously the website, because we have ads all over the place, so in aggregate that’s the biggest thing and then of course the emails are another really big thing. Then there’s hundreds of little things that all kind of add up, and when they all add up, they all kind of informs the final product.

When you get to be like this is going to be our fifth year, when you gather reputation and when you trend globally like we always trend globally number one on Twitter when our conference is going on. We had 70,000 tweets at our last conference, so what ends up happening is people that are friends with the attendees can’t help but not see the bullets created, what happens when people come to the conference, because they take thousands of pictures, they go live, they talk about it for weeks and months afterwards.

So we get an enormous amount of free plus from our attendees and they evangelize for us, and that’s really kind of cool because we’re getting at the point where a lot of our sales are unattributed which means it’s good old fashioned word of mouth.

Steve: What’s nice also is that almost all your speakers have their own following too, right?

Michael: Yeah they are all – not all of them but many of them are very high profile, for example I’ll throw out a couple of names, Guy Kawasaki, Mari Smith, Jay Baer, Ann Handley, Michael Hyatt, Chris Brogan, Mark Schaefer, Tim Schmoyer, Darren Rowse, Chalene Johnson, Shaun McBride, Joel Comm, Zach King, Marcus Sheridan, Pat Flynn.

A lot of these people are like literally the dudes or dudettes in their space, like the top of the top, Cliff Ravenscraft, so because I just developed relationships with these guys over years and they are all like the kings and the queens of their space. As a result whether they promote for us or not they are known entities, which helps sell tickets because a lot of people are like I want to meet that person.

Steve: Yeah that’s amazing, so if I can just summarize your strategy it’s just being a cool guy, establishing relationships, and just helping each other, right?

Michael: Yeah and I’ll tell you one more thing, another way we make money on the conference that a lot of people don’t realize is we also sell virtual tickets for people that can’t travel, and it’s because – remember I mentioned how we started with online events, so we already had all the knowhow and systems in place to know how to capture all the recordings of all the sessions.

So we sell those recordings and we have thousands of people that purchase virtual tickets, and that really is getting the access to almost 140 keynotes and breakout sessions and panels and workshops after the whole thing is over with. So there is a whole another revenue stream that we have that’s coming in on the virtual ticket front.

Steve: So the listeners out there, the back story between this conversation is Mike has been trying to convince me to sell virtual tickets before the tickets are sold out, and so I’m going to just blindly take his advice and give it a try very soon.

Michael: It’s really, really great because in our case it’s significantly less costly for the virtual ticket than it is for physical ticket, and on top of that when you don’t have – because like here’s the deal, a lot of people would love to come but they just can’t afford to travel, and they can’t afford to buy a ticket, but they might be willing to pay just to get to the content, and that’s always been the core. And we’re also getting in — you’ll be excited to hear merchandising too, so we had t-shirts.

So last year we started selling t-shirts, this year we’re going to probably introduce a new t-shirt every year, so we’ll have two different t-shirt designs that we sell on site and eventually I’d love to get in the baseball caps and all that kind of stuff. So that’s not going to be a huge chunk of revenue, but merchandising is part of our future too.
Steve: That’s cool, that’s good to know. Hey Mike we’ve been chatting for quite a while, I want to be respectful of your time, where can people find more about Social Media Marketing World?

Michael: You can visit Socialmediaworld17.com, or you can just Google it or you can go to Social Media Examiner and check it out.

Steve: And where can people find you online?

Michael: If you have room in your podcast listening, my podcast is called Social Media Marketing and there I produce really rich content every single week, and then on Twitter I’m Mike_Stelzner, or you can just Google my name and I’m pretty much everywhere.

Steve: Cool, well Mike thanks a lot for coming on the show; I really appreciate your coming.

Michael: All my pleasure Steve.

Steve: All right take care.

Hope you enjoyed that episode. Now I’m actually going to be speaking at Mike’s conference Social Media Marketing World next month, so if you want to meet up, join me in sunny San Diego. For more information about this episode, go to mywifequitherjob.com/episode151.

And once again I want to thank privy.com for sponsoring this episode. Now Privy is the email capture provider that I personally use to turn visitors into email subscribers, therefore email capture, exit intent, and site targeting tools to make it supper simple as well. I like Privy because it is so powerful and you can basically trigger custom pop ups for any primer that is closely tied to your ecommerce store. So if you want to give it a try it’s free, so head on over to privy.com/mywifequitherjob, and that’s spelled P-R-I-V-Y.com/mywifequitherjob.

I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all these sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/Klaviyo, and that’s spelled K-L-A-V-I-Y-O.

Now I talk about how I use all these tools on my blog, and if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away via email, thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

150: How My Student Abby Makes 100K/Month Selling High Heel Insoles Online

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150: How My Student Abby Makes 100K/Month Selling High Heel Insoles Online

Abby Walker is a student in my Create A Profitable Online Store Course and I’m really happy to have her on the show today. Abby runs VivianLou.com where she sells insoles for high heels.

What I love about Abby is that she never takes no for an answer and finds opportunities from out of nowhere. Some might call it luck, but I believe that everyone is in charge of their own fate. She’s doing awesome and she’s not even on Amazon yet!

Enjoy the interview as there are a lot of details that Abby shares that will motivate you.

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What You’ll Learn

  • How Abby found her niche
  • How Abby sources her products
  • The details behind being featured on HSN
  • What it’s like to be on Oprah
  • How her Facebook ads return a ridiculously high ROI

Other Resources And Books

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Transcript

Steve: You are listening to the My Wife Quit her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not with their businesses. I’m Steve Chou and today we’re talking to Abby Walker, a student in my “Create a profitable online store,” course who is killing it online. She runs the site vivianlou.com, where she sells insoles to alleviate the pain from wearing high heels.

But before we begin I want to give a quick shout out to Privy who is a sponsor of the show. Now I’m super excited to talk about Privy, because I use and rely on Privy to build my email list for both my blog and my online store. Now what does Privy do? Privy is an email list growth platform, and they manage all of my email capture forms, in fact I use Privy hand in hand with my email marketing provider.

Now there are a bunch of companies out there that will manage your email capture forms, but I personally like Privy because they specialize in ecommerce stores. Now Privy is easily the most powerful platform that I’ve ever used, and you can trigger sign up forms based on any primer that you desire. So for example let’s say you offer free shipping for orders over $100, well you can tell Privy to flash a popup when the customer has $90 in their shopping cart to urge them to insert one more item.

Here’s another cool use case, if someone has item A in their shopping cart, I can easily tell Privy to display a unique and special coupon code for that item or to display a related item or offer. In terms of email capture, right now I’m showing a different email lead magnet depending on what product a customer is browsing in our shop.

So bottom line Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/steve, that’s P-R-I-V-Y.com/steve, and try it for free, and if you decide you need the more advanced features, use coupon code MWQHJ for 15% off. Once again that’s privy.com/steve.

I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. Now I’m also blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my ecommerce store, and I actually depend on Klaviyo for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another email marketing provider. Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought which makes it extremely powerful. So let’s say I want to send an email out to everyone who purchased a red handkerchief in the last week, done. Let’s say I want to set up a special autoresponder sequence to my customers depending on what they purchased, piece of cake, and there’s full revenue tracking on every single email.

Now Klaviyo is the most powerful email platform that I’ve ever used and you can try them for free at mywifequitherjob.com/Klaviyo. Once again that’s mywifequitherjob.com/Klaviyo and that’s spelled K-L-A-V-I-Y-O. Now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast, today I’m really happy to have Abby Walker on the show. Now Abby is actually a student in my “Create a profitable online store” course. She joined over a year ago and she’s been doing amazing with her business Vivianlou.com. Vivian Lou sells special insoles that allow you to wear high heels four times longer without any pain, which is actually a major pain point that a lot of women have.

Recently she was featured in Oprah magazine and on the View and in October alone she closed with six figures in sales. Anyway today we’re going to dig deep and find out how Abby came up with the design and how she managed to get the word out about her insoles. And with that welcome to the show Abby, how are you doing today?

Abby: Very good, thank you so much for having me on.

Steve: So Abby I was just curious, I mean both the name of your store and your product are a little bit random, so how did you get leads for your online store and the name?

Abby: Sure so I’ll just go back from the beginning, because I honestly stumbled across this product as I was kind of just a random question I asked. So my story starts actually in 2001, so I was fresh out of college, working in down town Chicago and I fell in love with high heels. I was struggling to find a niche in the workplace, and I worked with these women who had beautiful hair and beautiful jewelry and beautiful clothes.
I was like how do I find my niche in the workplace and still move across a pair of high heels that I absolutely loved and forever kind of changed my course. I was in the corporate world, corporate communications world forever, but had really always loved high heels and wearing high heels. So in 2012 I decided to start a blog, and this blog was actually the platform for me starting my online business but in a roundabout kind of way.

So I launched this blog called Mama’s Shoes and I worked on that honestly off and on for about two years. In January 2014 I wrote a blog post about foot sprays that were designed to alleviate pain and reduce inflammation for women who wear high heels. And I felt these products were phenomenal in concept, but at the time I worked for a company that manufactured holistic supplements, and so I was really attuned to the ingredients that were put into beauty products and over the counter products.

Some of these products had Lidocaine which is a numbing agent that then [inaudible 00:05:46].

Steve: Okay.

Abby: And so in my mind I was like, well great concept but if you wear high heels you really probably shouldn’t numb your feet, it’s not a very good idea. So I had this great idea in January of 2014 that I was like I’m going to create my own foot spray. And I knew nothing about manufacturing, I knew nothing about formulations, I knew nothing about ingredients, but I pretty much had the courage and the curiosity to hire some folks who could help me formulate the spray.

So I hired a clinical [inaudible 00:06:21] and a naturopathic doctor to help me formulate this foot spray, and it was a phenomenal, phenomenal product. We could manufacture it on a small scale, but we couldn’t replicate the effects of the product in a large scale. So I was really frustrated, kind of broken hearted, because this business concept that I had or this product concept wasn’t taking off. But I continued to do market research as it relates to women in high heel pain, and in April 2014 I stumbled across this forum where two women were talking about this amazing insole called Insolia.

I was like why have I never heard of this, I wear high heels every day, I shop for high heels, I write a blog, why have I never heard of this product? And so I called up the CEO of the product and said, why have I never heard of this product? Long story short he sent me some samples, I tested them out, I fell in love with this product, and I offered my services to help him market this product to women.

My initial proposal was like, hey I’ll take a cut of an increase in sales, and long story short their company had pivoted out of the direct to market, or direct to consumer market. They are a company that’s really based on creating – being OM, so design insoles that are manufactured into shoes. So they really weren’t looking to grow their direct to consumer market. And so long story short after a couple of conversations, I ended up becoming the exclusive distributor of the product in the United States and Canada.

Steve: Wow, okay.

Abby: I know so it all happened because I picked up the phone and asked why have I never heard of this?

Steve: I think you skipped a bunch of steps here, so why was he willing to take a chance on you and become the sole distributor?

Abby: Honestly I have no idea, honestly I don’t know. The two gentlemen that I work with are absolutely phenomenal, they are wonderful people who are probably two of my biggest cheer leaders, and honestly I think because they are so focused on growing the Om side of things that they were willing to take a chance on me on the direct to consumer business. They weren’t doing that much of business, so it wasn’t like they were – there was a steady pace of sales, but it wasn’t significant enough to look for someone who had a tremendous background.

I think they were just really curious about how I could grow given that I am passionate about the product and I wear high heels every day. They were men to be quite honest trying to market a product to females, and so I suspect that where they were like, oh this woman came to us and said she was interested, and let’s give it a shot and see where it goes.

Steve: So they allow you to put your own brand on the product as well?

Abby: Correct they were unbranded, so it’s all branded under Vivian Lou, yeah so it’s my brand, my company and they act as pretty much my contract manufacturers and I have like as I said an exclusive arrangement with them for Canada and United States. So just a phenomenal opportunity, but I didn’t know the first thing about online sales or building a store or what I was doing, so I spent the summer of 2014 really drinking from the fire hose.

I had to look up legal entities and minimum quantities and insurance and trade mark and packaging and all of that kind of stuff. It was a crazy summer to say the least.

Steve: So why the name Vivian Lou as opposed to Abby Walker?

Abby: When I started the company, I was really looking to give the company a personality and I was reading all these articles about naming conventions and how you should have a single word and it should have an X in it and it should really capture people’s attention, and then that really sat well with me. And so one day I actually sat down and created a list of attributes of the women I would like to serve with my company.

So it was she stands tall and shines bright, she can accept the compliment with a simple thank you, she is feminine but can run with the boys, it’s just that all of these like list of attributes, and one night after dinner I was actually sitting down with my husband reading all these attributes and he was like I know someone who that describes exactly even though she may not be your target market. I’m like you’re right; it was our three year old daughter.

Steve: No way, okay.

Abby: She doesn’t wear high heels, but she embodied all of these attributes that I was describing, and so I decided to name the company after her.

Steve: Okay, that’s a big story actually.

Abby: Yeah so it’s funny because we see all this Vivian Lou everywhere and my son is like when are you going to come up with a company named after me. I’m like next company honey, next one, so yeah and one of the most things that I take most pride in is 2% of every single one of our sales goes to organizations that help women revitalize their confidence and reclaim their independence. So we support Dress for Success in the Twin Cities and the Women’s Bean Project in Denver.

Steve: Okay, so just curious with this manufacturer, are there minimums or like in the beginning were there any minimums that you had to purchase or did they just give you a bunch of products and say, hey just try to sell these.

Abby: At first I ordered the product what I call raw on box, so it just comes not packaged and it lands in my warehouse. I probably — my first order was probably 1000 insoles, so it was so tiny, my first orders were so tiny and now we have minimums in place. Now that we have a real formal exclusive arrangement, there are annual minimums in place that I have to meet, but…

Steve: But even the order of 1000 like did you know that they were going to sell ahead of time, like did you validate it before you bought 1000?

Abby: No and it’s so funny because at the time it was just kind of a side business, so I worked full time, my husband worked full time or works full time still, and he’s like this is a really hair brained idea like you don’t have any background in this, you don’t even know – so he agreed, it’s like I will give you $7500 and then that’s it, like you can do with that what you need to do to build a website, order product, get your boxes, find a fulfillment center.

So one of the things that I first did was I knew that if I were fulfilling orders out of my basement or garage, it wouldn’t go anywhere. I needed to partner with a fulfillment center right away, so that’s one thing that I did that I think helped set me up for the success where I am today, because I wasn’t scrambling to fill orders, it was all done through a fulfillment center.

Steve: Which one did you end up going with and how did you find them?

Abby: I went with a fulfillment center in Minneapolis, at the time I was in Minneapolis. It’s called King Solutions and they were great, they were honestly phenomenal, I actually love that warehouse. And I just picked up the phone and called a bunch of fulfillment centers and asked if they could fulfill orders out of Shopify. So my store is built on a Shopify platform and then you won’t have to do like all of this data transfer.

I wanted them to have an API on app that would sync into Shopify so they could pull orders out and then upload tracking information for shipping, and I was really small like I only had 1000 products offer, so none of these big warehouses were even willing to talk to me. So I was just kind of picking up the phone and doing a lot of Google searches and asking if they would be interested in taking on the small, but potentially many.

King Solutions actually took me on and phenomenal. They were a great partner and I’ve sent to move the company to Wisconsin.

Steve: Just curious like how much does it cost for them to fulfill something like a typical order?

Abby: Well so they have — there are a couple of different costs, so they actually did the assembly of my product for me. At the time my product was just in these really plain brown boxes, and so I would have then there was a cost because I would have them keep those for me in this fulfillment house. So then there was kind of a monthly storage fee, and then there is an order fee, so that can range anywhere from like 60 cents to 75 cents for an order that come in

Steve: [inaudible 00:15:28].

Abby: Then there is a pick and pack, so if an order comes in and if there are four units on that order, then you get charged per pick, and so that would be your pick and then obviously the shipping cost involved.

Steve: Okay so overall it’s a very small percentage of your cost?

Abby: Correct.

Steve: Okay, you know what’s hilarious, I didn’t know about your back story about your suppliers, so I had a bunch of questions like how you found your contract manufacturers, but it sounds like everything was just kind of serendipitous, right?

Abby: Absolutely.

Steve: They’re very reliable from a supplier stand point as well, right?

Abby: Absolutely, I mean it is like a lot – so I’ve told my story to several people and a lot of them are like they are just like divine interventions, like how this happened, why you picked up the phone, why they are willing — and it is, it’s all serendipitous like how this all came to be.

Steve: And in terms of your website did you design that yourself or did you contract?

Abby: I did.

Steve: Okay.

Abby: So my first website, so I designed – I hired a gentleman who I knew to design my logo, but then I designed the original packaging, this brown box that it came in, I designed my own Shopify website and it was embarrassing.

Steve: I didn’t think it was bad actually because it had the message, like I always look for the message as opposed to the esthetics.

Abby: Right like write up tab.

Steve: Yeah.

Abby: Yeah so I mean it was – I was extremely proud of that website just because it was all me. I had put my heart and soul into that and what not, but I quickly realized that I needed, or earlier this year I needed to kind of upgrade or…

Steve: Spice it up a little.

Abby: Level up yeah where I had the packaging and how it was being presented in the market place. So I kind of have a unique story too, and I don’t know if I should share this but…

Steve: Go for it.

Abby: I’ve actually raised the price twice.

Steve: Yeah I was going to talk about that actually, I think they are too inexpensive.
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Abby: Oh I love you, I love you. So it is so funny, okay when I first took on this product, the manufacturer had perimeters for me and I didn’t know enough of it at the time to kind of push back, but I knew that I was selling two for 19.95 and I knew that that really was positioning this product in line with the doctor soles or [inaudible 00:19:18] the doctor soles. This product is so far beyond the doctor soles product or any other insole in the market place.

The science that has gone behind it, the way it’s designed, the way it’s fitting your shoe, it’s not one size fits all. It comes in four different sizes; I mean it is so scientifically based in why it works and how it works that I knew it needed to be positioned in elevated space. But I took their guidance, and then in the summer of – oh man, I don’t know if it was the summer, but in Minneapolis I went to a free seminar talking about seven steps to increase your sales.

The woman who was putting on the seminar [inaudible 00:20:04] who is phenomenal by the way, she recommended that I double my price. She was, you’re not positioned well to sell in the market place, like you should be selling one for 19.95, and I was like I don’t know if I can do this. She’s like I challenge you to do that, do it this weekend, like don’t sit on it, just do it.

So I did it and I got two hate mails from customers, they weren’t taken aback, I think they see the value in this product, and I also offered I said for the next six months you can get it at two for 19.95 versus the one for 19.95. So that was where I ended up, but then when I re-launched the product and the branding in August of this year, I actually took it to $29 per pair, and then offered bundles, so women can get at much significant discounts if they add bundles, a bundled pair to their offer.

Steve: Yeah even that I think you can even go higher, because it’s all like such a huge need that everyone is looking for.

Abby: I know.

Steve: I didn’t notice all those doctors, like were you involved in that in getting the doctor studies and all that’s tuff or was that…?

Abby: No that had all been done before I had — yes. So I literally was handed a business, like a really viable business.

Steve: It’s really guys, anyone who is listening should just head over to viavianlou.com, it’s a really good sales page, like as soon as you land on there, you know what the value proposition is, and so Abby just did a really good job on the site. So let’s talk about the first sale, how did you get your first sale?

Abby: My first sale, again just a phenomenal opportunity, not only was I given the business; I was also given a list of women who had expressed previous interest in the product. So I was handed a list of…

Steve: Like an email list or…

Abby: Yeah like a list of emails from women who had purchased previously direct from them and all had expressed an interest. So I started there just reaching out, sending out notes to women saying, “Hello, you may have purchased this before from Insolia, but now I’m the authorized distributor in the United States and Canada. I would like to offer it to you at a discount, can I get you on my email list yadi yadi yadi yada.” That’s really how it started generating sales.

Then it was just kind of word of mouth. I was doing some Google advertising and some really minimal advertising on Facebook myself, but that wasn’t generating much traffic. So in early 2015 I was doing five sales a day, and so it was still kind of a hobby, and it was frustrating because I knew the potential for this product was huge and I was really struggling with how to get it off the ground. I kept it that way throughout much of 2015, and then my brother in law who works for Kohl’s department store, he works in their corporate headquarters, he had actually gone to a conference in New York City about the future of retail.

I happened to be staying at their house and I was driving my kids to Michigan in August of 2015 and he had just come back from the conference, so we were sitting down just talking about what he had learned. He had said there was this great store in New York City called Story, and the woman who runs it called Rachel Shechtman, named Rachel Shechtman, she’s trying to change the face of retail and she has this store where she tears it down every like four to eight weeks, and rebuilds it as a different “Story.”

Her retail store operates like a magazine where every month or so it’s torn down and it comes up with a new theme. I had signed up for her newsletter because I thought that concept was brilliant and I was like maybe one day my product would fit into one of her stories. Two weeks later I got an email saying that she was hosting a pitch night, and these pitch nights typically are designed for artisans and local business owners in New York City, but because I was on her mailing list, I was like why not me.

So I actually applied to attend a pitch night in September and I was actually one of 34 folks who were accepted to come pitch. So September 16 last year I flew to new York City and pitched my product to Rachel Shechtman. Well she also had there Middy Grossman who is the CEO of HSN. So I was scared out of my mind but I pitched my product, and half way I had 3 minutes to pitch and half way through the pitch Middy Grossman took off her Christian Louboutins and was like put them in, if they say what you say they can do, put them in my shoe.

I was like you realize these are permanent placement insoles, like I can’t take them out once I put them in, and she goes let’s do this. And she stood up, and she’s like where have these been all my life. And you have three minutes and no one commits to anything, and Rachel is yelling out I’d like to have these in our home for the holiday Story, your head is just spinning.
So I left that night not knowing anything, I was great, Middy loved them, Rachel clearly thought they were neat, but there was no commitment.

So literally I said like a silent wish, every morning I was like please HSN call, please HSN call and sure enough a week later I get a phone call from HSN saying that Middy Grossman had dropped off the product, and wanted to test it on a show.

Steve: This is crazy, okay.

Abby: It is, I mean it’s just crazy. And so I was fast tracked through HSN like QA and legal process because they were trying to get – when I originally talked to HSN, they were hoping to get the product done during the Easter time frame which is a big push for them, but I got a call in November saying that they were trying to get it on I thought as a product wrap up bought like product introduction on January 4th. So I had to re-kit the product, so they were selling them as a two pack so we had to buy suffocation bags and HSN only UPCs and have my warehouse get all this new product.

So we were able to get that done and ship it off to HSN in December in time for this January 4th show. And ironically we had gone to New York City over the holidays and I had run in Rachel Shechtman, because we went to see the product in the store, and she goes, “Oh well you must be going on air on January 4th.” And I was like, no it’s just a product wrap up, she goes, “That’s odd,” she’s like typically you’ll be going on air.

And so I left the store that day, and I was like oh no, oh no. I’m like but I’m not going to think about it because I haven’t been contacted, and sure enough I went back to my in law’s house that night and I got an email from Rachel saying, “You haven’t filled out your HSN profile like on air personality profile. I was like, oh no, so literally it was a week I didn’t eat or sleep or do anything for a week. I was so nervous but I was on air on January 4th.

Steve: Oh you actually went on the show?

Abby: Yeah it’s like actually I did go on air, so I went and I flew down the day before and they do all these like tests. I had to wear ear pieces and they were telling me like look at camera five, look at camera four, meanwhile you are trying to have this conversation, so it was just crazy. But I sold out on January 4th and then…

Steve: On HSN, what are the terms in terms of like financial?

Abby: Sure so it varies. They actually place POs [ph] with me, so they place POs and then there are different ways to fulfill that product, so you can either drop ship directly from your warehouse or you can send it to one of their central warehouses and they can handle all the fulfillment, the customer service and all of that kind of stuff. They were getting it at a price point that it didn’t make sense for me to handle all the fulfillment and the customer service.

Through our negotiations, I just send them all the products and they handle all of the fulfillment and customer service side of things.

Steve: Are you willing to reveal like how much they take of the cake?

Abby: Sure, they take upwards of 60%.

Steve: Okay, it’s not horrible, okay.

Abby: It’s not horrible but they were selling two for one, so it was on top of an already 50%.

Steve: Oh I see, got it.

Abby: Yeah but the way I looked at it is I was making money, it wasn’t a lot but I was making money per unit sold, and the way I looked at it I was making money to advertise, because it was a great advertising opportunity. So even though it wasn’t a great financial position for me, how can you say no to an opportunity like that?

Steve: Do you get the [inaudible 00:29:03] as well like email address?

Abby: No, no, no, no, so they keep all that stuff, so they keep that really close to their vest, they don’t reveal that kind of stuff. So I went back on, on March 7th or 17th and sold out again, I went back on April 4th and sold out again.

Steve: Can we get an idea of like how many units we’re talking about here?

Abby: Sure so it was between – they varied, but it was like 1200 units or 1200 two packs.

Steve: Okay in like a span of like an hour or something like that?

Abby: Ten minutes.

Steve: Ten minutes, good lord.

Abby: Yeah, so I went back in April of this year, I’m like Bill my husband, I was like if I can prove that market and this product – there is a market in HSN which is such kind of a microcosm of — it’s such like a unique viewer audience. I’m like if it can sell out in ten minutes three times consecutively for this audience, there has to be an opportunity for me to blow this up across all of United States and Canada and make it a truly, truly viable business.

So in April I convinced him to let me jump in, so I quit my full time job and have been focusing on this only since May of this year. So in May I was invited back kind of as alumni to the pitch night in Story for the Story store in New York City, and that night I happened to meet Adam Glassman who is the creative director for Oprah Magazine.

So that night I kind of shot at my back, she’s like this is a great product, but your box – your packaging just doesn’t kind of scream what it does, and Rachel Shechtman was like, “Yeah if you want this to be in retail stores, you might want to rethink your packaging,” and all this kind of stuff. So just a great opportunity to talk to people who know the business and I did have to take a step back and do like what do I want this to look like, how do I want this to resonate in the market space if I can’t show case it on a website, how do I want this to sit on a retail shop?

I took my cue from Spanx, so I loved how Spanx disrupted the hosiery market place, and I loved how bold and bright and red and colorful they were. So I took my lead from them and spent this past summer redesigning my packaging, then in June I was notified that I was going to be in the September issue of Oprah Magazine.

Steve: Crazy.

Abby: At the time so it was June and at the time it was going to be on the show, or the September issue so it was going to be on the newsstands in August when they had asked for my price point was, and I was like this is the time to make a commitment, because it was going to be in print. So I can either go with my existing price point of 19.95 or I can go with my elevated price point of $29, and so I just on the phone I was like this is it, it’s going to be $29. And so she’s like, okay that’s what is going to go on print.
I was like oh man, so I had to redo the website, I had to redo the packaging, I had to get everything set for first week of August when that issue hit the newsstands.

Steve: What was the effect of the issue on sales?

Abby: Say that again.

Steve: What was the effect of being in that magazine on sales exactly?

Abby: Minimal to be quite honest.

Steve: Really, interesting.

Abby: Yeah so I had – and I think because it was print, so maybe if it would have been an online article, and I was mentioned in the online article, but if it was – so I’ve also been featured in Real Simple but it was an online, it was realsimple.com not their print publication, and I’ve gotten significantly more traffic and sales from that feature than I have from being in Oprah, the print magazine.

But it’s phenomenal, I mean it’s just such an honor to say that you’ve been featured in Oprah Magazine what not, but sales ironically didn’t jump too much. They jumped for sure the first week it hit the newsstands, but it wasn’t sustainable, it wasn’t a sustainable development.

Steve: It has been our experience as well. Actually we were on Real Simple as well and just like a tiny little spike, but in general all the other magazines that we’ve been in also there is never like a huge spike compared to like being on TV for example.

I just want to let you know that tickets for the 2017 Sellers Summit are now on sale at sellerssummit.com. Now what is the Sellers Summit? It is the conference that I hold every year that specifically targets ecommerce entrepreneurs selling physical products online. And unlike other events that focus on inspirational stories and high level BS, mine is a curriculum based conference, where you will leave with practical and actionable strategies specifically for an ecommerce business.

In fact every speaker that I invite is deep in the trenches of their ecommerce business, entrepreneurs who are importing large quantities of physical goods, and not some high level guys who are overseeing their companies at 50,000 feet. The other thing I can also assure you is that the Sellers Summit will be small and intimate. Last year we cut off ticket sales at around 100 people, so this event will sell out quickly.

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So the Sellers summit is going to be held in Fort Lauderdale, Florida from May 18th to May 20th, and for more information you can go to sellersummit.com, once again that’s sellerssummit.com or just Google it, now back to the show.

Abby: Right so speaking of TV, so in July, so in June I was notified I would be in Oprah Magazine and then in July I was notified that Adam Glassman had selected our products as one of six products to be featured on a special view your deal Oprah version on the view. So the view hosts these flash sales, these two day flash sales called view your deal where they offer products at a 50% discount but only for two days.

That was a phenomenal opportunity that I was notified in July, so I had to get ready for that as well. So July 28 my new packaging was done, the first week of August I launched the new website, and then I was doing six orders a day like average five to six orders a day in August of this year. And then I started playing around with Facebook ads and had landed on one that was converting significantly really, really well and so I was doing 75 orders a day.

Steve: Let’s back track a little bit, so the view have you gone already?

Abby: Correct yeah.

Steve: [inaudible 00:36:35].

Abby: So yes so I was averaging 75 orders a day in September and then the end of September I went on the view, so the view was at the end of September, it was 26th and 27th were the flash sale days, and I did 2565 orders in one day.

Steve: That’s crazy.

Abby: It was insane, it was funny because my new warehouse actually they have these display monitors throughout their offices, and so they had put up my order systems on their display, so everyone in the office was like, oh my god she just hit 500 sales, oh my god she just hit 1000. They kept calling me being like do you know what you just hit, I’m like yes. Honestly I had to lay down twice that day because I thought I was going to pass out.

Steve: What were the terms for being on the view, do they take like a similar percentage as HSN?

Abby: No, so the view it’s interesting so they set up and I don’t know how much I can share or should share, but they set up their own Shopify site, so it’s kind of a flash sale on their terms. So I offered it at 50% offer for retail, and then they took a percentage just for keeping me on the show, and I’m not going to reveal what the percentage is. They take a percentage of kind of having me on the show.

Steve: Okay but before then you had already expanded your sales 10X with Facebook ads, so let’s talk about that Facebook campaign that’s been killing it for you. What does the ad copy look like and what does the landing page look like?

Abby: Sure, I don’t have a landing page; I just drive them to my home page.

Steve: Well your home page is like a sales page.

Abby: It is kind of a sales page, yes so it’s designed kind of as a sales page, but I have two ads that are converting extremely well and if you notice the – it’s the shoe graphic that I have on my home page, that kind of hero image when you first land. So it’s those pairs of shoes and then honestly underneath I just have wear high heels four times longer without pain, that’s the graphic.

Then the text on top says something like love high heels but hate the pain, we have a product that will forever change the way you wear high heels, and then the headline underneath it is just Vivian Lou Insolia with shifting insoles. So it’s a very, very basic ad that happens to be converting extremely well for me.

Steve: Can we talk about retargeting and what are the parameters that you use to target your ads?

Abby: Sure so the only parameters I have set up for those series of ads, it has to be a woman in the United States who speaks English, who has an interest in shopping and is 38 years old or older.

Steve: Interesting, so how did you come up with 38 years old or older?

Abby: Based on demographics, so the gentleman from Insolia had done a demographic study, and the women who purchase my shoes tend to skew older, and I think women who buy high heels when they are younger either have more tolerance for pain or at a $29 price point they would rather put that toward a new pair of shoes versus buying an insole to put into an existing pair of shoes.

Early on I tested Facebook ads skewing younger and then skewing older and the age that skews older tends to purchase significantly more than the younger age group.

Steve: So are you still marketing to the younger curve or did you just turn that off?

Abby: No, I turned it off all together.

Steve: Okay and in terms of – like you’re saying it’s killing it, like can I just get an idea what your conversion rate is on these ads and how much you’re paying per click?

Abby: Sure, I wish I had my…

Steve: It doesn’t have to be exact, like just what [inaudible 00:40:36].

Abby: Okay, let’s just say I am 6exing my daily spend.

Steve: Oh in terms of — okay so you’re making 6X?

Abby: Each of the profitability, so what I spend on my Facebook ads daily, I make like 6X daily.

Steve: That’s awesome, and so once you found out that it was working, you just scaled it up, right?

Abby: I scaled it up yup, and it’s crazy how if you raise it by $50 or lower by $50, it completely impacts and it varies, on a day it can vary 5X to 6X but that’s consistent by how much I spend a day. So if I’m running short on inventory which I did after the view, I had no idea how crazy that would take off, I ramped down my Facebook ad spend because I didn’t want more orders until I could get inventory, I didn’t want to go out of inventory and so I really scaled back.

Then sure enough my orders went – I was seeing much smaller order numbers come through. One of the things that is crazy to me is that Facebook can have such a profound impact and it is so true, but I also don’t want to rest on my roles, because I know Facebook algorithms could change or whatever the case may be, it could go away tomorrow.

So some of the things I’m focusing on like today is I only make five sales a day through Amazon and I’m not doing Amazon FBA and so to build my Amazon business, to also open up an amazon.ca. So I’m not even advertising to women in Canada right now which is a huge lost market. I’m in talks to open up a warehouse in a fulfillment center in Canada as well so that all of my inventory to amazon.ca, and to Canadian customers are fulfilled through Toronto.

Steve: Just curious, when you’re scaling your Facebook ads, how did you know how high to scale it to, like how high did it get and why did you stop there?

Abby: I’m at $500 a day averaging kind of $500 a day right now and that varies depending on what my inventory looks like. Now I will tell you I’m much higher than 6X since Friday based on Instagram ads that have taken off, and I’m still only spending $500 a day but it’s crazy.

Steve: So why 500, why not like 1000?

Abby: Because I don’t have confidence in my fulfillment center right now to process that many orders, so I’m in the process of looking for a new fulfillment center, one that has the capability to do very large quantities of pick, and pack orders in a single day.

Steve: So I was going to ask you this also, you mentioned like your Instagram ads recently took off, do you know why that happened or do you have any idea – were you just running like ads on all the Facebook platforms and then all of a sudden Instagram took off?

Abby: My initial two ads, the ones that’s been driving the majority of the traffic, when I initially set them up. I set them up to just run in the Facebook newsfeed and on Instagram, and I have not touched those ads except for ramping up and down spend since the end of September, and I have no idea why Friday these Instagram ads have taken off.

So last week ironically I engaged an agency that is like a pay per click agency, and so I sent them a note this morning asking them if they could look into why all of a sudden Instagram has taken off because I had no explanation for it.

Steve: And we forgot to talk about the other ad, how is the other ad different from the one we already talked about?

Abby: The other ad is just one of the skews, it’s one of the red pairs of high heels that’s in the other ad, and it says something like high heels without the hurt is what it says in the copy on the ad, and then it’s just the same intro text up top, so again like love high heels? Hate pain? And then just the name of the product, and the headline down below.

Steve: Is it the same audience that you’re driving…

Abby: Same audience.

Steve: So it’s just a different variation of the same thing, otherwise the landing page, everything is identical?

Abby: Yes and I spend between $4 and $5 per conversion…

Steve: That’s crazy.

Abby: Without the ad I know.

Steve: And we were talking about this before the interview recorded, but she is not doing any retargeting yet, I think you’re doing minimal email marketing right now too, right?

Abby: Minimal.

Steve: So like there’s all these things that you can totally blow this up with which really excites me actually, like you’re just at the tip of the iceberg right now.

Abby: I am, and I’m quickly becoming overwhelmed which is a phenomenal problem to have, so looking for customer service help and those sorts of things, but yes the potential for this product to kick off is huge, and I really need to focus on growing this out. I’m hoping I’ll be able to in three weeks once we figure out the fulfillment center situation.

Steve: So let’s talk a little bit about, let’s [inaudible 00:46:35] the listeners a little bit, so what were some of your biggest challenges in starting your store, how did you overcome them and how hard was it for you to get started and what general advice would you give them?

Abby: Oh man, the hardest part for me getting started was not knowing anything, so your course was a phenomenal help, I mean even just hearing from others who had gone through the same thing or taking and keep away from this article or keep away from that article, it’s just a tremendous help.

I think my one tip I have is don’t be afraid to admit that you don’t know anything and rely on folks who do know what they’re doing. It was a huge learning process and still is for me, I dove in not knowing much about HTML, but learning it quickly to try and get my photos to become the right size on a Shopify platform to asking help in understanding a contract when it comes to either your fulfillment center or becoming an exclusive distributor.

There was just so much to learn, but I loved that part of it, so while it was a challenge, it was also really rewarding that I admitted that I didn’t know what I was doing but I was okay with that and I wasn’t shy to ask a lot of questions.

Steve: It’s amazing, I mean one thing I like about your story is that you’re a go getter right, I mean you called the distributor and you…

Abby: Yeah.

Steve: Then you decided to go to New York to join this group and that got you an Oprah and the view and HSN.

Abby: You’re right.

Steve: And fulfillment houses you went out and you just got one who was willing to work with you despite the small quantities. I mean that’s – what it really comes down to is doing the leg work and willing to do the work, right?

Abby: Yeah and having fun, I mean there are often times you can get bogged down in such minute details, and I think at the end of the day being able, one to like kind of laugh at yourself and say this is just a learning curve, this is just part of the journey is really helpful. And then two, I would say this may be my biggest tip and I don’t know where I heard this, but don’t compare your beginning to someone else’s middle. So when you look at where you want to be or how you want to be set up and that’s why I was kind of so embarrassed at my first version of my website…

Steve: I thought it was great, you remember this conversation, I thought it was great.

Abby: Yeah I do, I do and you were like don’t change it, it looks great, people know what they’re getting. But yeah so don’t compare your beginning to someone else’s middle and that I think is critical, and it’s all journey and I’m so thankful, so incredibly thankful for all the people who have given me this opportunity and given me their time to share their wisdom on how to move forward.

Steve: That’s awesome Abby, well you know I really appreciate you coming on the show, I think your story is really inspirational, I think the listeners will get a whole lot out of it.

Abby: Oh thank you.

Steve: Thanks again Abby, oh and I always end, so where can people find your products, I didn’t spell your URL?

Abby: On my website at vivianlou.com, V-I-V-I-A-N-L-O-U.C-O-M.

Steve: Yes and anyone who has heel pain or high heel pain should definitely go check it out, I will be getting a set for my wife for sure.

Abby: Awesome, excellent.

Steve: Thanks a lot for coming on Abby, take care.

Abby: Thank you.

Steve: Hope you enjoyed that episode. As you can probably tell Abby is an amazingly driven woman and her success is a direct result of her hard work and tenacity, so congrats Abby. For more information about this episode, go to mywifequitherjob.com/episode150.

Once again I want to thank klaviyo.com for sponsoring this episode. Klaviyo is my email marketing platform of choice for ecommerce merchants, and you can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all of these sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/Klaviyo, that’s K-L-A-V-I-Y-O, and once again that’s mywifequitherjob.com/Klaviyo.

I also want to thank privy.com for sponsoring this episode. Now Privy is the email capture provider that I personally use to turn visitors into email subscribers, therefore email capture, exit intent, and site targeting tools to make it supper simple as well. I like Privy because it is so powerful and you can basically trigger custom pop ups for any primer that is closely tied to your ecommerce store. So if you want to give it a try it’s free, so head on over to privy.com/steve. Once again that’s privy.com/steve.

Now I talk about how I use these tools on my blog, and if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away via email, thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

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149: How To Make 6 Figures Selling Jewelry Online With Tracy Matthews

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149: How To Make 6 Figures Selling Jewelry Online With Tracy Matthews

Today, I’m thrilled to have Tracy Matthews on the show. Tracy is someone who I was introduced to by Andreea Ayers and she runs the popular site Flourish Thrive Academy where she teaches others how to sell jewelry online.

Tracy has a ton of experience in this area and her jewelry line was sold in over 350 retail outlets all over the globe (ABC home, Sundance Catalog, Bloomingdales, Anthro) and she’s been featured in many magazines like Real Simple, InStyle And lucky magazine.

Anyway, since Tracy specializes in jewelry sales I am very eager to pick her brain on tactics specific to the jewelry niche

What You’ll Learn

  • How to stand out in the jewelry niche.
  • Should you sell on Etsy or your own site.
  • How to drive traffic to a jewelry site
  • How to be successful selling jewelry.
  • How to sell jewelry wholesale
  • The best marketplaces to sell jewelry.

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
Klaviyo

Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
Privy

ReferralCandy.com – If you’re already getting steady orders every month, adding a refer-a-friend program to your store can give you a new sales channel. And ReferralCandy is the best in the business. Click here and get a FREE $50 credit towards your account.
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SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

EpisodeTracy
Steve: You are listening to the My Wife Quit her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not with their businesses. Today I have Tracy Matthews of Flourish Thrive Academy who specializes in teaching others how to sell jewelry online, but before we begin I want to give a quick shout out to Klaviyo who is a sponsor of the show.

Now I’m always super excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I actually depend on Klaviyo for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another email provider. Well Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here’s why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought which makes it extremely powerful. So let’s say I want to send an email to everyone who purchased a red handkerchief in the store in the last week, easy. Let’s say I want to set up a special autoresponder sequence to my customers depending on what they purchased, piece of cake, and there’s actually full revenue tracking on every single email.

Klaviyo is the most powerful email platform that I have ever used and you can actually try them for free at mywifequitherjob.com/Klaviyo, and that’s spelled K-L-A-V-I-Y-O, so once again that’s mywifequitherjob.com/Klaviyo.

I also want to give a shout out to Privy who is also a sponsor of the show. Now what’s cool is I also use and rely on Privy for both my blog and my online store. So what does Privy do? Privy is an email list growth platform, and they actually manage all of my email capture forms, and in fact I use Privy hand in hand with Klaviyo.

Now there is a bunch of companies out there that will manage your email capture forms, but here is why I like and chose Privy. So Privy is easily the most powerful platform that I’ve ever used, and you can trigger sign up forms based on any primer that you desire. So let’s say you offer free shipping for orders over $100, well you can tell Privy to flash a popup when a customer has 90 bucks in their shopping cart to urge them to insert one more item.

Here’s another cool use case, if someone has item A in their shopping cart, I can easily tell Privy to display a special coupon code for that item or to display a related item or offer. In terms of email capture, I’m showing a different email lead magnet depending on what product a customer is browsing in our shop.

So bottom line Privy allows me to turn visitors into email subscribers, which I then feed to Klaviyo to close the sale. So head on over to Privy.com/steve and try it for free, and if you decide you need the more advanced features, use coupon code MWQHJ for 15% off. So once again that’s privy.com/steve, now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast, today I’m thrilled to have Tracy Matthews on the show. Now Tracy is someone who I was introduced to by Andrea Ares and she runs the popular site flourishthriveacademy.com, where she teaches others how to sell jewelry online. Now Tracy has a ton of experience in this area and her jewelry line was sold in over 350 retail outlets all over the globe including ABC Home, Sundance Catalog, Bloomingdales, and she’s been featured in many magazines like Real Simple, InStyle and Lucky magazine.

Now in my create a profitable online store course, there are several students selling jewelry to varying degrees of success, and to be honest I think that selling jewelry is not one of my most recommended niches, because it is so competitive and you really have to market yourself well to stand out. But since Tracy specialized in jewellery sales and she is very successful at it, I’m very eager to pick her brain on tactics specifically for the jewelry niche. And with that welcome to the show Tracy, how are you doing today?

Tracy: I’m doing great, thanks for having me Steve.

Steve: So give us the quick background at how you got into ecommerce and specifically jewelry?

Tracy: Okay so back in the olden days when I was in college, I took a jewelry making class as an elective, and I knew that – probably a couple of months into
that class that this is what I was going to do for a career. The independent jewelry seen in the early 90s were just sort of emerging, and I was working in a lot of boutiques and specialty stores at the time, working in retail and I just loved the idea of selling my jewelry in the store.

So fast forward a couple of years later I launched my business full time, I worked from a part time business to full time business and started selling to stores. So back in those days, selling to retail stores was pretty much the only way you could have a jewelry business, the internet wasn’t really around. I remember when I started my company, this is so embarrassing back in 1998, I don’t think I even had an email address; we used to fax in phone in order to communicate.

Steve: Wow, okay.

Tracy: Which I felt was pretty crazy. So fast forward a couple of years later ecommerce started coming around, and I started my first ecommerce website for my company at that time Tracy Matthews Designs. Ecommerce at that was really just like a secondary part of our business because still 95% of the business came from wholesale. So I closed that business down in 2010 to start anew direction doing custom work and selling jewelry to private clients, and I knew when I started this new business model because it was so different and working directly with clients that I was going to be meeting a lot of people online.

In fact 50% of my leads come from people just finding me through organic search on Google. So I knew that a lot had to change, I had to change the way that I was showing up in my business, I had to change the way that I was branding myself and I also had to change the way that I was communicating on my website if I wanted people who were just finding me randomly who didn’t know who the heck I was to actually fill out that form and move to the next set.

So that’s sort of my journey into the jewelry industry and I had an ecommerce site for many years, I’m going to be probably eventually launching a ready to wear bridal line which will have an ecommerce aspect in it, but I also teach thousands of jewelry designers how to create rounds online and also have successful ecommerce stores.

Steve: Yeah absolutely and we’re definitely going to talk about that. I‘m just curious just hearing your story why did you start the wholesale business in favor of more I guess you wanted interaction with your clients?

Tracy: That is a great question. I’ll try to make the story short; it’s kind of a long story. I had been in wholesale for about 11 years at that time, something like that before I closed the business. I don’t know if you remember 2008, but it was a very tumultuous time in the economy.

Steve: Yes it was, yeah.

Tracy: And quite honestly it was a combination of factors. I’d been in the industry for a long time, the face of wholesale was changing at that particular time, and the type of jewelry that I design was very personal, kind of [inaudible 00:07:31] and the trend in the market was kind of going more towards big and bold and cheap and chick at that time because people didn’t have as much expendable income to spend.

So the middle market was starting to close and I did have a fine jewelry line that time that was starting to become successful, I started shipping to a bunch of stores. Some of my best accounts were picking it up which is great kind of moving it to that new direction that my business was evolving into.

Then 2008 I started getting bankruptcy notices from some of these companies in the mail which for anyone who has a forward based business who is shipping lots of volume like a thousand units at a time or sometimes $100,000 orders it can be quite detrimental if you don’t get paid on time for your cash flow, or when people tell you that they are pretty much not going to pay you.

So I was faced with a choice, do I stay open or do I change directions? I lost my passion for wholesale at that time, and I was working with business consulting, I highly recommend getting consultants serve you in your business, I think that was the best decision I’d ever made, I actually made it too late. But working with this business consultant slowly helped me pull out what it is that I love to do and he kept asking me these questions to do with me, like what is it that you love, what do you love about this business, what do you hate about this business, where do you see yourself?

And I’m like I really miss the interaction with the clients and I missed that, I missed the designing part, I missed this creative process piece and I missed having a personal connection. And so we kind of worked shop together and I’ve been doing fine jewelry for a while, and I had designed my first engagement ring a couple of years into my fine jewelry line, and I realized that that’s sort of the direction I wanted to go in, and it was like feeding my soul. So I think that it was just an opportunity for me to kind of reinvent and have my small successful business.

Steve: Would you just say that if you wanted to go into jewelry today, you should just go to the extreme either like really fine jewelry or less expensive jewelry as opposed to that middle ground?

Tracy: That’s a great question; it depends on what you’re trying to do. I’m not really a huge fun of people like under pricing jewelry or importing jewelry from China and trying to have a jewelry brand, I mean like everyone is doing that. What we really do is we try to get people to position themselves from their brand.
It’s interesting; I was talking with a former client of mine who owns this great store the [inaudible 00:10:17].

She came and talked to our community and she was saying one of the things that drives her crazy about designers coming in is that they really don’t know who their customer is, and they end up designing for millenials but then over price their work and millenials can’t afford it, they are making things basically in a baby boomer price point. So I think when it comes to really expensive or really cheap, I think it really starts with knowing who your customer is.

If you are designing for millenials, then design in the millennial price point and work backwards so that you can do that. If you are designing for people in their 40s and 50s who have a lot of expendable income like I do, then design fine jewelry or things in a higher price point that they can actually afford. So I think that you can have a successful business in any price point, you just need to be really clear on who it is that you are targeting and what your positioning is on your brand.

Steve: Okay, I guess one of my main questions is what makes selling jewelry different than for example selling other regular retail products online?

Tracy: Well I think jewelry is a really personal purchase. There’s been a huge rise of people self purchasers these days, where they are buying jewelry for themselves to commemorate special occasions, it’s no longer just like a gift giving thing anymore even though that’s still a huge part of the market.
One of the things that I always try to do when creating different jewelry collections over the course of my career is to create things that people want to collect, and I think that’s something that’s so different about jewelry is that it’s really a collectible item, it’s something that is often passed down through the generations. Depending on the type of jewelry it is, junk costume jewelry is probably not, but my grandmother gave me some really cool costume jewelry and I love it, so maybe, you never know.

But thinking about it in terms of what is the meaning behind it, and I think jewelry is very different than other products because for instance like a sweater that you might buy on [inaudible 00:12:23] you might have like a very classic cardigan that you wear for years but like a Chinese sweater or something like that might be out of style in two years where a very personal piece of necklace you might wear for 20, 30 – it might be around for a hundred years because it’s being passed down.

Steve: Right, so how do you frame your jewelry in such a way that it makes it like a collectible, and how do you make the customer feel the meaning of your jewelry?

Tracy: I think a lot of it comes to your brand positioning; there is no doubt about it, you can literally throw a rock and hit a jewelry designer, there are so many others these days. It’s how you can position yourself and stand out and how you can share your story. So I’ll just share an experience for my personal life, my mother passed away when I was in my early 20s and if she hadn’t passed away, I probably would have never fallen into the jewelry industry, that’s a story for another day.

Because of that I had inherited some diamonds from her and other pieces of jewelry that were basically family items and these diamonds were not set. So I wanted to create something for myself that I would wear every day, so that was my first piece of earring redesign. And the way I position myself is based on my story about my mother, and I redesign a lot of family items into pieces of jewelry that people want to wear every day.

So a lot of the customers that come to me, they find me because they are maybe searching for a redesigned family earrings or something like that, they land on my website, they see my story, they go to my about page, read what I’m all about and my history and then we have strong calls to action that gets them buying to the next step.

So I think that for every designer it’s a little bit different, we work with people who do personalized jewelry, they have a different kind of story, or people who have a very formal training at GIA and they came about designing jewelry in a different way.

So I think there are so many different ways to position your jewelry business, but I think a lot of personal branding and the success of a jewelry business comes down to what it is that you stand for, the values, the prop that we call this the [inaudible 00:14:43] proposition, other people call it a unique selling proposition or an emotional selling proposition, it’s like how you are connecting with your audience to position your brand and then turning that into something maybe that is going to be something that they want to collect down the road.

Steve: Does that apply then that you have to use your own face and your own personality when selling your jewelry, or can you still create like a non personal brand?

Tracy: You definitely can create a non personal brand; I think that there are many successful brands out there who have. Some use like different types of names like a pseudo name or something like that. Most of the brands I’m going to use, they do show their face at some point, but remember this like [inaudible 00:15:30] back in the days with those really successful called King Baby, and I can’t remember the guy who owns it, but he really position himself like all the imagery on the site wasn’t really about him, it was more about the jewelry but then you find out about him when you go to the bio page. Or there is – I’m trying to think of another good example.

Steve: It sounds like story is a very strong aspect of being successful in the jewelry business?

Tracy: I think so. We have a lot of introverts or shy people, there is a lot of introverts that are very social, but there is a lot of shy introverts who are afraid to put themselves out there, and that’s fine. But I think the more that you’re able to put yourself out there, the more people want to buy from you, because that’s my personal experience at least the types of clients that I work for. There are many successful beginning and small name jewelry brands that never show their face, but they are really positioning or branding, it’s just a little bit different. But I think from a niche designer, positioning on your story and your values can be really valuable in helping you grow your business.

Steve: Okay so I know you teach a very successful class on how to start a jewelry business, so I was hoping that maybe you could just walk me through the process, like let’s say someone out there listening wants to start a jewelry business, what’s the first step? Assuming I’ve already created some jewelry, do you advice like I go on Etsy, do is start my own site, what’s the first step?

Tracy: Well it really depends on the amount of money you have to invest in it, how much time you’re willing to put in it, because there’s a lot of different ways that you can successfully run a business. You could do in person events like craft shares and craft fairs, you can set up a website which as you know and your audience should know that takes a little bit of time to get traffic to the website and to be able to build the website up.

If you want it fast you can get on Etsy as you mentioned. There were some pitfalls that come with that or you can go back and try to wholesale right away. There is a lot of different ways that you can start a business, I think the things to consider in the beginning are – we try to walk people through understanding like when they’re designing collections who their audience is which I mentioned earlier, how they’re going to be positioning their brand, so these are sort of the steps if we’re not talking about the legal steps to start a business.

Steve: Yeah not the legal steps yeah.

Tracy: And then we will talk about collection development because I think that’s a really important piece. A lot of people who fall into jewelry making or jewelry design don’t really think like a designer, they think like a maker and they just make a bunch of stuff because they like it and not think about how that ties into a merchandising perspective, which from a retail standpoint that’s like one of the number one things that buyer s are looking at.
It doesn’t matter what kind of buyer it is, whether it’s someone landing on your website for the first time, someone buying from you in personal, or someone buying from a boutique or a specialty store, how your collection merchandises together is what makes it sell.

Steve: Can we talk about that a little bit?

Tracy: Yeah, sure.

Steve: What goes into creating a collection so to speak?

Tracy: What goes in to creating, we call it collections that sell.

Steve: Yeah I don’t know anything about this so…

Tracy: There are three main aspects. If you think about a lot of successful businesses it’s like it’s pretty prevalent these days across all industries, but if you go into a fast food restaurant and you order a burger, they are always going to be trying to sell you fries with that or a full meal. So you have to be thinking like how you are building your collection around it, so you start with your signature pieces which we call the gateway pieces. They are the pieces that people – they’re probably going to be your best sellers and the things like people are always going to buy.

Then you want to build that also around your statement pieces. The statement pieces are the pieces that are bigger and bolder and it doesn’t matter if you design [inaudible 00:19:34] jewelry or supper substantial cost to your jewelry. They are the ones that really like catch the eye, so those are the pieces like if you’re displaying at show or they are in a retail case or on your website, people might go to first, but they might not always be the ones that they buy, they sort of like draw the attention in.

Then sort of round if out by the up sell or the add on item which is like a lower price point item that can be literally up sold at the end, so like maybe someone comes in and buys your middle price point necklace and then they want a pair of earrings to go with that. That’s the development around it and then as far as a price point structure level and then on top of that you have to be thinking about design, like what do you stand for as an artist, what’s your signature style, what are the key elements that are tying all the pieces in the collection together? Is it a design esthetic, is it a color story, is it how the pieces are made, or is it something else.

So it’s a combination of esthetics, I would say size, scale, structure, price point, all those things and how all that works together as a unit as a whole.

Steve: Can we use an example of one of your collections for example just to kind of fill in some of these blanks because I don’t understand all the terminology and everything.

Tracy: Absolutely, so when I was designing like foreign collections when I wholesaled, I would have like a necklace that sold really well, and it was like the best seller, I’m trying to think of the name of it, I was going to use the name, I will call the Shonti [ph] necklace. I used to teach yoga, so a lot of my pieces were named after…

Steve: Okay so you were targeting yoga people specifically?

Tracy: Not necessarily, it was more of a fashion jewelry line, but a lot of the influences of my design were based on Indian architecture or Moroccan shapes. So it made sense that I would use those fancy names. So then I would have a similar shape to earring but maybe that was like smaller that went with that. So maybe the necklace retailed for $125 and then the earrings retailed for $50, and then when I would be merchandising I would have another necklace like let’s say on the pendant, the chain for the Shonti necklace that I’m making up right now.

It had like an element and some stones or whatever. I would have something similar to that, but let’s say instead of one element in the center of the necklace, they would be like three or four or five elements of a similar shape on like one piece, so it was like a statement piece that really stood out. Without having visuals in front of you that’s the best way I can explain it over just with my voice.

Steve: I think I can understand, so you have something that basically draws everyone’s attention and it might be more expensive or too bold for people who actually buy it, but then they buy the toned down version, is that…

Tracy: Yeah they buy the toned down version because maybe – a lot of people do buy statement jewelry obviously, there is tons of statement jewelry brands, but you want to be building collections around these three aspects. So even if you’re only selling items like let’s say you only sell bracelets and you don’t do all categories of jewelry, you would want to have a low, medium, and higher price point piece and with those scaled price points, they will be like more embellishments based on the design and price.

Steve: Can we talk about pricing a little bit, like how do you come up with your prices?

Tracy: Jewelry is very specific pricing formula I guess is the best way to put it, and there is no really one way to price, so it’s confusing. I think the one thing that people need to remember is that you need to make sure that you have your archer crossing down and that you’re changing fair market labor for the labor of the piece.

Probably the people in your audience, probably a lot of them aren’t necessarily makers, they might be people who are outsourcing jewelry design, or outsourcing the making of the jewelry, that’s great because I’m a huge believer in that because I feel like you get fair market rates. I think when people get into trouble is if they are actually making now the jewelry themselves, and they think, oh I want to make $50 or $100 an hour and they are wrapping a necklace, that’s not a fair market wage rate for that labor.

So you need to get the actual costing down of the materials and the fees and a fair market rate for the labor that’s included, and the first thing that you need to do is to be taking those same things and then marking them up to a wholesale price point. So just a basic formula because there is so much more involved in this like with over heads and how much you market at, but let’s just say you’re using a basic pretty simple formula.

You take the labor and the materials, charge that by two, that gets you to a wholesale price point, and then to get your retail you’d want to charge that number by 2.2. So let’s say we have $10 cost of material and labor, that gets you to $20, and then that will get you to I think about $50, $20 wholesale and then like $50 retail if that make sense.

Steve: So that’s interesting, so that’s like a very scientific way of pricing, and I know I just bought something for my wife from Cartier [ph], and I guarantee you that it was marked up.

Tracy: Oh my god, Cartier market are pretty more than that.

Steve: Yeah exactly, so I’m just curious like you mention like story and all that stuff that will entice people to pay more. So you had that formula that you just gave me but for the students in your class for example that have managed to gain the mind share of their follower, how does the pricing work, and can you price a lot higher?

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Tracy: You absolutely can. When I’m pricing my custom jewelry a lot of it really depends on the variables of the project, it depends on who I’m working with, return of the budget of the client and it also depends on what I like to call the pain in the ass factor, like how hard are they to work with. So I’m obviously designing something different, it’s not ready to wear and it’s custom, so there was like a lot more expensive. I try to educate my clients on the front end that you can’t compare a custom piece of jewelry to a commission piece of jewelry basically.

So something that you find in the market, there are like apples and oranges, but for people who are designing ready to wear product or ready to wear jewelry in particular, a lot of it really comes down to what I spoke about earlier on understanding who your audience is, understanding who you are designing for and then understanding what the perceived value really is on your work because a lot of things you can charge, have a lot bigger margins because people see that there is much more value there.

A lot of things can’t be marked up that much. I think Etsy has created this phenomenon of people totally under pricing their work, and it’s devastating for the jewelry industry. I think that what I really encourage designers to do and makers to do is to come up with something different, like come up with a new idea. It’s cool that you started this hobby making things and you’re turning into a business like I’m all for it, but now it’s time to appreciate even further, like what makes your designs different than everyone else’s.

So like really be pushing that design piece and then I think like communicating the value of the process and what goes into the work to your clients, I think that’s really the most important piece with pricing and being able to charge a little bit more. If you can’t successfully do that, people aren’t going to buy it.

Steve: So in your case, what would be something noble in the world of jewelry, like I obviously don’t know anything about jewelry, so like what is an example of something noble that you have done and can you kind of go through the process that you’ve conveyed to the customer?

Tracy: What do you mean by noble?

Steve: You mentioned that when you’re designing jewelry, it helps to have something that is totally unique, doing something that other people…

Tracy: Okay so like something that I’ve done?

Steve: Or anything or any of your students that have been successful.

Tracy: Well this is a good example because I think it’s really unique and very different. We had a student come through our program a couple of years ago, and she designed like centic [ph] food jewelry which was really kind of random, I’m like I don’t know who would really like to wear like centic [inaudible 00:29:20] of jewelry but she had a huge market for it.

It was a very low price point, it’s very different, I’ve never seen anything like it. I still haven’t seen anything else like it, and it was something, she sold it like more on mass, but it was something that was very different and very unique to her. So we have – I’m trying to think of someone really specific.

Steve: That’s pretty unique.

Tracy: It’s pretty unique. We have another design on our mastermind program right now J. Kerry of the [inaudible 00:29:51] and she — a lot of people do personalization, but I found this really unique, they customized latitude and longitude points for their particular stores and clients. So they’ll do like a whole range of products that are personalized just for that store based on their latitude and longitude location. So it’s great for like destination spots, vacation spots where people are buying, so I think people will be willing to reimburse a little more or something like that, you know what I’m saying?

Steve: Yeah totally, so once you have your unique aspect with your jewelry and let’s say you’ve done a really good job with your story telling and the process by which you make the jewelry, how do you actually get the buyers to come to you?

Tracy: Well yeah, that’s a great question. I think in any business especially products type businesses, unless you’re going like [inaudible 00:30:50] to like really like ninja ecommerce strategies like you do, I think it takes like really a variety of methods. For instance like my business from the beginning, I did have a huge wholesale business, I did trade shows, I met buyers; I got class and had my work on a lot of celebrities.

But it wasn’t like I started my business and that happened, that was like over the course of 11 years. It started step by step and when I was just starting out, I would do anything to get an introduction to a store owner. Like basically I really have always said that my business has grown based on my frontal, whether it be referrals, people sending their friends to your website or people providing introductions to maybe a store owner because they are friends with them.

My first store opened when a friend of mine who was from Portland, Oregon introduced me to the store owners of the amazing store called Twist [ph], and that introduction then saw another introduction that I had to this store in Francisco where I was living at the time called [inaudible 00:31:53]. Those two doors opened like a whole variety of doors for me in the wholesale world because if you were selling at those stores people found you valid.

So that becomes like sort of their system overflow and building trust, it’s like recommendation. So testimonials on your website, how other types of social proof that you’re getting, referrals from other customers and I think something that you asked like how, I think there are so many ways, that’s one way, referrals.

Steve: Let’s say I want to get into wholesale for example, what would be like the first step that you would recommend?

Tracy: Well you need to get a line sheet together and a line sheet is basically a wholesale catalog of your work. You need to have all these branding assets that we spoke about earlier together; you need to have a really tight collection that has something unique and different. You need to have clearly maybe a store list of stores that you want to sell to that are not necessarily selling products like yours, but that your jewelry actually hangs with the designers that they are working with.

You need to understand who their customer is so that you’re making sure that you’re approaching the right kinds of stores. Basically you would just start with like sending them post cards or shooting them emails; I think that’s the best way or getting introductions from other people.

Steve: So when you mention a collection I just want to touch back on this, does that imply that you need pieces for like a necklace, a bracelet, earrings, and that sort of thing?

Tracy: It can but there is different ways to develop collections, because you can have an item driven business where like let’s say your entire collection is only hoop earrings. You could do an entire collection only of hoop earrings in different varieties of styles and that would be what I consider an item based collection.

Steve: Okay.

Tracy: Or you can do something where it’s like all sorts of products that like coordinate together.

Steve: So how many pieces constitute a collection?

Tracy: Twelve to 24 I would say minimum, but when I was wholesaling I had up to 150, it depends.

Steve: Oh my goodness, okay. So basically you can’t just walk into one of these stores with like five pieces and hope to get in?

Tracy: Do you probably won’t get in? It’s hard, those like the businesses I think are better for like selling an entire — like if you only want to go deep in
like five designs, selling it on a platform like Etsy or Amazon handmade, or you could try it on your own website, but if you’re really serious about building a brand, you need to develop a cohesive collection.

Steve: Okay that’s good to know. So assuming I have all these pieces, is there any kind of strategies involved, like I’m emailing a store, what do I say?

Tracy: Hi there, my name is Tracy Matthews. My friend so and so told me about your store and I just love what you are doing. I wanted to introduce my line to you, here is a little bit about my line, I would probably tell them a little bit about my line. I’ve been featured in these places, and some of my key accounts are these stores. It depends on the account, but you might want to reference stories, you might not, because some stores like it, some stores don’t.
I think smaller stores would like to know that you are like in a really awesome door. Here’s a link to my line.

Steve: This is my first store though.

Tracy: Your first store. I would try actually; here is what I would do if it’s your first store. I would try to look in your local market; it’s always easier to start locally than anywhere else. I would find a couple of stores in your local market, I would walk in, get a sense of what the vibe is there, try to talk to someone.

I won’t try to show them your jewelry right there, I would try to talk to someone and have a conversation with them about who does the buying, complement them on their store, get more information, and then put yourself out there to say – hopefully they comment on the jewelry that you are wearing because you’re wearing your jewelry in the store, right?

Steve: Yeah.

Tracy: And then start a conversation and try to get an appointment with the buyer that way. I think locally that’s the best way is to develop a relationship and just say I’d love to make an appointment with the buyer. You can’t take it personally if they say no or they are not interested at the time. These people are really busy and it might take a couple of tries before you get in the door. I know that there are statistics out there that says 7 to 10 touches before I know turns into a yes.

So it takes some time and you have to give yourself in, but I would do that and try to get in to a couple of stores in your local market and then I would leverage those local stores into like maybe surrounding areas. For instance like when I lived in Francisco, there was like 15 neighborhoods in Francisco that I could potentially sell into. So I was like stock all those neighborhoods, try to get into one store each in those neighborhoods, and then I would go to the south bay, and then I would go to the east bay and then I would go to [inaudible 00:36:49].

So you are like expanding your circle. Same thing with New York, it’s like you might want to sell this to so and so, then you might sell to a store in the west village, you might sell to your store in Brookland. So just expanding in different neighborhoods, and then so as to give you exposure and leverage to get introductions…

Steve: To get into the bigger ones.

Tracy: Yeah.

Steve: Okay, it works just like wholesaling for other products that way too, you start out with small stores. Okay and in terms of what makes a jewelry line a success at one of these smaller boutiques in terms of sales?

Tracy: I mean related price on the store, I think that educating the sales people about your product I think this is really important so that they know what to talk about. I think being in a store that actually is committed to selling your work; I think it’s a struggle these days. A lot of stores call themselves like a wholesale store or whatever but they are just taking stuff on consignment and that’s tough, like I don’t recommend that at all.

I recommend trying to go for stores who are actually going to buy your product, because they invested in the inventory and they want to sell it. So really like developing partnerships with the stores that you’re working with and teaching them how to sell your work I think is like the number one key to success.

Steve: Is there like a minimum order?

Tracy: I think that people should have minimum orders for sure. I don’t like dollar amount minimums because I think that money gets in the way of strategic buying. Instead I would recommend people having a per piece minimum depending on the type of collection that they have. So for some collection that might be six pieces because it’s a bolder collection.

My collection was always kind of [inaudible 00:38:34] so 12 pieces made sense from a merchandising stand point, and for other collections it might be a little bit more, but I would have a like per piece minimum, I think that’s really the best way to go.

Steve: It also sounds like of you have a really good online presence or just a presence in general, the chances of getting in the store are much easier, and so what are some of the things that you recommend to really get the brand out there?

Tracy: I can tell you honestly most stores will not take you seriously unless you have a beautifully branded website, an Etsy shop is not enough, Amazon store is probably a ton of moth only. You could do those things on the side but I wouldn’t advertize it. A website is basically like your digital business card, and it shows people that you are a serious business owner and that you are legitimate.

There is something about it. I talk to so many business owners and like I said there are so many ways to sell jewelry, like you don’t even have to wholesale your jewelry in order to have a successful business, I don’t anymore and I’m doing multiple six figures these days. So it’s not that hard, it’s just about being strategic and understanding who your audience is.

So I think a website really creates – a good website creates really a lot of brand validity and I think what you need to do on that website is to be able to build trust when people land there, to make it look like you know what you are doing and to make it look like you are not a [inaudible 00:39:59]. You can do through your imagery, having really good professional photographs through a lifestyle look book sort of images that create the feeling of your brand and what you stand for.

I’ve heard so many times the about page is the number one visited page on a website because people want to know what the company is all about, whether or not you are a personal brand or you’re just a brand name. A well written about page that draws the reader in is very important, it’s about them not just you which I think is a huge mistake I see designers doing all the time.

And then a website that takes people to the next step is important, so if you want to wholesale, so if I’m a wholesale buyer and I’m checking you out, I want to know like how do I order wholesale from you if I want to? So you need to make that crystal clear on your website if that’s an offer that you have.

Steve: Does that imply that you need a shopping cart on your website or?

Tracy: No you don’t have to; I mean for ecommerce obviously you do. I think over time it can be expensive to build out, that’s a nice park and I know some website platforms you can basically like replicate your ecommerce store and turn it into a wholesale store by just creating like a discount for that particular store, but there is a place you can do it.

But what I would do is have some sort of password protected area on your site where buyers can go and apply and then log in and then they can go into the secret area of your website and check out your line sheets or ordering your shopping cart, but it’s not necessary but it’s a good idea to have. It’s not necessary to have a shopping cart.

Steve: People can check out Tracymatthews.com, is that the site?

Tracy: Yeah Tracymatthews.com is my jewelry site, full disclosure I don’t wholesale anymore so you won’t have that, I don’t have that but you can see how I walk people through the custom jewelry process and get them to fill out my form on there.

Steve: Okay and it is still that site where you’re getting your custom customers, is that correct?

Tracy: Yes, absolutely.

Steve: Okay we’ve walked through going in stores, what are some of the other ways to market your jewelry as a small business owner?

Tracy: Online is a great way, it’s a great way to get the word out there about what you do, but like I said jewelry is really a very referral business and people – I don’t know if this is your answer Steve but a lot of people just put up a website and expect people to show up.

Steve: Exactly yes, it never happens.

Tracy: It requires strategies, so it’s like what is your marketing strategy, how are you getting the word out there? I think a huge missed opportunity that people don’t leverage enough is their friends and family network, and people think that that’s not a super professional way to build a business, but it really is like even to this day a lot of my best sales have come from a family or a good friend referring another person to me and then they refer someone and they refer someone. So it starts there and then expands beyond that.

So that’s the place to start. Obviously as you start to grow you want to be building your brand, and so you do that I think what we teach is really to get exposure through influencers, through traditional PR methods like getting placements in magazines or influential blogs. Influential Instagramers are huge in the jewelry industry; I know a lot of the designers we work with have brand ambassadors who basically either get free jewelry in exchange for sharing products on Instagram.

That landscape is starting to change a little bit, I think that there is a huge opportunity in brand building through affiliate marketing which is I think underutilized in a lot of markets. People don’t think outside of the box of how you can use affiliate marketing to spread the word about what you’re doing from a jewelry perspective, and I’ll give you an example of how I’ve done that with my custom jewelry business.

There are a lot of parallel markets that aren’t necessarily product based businesses that can refer products. So the wedding industry is a really good example, there are coaches who coach bride to like lose weight on their wedding day, or they coach them how to like decor. There’s wedding planners who can refer our business, or there’s like wedding photographers who are always in front of clients who are looking for other services.

So a couple of years back I partnered with a coach who was actually working with brides who were trying to lose weight for their wedding. It was an offer to her community, she went and blog posted about me and sent an email out to the people in her program saying, here’s my friend Tracy, she’s an amazing jewel custom designer, she’s offering this to my community, check out, this might be a great opportunity for you to have a custom wedding band made.

I was able to build a ton of leads for my list and then also I got probably about $5,000 in orders just from one email from her, and I gave her a small commission of like $100 for her campaign. So those ways it’s still like it is like a pain or play or like a leverage [inaudible 00:45:17] sort of thing but I feel like those are great opportunities, and this is huge in the blogger community these days. A lot of times bloggers you might be able to work out something with them instead of paying them upfront to work out some sort of affiliate commission opportunity.

If they are really getting traffic to those sites, you can offer some sort of discount to their readers. I’m not a huge fan of discounts, or you can offer something special to their readers if you don’t want to discount and you can track all that traffic with an affiliate link and pay the blogger based on the number of sales that they got. And you can stay connected with them so that you’re honest so that they know how much if they are really serious about selling more of your work that they can promote it and push it more.

Steve: You mentioned the email list, what do you do to get people to sign up for your email list, like what do you say?

Tracy: One of the best opt-ins that I had, I don’t have it any more because I felt like it was a little off ground for me, but when I started over back in 2010, my first opt-in was a jewelry cleaning guide. It was basically like learn how to clean your fine jewelry in non toxic ways. They’d opt-in; they get an email with this jewelry cleaning guide that taught them how to clean their jewelry that was really cool.

That was a really good opt-in that I had personally. What I really like that I think is working right now and a lot of people are starting to do it, so who knows if this will continue to working or not, but we have a designer in our community named Carina Harris [inaudible 00:46:50] and she started this VIP program for members. So she opens up a membership like if they opt-in to her mailing list for VIP sales that are only open to them, you can only get in on the sale if you are on the list, special like pre packaged items that are only available to those people and then some sort of style guide or something like that, there are a couple of other things.

Carina is like super stylish and really, really good at branding and marketing and packaging things together, so she will create these like Mother’s Day boxes that had like, here is the joy, then like it had a candle and some candy in it and it was wrapped up beautifully, she’s a great marketer. There is a lot of things that you can do like that, you can show people how to wear the jewelry, you can do some sort of like quiz on the front end where they are doing self assessment test like what’s your jewelry style, and then they take the quiz and then it points them to what they should buy on your website. So there is a lot of different ways that you can get people to opt-in and get them engaged.

Steve: How is she driving traffic to her site, is she running ads, is it blogging?

Tracy: She has a really great social media, she’s blogging as well, probably not as much as she should be, and then she does a lot of in person shows in her local market and she builds her email list in person. With a lot of jewelry I think that it’s a multi pronged approach not to be choosing any of the jewelry tab, but it really is.

I look at times you can’t just like I rely on one way, because you have to test what works for you. If you’re someone who sells a lot of jewelry in person, that’s like a great lead generation tool that’s on this opportunity if you’re not taking it, if you don’t have a lot of money to invest in paying for Facebook ads or Google retargeting and stuff like that. Hopefully you’re not getting the traffic to your site in the first place.

So but Carina I think she might be doing some retargeting, I don’t think she’s doing a lot of paid ads, but she’s blogging, she does has a great social media, she does a lot of in person to build her list and then just – yeah I think and then getting – what am I trying to say? Getting featured in the press, so getting bloggers to feature her, partnering with bloggers and influencers, and getting her stuff on TV shows, and magazines.

Steve: Can you give me an example of a good outreach email when you’re reaching out to some of these influencers for your jewelry?

Tracy: Sure, yeah, I mean it’s similar to like reaching out to wholesale buyers. You’d probably do something – I think the most important thing especially for influencers plus PR, anything like that is to have a good headline. You want to make sure that someone wants to open your email, so study headline writing formulas, so when I was talking to [inaudible 00:49:48] last night, she said something really good, it was really cute. It was something like don’t open this email; because if you do you’re going to die, the jewelry is so beautiful.

So thinking about something that’s going to get them interested to actually open it instead of like pro stud earrings, no one is going to open that stupid email. So think of like a catchy headline that’s going to capture their attention, and think of who their audience is in the first place and do some sort of play on that, that’s like another whole another podcast if you like.

You want to do an introduction, you want to tell them who you are and why your jewelry is relevant to their audience, that’s the first step. Then you want to tell them a little bit about your jewelry line and get into your pitch. Our PR expert for Flourish and Thrive [inaudible 00:50:33] recommends bullet pointing things so that it’s easy to read, so you can bullet point like five things that the editor or influencer, whoever needs to know about your brand in the center of it.

Then you tell them how to follow up for samples on the next step, and include in the body of the email – I prefer a collage picture that is like small in a file so it’s not like 20 megabytes, you want like 4 megabytes or smaller that is a great visual or example of what it is that you’re pitching. So it could be a couple of pieces of jewelry or maybe you want two pieces depending on what the angle is. So that’s like the formula, now what’s written in there will be a little bit different.

Steve: Sure, I hear there is a course on that.

Tracy: Yeah there is like courses on that, we also have blog posts about it over Flourish and Thrive Academy, so lots and lots of information.

Steve: Yeah, I was [inaudible 00:51:29], don’t go there. So I’m just curious, it sounds like when we were talking about this, it sounds like you have a negative feeling towards market places, is that accurate, like Amazon, Etsy and that sort of thing and so…

Tracy: I was not negative, but I will clarify, finish asking your question and I’ll clarify.

Steve: Oh no I was just saying does that mean like it’s kind of mutually exclusive, like if you want to have a serious jewelry line that is going in retail shops and stuff, does that imply that you shouldn’t be going into like Amazon?

Tracy: Okay, that’s a great question. I know a lot of retail stores actually selling on Amazon like designer rings and designer stuff, and a lot of designers – I don’t want to [inaudible 00:52:12] for I’m not 100% sure, but a lot of like high name designers are actually all selling stuff on Amazon in the designer section. So I don’t necessarily think it’s bad, but it shouldn’t be the primary. Same thing with Etsy, I don’t think it’s bad, but it should be a secondary source. I think that the problem comes in when someone relies solely on these markets.

If you’re trying to build a brand, if you’re just trying to make money selling products, that’s different, a totally different mindset, you’re just trying to make money selling some products, putting it online and getting on to Amazon, that’s like…

Steve: I feel it’s not sustainable though unless you build your brand though right?

Tracy: Yeah, so like with jewelry like I said if you really want to have a successful and sustainable jewelry business that’s growing and you want to keep developing collections and evolving as a designer, the branding piece is like the most important part. It starts with the website and then these other things are great alternative tools and we have a lot of designers in our community who are doing Etsy and Amazon handmade and selling on their own website.
In fact one of the designers in our community is Stephanie [inaudible 00:53:14] has a really successful business doing multiple six figures, and she has a beautiful website, and the majority of her sales actually come from Etsy, I think like she told me 70%.

Steve: Interesting.

Tracy: But she realized the importance of having a branded website because that gives her validity in the eyes of her clients, so she sells at Etsy business but the website helps improve the brand. So I think it just really depends on your branding, I think for a lot of people Etsy can be a good way to get rid of excess inventory, you can include the Etsy shop in a different name that’s related to your brand so it doesn’t conflict when people find things on Google search. There’s a lot of different ways you can use that tool, so I don’t think it’s bad, I think it’s like a good secondary.

Steve: Okay so the reason why I asked that question is people who shop on market places like Amazon or what, not Etsy but Amazon, they are more focused on price. It just seems to me that you can command much better prices if you’re just selling on your own site.

Tracy: Well that’s the whole thing, I mean Etsy and Amazon – Amazon campaign now, it’s real like people are competing on price and none of us are going to be – well maybe even you maybe importing from China one day I don’t know and doing mass volume, but the only way you can really compete on a stage like that is volume, and if your business is not set up for volume, then it’s going to be really hard to make money.

I think that it’s cool if you want to play on that stage and you want to do a volume business and many people can have very successful jewelry businesses doing that, but that’s a totally different game and it requires prior infrastructure, it requires a lot of strategy, it requires a lot more work I think in my mind.

I used to sell like ship orders worth 1000 units that we would produce in China and India, and the management of those processes, we would negotiate discount, the stores would negotiate discounts and I’m thinking like I think that in order to have a successful business in a discount market place like it would be the same thing is that like you have to do volume, so I don’t know.

Steve: Is it generally harder to brand those items too, and did you ever have any copy cats?

Tracy: Oh gosh, everyone has copy cats, it happens, but that seemed for reason being a designer that is continually evolving in their design, because that’s what makes you stand out and people to keep coming back. People can tell someone who just copies.

Steve: Right and I think just your personality and your branding is what prevents you from falling victim to that.

Tracy: Yeah, exactly.

Steve: Okay cool Tracy, you know we’ve been chatting for a while; I want to be respectful of your time.

Tracy: I know.

Steve: Where can people find you if they want to learn how to start their own jewelry business?

Tracy: Absolutely, you go on over to flourishthriveacademy.com, you can also find us at fnta.com if you like, flourishthriveacademy.com and you can check out some of our courses. We have so many courses that walk you all different aspects of the jewelry industry or the business of jewelry I should say. Then we also have a membership community, we have a free online community, lots of different ways to participate, so I hope to see you over there.

Steve: Cool and your site was tracymatthews.com also.

Tracy: Yeah my jewelry website is tracymatthews.com.

Steve: Okay, awesome. Well hey Tracy thanks a lot for coming on the show, I learned a lot because I know nothing about jewelry.

Tracy: Thanks for having me; it was so fun to be here.

Steve: All right take care.

Hope you enjoyed that episode. Now selling jewelry online is really challenging, you have to stand out in order to succeed and Tracy is an expert at making that happen. For more information about this episode, go to mywifequitherjob.com/episode149.

Once again I want to thank privy.com for sponsoring this episode. Now Privy is the email capture provider that I personally use to turn visitors into email subscribers, therefore email capture, exit intent, and site targeting tools to make it supper simple as well. Now I like Privy because it is so powerful and you can basically trigger custom pop ups for any primer that is closely tied to your ecommerce store. So if you want to give it a try it’s free, so head on over to privy.com/steve. Once again that’s privy.com/steve.

I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all of these sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/Klaviyo, once again that’s mywifequitherjob.com/Klaviyo.

Now I talk about how I use these tools on my blog, and if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away via email, thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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