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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

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 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.
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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. 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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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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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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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 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

Sponsors

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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 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.

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 shopper, 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.

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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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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148: How We Grew Our Ecommerce Store By 22% In 2016 With Steve Chou

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148: How We Grew Our Ecommerce Business By 22% In 2016 With Steve Chou

My wife just closed the books on BumblebeeLinens.com for 2016 and I’m happy to say that we had another year of double digit growth. In this episode, I go over in detail how we grew and what’s in store for 2017.

What You’ll Learn

  • Why it was a tough year for my shop
  • Our revenue and profit numbers for the year
  • The main contributors to growth for 2016
  • Why conversion optimization is so important
  • Why you need to keep an open mind
  • The importance of a mastermind group

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.
referral candy

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 break down how my online store performed last year and all of the strategies to increase sales for my online store, 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. Privy is easily the most powerful platform that I’ve ever used, and you can trigger sign up forms based on any primers 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 display a related item for purchase. 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 privy.com/steve, 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/steve to try it for free.

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’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 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 as well.

Klaviyo is the most powerful email marketing platform that I’ve ever used and you could actually try them for free at mywifequitherjob.com/Klaviyo, that’s mywifequitherjob.com/Klaviyo. Give them a try, it’s absolutely free, and it’s a no brainer, 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 last week I reported on the earnings for my blog, and so what I thought I do is report on the earnings for my ecommerce store as well. So those of you that know me know that I also sell handkerchiefs along with my wife at a store at bumblebeelinens.com. If you guys have never visited our site and if you’re getting married go over there and I’ll hook you guys up, but that’s bumblebeelinens.com. If you want to check it out and kind of follow along with what I’m talking about today.

Anyways my wife just closed the books for Bumble Bee linens, and it was another double digit growth year end. This actually marks the ninth straight year of double digit growth, and if you want to put that in perspective, when I was working my full time job not too long ago towards the last several years, I was lucky just to get like a five to eight percent raise.
So when you compare that to our store where we’re consistently getting double digit increases in revenue and profits, it’s not even a comparison, and it just goes to show that the only way to make life changing money is with your own business. If you’re working a day job and unless you have a lot of stock options, it’s probably not going to happen.

So we’ll get into the numbers a little bit, but 2016 was actually supposed to grow even more with our online store, and I was actually planning on devoting a full half year towards expanding our linens business. But as I mentioned in the last podcast, I ended up officially declaring that I was quitting my job on June 1st, but ended up staying on part time until October 1st.
Now in addition to that I also decided to run my own ecommerce conference and it was the first time that I had run my own event and it ended up being a ton of work. Now I kind of went in knowing that it was going to be a lot of work, but again I didn’t know to what magnitude the level of work was going to be. So that ended up taking a lot of time to plan.

And speaking of conferences, I thought I just do a little quick plug for the 2017 Sellers Summit which is my conference; tickets are on sale right now at sellerssummit.com. I’m not going to talk at length about it, but here is my 30 second value proposition for my conference.

Now for those of you who know me I’m big on action and not really on inspiration. Every speaker that I invite actually gets his hands dirty in ecommerce, and will cover actionable strategies to actually grow your business. I’m also not a huge fan of large events where you can kind of get lost in the crowd. So my events will be small and intimate. Last year we only sold 100 tickets, and this way everyone gets to know each other and all the speakers as well.

I’m also not a huge fan of speakers kind of like hiding in their rooms during the event. Last year all the speakers were accessible and approachable, and that’s kind of one of the main value adds for my event. So go check out the conference site at sellersummit.com, and hopefully I’ll see you guys there. But anyways despite the conference, and the fact that I actually kept working until October 1st, I still made some major improvements to the site which I’m going to share with you guys today.

So first and foremost here are the numbers, so revenues went up 22%, operating profit went up 24%, traffic was flat and increased just 1.7%, but the desktop conversion rate went up 29%, tablet conversion rates increased by 18%, and mobile conversion rates increased by 88%. So a couple of things to point out about these statistics, the traffic was flat, and I actually did not really focus that much on customer acquisition. Instead this year – or last year I should say, I mainly focused on conversion optimization.

So all of my changes were aimed at making more money with what we had, and I’ll go into a little bit more depth about that a little bit, but I also want to take a quick moment to talk about the pain. Now 2016 was filled with turmoil, so let’s get some of the low lights out of the way first, because I honestly felt that we could have grown more had Murphy’s Law not taken place. One thing that just really sucks about ecommerce is that you got to feed the machine, you got to buy physical inventory, unlike digital products everything takes up space.

Towards the latter half of 2016, we were actually at max capacity in our warehouse, and by max I mean that every single nook and cranny was filled with linens, and we had so many that I debated whether to just use our linen like as napkins in everyday use because we just had things just like lying around all over the place.

And here’s the thing, we knew our lease was going to run out in 2016, and we knew this ahead of time so we actually negotiated month to month for it to stay, but here is what ended up happening. We had this huge container coming in from China, and we basically had no place to store it because we already were at max capacity in our warehouse and basically this gave us two options.
We could stay at our existing office and basically move a good portion of our business back in our house like a 24 container back in our garage and probably in our office or wherever, we had to find a place to store at our house, or we could just quickly speed things up and move into a larger office, and sign a longer term lease. What ended up happening is we had to make this decision in a hurry and ultimately we decided to move as that was the better long term solution.

So here is the thing, back when we moved into our first office it was really simple, because we didn’t have that many linens, but this time around it actually took six guys an entire weekend to move our stuff over. And because we were kind of in a rush like this container was just literally coming in pretty soon, we didn’t actually label everything properly, and as a result things were just really disorganized post move.
There were linens everywhere, we had problems finding everything, and to make things even worse we had the holiday season kind of rearing up just around the corner and it was kind of a disaster. Reluctantly my wife asked me to turn off ads, and I didn’t want to turn off ads because that’s just like leaving money on the table, and so I thought about it and I didn’t want my wife to go nuts, and so I reluctantly complied.

What’s funny is I just remember the conversation. I was like, “All right we can turn off ads, cool, so how about we turn it off for just like an hour, how about just two hours or four hours, you just need a half day to get back in business, right?” And my wife would come out to me, she’s like, “Have you seen the office, plus we have two brand new employees to train, there is no way we can handle all this business right now.”
So I didn’t want her to go crazy, I value my marriage and my family and my life and so I said fine. We left some money on the table by turning off ads for a while but eventually everything got organized, but that period of I would say three weeks really, really sucked when it came to our business.

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. And 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.

And this tactic works wonders, and in fact it is 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, and 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.

Well let’s talk about the improvements really, so those are some of the main low lights, but I did get a good amount of work done to actually improve the site, and the biggest change was that I redesigned our entire site. And here is how that kind of came about, because whenever I take on huge projects like I say redesign, it really has to make sense for me to do it.

So here’s how it went up. A bunch of us were in a mastermind retreat and we were doing hot seats, and basically what a hot seat is, is you go around, people ask questions and then everyone else tries to help you improve your business. And so when it came to my turn I was like, hey guys, my store the conversion rate is great, it’s like we have a 3%, I’ve got a ton of stuff on my plate and I’m wondering if redesigning the site should be one of those items that I should prioritize for this coming year.

The response to that was very harsh and very immediate, so Mike Jackness was like, you know what, I’m looking at your site, and I don’t see how you’re making any sales at all. I mean this site looks like it was designed in the 90s. A couple of other guys David and Jason were like, you know I think it needs a new logo, I think it needs brand new pictures all over the place. Dina was like these are the sites I like to buy and improve because there is just so much head room.

But the comment that actually impacted me the most was Kevin Steckel when he said, you know what dude; I actually wouldn’t buy your class based on how your store looks alone. And so this roasting actually went on for a good 30 minutes, and I just wanted to crawl up in a hole and die. We were actually in Montana at the time at the Ski Resort, and I just wanted to take the ski lift to the top of the double black diamond and just go straight down.

I tried my hardest not to get defensive which is actually something that I’ve been working on for many years now. When I’m getting constructive feedback, I try not to just argue with the person, I just take it, I just take the abuse. And so I just kind of sat there quietly and I ended up taking lots of notes. I didn’t necessarily agree with everyone’s comments, and here is actually my philosophy on website design.
Just because something looks pretty doesn’t mean it makes sales, functionality and usability is what determines sales. One of our largest competitors actually has a heinous looking site that does really well. But that being said, there were a couple of principles that I was not doing that I was actually teaching about in the class, and I didn’t want there to be this disconnect between what I was teaching and what I was actually implementing. And I actually do believe that you do have to have a minimum threshold and anesthetics on your site to not turn away customers immediately.

So ultimately it just comes down to trust, does your website design inspire trust in people that are actually coming to your site so literally as soon as the abuse or I mean the feedback was actually done, I ended up contacting my web designer that day and I started drawing out sketches in my mind about the improvements that I want to make to my site. And as soon as I got back from the mastermind, literally the day I hoped off the plane, I shut the door and I cranked out a 100% redesigned site in seven weeks.

Now it was a little bit bulky at first, but within a couple of weeks I had worked out the kinks and then I sent that site back to the people at the mastermind for another round of roasting. This time around the comments were much less severe, and it was obvious that it had made a difference based on the conversion rates that I was getting. So within the first couple of months, the uplift that I was getting was pretty dramatic, so desktop conversions were 46%, tablet conversions were 25%, mobile conversions were up 21%.

I was actually getting a lot of positive comments from customers as well who would email me saying, “I love your site, it looks beautiful.” Now once again how pretty a site doesn’t matter as much as you think, you just have to be kind of on par with your competitors in this department and just do things better. And so you have to express your value proposition very clearly, you have to make things very easy to find and navigate, you have to reassure the customer and establish trust, a customer has to trust you enough to hand over their money to you.

I posted about my site redesign and I’ll post another link in the show notes, but I wrote about everything that I considered in my site redesign in very great depth. But if there is anything to be learnt here, it’s that when people are bashing on something that you’re doing or trying to actually help you by providing constructive feedback, do not get defensive. Instead listen, pick what you agree with and what you don’t and then take action immediately while the iron is hot, and when you feel like jumping off the top of a mountain and crawling into a hole and dying.

All right, so back to the income report. One of the things that actually surprised me the most was that the mobile conversion ended up being 88% up in the latter half of the year, and there was actually one very minor change that I made to accomplish this feat which in retrospect I was a complete idiot for not doing this a lot earlier. That one change was actually implementing PayPal one touch.
Now what PayPal one touch is, is it allows a customer to log in to PayPal and all of their information is just magically imported into your shopping cart during check out, so they don’t actually have to type out anything. And so also if they happen to be logged into PayPal, the transaction literally is like one click check out on Amazon. And so as you can imagine if you are on a mobile phone, you don’t want to type anything, right? It’s much easier to just go through, have everything imported from PayPal and you just have to click one button and then check out.

And so this one single change removed the friction off of mobile transactions, and probably was the largest contributor to that increase in conversion rate on mobile. Now I made a couple of other changes as well. The other major change I made was to my Google shopping campaigns after talking to Daniel Packer who I’m actually having on the podcast very soon to talk about Google shopping. Right now Google shopping is the highest converting pay per click ad platform that I personally run on, but I discovered that I wasn’t doing the last 5% to maximally optimize my shopping campaign.

So for example my feed wasn’t optimized, I wasn’t uploading my reviews to the merchant center, I wasn’t using structured mark up on my pages. These things incidentally had been on my list of to dos, but sometimes it takes a kick in the butt and talking to somebody to actually get things done, and again I’ve written about this also which is all included in the show notes after this is done.

Now the other thing that I did which had a pretty good effect as well is I added several new email autoresponders using Klaviyo. Now what’s nice about email autoresponders is they are set it and forget it, so for example I wrote new post purchase sequences. Once again these are sequences after someone has purchased from us, and I segmented them based on what they bought. So for example if they bought hankies I sent them a custom post purchase sequence based on handkerchiefs. If they bought napkins, I sent them a very specific sequence based on napkins.

I also put in win back campaigns by sending email to customers who had purchased in the past but had not within a certain amount of time. So for example someone hasn’t purchased in 60 days, I sent them a 10% coupon, they haven’t purchased in 90 days, I sent them a 15% coupon. And so by sending them gradually increasing coupon amounts and this incidentally is called the discount letter, I’m trying to get customers back to make that second purchase, because it’s much easier to get a customer to buy again as opposed to acquiring a brand new customer.

I also put in this nifty abandoned new sequence that basically emails customer suggestions based on what they were browsing. And if you shop on Amazon you’ve probably noticed this in the past, if you’re looking at a certain item, within a couple of hours if you don’t buy anything Amazon will send you an email with suggested products that were very similar to what you were actually looking at on your site review.

And then finally I made a bunch of miscellaneous usability fixes that I actually discovered while answering phones on Cyber Monday and Black Friday. And yes business was so good during that period that I actually had to take one for the team and answer customer support calls so we could actually have the other members of the team focus on order fulfillment. Anyway so just to give you an idea of what some of these customers are like, a lot of our repeat customers are over the age of 55, and some of them can actually barely surf the web, and so answering phones for the first time in a long time was actually pretty eye opening for me.

So for example some of my customers could not figure out how to remove items from their shopping cart. What they ended up doing is they were entering zero for the quantity, and the way I had my set up before was I had a specific button to actually remove the item from the cart, entering in zero in the quantity was not removing items from the cart.

And so I fixed that, and other people couldn’t figure out, like these were 55 year olds or 65 year olds on their mobile phones. They couldn’t figure out where to tap, and the reason for that is I have pictures of the products and item description and the price, but there is no real call to action like add to cart under each item. And so I’m actually still in the process of making all the products and the pictures more obviously tappable on mobile without making the site look ugly, but these are just some of the things I discovered while answering phones and talking to some of our older customers.

But yeah bottom line sometimes you just have to pick up the phone and talk to people to find out what’s wrong with your site, and it actually gives you a chance to understand what your customer base is really like and what the pain points with your site actually are. But overall I’m really happy with the 22% increase in revenues, and this year I’m going to do a lot more work on the customer acquisition front now that the foundation is in place and my focus has mainly been on Facebook ads.

Naturally I’m going to report on my progress as more data becomes available, but I wanted to end this Facebook live and podcast episode by addressing a common question that has been brought out to me by several readers, and here’s how it reads, “Steve I saw your income report and how you made a million dollars with your blog this past year, congratulations. My question for you is should I go into ecommerce or should I blog? Because you have to actually carry inventory or deal with physical products it seems like running a blog and digital products is so much easier.”

So here is my answer to that question. If you need money sooner rather than later, then sell products online, but if you have a three to five year time frame, then in the long run maybe starting a blog makes more sense. To give you some perspective, I didn’t actually make a dime on my blog until after a year, and I didn’t make anything meaningful with my blog until after three years, and if you contrast that with my online store, we made six figures in our first year, because we were actually exchanging a product for money, whereas with blog and content it can be a lot more ambiguous unless you create a digital content.

And so today I actually run both because both businesses actually complement each other. I treat my ecommerce store like a laboratory where I try all these new things in ecommerce, and then I report on the results at mywifequitherjob.com and my training class at profitableonlinestore.com. I also report these results at my conference at sellerssummit.com. So my advice to you is no matter what you decide, just do something, and stop sitting round pontificating about it. And just depending on what your income goals are in the near term or the long term, pick a business model that is appropriate for you.

Hope you enjoyed that solo episode and I actually want to ask a favor of you. If you wouldn’t mind leaving a comment in the show notes and let me know if you would like to see more solo episodes, and because I do them live on Facebook, it’s actually good practice for me for my public speaking skills as well. For more information about this episode, go to mywifequitherjob.com/episode148.

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 in abandoned cart sequence, a post purchase sequence, a win back campaign, and basically all of these sequences that will make your online store money on auto pilot. So head on over to mywifequitherjob.com/Klaviyo, that’s K-L-A-V-I-Y-O and sign up for free. One 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. 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. If you want to give it a try it’s free, so head on over to privy.com, that’s 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.

I Need Your Help

If you enjoyed listening to this podcast, then please support me with an iTunes review. It's easy and takes 1 minute! Just click here to head to iTunes and leave an honest rating and review of the podcast. Every review helps!
 
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Ready To Get Serious About Starting An Online Business?


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!

Give Me Access To The Free Course!
Enter Your Email Address:

147: How I Made Over One Million Dollars Blogging In 2016 With Steve Chou

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147: How I Made Over One Million Dollars Blogging In 2016 With Steve Chou

My wife just closed the books on MyWifeQuitHerJob.com for 2016 and I’m happy to say that I hit 2 major milestones this past year. In this episode, I go over in detail how I managed to make over a million dollars blogging and what’s in store for 2017.

What You’ll Learn

  • The 2 milestones I hit this year
  • Why I decided to quit my job
  • Why it was so hard for me to quit
  • The income report for my blog
  • How I hit the million dollar mark this year
  • My Facebook ads strategy
  • Should you start a blog or an 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.
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.
referral candy

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. Now I’m Steve Chou, and today we’re going to do a solo episode where I break down how I made over a million dollars blogging in 2016, but before we begin I want to give a quick shout out to Klaviyo who is a sponsor of the show.

Now I’m actually 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. 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 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, boom, 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 a full revenue tracking on every email too.

Now 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 the way you spell Klaviyo is K-L-A-V-I-Y-O. Once again that’s mywifequitherjob.com/Klaviyo.

Now I also want to give a quick shout out to Privy who is also a sponsor of the show. Now what’s also cool about Privy is 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 is a bunch of companies out there that will manage your email capture forms, but here’s 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 in your store, now 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 in their cart.

Here’s another cool 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 or offer. And 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 over to Klaviyo to close the sale, so head on over to Privy.com/mywifequitherjob and try it for free, 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/mywifequitherjob, now onto 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 a very special guest and that special guest is actually me. Since my wife just closed the books on mywifequitherjob.com, I thought it would be good to kind of give a little recap of how I did and everything that I did this past year to reach the one million dollar mark, which is really cool.
I hit two major milestones this year, so first one I just mentioned I made over one million dollars in revenue which is something that I never thought that I’d be able to do with my blog, with my store certainly but not with the blog for some reason because it still feels like kind of funny money to me in a way.

The second major milestone that I hit was that I finally quit my job after 17 years of working at the exact same company. Now out of both of those milestones I would have to say that quitting was actually more difficult to me than making the money, and the reason why it was so hard for me is you got to understand when you are at a company for 17 years you build a lot of these friendships, and my entire identity was carried along with my profession.

And here’s the thing about me, I don’t know if you guys know this about me but I’ve known that I’ve wanted to be an electrical engineer since the age 10. My dad was an electrical engineer and really bottom line as an Asian; I really had only three choices to begin with. I could be a doctor, a lawyer, or an engineer, so naturally I chose an engineer because my dad was one.

I’ve actually designed micro processors for over 20 years, and so a lot of my brain power over the years has been dedicated to designing micro processors, and if you’ve done anything for that long, you probably know that it’s really tough to give something up like that, it was a part of my identity.

And here is the thing, so I was just up at my buddy’s engagement, and one of his friends came up to me and asked me, “Hey what do you do for living? I had already quit at that point and honestly I didn’t know what to say, am I a blogger, am I a writer, am I a podcaster, am I a conference thrower?

And so what I ended up telling that guy was, “I’m actually unemployed right now, and just kind of doing my own thing.” The guy was like, “Oh man okay that’s tough, if you ever need any leads or help getting a job, I can hook you up.” I said, “Oh no, no, that’s good, I’m just doing my own thing, it’s not a big deal.

I ended up just feeling a little awkward at that conversation because in the old days I could just say that I was a hardware engineer, a micro process designer and that would be the end of the conversation, because no one would ever want me to go into more depth about the technical stuff. Now if I say I’m a business owner or a blogger or a writer, the follow on questions are, oh yeah what do you write about, what do you sell and what not.

To be honest sometimes I don’t want to get into all that, and it was just so much easier back in the day just to say I’m an engineer, no one wants to know any more, and that’s that. I did want to talk a little bit about what it’s been like to quit, because it wasn’t like an amazing thing when I first quit and perhaps it’s because I was just kind of slowly leading up to that point.

I wrote a blog post back in June saying that I had quit my job, but that was actually slightly a lie. I did announce my resignation during that point, but the company gave me this really sweet offer to stay just two days a week, gave me full health insurance and there were some other line items to that deal which I don’t want to disclose publicly, but in a nut shell it was an offer that I could not refuse, and so I stayed on working two days a week, and then I finally left cold turkey on October 1st.

It’s just been okay, and one of the reasons why, and you guys might be thinking that I’m crazy for thinking this way, but I’ve got too much time on my hands right now. So right now I work until noon, I usually have lunch with my wife, then I usually work out in the afternoon, then I pick up the kids and that’s it pretty much. There’s just very little social interaction outside of Skype, I’ve got my Skype friends and that sort of thing.

What I found to be difficult about quitting is that it’s really hard to stay motivated in a way. In the old ways when I worked my full time job and I still run my blog, my podcast, and my store, I only had like a really small amount of time to get my stuff done and I had to plan my day really carefully. Now that I have so much time, I don’t feel like I have to plan anything and so big blocks of time can pass before you know it, so I’ve had to be a lot more diligent about planning my day.

But it has also allowed me to kind of figure out what makes me happy in life, and I’ll probably get into a little bit more about that in a future podcast episode, but having all this time has caused me to think about a lot of different things and what actually makes me happy. Anyways I don’t want to bore you with those details, let’s go ahead and jump to the numbers real quick.

So revenues for my blog increased by 46%, as I mentioned before we hit one million dollars. February was the highest month where I made over $125,000 in a single month, the traffic to my blog increased by 15%, the profit margins for a blog of course are astronomical, 90 plus percent. I just want to say this, what I really love about blogging is that it’s really highly scalable, and I can honestly maintain my blog in just 15 hours a week.

I’ve got it kind of down to a system, it takes me three hours to write a blog post, and I write one blog post per week. It takes me roughly two hours to put together a podcast, it takes me 10 hours roughly to manage my course and my email load and so overall it’s very scalable, and that’s what I like about blogging. Now what’s funny about all of this also is I routinely get a bunch of entrepreneurs on my podcast and even though the blog is doing really well, I still have my insecurities so to speak.

Now I recently interviewed someone who is really high profile and if I told you who this person was you would instantly recognize that person, world renowned author. He basically flat out told me that my blog was just a job and not a business. At first I was going to argue with him and debate back and forth, but he is right in a way, the blog and everything I do that’s related to the blog cannot function without me being there, like I got to be the one to write the blog post and that sort of thing.

Of course I can probably contract it out but it just wouldn’t be the same if I wasn’t putting out that content myself. So instead of trying to argue with the guy I just let it go because honestly at 15 hours per week it’s not really a bad gig and a million bucks is nothing to sneeze at either. But anyways you probably noticed that the traffic to my blog went up only 15% and the revenue actually went up 46%.

For 2016 my intention was actually not to grow the blog that much. I was going to focus all my efforts on my ecommerce store and what ended up happening was I didn’t end up focusing my time on my blog or my store all that much because I ended up working until October, that was kind of unplanned. But I did want to talk a little bit about how I did grow my blog that 46%, so one of the things that I did was I ran more webinars.

I just want to take a little bit of time to give a quick shout out to Grant Baldwin and Toni Anderson who kind of pushed me towards giving webinars a try because I did not want to give them at all. I can be someone anti social at times, I like to hide behind the computer and do coding, I don’t really particularly like doing webinars.

The space for blogs is a little bit different because it’s a little more off the curve and I can just talk about whatever, but I was reluctant to try it, but then Grant sent me this spreadsheet of all of his profits that he was making with his webinars, and then Toni kept nagging me to give it a try. Nagging is probably not the right word; she kept urging me to try because she knew that it would be big for me.

So I ended up doing one and I made $60,000 in 90 minutes of work, and then I just sat there I was like $60,000 in 90 minutes of work, all right, it’s not bad, I can do these, I can do even once a month.

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. And 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.

And this tactic works wonders, and in fact it is 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, and 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.

And I still don’t completely enjoy doing them, so I just do them once a month, and what’s cool about these webinars is that it’s like instant cash, so during the month of November my wife told me that I was short of my million dollar goal by about $30,000, and I was like don’t worry about it I’ll just do a webinar. And so I just did a webinar a couple of weeks later and that webinar ended up doing $50,000 and so I hit my goal in early December actually.

Now the funny thing about webinars is I don’t really know how they work. When I get on a webinar I’m certainly not an expert but it just converts so well, and I think it really has to do with like the real time and personal nature of giving a live webinar. I always stay on till the very end to answer as many questions as possible and for all of you guys who know me, I’m not really a sales guy, I’m not a sales person by any means.

So what’s funny about all this also is I started having these successive webinars, and I ended up giving two speeches about webinars at FINCON and Digital CoLab which are two awesome conferences this past year. If anyone is interested about how I ran my webinars, I could be coaxed into doing a Facebook live session or even a podcast about it if you guys are interested. If you guys are interested leave a comment in the box for me.

The other thing that I did to grow my blog this past year is I ran a lot of Facebook ads. Now for all of you guys who aren’t quite familiar with what I sell, I sell a course that retails for about $1300. Now no one is going to spend $1300 dollars with me on impulse, and you got to get people to like you, you got to get people to trust you. Very few people will actually even sign up for your email list unless they trust you.

And so what is started doing this past year is I started running ads to some of my best content. These are great blog posts that I had written in the past just to get a little bit of mind share and then I ran ads to these posts. When you ran ads to posts, it ends up being really cheap. Some of my best posts and ads, I’m paying like nine to 13 cents per click which is really good.

And then what I do, for all the people who actually land on that page and read the article, I retarget them to an email sign up page, and because they are already familiar with my work, they’ve read a blog post, they are much more likely to sign up for my email list and as a result I’ve been paying between one and two dollars per email sign up for those people who’ve actually experienced my content in the past.

I’ve also tried running ads straight to a sign up form but I end up paying a lot more money when I do that, sometimes on the order of five or six dollars. So just by sending people to content first and then a sign up form, it ends up being cheaper and much more effective. So right now I’m not really scaling these ads, but I plan to this year in 2017, and I’ve got a strategy plan for this year that I’ll probably talk about publicly a little bit later once I’ve implemented it and once I know that it actually works.

Ultimately the key to all of my course sales is email. Email is the backbone of my entire blogging business. Now for all of you guys who are unfamiliar with that, I offer a free six day mini course on how to start your own ecommerce store, and if you’re curious right now you can head on over to mywifequitherjob.com, there is sign up form right there on the front page and I’ll deliver that course to you via email.

Now I’ve given a bunch of talks about my email sequence in the past, but I’ll just quickly summarize a little bit. The first nine lessons of that free six day mini course are hard core teaching lessons and I actually don’t hold anything back. I teach you everything that it takes to get started in ecommerce, so it’s a 30 email sequence, and the remaining 20 or so emails are what I call get to know Steve type of emails.

What’s funny about this is I have separate emails targeting females and separate emails targeting males in particular to just kind of get them to jump on the Steve band wagon so to speak. So for example for the women I have an email that talks about when we had our first born and she couldn’t stop crying. I talk about the story how I felt so prepared for my first baby.

I was reading all these baby books and I just got really cocky about being able to calm down a baby, but when my baby girl finally came out, she ended up crying uncontrollably and all that book knowledge that I had amassed was worthless. I ended up [inaudible 00:17:57] the baby at last and buying all these toys to help pacify my child, and the point of that email of course is to say that no matter what you read online, and no matter how many books you read, you’re never going to be prepared to start your own business and that’s why you need extra instructions to sign off for my class.

So that email actually goes put to the women. For the guys I have a post on six pack abs and comparing getting six pack abs to starting a business, so it’s really funny. So for both of those posts I always get a lot of comments on the six pack one from guys and a lot of comments from the women about the baby post.

For those later 20 emails I also do a bunch of case studies with my students and needless to say that this email sequence converts really well to get people to actually sign up for my class. Now one other thing that happened this past year which was just really incredible for me was on May 19th, 2016 I started my own conference which is called the Sellers Summit.
Here’s the thing about the Sellers Summit, I had always wanted to be a keynote speaker, but no one was willing to let me become a keynote at any of their conferences, and so instead of kind of begging people to let me be their keynote, I decided to start my own conference instead. And once again I want to give a special thanks out to Toni Anderson for pushing me to do this, and she is actually a partner with me in launching this conference.

Anyways this conference was actually the most fun that I’ve ever had outside of my wedding reception just in case you’re listening Jen, and I had a blast and I decided to throw another one and I’ll probably do a separate FB live on this. But the reason I started the conference of my own, and there are other ecommerce conferences out there, it’s mainly because I was just tired of conferences with just inspirational speakers.

I wanted to start a conference that was more strategy focused, based on strategies and low level tactics and kind of avoid all the inspirational stuff, because I don’t know if you guys know my personality but I don’t need to be inspired, I just need to learn. And I was just betting that a bunch of other people out there had the same philosophy. And so as a result, I only get hardcore ecommerce [inaudible 00:20:17] to actually talk in my conference.

These are entrepreneurs who are actually getting their own hands dirty. There is a huge difference in actually doing something versus having high level knowledge about something or even contracting stuff out to other people. I like to get speakers who are kind of deep in the trenches and doing everything and getting their hands dirty. And so the summit was actually designed to provide very actionable content.

The other thing that I was just kind of tired about other conferences was going to like multi thousand person events, like you can get really lost in the crowd when there are just so many people there. And so I purposely made my conference very small and intimate, so I could actually form some meaningful, intimate relationships, and so those are some of the cool philosophies why I decided to start my own conference besides wanting to be a key note of course.

I just want to give a quick shout out; tickets are on sale right now for the Sellers Summit. Go to sellerssummit.com, the price is actually going to go up on February 1st, so be sure to get your tickets before the price goes up.
Now the other thing I did, or I should say that I’m constantly doing is I am always improving my class. Now here’s the thing about courses, if you don’t update them, they’re going to get stale and what’s ironic is that the more work that I put forth on improving my ecommerce store; it actually improves my training class because it creates a lot more material for me to teach.

And so I spend portion of the year improving my online store and I’m not going to go into too much depth about what I do for my store because incidentally the next podcast is going to go over the year and recap for my ecommerce store. But I’ve been updating my course constantly with all the latest things that I’ve been doing to improve my online store.

So a couple of these things are I completely revamped the email autoresponders for my store, I experimented with a lot of Facebook ads for my store, I talked a lot about conversion optimization, I invited more guests to the class, industry experts to come talk to the students about areas of their expertise. I also sent out the survey and was very pleasantly surprised by the results.

Here’s what’s really cool, 56% of the students who have been with me a year and launched their own product are now making at least four figures per month, and 9% of these students are making more than $50,000 a month in revenue which is really awesome, it makes me feel really good, I’m going to try to get some of these students to come on the podcast to talk about their experiences.

You probably have already heard from Jen Depaoli who runs showercurtainhq.com, you may want to check out that episode if you haven’t listened to it, but right now I have two other students lined up to tell their stories as well. So given my results in blogging and the fact that I made over a million dollars this past year, does that mean that you should go out and start blogging or should you start an online store, and I get this question a lot because I’ve been successful in both areas.

The answer I always give is it depends on your long term goals. I’m going to be upfront and say this, blogging is a slog, it actually took me three years before I made any sort of meaningful money with it and it can be hard to do something for three years and not have anyone really reading your or making any money, but it’s really incredible once the money does start rolling in because it ramps up really quickly.

Contrast that with my store. I actually ended up making six figures right away, but in the past couple of years the growth has slowed. It’s still in the double digits, we’ve maintained double digits since 2007, but it’s not as high as the blog. So bottom line if you want to make money sooner rather than later, you want to sell something online, and so if you want to make money soonest, go with the online store because you have a product you’re putting it up there and someone is exchanging you money for an actual product.

But if you have a three to five year time horizon I would say I would start a blog, maybe a podcast and really build your own personal brand. So of the two businesses that I had today I feel like the blog has much higher barriers to entry because no one can take my identity away from me. I’ve built up a personal brand, and this is despite the fact that my mom constantly asks me, why are people reading your stuff? I told her my results actually, I told her that I did a million dollars, and she is like what, why are people buying your stuff? And so at least now it’s gone from why are people reading your stuff to why are people buying your stuff.

In the Asian land that’s like a huge upgrade in terms of place. Anyways that’s pretty much all I had to say about how my blog performed in 2016, going forward I don’t know if I want to take on any additional products, projects just yet. I do have a software product that I’m hoping to release later on this year, but for now I’m just going to focus on making my existing properties better.

Hope you enjoyed that solo episode. Next week I’m actually going to be talking about how my ecommerce store performed in 2016, and discuss all the changes that I made to make that happen and grow that business as well. For more information about this episode, go to mywifequitherjob.com/episode147.

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 tagging tools to make it supper simple as well. Now I personally like Privy because it is so powerful and you can basically trigger custom purpose 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.

I also want to thank Klaviyo, which is my email marketing platform of choice for ecommerce merchants. Now you can easily put together automated flows like in abandoned cart sequence, or post purchase flow or win back campaign, basically all these sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/Klaviyo, once gain that’s mywifequitherjob.com/Klaviyo.

Now I talk about how I use these tools Privy and Klaviyo 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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146: How To Grow From A Company Of 1 To A Company of 1000 With Michael Gerber Of E-Myth

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How To Grow From A Company Of 1 To A Company of 1000 With Michael Gerber Of E-Myth

Today, I’ve got an extra special guest on the show. He’s an author who I’ve followed ever since I started my first business.

He is an amazing speaker, author, and business consultant who has coached more entrepreneurs than anyone I can think of.

His book the EMyth Revisited is considered required reading for anyone wanting to build a business of their own and changed my way of thinking about small business.

He’s the founder of the dreaming room, a 3 month program that introduces you to a new way of thinking about entrepreneurship.

Now if you don’t recognize who I’m referring to yet, it’s the one and only Michael Gerber. Enjoy the interview!

What You’ll Learn

  • The biggest mistake that new entrepreneurs make
  • Why most businesses are broken
  • The necessary personalities of a successful long term business owner
  • How to size up a business
  • The mindset required to build and scale a business for sale
  • Questions you need to ask yourself before you start your business

Other Resources And Books

Sponsors

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 talking with Michael Gerber, who is the world renowned author of the E-myth series of books. You will learn how to create a company from the ground up the right way so that it’s scalable and sellable.

In other news I want to let you know that the 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. 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 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 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, so once again that’s sellerssummit.com and go check it out.

And if you want to learn how to start your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business, so go to my wifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email. Now onto 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’ve got an extra special guest on the show. He is an author who I have followed ever since I started my first business, he’s an amazing speaker, author and business consultant who has coached more entrepreneurs than anyone I can think of. His book The E-myth Revisited is considered a required reading for anyone wanting to build a business of their own, and it actually changed my way of thinking about small business.

He is the founder of the Dreaming Room, a three month program that introduces you to a new way of thinking about entrepreneurship, and if you don’t recognize who I’m referring to yet, it is the one and only Michael Gerber, and with that welcome to the show Michael, how are you doing today?

Michael: I’m great Steve and thanks for the lovely introduction.

Steve: So Michael I know your work well, but for the benefit of the listeners who may not have heard of you before, can you kind of tell us what led you to write the E-myth series of books and at a high level what the E-myth is all about?
Michael: Sure, well the reason I wrote the book is because we had been working for seven years prior to the publication of the book with small business owners, and when I say working with them I mean we were teaching them a whole new paradigmatic way of thinking about what they do every day.

And so that came to the whole idea of the e-myth, the e-myth is the entrepreneurial myth and it essentially says that despite the fact that most people believe if you own a small business you’re not an entrepreneur, the contrary is true that in fact very few small business owners are actually entrepreneurs. They are what I’ve come to call technicians, suffering from an entrepreneurial seizure, meaning they simply created a job for themselves, another working for a lunatic.

Steve: Meaning themselves, right?

Michael: Yeah of course. And so our work over the past 40 years, we launched our company in 1977, has been to actually transform the state of small business by awakening the entrepreneur within a small business owner so that he or she can approach the act of business development with a completely different perspective about how to do that work.

We have an expression that I’m sure you know; you’re familiar with my work. It says, “Work on it not just in it,” and 99% of all the people we ever meet are just working in it, meaning they are their business, they don’t own one. And so their business is completely dependent upon them, if they are not there, it doesn’t work.

Steve: Okay, so let’s expand upon that a little bit. I know a bunch of people in the audience have probably read your books, what would you say the biggest mistake is that new entrepreneurs make in trying to actually follow your principles and making your business the product and that sort of thing, why are most businesses broken?

Michael: Well the biggest mistake they make is by not following my principles, meaning they might think they are following my principles but there is no rigor to it, understand the rigor is key.

Steve: Do you have any examples of people who kind of fall into this category of people that you’ve worked with, I know you’ve worked with thousands of businesses in the past, so maybe if there is some things like watch out for that you can talk about?

Michael: Well sure, but rather than talking about the people who didn’t do it, let me just talk about just a handful of people who did do it.

Steve: Sure okay it sounds good.

Michael: A perfect example is a company I’m sure you know, Infusion Soft.

Steve: Yes.

Michael: Infusion Soft is a great example for a company that truly internalized my e-myth point of view and then went on to actually participate in a dreaming room with me, and that is not several months process, it’s a two and a half day process. I now call it the new dreaming room to align it more with Beyond the E-myth rather as it was with the original e-myth books.

Infusion Soft came to me about six and a half years ago, and they were introduced to me by a good buddy of mine, and they wanted to spend two and a half days with me with a large audience, not an audience of them spending the day with me, but an audience they are spending those two and a half days with me in what I call the dreaming room.

Steve: Can we talk about what the dreaming room is first before you go on?

Michael: Sure, the dreaming room is really the first half of a process for creating a company that works, I call the strategic half, and I’m saying that without it, in the absence of that process most companies will fail. The dreaming room really works around the four personalities that exist within a true entrepreneur.

I call them the dreamer, the thinker, the story teller, and the leader. The dreamer has a dream, the thinker has a vision, the story teller has a purpose, the leader has a mission. I’m saying every entrepreneur, no matter what their company aim is, no matter kind of a company it is, no matter what industry they are in, every entrepreneur is a dreamer or thinker or story teller and a leader or they are not an entrepreneur.

And so our first job obviously is to awaken the entrepreneur within every small business owner on the planet, and we do that in the dreaming room and now in the new dreaming room.

Steve: And does that imply that those traits can all be within everybody, or do you need to …

Michael: Everybody, and everybody does ask that question, what if I’m a dreamer but I’m not a thinker, what if I’m a thinker but I’m not a dreamer, what if I’m a this and I’m not a that, and I’m simply saying get with the program. In other words Steve they all have to be there, because without one part of you, there is no venture possible, there is no enterprise possible, you can’t buy that, you have to develop that.

And so it’s a process of you might say personal growth toward the evolution of a great enterprise, and until you’ve done that you don’t really understand what I’m talking about. So you have to simply a measure of trust, the guy has been doing this for 40 years. Everybody speaks about the E-myth. If you haven’t read the E-myth you don’t know anything on and on and on and on, so at least I’m saying somebody got to simply give me a pulse and say okay I’m going to do that Gerber.

Well that’s what the Infusion Soft guys did. When they came in it was a very small company, they didn’t know where they were going, and because they didn’t know where they were going they obviously didn’t know how they were going to get there. They thought they were a software company, in the dreaming room they discovered in fact something significantly different than that, and they discovered their dream, their vision, their purpose and their mission and their minds were blown.

In fact today Clate Mask, the CEO and one of the key share holders of Infusion Soft says that there are three major contributions that led Infusion Soft to where it is today, and one of those was Michael Gerber in the dreaming room.

Steve: Okay, so back when they were a small company or just a software company, which one of those elements were they lacking actually that you helped them with?

Michael: They were lacking all of it.

Steve: Oh really?

Michael: They didn’t really have a dream, they didn’t really have a vision, they didn’t really have a purpose, they didn’t really have a mission. Understand these words, everybody has heard but not in the context in which I use them. So let me give you an example of that, in my case my dream way back then in 1977 when we started out – in short at the very beginning my dream was to transform the state of small business worldwide.

My vision was to invent the Macdonald’s of small business consulting. My purpose was that every independently owned small business can be as successful as a Macdonald’s franchisee, or if they truly get it as successful as a Macdonald’s franchiser itself. And finally my mission was to invent the business development system that was absolutely critical to grow any company.

And that’s how we started out in 1977, and it’s the wager of that, that has created our company and our ability to do the work that we have done and the ability to do what we did with a company like Infusion Soft, like 1-800-Got Junk and on and on and on and on, company after company after company, we’ve worked with over 100,000 clients since we formed our company in 1977.

Steve: Do those aspects of your business, do they ever change over time or are they kind of like steadfast things that you decided in the beginning?

Michael: No they never change.

Steve: They never change, okay.

Michael: My dream is the same, my vision is the same, my purpose is the same, my mission is the same. Some of the how we do those things change of course as new technology comes forward, as the internet has changed, as this has changed, as that … How we do what we do is altered, but the core baseline for what we do and why we do it hasn’t changed at all.

Steve: So is the reason why you need to figure this out because it dictates all of your decisions going forward, is that the fundamental principle?

Michael: But of course, it’s the heart of it.

Steve: Okay and so people go to your dreaming room like Infusion Soft and you allow them to discover for themselves what these primers are with their business, and then what is the next step?

Michael: Well we don’t allow anything; we take them through a rigorous process. The process generates insights, perspective, a paradigm that is an internal experience for the people who are there. We don’t tell them what their dream, vision, purpose, and mission are.

Steve: Of course.

Michael: They do, but it’s the process through which we stimulate and inspire them to discover something they didn’t know before they came in the door so much so that Infusion Soft if you were to walk into their company today which is now doing 100 million in revenue with close to 1000 employees and hundreds of contractors, you discover on their wall, our dream, our vision, our purpose, our mission written explicitly on the wall so that everybody can see it.

Steve: So once you’ve figured these things out about yourself and your company, what is involved next in taking it to a business of one to a business of 1000?

Michael: Well that’s cool; I call this the tactical component of this thing we’re talking about.

Steve: I would imagine most people that come to you are probably interested in tactics, right, is that correct?

Michael: Oh yeah everybody want more sales, I mean that’s all everybody wants, more sales, more sales, that’s why – in fact the primary business service out here on the planet is we’re going to show you how to get more sales, more sales, more sales and we don’t do that at all, because in our case what we’re essentially saying if we will define a way to get you more sales, we destroy your company, because you couldn’t handle them.

Steve: I see.

Michael: And you couldn’t handle them because you’re not organized to handle them.

Steve: Because the process is not in place?

Michael: Right, the system is not in place, so that’s the second half; I call it the job, the practice, the business, the enterprise. What we used to do, we used to fix broken businesses, in other words the whole business of E-myth for years has been fixing broken small businesses. And so we’d start out to fix the broken small business, step one step two and step three etcetera, we’ve stopped doing that. We don’t fix broken businesses any more, we start new ones.

So we’d say to anybody coming to us, look we’re not here to fix your broken business, and we can guarantee you it’s broken and I can demonstrate that in a thousand ways, but that’s not a problem if you do that process right now. Let’s just accept the fact that you’ve got a business that you’re doing whatever you’re doing, it’s producing whatever it’s producing, I’m going to call that business old co.

What we’re going to work on though is new co, we’re not going to fix the business you’ve got, we’re going to create the company you want, so we’re going to start it a new and we’re going to start it a new by discovering what your dream, your vision, your purpose and your mission are. Once we have done that we’re going to start to go to work on your company from step one with a blank piece of paper on beginners mind to first determine what your client fulfillment system is, I call that the job.

So we’re going to go on, on the job to design, build, launch, and grow and turnkey your client fulfillment system, that is what you deliver to your most important customer, turnkey…

Steve: So the concept of Infusion Soft … go on sir … yeah before you go on I was just going to say in the concept of Infusion Soft here the delivery system I guess would be their email marketing software?

Michael: Of course, but not just the software, the whole methodology by which they work with a client.

Steve: So the on boarding process?

Michael: Well the on boarding process, the continuous improvement process, the continuous help that they provide, no not that way, this way, no not that way, this way, the constant process by which they engage their client to become a significantly more functional representation of what Infusion Soft was created to do.

Steve: Okay and then in terms of old co and new co, Infusion Soft, did you tell them to throw away their old or was this…

Michael: No it wasn’t throw it away, it’s never throw it away, just keep and let it do what it’s doing. In the meantime we’re going to create new co over here, and as we build new co gradually old co is just going to disappear.

Steve: Okay I understand, so sorry I interrupted your thought.

Michael: No but a great question. So the job, so first we’re going to create the client fulfillment system, and we’re going to turnkey it, we’re going to document it, we’re going to be able to transfer it to another guy, another guy, another guy, another guy meaning inside of the company the people who are responsible for delivering the client fulfillment system will have a turnkey methodology in order to deliver it with integrity to every single client that they get, you follow?

Steve: Yes, so do you work on all these things before you even get your first customer because the way a lot of people work is they just try to get customers just to validate what they are trying to do first and then put the process into place.

Michael: Yeah, you’re getting customers validating the job, the client fulfillment system, but even if you’re giving it away, you’re testing it, validating it, quantifying it, reassuring yourself that the way you do it actually has the impact you intended it for their house.

Steve: Okay, so this is like ongoing process, it is not something you have in place before you get your first customers, right?

Michael: No it’s an ongoing process, and I describe that ongoing process very, very clearly in Beyond the E-myth book, so that anybody who is listening to us right now, if they get the book, they will be able to understand much more clearly what the dream is, what the vision is, what the purpose is, what the mission is, what the client fulfillment system is, the process by which you do the work that I’m describing here.

Steve: Okay, don’t worry we’ll link all that stuff in the show notes with a link to the book.

Michael: So the next step is practice, and the practice is what I call the three legged stool. Now we’ve created the turnkey client fulfillment system, that’s absolutely critical, that’s why I said that everybody wants to get sales, sales, sales, sales but they don’t have a turnkey client fulfillment system, so even if they got sales they wouldn’t be able to replicate their ability to deliver the result that in fact they are designing their company to do.

So they’re setting it off on a completely awkward and dysfunctional path. So I’m saying these steps are so critical and absolutely essential if somebody is going to create a company that ultimately will become a leader in what it sets out to do. You got to do it, so the three legged stool is lead generation, lead conversion, client fulfillment.

Sure now that we’ve tested, validated, secured the ability of our client fulfillment system to work, now we’re going to put the pedal to the metal and attract more people to buy it, and that’s the three legged stool, lead generation, attracting people to our door, lead conversion, converting them into customers, client fulfillment, converting those customers into clients.

You can begin to see it as the franchise prototype. So effectively the six step in this process is step one is the dream, two is the vision, three is the purpose and four is the mission, five is the job, the client fulfillment system. Six is the practice which is the client acquisition and client fulfillment system integrated into one thing, that’s your franchise prototype. One you turnkeyed that system, you can now put the pedal to the metal and grow your company into a business.

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So in the book you often mention the franchise prototype and when you use the word franchise, are you kind of using it loosely here, because when I think of franchise and you mention this in the book Macdonald’s all the time, when you use the word franchise, are you talking how like the franchise business model or in terms of just making your business scalable and allowing other people other than yourself to run it?

Michael: Franchising is simply a model for expanding the reach of your company, it’s a distribution model. So when I say franchise, note that Starbucks isn’t a franchise, those are all company owned stores, and understand but those company owned stores operate like a franchise, there is a barrister in every single one of them.

Every single one of them are identical to every single one of them so that business model that they have developed is in fact their franchise prototype. Once they roll that franchise prototype to store number two, they were going into the process I’m describing now which is the development of your business, and the business resides in the turnkey systems of lead generation, lead conversion, client fulfillment, but also with the turnkey management system.

Steve: Okay, can we talk about the turnkey management system a little bit; can you talk about exactly what that is in an example maybe in Infusion Soft company concept since we we’ve been talking about that company?

Michael: Absolutely, the turnkey management system is our ability to assure ourselves that every single one of our practices think chiropractor, think graphic designer, think whatever, whatever business you are in, every one of them is utilizing the system we’ve designed, built, launched and grown for the very purpose of replicating ourselves faithfully with great integrity everywhere we live.

The management system determines that in fact that is happening, so it’s the oversight that’s critical if the business is going to have integrity in the operational deliverable that effectively we’ve designed, built, launched, and grown, you get my point.

Steve: So does that imply then – is this all based on metrics that you set up for your company then?

Michael: Of course they are metrics that we set up for our company, but the metrics that we learn as we implement what I’ve
just described and it speaks to us, we’re quantifying it, how many of those, how many of those, what is the conversion from this to that and on and on and on and on. We begin to understand the metrics of our business and we manage to do it.

Steve: So the concept of your company for example, what were some of the metrics earlier that you used when you were going out and consulting other businesses?

Michael: All right very, very simple. We would call on a small business down the street, way back then at the very beginning we had what we called marketing associates who knocked on doors. They would walk into every small business, every business in our trading zone and effectively they had this script and they would invite them to a free seminar.

So we had to measure the number of calls that were made, the number of business owners that were talked to, the number of invitations that were delivered, the number of enrollments that were made, the number of people who showed up at the seminar and the number of people who showed up for the needs analysis that we would do following the seminar, the number of people who having done the needs analysis and on and on and on, you get my point?

Steve: Yes I do, so how do you know what metrics are good, like how do you determine what your goals are or what metrics you should expect to see?

Michael: You make it up at the beginning, you make it up. So as an example we’re rolling the new dreaming room out to 150 markets, and that means we will open our doors in 150 cities and deliver a new dreaming room in every one of those cities once each month. We know that that dreaming room we delivered to 50 participants, and so we’ve set the objective for 50 participants. We know that those participants will pay $3,000 to participate in that two and a half day experience, and we’re projecting that 30% of those participants will enroll in Beyond the E-myth program.

So we’ve set out some goals, let’s call them that and we’ll measure our performance against those, and as we begin to measure our performance against those, we’ll look at what constituted our performance, meaning there is a leader of a dreaming room. Did the leader use the dreaming room system they were trained to use and on and on and on and on?

All of these measures come to bear on our performance in every one of those markets nationally, internationally because we’ve tested them, validated them, and improved upon them every single step of the way through what we call continuous improvement.

Steve: You brought about a couple of interesting points there, but one thing that just was fascinating to me is you are releasing this dreaming room in 150 places, is that correct?

Michael: We will over the next two years.

Steve: So can we talk about your process, I mean do you have a huge organization that handles all these things, like what is your process for just even releasing it to 150 places, that sounds like a lot of places to roll out?

Michael: Yeah indeed it’s a lot of places, but it’s not 250 places or 1000 places, so in one respect it’s not a lot of places, but how do we do that? We do that by growing that and bootstrapping it.

Steve: What is your role in this process, you develop all the materials and then you train a bunch of people or do you train one person…

Michael: Don’t say your role because in fact it’s not my role. I’m doing the first four new dreaming rooms myself. We’re videotaping those, audio taping those, we’re scrutinizing those, and we’re scrutinizing the impact they have on the audience. We also have a lead generation, lead conversion system in place to attract people to come to those dreaming rooms, and we’re testing that and validating that every step of the way as well so we’re preparing to grow.

Steve: So this is the franchise prototype stage?

Michael: [inaudible 00:30:27] that’s what we’re doing; we do exactly what I’m suggesting everybody needs to do Steve.

Steve: Okay and in terms of your lead gen, I’m just curious about your own organization, this book is obviously part of that, but is it primarily through email, word of mouth, what are your primary lead gen mechanisms.

Michael: Our lead gen is everything that you could imagine we’ve done in doing what we’re doing right now, so this very podcast interview is part of our lead gen process. I told you I have done about 30 podcasts, now that’s me, I’m speaking to you and you sharing what I’ve spoken about to your folks and them sharing what they heard with their folks and on and on and on and on.

You do that 30 times, 40 times, 50 times, 1000 times and you begin to understand that what I’m doing is I’m telling the story, I’m the story teller, I’m telling the story. Steve you tell the story, when you do a blog you’re telling a story and when you do whatever you do, when you ask me questions you’re really moving it to a telling a story.

So effectively you started your company for the purpose of doing something that you can define as your something, and the way in which you do it you can define as your way of doing it, and I’m suggesting that’s the beginning of the prototyping process. But to the degree it doesn’t go beyond Steve, it’s not an enterprise, you follow?

Steve: Yes.

Michael: So the whole objective of this is not for Michael to do this work, the whole objective of this is to build an
enterprise that does this work and lives without me, that’s why we say every life a legacy.

Steve: But Michael needs to be very heavily involved in the beginning right to develop the franchise prototype?

Michael: Of course I’m the entrepreneur, Michael was very involved at the very beginning just like I get involved in the beginning of whatever I’ve done…

Steve: This is funny we’re talking about each other.

Michael: But not to build a company dependent upon Michael.

Steve: Right, so let’s say I haven’t done your franchise prototype which is your course and your dreaming room right now, how do you kind of scale from there going on?

Michael: It’s very, very simple. You do a second dreaming room, a third dreaming room, a fourth dreaming room, a fifth dreaming room. In short now I’m in San Diego, then I’m in Anaheim, then I’m in…

Steve: But it’s not you at this point?

Michael: No, no it’s not me, these are certified new dreaming room leaders, and these are people who have learned the script by actually studying the script. And the script is what; the script is me doing it.

Steve: So let me ask you this, you mention the word script, does that imply that these leaders are just going off of a set protocol, or is there room for creativity there?

Michael: There is no room for creativity. Just like there is no room for creativity at Macdonald’s or Starbucks etcetera, there is a business model and the business model says the barrister doesn’t change your name from barrister to waitress; she didn’t get to do that.

Steve: Right.
Michael: Very creative, choosing to wear some stupid outfit, you understand?

Steve: Yeah I understand that.

Michael: It’s absolutely clear, so understand that what we’re doing is creating a template, a turnkey template that we can then expand worldwide.

Steve: So let me ask you this question, I’m an engineer so these are some of the things I think about, so given that people are using a script and everything is a template, is it hard to attract people as part of your organization?

Michael: No it’s easy; oh it’s just blatant simple.

Steve: Okay and what is the process then, how do you convince someone who is really, really out there and wants to do their own thing to come work for you or is that just not the right people that…

Michael: Well you understand it’s a process and so everything is a process. The process is simply a system over time, so understand if I’m going to attract somebody to become a new dreaming room leader, then I’m going to determine what the demographics of that individual or those individuals are, and I’m going to then go out in the market where we are going to open our door to seek out our finalists and we’ll do that using a system. The first thing is this, the second thing is this, the third thing – you follow what I’m saying?

Steve: Yes.

Michael: And all of it is turnkey, so even the process by which we audition these individuals is turnkey, everything is turnkey. Everything is developed, refined, designed to work in a very specific way so that we can be assured that when we get a leader in Cincinnati, that leader measures up to the kind of person we’re looking for and the absolute clear result we’re intending to produce.

So a dreaming room in Cincinnati is the same as a dreaming room in Cleveland is the same as a dreaming room in San Mateo, is the same as a dreaming room in Santa Rosa etcetera. It is, it is, it is, and it is because it’s organized in that way to produce a very specific result we’re looking for.

Steve: Okay so literally…

Michael: Practically so and that is we’re continually working on the new dreaming room even while we’re delivering it, and so there is the system for improvement, for continuous improvement as well and every leader will participate in that. So everybody is getting a chance to work in a harmonious way to continually improve upon what they do to improve upon the results they produce.

Steve: Okay so you have a feedback mechanism in place essentially, right? All of your satellite dreaming rooms you probably get together and you share feedback and then improve and enroll these…

Michael: You’ve got to, you’ve got to, you can’t grow without this, you understand the…

Steve: Yeah totally it makes sense.

Michael: That’s when I say the franchise, the franchise, the franchise, you can’t grow without this. I could send anybody to any dreaming room anywhere and they would have the same experience or be it the same experience given the difference they bring to the room, you follow me?

Steve: No I do follow you, I’m just trying to think of this model in terms of like a software company for example because they aren’t like separate franchises so speak, right? So when you’re talking on the concept of like in Infusion Soft it’s a little bit different because there is only one central area. I guess the way the software is delivered is like a franchise, right?

Michael: No it’s really not different and we would have to get really, really, really specific for you to take that in. It’s absolutely clearly transferable to any kind of company on the planet, and we have done this with every kind of company on the planet and absolutely faithfully, rigorously stood on the platform that I’m sharing with you here, and as we do that you begin to see that it applies everywhere, it’s a universal system.

Steve: Let’s talk about your book for a little bit; this book is targeted to people who are solopreneurs essentially, right?

Michael: Well they don’t have to be, we’re taking that as the worst…

Steve: Worst case scenario.

Michael: Worst case scenario, they call themselves solopreneurs, I immediately diffuse that word by essentially saying it’s contradiction in terms, entrepreneurs are not solo, period. No entrepreneur ever succeeded as a solo anything, so effectively if a guy calls himself a solopreneurs he bought a pitch, and that’s an info marketing pitch. It’s effectively saying creating a lifestyle mentality about being there on your own all alone doing what you do and how splendid you are, and I’m saying bullshit.

Steve: Sorry, this is what I want to ask you Michael, so along those lines how do you coach people to think bigger. Some people just want to create a business that allows them a lifestyle so to speak.

Michael: I got it Steve, I got it and it’s a great question, it really is a great question and the reality is I can’t get them to want more than they’ve got, but I can inspire them to see the limitation of what they presume they want by expanding their availability to something they never thought they wanted, and in the process of doing that something can happen.

And so that something can happen frankly it’s exactly what happened in Infusion Soft, the guys told me they really didn’t want to grow any bigger than they were, understand didn’t really want to grow any bigger than they were, they had no idea whatsoever that they were going to grow to become 100 million and then a billion dollar company when I first met them.

Steve: How did you convince them?

Michael: I’m sorry I didn’t convince them at all; suddenly they woke up to the possibility. It’s waking up to the possibility that’s extraordinary. Have you heard of Landmark?

Steve: No I have not.

Michael: Have you heard of EST [ph]?

Steve: No I have not.

Michael: Okay, so Steve I’m going to sit here as you’re on your way, look up Landmark, they are right there where you are, they are in fact worldwide. Have you heard of [inaudible 00:41:49]?

Steve: I have not; maybe I should make a list of these things.

Michael: Hey Steve man I’m telling you, yeah this is big stuff. Well if you heard of Landmark and you go to the forum, the
forum is an event all about possibility and you walk out of that with completely new framework. You begin to understand that all the “choices” we make are really choices to live in our comfort zone, and I’m saying to live in our comfort zone is in fact the worst thing any of us can do because it prevents us from seeing what’s possible.

So when I look at Steve and I don’t even know you Steve and I don’t have your picture in front of me, but when I look at
Steve I’m saying Steve is somebody he has never even met before. As successful as you are and the possibility of that is a mine blower Steve, that’s what the dreaming room is all about.

Steve: Okay, I have to check out these resources then, are they similar to the dreaming room then or no?

Michael: I’m sorry.

Steve: The resources that you just asked me about, are they similar to the dreaming room?

Michael: No.

Steve: No.

Michael: They are personal growth.

Steve: So Michael we’re coming on 40 minutes here, I want to be respectful of your time. Can you lay out like a roadmap for someone who wants to get more involved in e-myth and your coaching, where should they start?

Michael: Absolutely positively, all they need to do is to go to www.beyondemyth.com and they will be connected, they will be able to get the book; they will be able to read the book. In fact we have a special I think going on right now, what’s that, automated book.

Steve: I’m sorry.

Michael: What’s that automated book you can buy it for $1.99.

Steve: Oh on Amazon you mean the eBook.

Michael: Yeah you get it for $1.99, just do it.

Steve: Okay well that’s a steal you guys.

Michael: Yeah I mean that’s a steal, just freaking do it, and then the minute you do that you’ll understand this much, much better and will begin to pause a question for you, what is the possibility awaiting you, and how do you proceed to pursue it, and many people don’t want to do that, then just forget it since it’s not something we talk about.

Steve: Okay, by the way the book is a pretty quick read and it goes by really quick, so I highly recommend everyone go and check it out.

Michael: Thanks Steve, you enjoyed it?

Steve: Yeah I did, I did, I read on the plane in fact.

Michael: Oh wonderful, give my best to your wife and stay in touch with us. Check out Landmark if only to speak to the whole idea of extreme possibilities, and you discover that in fact you’re going to want to bring stuff like that to everyone you work with and wrench him out of their comfort zone to see the possibilities that are just waiting there unattended to for everybody.

Steve: It sounds good Michael. Thanks a lot for coming on the show, really appreciate your time.
Michael: My delight Steve, thanks, bye, bye.

Steve: All right take care.

Hope you enjoyed that episode. I’ve actually been a huge fan of E-myth Revisited ever since is started my ecommerce store and it was an honor to finally meet and chat with Michael Gerber one on one. For more information about this episode, go to mywifequitherjob.com/episode146.

And just a reminder that tickets to the 2017 Sellers Summit are now on sale at sellersummit.com, the conference that I hold every year that specifically targets ecommerce entrepreneurs selling physical products online. The event will be small and intimate, and I promise you that the speakers will focus on actionable strategies to improve your ecommerce business and not high level BS. So head on over to sellerssummit.com, and check it out.

And once again if you are interested in starting your own online business, head on over to mywifequitherjob.com, and sign up for my free six day mini course on how to start a profitable online store. Sign up right there on the front page, and I’ll send you the course via email immediately. 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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145: How To Make 6 Figures With Network Marketing (MLM) With Rachel Holland

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145: How To Make 6 Figures With Network Marketing (MLM) With Rachel Holland

Today I’m really happy to have Rachel Holland on the show. Rachel is someone who I was introduced to by a friend and she is killing it in the network marketing space. Rachel runs the popular site Surviving The Stores where she teaches others how to save money and live healthy on a budget.

She and her husband Ryan run the site together and have turned it into a huge resource. Anyway up until this point, I have not had anyone doing network marketing before on the podcast and I’m very curious how it works. Enjoy the interview!

What You’ll Learn

  • How Rachel came up with the idea for her site and how she got into network marketing
  • How network marketing works.
  • How to get customers to sell under you
  • How to find the right network marketing product to sell
  • How the payouts work for network marketing

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 with Rachel Holland, who was introduced to me by a good friend. Now Rachel runs survivingthestores.com, and the reason why I want her on is to discuss the ins and outs of network marketing.

In other news I wonder that 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 single year that specifically targets ecommerce entrepreneurs selling physical products online. 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 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 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, once again that’s sellerssummit.com, so go check it out.

And if you want to learn how to start your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business, so go to my wifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email. Now onto 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 Rachel Holland on the show. Now Rachel was someone who I was introduced to by Tony Anderson, and she is killing it in the network marketing space. Now Rachel runs the popular site survivingthestores.com, where she teaches others how to save money and live healthy on a budget.

She and her husband Ryan run the site together and have turned it into a huge resource. Anyway up until this point I have not heard anyone doing network marketing before on the podcast, and I’m just really curious how it works. With that welcome to the show Rachel, how are you doing today?

Rachel: Thank you so much Steve, I’m glad to be on the show with you, I am doing great today.

Steve: That’s good to know, there are just so many questions that I have for you about this space, but let’s just start from the very beginning, how did you come up with the idea for Surviving the Stores, and how did it move into the network marketing space?

Rachel: That’s a great question, so back in 2008 I was a stay at home mom and my husband was working outside the home, and as everyone knows the economy tanked and we were just really, really struggling to meet our budget every month. Gas prices started to rise and it just killed us. So we looked at our budget and we said, okay where can we cut back, what can we do, and we didn’t have people, we didn’t drive a lot and there weren’t a lot of places that we could cut back.

Where we saw that we could cut back was in our grocery budgeting because we were just spending crazy amounts. So I actually started Surviving the Stores as a way to keep myself accountable in grocery budgeting. It has moved from that through the years to end up being a full time income for our family starting in 2010, 2011 and I was able to use that blog as well to launch a network marketing business even though I had no intention of doing that at all. I was actually pretty against network marketing in general.

Steve: Okay, I’m just curious, are you friends with Ellen Chase because that grocery budgeting stuff is like [inaudible 00:04:17] early too?

Rachel: Yes, Ellen and I are very good friends, I love Ellen.

Steve: Okay and so did you start Surviving the Stores to make money in the beginning or was it just a way to document everything?

Rachel: Not at all, it was very much just a way to document everything.

Steve: Interesting, so how did it gain traction?

Rachel: You know the news media printed up in our local Dallas Fort worth area, and then it ended up being on a segment with Good morning America…

Steve: Oh my goodness, okay.

Rachel: It took off from there, and people found out about the site and grew that way.

Steve: Did you do anything to get those media mentions?

Rachel: I did not, I mean I know there are classes now at blogging conferences about how to get in the media, but no, but he ended up just finding me.

Steve: Okay wow, that’s incredible, okay. So how did Surviving the Stores and not talking about the network marketing stuff just yet, how does Surviving the Stores make money?

Rachel: We make money through several ways, the first one being through just general CPM ads, and so and all possible clicks, so Google Adsense or just in ads that when you make money off of impressions to your site, so take photos to really generate a good income. You have to have a lot of traffic to your site. That’s always been a very significant way that we have made money, but also through affiliate links.

Since we were a deal site for so long, we would find good deals, and then we would have affiliate links that we would – let’s say Kohl’s [ph] had a good deal online, then we would have an affiliate link over to Kohl’s and say here is how you get this at the best price, so we would make money that way as well. As you can imagine, the fourth quarter was always our best quarter for that for sure.

Steve: So this is all physical product affiliate links?

Rachel: For the most part, yes.

Steve: Okay, because I know you told me earlier prior to this interview that you had grown this blog to six figures without the network marketing stuff, and so this is mostly affiliate and ad revenue?

Rachel: Yes. I never did a lot of sponsored posts, that wasn’t something that I – I wanted to blog because once I did start making money blogging, I wanted to be on my own schedule, on my own timetable and so I know a lot of bloggers also make money through sponsored posts and that was not something that we really did often.

Steve: Okay, and in terms of finding these deals, like how would you find them?

Rachel: Research, lots of research. There are deal forums out there where people get on and search for deals and post deals that they have found, and then others get on and search for it. So basically as the deal blogger, I would get on and look through to see which ones were the best ones, because it’s just a mess I these forums, it’s an absolute mess. So you get on and you search for what the best deals are, and then you can post them as a blog post in your blog.

Steve: Interesting, so it’s a manual process, it’s not automated?

Rachel: Absolutely, it was completely manual.

Steve: Oh wow, so what is the typical affiliate cut then for like Kohl’s you mentioned for example?

Rachel: It depends, it depends, anywhere from – there are some affiliates where I’m not going to name any names, but some of them are at 1%.

Steve: Wow okay.

Rachel: You know what, surprisingly those don’t get posted that often on blogs, but then anywhere up to 4, 8, 10%, and then if you work with other bloggers as an affiliate for example you mentioned Ellen Chase. She has several different programs that you can be an affiliate for, and so she pays a much larger percentage than say Kohl’s or Best Buy or any of those.

Steve: So would you say that your audience were people that did not have a lot of money?

Rachel: You know it’s really surprising because there were some who were in that same place that I was where they just were struggling to make ends meet, but then it’s very interesting because a lot of the people who are looking for deals and who are looking for coupons, they have very good, very established salaries. They are just not trying to make ends meet, but they know how to be smart with their money and save.

Steve: Okay and in terms of – outside those major media mentions that you got, what were some other ways that you got traffic to your site?

Rachel: Networking, absolutely networking with other bloggers.

Steve: Like face to face?

Rachel: Yes, blogging conferences, lots of blogging conferences, just networking with people, doing projects with other bloggers where you post about them and they post about you, or you do a series together. I did a series with Tony, actually a few series with Tony over the years, then just think of like that where you are – it’s a reciprocal thing you just, you help them by sending your traffic to them and they help you by sending their traffic to you, and it’s just a great relationship.

Steve: Interesting, so when you start out though and you have nothing, like how would you approach someone with a lot more traffic than yourself?

Rachel: That’s a great question.

Steve: Just curious.

Rachel: Just build a relationship with them, for me it was meeting people in person and talking to them, getting to know them, learning about their site. In a lot of ways very similar to what you do with network marketing asking them a lot of questions, learning about what they’re doing, their passion behind blogging, why they’re doing what they’re doing, what their blog is about, what they want their readers to come away from their blog feeling, or just getting to know them, really developing those relationships.

Steve: So you could not have gotten your blog to where it is without these face to face in person relationships that you built over time?

Rachel: No way, there is absolutely no way.

Steve: Okay and so I know prior to this interview we chatted about how you’ve gone away from being a deal site and you’ve moved over to network
marketing. Can you describe that transition?

Rachel: Yes, so I was actually pretty against network marketing for a long time, all of the stereotypes that you hear about network marketing, those were things that I believed because I had experienced it back in college. When I was in college I was a freshman in college and I was looking for a job to make just some extra income and I looked in the paper, the classified ads, that’s before you would just look online or on Monster. I looked at the classified ads and there was an ad that said make your own hours, unlimited income potential, call for an interview, must be a self starter.

I said, yes absolutely, that sounds like me, I can do that. So I called and they said, oh we have an interview spot open and they brought me in, I even took a little test on the computer and they brought me back into the back room and said, you seem like you would be a great fit for our company, all you have to do is buy this starter kit, it’s commission only. And so I was then ready to start selling the best knives ever.

Steve: Was it Cutco?

Rachel: Yeah, it was Cutco, I wasn’t willing to mention the brand, but yes it was Cutco.

Steve: The reason why I ask is my friend used to sell those knives when I was younger, yeah.

Rachel: They are great knives, I mean their scissors really do cut through a pinning and I don’t know of any other scissors that will cut, they are great scissors. But I lasted about two weeks in the company and it was when they told me to talk to my family and friends while I was brand new in a college town, I didn’t know anyone. And they said, well here you can have the records of anyone who had bought previously and I could go to their house, or I ask them if I could come to their house and clean their knives, and then while I was there I could show them the new product catalog.

I did that and then I thought, you know this probably isn’t the best idea for me as an 18 year old college freshman going to people’s house asking them if I can clean their knives. I ended up saying this is a bad gig, this is not something that I want to do, I never want to sell anything ever again, I am done. That’s where I ended off and so for me it wasn’t just a seamless transition into network marketing.

Steve: Can we define what network marketing is, I’m pretty sure a lot of people out there listening don’t even know what it is?

Rachel: Yeah so network marketing and there are all kinds of wrong definitions out there, but really network marketing is a way to create a residue income that not only can last through your lifetime, but I know with the company that I’m a part of we can actually will our business to our children and they can continue to receive that residue income, but a way to receive a residue income through sharing about a product that you love, and then you believe other people will love. So I would say in a nutshell that’s a good definition of how it works.

Steve: So to summarize what you just said, you sell something or you have people that are selling on your behalf and you take a cut of what they sell, and they can recruit their own sellers as well, is that how it works?

Rachel: That’s correct and the way that I like to share with people is I talk a lot about sharing because really that’s what it is. Whenever I’ve tried to sell it doesn’t work out so well, just sharing about what I’m doing and if you’re passionate about it, people will be asking you how do I get this, what do I do?

Steve: Interesting, okay. And so you mentioned synergy before, you were talking about how transitioned from Cutco and then you had a bad experience there, but then what changed your mind about – you’re doing essential oils now, is that correct?

Rachel: Yes, that’s correct.

Steve: Okay, so how did that transition take place?

Rachel: Well I ended up getting – I was researching essential oils and I had settled on where I wanted to get essential oils from. I had always – you’ll see lots of posts dating back to almost the beginning of Surviving the Stores on natural remedies. That was something I was already interested in; I wanted to get started with essential oils. So I researched several different companies then ended up deciding on one specific company.
I knew that I wanted to get started with them but just for the essential oils. I had no interest at all in doing the business in any way and I even told the person that I signed up through. I said my plate is already full, I’m blogging full time, I do not want to end up with marketing again, so I just want to get these products.

So for a year I stuck to that and for a year I just got the products, but because they have been so beneficial for our family and because it fits so well with the blog, I started blogging about them, I started sharing on Facebook my experiences and how they were benefiting our family. So people either from the blog or from friends on Facebook would message me saying, okay tell me more, I want to sign up.

Steve: Interesting, so actually can you just describe what essential oils are for just the people who are listening who might not know what that is?

Rachel: Absolutely, so essential oils are plant extracts and they are essentially the life blood of plant, they are what go through the plant, they give the plant its smell, they do amazing things for the plant, and I believe that they are what God created to work with our bodies, to help our bodies do what they’re supposed to do.

Steve: Okay, and so it’s mainly for medicinal purposes?

Rachel: Health and wellness.

Steve: Health and wellness, okay and so you started writing about the essential oils on your blog and then people started becoming interested in what you were talking about, and they wanted to buy their own, is that how this all started?

Rachel: Yes, exactly.

Steve: And then you hadn’t signed up or anything to sell these things, did it just fall into your lap then?

Rachel: Well so one of the things that’s great about certain companies and this is true for the company that I’m with, whenever you get a starter kit with this company, you are not required ever to sell anything, but you do have the ability to share and get a referral check from the company essentially.

So we call them a thank you check, so you get a certain amount whenever somebody else purchases a starter kit through your link, it’s like an affiliate link. You can earn through that, through sharing with other people and they purchase, and then you get a bonus or a commission off of that.

Steve: This is different than the cut of the sale; this is just a flat commission?

Rachel: For their initial kit yes, it’s a flat commission.

Steve: Can we talk a little bit about what this starter kit is, like you’ve mentioned it a couple of times but I’m not sure what goes inside of that?

Rachel: Inside this starter kit for essential oils there are 11 of the most popular, most used essential oils, because really the world of essential oils can be very overwhelming and anyone who has dabbled in it can say, oh my goodness there are so many things out there. So what the company that I work with which is called Young Living Essential Oils has done is they have put together a kit that has the most popular essential oils, the ones that people would be using every single day.

Steve: Okay but if you want to buy a certain set, like do you have to buy the starter kit or can you buy the individual oils that you want?

Rachel: You can buy the individual oils as a retail customer, so there are two different things that people can do when they sign up, they can either be a retail customer and they pay a 24% mark up, or they can become a wholesale member by buying a starter kit and then they get a 24% discount forever, and they also get that ability to share with others and earn that commission if they choose to do that.

Steve: I see, so how much does this starter kit cost?

Rachel: It costs $160 which is absolutely incredible for starting a business. If somebody does go into that saying yes I want to start an essential oils business, for $160 they can, which is an incredible price.

Steve: And if I were to just buy like a few bottles of the oils that I wanted to, like how much is each individually, you said that starter kit has 11 you said?

Rachel: Yes, it really depends. So you can get certain oils for $5 and then there are oils that are almost $200, so for example rose oil. Rose is just extremely delicate and expensive to distil the oils out of the rose plant, so it really depends on the oil itself.

Steve: Does that rose oil come with the starter kit though?

Rachel: It does not, but there are some frankincense stuff and frankincense is an extremely amazing and much more expensive oil. So everything in the starter kit, if you were to buy it all separately, it would be over $350, so the starter kit is actually just a really good deal in and of itself for getting started for the essential oils.

Steve: I see and it sounds like it gives you like – it’s like a variety pack for example if you’re just starting out it makes sense to get that regardless?

Rachel: Exactly.

Steve: Okay and so now you have the starter kit and you’re using these oils yourself, so how did you transition and how did it work in terms of selling these oils?

Rachel: What I did was I created a few Facebook groups and really Facebook groups have changed the game for network marketing. I mean it just really has because even 10, 15 years ago, or five years ago network marketing was done over the phone and that was it, and through emails, emails, snail mail, over the phone.

Facebook groups have changed the game because I created, one of the first things I did when I started the business was create a few Facebook groups, and I have for example a Facebook group that’s specifically just for education where people can ask questions about essential oils and how to use them on their family, on their kids, on their pets, all of that, and then another group specifically for those who are interested in learning more about the business.

And so in a sense I created like a little bit of a funnel system through Facebook groups which has been really neat and fun to do, and that’s one of the things that I learned through blogging was how to do that. So not only do I have that through email but also in a sense through these Facebook groups.

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How did you build the Facebook group?

Rachel: Just on Facebook there is a little thing that says group…

Steve: Oh sorry, I meant how do you build members, like how do you add a whole bunch of members?

Rachel: Once somebody signs up, I email them and get their email address that they have, and most people, the majority of people have a Facebook account. So I email them and I get their email address that they use for Facebook, and you can add people to the group with their email address.

Steve: So this starts from your blog it sounds like then, right?

Rachel: Either from my blog or people that I know personally, either way. I’ve built both ways; I have several people that I know personally and then blog readers as well.

Steve: So would you say you got most of your downstream people through personal relationships or through your blog?

Rachel: Personal relationships for me.

Steve: Interesting, so can you describe how that works, how can you get critical mass doing things that way?

Rachel: Because everybody knows people, so I have a certain number of people that I know, but then each of those people has a different sphere of people that they know, and then each of those people has a different sphere of people that they know. So everybody has their group and so let’s say I end up signing someone up and they get their starter kit, they love the oils; they are interested in the business. And I say it in that order, because whenever somebody tells me okay I want to get a starter kit because I’m interested in the business, I kind of back up a little bit, because I want them to truly love the products first before they jump into the business side.

So once somebody does that, let’s say I enroll somebody who decide that they love the oils and they do want to get started in the business, and if their network is also a large network, then that means that my team and their team grows more quickly, they want to sign someone up who has a smaller network. Really that’s a big part of why it’s called network marketing or relationship marketing.

Steve: Okay and how do the economics work, like let’s say you sign someone up, like what is your cut and what is their cut?

Rachel: So if I sign someone up, and it really varies from company to company. Every company is going to have a different compensation plan, and that’s one of the things that I tell people whenever they say they are interested in a network marketing business. I tell them to look at the compensation plan, look at the income disclosure, every network marketing company is required to have an income disclosure up there at least I think every couple of years.

So take a look at that and see if these are the incomes that you are comfortable with, so every company does it differently. The way that Young Living works which is the company that I’m with is that I earn a commission when somebody buys the starter kit and that commission is $50, and then there is a bonus during their first three months for what they buy during their first three months, and then you get just general commissions depending on the level that they are on after that.

So starting in month four you get just regular commissions. The thing about essential oils and really any consumable product, because I would highly recommend for those who are considering network marketing to make sure that it’s a consumable product that you love, that you use daily, that you would use whether or not you are making money, because other people will do the same. So there are – I mean over 90% of the people on my team are not building a business, they are buying these products because they need them every single day.

So I just want to commit to anyone who is considering this that that I think would be a very crucial thing in deciding which company that you go with.

Steve: Interesting, so for the first three months you get a commission of what your person consumes and then afterwards like if they…

Rachel: You still get a percentage.

Steve: You still get a percentage, but then if they go on and sell starter kits, you also get a cut of that as well, is that correct?

Rachel: Correct.

Steve: And how does that work, like what are the economics like there?

Rachel: Again it varies from company to company. If I enroll someone and then they enroll someone else, I also get a percentage from that enrollment, and then up to a certain level. So all network marketing companies will have let’s say either five levels or six levels that you get paid on. Really there is so much in here, different network marketing companies even have completely different commission chapters like some will do uni level commissions, others will do a binary system which is just kind of I don’t understand that level.

Steve: How do your levels work, like I guess I don’t understand how that works, what does it mean to be in a level?

Rachel: So let’s say I sign up four people and they are on my level one, and then let’s say each of those people sign up four people, then each of those people will be on my level 2.

Steve: I see, okay.

Rachel: And then if those people sign up people, they would be on my level 3.

Steve: Got it, got it, okay so your level one people then I guess what commission do you get off of them with your current company?

Rachel: With my current company after those initial three months it is 8%.

Steve: 8% okay and then the level 2 guys what is the cut, it’s a smaller cut I would imagine, right?

Rachel: Yes 5%.

Steve: Okay and then it just trickles down?

Rachel: And then four, four, four, correct.

Steve: Okay and then how many levels can you have, infinite levels?

Rachel: Well so this is where you get into the tricky parts ins and outs of the compensation plans, so there is uni level commissions, and then with our company we also do generation commissions which is when you get to a certain rank, you get an extra percentage off of your team, the what is going on within your team.

Steve: Okay this is fascinating, so what is that, like I didn’t quite understand what you just said actually. So after a certain point you get extra commissions?

Rachel: Correct, so in my company for example whenever you reach the rank of silver, you get an extra, well that’s called a generation commission off of everyone, off of the entire volume of your down line.

Steve: Oh my goodness okay.

Rachel: And then whenever people under you get to higher ranks like so let’s say somebody under you gets to silver, then you get an even larger amount of commission, so what’s really, really fun about it is that it benefits me for other people to grow…

Steve: To do better.

Rachel: Or to even just to pass me, like it’s wonderful to watch, and I get to be a part of other people having these financial successes and residual income for the rest of their lives.

Steve: What does it take to achieve silver like you mention like these different levels, how do you achieve that?

Rachel: With our company to achieve silver you have to have to have a certain group volume which is just overall sales essentially in the group. And then you have to have two people on your level one, on your first level who also have a certain amount of group volume. It will vary from company to company and I see people all the time getting to that silver rank within a year. At silver rank the average income is $1,700 a month.

Steve: Wow, okay and can you give me an idea of what volume is required to hit silver?

Rachel: 10,000.

Steve: 10,000 okay a month or?

Rachel: A month yes

Steve: A month, okay, and just for clarification what level are you at right now I’m just curious?

Rachel: I’m at the diamond level.

Steve: And then what are the advertised incomes for that level?

Rachel: That income disclosure says that the income for diamonds would be 20,000 to 50,000 per month.

Steve: That’s amazing, okay, and so even though – like even if you just stop doing this altogether, you would still get that income from month to month?

Rachel: So we essentially did that.

Steve: Okay.

Rachel: Last fall we had this crazy idea to pack all of our things in storage and buy an RV and travel the East Coast in RV. It was an amazing experience, I mean just incredible, we got to go to DC and Williamsburg and [inaudible 00:32:25]. It was so much fun, and I thought that I would be able to work more on the road, but I was not, we were just busy the entire time.

I was still diamond during those months, I still made those pay checks during those three months, and three months was as long as we lasted and we said get us out of this thing and into an apartment. We wanted to do a year but no, that was not going to happen with four kids.

Steve: So is there any maintenance that you have to do then?

Rachel: There is, it really just depends on what you want to do, so I still teach classes because I love to, I love helping people get started, so I still teach classes, I have weekly calls for my business builders. Any of the people on my team who are interested in building a business, I have a weekly call with them where I share with them just something encouraging to help them, and then we do a question and answer time every week so they can bring me their questions and we just talk through those things and brainstorm together.

And then in the Facebook groups I post often, different whatever the specials are that month or different things for business, but then I also for people who are interested in the business, I’ve put together a two week boot camp to help them get jump started. It’s actually called the jump start boot camp to help them just start their business, to know here are the things exactly what you need to do to get started on the right foot in a network marketing business, and specifically in this network marketing business.

Steve: I was just going to ask because if your downstream people don’t make any money, you don’t make any money either, right?

Rachel: Exactly, and that’s the beauty of it, me being successful means that so many people on my team are successful, and there are multiple people on my team who are making six figures as well.

Steve: Okay wow, so in terms of your Facebook groups, it sounds like that’s where you do the majority of your marketing, why not just your blog and email, why is Facebook groups better than just like an email marketing list?

Rachel: Because I love getting to know the people, I mean I’ve built friends through this, through Facebook groups. Everyone is on Facebook constantly, I mean we’re always on our phone; I mean people even eat dinner on their phone scrolling through Facebook. It gives them a notification when someone posts in the group, they see it through their feed, it’s an easy way for people to ask questions, and also it’s way that I don’t have to personally answer everyone’s questions.

So I’m not getting all of the emails, somebody can ask in this Facebook group and then there are other people who can get on and answer those questions instead of me being the one that has to answer all of those questions.

Steve: Interesting, okay, and so I think I’m starting to understand how this works now. So getting them to just buy the starter pack is just like the beginning of the journey, right?

Rachel: Exactly.

Steve: And so the way to thrive in this business is you really have to put in the work to get to know everyone and teach them how to sell the stuff
themselves, is that accurate?

Rachel: Yes and there are systems like for example the boot camp. I run it through a system where it automatically posts on Facebook, and I run the boot camp also through a Facebook group, that jump start boot camp. So there are definitely systems in place that can help you, a lot of people use a scheduling software like HootSuite or something to schedule posts in their Facebook group.

There are so many different systems that I learned as a blogger that have come in handy during building a network marketing company, but yes getting to know the people is such a huge part of that and it’s one of my favorite parts, I love that.

Steve: Are these boot camps that you run, are they free or do you charge for them?

Rachel: I do not charge, no not at all. I can’t imagine myself ever charging for my team members to go through a boot camp to do something that yes benefits them but also benefits me. And I know that there are some network marketers out there who do that, who will have people sign up and say, now for only 3.99 you can buy my system to show you how to be successful in this. That’s just not me; I don’t want to do that.

Steve: So whenever you refer to your team members, are these like your level ones and your level twos?

Rachel: And level 20s and level 50s and anyone who is on my team anywhere, it does not matter where. I am a part of helping them get their answers.

Steve: Here is a question I had, so let’s say you get to like level – like your 20s for example, is it much harder for your level 20s to make money?

Rachel: No, not at all, I’m someone’s level 20. There is a good friend of mine who is actually at the highest level of the company, she’s also a former blogger, her name is Alyssa Francis. She’s at the highest level of the company which is loyal crown diamond, and the loyal crown diamond income is 100,000 plus per month so she is there. She is there, she signed up a year before me, and the person right above her is actually still just a silver, so those who are on your team can rank up faster than you, it really just depends on what you do.

Steve: The reason why I asked that question is because there is a cut that happens at each level, but pretty soon doesn’t that exceed 100%?

Rachel: It does not because there are some cut offs down there.

Steve: Oh okay where people don’t make any money if there is a sale or?

Rachel: This is where you get in to the really complicated ins and outs of the compensation plan, but yes eventually there is a time where there are some people may be on your level 13 or level 30 or something like that where you would not make anything off of what they bought, but if you are at a certain rank no matter what if I am a diamond I’m going to be making on average 20,000 to 50,000 per month.

Steve: And that’s from – so that number, like what determines where that range you lie on the diamond plan for example?

Rachel: A lot of it is determined on how many leaders you have on your team, so for example a leader would be considered silver and up with Young Living, so a lot of that is determined by how many silvers you have. Some of that is determined by how many people are in your levels one through five, but I would say the biggest portion of that is going to be determined by how many leaders you have under you, those other people who have reached silver.

Steve: Interesting because you mentioned that other example with your friend who was the ultra diamond or whatever rank that was, the person above her was just silver, like how is that possible?

Rachel: Because she didn’t do what needed to be done to get to the higher rank, so it’s not like everybody above me is a higher rank than me at all.

Steve: Interesting okay, so what does it take — so you mentioned with silver you needed to have multiple silvers under you, right?

Rachel: To get a silver you have to have two groups, essentially groups we call them legs, two groups under us that have an overall volume of 4,000 per month.

Steve: 4,000 okay and then what’s the rank right after silver?

Rachel: Right after silver is gold.

Steve: And then what does it take to become gold?

Rachel: To become gold you have to have an overall volume of 35,000 per month and then you have to have three legs under you, three groups under you that each has 6,000 of volume.

Steve: I see okay, so that one silver person probably just had that major leg which was your friend?

Rachel: Right and then another smaller leg and that was it, she never worked on creating those other legs.

Steve: I see okay, so going forward with your business right now, you mentioned that you had the opportunity to go on this really cool RV trip. So going forward like what – do you have incentive to continue to sign on new people?

Rachel: Absolutely and I would say even more than money. It is because I have seen these oils change people’s lives, and that truly is my incentive is that I want to get these oils into more people’s hands, because they are what were created to work with our bodies.

Steve: Okay interesting and so even today you continue to blog about these oils, you continue to run your groups and your boot camps, and at this point what would it take for you to reach that next level past diamond?

Rachel: At this point what it will take, so I have all of my legs in place for the next level, it is just a volume thing right now, so it is just gaining more volume, helping more people learn how to share and sharing with their friends in their network.

Steve: Interesting, so is it in your best interest then to give special treatment to your legs?

Rachel: As opposed to?

Steve: As opposed to just random people like focusing more on the people who are actually on your team, does that make sense?

Rachel: Sure yes, so one of the things about network marketing is that whenever somebody buys a starter kit, let’s say within Young Living, they are automatically a part of a team somewhere. So that way everybody is able to be helped by someone, so my responsibility within the company is to help those who are a part of my team.

Steve: Okay.

Rachel: And not that I don’t help overall, I mean I love talking to others and brainstorming with other leaders who are not a part of my team or even not a part of my up line, that is so much fun, I love doing that. I love having what’s called those cross line relationships; they are not your up line or your down line.

Steve: Okay I think I’m kind of understanding how this all works now, so the way you build your business is you ensure that the people under you are successful, and then you get these bonuses which push you up to the high bend as opposed to signing up as many level ones as you possibly can.

Rachel: Exactly, yes.

Steve: Okay that’s an interesting business model oaky. You mentioned earlier that it’s in your best interest to sell some sort of consumable and I don’t know, you probably don’t even remember this, but how does Cutco work, like most of the times when you buy certain knives you’re done, right?

Rachel: Right oh yes. I could use some more knives, actually I still have my set, but it’s been goodness almost 20 years since I bought my first set. So you’ll see those big ticket items where they are pretty expensive like the vacuum cleaners, I mean how often do you need a Cabby vacuum cleaner, or do you even need one, do you even need a $2,000 vacuum, I don’t know.
So a lot of people have that in their head, you know the people that come around to their door and say, hey I just want – I’ll shampoo one room of your carpet for free. A lot of people have that in their head, but yeah it’s just such a different experience now.

Steve: Okay and then I had a couple of more questions relating to oils, and so going forward, like your friend who is at the highest level, is she doing the same things you are?

Rachel: She is absolutely; she is still very involved with supporting people, because she wants to see as many people succeed in this as well.

Steve: Okay, and is she at the highest level?

Rachel: She is yes.

Steve: She is okay, and so really it sounds to me at least that you don’t go into something like network marketing unless you’re a true believer of the product?

Rachel: Yes, and I have had people join my team before who were just interested in the money and I tell you what that it faded very quickly, because they were not passionate about the product. So now that is just something that I tell people upfront that the business will not work unless you are truly passionate about the product.

Steve: How often do you actually go in person and have like parties so to speak, or is it all done online at this point?

Rachel: It depends, there were different seasons for me, there were times where I was doing in person things a lot. We are in an apartment right now and while we’re building a house, and so right now it doesn’t work out super well for me to have in person classes at my house, but I’ll do webinars and then when we move I will certainly have events at my house, but just because I love it.
I was at a retreat this past weekend, it was actually the silver retreat for everyone who had reached silver in the company, they invite them to Salt Lake City and you go see the lavender farm and everything, and there was a loyal crown diamond, again that’s the top level on the company. We spoke from the stage and she never taught one single class, she completely built online and got from – bought her starter kit to get to the highest level of the company in 18 months.

Steve: Wow.

Rachel: And that’s without teaching a single class and building all online, so it really can be whatever fits with you and with your personality and what you have time for, what you want to do.

Steve: Have you ever bought ads for any of the stuff or through your blog, like how did you get people to read the essential oils articles on your blog?

Rachel: I had a pretty good email list for my blog, and so that was definitely a part of it. We did run some Facebook ads, that helped back when Facebook would actually show your posts to people. That was good because we had a pretty, we had over 50,000 fans on Facebook and so that was great.
Then Pinterest, I would say by far Pinterest was the main traffic generator and sign up generator to our posts, so people would see a post on how do I use essential oils, or essential oils for a healthy immune system, or essential oils for a healthy respiratory system. So they would click on that post, come and read about it, and then decide to sign up to get a starter kit from there.

Steve: And to sign up is just a link that leads to some landing page where you can put in a credit card, right?

Rachel: Exactly.

Steve: And so for all these people who are listening who are interested in getting into this, what are some of your recommendations?

Rachel: To get into Young Living specifically, of course my recommendation would be to come to survingthestores.com…

Steve: Yes sure, of course.

Rachel: And click on the essential oils tab, and I would love to help you get started, but really I recommend whatever company you end up choosing
because I really do think that everyone should have some kind of residual income, and whatever that is, whether that would be investment properties or whether that’s network marketing, but to really develop some kind of residual income, to do your research before jumping into a company. Can I just say one little quick thing about residual income?

Steve: Yes, absolutely.

Rachel: With our blog, with Surviving the Stores, I thought that we had found residual income. There was one post that we had that we ranked really high in Google for, and we were making $1,000 per day off of that post, and I thought oh my goodness this is it, is this really going to happen? Well Google changed their algorithm, and we ended up on page two, and now we’re making about $5 a day on that same post.

And so the things that I thought were residual income ended up not being residual income, and so I love that this, that network marketing really can be true residual income for people and that’s what it has been for us. It allowed us to take those three months off last fall and so on, and I would say ask if you’re interested in a network marketing company, ask if it is something that if your income can be given to your children, if it can be willed because with Young Living the income is willable. That was huge for us; I love that part about our company.

Steve: Would you say that a blog is necessary or helpful?

Rachel: No not at all. It can be helpful for growing more quickly, but I have plenty of people who are making solid incomes and on their way to making a solid income just from teaching classes and sharing in person with their network. But I would say that whatever avenue somebody uses to grow their networking marketing business, they have to have a network.

And so whether that network is online, whether that network is at work and mums at the soccer field or wherever that network is, there has to be a network, there is a reason that it’s called network marketing. And so if somebody just wants to stay inside and not build any kind of network at all, then they are not going to be successful in network marketing, but there are many different ways to expand that network of people.

Steve: Okay, hey Rachel I learnt a lot today. If anyone out there has any questions for you where can they find you online?

Rachel: They can find me through survivingthestores.com. My Instagram is @Racheleholland, on Facebook I am Rachel Holland and again you’ll see Surviving the Stores, you’ll see Young Living. I also have another website called howtohomeschoolforfree.com, just because we’re also a home schooling family, and I put free resources that we find for home schooling. So any of those places you can find me there.

Steve: Is there a contact form on those sites where they can actually reach you directly?

Rachel: Yes there is on both of the websites, yes.

Steve: Awesome and are you on Twitter as well.

Rachel: I am on Twitter, it is survivingstores.

Steve: Survivingstores, awesome. Hey Rachel, really appreciate your time; all of this stuff is fascinating to me, because I haven’t had anyone on the show doing network marketing before, so I appreciate it.

Rachel: Thank you so much for having me; this has been so much fun.

Steve: Thanks a lot for coming on, take care.

Rachel: Thanks Steve, you too, bye.

Steve: Hope you enjoyed that episode. I’ve always been skeptical of network marketing and MOM, and it was actually good to hear from someone who is actually making significant money from that business model. For more information about this episode, go to mywifequitherjob.com/episode145.
And just a reminder that tickets for the 2017 Sellers Summit are now on sale at sellersummit.com, the conference that I hold every year that specifically targets ecommerce entrepreneurs selling physical products online. The event will be small and intimate, and I promise you that the speakers will focus on actionable strategies to improve your ecommerce business and not any high level BS. So head on over to sellersummit.com, and check it out.

And once again if you are interested in starting your own online business, head on over to mywifequitherjob.com, and sign up for my free six day mini course on how to start a profitable online store. Sign up right there on the front page, and I’ll send you the course via email immediately. 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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144: How To Make 6 Figures Teaching People About Rideshare Services With Harry Campbell

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How To Make 6 Figures Teaching People About Rideshare Services With Harry Campbell Of TheRideShareGuy

Today I’m thrilled to have Harry Campbell on the show. Harry is someone who I just met at the financial blogging conference in San Diego and we actually met playing basketball.

A few conversations later and I knew that I wanted to have him on the podcast. Harry has an interesting story. He started his site TheRideShareGuy.com in 2014 when he was a full time aerospace engineer and part time Uber and Lyft driver.

And seeing as how ride share services were starting to take off, he decided to create the ultimate ride sharing resource. Today, Harry has quit his engineering job to work on the site full time and his mission is to help drivers around the world. Enjoy the episode!

What You’ll Learn

  • Harry’s motivations for starting the ride share guy
  • How RSG makes money
  • How Harry built traffic to the site early on
  • Which strategy has been the most effective in terms of revenue growth
  • The best forms of traffic and how to build it
  • How Harry gets people to sign up for his course
  • The primary difference between Uber and Lyft

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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 with Harry Campbell, who is someone I met at FinCon this past year. Harry runs therideshareguy.com, and you’ll learn how he turned blogging and podcasting about ride share services Uber and Lyft into a six figure business.

In other news I just want to let you know that the 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. 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 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 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, once again that’s sellerssummit.com, and go check it out.

And if you want to learn how to start your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business, go to my wifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email. Now onto 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 Harry Campbell on the show. Harry is someone who I met at the financial blogging conference in San Diego just a couple of weeks ago and we actually met playing basket ball, and a few conversations later on the court, and I knew I wanted to have him on the podcast. Now Harry has an interesting story, he started his site The Ride Share Guy in 2014 when he was a full time aerospace engineer and part time Uber and Lyft driver.

Seeing how rideshare services have started to take off, he decided to create the ultimate ride sharing resource and community. So today Harry has quit his engineering job to work on the site full time and his mission is to help drivers around the word. With that welcome to the show Harry, how are you doing today man?

Harry: I’m doing well; I think I’m just about recovered from the conference, so a perfect time to come on the show.

Steve: I’m not quite recovered yet myself, and you picked an early morning – oh it’s not early morning slot, it’s 8 AM right now, but I’m still a little groggy.

Harry: We’ll ease into it.

Steve: So Harry you are a successful aerospace engineer, so my first question is why the heck did you decide to drive for Uber and Lyft in the first place?

Harry: It’s funny you’re mentioning that in the intro and honestly it seems like a long time ago that I was an engineer, and I don’t know if that is a bad thing or a good thing, but yeah you’re right, I used to be an aerospace engineer for Boeing, and really I guess I’ve always been attracted to side hustles and just honestly easy ways of making money. For me I heard about people driving Uber and Lyft and doing it on their spare time, and some of the drivers were telling me, and this was a few years ago when Uber and Lyft paid a lot more, price has come down since.
Some of the drivers were telling me they are earning 30 to 40 bucks an hour, and I was thinking to myself, hey that’s more than I make in my day job so I should probably check this out even if it’s only for a few hours a week.

Steve: Interesting so an engineer the Uber and Lyft position was making more than your day job?

Harry: I would say that in limited capacity yeah, I drove a couple of big holidays like July 4th on average $50 an hour, but on the regular I think when I first started I was earning $20 or $25 an hour, so it was less than my day job. It was like that feeling where, hey I’m doing something that’s actually pretty fun, when you do anything zero to ten hours a week it’s a lot more enjoyable than something you do 40 hours a week, right?

Steve: Okay yeah I know absolutely. So this is just basically in your spare time you had nothing better to do for that day and just this was just earn some money, right?

Harry: Yeah and honestly I really blame my wife, because my wife was in medical school at the time and that meant that I had a lot of free time.

Steve: Oh yeah absolutely, actually you probably still have a lot of free time right, because she has to go through residency and all that stuff?

Harry: Yeah I guess so, she’s actually so she’s just starting to apply to residency, so I’d say that that’s the one thing that I guess has benefited my business because in a lot of ways I just had a lot of free time to figure
out ways to make money, figure out ways to work and do all that good stuff.

Steve: So what was the motivation for starting The Rideshare Guy then?

Harry: Well honestly I went out there and started driving for Uber and Lyft, and I was expecting it to be super easy and super fun and it was sort of all the above, but at the same time it wasn’t as easy as it seemed. It’s combination really of dealing with customers, safe driving and navigation and also running your own business too, because you’re 1099 independent contractor for Uber and Lyft, you have to do things like tracking your mileage and file a schedule C at the end of the year.

A joke I make is it wasn’t rocket science like my real job, but it definitely wasn’t as easy as it seems, so for me I started goggling and went on YouTube and I said, hey there’s got to be some people giving advice and tips for basically how to maximize your income, and the crazy thing was that I couldn’t find a single blog, not a single blog about rideshare.

I reads a few articles here and there just about people doing like a one off experience type article, but I couldn’t find a single blog, and at the time Uber was worth $10 million and there’re 100,000 drivers in the US. This light bulb went off in my head that hey there’s nobody doing this, so I either have a really good idea or a really dud idea here.

Steve: Can you give me an example of a piece of information that you were looking for but you couldn’t get online about Uber, I mean to me in my mind right now you just pick up the app and you start driving, right?

Harry: For me honestly I was really concerned with how much I was making, so obviously I’m an engineer like you and I was doing just these detailed really natty spreadsheets. I would import all of my ride data and I would go in and calculate by the hour and by the ride and just see where my down time was, because obviously you don’t make any money during your down time as a driver.

So I was just trying to figure out ways, hey I’m making $28 an hour right now, how can I go make $35 an hour, what are the opportunities, even something as simple as texting your rider so that they’ll come down faster can maybe save you two minutes on every single ride. I was looking for stuff like that those like really more in-depth strategies that would help me earn more money and I couldn’t find anything close to that, so basically I decided to create it myself.

Steve: Okay, so basically maximizing your Uber driving experience?

Harry: Mm-hmm.

Steve: So when you started The Rideshare Guy, was it with the intention of making money or did it start out just as a purely informational site?

Harry: So to be honest I would say that it was a combination of both, I definitely didn’t have a completely altruistic view, and I said, hey I want to start this because it is cool and I enjoy it, but I knew a few things. I knew that I enjoyed it; I was really interested in just taking the technology behind it and the whole start up that seemed really like sexy and fascinating to me because I worked this boring day job as an engineer.
Then at the same time I also saw the huge potential business opportunity. I didn’t think that I would make a ton of money in my first year and I didn’t, but I knew that it was probably a good bet that Uber was going to keep growing, and if I can establish myself as this go to person for the drivers, then there would be a huge opportunity.

I should also say that I did have a little bit of a head start because how I got involved in the whole of personal finance bloggers conference and everything, I did own and I do still own a couple of small personal finance sites that I started like 5 years ago, and those were purely for hobby, but that’s how I got into everything and saw the potential of guys like Jim Wang at Bargaineering and those types of guys who were selling their blogs for lots of money and the kind of I could basically, hey my site was maybe getting a few hundred page views a day but I could extrapolate.

I could see that if I could get to that point in maybe that niche or a different niche, I could probably make some real money.

Steve: I see so but in terms of your personal finance blogs, did those ever go anywhere?

Harry: Not really, I would say so I started a couple of – actually more three or four and two of them still exist today, but honestly though they are still making about $500 a month net and right now it’s 100% passive for me. I have a couple of people that completely manage it, all we do are just these simple sponsored posts and we do one article a week, so I’m not doing any work on those.
It’s very low traffic, may a 1000 page views a day which is very small for a personal finance site, but I could see that if I can grow that audience even whether it’s in the personal finance niche or another niche I think that I can make significantly more. It’s less what I saw with Rideshare, I was coming from this very saturated niche of personal finance where it was harder to break through. For me now I’m going in Google and I can’t find a single blog and I’m getting all excited, because…

Steve: Totally, I’m just wondering how much time comes into play here, because when you started your PF thing, it was already pretty saturated.

Harry: For sure, I mean I think that’s definitely one of the big things, timing and honestly just getting lucky is important, but I think what really benefitted me is that I was continually putting myself in that position to start something. A lot of people were saying to me, hey you work as an aerospace engineer; you get paid a lot of money, why would you go and drive for Uber and Lyft?
For me it was just about just trying it out, I didn’t know that I was going to try it out and then start a blog and then quit my day job to focus on the blog full time and then have this big business, but it was just like continually putting myself in that position, because you really never know what’s going to happen. But one thing you do know is that nothing will ever happen if you don’t continually try stuff, so that’s what it really was about for me.

Steve: Okay and so how does the Rideshare Guy actually make money?

Harry: Right on, so I’m surprised it took you so long to ask me that question. Literally the first question I ever get asked by anyone regardless of age, sex, and anyone they always ask me, so it’s funny. So we actually have a few different revenue streams and some are a little bit more traditional that your audience is probably familiar with, but really what it boils down to is one of our main sources of revenue is driver referrals so signing drivers up for Uber, Lyft [inaudible 00:11:04] that’s the most obvious one.

We also do direct advertising, so with any advertisers that have products or services that are looking to cater to Rideshare drivers. An example of that would be Intuit in their QuickBooks self employed product, so they’re one of our biggest sponsors and basically they’re looking to get drivers to track their expenses and use them for trouble tax and all that good stuff.

Then we also have a video training course that we sell, very traditional online marketing 101 training course, and then we also have a really unique one that’s an insurance market place since Rideshare drivers need a rideshare insurance. We actually have worked with – we have over 30 individual agents signed up on our site in this big directory and two companies at the corporate level, and so that’s another big revenue stream for us, because as you know insurance is a high commission product.

Steve: Yeah absolutely.

Harry: Honestly I wish I could take more credit for that one, but literally agents started reaching out to us and asking if they could come on our site. Someone wanted to give us money, so we had to figure out a way to accept it.

Steve: So you get paid per lead for that?

Harry: We actually don’t get paid per lead but we do a monthly, basically we charge them a monthly fee and honestly I don’t think I have the insurance marketplace as optimized as it could be, but it’s really simple on our
end. We basically have a directory by state, and then the different companies available in each state and then we list one agent per city.

So it’s super simper, super rudimentary to be honest but at the same time we drive traffic to it every month with an insurance article and we’re really well optimized as far as rankings and things like that. So we’re doing well for all the insurance key words and it works, lots of agents sign up and we have about a 95% renewal rate for our insurance agents.

Steve: Wow, that’s awesome, so of all those income sources that you specified, which one is the top one?

Harry: I would say probably – actually the income sources, I’ve worked really hard in 2016. It used to be all driver referrals because honestly driver referrals were the easiest and most natural fit, we would be writing about Uber and say, hey here is our experience at Uber, go sign up. Pretty natural and pretty easy to mention, we would tell drivers you can make more money by driving for Uber and Lyft, go sign up for both of them, stuff like that.
That was the most natural fit and I would say in 2015 that was by far probably 75% of our revenue. In 2016 though I made a really big push to build out our direct advertisers and affiliates, so I hired a guy full time to handle that and then I have another guy part time that does the insurance marketplace, so honestly driver referrals is probably about 30 to 40% right now, but then the rest are pretty evenly matched.
Our direct advertising and affiliate, our video quarters and our insurance market place all pretty even when it comes down to that.

Steve: That’s cool man. I’m just curious what is the pay out for a driver referral?

Harry: Well, that’s the crazy thing is first of all it’s funny that it really varies, so I’m going to say a number and you’re going to say that sounds pretty high, but in some cities it’s a lot lower. So in a top major market it might be like $500 to $750.

Steve: That is crazy.

Harry: LA, San Francisco, it’s $500 to $750 and obviously it varies, it goes up and down a little bit. This month it actually dropped to 250 but over the past year in a major market honestly it’s been averaging around $500, and the crazy thing is that it’s double sided, and I’m simplifying it a little bit. Basically what happens is if I’m an existing driver, I can go refer my friends, we each get $500 after they do 75 rides in 30 days, and that’s the gist of the program.
There a lot of small to mid size cities that might be anywhere from like 10 or 25 bucks to a couple of hundred bucks but still it’s definitely high amounts for driver referrals.

Steve: So they have to do 75 rides in 30 days, so do you do anything post sign up to encourage them to do that or?

Harry: That’s one of the really unique things is that I actually don’t have a direct affiliate program set up with Uber and Lyft even to this day. I’ve had my site for two and a half years, I’m probably one of the top referrers by volume with Uber and Lyft, yet I actually use the same referral code that I used when I first started and it’s my driver referral code, so I have…

Steve: Interesting, okay.

Harry: Isn’t that crazy? I have no tracking, I have no ability to follow up or anything like that and I’m also doing very high volume, and you’re right it’s actually a big problem for me because Uber and Lyft don’t have – it’s funny because these companies are also big, but they don’t have any of the affiliate tracking or anything like that you are probably used to with some of the more established companies with more established programs.
For me I actually only get about a 5 to 10% conversion from the people that sign up using my link to the people that actually end up driving and getting me paid a bonus.

Steve: Okay but the dollar amounts are so high; I guess it doesn’t really matter.

Harry: Exactly, so the dollar amounts are still so high when I really try to focus and honestly I’ve never been that in love with increasing conversions and worrying about all that even though it’s funny because I’m an engineer, and since I started blogging I really kind of just attacked the top of the funnel and said, hey I like writing articles, I like doing content.
If I spend more time on content, I can increase my top of the funnel and I end up doing something that I like and then do that way and by that way I can actually increase my pay out down the road as opposed to down the funnel increasing my sign ups to conversions by 12%. I would rather just focus on the top of the funnel because that’s what I enjoy and also that’s what I think my skills are at too.

Steve: Okay and so when you made this shift to go again to steer your business away from the referrals more, did you focus more on your course or the insurance part?

Harry: Honestly I wish I could say that I took more credit for the insurance, I sort of stumbled upon the insurance, but at the same time we did the course I would say I spent the most time on the course. I would say that I spent the most time on direct advertising and affiliate stuff and then the insurance marketplace and then the course in that order, because that was what when I first started really trying to expand the income, that was what was already producing the most income in that order if that makes sense.
Really I felt like the course was going to be tough to boost that income, basically it’s like, hey here’s the channels that are doing well, I want to double down on those and spend more time on the channels that are doing well, that have the more potential, that’s how I focused and allocated my time.

Steve: So in terms of the course, how much do you charge for it?

Harry: I charge $97 a pop for the course.

Steve: Okay it’s just a lump sum, right?

Harry: Yeah, one lump sum and then they get access to a bunch of videos.

Steve: In terms of your direct advertising model, do people come to you or do you have like a team that’s going out to these companies and approaching them?

Harry: That’s one of the nice things; we talked earlier about there not being a lot of competition right now. If you’re looking to advertise to Uber drivers, my site is probably one for the best places that you can go. So honestly all of our advertising deals that we do come from inbound leads, we do very, very little, almost none, no outreach.
So everyone is coming to us, we have a little process that we put them through, if they are a huge advertiser, we’ll hold their hand and talk to them, but otherwise we make them fill out an inquiry form and then I have one of my guys go and reach out to them and send them our media kit and things like that and take things from there.

Steve: Okay and then I know you have a podcast as well, is that all part of the advertising equation, is it for the podcast or is it for the site more?

Harry: So I have a blog, podcast, YouTube channel, and video training course, so those are my four main mediums and the four main ways that I distribute content. It started with my site two and a half years ago, I did the
blog and the podcast. It is a no brainer; hey I’m catering to all these Rideshare drivers that are going to be in their car all the time, probably I should start a podcast, right?

Steve: Right, yeah absolutely.

Harry: What I found was that my blog growth was just eclipsing my podcast growth, so right now I’m at about 10,000 total downloads a month for all of my episodes every single month for the podcast and the website, the blog is actually – so this past month, in the past 30 days, we did 800,000 page views last month.

Steve: That is crazy.

Harry: Yeah so you can see that there is a pretty big difference there, right?

Steve: Yeah, so you’re focusing more on the blog?

Harry: I would say yeah we’ve definitely spent way more energy and time on the blog, but at the time I enjoy doing the podcast, so we do sell advertising spots on the podcast, but it’s not anywhere near one of our main forums, one of our main outlets of revenue. Actually what I’ve been really surprised with is the YouTube channel is I started the YouTube channel about a year and a half ago and it was really to promote our video course.
I said to myself, this is how I think, right? I’m going to start a video training course, we’re going to have videos in there, I should start a YouTube channel because then people who will like my YouTube channel will maybe buy my video training course, it’s pretty simple thinking, all right. Actually what happened was that our YouTube channel started doing really well, we now release two videos a week, and it actually has grown to 10,000 or 11,000 subscribers, so that’s been one cool thing.

I guess in order of how well our outlets are doing I would say the blog is definitely our number one advertising outlet, and then YouTube below and then podcast way down below.

Steve: Interesting, that’s not what I would have expected.

Harry: Yeah I know it’s interesting, pretty funny too because the YouTube channel I just started on a whim and it’s actually been pretty close to the blog in terms of growth.

Steve: In terms of getting traffic, what is your primary traffic source?

Harry: My primary traffic source is search, so we get about 67% of our traffic from search and it’s all organic. I mean I guess I’ve done some Facebook boosted posts here and there but never more than like $50 and that’s only really started in the past year, but when I was first growing my site everything was all organic, and it was really kind of – yeah I mean that sort of – to answer your question basically 67% organic.

Steve: Okay and then what about the other 33?

Harry: The other 33 is going to be mainly direct, actually it’s really mainly direct, and then referrals, so I could probably pull up the numbers for a little bit more in-depth of the top of my head.

Steve: No that’s okay, I was just curious.

Harry: Actually I do know, so it’s mainly direct and referral. One area that’s really low compared to other sites is actually social, so I think social is 4 or 5% of our overall traffic which when I talk to some of my other friends, I think they told me that their social stuff from Facebook, Twitter, Reddit, whatever is a lot higher, but our social traffic is actually very low.

Steve: Did you do anything deliberate to get all that sort of traffic?

Harry: Oh yeah definitely, I mean like I said I’m not an SEO expert or conversion expert or anything like that, but I think one thing that I’m really good at is establishing relationships with people, and so for me I saw the media as a huge opportunity to really help grow my blog. I was doing a ton of organic stuff, I was out there in Facebook groups, I was out there taking Uber rides, I was having my friends talk to Uber drivers.
I was doing everything I could organically word of mouth, but at the same time once I started to get traction with my site, I looked at these huge media sites and said, hey with one link or with one article mention or something like that, one quote, I can probably drive hundreds or maybe even thousands of views to my site. For me at the time Uber and Lyft and even today are still really hot in the media, everyone is writing about them.
For me I really started to try to establish relationships with everyone that was covering media, so I had all of these media outlets like The Verge, Business Insider, all the big tech publications, they all have at least one or two people dedicated to rideshare, dedicated to the whole Silicon Valley space. So I started finding them, identifying them, trying to develop relationships to them, just become a really good source for them so that when they did need a quote, they would know that I am the one they should talk to at least.

Steve: Can you talk about some of the things that you did to get on their radar?

Harry: For sure and this is where I think it really helped me having a little bit of experience blogging in the personal finance niche, so back in the personal finances and I don’t know if people still do this anymore, but everyone would do these weekly roundups and I’m sure you’re familiar with these.

Steve: Yeah of course.

Harry: It’s basically a bunch of friends or even sometimes not even friends, the [inaudible 00:23:24] or whatever they would call them, and each week you would feature maybe five or ten or sometimes 10 or 20 different articles from your friends, and then you would share them on social media and you basically all link back to each other. For me I took that strategy and applied it to Rideshare, and the reason why I thought that it would work so well is because no one else was doing it. First of all I was one of the only rideshare bloggers…

Steve: Right exactly.

Harry: Then second of all I said hey – so I started featuring about five to ten different articles that I found during the week, and I would post them on my Facebook page and see which articles were most popular with my audience. So I was posting probably 20 or 30 articles a week on my Facebook page every week from like big outlets, like reputable outlets like CNN, a lot of the tech blogs which people may or may not be familiar with, The Verge, Business Insider, all of those and I would see which ones would do the best.

Then I would feature them in my weekly roundup on Saturdays, and after that I would have my virtual assistant go in and she would find all those authors, find the publications and she would tweet them and say, hey – first she would follow them and then she would tweet them. She would say, hey @stevechou, at My Wife Quit Her Job, we just featured your article on the Rideshare Guy, and then we would link to that article.
Now they sort of, first of all we were stroking their ego a little bit because one thing I found is reporters love Twitter, and that’s one amazing way to get in contact. You may not get a response from them, but I guarantee they’ll see it, every single reporter is on Twitter, I don’t know what it is but they all love Twitter, and then now we’re featuring them, so we’re stroking their ego a little bit.

Then they maybe come to our site and see that, oh hey this guy actually has a blog, he has this little branding, the Rideshare Guy, he’s a driver and so now we’re starting to establish those relationships with them and just interacting in general with them on Twitter, so that’s really how I started reaching out to a lot of people. Of course I saved all their names, all their emails as we were featuring them.

Once we’d established a little bit of relationship, I think I reached out with an email and said, hey I’m Harry, I’m the Rideshare Guy, I’m an Uber driver, I know this, I know X,Y, and Z, here is why you should listen to me. If you ever need anything – I didn’t ask for anything, I just said if you ever need anything, here is my cell phone, here is my email, I never sleep, I’m available at all times of the day.

I really just tried to be a valuable resource to them, because one thing I found with reporters is that they just need – they don’t really care where they get the source from, they just need you to be credible, they just need to make sure you’re not a wacko, that you can get back to them quickly if they’re on deadline, and that they are not going to quote someone who turns out to be crazy or psycho or anything like that. For me I was just trying to put myself in that position to help them.

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Okay and so once you establish initial contact – so how many roundups did you do? Are we talking about like a handful of these or do you do this every week?

Harry: I have done them every week for about two and a half years, I still do it today, it still works really well I think.

Steve: And each time you reach out to another group of…

Harry: I don’t email any more, but now what I do is every week on Saturday I publish a roundup, but now we do about maybe five to six articles featuring the top stories of the week. Then I have my virtual assistant go in the following week and tweet them, say hey reporter X at the publication, we feature the article on my blog and then we follow them.
That is what we’re doing now to continually find a lot of these reporters and now I will say when people – a lot of reporters find us to be honest we put the badges on our site to show them we’re a little bit legit where I have been featured and things like that. It’s a little bit of a snow ball effect now, but when I was first growing my blog that was really how we did it and of course I also did the low hanging fruits to help a reporter out, things like that.

Steve: Do you ever have any luck with hello [ph]?

Harry: To be honest I have a pretty interesting hello strategy, well not interesting hello strategy, but I have a little strategy with hello too because I have a lot of friends like you that are bloggers that are media that use hello and so I ask them. I ask them, hey what is in a good hello request? So what they told me was that you need to be first, because some of these hello requests get dozens or hundreds of responses, you need to be first.
So I set up little alerts in my Gmail, basically anytime a hello request comes in with like an Uber, Lyft, Airbnb, any type of those mentions, now it’s mainly Uber, Lyft rideshare that I look for, it stars it in my Gmail so hopefully I’ll see it pretty quickly. Then I have a canned response that is custom tailored, and then I custom tailor just the middle section of it depending on the hello request.

Then usually these hello requests will tell, sometimes they put anonymous but most of the time they’ll say a letter from – so like I just did one for New York post and the reporter’s name was Christian. I found him on Twitter like I said Twitter has been my best friend when it comes to dealing with reporters. I found him on Twitter and I sent him a message, I said hey I just sent you a hello request about I’d love to chat, and sometimes I’ll send them my contact and sometimes they’ll just reply to me on Twitter and we’ll just do it right there.

So that’s how I do it. I try to just get them multiple touch points, because you could imagine how many people are responding to those hello requests, how many people are also tweeting them. So now when they go and see 100 hello requests, if mine was first, hopefully they’ll be like Harry Campbell Rideshare Guy, I think that guy just tweeted me and maybe open mine first.

Steve: Interesting, so do you pay for the hello service because you get earlier alerts right?

Harry: Oh really, I didn’t even know that, maybe I should be doing that, but no I don’t pay for it, I just wait till it comes into my inbox, and I will say since Rideshare isn’t as saturated a niche as personal finance I am 100% sure that there aren’t nearly as many people responding to these hello requests as in another niche.

Steve: That’s probably true, yeah okay. Like one of five maybe.

Harry: Yeah honestly one of five, but at the same time it’s kind of all goes back to me picking this niche and trying to establish myself as a go to person in a smaller niche although I guess I will say that it’s grown a lot bigger than I would have ever thought.

Steve: Right now so you’re reaching – you do your initial outreach, do they usually reply at this point or you just keep following up with them?

Harry: Hello, are you talking about hello?

Steve: No, not hello, your other strategy with the roundups.

Harry: My other strategy with the roundups, well my other strategy with the roundups is really just about establishing a relationship so that when they do need a source or when they do need someone they think of me first, that’s what I’m trying to get because you can imagine like these reporters – I really try to do honestly like the opposite of what everyone else is doing.
These reporters are getting dozens, hundreds of pitches asking me, hey come on, hey I have this story for you and anyone who has ever written for Forbes or Business Insider, or Huffington post knows that if you put your email anywhere on the site you are going to get dozens or sometimes hundreds basically really crappy PR pitches, and so for me I’m trying to provide like the opposite experience. I want to find them around Twitter; I want to establish my relationship on Twitter.

If I do email them I don’t want to really ask for something, I want to say, hey I’m here to provide you value. Sometimes especially when I was first starting, I was looking for really interesting stories and sending them to reporters. I was looking for like things going on in rideshare and then sending them to that as opposed to feeling like, hey write about me, write about my site.
It’s like the strategy of really like I was trying to provide them value in the sense that they were looking for good stories, and it’s also about knowing these reporters. I talked to one reporter at [inaudible 00:32:03] who told me she had to get 2 articles a day, that’s a lot.

Steve: Yeah I know totally.

Harry: So for them if they can find anything that’s in the realm of a good story and they trust you, they’re going to be really thankful to you because you’re always feeding them good ideas and helping make their job easier, so that’s the type of stuff I was really looking for.

Steve: Okay, would you say that getting mentioned in these publications is one of the main reasons why you are ranking in SEO?

Harry: I would say that it has to be, I’m not an SEO expert but at this point I think I have a page on my site that we can probably share on the show notes, but I just call it my around the web page and I think that I’ve probably been quoted, featured, linked maybe 300 to 400 times or more and these are publications.

Steve: Oh wow.

Harry: These are everything from New York Times, LA Times, Wired, San Francisco Chronicle all the way down to like I just did one for like the Boston College, I don’t know some Boston college newspaper because that’s the other thing, I take every single – no media request is too small for me and there is literally a reason behind that too.

Steve: Okay, just curious I know a while back, a whole bunch of the bloggers started removing their roundups because of panda, like [inaudible 00:33:12] the articles, has that had an effect on you at all or do you care?

Harry: Honestly I don’t really care and that has always been my strategy. I know what I’m good at, like I’m good at creating content, establishing these relationships. Honestly I don’t know crap about – I know what Google panda update was, but I guess I didn’t see a big drop off from that, and so for me I’ve never really trusted what Google said. I just look at the numbers, like hey if my site is still doing well I’m going to keep doing what I’m doing; I’m going to keep trying new things to try to push the envelope.

If crap starts to hit the fan, then maybe I’ll hire someone to try to sit down and reassess. I think at the same time though I think it really depends on what a lot of other people are doing. If everyone is doing roundups and it’s the spammy way to approach things, then it does make sense that it’s not as valuable, but for me if I’m curating all these articles.

I actually will say in the text face especially, just the sheer fact that there’s so much content these days, a lot of bloggers and a lot of journalist are actually moving to this curated newsletter format where they may not publish it on their website, but once I’m subscribed to a bunch of newsletters from really top people in the tech and rideshare industry, and they send out weekly newsletters basically challenging the top content, because there is so much info these days.

Steve: Interesting, have you done any paid advertising at all?

Harry: I really haven’t done — I mean I’ve done hundreds of dollars but not even thousands in my two and a half years of doing this, I’ve probably spent no more than one or two thousand dollars. So paid advertising is not something that I’m good at, and also I just honestly feel like anyone can do – no I shouldn’t say anyone can do paid advertising, but I feel like it’s a low barrier to entry.
I feel like anyone can really go and spend a bunch of money and try to get return on their site, but I feel like it takes a lot more work and a lot more strategizing and brain power to think about how to develop these relationships with the media, how to get free things and things like that. Those are what I enjoy doing, because I think it’s a lot more challenging and I think that the value and return is a lot better.

Steve: It sounds like your primary strategy is just put out lots of content in all different channels and get linked up, and then just get all of your traffic organically, right?

Harry: In a nut shell that’s honestly exactly what I do.

Steve: In terms of just content creation then, how often do you post to your blog and the YouTube channel and the podcast?

Harry: For sure, so I’m actually extremely consistent with the blog, and I think that’s one thing that’s been super important. I’ve done four articles a week I think for the past year and a half, Monday, Wednesday, Friday, Saturday and before that I was doing three articles a week. On the blog I’ve basically almost always done four articles a week. On the podcast I do one every two to three weeks, and then on the YouTube channel I do two new videos every single week.

Steve: How do you promote your articles on your blog since you’re posting almost every day?

Harry: Right on, so I’m posting four times a week, so every time I do a new post I release it at 9 AM Pacific, Monday, Wednesday, Friday, Saturday and then I also have my – it’s called like blog to RSS set up, so it automatically goes out. I’m a really bad blogger, I should probably know what that’s called, so it basically sees my RSS feed that a new post is out and then at 10 AM it sends it out to my email list.
They get the entire article in the email and we actually have – so that sends out and then I’ll post it to Facebook and I use co schedule to basically post it four times after that and I go from there. So that’s really all I do every time I release a new post.

Steve: Interesting, so do you send out four emails a week then?

Harry: Mm-hmm.

Steve: Okay, and do you have another email strategy like do you follow those people to your course or towards Uber referrals, do you do anything else besides just sending out the article?
Harry: Yes so I would say the email is one area where I did a lot of work on right at the beginning because I was hearing all these big people that are smarter than me were saying, hey you need to build your email list. I said okay I want to build my email list, so I used all of the SumoMe plug-ins, the drop down on the top bar and then basically all the basic ones. So I’m collecting I think about 40 to 50 emails a day right now using those basic plug-ins, and I don’t even think I paid for it actually, just the free plug-ins.

So it seems to be working pretty well on my end, so I’m adding about 1000 to 1500 new subscribers a month, our email list is at 18,000 or 19,000 right now. According to MailChimp we have a 30% open rate although it does seem like most articles get opened in the 20 to 30% rate, so we’re in that kind of range. All that I do though with my email, I have about a ten email autoresponder.
When they sign up I send them this ultimate guide which is honestly is like a15 page PDF but it’s more like an ultimate guide to my site. It’s like getting here, they’re getting started, and then I throw in an affiliate offer and to go through and provide some value and then pitch in an offer and things like that. Then I highlight my top blog post and then I highlight my top YouTube channel in the autoresponder, I introduce some to my various channels.

I will say I’m literally looking at my to do list right now and on my to do list is the build out like a three month autoresponder that has 50 more emails, so that’s on my to do list, that’s the one thing I haven’t done a good job of, but it’s definitely something I need to do.

Steve: I’m just curious how you get the sign ups, is that just naturally through affiliate links in your articles or is that part of your autoresponder?

Harry: How I get signups for…

Steve: The referrals for drivers, the ones that pay out 700 bucks a pop?

Harry: Honestly those are mainly from my site, so I’m not doing a lot of email conversions, I guess I will say that obviously when I send a blog post out obviously if there is anywhere to include relevant links or anything like that I’ll do that in emails. But in my autoresponder it’s more about introducing people to the various areas where they can find me, like I’ll highlight my most popular YouTube video and I’ll say, hey go subscribe to the YouTube channel, go check it out.

I’ll highlight one of my most popular podcast or highlight my video course and I’m not doing as much sales from the emails although I probably could and should and will be in the future. Most of my conversions are actually coming straight from the blog and people finding me and converting there and clicking on my links all over the site, because I have on my other resources page, I have a sign up bonuses page, I have an insurance market, all of these pages on my site, so I’m getting most of my conversions from my actual blog.

Steve: Okay and then your email sequence it sounds like just introduces the reader to all those different channels where they can just pick and choose what they want to consume?

Harry: Exactly, now that we’re talking about – I am a little embarrassed of my email autoresponder series, because I think I’ve heard it up there for about a year and a half and it should definitely be a lot longer, so maybe after this call, I’ll go set it up.

Steve: I was just curious because you have this course right, you get to keep all the cash too, and the payout isn’t bad 97 bucks, so I was just curious if you actively market it?

Harry: I would love to talk about the course because for me the course is one area where I started it just because it’s like that online marketing 101, everyone saying, hey you got to do this course, obviously it’s nice because it’s very diverse, it’s like mutually exclusive from driver referrals. If driver referrals I don’t control that, one day if Uber said hey we’re not going to pay you any more, my income goes from X to zero.

With the course that will likely never happen, if anything it might be a slow drop, but for me I’ve always felt – I haven’t felt bad taking money from drivers but honestly Uber drivers don’t make a lot of money. So I would rather find ways to extract money from direct advertising or find rideshare insurance product that they need to get anyways and monetize that way as opposed to – I still do a lot on my video course, we just spend a lot of time building out an affiliate program.

We actually now have a blog on, so we have the course hosted on a separate site called maximumridesharingprofits.com, which is probably one of the longest URLs you’ve ever heard. But we actually added a blog and we started transcribing so I use this transcription service called Speechpad that’s only a dollar per minute, and we started transcribing all of the content from our YouTube videos over to the MRP blog.

So we took out top YouTube videos, the ones that basically were doing the best and we transcribe them and now we do one post a week on the MRP blog, and we’ve actually been able to get the traffic up completely organically to around 75,000 page views a month on that separate site, just on transcript and we obviously have one video that is about how to enter multiple destinations on your Uber ride and that’s doing 25,000 page views a month.

It’s definitely for me one other area that I really have been focusing on, it’s kind of leveraging my content across different platforms, because we spend a lot of time, we only do four articles a week which might sound like a lot, but I obviously have other writers that help me. We spend a lot of time and a lot of research and a lot of effort into these articles and one thing that we’re finding is that our audiences are very mutually exclusive.
The podcast listeners don’t read blog articles, the YouTube viewers don’t do the other two, so what we’re trying to do now is not necessarily repost the exact same content but figure out ways to leverage a really big blog post, maybe there is one paragraph that we can go more into detail on a YouTube video, and we are already very familiar with it, and it might make for good YouTube video.

So we try to leverage that content so that we’re not coming up with completely original content across every channel because honestly we have a very different audience, so it’s not like someone is going to see the same thing in three different places.

Steve: So it’s not just a straight transcription, you’re taking that transcription and you’re turning it into a post, is that right?

Harry: No it’s basically a straight transcription, we’ll add headers and put a neat little intro but honestly it’s more of a transcription than a blog post and we try to make it pretty upfront. We’re pretty upfront about like hey here is a video we recorded, because actually a couple from people complained and they said your blog posts are amazing on Rideshare Guy but your MRP blog posts suck.
I said well first of all if you think these are blog posts that’s probably a problem on my end, so we just try to make it really clear that, hey this is a transcription of this video. People seem to – we haven’t got a single complaint since we started making that a lot more clear and it seems to be working pretty well.

Steve: In terms of revenues for the Rideshare Guy, are you going to hit seven figures this year or?

Harry: Not quite at seven figures but hopefully at some point in the future.

Steve: Okay, that’s amazing. This is just a question that I have that I was just really curious about, what’s the difference between Uber and Lyft?

Harry: That’s actually one of my most popular YouTube videos.

Steve: Is it right, okay.

Harry: Honestly for me I’d say the biggest difference is that Lyft tends to be more of a driver friendly community. They have a lot of features, once you become a driver they have a lot of features that are just more friendly to drivers, they have enough tipping so passengers at the end of the ride can leave a tip in the app, Uber doesn’t have that. If you do a certain number of rides, Lyft will actually – if you do 50 rides a week, they’ll give you 10% of your commission back, things like that.

I would say that Lyft has typically has more of a community and more driver friendly features. Uber on the other hand they are like you know what you’re going to get. Uber you’re always going to be busy with Uber, you’ll probably going to make more money with Uber than you will with Lyft, but you also at the same time know they don’t really care about you, it’s like you are a number on a spreadsheet to them, they are like strictly business.
Lyft is like this friendly alternative that really cares about you. You kind of support them even though you don’t make quite as much money but you support them because you like them.
Steve: Interesting, so if I’m driving though and I have both those apps, I’m just going to use the Uber app right?

Harry: Yeah I mean honestly that’s one of the strategies we talk about on the site, if you sign up for Uber and Lyft during slower times, it makes sense to turn both the apps on and just take whichever request comes first. For me I’ll always take a Lyft request over an Uber request if it comes in, because the rates tends to be a little bit higher, the passengers tend to be a little bit friendlier, and you also have the option of getting a tip on the Lyft app.

Steve: Okay and then in terms of one completely demolishing the other, do you foresee both of these services co-existing going forward?

Harry: Yeah, I mean I definitely think that going forward – I mean the funny thing is that Uber is obviously this huge $68 billion company and Lyft is often thought of as an afterthought, but at the same time Lyft is a $5.5 billion company. I think a lot of people forget that, but if Lyft were to stand on its own, it would be one of the biggest tech companies out there today, but since they are in Uber shadow they pale in comparison.
I think just because of that I don’t know that Lyft is going to be able to really ever come close to Uber as far as market share. I think Uber has about 80% market share right now in the US, but I do think that Lyft can definitely coexist, and 20% of a trillion dollar market is still a really good business.

Steve: So going forward Harry, what plans do you have for your blog to grow even more for the latter half of this year and next?

Harry: Definitely, well I would say that for me my goal by the end of 2016 I would love to hit a million page views a month, so that’s just one number that we put in our head at the beginning of the year. For me honestly I definitely like the growth, but one thing I’ve found as I’ve gone on is that it’s not all about growth for me, I really like the balance of life and work, I mean I’m married, no kids yet, but at some point in the future I’ll probably have kids.

For me it’s about continually growing the business, but at the same time really figuring out the areas where I can optimize and make things more efficient, because like I said right now there’s probably the insurance market place for example, I think we could probably increase the revenue by 20 to 30%, but I think it would cause a lot of extra headache and a lot of extra hustle for me, so I don’t know that it’s worth it.

For me it’s really just finding those low hanging fruits and just exploring things. I really like taking on challenges that I haven’t done, so like for example right now I’m in the process of launching a consulting business to help some of these startups who are doing products and services for drivers. A lot of people who are doing how to start a rideshare company type stuff, because I have a lot of this industry expertise and knowledge, and honestly if you don’t work directly at one of these companies, there aren’t a whole lot of people that you can go to.

So for me those are the types of challenges that I’m looking forward to and trying to really grow other businesses and leverage everything I’ve done, leverage my audience and my expertise to diversify into other projects.

Steve: In terms of quitting your job, how much was The Rideshare Guy making when you quit?

Harry: The Rideshare Guy was making about, I think $30,000 to $40,000 a year.

Steve: My goodness, okay.

Harry: We were probably on track to make $30,000 or $40,000 a year, but I could see the writing on the wall. I mean we weren’t optimized, I talk about we aren’t optimizing some revenue streams right now. When I quit my job we weren’t – I literally had not focused – for the first year of the blog; I didn’t focus on making money.

I really just focused on building that audience, I really wanted to get to 100, 000 page views a month because from talking to other bloggers, and talking to other people it seemed like that was the level where you could start to eke out a full time living and really start to turn it into a business. For me in that first year of running the blog, I was really just focused on growing it.

If someone came to me and said, hey we want to give you money for this, great but I really didn’t even consider any of those small monetization opportunities, because for me I looked at it like, hey I might spend an hour on this ad deal right now and make$250, but if I can grow my audience to two or three X in a year, then I can charge $750 and it’s still going to take that same one hour.
So it’s like trading that hour now for trading it later and I will be able to make more money, so I was just trading my time for the hopes of making more money which ended up working out.

Steve: Yeah, I’m just shocked, because you quit when you were only making 30 or 40K and you live in LA, and I imagine your aerospace engineering job paid pretty well.

Harry: Yeah so I was getting around I think 70 to 80,000 as engineer but obviously plus all the benefits and bonuses and everything like that, but honestly for me I wanted to do personal finance blogs. You can imagine I’m a big saver, I worked for six years as an engineer, and I was always doing side hustles and always making extra money on the side, so I had a pretty large – I mean I had a six figure emergency fund saved up.

It wasn’t as big of a risk, I think from the outside I think it looked like a lot bigger risk than it was to me. Honestly for me it didn’t seem like a big risk to me. When I quit my job my boss said, hey if you want to come back just let me know. He was like I don’t know what you want to go do but if you want to come back, just let me know, I’ll have a job waiting for you.

Steve: That’s awesome; Harry thanks a lot for coming on the show. If people want to reach out to you, I know you answer every single email you get is that what you said?

Harry: Honestly I test people, so a lot of times people just email me to say hi and to ask me if I check email, so yeah feel free. It will be me, it won’t be a virtual assistant and shoot me an email Harry on his site or obviously you can find me on therideshareguy.com or on Twitter @therideshareguy. I keep it pretty simple, so keep that…

Steve: Everything is the rideshare, he’s got a YouTube channel too.

Harry: Yeah it’s at the Rideshare Guy

Steve: Rideshare Guy yeah. Cool man well thanks for coming on the show, really appreciate your time.

Harry: Yeah awesome, I really appreciate you having me on and I look forward to talking more.

Steve: All right Harry, take care.

Hope you enjoyed that episode. Harry is the perfect example of someone who found a market that wasn’t being well served and then jumped on it, and his story just goes to show that you can make by providing value to those who are looking for answers. For more information about this episode, go to mywifequitherjob.com/episode144.

And just a reminder that tickets for the 2017 Sellers Summit are now on sale at sellersummit.com, the conference that I hold every year that specifically targets ecommerce entrepreneurs selling physical products online. The event will be small and intimate, and I promise you that the speakers will focus on actionable strategies to improve your ecommerce business and not any high level BS. So head on over to sellersummit.com, and check it out.

And once again if you are interested in starting your own online business, head on over to mywifequitherjob.com, and sign up for my free six day mini course on how to start a profitable online store. Sign up right there on the front page, and I’ll send you the course via email immediately. 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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143: How To Make 6 Figures As A Food Blogger With Bjork Ostrom Of PinchOfYum

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143: How To Make 6 Figures As A Food Blogger With Bjork Ostrom Of PinchOfYum.com

I’m really happy to have my friend Bjork Ostrum on the podcast today. While Bjork and I have not met in person, we have mutual friends in Erin Chase and Jim Wang, both of whom I’ve had on the podcast in previous episodes.

Bjork runs the very popular site Pinch Of Yum where he blogs about food. And when I say that his site is popular, I mean that it is crazy popular. Last month he had 2.7 million visitors to his site. He has 91,000 Facebook fans, over 227,000 Instagram followers and almost 100K Pinterest followers.

Enjoy the interview!

What You’ll Learn

  • Bjork’s motivations for starting his food blog.
  • How long it took for the blog to take off.
  • Bjork’s early traffic strategies
  • Bjork’s Pinterest, Facebook and Instagram strategy
  • How does PinchOfYum make money?

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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 with Bjork Ostrom, who is one of the most successful food bloggers I know. Now Bjork runs pinchofyum.com, and you’ll learn how he makes between 50 and 100K per month running a successful food blogging business.

In other news 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. 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.

And in fact every speaker I invite is deep in the trenches of their ecommerce business, entrepreneurs who are importing large quantities of physical goods, and that’s some high level guys who are overseeing their companies at 50,000 feet. The other thing I can assure you is that 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, so once again go check it out at sellerssummit.com.

And if you want to know how to start your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business, so go to my wifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email. Now onto 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 my friend Bjork Ostrom on the podcast today. Bjork and I have not actually met in person, we both have mutual friends in Erin Chase and Jim Weng, both of whom I have had on the podcast in previous episodes.

Bjork runs the popular website pinchofyam.com where he blogs about food, and when I say that his site is popular I mean that it is crazy popular. Last month he had 2.7 million visitors to his site and this incidentally is the slow season for them, he usually gets a lot more traffic. He’s got 91,000 Facebook fans, over 227,000 Instagram followers and almost 100,000 Pinterest followers.

What’s cool is that they actually publish monthly income reports and last month Pinch of yam generated roughly 60K. So if you’re interested in how to make money with a food blog, you’ve come to the right place and you’re listening to the right episode. And with that welcome to the show Bjork, how are you doing today man?

Bjork: Hey, I’m doing great Steve, thanks so much for having me on the podcast, truly appreciate it.

Steve: Yes, so was I accurate about those traffic numbers, usually they are like double that, right?

Bjork: Yeah summer is a slow season for food blogs especially if you have any bend towards like nutrition type content, because the pick season will really be January, February where people are wanting to find healthy recipes and things like that. So this is actually perfect that I’m on this podcast because I want to say this right off the bat, my wife Lindsay did indeed quit her job, and she does Pinch of Yam, and I want to make sure like in terms of the content side of things, those traffic numbers and the social media following, like all credit due to Lindsay for building those up.

However, I definitely have a role in the business, but I’m more like behind the scenes and Lindsay is very front face things, so I want to make sure that she gets credit for that, and that we can have this super synonymous relationship in terms of the actual content that we are talking about in the name of the podcast, right?

Steve: And there my friends is how you stay married for very long.

Bjork: Yeah.

Steve: So give us a quick – I should have been interviewing Lindsay instead, I don’t know?

Bjork: No, I think this will be good, I think you’ll be able to get a lot of awesome content from it, but I wanted before we got into it, I wanted to make sure and say that on the content side of things, she drives that forward, I have a really good understanding of it, but I just want to make sure to give credit where credit is due.

Steve: I think we have similar roles; you are more in charge of the tech and that sort of thing?

Bjork: Yup exactly yup, I love the behind the scenes element of it for Food Blogger Pro, a membership site which we might talk about a little bit later. We’re going through some design updates, so I’m looking at like the check out process on different pages and updating what that looks like or I love the idea of doing like AB tests and things like that. I work a lot with the servers, ad networks; think a lot about like critically about how can we create income from the site itself off of the traffic and engagement that Lindsay has brought to the site.

Steve: Yeah we‘re very similar, like my wife is like the brains and I’m like the marketing and the tech and that sort of thing, that’s cool man. We have to compare notes later.

Bjork: Yeah, it’s a fun relationship because both are needed, right? So like you can’t just have content without the business side of it and you can’t just have the business side of it without the content side of it. So I feel super blessed and thankful to be married to somebody who is also somebody that is in a sense a business partner, but that is really capable and awesome and super skilled at the content side of things, because that allows me to do what I do.

Steve: Absolutely, so give us the quick background story, how did you guys come up with the idea For Pinch of Yam and how did you get started?

Bjork: This was six or seven years ago and I was the one interested in online business and technology and computers, and I would geek out on podcasts and audio books and things like that. So I was listening to Gary Vaynerchuk’s book Crush It, and for those that have read it or are familiar you know that he talks a lot about this idea of a personal brand and building a personal brand, and how possible that is because of the internet.

The example he gives is if you’re really into worms, like you could be the expert on worm farming and you could write a worm blog, and then there will be people that have worm farms that sell them, they want to come to you and work with you because of your expertise in worms.

As I was listening to that audio book just stuff really clicked, and around the same time Lindsay had been interested in recipes and food, and we were recently married, so she for the first time was cooking for two people and really enjoyed that process. We were sharing things on social media and felt like, you know what, I wonder if there is a better place for this to live.

Those two things came together at the same time, I was listening to this book; Lindsay was going through this processing of enjoying food and food content, but not really knowing where that would live. So we had this meeting and over the years it’s grown into this mythological meeting that we don’t even know if it actually happened or how it happened, but basically was the sit down conversation of maybe there would be a better place for this.

The first step was creating this blog, and we created on Tumblr at the time, and was the place where Lindsay started posting content, and that’s the origin story for us, that’s where things started.

Steve: So why did you choose Tumblr?

Bjork: At the time that was one of the suggestions that was made, I think Gary Vaynerchuk had built his personal blog on Tumblr, and at the time I don’t think WordPress was quite as established. Well I know it was, and it’s just such a behemoth today. I think it was still established obviously, but it wasn’t until like a year in that we said, you know what, this isn’t the best platform for a food blog, or for really a blog in general with the type of content we were creating. There is just so much that you can do with WordPress as you know, so we made the switch, we switched over, and it’s a WordPress blog now.

Steve: What year was this?

Bjork: Started in 2010, April of 2010.

Steve: Okay, right. Oh around – I started a year before you I think.

Bjork: Sure with the ecommerce site.

Steve: No, with the blog actually not the ecommerce site.

Bjork: Okay, ecommerce site was before that, a couple of years before that?

Steve: Yeah ecommerce site was 2007, the blog was like 2009.

Bjork: I should know this because I just interviewed you for our podcast.

Steve: Yeah I know it’s funny, we just spoken.

Bjork: I didn’t study my notes before I started.

Steve: Were you guys both working at the time?

Bjork: Yeah, so Lindsay was a teacher, she’s fourth grade teacher, and I was working at a nonprofit. I would say this would be like a tip or a little jump for people that are listening that are thinking about making that transition, one of the things that I knew at the nonprofit that I was at was there was some flexibility in my role, not a ton but a little bit.

I was really interested in web sites and web design and online businesses and I was working at a nonprofit that actually partnered with schools. We would go into schools and we would do retreats. Like those who are familiar it would be like a weekend camp parked into one day, and we would talk about things like respect or courage, kindness, things like that. It really came out of this idea that there was a need for schools to have these conversations, incredible organization called Youth Frontiers.

Anyways what happened was I knew I was interested in this business side of things, so what I did is they had a position open for like a 10 hour a week IT person, and I said I would be super interested in filling that because of my interest. So as much as possible if you can, for those that are listening find ways to like own little tiny pieces of a job that you might be interested in an area that you might be interested within the company itself, and maybe that is even volunteering for something.

I think that’s a huge way that you can make steps towards moving towards your goal without having to super burn the candle on both hands. There is obviously a little bit of that that has to happen, but as much as you can roll that into the job itself, that can be a huge win and that was one of the ways that I curved my teeth initially with understanding WordPress and web design, and even just like IT stuff in general like what is a server and how does it work.

Steve: I see so those skills directly translated over to Pinch of Yam?

Bjork: Yeah for sure 100%, and I think it’s not something I went to school for, I didn’t have any experience with it. It was all on the job training in the sense that I said I know I want to do this and I know I want to do it [inaudible 00:10:42] perform on our own, so I’m going to see if there is any way possible that within my normal day to day that I can start training in on this wherever I am.

Steve: That’s good advice, so was your wife trained in food or cooking I should say?

Bjork: Yup, that’s a good question. Lindsay doesn’t have any formal experience with food or food prep or recipe development or anything like that, just a general interest with it and I think really a skill, this is something that we’re starting to learn, another little takeaway here, but I think that everybody has some type of background that they can shift and maneuver in a way that applies to what they’re doing.

For Lindsay, she is an awesome incredible teacher and she is able to take that and she’s a really good communicator as well, and so she is able to take that, adjust that and apply it to this niche where it’s not 100% food, it’s also communicating how to create something or story telling or communicating with a group of people. She’s been able to take that and apply to it, she’s also just from seven, eight years of making recipes, and testing and learning about it, she’s really good with food and recipes and content, but a lot of her skill set also applies to her background of teaching.

I think everybody has that previous experience in something that they might not think applies to maybe an ecommerce site or developing an online business, but better if you really critically think about it, you can adjust and maneuver that and apply it in a way where you can leverage what you’re doing more efficiently because of your previous experience in whatever area it is.

Steve: Absolutely, arguably the communication and the personality is much more important than the actual thing that you’re talking about, right?

Bjork: Mm-hmm.

Steve: Whether it be food or quitting your job or whatever. I’m curious though, so you started out on Tumblr, how long did it take for the blog to take off, did it off on Tumblr?

Bjork: No, well and that’s all relative like when you’re first stating, it feels like it’s taking off when you have 100 visitors.

Steve: Okay, sure.

Bjork: It just like scales up appropriately to however much, like as soon as you get 100, the next time you get 100 it’s not as impressive, like you know how that is whether it is page views or the income you’re able to earn from it or whatever it is. Let me pull up a stance real quick here and see, it took a really long time to get to a point where I was like, now we’re moving along fast and have a lot of momentum, it’s one of those things where I would say it’s you work hard for three, four, five years and then you’re an overnight success, right?

Steve: Sure, sure, but you know what’s funny is I had Erin Chase who is a mutual friend, and her blog took off in like three months whereas it took me three years, so I was just curious what your trajectory look like.

Bjork: Yeah so if I were to look back, and this is on a month to month basis, I would say it “took off” probably at the beginning of 2013, and that’s where we’re starting to get like 500,000 sessions a month pretty consistently. There was also rump time where in terms of as a business we were starting to make comparable income to what we had in our normal jobs, and granted it was like teaching in a nonprofit, so it was not like we were Wall street bankers, but it was at the point where we said, maybe it would make sense for us to switching over to doing it as a full time job.

Steve: Did you guys both like your jobs?

Bjork: We loved them and that was one of the reasons why we had this like super slow transition out of them, and to paint that picture what it looked like is, and this is maybe a takeaway as well like we didn’t burn the bridge and jump off. We did make this very slow transition, and I know your story is a little bit similar where we would have been able to switch out, but we cut back to like three, four’s time.

So we’d spend one or two days fully dedicated to our own businesses, and then it switched to like half time. Lindsay was able to get a job where she had reduced hours, it wasn’t a classroom teacher, she was helping out kind of in a more specialized subject, and then I was going in a couple of days a week. And then it switched, Lindsay left and then I went into like a consulting role where I was doing maybe a few hours per week, and then eventually transitioned full time two years ago.

Steve: That sounds exactly like my story, it’s crazy.

Bjork: It felt super comfortable and we knew that we had a foot in the door in these other jobs and it allowed us to comfortably make the transition where we could see, hey in general the trajectory with these is up and at any time it’s like you always have a little bit of that feeling of like well everything could crash and burn and it could, but I think with two years of feeling that tension of, yeah I could be leaving my job but I haven’t yet. It really feels good to like draw that tension out, so you just feel really ready and at the point where it makes sense, you’re mature and it’s like the decision is ripe, it’s like ready to be picked and it feels appropriate to move on.

Steve: Can we talk about those first three years leading up to the hockey stick so to speak, like what were you guys doing those first three years and what was it like?

Bjork: Sure, so it was a lot of like mornings, evenings, weekends, and lunches. So we would feed the content side or just the work in general into early mornings or not necessarily even late nights but evenings, and then for both Lindsay and I pretty consistently like over lunch we would work on stuff and then weekends. That was just the norm for quite a while and…

Steve: Is this just content production?

Bjork: It’s content production for Lindsay, so it’s recipes, photography, writing the posts. For me it’s behind the scene stuff, so it would be maybe working with ad networks or thinking about affiliate type stuff that we could be doing for the blog. Eventually it moved into me focusing on Food Blogger Pro. So a for a long time the vast majority of the work those first years in terms of Pinch of Yam itself, the food blog, that was Lindsay, 80%, me 20%.

Then once we got to a point where we said, it might make sense to build this membership site for food bloggers, that’s where things really went up for me in terms of my time and my energy, because I shifted and I was focusing really heavily on that to really ramp that up. But those first few years it was just like you just fitted in where you can, and it feels like you’re doing two jobs because you were, right?

Steve: Sure of course.

Bjork: It can be a little bit overwhelming and it can feel like we’re doing so much because you are. I don’t think it always has to be that way, but if you’re doing like slow transition and building up, bootstrapping a business I think it has to be like that for some time where you sacrifice on sleep, or social activities.

It doesn’t have to be extreme where you feel completely burned out, but I think there is a little bit of that where you have to pay your dues in order to get to a point where you make that transition and shift and are able to focus on a full time.
Steve: How did you increase traffic, was it just putting out content and did people naturally find it, what are some things that you guys did to promote your content?

Bjork: In the early stages there were food sharing sites, so FoodGawker, Tastespotting. These are sites where it was kind of served the role what Pinterest does now where you would post your recipes, it would be your photograph, people would like it, they would click on it and they would come to your site. That was really early way of doing it and you need to have really good photography, but that was an important piece of it.

Steve: Those guys are still around?

Bjork: They are yeah, but in terms of like actual impact that they would have on traffic would be less than maybe focusing on Pinterest or just SEO in general.

Steve: Okay, sure.

Bjork: SEO is such a long tail thing like a long term and long tail, so we really start to see that now, that’s one of the primary traffic sources for us is search, but in the early stages it was more of that promoting content. Not in the sense that it was paid, but you were exchanging your photograph on a site, and that allows you to get traffic for them to use that photograph to be able to build these visual representations of recipes.

Steve: So back then Pinterest wasn’t around, there was SEO, did you guys do a lot of link building?

Bjork: No, that was never something that we were super intentional about doing other than being open to people using the photographs for Pinch of Yam or a list of the ingredients, so relatively we grow in terms of allowing people to use the content on Pinch of Yam. It can’t be the full recipe, but if people said, hey we would love to link back to this recipe and use the photograph; we’d always be open to that.

Or there is editors at BuzzFeed and if they’ll reach out we say yeah you have open access to use any of the photographs that we have here on the blog, because we know that that not only is a traffic driver but they are also dropping a link in the BuzzFeed which is a good thing.

Steve: Interesting, so early on then I’d say for the first couple of years was the majority of your traffic from these sharing sites?

Bjork: Early on it was probably a combination of like social sharing and then starting to get into some SEO stuff, it was a mix of that and then some direct traffic as well. So people that are coming back and maybe they bookmark a recipe and they come back to it. And then when things really started to pick up and become influential was like when it tipped over into Pinterest, and that was a huge traffic driver and still is, it’s the second most popular source of traffic for Pinch of Yam, but for a while was the number one source of traffic.

Steve: So in terms of SEO did it take a long time for that to kick in, like did it take years for that to kick in?

Bjork: Yeah it took a long time. Obviously right off the bat you’re getting some search terms, but it took a while in order for that to really kick in and become an influential factor in the traffic. I don’t know the exact dates and what they look like, but even like I’m pulling up here and looking at real quick.

From December of 2012 we would get maybe 7 to 8,000 visits a day, but it’s like if you go back to that first year even after the first year was maybe like 500, 600, 700, which sounds like a lot especially for people that would bend towards having some type of business related site or ecommerce site, but the reality with like a strictly content based site where to advertise, it’s monetize off of advertisements and sponsorships primarily. That’s not a lot of traffic and engagement just because you need so much in order for that to get to a point where it’s influential.

Steve: Okay, so would you characterize your early traffic strategies then was just like putting out really good content and then taking advantage of these social sharing sites?

Bjork: Yeah for sure and to be honest I think a huge part of it was not really having a super strong strategy, it’s not like we came in and said we’ve got to think about link building, or we have to think about doing guest posting or anything like that. It was really just Lindsay producing content and trying to figure out the best possible way to get good photographs that represent the recipe, good recipes like finding those.

Then there was the intention where I heard of like these food sharing sites, but to be honest like early on we really focused less on traffic and more on content. When I say we I mean that was Lindsay, she was really focusing in on that and there wasn’t really an intentional effort by either of us to say like, hey what are some strategic things we can do for link building or building social media following or anything like that.

Steve: So if we would fast forward today and you were to start from scratch today, what would you be focusing your efforts on?

Bjork: I think it would be smart to think about within the content that we’re producing and we’re starting to think about this now, like what are the sub niches within it. Pinch of Yam as a food blog is a little bit of lifestyle and then food and recipe which is a very big category, so it could be anything from chocolate chip cookies to like a healthy salad.

We have a really broad range of content that we can produce, but that also means like it’s a little bit more of the titanic versus a speed boat. It takes so long to get going and to move when you have a huge range of content that you’re producing. If you have a little niche, you’re able to get traction with that a little bit quicker and also you’d have a better idea of what your offering is as opposed to a site that’s a little bit more of a catch on in terms of the content.

I don’t know if I would necessarily niche it down what it is, but within that be intentional about thinking what are the things I want to be known for, what are the niches within the food category that we’re going to really claim and own, and then how can we produce offerings whether that’s the free content or paid for content within those little niches or areas of focus.

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In terms of – you mentioned Pinterest was like your number two. In terms of like Pinterest, Instagram, Facebook, and SEO, how do you allocate your resources today?

Bjork: It would be SEO, it would be Pinterest, and then to be honest there is this interesting sub category of social media and I think is something that I’m just starting to understand a little bit better, that we’re starting to understand a little bit better of like it’s not about traffic, it about engagement on those platforms.

A great example that I love to refer back to all the time is BuzzFeed. BuzzFeed isn’t trying to drive traffic; they are not trying to post something on social media, like they are not posting a story on Snapchat for instance, and then including a little link back to BuzzFeed to get you to opt in to their free download. What they’re doing is they are entering the room and saying what is the vibe here in this social setting, and then they’re feeding in to that and having conversations with the people in the room.
That feels really natural as opposed to like coming in and being like, hey guys, now that I’m here everybody come with me and go in to this other room that has a different feel, and we’ll take you out of the context of where you are. One of the things that we’re trying to do is figure out how can we be having — creating content that lives really naturally on these other platforms and remove the idea of traffic.

So we’re not thinking how do we get people back to the site, how do we get people to download stuff for free. It’s more about how do we produce something that fits really well for this platform, that engages people where we can build the following. One of the huge things that we do is then work with companies in a sponsorship relationship, and so they’ll maybe sponsor a video and you’ll see that with BuzzFeed as well, they are a great example of a content driven site that does that at a really high level.

Steve: How much traffic do you need to get like a sponsorship?

Bjork: I think it depends on the niche, so like last night I was reading Modern Dog magazine which we subscribe to and get, and which is a great case study in and of itself, but as I was looking through it I thought, there is probably not a lot of people that subscribe to this magazine like thousands, maybe not tens of thousands, but they have so many opportunities to do sponsorships or in this case again advertise on the magazine, because they know that it’s such a specific niche.

I look at these products that are in there and it’s like, oh yeah I’m interested in not all of them but a lot of them, because we have a dog and we love our dog. And so when I look at these products it’s like I can see how a small magazine with a small subscription base how they can make it even like an actual print magazine which is crazy.

The idea being that you can have a really small audience if you have a super specific niche because those people out there sponsors or companies or whatever it is that are interested in working with you will know that and understand that the audience that they are serving that content to is really aligned. An ad in Modern Dog magazine while maybe isn’t as expensive as it would be in Time magazine is potentially just as effective because of the audience that they are advertising to. My official answer is that I think it depends.

Steve: In terms of Pinch of Yam, you guys mention it’s advertising and sponsorships, when were you guys able to attract both?

Bjork: Sure, advertising you can do right off the bat, and the reason is because the primary way that ads are served right now for a content site, so if you are running traditional banner ads or pre-imposed or video ads, those are programmatic ads, so essentially what’s happening is you’re not working directly with a handshake deal with another company and saying, hey you can show this ad on our site for $3000 this month and then they show them.

What’s happening is there is these, it’s essentially micro transactions that are happening on the back end server side where there is an ad buyer and an ad supplier and those are talking to each other, and based on cookie behavior from somebody. People I think understand that in general even if they don’t know advertising, because they go and look at a basket ball hoop and then three days later they see an ad for a basket ball hoop even though they are looking at a coffee site.

The reason is because you’ve been cookied and so then that ad shows. The thing to know is that when you’re browsing, what you’re doing is essentially building up a profile, and so they start to understand potentially what your age is, where you’re located, what sites you’ve looked at, what things you’re interested in and that profile is then wrapped into something that ad buyers can say I want to buy $10,000 worth of ads against this type of buyer and they’re making those micro second decisions.

Long explanation to say if you want to run ads you can do that relatively early on, you could use something like Google Adsense and get up and running pretty quickly, but the payoff that you’re going to get isn’t very high especially if you don’t have a decent amount of traffic.

Steve: What do you guys get paid out?

Bjork: I would say like in this past month so July would be anywhere from 25 to $30,000 based on…

Steve: No I meant CPM sorry.

Bjork: At this point overall we’re getting probably like seven to eight, I think it was eight.

Steve: That’s actually pretty good.

Bjork: That’s really good, but some of the things to know is that that’s like the cumulative like wrapped up total for like video pre-imposed, it’s the ads that we have injected on mobile and desktop, so it’s not just like one ad, that’s cumulatively like what do we get like on 1000 visits.

Steve: I see for all the ads encapsulated?

Bjork: Yes.

Steve: Okay got it.

Bjork: So it’s not like one individual ad unit which then adds up so we’re getting like 40 or 50, it’s for 1000 visits on average what will the site earn from advertising.

Steve: Okay and then in your experience, which networks have provided the best payout?

Bjork: There is a couple of networks and these are specific in the food niche, so the two that I think of that are the most popular right off the bat, they are most common I would say, the company we work with is called AdThrive, and they are going to be a company that comes and both of these are as far as I understand holds your hand and gets you up and running.

They have a minimum page views and I don’t know what that would be, you would have to go to their site to check it out and there is another one called Mediavine which operates in the same way. On Food Blogger Pro, those are the two most common that we hear from people using. Then after that I would go into there’s thousands of individual ad companies, but they are usually less of like, hey we’re going to come and partner and more of like we’re going to give you the script that you put on your page and then we collect off of that. Mediavine and AdThrive are a little bit more involved in the process.

Steve: Okay and in terms of when you were able to attract these offers, you mentioned like there was like a minimum page view limit, were you guys running Adsense early on and then gradually shifted over?

Bjork: Yeah, well it was comparable to ad, so we had Adsense and then we had some food specific sites or companies that we were working with. There was one called Foodie Blogroll, there was another one called Gourmet Ads. These are companies that are ad companies with the focus on food content, but the thing is just with the shift to programmatic over the past few years, you see that becoming more generic in the sense that it’s not like a food related company is going to be working with other food companies as much, because of programmatic.

They don’t care as much about who are the blogs they’re working with, they are more focused on who is the actual individual and what is the ad that we’re serving them. So to answer the question, we started out with some individual ad networks like Adsense, Foodie Blogroll, Gourmet Ads, and then eventually you start to work more. So you have a handful so you can an ad stack that you’re running and you’re playing around with which ones work better and which ones show first and things like that.
Then eventually we started to slowly shift over towards having a partner advertising company take over and really run with that.

Steve: I see, do you still do private placements on your site?

Bjork: No, and we never really did.

Steve: You never did?

Bjork: No. And to do that is totally possible, but I think it’s becoming less and less common to do actual like display placements, so like somebody would buy something on the side bar because of the shift of programmatic advertising. What is really common and becoming much more important is, it ties into what I was talking about before like the BuzzFeed thing where you partner with and work with a company and they say we want to sponsor this post that you’re doing and this video on Instagram.

We will work with a company that does let’s say chocolate, and they want to focus on having their content in a video and then include it in the recipe, so there will be like a product shot of it. It’s like an online version of America’s Got Talent, drinking Dunkin Donuts.

Steve: Sure got it.

Bjork: Whatever it is that they are doing.

Steve: Like a TV show is they are embedding like car commercials practically.

Bjork: Yes exactly and it’s a more transparent version of that, so it’s not trying to hide it necessarily, it’s more saying, hey for this post, for this video we’re working with this poster company. You’re letting people know and there’s rules and regulations around that, that you have to be transparent in that and we’re pretty intentional at doing that, but the basic idea is the same where you have an audience and you’re exposing that audience to the product in a way that isn’t a traditional ad.

Steve: Are there ROI goals on their end for that and how much is that pay compared to your regular CPM ad?

Bjork: Yeah, so it’s less CMP based and it’s more – there is a negotiation element to it and there is also just a – I think kind of a – like you scale up with more traffic and engagement obviously. So I wouldn’t be able to say CPM, I think the ROI is a little bit difficult because they are not necessarily tracking sales.

If you have a company that is selling Ketchup, they are not selling that online, and they’re not like using a coupon, usually not using a coupon to encourage people to use that, so then they can track the sale of it. So it’s a little bit towards like PRish in the sense that it’s awareness as well as…

Steve: Their branding place basically.

Bjork: Yeah right exactly.

Steve: Got it, okay.

Bjork: I think in terms of what you will be able to get for that, for us like at this point we’re looking at anywhere from maybe like — I wouldn’t even know and it depends on the package, but I would have to check with Lindsay because she does more of the client relationship stuff like this. But I would say it won’t be uncommon if you have a site let’s say with a million page views to get somewhere between – this is a total guessing, lots of variables and this would like what type of content is included in social promotion and stuff, but maybe $1,000 to $3,000 for that type of sponsor content.

We know people that for instance like they don’t show any ads on their sites, so just super clean site and they don’t have a ton of traffic engagement, but they’re charging $10,000 to work with the brand, to do a video on a post and promote on social media. A lot of it depends on your strategy and how you’re presenting the content on your site, and also negotiation probably.

Steve: Okay, you know what I’ve had other food type of bloggers on the podcast, and I have friends that do that too and they’ve all been telling me that just the whole ad revenue model is been decreasing over the years. Are you guys experiencing that as well and what have you been doing to combat that?

Bjork: Yeah for sure, and it’s interesting because it decreases and then – I was just thinking about this the other day and then it changes. So like people figure it out and they catch up with it and then the industry changes and then people figure it out, they catch up with it. I think in general, display advertising is on this trend down, it’s becoming less effective, and I would say that in sense of like traditional display ads like banner ads.

But it’s interesting because as tracking becomes more effective, then I think the value of that comes up, so we’re starting to see an interesting shift where tracking is becoming a lot more capable, and programmatic is becoming more effective, so I think, I don’t totally understand the deep, deep intricacies of the industry. I think what happens essentially is that as tracking becomes better; people are willing to pay more because it’s more effective to serve those ads to a targeted market.

I think that there is an element to that. I think in general it’s a little bit like trying to swim upstream, you can make progress, but it’s not as easy as swimming downstream. The other element of display advertising is – and this a little bit of a shift, but video ads are in such high demand that there is a really high CPM on video ads right now. That’s one of the reasons you see this shift towards videos, not just because that’s how people are consuming content in general.

But for content sites whether it be CNN or Mashable or the StarTribune [inaudible 00:40:01] whatever it would be you see them starting to include a lot of video and running ads pre-imposed against that, because it’s such an effective way to monetize content right now. The interesting thing with that is sometimes you’ll even see on some of these new sites that they’re showing videos that have to do with the report but not necessarily. It’s almost like they’re just trying to figure out ways to include video content so they can run an ad against that even if it’s not directly related to the story; maybe it’s remotely related to it.

Steve: Does that mean you’re focusing more on video content today?

Bjork: Yeah, so we just hired a full time video person, so she is shooting and editing and then we have a part time person that we call a shooting assistant and is handling all of the food side of it. So it’s not necessarily Lindsay every time that’s going to be doing the video, it’s traditional like you see on Facebook a lot of times these food recipe videos where the person isn’t necessarily front center, so we’re doing a lot of those and starting to include those on social media as well as within posts and things like that. We’re really leaning in to it; we’ve hired a full time person and somebody part time.

Steve: In terms of Food Blogger Pro, that was my way of trying to segue in to Food Blogger Pro by the way.

Bjork: Yeah nice good, because there is videos on there as well.

Steve: So you have ad revenue and you had all your eggs in that basket, so can you tell me about how you thought about doing Food Blogger Pro?

Bjork: Sure, so that was three years ago now and it really came out of us – so we did these monthly business reports where we said, here is what’s happening, it’s pretty typical for what you see with like income report or transparency report or whatever you want to call them. Here is what we did this month to create an income, here are some of the expenses, here are some of the things that we learned.

As we started to do those more and more, naturally we had people reach out and ask questions about it, and it just started to become this like a rhythm of everyday we’d have a handful of people asking XYZ, so…

Steve: Was that the reason you had the income reports by the way or no?

Bjork: It wasn’t intentional at the beginning and to be honest when I think back to when we first started, it was way in the beginning and it was before the blog was really anything, so we were making maybe $20 from it or $100 the next month. So I don’t think I would like to think that I was that intentional to begin with, but I don’t know, I don’t think I was.

Steve: Okay.

Bjork: It’s one of those things where you look back and it’s almost kind of funny really knowing what it was. I think there was truly, we started out by saying it was the food blog money making experience – experiment. So I think that’s really what it was and in a way I think what happened was I had like two people on my shoulder, so the classic like angle, devil situation, where on one shoulder was people saying like you can do anything, you can create one blog and have that be your full time thing.

On the other shoulder are these articles that I had read where people were like of you’re going to do this especially in the food space you have to do it out of passion, only passion because it’s never possible to turn it into something like to make a business out of it. For me it was – and for Lindsay I think too was an experiment in saying like is this possible, is this something where we can build this into something that we’re actually able to create an income from.

That’s like the purest form of what it started out as. I think as it got to the point where did start to get – some people that would follow along with them would be interested in them. It was at that point where we said, maybe there is a little sub category that we can build or sub community of people that are doing similar things, or interested in doing similar things and that’s where the idea of Food Blogger Pro came about.

Steve: Is that course primarily marketed through Pinch of Yam?

Bjork: Yeah and then we have some affiliates, we have some pretty awesome affiliates too and those are, I would say 99%. Everybody that I know of are people that are members of the course and then promote it to their readers. The nice thing is like the audience that we serve there is also people that have audiences, so affiliate marketing makes a lot of sense for us because we can just work with people that are members, and it’s natural for them to talk about it and promote it.

That’s the really other big piece of it, but in general it’s something that’s tied to Pinch of Yam, like if we ever wanted to sell Food Blogger Pro, which we have no intention of doing especially not in the near future, nobody would be interested in it because they would be like, well it’s essentially attached to Pinch of Yam, it’s not necessarily a standalone thing.

Steve: Got it, can I ask you like how you decided on pricing, it’s a membership site, then you have a yearly membership versus like a onetime fee, so I was just…?

Bjork: That’s a good question, I think that I liked the idea – personally I really like doing small incremental changes over a long period of time, I’m more – especially at the time, not as much anymore. The idea of building something up and then doing a big launch was a little bit intimidating to me, and having like a high price point for it. I really liked the idea and still do of this recurring revenue as opposed to like a really big launch and then waiting.

That being said, I think there is space for that and I think that it makes sense to have that type of offering in your sales funnel, or your offering list or catalog or whatever it is that you want to call it, and at some point we’ll probably start to have things like that. But it wasn’t like a super intentional thing to be honest; it wasn’t like I sat down and weighed the positives and negatives of having a higher price point.

Steve: But you guys still do launches, right for this product, like right now it’s closed?

Bjork: Yup, so that’s one of the things that we’ve changed and that’s why I was saying previously especially when I first got started, the idea of a launch was really a scary thing, but as we got into it, one of the things that we realized is like I was growing weary of like always promoting and always encouraging people to sign up. We worked with Stu McLaren who is connected with or was at the time Platform University and has done a lot of membership site and stuff.

That was one of the recommendation that he had is both for marketing sake like it’s easier to market when there is an open and close and also so that you’re not always weary from promoting it. It makes sense to switch to kind of like a college or university, where you’re doing a longer period, people join and then they are part of the community. That was a big change for us and felt really good in the sense that we could step back a little bit and not always be in promotion mode.

Gary Vaynerchuk talks about jump right hook, so you’re giving, you’re giving, you’re giving and then every once in a while you’re like; I’m going to promote this. That feels really good to have that rhythm, and also it’s just better for marketing, it’s something that I think people are used to, so there is big movie premiere and you see ads for it and everybody goes and they watch it. You have a long period like I said for college or university and it starts at this date, and everybody joins.

There is a natural rhythm to it especially with something that’s community oriented I think versus I would say if it was a SaaS app or like an application. Obviously it doesn’t make sense to have an open and close for something like that, but that shift has worked really well for us. I don’t know if I would have been able to do that to start as much just because I wasn’t as comfortable.

Steve: I mean it’s a ton of work which is why I don’t do open and close launches, instead I just have an email sequence that’s really long that teaches a lot, and then presents the offer and then teaches some more and then presents the offer.

Bjork: What is your reason, is that something you tested or it just felt like a good fit for you?

Steve: I don’t like doing launches just because it’s just too much work and pressure just all once and you have to do it – I would dread doing a launch every time I do it basically.

Bjork: Sure, sure.

Steve: And so for my personality I thought it was just better to just leave it open and let my email sell it for me.

Bjork: Yeah for sure.

Steve: But I also do webinars too which is kind of like a launch but not really. I just do those once a month.

Bjork: Okay once a month and is that only – this is like switching the interview a little bit, is that because, or is that only to new people to the list like who do you email for that webinar?

Steve: Yeah people who have been to the webinars before, people who have expressed interest in certain pieces of content that I have, and people who are new to the list.

Bjork: Got it, okay interesting.

Steve: But what I found also is that people will attend multiple webinars, like there’s been people who have attended every single webinar that I have given even though it’s the same content sometimes.

Bjork: Right, right, interesting.

Steve: So Bjork real quick, in this interview I was hoping that you would be able to provide a piece of advice to somebody who wants to start a food blog, because we were both bloggers and I know that can be a slog especially in the beginning, right?

Bjork: Yeah for sure.

Steve: What would you recommend for these people?

Bjork: A few things here, I think it’s really important to figure out something that you’re going to you’re going to enjoy regardless, so there’s all types of income, so there is the income that we think about and that’s income where it’s like literally dollars into the bank account. But there is also these income sources that we don’t talk about as often it’s emotional income, like how do I feel when I’m working on this, am I excited, does it feel like a good fit, is this something I’m passionate about.

There is relational income, so if you’re somebody who is naturally extroverted and you’re wanting to be around other people all the time, maybe starting a blog where you’re like having to be by yourself all the time and work on content in this closed room isn’t going to be a great fit. If you do know that you want to do a blog and you are super extroverted, think about ways that you can shift that so that you’re working with individuals more or working with other people, if relational income is a really important thing for you, that you’re factoring that in.

So that specific item is think about the types of income not just like the primary money income which is what we normally think about, there is all these other ways that you could be creating an income. I think the other thing especially if you’re going to be going in to something purely content driven where you are eventually going to want to work with advertisers or sponsors or things like that, to know that it takes a really long time, and that’s why that first tip or takeaway is so important.

It just takes a lot of time to get up to speed if or get to the point where you’re creating enough monetary income for that to replace your job or to be significant enough that it makes an impact, so to be patient. We call that 1% infinity, this idea that you’re improving a little bit 1% over a long period of time infinity, but doing that each and every day, that’s a really important thing.

Specific to the food space, I would say it’s really important to think about what is it that you’re going to own in terms of the niche which we talked a little bit about before, and you’re able to get a lot more traction if you start out with a specific niche. The interesting thing here is that there has to be a balance between claiming a niche, but also restricting yourself long term to only that niche.

I think that would lean into the name side of things, so I think you can have a name that is flexible enough, that allows you maybe to claim that name and then have maybe a tag line that defines the niche a little bit more. So down the line you’re able to open it up a little bit once you do have that traction initially that you’ve gained because you’ve claimed this niche, because that’s such a common thing is eventually you get to a point where you want to niche out. Amazon didn’t want to sell books forever, Zappos didn’t want to sell shoes forever, their names allowed them to change because of the flexibility of that. If it was a shoesite.com, it would have been really hard for Zappos to switch down the line.

I would say the third piece is think about a niche that you can start and that you can really claim, but always be thinking about the reality that later on you might want to open that up a little bit and to be intentional on how you’re structuring it and naming it and branding it to allow that to happen.

Steve: I think dashofyam.com is available too?

Bjork: Oh yeah, there you go, yeah.

Steve: There you go, hey Bjork you’re good, thanks a lot for coming on the show. If anyone has any questions for you, where can
they find you?

Bjork: If people wanted to reach out, probably the best way, I’m not super active on Twitter, but if people wanted to reach out and connect with me on Twitter I’m on there, Bjorkostrom, and then we’re just at Pinch of Yam and Food Blogger Pro. So if you want to follow along with what we’re doing, you can go to Pinchofyam.com, and then the membership site is foodbloggerpro.com, and we’d love to connect and hear from you, so that’s it.

Steve: Cool, thanks for coming on the show Bjork, really appreciate it.

Bjork: Thanks so much Steve, appreciate it.

Steve: Take care.

Hope you enjoyed that episode. As I mentioned before Bjork is one of the most successful food bloggers I know, and is the perfect example of someone who took an interest and turned it into a thriving business. For more information about this episode, go to mywifequitherjob.com/episode143.

And just a reminder that tickets for the 2017 Sellers Summit are now on sale at sellersummit.com, the conference that I hold every year that specifically targets ecommerce entrepreneurs selling physical products online. The event will be small and intimate, and I promise you that the speakers will focus on actionable strategies to improve your ecommerce business and not any high level BS.
So head on over to sellersummit.com, and check it out now.

And once again if you are interested in starting your own online business, head on over to mywifequitherjob.com, and sign up for my free six day mini course on how to start a profitable online store. Sign up right there on the front page, and I’ll send you the course via email immediately. 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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142: How My Student Jen Makes 6 Figures Selling Shower Curtains Online

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142: How My Student Jen Makes 6 Figures Selling Shower Curtains Online

Jen DePaoli is a student in my Create A Profitable Online Store Course and I’m really happy to have her on the show today. Jen runs ShowerCurtainHQ.com where she sells shower curtains online.

What I love about Jen is that she hustles, she’s constantly finding new ways to expand her business and she’s not afraid to try a variety of different business models. Just like the other student interviews that I’ve conducted, this podcast provides a very realistic, in the trenches account of someone who just started their online store.

Enjoy the interview as there are a lot of details that Jen shares that can help anyone get started.

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 Jen came up with her niche
  • How Jen got started without investing a large sum of money on the business
  • Mistakes Jen made in getting started and how to avoid them
  • How Jen attracted customers to her store early on
  • How to leverage marketplaces like Houzz and Amazon

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Transcript

Steve: You are listening to the My Wife Quit her Job Podcast. If you are new here, it’s a show where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now I don’t bring on these famous entrepreneurs simply to celebrate their success, instead I have them take us back to the beginning, and delve deeply into the exact strategies they used early on to gain traction for their businesses.

Now if you enjoy this podcast please leave me a review on iTunes, and if you want to learn how to start your own online business be sure to sign up for my free 6-day mini course, where I show you how my wife and I managed to make over 100K in profit in our first year of business. So go to mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email.

Now before we begin, I want to give a quick shout out to sitelock.com for being a sponsor of the show. SiteLock is the leader in website security, and protects over 8 million websites by monitoring them for malicious activity 24 hours a day, 7 days a week. So here is the thing, most online business owners never think about security until they get hacked. Now my online store got hacked long ago, and it was the most miserable experience ever.

I basically lost thousands of dollars as I frantically tried to patch the issues, and get my store back online as quickly as possible. In the event that you get hacked, call sitelock.com, and they will help you out, or even better protect your site before you get hacked. Right now you can get 3 months of SiteLock free if you go to sitelock.com/mywifequitherjob. Once again that’s sitelock.com/mywifequitherjob. 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 Jenifer Depaoli on the show, and Jen is actually a student in my Create a Profitable Online Store course. Now it’s been a while since I’ve heard a student on the show, but last week I actually sent out a survey to my class of about 2000 students and was very pleasantly surprised with the results.

It turns out that 56% of students you’ve launched a product and have been here in the class for at least a year are now all making at least four figures per month, and a whopping 9% of students are actually doing over 50K per month. Anyway Jen runs the awesome store showercurtainhq.com, where she sells shower curtains designed by local artists.

And I’ve had the pleasure of having her in the class for over a year now, and Jen is doing really well with her store where she makes money selling on both her site and on Amazon. And with that welcome to the show Jen, how are you doing today?

Jen: I am doing great Steve, thank you so much for having me.

Steve: Yeah it’s been over a year since we last chatted on Skype I believe, and a lot of things have happened since then.

Jen: Yes, they absolutely have. I took your class and I have to tell you by the way, I found you because of the name of your website My Wife Quit Her Job. I was working at a pharmaceutical lab, and I was very unfulfilled, very miserable, I wanted to just quit and stay home, but the money was good. And I found the podcast through Pat Flynn, he opened up my eyes to making money online, and so I just became obsessed with learning how to do that, and I came across your blog and I was hooked ever since.

And I found your blog and then I wanted to buy your course, and my husband who is like my biggest fan and my biggest skeptic, I remember showing him the course, I was like, “Honey I want to buy this guy’s course,” and he was like, “I can already tell you that looks like a scam.” And I was like, “No you don’t understand, you got to visit this guy’s blog, his wife got to quit her job, they sell stuff online.” He’s like what do they sell online? And I’m like wedding linens and they make a lot of money doing it.

So he finally just said, do whatever you want but I don’t know, it doesn’t look like it would work to me. So I was like [inaudible 00:03:54] determined just to prove him wrong. So I started drop shipping shower curtains, it took me a long time by the way to find my niche, but once I found my niche …

Steve: Yeah, can we talk about that real quickly?

Jen: Yeah.

Steve: Talk about the process of finding your niche actually.

Jen: Yeah, I was one of those people where it was kind of like paralysis by analysis for a while, I don’t know if that’s what you call it, but I had a really hard time. I had already bought Market Samurai, and I was just going back and forth, I couldn’t find the right niche, but then – and I would always think about while I was just taking a shower, okay what’s going to be my niche?

I finally just realized, okay shower curtains, unless you have a glass enclosed shower you need a shower curtain and it usually sets the tone for the bathroom, then you know what color to paint the walls and what waste paper basket to get and light fixtures. And a lot of people need to get them, and they fit the metrics that you taught of shipping something small and it’s not an electronic.

So I was like you know what, I’m going to just email Steve and ask him a few things this is a good niche. And I remember you emailed me back right away and you said I already did the keyword research for that for somebody else and I know it’s a good niche, but the good news is, is that person picked a different niche, so you would the only one in the class that is going to do shower curtains.

So finally I just said you know what, I‘m going to do shower curtains. But I was still a little bit afraid to import from China, so I started out drop shipping, and so I just cold called this company. I just started cold calling companies that I found on Etsy and asking them if they would drop ship, and the third company I called it was really cool.

It was a husband and wife team, and they were like, oh yeah we could drop ship for you, how about if we gave you a 30%, we’ll give you a coupon code, and then you can pick out which ones you want, and you can put them on your side. And so I started out drop shipping and I remember my site was live for about a week and then I finally got like that little update on my phone from Shopify that I had made my first sale, and I was like, oh my gosh.

It was like I couldn’t remember, it was like early Sunday morning and I run into the room and like to show my husband like, look I made a sale on my website. And after the site was live for about a month, I remember thinking, okay this class that I took it just paid for itself.

Steve: Awesome. I know you have an interior decorating background somewhat, right?

Jen: I do.

Steve: I just want to ask you this, and this is a question I ask a lot of people, are you passionate about the products that you sell or is it just strictly a money thing?

Jen: You know what that’s a really good question. I do pick products that I would want to put in my own house, and now I’m actually importing shower curtains from China. And again I just keep an eye out on the market like what patterns are hot, what’s trendy, and then if I see something that I think might work, then I go and do the key word research on it to see if it would sell.

I also go and see if there is other competition out there. So I guess — but the answer is yes to both. I also have a sales background, so I want to get paid if I’m going to work hard, and I want to have a type of lifestyle where I can go on vacation with my husband and my daughters and go whenever I want.

Steve: How important do you think it is to like really be passionate about what you’re selling, just in your words?

Jen: You hear different opinions on it. I think that it makes it easier if you’re selling something that you’re passionate about. I mean you’ve had so many entrepreneurs on your podcast that they’re selling something – you’ve even said yourself it’s not like you’re passionate about wedding linens, but your wife is, I mean you guys have a really cool story about how you chose that niche too. So I think there should be some connection to it.

Steve: Okay and you mentioned that you keep up to date with what you think is going to be popular. Let’s say you find something that is popular, how do you go about figuring out whether that particular curtain style is going to sell?

Jen: Well I was able to find some vendors in China that would send me smaller quantities where I can test the market, and then also I have a printer that I have teamed up with. So if I have an artist that will sell some [inaudible 00:08:22] art, and I can put that on a shower curtain, I will try first drop shipping and see if it sells really well that way.

In fact I have two styles that sell really well on my website and then houzz.com, which is a really great market place if anyone sells anything home décor related, and I sell a couple of those styles a day. So I need to just contact the artist and see if I can buy the rights to that and order that one particular style in bulk, because I think that would do really well, actually I know it will do well on Amazon. If people are willing to pay $100 for a shower curtain on Houzz for that style, then I’m sure that if I bought it bulk in China, they would be willing to pay $20 for that same style.

Steve: So back when you were trying to get drop shippers, did you say anything special? So you went on Etsy you said to find these people?

Jen: Yes.

Steve: And then you actually mentioned that you print your own shower curtains as well, how does that work?

Jen: Yeah, that was my second step. So I was drop shipping just strictly drop shipping for a while, and at a 30% profit margin, I didn’t really have any money to do any sort of marketing, so I just figured, okay what’s the next step? I need to find my own printer that can print my own styles.

And so I finally was able to find a printer and I teamed up with an artist who gave me some styles that I only I sell, so own styles they can only get from me from either my website or my brand on Houzz. So it’s still is somewhat of a drop ship business model, because I don’t hold any inventory even though I have my own printer, and my printer isn’t in my garage, the printer is in Kansas city. But then also my husband is a graphic designer, so I was able to have him draw up some really cool patterns that I’m able to sell as well.

Steve: So this printer actually prints on shower curtains, meaning like they stock shower curtains and they just print whatever design that you want on them?

Jen: Yeah. The process is dye sublimation and so this printer they will print shower curtains, they’ll print pillows, they will even print leggings if you want to design your own leggings they’ll print those. I just mostly focus on shower curtains, I also sell a few pillows with the same designs on Houzz, but again the only reason why I’m selling the pillows is because I can drop ship them, I don’t have to hold those inventories, because that would take up a lot of room in our garage.

Steve: Okay and you mentioned how several times now, a lot of people out there they are selling on Amazon, they’re selling on their own site, but very few people have talked about Houzz, so what is the process on selling on there like, what are the margins, how much do they take, and how easy is it to use?

Jen: Okay it’s extremely easy thing to use, and I know that Houzz is really trying to build their market place, and so if you get started selling, you could actually talk to a person live for free where they help you get your whole store set up, and they take a 15% margin every time.

There is no monthly fee, it’s just every time you sell they take 15% of it, and the traffic there is unbelievable. If you talk to any other person that sells on that site, it’s highly worth it. They do recommend that you offer free shipping, so again it’s beneficial if you’re selling something – not like a piece of furniture or a table where it’s going to be expensive to ship. So yeah it’s extremely a profitable hub, anything that you would use in your home, but I’ve even seen stuff that won’t use in your home, I’ve seen baby products being sold on there as well.

So I will say this that the customer that buys off of Houzz is very – I don’t know if the right word is picky, but I do get more returns if the product isn’t completely perfect, they’ll right away and want to return it.

Steve: Okay and they don’t do any sort of fulfillment for you, you always have to sell and fulfill all the goods?

Jen: Correct, yes as of right now.

Steve: Are there any guidelines like they enforce on shipping times and that sort of thing, like how do they keep you guys in line?

Jen: Well the biggest guideline they want is they want the picture on a white background, because it’s an interior designer website, so they really want the pictures to look very professional. I think if you submitted a picture and they didn’t like it, they would say you need a better picture.

And then when you are setting up the listing you need to give a window of time when the order will ship, and since my curtains are – since most of them are made on order I say please allow six to ten days before the order is shipped, and it has not been a problem. The only time I think that they would get upset is if somebody ordered a return and you didn’t respond to them right away, they want you to respond within 24 hours when someone messages you.

Steve: And in terms of the market place, is it just list it and forget it or like are there ads for the platform or anything like that?

Jen: I believe you can buy ads, but I have not, I’ve been able to get enough traffic that it hasn’t really – it’s just hasn’t been something I’ve done because I’m also selling on Amazon and working on my own website. But you can buy – I will tell you this though, they do have newsletters that they send out to their readers every single week.

And there was one time when one of my shower curtains was featured, and I did not know that they were going to feature it, the person just found it and said here’s a new product and it also happened to be the weekend before Thanksgiving. So I think Christmas season was already starting, and I remember selling 30 of those same shower curtains in one day and these were $100 shower curtains.

Steve: Nice.

Jen: So those are really, really nice things.

Steve: So let’s talk a little bit about just – go in to a little bit more depth about some of the more difficult parts about getting your business off your feet. So you mentioned early on that you drop shipped by contacting Etsy vendors, when did you make that decision that you need to go to China to get some stuff?

Jen: It was – okay so I talked to you right after I got laid off from my pharmaceutical job. I was home for about four months and I was researching China vendors, and I knew that if I ever was going to make this the type of business where I was making money in my sleep, I could go on vacation and not have to worry about it, I was going to have to import from China.

I had made that decision, but I hadn’t pulled the trigger yet. I remember I was about to put an order in and I was still in between jobs, and so I could tell that my husband didn’t want me spending $6000 with some folk I never talked to before, I was just emailing.

So I finally told him, I said okay I will get another day job, but once I start getting money coming in from my job I’m going to take the money I have made from my shower curtain business and I’m going to import from China. And he said that’s fine, do whatever you want. So I got a new job, totally new industry where I worked from home, I’m an independent contractor so I can make my own schedule but I did have money coming in.

So I found two vendors, put in the orders – and I will tell you this, the first order from China is always the scariest, you wire the money, it’s so scary, you are like I hope that these people don’t scare me, but then the second order that you put into China it’s also scary, it’s just a different scary because it’s not going to get here on time, and you’re going to run out of inventory. So yeah.

Steve: So did you have any problems with quality control at all initially?

Jen: You know what I haven’t, I’ve not gotten one, I’ve been very lucky, I just ask a lot of questions. Usually though whenever you put in a smaller order, they don’t want to accompany with packaging. So these three new styles that I’m launching, they said we’re not going to do any sort of insert cards.

So I’ve had to order stickers and my mom was over yesterday helping me put stickers and labels and barcodes on these new shower curtains, but as long as they’ll sell well and I do a reorder, then they’ll do the insert cards and everything else that I want. No the quality control has been really good, I’ve been very lucky.

Steve: Okay and in terms of your initial orders for testing like how many of these do you buy, like for these three new products that you’re launching?

Jen: Yeah, I bought 300 of each.

Steve: Okay, 300 of each, okay and then usually you start with that quantity and then once you know that it’s going to sell then what do you usually step up your order to?

Jen: Well obviously the more you order the less it is, so as long as it sells a couple a day my second reorder for this one product that’s selling really well – my first order was 1200 because that vendor was not going to do any lower than 1200 for the first order, and then the second order was 3000. Obviously it’s less per unit and again I’m afraid I’m going to run out of inventory by quarter four, I’m going to need to order before Chinese New Year.

Steve: And what’s your turn around time, I’m just curious?

Jen: My turn around time for my website or Amazon or Houzz?

Steve: Oh no, not for fulfillment, just in terms of getting product in your warehouse or in Amazon’s warehouse?

Jen: Oh when I order from China?

Steve: Yes.

Jen: It took about a month, I did everything by sea, I’m cheap so I just figured – once I got that sample and I was comfortable with the sample, I just had everything ordered by sea and it took about a month.

Steve: Okay and then what would you say like your margins are from the products that you order from China, are they north of like 70%?

Jen: Yeah the stock that I had to reorder the style, it sells on Amazon for about $19.99 and I was able to order it for $2.50.

Steve: Okay, so it’s much more than drop ship, like significantly more than drop shipping?

Jen: Oh my goodness yes, yeah.

Steve: Okay, so today I’m just curious do you still drop ship any products?

Jen: I do actually, some of the ones that have sold really well, I’ve cut them on my website, and my website has been around long enough where it has some organic traffic from Google, and if somebody orders a shower curtain that I have to drop ship, I figure okay all I have to do is send an email to order the shower curtain and it’s 20 bucks, I make 20 bucks for an email that takes me two seconds to put the order in for, so yeah.

Steve: And in terms of just your site versus Amazon versus Houzz, like what does the revenue split look like?

Jen: I would say most of my profit right now does come from Amazon and then Houzz would be second and then my website would be third. However, I am working right now, my focus is building my website, because you talked about it on your last podcast Steve that Amazon is very cut throat, I’ve had a lot of piggy backers on some of my styles, and then I have to send them a nasty letter.

So that was the best advice that you gave me was don’t put all of your eggs just in the Amazon basket. Sell on Amazon, sell on your website, have a lot of different revenues and platforms that you sell on. So where I will spend my marketing dollars will be on my own website.

Steve: Before we actually started recording we had talked about certain products that you had on Amazon, have you had any products that were easily found on let’s say like Alibaba where you’ve actually ended up losing margins or having a lot of competition for?

Jen: Yes, the one that sells the most I had that, and what I have zero tolerance for is another vendor selling underneath my listing, I will immediately send them an email and say, “I created this brand from scratch, I don’t know what type of curtain you’re sending these people, but you’re sending them a counterfeit, so I will report you to Amazon if you don’t take down your listing immediately.”

But what you can’t control is that I’m selling a shower curtain and if it’s a cool style and it’s got a bunch of reviews, people are going to know that people want it, and so some people can make their own listing and copy it, and there is nothing I can do to really control that which is why I also need to also sell on other platforms, and I need to continue to launch new products as well.

Steve: So would you say that you’re focusing more on your own designs at this point?

Jen: Yes.

Steve: Okay and with your local artists, can you actually take their designs and sell those on Amazon as well or are you already doing that?

Jen: With my local artists, the only way I would sell them on Amazon is if I could take their art and have it mass produced in China so that the profit margin would be good, and I would pay them for that and it would need to be something that we would agree to. But as of right now the only designs that I’m getting mass produced are the patterns that I’ve either found on Alibaba or my husband has designed a pattern, because I said, hey I like this pattern, can you design me something like it.

Steve: And just as an aside, has your husband come around, because I actually have a lot of students in the class whose spouses aren’t on board when they first launch, and I’m just curious has your husband come around?

Jen: Yes he has. There was someone that I once heard on the podcast describe their spouse as their biggest fan and their biggest skeptic, and I immediately thought, oh my gosh, that’s totally my husband. But yes, he has come around. My advice for anyone where their spouse is not on board with their ecommerce dreams is you just got to show them the money.

Start small, and you can start small, there is no risk in putting up a drop ship store, it’s a great place to start, just know that that’s not where you’re going to make quit your job money, but show them the money and just show them how hard you’re working and then they will get on board. Now my husband is always asking, hey how many shower curtains did you sell today?

And it is fine too because we built our dream house and he built this great big garage to put all of his tools in, and right now there is 3000 shower curtains also sitting in this great big garage that we need to send them to Amazon. So I definitely converted him and I think he’s a lot more open minded too that it really is possible to make money online with this gift that we have of the internet in the age that we live in.

Steve: Just curious, how much money did you invest in this business to start out?

Jen: Initially, well the cost of your course which by the way is worth every penny, you could double the price and it would still be worth every penny and then some, but then to start my website I was — I don’t know like I think I spend 300 bucks a year on Shopify. So that was, I mean there 30 bucks a month to get it started.

Steve: So practically nothing basically?

Jen: Yes.

Steve: Okay, can we talk about your site a little bit, you got your first sale on your sight Right?

Jen: Mm-hmm, I did.

Steve: What sort of marketing were you doing just for that first sale, do you remember?

Jen: Yeah, I was trying to do as much free marketing as possible because I’m cheap. So I set up a Facebook page, I’m addicted to Pinterest, so I would pin everything. I took Pat Flynn’s be everywhere approach, I don’t know if he still sells, but I put it up on Instagram, Facebook, Pinterest. I even put it up on Twitter, I remember my brother like texting me, like stop putting shower curtains on Twitter.

So it was a lot of free marketing. I would even like sometimes comment, which I don’t do anymore because now I realize that that was annoying and spammy, but sometimes I would comment on articles, on blog posts and say, oh that’s a really cool shower curtain, if you want another cool shower curtain, come to this website. I stopped doing that.

So I have done some Google advertising, but again I shied away from it at the time because I was only drop shipping and so I felt like the profit margins were so thin it wasn’t worth the investment. But now that I am importing my own goods from China and there is a higher profit margin, I am going to reinvest in Google marketing. Is that where you still suggest the best place to go when you’re marketing your own site?

Steve: Yeah, I mean it really depends on the type of product that you sell, like if it’s a well searched product then Google is pretty good, but if it’s something more noble or more unique where you want to give it a little more originality, then Facebook marketing actually works really well.

And now that your margins are really high yeah you should definitely go and try those out. There’s a little bit of a learning curve, but once you get it, it’s like this channel that you can just pour more money into it and max it out.

Jen: Oh that’s awesome, yeah.

Steve: So what has worked for you, you mentioned a whole bunch of things there, which one worked the best in terms of getting sales, do you remember which channel actually produced that first sale?

Jen: I think it was Pinterest.

Steve: Pinterest, okay. And in terms of your Pinterest strategy, is it just, like how often do you, how much time do you spend every day pinning?

Jen: You know not nearly as much as I used to. When I started my new day job, there was a learning curve to that as well, and so I took some time off of the business, because the curtains had already been ordered and put inside in there, so fulfillment by Amazon so that’s what my focus was. So not very many hours on Pinterest [inaudible 00:25:25].

Again, another strategy though that I did do that I believe you taught me was just long tail key words. I think that those helped me a lot. When I bought your course I had already owned Market Samurai, and so I was just trying to find all of the long tail key words that work with Amazon. Black and white shower curtains is a highly – you know stuff like that.

Steve: So search is probably a good source of revenue for your site, do you know when it kind of kicked in?

Jen: It probably took about six months before I was getting…

Steve: Six months, okay.

Jen: Really good organic traffic.

Steve: Okay, so let’s talk about Amazon for a little bit. You started selling on there when, maybe 16 months ago?

Jen: Yes, September of last year.

Steve: Okay, yeah and how did you get started there and any particular launch strategies that you want to share for your products?

Jen: Yeah, my biggest launch strategy on Amazon was getting to the fulfillment center, set up a listing and then give away enough to get free reviews. And you know I had already practiced on Amazon before, I forgot to tell you this, before I imported from China. I did do a pretty big wholesale purchase for a company that was going out of business, and so I just said you know what I’m going to use this as my experiment on Amazon.

So I had already had a little bit of experience on Amazon before I imported from China, but I remember you told me that there were certain thresholds that you wanted to get in terms of reviews. So once you can get ten reviews that’s the first threshold, and then you want to get 25 reviews, and then once you get up to 100 reviews it’s pretty much organic traffic on Amazon and you don’t have to worry about it.

And so that’s where I’ve gotten my first two styles is they have enough reviews so I don’t need to pay for any clicks, but you give away enough free products and just ask them for an honest review. And then if the product is good, the cream rises to the top.

Steve: Right, and have you ever had any duds that you threw up on there that you just ended up taking down?

Jen: Not yet, no.

Steve: Not yet, okay, so that means you have good taste?

Jen: Yeah, I think so.

Steve: So there’s a lot of questions here that just people who are out there who are just kind of on the side lines probably want to know. So you already mentioned that you spent like $300 to start this business, how long did it take you to put up your site, and did you have any struggles with that?

Jen: You know what, I remember watching the video that you have on your course about how to code, and I remember thinking okay there is no way I’m going to know how to code. Then you came up with another video saying this is why Shopify is my preferred platform, if you’re not going to code yourself, use Shopify.

And so I immediately set up my Shopify cart and I remember setting up my website and almost thinking that I did something wrong because it was so easy. I am not tech savvy at all, and I think setting up my initial site was less than an hour.

Steve: Oh wow, that’s easy provided you had all your images of course right for your products?

Jen: Yes.

Steve: And in terms of your images, did you get professional photography or are they like letterings [ph] that your husband has done?

Jen: You know what; they’re all letterings. Because I was drop shipping, all the curtains are made on order and so at the beginning I was drop shipping, and they were made on order. And so they were computer letterings of the art work on a shower curtain, and so those were the pictures I was using.

Now that I actually have a physical product, I do need to get professional photos taken because I know people like that as well, but it’s amazing that what a really good graphic designer can do with a basic pattern just on picture of a white shower curtain. They can put that pattern on a shower curtain; it would look better than a photograph.

Steve: Yeah you know what’s funny is a lot of people use letterings over photographs because it’s hard to get like all the white balance and everything correct and consistent across your sites. So it’s funny that you say that because I think artist letterings are the way to go if you’re displaying shower curtains in the same way for example all across your site.

Jen: Absolutely and at first I struggled with is this the right thing to do, but if you look at any other really big store that sells home goods, all of the pillows, all of the shower curtains, all of the rags, they are probably all computer letterings over white rug and then they put that pattern that they’re selling on that same picture

Steve: Absolutely, and in terms of finding your niche, how much did you struggle with that, and do you have any tips for people who are out there who you just can’t figure out what to sell?

Jen: Yeah it probably took me about a month to figure out the niche, and I remember – are there ever people that take your class and they never take action because they can’t find their niche?

Steve: Yes.

Jen: Yeah, I think I almost fell victim to that and finally I was just like okay I just keep coming back to shower curtains, and I shot you an email and you said it was a good idea. The advice I would give to people is do your research but then just take action, because even if you try something and it doesn’t work, well you’re going to learn so much on that process and you’ll figure out along the way.

But don’t not take action because you’re scared, you’re probably going to make some mistakes here and there, and that’s okay. But take action because if you don’t take action nothing is going to happen and then you’re going to be just working your nine to five job that you hate forever.

Steve: And how much time did it take for your launch, so you got the idea let’s say after a month, and how long did it take you to get the vendors together and then actually launch your site and get your first sale?

Jen: Well, okay so once I figured out the niche, then I started researching, that took about a week. I remember writing down five people that I was going to call, and the first three people told me, no, drop shipping is not really something I’m interested in doing, and then the fourth person that I got a hold of told me yes.

They had so many products because they were contracting with artists as well that they had enough products that I could launch my store on that. And so all I did was drop ship for probably the first four or five months of the store being live.

Steve: Okay and then in terms of just some of the challenges that you had, what would you say was the hardest part about getting your ecommerce business off of its feet?

Jen: I think I waited way too long to import from China, because I made my first sale and then I got complacent, and then I did the math and I would have needed to sell eleven shower curtains a day drop shipping in order to make up for the income that I was making doing my day job, and there was no way that I was going to get to that point without doing marketing, but I didn’t want to do marketing because the profit margin was too low. So it was I was kind of stuck in that cycle, and so I wish I would have pulled the trigger earlier on importing from China.

Steve: And in terms of finding your Chinese vendors how did you find them?

Jen: I followed the video that you have on your course to a T, just the exact verbiage, just found the ones that had good reviews, where they trade the facility and pretended to be a buyer, which I’m not really pretending, I am the buyer for my store, and I would send them all an email asking for the products and what their minimum order quantity is, and they all get back to you right away.

And so a great time to talk to the Chinese vendors is at night after your kids go to bed, I was emailing them. And I remember it took a couple of months for me to just go back and forth of course balance with people before I found two that I really trusted.

And what’s funny was because my orders were so small, the people that I worked with, they were brand new to their company. They ended up telling me after the fact like you are the very first customer, you are my very first order, I’m so excited, we will help you.

Steve: Oh my goodness.

Jen: I think they figure out pretty quickly when you only want to order 500 of something that you’re not Home Depot or you are not Pier 1.

Steve: Sure, sure, sure. And in terms of getting samples and that sort of thing, like how many vendors did you contact in the beginning until you narrowed it down?

Jen: I probably got samples from maybe five or six different vendors, and that was another place where the cheap part of me didn’t want to take action because – and Scott Walker [ph] talks about this all the time in his podcast, he says that people don’t want to spend $50 on a sample, but you got to just look at it as the cost of doing business.

I would rather lose $200 and find out that that’s not a good vendor to work with, than invest all of this money and then realize after the fact that it’s not a good vendor to work with. So just know that that’s going to be initial a couple of hundred bucks, be willing to spend that, get a really good sample and your vendors will take care of you.

Steve: Okay and then have you had any issues just getting the product over via sea shipment, because that can be a little bit intimidating as well?

Jen: Yes, that process was another – I would say that that was another place that I procrastinated on because I was just – all of the logistics really scared me, so I ended up using a third company, Coppersmith was the company that I used and they are fantastic. So I think that when it was all said and done it cost me $1300 for them to just take care of everything, and I’ll probably just use them moving forward, because or me that’s worth it.

Steve: And you always have everything shipped to you first before you send it off to Amazon?

Jen: I do, I don’t know if I’ll always do that, but whenever I’m launching a new product, I will definitely have that.

Steve: Okay and there is a lot of people on the sidelines who are looking at this interview, or they’re listening to this interview, and they’re probably a little bit hesitant. Do you have anything that you can say to them to just encourage them to even just get started?

Jen: Yeah, I would say this; I would say action cures fear. What’s really weird Steve is my new day job I am a sales coach where I talk to sales people on the phone and encourage them to do the things they know they need to do even when they don’t feel like doing them, and one of the things I always tell them is action cures fear.

Whatever they’re afraid of, the anticipation is way worse than actually having to go through it, and whatever you’re imagining is way worse than any challenge you’re going to come across. So just take action, whatever that next step is do it, because you’re going to regret it if you don’t take action.

Steve: Do you recommend people take your route as well which is like dip your toes in drop shipping, or do you recommend that they just jump right in and just start importing?

Jen: If they’re really scared, then try drop shipping; you really honestly have nothing to lose other than 30 bucks a month to set up a Shopify store. But again that’s one of my biggest regrets is that I didn’t import from China sooner.

Steve: Well hey Jen, thanks a lot for coming on the show, I know that a lot of listeners are going to be inspired by what you’re saying here. If anyone has any questions for you either about the class or your store or just your experiences, where can they find you?

Jen: You know what I’m on LinkedIn all the time, so if they want to find me on LinkedIn, or if they email sales@showercurtainshq.com, that goes right to my Yahoo account, and yeah I would love to talk to them.

Steve: Oh yeah I know one thing that I actually did want to ask you is when did you start realizing the importance of having your own brand and your own products? Was it when you started getting piggy backed?

Jen: Let me see, that’s a good question. So I guess when I realized I needed my own brand was when I wasn’t making – I knew I wasn’t going to make really good sustainable income just drop shipping because when you’re drop shipping you’re selling other people’s brands. So that was when I realized, but again yeah the first time I got piggy backed, I realized also the importance of having my own store, so they really are mutually important.

Steve: Okay, well Jen thanks a lot or coming on the show, I really appreciate it.

Jen: Thank you so much or having me Steve, and thanks or your awesome course.

Steve: All right take care.

Jen: Okay, bye, bye.

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141: How To Launch An 8 Figure Ecommerce Brand With Ryan Deiss Of Digital Marketer

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141: How To Launch An 8 Figure Ecommerce Brand With Ryan Deiss Of Digital Marketer

Today, I’m happy to have Ryan Deiss on the show. Now I’ve actually been following Ryan for quite some time. He is the founder and CEO of Digital Marketer and over the last 3 years, he’s invested over 15 million on marketing tests, generated tens of millions of visitors and sent over a billion emails.

He is an expert when it comes to online marketing and brand building. He runs a major conference called Traffic and Conversions every year. And he recently started a new conference called Content And Commerce which I attended in Florida.

Today, he’s going to teach us the right way to market your business. Enjoy the episode!

What You’ll Learn

  • Ryan’s first set of experiences that set him off on his journey.
  • The traffic source that Ryan always experiments with first
  • The most important aspect of running a successful ecommerce business
  • How to launch an ecommerce brand with limited resources
  • Ryan’s recommendations regarding selling on Amazon vs your own website
  • How to come up with a content strategy
  • The hierarchy of advertising that Ryan uses for his own ecommerce brands.

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Transcript

Steve: Welcome to the My Wife Quit her Job Podcast. Today I’m excited to have Ryan Deiss on the show. Now I’ve actually been following Ryan for quite some time, he is the founder and CEO of Digital Marketer, and over the last three years he’s invested over 15 million on marketing tests, generate tens of millions of visitors, and sent over a billion emails of which end up in my inbox every single day.

He’s an expert when it comes to online marketing and brand building, and he runs a major conference called Traffic & Conversion every year, and he recently started a new conference called Content & Commerce, which I actually attended in Florida.

And let me tell you he was a hard man to get on the podcast. Here is what I had to do to get him on, and in fact for everyone listening here is a free blueprint for getting Ryan Deiss on your podcast, and I’m not exaggerating. So first off I went through his friends’ list on Facebook and reached to five of my friends that knew him, and so I had guys like Noah Kagan, Andrew Warner, Maneesh Sethi, Laura Roeder, Billy Murphy, Eric Siu, Neville Medhora email him all at the same time to intro me.

Actually I split it apart, only I had like five of those guys email first, and then I saved the other guys in case he didn’t respond. And by getting bombarded with multiple emails all at the same time, it made me look much bigger than reality, and I finally conned him into coming on the show.

Anyway the reason I wanted to have Ryan on the show is to teach us the right way to market your business today, and with that welcome Ryan, how’s the going man?

Ryan: Thank you for having me, the funny thing is I had heard about you and the show, so you could have just emailed me.

Steve: What?

Ryan: But there was no doubt that when you get that many emails at the same time, I’ve never seen anybody else do that, it was tremendously effective, so kudos to that, and then all the difficulties of us connecting after that were just me being really busy and disorganized, so I really appreciate the work that you do.

Steve: I contacted him right before his conference which was a bad idea, so like I would probably modify that strategy for everyone who is listening; don’t bother him during times of like pick stress like right before a conference.

Ryan: But it was good, that was good and obviously it worked, and I’m happy to be here, so thanks for the invite.

Steve: So Ryan, you’re really well known online but everyone is going to start somewhere, so before we begin with the gist of the interview, I’m just curious to know how you got started in the very beginning with Digital Marketer.

Ryan: Oh gosh, like how far back do you want me to go? I mean so really this whole thing kind of started in 1999, that was when I made my very first sale online, and I was a freshman at the University of Texas and I decided to make some extra money. It started off interestingly enough; I really wanted to do something on the internet, right it is 1999 is when dot coms had blown up in some cases like literally, totally imploding I guess.

But I knew I wanted to do that, so I wound up getting a job with this kind of internet startup that quickly went under, but one of the things I learned to do there was some basic web design. I was terrible at it, but because I was bad, I only knew how to design really simple web pages, and I remember one of the very first websites, it’s kind of embarrassing to remember one of the very first websites that I ever created for a client after I got let go from this company, because they went out of business.

My first client was a lactation consultant, no joke, and so I’m sitting here building this website to – like build this website for her and I’ve got all these like breast pumps and all these like stuff under saying nice things, and my friends were like, dude what are you into, this is super weird for a 19 year old guy to have all these images of breast pumps or something like that on his sight.
So I go on and build this website for her and she wound up not paying me, so I had this website and I had all this stuff going, so I didn’t really necessarily want to sell like breast pumps online, but one of the things that she had me produce was this little e-book on how to make your own baby food. I was like I bet I could sell that.

And so I remember I built a simple web page for it and started selling that product, and dude I just made some extra money, and then I wanted to meet the girl, one I decided pretty quickly that I might want to marry this girl, I need to make a lot more money.

Steve: It always starts this way you know yes.

Ryan: Yeah, it’s always [inaudible 00:04:24] but yeah I know I mean really it kind of started just to make some extra money, and then it started to make a lot of extra money so I can buy her engagement ring. And long story short by the time I graduated, I was engaged, the ring was bought, on her finger and I had about a couple of a hundred different little websites, selling crazy little products.

Steve: That is very nice, you’re actually smart to marry young, because as you get older the ring size and the diamond size is expected to be larger at least.

Ryan: Yeah I mean at the time it seemed like it was a lot of money in the world, and I had told her we can go back – I can get you a new and we can swap that diamond for a ruby one, dude you look better, she’s like no I like this one, I like this one.

Steve: Were you getting started on Digital Marketer?

Ryan: So funny enough Digital Marketer started raising its head inversably this year, so Digital Marketer I tend to think we started back in 2011, and that’s because I never really thought about the teaching of marketing as being a real business. So Traffic & Conversion Summit are events, that is actually older than Digital Marketer the company.

Steve: Interesting okay.

Ryan: I just started, because I was doing it, that’s the thing that’s always kind of separated me and others company from I guess other people who talk about marketing is I always just did it, I was out there selling stuff, building websites, digital products, physical products. It didn’t really matter.

I got asked to speak at some conferences by people who knew that I was doing cool stuff, and I remember I would speak at these conferences and when I was done everybody was like what are you selling, like nothing. Do you have a book, do you – and people would ask me like if I could do consulting, like no I can’t, I’ve got these businesses that I’m running over here, I don’t have time.
But I realized when enough people asked I should do something, so I would occasionally produce some products and I had a little email list, and I would tell my email list, “Hey I’m going to do this six week thing.” One time I had to do that to pay a tax bill, because I didn’t know, early on like the first year I made a lot of money, I didn’t really know how taxes worked, seriously like this is so unbelievably embarrassing to admit, but I had like a quarter million dollar tax bill and I didn’t have the cash.

I had invested in other things and just not planned well, and so really I said hey I’m going to do this thing or I’m going to teach this class, and it’s going to be six weeks and pay me now for this thing, I’m going to do later, because I kind of got to write the check now. That was back in 2006, 2007.

So I started selling products and then we decided to an event just for fun really to get – Traffic & Conversion Summit started just as a way, it’s like that high school party where you invite a couple of friends over, because your parents were out of town, and next thing you know like the whole school is there.

That was sort of like at Traffic & Conversion summits, everything just sort of happened. I remember it was at Traffic & Conversion Summit number three which – you can do the math; I’m not mathing particularly well today.

Steve: That’s okay.

Ryan: But 2009, I guess 2008, 2009 when I looked out at this – 2009, I remember looking out at this crowd of 1000 people and thinking to myself, this is a business, I should call this something. That’s when we acquired the digitalmarketer.com domain name, still it took way too long to get it launched, but yeah that’s how Digital Marketer was born.

Steve: That’s cool, so Ryan you talked about selling a lot of products online, a lot of these listeners out there, they are in ecommerce, and they want to sell physical products online. So I thought it would be interesting to get your perspective on how to get traffic and sales to a brand new ecommerce store.

I know when I was at Content & Commerce, you talked a lot about merging content and commerce together, but you’d already had all these large content companies that you had acquired. And so I thought it would be interesting to start from ground zero, and to make this a little bit more difficult let’s talk about this ecommerce store that you’re starting from the perspective of selling something hard like jewelry or clothing, so what traffic sources would you experiment with at first, and what would be your main focus with limited resources?

Ryan: You see the first question that I always want to answer before we even look at traffic or anything like that is who? I’m a big believer, every business that I’ve ever started whether we were selling digital products or physical products, and we incidentally make a lot more money selling physical products than we do digital products, so I love physical products, I love selling stuff.

I’m best known for Digital Marketer and for the digital stuff, but there is a big building for the people that focus on selling hard goods. But in every business, and this goes all the way back to literally when I sold my very first e-book on how to make your own baby food, every business I had ever started was market centric, I think this is so critical especially for ecommerce people.

They decide that they want to sell something, I’ve got this product or I found this cool thing that I can get a good price on, and so they want to build a store around it. And more times than not I see this mistake happen especially in ecommerce, people define the business by the products they sell, when they should be defining the business by the people they serve.

You don’t define your business by the products you sell, you define it by the people that you serve, and that’s so unbelievably critical.

Steve: So what are some exercises that you can do to figure out the who?

Ryan: Well, I mean I think a lot of it is kind of intuitive, right? I mean it’s an A, you just – sometimes it’s really simple, you know that a certain someone is going to want to buy this, so I mean we sell a lot of knives and stuff like that, so we know people who are in the camping and outdoors are going to want to buy that particular item.

Does that mean that a soccer mum would never buy a knife? No, of course not, they’ll buy knives too, but I think in the beginning what you have to force yourself to do is to niche arbitrarily, and that’s the hardest thing in the world, because everybody says, oh everybody is going to love this, but I would just kind of reference and point to Facebook.

When Facebook first launched, granted it was – works for everyone, but Mark Zuckerberg said we got constraints here in terms of server loads and stuff like that, so this is only open to people who are at Harvard, that’s it. People who are at Harvard, this is who we’re going to serve, then it expands to other I believe universities, then all universities, then all universities and high schools and then finally kind of every man, woman and child on planet earth.

So in the beginning I would say look at your product and say who is the most obvious customer for this product, and get it as narrow as you can stand it, because you can always go broader, you can always go broader. Wal-Mart started in just a really small town store like these tiny little stores where they stood out by offer the lowest prices and stayed open longer than anyone else and then once they established that foothold, then they were able to grow and expand.

So I think that’s for steps is just niche down arbitrarily, so let’s give an example where you’re looking at clothing, right?
Steve: Okay actually I have a perfect example like I started with handkerchiefs, and we started with just that one product line, and we became the largest supplier of handkerchiefs, and then we gradually expanded to other linens.

Ryan: Yeah, but I would ask myself like who is most likely to buy a handkerchief, right? Do you know in the beginning the people who were actually buying it?

Steve: We targeted brides, and that’s it actually.

Ryan: Yeah exactly, so brides, so you’re saying brides and I’m guessing that they’re buying a handkerchief specific for the wedding…

Steve: For the wedding.

Ryan: Or selected gift to the groom, or was it some handkerchief that they used.

Steve: That they used actually.

Ryan: Okay so bridal?

Steve: Yeah.

Ryan: Great, bridal party handkerchief, so you’re going to start there. So what you’re saying initially, and this is what’s so beautiful about this whole thing is you can say right now today I’m going to start selling this item to this group. Now at some point you will have a choice that you can make, and the choice can be both, but then you have a choice that you can make, okay you’re going to start off selling handkerchiefs to brides.

Now you could say, okay I want to build a business around a certain thing brides and wedding parties, you can go that direction. Or you could say no, no who else buys handkerchiefs, I want to expand laterally, I want to expand and take this product into other markets, but you always have to pick somewhere, because just like you said, and just like you alluded to in your initial question, where do you start, where do you begin?

And I think this is where people blow it. They are like, okay so I have the internet. Let me narrow that down to Facebook, God it’s still too many people, and if you go on to Google and you say I want to target everybody who searched into handkerchiefs, if you’re just getting started, you’re going to get obliterated, you won’t break through, there’s too many other people that have gone before you.
Never forget that at the end of the day, here is somebody who is able, and willing to spend the most to acquire a customer, they are going to win eventually. It’s not about who has the best product, it isn’t really about who has the best marketing, it’s who is able willing to spend the most to acquire a customer.

If you’re just getting started, you’re on a shoe string budget, you don’t want to go head to head on Google AdWords against – I don’t know who the biggest handkerchief supplier is now on Google, but you don’t want to go head to head against them. So that’s where you have to come and pick a niche within a niche so you can establish that foothold and begin to generate some revenue and learn a little bit more about the customer.

So it’s always, always, always answer the question of who, who am I going to serve today? With understanding that it may change tomorrow, you may expand that, it’s all fine, but today who are you going to serve. Then I tell people always start on Facebook, that’s where we begin every single business, I don’t care if it’s B to B, B to C, no matter what you’re selling, you’re always selling it to humans, it’s always H to H, always human to human. If you want to target humans, humans are on Facebook.

Once you’ve answered the who question, now targeting on Facebook becomes much, much, much easier. And so that’s always where we begin from a traffic stand point.

Steve: Okay, let’s go into a little bit more depth about Facebook, and maybe we’ll use your knife story as an example from the very beginning. So you know who you are marketing to, you picked a very small niche, what does your first Facebook ad campaign look like?

Ryan: So what it always starts with is – let me say this, it almost always never starts with a store, it always begins with an item, a single product, and that’s for multiple reasons. One, a store is more complicated to build, a store is more expensive to stock, but we also found, again if we’re targeting – if we think about the who, there is one particular thing they want more than anything else, somethings that’s going to be super awesome.

And what I want to do, my goal is to acquire a customer, it’s not to make a sale, it’s to acquire a customer, that’s always that initial goal, not how do we sell this thing.

Steve: That means your customer is someone who actually pays money, or someone who signs up for an email list?

Ryan: Someone who pays money.

Steve: Okay, got it, go on.

Ryan: I want someone to actually buy something, so that first item is usually going to be something fairly inexpensive, or it’s going to be something incredibly expensive where I’ve gone in the same margin I’m looking to make very few sales but spend a lot. I don’t want to be someone in the middle; I don’t want to be selling commodity type items.

I even want to be selling something ultimately desirable, like something that’s really cool but really cheap, an impulse buy item, or I want to have the ultra premium luxury item. I want to go way up above the market, and I want to go way below the market, there is room in both ends, there is almost no room in the middle.

So when we first went into the knife space, we came out with this credit card knife, which now it’s been like a knock off a billion times, they have advertisements in every Canadian airport saying don’t bring this knife on the plane, because we sold so many of these knives.

We advertised it as, hey this is the coolest knife in the world if you’re into every day carry.

It is not going to necessarily be appealing to the soccer mum, but it is going to be appealing to the market that we want, people who like to walk around with a knife at all times for personal protection or just it’s nice to have a sharp thing.

We’re speaking to our audience that we want, we’re not just not targeting them in Facebook but we’re speaking to them in the message we bring, does that make sense? We’re speaking to them in the messaging, because I just don’t want to sell a product, I want to acquire a customer. the customer I want, the one that loves knives so I’m going to use that messaging on the landing page, and in the ads to speak to the customer, and then have a really low dollar item in there to acquire them.

Now what we were able to say once we knew that worked, we were able to say, on the next page down in the sequence; hey you just got the coolest little knife in the world. Now we would like you to have the coolest big knife in the world, check this out, this top glittering knife, here is everything it does, blah, blah, blah, but we didn’t develop that large, premium item, until we knew we could acquire a customer base.

That’s always – just again I don’t care what business you’re in, the most important, the most critical question every business must answer is how you’re going to go about acquiring customers and ideally at a profit.

Steve: With that credit card knife, did you guys give that away, or was it just ridiculously cheap like free plus shipping or was it just like a really low dollar value item?

Ryan: We had a bunch of different variations of the offer, but if they just paid $2.95 in shipping and handling on the low end which I would still consider that person to be a customer, because they have gotten out the wallet, they have done something to acquire it even though it’s free. We tried to bunch it at different variations based on where we were selling that item.

Steve: And just curious, who exactly were you targeting with that first promotion?

Ryan: We were typically targeting people who were interested in outdoors camping, hunting, fishing, survival preparedness, those kinds of things.

Steve: And I’m just curious, of those people who took advantage of that offer, how many of them took advantage of the more expensive offer when it was presented to them?

Ryan: Anywhere from 15 to 30%…

Steve: Okay, wow.

Ryan: It depended on the price point and where it was offered. So in some cases if somebody bought it, and they didn’t receive that as an immediate upsell, it would be less, maybe you’re talking like 8 to 10% of the people we get to send at some point in the future.

But yeah I mean you can make that immediate offer, that immediate up sell, just like what Amazon does, people who bought this also buy this. It’s always going to be more effective, and 15 to 30% wasn’t uncommon depending on a traffic source.

Steve: Okay and then let’s talk about what you do with the people that don’t buy, and how do you nurture them to eventually make a purchase?

Ryan: Yeah, when you find out where they live, you steal their cat, and you tell them that you’ve got to come back and buy.

Steve: You stalk them on Facebook?

Ryan: Yeah, it’s kind of like how you got me here. I mean it’s exactly what you said, it’s nurturing, it’s continuing to add value in advance, sending them content, continuing to talk to them about the stuff that you know they are interested, and that’s why I said the who is so important, because if all you do is sell them knives, and you don’t really know who is buying it, then what are you going to talk to them about.

If you don’t know the who, you don’t know what you’re going to talk about, and content marketing is why so many people have such a difficult time with content marketing and starting a blog is because they don’t know who their who is, and so they don’t know who they’re talking to, and so they have a hard time talking.

So yeah we have a newsletter about personal preparedness and we did product reviews and content how to use one of the things and every now and then we run a sale or we introduce a new product or offering and maybe somebody who wasn’t interested in the big knife, maybe they were interested in a cross bow or something else we’re selling, or maybe there is this really cool watch that we have.

When you have an audience, when you’ve already aggregated the attention, then building out a product line just becomes fun and easy. It’s much easier than doing what a lot of people do which is just, okay I want to have a store, and I want to sell knives, because I like knives, so let me go and find out about knives.

Okay I feel like if I’m going to have a decent store I need to have about 15, 20 items, let me go and figure out what these things are, write the product descriptions, put it up. Okay now you got a store and you drive the traffic to it, nobody buys anything. Nobody buys anything, because the knives you’re selling aren’t any better at least as far as the picture and description are concerned from this same knife they could buy a brand they’ve heard about, or from a retailer they know already.

If you’re going to compete coming out of nowhere, you got to have some differentiation, and then eventually I believe you got to build a community.

Steve: Let’s talk about that for a little bit, so when you’re first starting out, were you selling other people’s knives or did you have your own line from the start?

Ryan: No, starting out we were always – we always begin with one item, one item and then along the way we’ll steal other people’s stocks, and if it works, if people buy it, then we’ll go to those people and say, hey we want to private label it, so we want to label it, or if they won’t play then we will develop our own. If it’s something that we feel like we can do and improve on the product.
If somebody truly has just a far superior product and the patents on it is protected, then we’ll continue to sell their thing. We’re not going to come out with a worse product than something that’s already available in the market just so we can call it our own, because then it’s not serving your audience.

But yeah the way that it grows is we’ll start off, we might buy a batch of somebody else’s products and just wholesale it and have real too thin margins but find out, wow people really liked this. So while we didn’t make any money, we also didn’t risk and locked up a bunch of cash going over there, doing direct importing or custom manufacture bringing some of those kind of things. I always want to know that people are going to buy it before I write a big check.

Steve: Okay, yeah I was going to ask you like how much price compared to this in the factory in here if you’re selling other people’s products, but it sounds like your main goal here is not necessarily to make a profit in the beginning but to gain like a list of customers that you can market to later, is that accurate?

Ryan: Yeah, I like getting paid to do market research.

Steve: Okay and in terms of like just getting their emails, I know you do this for Digital Marketer where you give away a free piece of content, but for those people who don’t use the triple R, they don’t pay you any money, what do you do with those people?

Ryan: We’ll continue to follow up and as we come up with additional offer, we’ll take them off the first offer. So maybe they weren’t interested in the little credit card knife, but they did go ahead and still subscribed for our newsletter, because most people do totally free offers as well, it’s totally free accounts and offers, special reports, those kinds of things, and we’ll just offer them something else.

Just because they didn’t like this doesn’t mean that they’re not our market fit, and that’s the difference between – you own it let’s say message to market fit and product to market fit. You could be speaking to an audience with the right message, but then when you put the product in front of them that corresponds to that message, maybe they say, I don’t like that.

It doesn’t mean that they didn’t agree with your over arching message, the over arching message could be if you’re a responsible adult, it makes sense to have a knife on you, right? Whether for personal protection or just because you need to cut off one of those like obnoxious electronics cases when you buy something you know that everything is in.

It’s handy to have a knife with you, so if that’s the message then you say; hey do you have a knife, so that’s where you might want to check out the credit card knife. They maybe look and they go, that knife seems too small and it’s too thin, I don’t need that, it’ll probably get lost, so maybe they’d say no, but maybe I come back later and I say it’s handy to have these things on, so check out this watch.

This watch has all these other things built into it, it’s got a little cutting blade here that you can pull out, it’s got this thing over here and then they go, oh cool I like that. So you can nail the message but miss some of them, have the message to market match but miss on product market fit with some of the market. That’s why you just – if they didn’t buy this thing, lets’ come up with this, that’s merchandising, let’s come up with new things that we can put in front of them that they will buy.

Steve: So just to summarize everything that you just said, it sounds like you have a pool of people that you just try and get to spend any money on them at all, and you are constantly trying different offers to get them to spend even a little bit of amount of money. And then the people that do spend some amount of money, you send them an offer to that something larger, and for the people who take advantage of the larger offer, you can continually sell to those guys, because they are loyal customers, is that kind of accurate what you said?

Ryan: Yeah, the easiest thing in the world to sell and the thing that will always have the highest conversion rate is more or better than what somebody just bought. So a lot of times we’ll say, hey you got one of these, how would you like to get three more at a discount. That could be a logical up sell to increase your immediate customer value, and the product line expands as the intricacy of the audience expands.
And then eventually one audience can birth another audience, it’s how we’re able to spin off from survivallife.com, which is a branch of survival and preparedness people into homestudy.com where we have pioneers etcetera, because we knew that there was an audience.

We looked at it and we said, wow, oddly enough we do have a lot of soccer mums on this survival and preparedness kind of thing. What they were liking was the home improvement stuff, the vertical gardening stuff that we had, things on color preparing, family emergency patterns and those kinds of things, the responsible stuff.

So we spun off and created a separate property for them, which now allows us to talk to that audience in addition to the one we’re talking to, we just create another property for them. We’re able to advertise now a whole product line developed around that.

Steve: You know one thing that we did not talk about so far is Amazon. What is your take on people who just start on Amazon and stay on Amazon, is that a strategy that you would recommend? How would you proceed with Amazon?

Ryan: I think starting on Amazon is really, really smart especially if – I mean because it’s a built in audience, and there are ways to hack at Amazon, it is not as easy as it once was, but there are still ways if you’re willing to drive, to prime the public just a little bit through some advertising to drive your sales up on Amazon. And if you have a good product, and you can push it to the top, it’ll tend to stay at the top, so I think that’s great.

So I think starting on Amazon is fine, the only thing you have to be careful of, and I learned this the hard way is if you don’t have all of your logistics in place, and if there are some quality control issues, you’ll get slaughtered on Amazon.

So we sold some chemical products that were actually in the equine markets sold to horse owners, and it was a great product but in the shift to Amazon some of the shipments didn’t make it to Amazon to do with the fulfillment, so people bought stuff and things were delayed.

People got really, really upset and then when our factory was trying to speed things up, they made some mistakes on the formulations and things didn’t work quite right, it was just a big mess. It was out fault, we messed up, but the scary thing about Amazon is you can make an honest mistake and you can fix it with the customer, but those reviews will linger there.

And so the danger to launching on Amazon is if you don’t have your ducks in a row, you can get nailed on the reviews, whereas if it was on your own website you make a mistake, you apologize, maybe you get a refund, you send them cookies; you do whatever you got to do to make it right. Mistakes are going to happen in business, but at least they are not leaving a review on your website that’s going to hurt you moving forward.

But absolutely, launching on Amazon is like if I wanted to come out of the line in a barbecue sauce or something like that, and I just asked Wal-Mart, hey can I set a little table out in front of the Wal-Mart and start my barbecue sauce, and they are like yeah sure go ahead and do it. You would be crazy not to take them up on that, because if they see you’re selling a ton of barbecue sauce, maybe they put you on their shelf.

So I think it’s smart, but to stay on Amazon, and to only be on Amazon is dangerous, because really what you are then is you’re a wholesaler, Amazon is a retailer. You don’t own the customer relationship, that is Amazon’s customer. So we like to be on Amazon, and we’ll drive traffic to Amazon and do all that, but we still want to be building our own communities, and maintaining our own customer relationships.

Steve: The reason why I asked you that question is because when I first asked you about starting out, you mentioned go on Facebook and promote one product first. Would that order still be the same, would you still proceed on Facebook and develop your own audience first and then go to Amazon, or the other way around?

Ryan: That’s what I would do and that’s what we have done. We’ve started on Facebook, buying advertising to sell a certain item to build an audience, and then once we knew it had a pulse, then we would expand and put those products on Amazon as well, because for us what it came down to was just inventory management. We didn’t put a lot of our products on Amazon, because they sell out really quickly.

And so I can sell them through our own channels and make a much better margin, or I could put a bunch of stock in Amazon, and not have too much to sell through our own channels, and when you’re doing really big volume, but you’re a self funded company as we are, I kind of imagine the cash flow is a bit interesting.

So my recommendation and what we do is start off selling through your own channel some individual items through your own store whether it’s a Shopify store or just a simple web page, and then quickly move to Amazon once it’s clear that you got a good product that people like, because if you are effective at advertising it, people are going to go to Amazon to look for the product.

I have a friend of mine who is former VP of media and acquisitions for Beachbody, big infomercial companies selling fitness products, and we’ve told him for a long time, Ernie you need to get your stuff on Amazon and he didn’t want to do it and the higher ups at Beachbody didn’t want to do it either is because they were afraid that it was going to cannibalize their sales.

What they found was that the people who bought through the infomercial, the people who bought through the website did that, but then there was this tall giant audience out there, this massive customer base that had no desire to buy off an infomercial and had no desire to buy from a website, but they would buy on Amazon. So when they put it up on Amazon, it was just a whole lot of free money, like hundreds of thousands of dollars in free money every single month.

Steve: So when you have your audience in place, do you market to both at Amazon and your store then?

Ryan: Yeah, we’ll kind of mix it up. If we start to see our Amazon rankings dip a little bit, just because of lack of sales, maybe sales a little bit slow over there or maybe you got a new competitor coming into the marketplace, bringing a lot of energy, then we will divert a portion of our ad budget instead of sending it into our own page, sending it to Amazon.

And we’ll also give people on certain websites the ability to buy from us or buy on Amazon, and you usually that’s enough to keep it up in the higher listings where we want it to be. But for the most part our advertising is designed to drive sales to our own channels

Steve: Okay, and in terms of your favorite ways to get in front of customers, did you say it’s email and Facebook retargeting, or do you use any other methods?

Ryan: I mean Google, when you get going I think you’re crazy not to do especially as your branded search goes up, people start searching for your products by brand, you’re smart to buy Google ads and to get out here. And so we’ll always start with Facebook, once we build our retargeting audience, obviously spend more on Facebook retargeting as we build our email list, and we’re sending regular email operations, the next step that we go is to Google.

And then you start playing with – depending on your market, you might go up to affiliate networks. It makes sense to put your stuff in Commission Junction or ShareaSale or some of those other ones, or have your own affiliate program. It can also make sense to try different content, just get on every platform, so Outbrain, Taboulleh, those types if you have content going. It doesn’t work for everything, it can be expensive, but we found in broader markets like beauty and things like that it can work well.

Steve: What about Facebook Messenger marketing, are you using that a lot yet?

Ryan: Just getting started testing that, so I can’t say that we’re using it a lot. I’m very, very excited about Facebook Messenger, and the ability to create lists essentially in it to do follow up, so we’re doing some testing there. I don’t have enough data to report back, but I can’t see how it’s going to be a bad thing.

We’re testing ads in Facebook Messenger, and all those stuff to build our Messenger audience, and I’ve also – it’s funny but apps, if you can build a store, having an app would be – you can do push notifications. I think the future is coming up with ways to communicate with your audience outside of email. I’m not saying email is dead or dying, but just give me multiple ways to communicate.

Retargeting is a way to communicate with your audience and to talk to them. Messenger, different messenger apps is a way to do that, having your own apps, you can do push notifications and things like that, it’s big.

Steve: Interesting.

Ryan: And all these.

Steve: What step in the hierarchy would you even consider an app for yourself?

Ryan: I think it’s pretty far down the road, I think you have to have a pretty significant customer base to following — building a big brand, and you probably won’t be able to build an app around a product. I think an app is going to be built around the audience. So I think Survival Life could have an app for survival and preparedness enthusiasts.

Hoffman Richter which is our knife brand, I don’t see why anybody would ever download a hoffman richtor app, but if people go on there, consuming your content, maybe through your blog or a podcast, I know we’re launching this for Digital Marketer, because we have a lot of content on our blog, and we email out some of the content, but I know that people would love to consume it in app form, they told us that, same with our podcast. So if we give people the opportunity to listen to podcasts in the app and receive content there, that’s great, because we also have an opportunity to communicate with them through that app.

Steve: That’s awesome Ryan, hey I want to be respectful of your time, I know you got a meeting in like a couple of minutes, so let us close it right here. If anyone wants to get a hold of you or learn more about you, where can they find you, and tell us about your conferences in your bed that’s coming up?

Ryan: Yeah I mean definitely digitalmarketer.com, check that out at digitalmarketer.com/blog. You can get some of our free content and yes we will at that point retarget you, so you will get some more retargeting ads and action, and we have a 15,000 member community called Digital Marketer Lab that there is an opportunity to request. It’s an invite only community, but there is an option to request and invite there on the home page, so definitely people should check that out.

And then if you’re in the business of marketing stuff I think you’re crazy not to be at Traffic & Conversion Summit, trafficandconversionsummit.com. Check that out, it’s in San Diego, California in March, I think it’s March 9th through the 11th, but trafficandconversionsummit.com, check that out. We’re expecting 4500 people this year, so I keep saying it’s the largest conversion conference in North America and nobody has called me on this, so I’m going to keep saying until somebody tells me it’s not true.

And then you mentioned Content & Commerce Summit, the one we just did a couple – back in – when was that, September, and it seems like forever a go, yeah and I think longer but yeah, so we just did our first Content & Commerce Summit in September, and we’re planning to do another one in September 2017.

Really the whole idea behind that conference is to bring together digital media companies, people who are building audiences, we have ecommerce companies, because I think that these two groups need to know one another, they need to hang out a lot. I think they are one another’s or should be one another’s best friends, so yeah.

Steve: And as a foreword they put a little plug too, like if you guys want to know how Ryan Deiss operates, you can just sign up on any one of his lists on email, and you’ll notice that he’s trying to get you to buy something really small like $7 or whatever and that will take you on to another funnel. So it’s just really interesting if you go ahead and just buy some of these things and just watch how his funnels are working.

Ryan: Just know we do screw up a lot of times, so if you see something that looks weird, there is a good chance we’re testing something that’s failing miserably. So I tell people, do as we say not always as we do, because sometimes we do stuff that just doesn’t work.

Steve: All right man, so thanks a lot for coming on the show, I really enjoyed it man. Thanks a lot.

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140: How To Bootstrap A 7 Figure Webinar Software Company With Omar Zenhom Of Webinar Ninja

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140: How To Bootstrap A 7 Figure Webinar Software Company With Omar Zenhom Of Webinar Ninja

Today, I’m really happy to have Omar Zenhom back on the show. Now Omar is someone who I met at a private mastermind meeting led by John Corcoran and he was actually a guest on the show already back in episode 88 when we talked about his award winning podcast, the $100 MBA.

But along with his podcast, he’s been working on another project, Webinar Ninja, which is a software company that he founded last year which is already doing 7 figures.

What’s also cool is that this project was self funded. If you follow my blog, you’re probably aware that webinars have become a pretty big revenue driver for me so they absolutely work. Enjoy the interview

What You’ll Learn

  • Webinar Ninja’s unique value proposition and why Omar decided to go into such a competitive space
  • How he got his first customers
  • Why he decided to launch his product to a small set of customers first
  • How much he leveraged his podcast to advertise his software
  • Why he bootstrapped the project and how much it cost him to start
  • How he put together his team.
  • Interesting webinar statistics gathered from his software

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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 are talking with my buddy Omar Zenhom the founder of webinarninja.com. Now in this episode you’ll learn the keys to running a successful SaaS business, and best practices for an online webinar.

Now before we begin I want to give a shout out to sitelock.com for being a sponsor of the show. If you owned a brick and mortar business you would secure it, right? Alarms, cameras, the whole deal. As an online business you may not think about security as much, but you should because your customers are. And did you know that one third of consumers hesitate to purchase online due to security concerns?

Protect your business and your customers with site lock website security, offering malware scanning and removal and industry leading web application firewall and more, SiteLock acts as your personal security team. So visit sitelock.com/mywifequitherjob for more information and get your first three months free. Once again that’s sitelock.com/mywifequitherjob.

And if you want to learn how to start your own online business, be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business. So go to mywifequitherjob.com, sign up right there on the front page and I’ll send you the mini course right away via email. Now onto the show.

Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m happy to have my buddy Omar Zenhom back on the show. Now Omar is someone who I met at a mastermind SF long ago, and he was actually a guest on the show already back in the episode 88, where we talked about his award winning podcast $100 MBA. But even back then Omar had a SaaS project brewing in the background called WebinarNinja. I think he launched it in 2005, correct if me if I’m wrong Omar. But he is already gone out to become one of the best webinar software packages out there and generates seven figures per year.

Now WebinarNinja stands out to me because it was completely bootstrapped. And what’s also cool is that Omar works together with his wife Nicole to run the business. Now as I have mentioned in the past starting a SaaS company is on my list of to do’s. And so with that welcome to the show Omar, how is it going man, how are you doing today?

Omar: I’m doing well man; I always get time for my [inaudible 00:02:51].

Steve: So did I get that right, did you guys start in 2015?

Omar: We actually started in 14; it was still in beta back then. We were just seeing if there was a market for it, really we were just – and we opened it up for a launch a couple of times for like a hundred users at a time. And when we sold out we realized okay maybe this is a viable idea. We officially kind of went browser based, and were more of a competitor in 2015.

Steve: Yeah I remember. I think I first interviewed you, you guys were still doing betas, like you had just released like a paid product or something at that point?

Omar: Yeah.

Steve: So how did you come up with a webinar software, because off the top of my head I can think of maybe six or seven just off the top of my head. Isn’t this like a super competitive area to be in?

Omar: It’s very competitive yeah. Well I kind of was a early adopter of webinars. I really loved webinars, because for those who know me a bit I was a teacher and educator for over 13 years at the high school and university level. And for me it was just a great medium for me to teach for my audience to give workshops, to do Q&A. I just thought it was a great like technology, this is a great idea.

I started doing them for our community at the $100 MBA and just to support our members, but it was also like almost not sure that it was worth because it was so clunky. The software that was out there or you had to like hodge podge yourself with like plug-in this video thing here, and then you have a separate chat area, then you go create your own landing pages. And then you have to create an email auto responder, and like they all have to work together and they are not really meant to work together. And it just didn’t seem holistic.

And then a couple of other software started to creep up. I didn’t like what was out there in terms of one either it was two for lack of a better term scummy looking. Like it was just not — it just looked like you just wanted to — it was all about like marketing and pushing and selling hard. And I know that marketing and sales is a big part of business, but the reason why webinars work is because they are there to build trust with your audience, for you to teach and to earn trust and build rapport, that should be at the forefront of the software. Or it was just expensive, or you had to download software, it was just kind of still not there.

Still it was like there is a lot of areas of innovation that can happen in there. So I purely just created a small version, a beta version for myself so I don’t have to dodge punches. So I don’t have to deal with all these moving parts or use any of these other like softwares that were currently out there.

And I just started doing webinars with it and my audience members who were on the webinar were like hey what are you using for this? I was like oh it’s just something I put together. I knew a little bit of PHP, HTML. I got a coder to clean it up for me like a freelancer, it wasn’t even a fulltime hire. And then they asked me, hey can I buy this? I was like oh I guess so. And like give me a few minutes to put up a sales page.

Steve: Wait so you coded the first version, I didn’t know that?

Omar: Yeah it was primitive, it was very small. And it was probably really like poorly coded I mean. But I had somebody clean it up for me in terms of — they had some bugs and I had to really read it out. But I kind of was self taught, I self taught myself PHP. I knew a bit of HTML, CSS just from design websites for clients and things like that. But yeah so that was a lot of fun but I’m known — I wouldn’t consider myself a developer.

In fact I’m challenging myself in the next couple of months to learn or master ruby on rails. It’s just something that I always wanted to do just kind of really feel like I know what I’m doing, and work my way around the code. But I always been a kind of person that like hey I’ll give it a try and I’ll get some help if I need some help. There is experts around me I don’t need to be expert at everything. And then some people just said hey I want to buy it.

So I just talked to Nicole my business partner and my wife. I said hey what do you think about this? And she is like let’s give it a try. So we just kind of packaged it up, and we only opened it to beta members and just a hundred members, we said we are going to see if they sell. If it doesn’t sell then forget it. And we sold out in 24 hours, so we were like okay great.

Steve: Amazing.

Omar: Yes so we were like okay there is a response, we opened it up again a few months later for another 100 and sold out. So then we were like okay we need to really think about this is a viable business. How much time, how much money are we going to invest into making this what it really needs to be really? And that’s kind of how the ball started rolling.

Steve: So a couple of questions for you. You said something interesting that you were trying to learn ruby on rails, but yet you are still trying to run this company. And for me at least my listeners and my readers have often criticized me for wanting to do all the technical stuff and run the businesses as well. So how do you kind of like balance the time for that?

Omar: Well first of all I’m not learning it so I can code my own software. The project now is way beyond my scope, like I would need a few years. Because it’s not just coding, it’s design, and there is all these different types of — I don’t know server administration, I don’t know SQL, I don’t know PHP, I don’t know Node.js, I don’t know web RTC.

There are so many things that go into the software that I need somebody who is — I need people, not somebody lots of people to be experts at it. But I’m learning it so I can understand the thinking process of developers; understand the logic behind so I can communicate more effectively with them.

So I can be able to understand — two heads are better than one. I see the business point of view things, sometimes we can troubleshoot through issues, or challenges we’re are having. Or maybe we want to develop a new feature but we are not really sure how we are going to build upon what you have existing right now. And I just want to understand how things work in terms of their world. And…

Steve: That makes sense yeah.

Omar: And I also think in a way it’s like learning a new language. It’s like learning Mandarin or learning Arabic or whatever it is. Something that’s completely foreign to me and I’m just jumping in, and I’m just challenging myself to be a learner again.

Steve: I think since I was the tech industry before like I know firsthand it always helps to have someone who understands the tech aspects when they are planning the project, because they know what’s realistic and what is not. So just curious how much did it cost you to start this business?

Omar: Well I never actually — I don’t believe in like dipping into savings or kind of getting funding or something like that when I start a business. I really think that you should get the money first, and I pre-sold it. I didn’t actually use it — I pre-sold those 100 beta members — they didn’t have any access to it. And the next 100 didn’t have access either.

We were still like — they had like limited access some of them just tried it out to give us feedback. But they didn’t have like full access to the software, there was a launch day and they knew what they were getting. Those very lucky numbers have lifetime memberships. So they basically formed webinar ninjas today. So I actually got the money first and funded it that way.

And I grew my team slowly. When you have a user base of under 500, you can do customer service yourself. You can do — or you can get one person. You can — you may need software like I didn’t use [inaudible 00:10:31] I just used Gmail with a business email which costs $2 a month.

Steve: Interesting, okay. So what was your value proposition just curious, because there were a bunch of other options out there at the time, right?

Omar: You’re right, so I wanted to make it a lot easier for people to create webinars faster, simpler. And I also like one of our core values is one to be easy and simple, but also two for them to focus on the content and not worry about the technology. Too much is going on, on other webinar softwares. There is too much things to worry about, do I have to record, do I have to do this? Where is my chart, how do I go back to that screen?

If it’s too confusing it should be intuitive, it should be easier follow. So that way you can just focus on your slides or whatever you are talking about on camera answering questions. So that was kind of our main focus to really make learning — like learning central.

So and on top of that I wanted to make sure that it’s all inclusive, meaning if you notice a lot of webinar softwares out there, they only offer live webinars, or they have a completely separate software for every webinar. So they have something else that’s just for anytime webinar. So I just thought that was foolish. I just thought that hey like I want to solve all the problems.

I want to be able to say hey you want to run live or evergreen or whatever in one package and I’m not going to up sale you, and I’m not going to charge you more for that. So we wanted to kind of just be all inclusive solution. So ease of use, interactivity, and making sure learning is the priority as well as making sure it’s an all inclusive package.

Steve: Is the email portion of that included as well?

Omar: Yeah all our email notifications and reminders are included. We send those out on your behalf. You also can broadcast emails, so like if you want to send out emails that follow after like create new emails like after the webinar or before the webinar. As long as they are on your — they’ve reached it for the webinar, you can email them.

Steve: Okay and you mentioned that you coded the first version, how did you actually find your first engineers to help you develop this? Like where did you find them, and what were kind of like the terms of having them on the project?

Omar: I basically went on freelancer.com which I was familiar with, because I used to be a freelancer as just a web designer. I used to do like WordPress sites, things like that. So I just looked for a PHP developer that had some experience with creating apps, and I just said hey, I just interviewed him on Skype. I have to say like my first hire wasn’t the best hire. We didn’t work out a couple of weeks after into the project, I had to fire him.

I took a couple of hires and then I found somebody that can help me out. But I realized that okay this person’s their knowledge or expertise only can take me so far, I need to up my game. And I need to get a better developer that can have a wider scope of what we are doing especially when we went browser based.

And then I continue to do that now even today like we have to improve our team all the time, like I want to push the envelope constantly. So we just hired new developers to join our team and we just hired new DX designer. So it’s just always trying to figure out like when I’m I going to hit that ceiling with the talent I have, and I need to get more talent, I get to get better talent.

One of the things I love to do is I love to read books. I love to read biographies of great entrepreneurs. Obviously one of my favorites is Elon Musk, and that’s one thing I really took out of his book is that he just really invested in his team. He got the best people whether it’s SpaceX or Tesla or SolarCity, he really invested in getting the best talent to get the best product.

Steve: So for your first hire though that didn’t work out, are you still getting your talent from the same place?

Omar: No.

Steve: How did you kind of refine your engineering? Yeah so where do you get it now, or where have you gotten your best hires from?

Omar: So it depends on the hire. So if it’s development I use a service called Toptal, they are actually sponsor of our podcasts, and so full disclosure, but that’s kind of how I found out about them, they approached us, they said, hey, we would love to be a sponsor in your show. I said what is this? It’s like; oh we’ve had the best developers and designers.

I was like, okay cool I’m looking to hire. And they said hey — we worked out a dealer, I was like, hey I want to use you so I can have a better read on my show. So I want to be able to hire somebody and talk about my experience. So when it comes to yeah designers and developers I use Toptal.

Before that I used Upwork, I used Hired, I used Freelancer. I have used all these different sites and some of them are more successful than others. If it’s customer service you have, it’s a lot of work to just find somebody with good communication skills, technical skills, but right now I would say half the hires we have come from referrals.

A lot of times we give incentives, we give bonuses for those who make a referral, and if that person is a great hire, and they pass the probation period which is 3 months, then the person who referred them would get a bonus, a cash bonus. It’s a good way to get somebody that will understand the culture of our business and our expectations, our level of communication, what we expect from them, things like that.

Steve: For your early hires at least did you provide an equity state to keep them motivated, like how do you keep them motivated for just your company?

Omar: I have never offered equity till this day.

Steve: Interesting, okay.

Omar: I’ve been approached a few times in terms of investors and I’ve turned them down just because I want be as boot strapped, I want to continue to be boot strapped as long as I can. As long as I’m profitable, as long as I’m able to grow the team the way I want to, and if I can keep in control of them, like I can still have control, full control, then I’m going to remain that way.

That’s a good question about motivation; we do a lot of different things with our staff, with our team to motivate them beyond monetary reasons. It’s just a fun place to be in terms of like, it’s all remote, but we also support each other with our slack channels, we help each other out. You know praise is a huge thing, making sure people feel valued, giving a project that challenge them, they can feel that they are working towards a certain goal, promotions, things like that, work experience.

Some people are just happy to be a part of something they have autonomy with, for example Rena who is our UXUY designer, she is excellent, she is great, and I mean she is a new hire, she has just been with us about 2 months now, but she loves working for us because we give her so much autonomy. I tell her, “Hey I’m going to give you my input, I’m going to tell you what I think, I’m going to tell you, by the end of the day you have a call, you have a last call because I hired you as the expert in this area, and I’m going to trust you in your expertise.”
Most people are not used to that, most people are used to just being told what to do, and in some way they have feel they have equity at least in terms of, and a creation or in terms of contribution to the project.

Steve: Interesting, okay, and so everyone is completely remote, like you don’t have a physical office, right?

Omar: No our whole team is remote.

Steve: Okay, so can we talk about those early beta users for a little bit, like how did you get those guys?

Omar: Well I had an existing audience with $100 MBA program as well as we were growing an audience with our podcast. I put out some fillers, I threw out an email, you know I did the whole thing where I talked about it with blog posts, I did some guest posting as well in other blogs talking about what I learned through doing X amount of webinars, hundreds of webinars, and what I’m trying to do to improve the weather and our experience with our software.

I tried to get it on as many podcasts or video shows as I could, and I thought if I could just give value, show people how to do well with webinars, how to win with webinars regardless of what software they use. This is something I do on regular basis with our webinars; I do on WebinarNinja 4, the software.

I do give offers with the software on the webinar, but I try to give as much value, like there is a lot of people out there talking about, “You can make all this money with webinars.” That’s true, you can make out money, and we have users like Johnny Dumas who’s made over 4 million dollars a year off webinar sales which is great, incredible, but the point here is that he hasn’t have a success because he’s some sort of charismatic person.

He has a formula, he has presentation skills, he crafts a great presentation. One of the things I did at the start to try to get as many users is to become an authority when it comes to how to actually craft a great webinar, how to put together a great presentation, how to interact with the audience, how to have on camera presence. These are things no one was talking about.

People were just talking about, “Use this tactic, or use red buttons or whatever.” That doesn’t really — you know the funny thing is that like what makes a great podcast, or what makes a great show or makes a great blog is the content. So if you can deliver great content, and I say deliver great content, it’s not only the content that’s important, but the delivery is important as well, like you can’t be a snooze fest, and those webinars that are engaging and exciting, they are engaging and exciting for a reason, they were designed that way, and you can do it too.

That’s what I try to explain, and that’s how I got my foot in the door and became an authority in the area of webinars in a different angle rather than talking about how to create your sales funnel with your webinar. I really just talk about how to give the most value, and so people can say, “Hey I actually got a win from this webinar. Maybe I’m not ready to buy, but when I am, I’m not going to shop around, I’m going to buy from this person because they gave me so much value already.”

Steve: So the webinars that you were running prior to WebinarNinja, were they about webinars or were they about some different topic?

Omar: It was a different topic, a business topic, but as I started to develop WebinarNinja, I started to think, you know half of the equation is the technical aspects of webinars, like people don’t do webinars because they don’t really fully understand how to use the technology.
The other half is I don’t know what to do on this webinar, what I’m I supposed to teach, how I’m I supposed to present. How do I make sure that people actually stay on, and they come back for the next webinar or tell other people? I wanted to have relief all that anxiety, I have control over that, I have a lot of expertise to that, I’m a trained teacher, I should be able to do this. That’s what I was trying to do with WebinarNinja is try to supply that training as well as supply the tools so that I allow that to happen.

Steve: Would you say that your best customer acquisition channels have been webinars themselves to your customers?

Omar: Yes, I would say so, yeah definitely. I would put that out there along with the content that we give, like we have a free course on WebinarNinja on how to plan a launcher for webinar which in some way it’s what we teach in one hour, but this is a little bit more in depth. We go from A to Z about the technical aspects to the hardware you need to how to actually sell, how to market, how to make sure that you have attendees, all that kind of stuff.

Steve: How do you get people to sign up for that?

Omar: Sign up for the actual webinar or the course?

Steve: The course, like how do you get traffic to the sign up page?

Omar: We do a variety of things, so one we actually have a little mini podcast on webinars called WebinarNinja that we started when we actually launched WebinarNinja talking about the creation of the software. We got experts, it’s a narrative type of podcast that we weave in interviews in, and that generated a lot of leads to the website.

I again did a lot of guest posting on different websites, talking about how to utilize webinars, but we also used paid advertizing, we used a lot of Facebook ads, and I had a bumpy start with Facebook ads at the start. I realized quickly that I need somebody who really knows what they are doing. I started to try to figure out myself.

There is a lot of things that are involved in Facebook ads, not only getting the right audience, and targeting the right audience, and also like pitching the right copy and all that stuff, but there is also the graphics, there is also the whole process of getting them to convert, so I started to hire an expert to help me out, which again a great expert helped me out, started to get us leads, wanted to take it to the next level, found somebody who is just a little bit better at it than now I’m on my 3rd hire.

Not that the other 2 hires were bad, I just hit my cap with them, and now I am more where I need to be in terms of the level of marketing and our money that we are using on Facebook ads.

Steve: In terms of your best converting Facebook ad, what does that look like, what is the ad and the landing page look like?

Omar: Well we have a lot of them, we have a whole bunch of them, but I really believe in trying to have a long term vision with things, and try to build rapport and trust. Most of our ads go straight to the course, or we talk about something in particular about the course. The more specific the ad, the better, like what are they actually going to get out of this course, like get a template on how to create your workshop, that’s a very clear understanding of what I’m going to get, what am I going to get out of this course?

And that goes into the course of course, and then they consume the course, they may sign up after the course. They get follow up emails, they may not, but then I invite them to a live webinar of that course. At the webinar I will teach a topic whether that’s how to grow your audience with webinars, or how to increase sales, or how to grow your business or whatever it is, and at the end of the webinar I will give an offer.

Even if they don’t sign up for the offer I continue to give them great content whether that’s blog posts or tips or research we found from our own company, like we do a lot of research on when the best time is to run a webinar based on our users, you know we extract that information depending on what country, and all that stuff and region. We try to support them as much as possible, but you have a better conversion rate when you have that several steps along the way rather than straight to a webinar, straight to an offer.

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I was going to ask you actually what is considered like a good cost per acquisition for you guys, for Facebook ads?

Omar: That’s a tough question because Facebook is slowly and slowly getting more expensive, [inaudible 00:26:35] slowly slowing it down. It wasn’t, it’s not as cheap as it used to be, the short term of it or the sure way of saying that. You know for us we have different plans of starting from $45 a month, we have different offers, things like that.

So for us as long as we can get a user for under that amount it’s a win, because that’s, it’s recurring revenue, and all our plans come with free trials, so they have 14 days to try it out before they’re even charged. For us it’s holding them on for that first 45 days, because you get the 14 days plus the month. Then for us we just know that if they give us a trial they will love it, and they will hang on, and we will have a long term process.

Steve: I’m just how you can track like the Facebook ad if it’s such a long term funnel sometimes, in attribute to the ad, and like how much you are willing to pay like for one of those Facebook leads going to the course.

Omar: Well, we track it with; you know we actually have tracking code on each page of our check out pages to figure out if they are actually converting from the ad. That way we know how much the advertizing cost is costing us, versus how many paying customers are getting. That is relative depending on the campaign and things like that, but we are talking about roughly $15-20.

Steve: Okay, you know since we are on the topic of acquisition, recently I saw an AppSumo deal where you guys were giving away lifetime memberships to the basic plan for a pretty low fee, and I want to talk about this promotion because it seemed a little counter intuited to me, and I want to know the rationale behind it.

Omar: Well the rationale behind it is we wanted more people doing webinars on our platform. I have known Noah just like you know him for some time, and I know Imen [ph] who run AppSumo’s deals for Noah, and they even talked to me about it, “Hey we really want to get a webinar software on AppSumo, and we really like yours because it is our hang out base, and it’s got a different angle, I like it.”

We have been going back and forth for about 9 months on this discussion of running this deal. I told Imen, “Hey man if I’m going to run this deal, I’m going to make it the best deal you ever heard.” He said, “Okay, great wonderful.”

I crunched the numbers, I went back, I took a look at our analytics, and the thing is, is that I realized that with our start up plan you have up to 100 attendees, live attendees, you have unlimited evergreen or replays or unlimited registrants, but you can have up to 100 people show up live. I looked at those users, and looked at how many webinars they actually create, I talk about, and I realized that that cycle of being a starter doesn’t last too long because once you get some sort of traction and success with webinars you are going to surpass 100 users pretty quickly.

It doesn’t matter from the users end, because they we getting an ROI. They are making money off the sales or making on the webinar, so for them it is a great deal for them to continue to do webinars and pay for our software which is a fraction of the price that they are making on sales. One of the things that is interesting about our software or our business model is that the more webinars that are done, the more viral marketing happens.

So every time you attend a webinar and you see that it’s been run on WebinarNinja that’s just another signal that WebinarNinja is a competitor there. That’s a choice, that’s an option for you if you ever want to run webinars, or if you are currently running webinars and you are not happy with your solution. So there is a lot of SEO benefits of running webinars.

So I crafted a deal with AppSumo that made sense for us from business sense in terms of our cost. And we also made some special deals for those who want to upgrade later on to a higher plan. And it just worked out fine. And luckily we did very well and I got an email from Imen saying that our deal on AppSumo was the best selling deal in the history of AppSumo, so I was like…

Steve: Really, holy crap okay.

Omar: So for us that was a great win. And also it was just also a chance for us to get people that are — that have been wanting to do webinars but haven’t. And I love taking on people that are – the first time they ever listened to a podcast and it was through our podcast. Those that never subscribed to a blog and they subscribed to a blog, those people are very loyal, because they feel like you’ve really influenced them in a strong way. So I love that kind of customer, so for us it was a great investment.

Steve: So if I can just summarize what you said, the whole point in giving it away is to kind of get them pregnant with the tool. And the ones who are successful will tend to upgrade to a higher plan whereas the ones who don’t would probably fizzle out anyways, right? So there was like a win-win?

Omar: Yeah, if you’re not using the software it is not really going to cost us much. It costs us obviously storage space and things like that, but really the big cost is when they run a live webinar, when they are using the video technology, the live broadcast. So if they are doing webinars, then they are going to start growing and passing 100 attendees is not too hard. A lot of people think that’s intimidating, but if you are you are making money and you are seeing an ROI, so for us it’s a win-win for both parties.

Steve: So given what you just said, how do you actually encourage people to use the tool and kind of how do you reduce churn on your product?

Omar: Well there is a few things that we try to do. We try to one, educate them on one, how to get started. A lot of people just don’t know how to get started, they’ve never thought about doing a webinar, they are not really sure what to do, so we do tutorials, we give them videos. We follow with email sequences, we do live webinars just Q&A with our members only.

When we release new features we show them how to use it on our Q&A webinar where we just say hey we just released a new feature, LeadPages integration, you go to LeadPages, this is how you do it. And just being open for questions, I try to be on as many webinars as possible; live webinars to keep people engaged. And at the same time I also like to kind of share the business logic of it.

A lot of people, they want to do webinars because they see their mentors doing it, but they don’t realize that you need to incorporate this in your marketing strategy. And I try to write articles or do videos on that topic, or share podcast episodes I do on that topic where it shows them, hey if you can invite people to webinars, X amount of people and X amount convert.

That’s like being able to just turn on a tap and say I want sales, let me do a webinar. So if people don’t realize that, some of them they don’t understand like it’s actually that much of an equation. They just kind of feel like oh I’m supposed to be doing webinars because that’s what people are doing.

Steve: I actually just started doing them last August, and they’ve been just an incredible revenue generator, it’s like ATM machine almost. It’s crazy but since we are on this topic also I know — since you run WebinarNinja you probably have a ton of statistics from all the people who use your tool. So I was just kind of curious, and I’m sure the listeners are curious too. Like some of these questions like what’s the best time of day to run a webinar, or what best day it is? Like what’s the average attendance rate and that sort of thing, can you provide some statistics?

Omar: Yeah sure, it all depends on your geographical location. But North America the best time to run a webinar are Tuesdays through Thursdays so Tuesday, Wednesday, Thursday. Tuesday being the most attended day. And the time range is between noon and 3 PM.

Steve: Interesting, okay Pacific Time or Eastern Time?

Omar: It depends on — see if the attendee is Eastern then that’s the Eastern Time. So it depends on where they are located. So that time range, so even if you just do 1 o’clock that kind of covers pretty much the time zones in every area. I’ve run webinars at 4 PM PSC which is 7 PM EST, and you get a different crowd.

You get people come back from work, it’s good to experiment, it’s good to try out. But in terms of just raw numbers that’s been the best time that we found, Tuesday from 12 to 3 in North America. Funny enough it’s different in Europe, they actually attend during the day, maybe at work or something. Like the numbers are completely different. It’s 10 o’clock in the morning to 12 noon is a sweet spot in Europe. So yeah so it depends.

Steve: Oh 1 to 3 is technically work also, isn’t it?

Omar: Yeah it is it’s true, but usually it’s like a lunch hour. Usually some people — I also think of people that are in existing businesses, or working from home. Usually you’ll do your work in the morning, like you do your production in the morning, and then in the afternoon you’ll have time at lunch or afterwards to attend a webinar. At least for me that’s what I would do. But it’s just interesting depending on the geographical location.

You also have to remember that your global — I have to constantly remind myself that we have audience members in Australia, New Zealand, and all these different areas have opposite time zones and sometimes you have to have a webinar at 10 o’clock at night, so you can suit that audience. And you’ll be surprised a lot of those audiences are hungry because they are not served.

Steve: Interesting, and then what would you say like the average attendance rate is across the board?

Omar: It depends on how many webinars you’ve done. So your attendance rate is actually very much correlated to how many webinars you do. So if you’ve done between one to three webinars, like you’ve anywhere between one, three webinars your average attendance rate is 43 people, just not that high 43, right? But once you start doing more than three webinars, from three to 10 webinars, you start to have an average rate of about 89, so it doubles, right?

So then after you’ve done a whole bunch like this is average. And a lot of people don’t do any marketing; they have low list well things like that. But once you’ve passed 10 webinars, then it starts to become exponential, once 10 webinars hits, then you are well past 150 and 160 attendees. We have a pretty large list and we regularly get 500 to 600 people on. And I do a webinar a week, so like there are plenty of times I miss and go to the next one. So and that’s with zero ad straight to the webinar, that’s just through content and just through emails to a list, we usually only invite people that are already in our network, or in our contact list.

Steve: I guess what I meant was like what percentage of signups actually attend?

Omar: Oh the conversion rate yeah. So the average conversion rate is 25% actually. And this is something that we try to really help people with. Features like add to calendar, features like our follow up emails. I also talk about the copy that you put in your emails leading up to the webinar. You have to…

Steve: Can we talk about that a little bit actually?

Omar: Yeah definitely. So one of the things I really recommend and I have worked on this on my own webinars. And I’m happy to say that my conversion rate now from registering to attendee is now surpassed 55% which is really good for…

Steve: Yeah that is incredible.

Omar: And a lot of it is that portion where now I’m trying to — there is two sales processes. There is one where you are sending an email to get people to register. And once they are registered, now you need to make sure they attend. And this is the part where people drop the ball. So we have these templates that go out automatically that you can customize. They are about five reminders, so there’s the one that’s a confirmation email when you signup.

Then there is one that says your webinar is tomorrow, your webinar is today, your webinar is an hour to go, your webinar is starting right now, right? So you can customize it and I really like to incentive people to show up to the webinar. And I do it in all different ways. So I’ll give something for free like a template or an eBook or a downloadable.

Or I tell them there is going to be an incredible discount, I’m not offering to anybody else except those who are live. On the replay the offer is going to be different. So that could be one incentive to show up live. Two, I incentivize them by doing something funny or interesting or personal. Or I say, hey I’m going to showing a video when I was four year old when I was dancing to Michael Jackson; you are not going to be able to see it. You got to show up live, you are going to love it blah, blah, blah.

Three like send me your questions right now, reply to this email, send me your questions and I’m going to answer them the first thing make sure your questions are answered right away. And a lot of people they just have questions and they want an answer. And it’s not about the products; it’s about your topic. And they want to know — they want to make sure their answer is going to be — their questions are going to be answered.

I just try and incentivize them as much as possible. If I’m having a co-host on right, I tell them, hey I’m going to have Steve Chou on, on this webinar, we are going to do a webinar together, we are going to have a lot of fun. In fact I’m going to ask Steve three embarrassing questions, and I put them boom, boom, boom.

Like a part of this is entertainment. People have to be incentivized to show up, and be like this is fun, this is different, this is interesting. So you have that portion of selling them to get on them on the webinar. But then when they are on the webinar you have to have a great webinar. You have a fun webinar that will keep them on. And keep long enough for you to be able to make them an offer at the end, right?

Steve: Yes, so what are some of your tips to kind of encourage someone to stay all the way to the very end?

Omar: One of the things I do and I have a lot of fun with this. I actually did this recently with a webinar I did with Jason Zuck. We were doing a webinar for our course, easy course, and at the start of the webinar, you know we talked, “Hey this is Jason, this is me.” We have a lot of fun, we joke around, and then we give the menu, like we say this is what we are going to cover in today’s webinar.

We just flipped the script, like no one does this, so we just said, “Menu number one, we got to tell you, warning, like we are going to sell something to you at the end of this webinar, so I want you to put your wallet in your freezer, give it to your cat whatever you got to do because you might buy something.” Obviously we are being sarcastic, we are joking, and then right before we are going to talk about the product for sale, because we are entrepreneurs, we are going to warn you, and say, “Hey we are going to start selling now, so if you want to leave, you leave now.”
No one has ever done that on a webinar, so there is like surprise, it’s intriguing, what the heck is this, like, “Don’t worry guys we will tell you when the work drops over and the selling start. That’s when we are going to start forcing you to buy something.’ People laugh, and it gets funny, because it’s like obviously we are not trying to force them to do anything. We are just trying to help them take whatever, or teaching to the next level and be able to do it in a structured manner.

When we get to the point where it’s okay we have done the workshop, “Hey guys, thanks for all your questions, now we want to show you something that we’ve been working on that we are going to sell to you for a special offer only for people on the webinar right now. So if you don’t want to buy this or you can afford it or whatever, don’t worry about it, please leave now, it’s okay, we won’t be upset, we are just going to be quiet for the next 30 seconds, and we are just stop talking on the webinar.”

Steve: Interesting.

Omar: It’s the funniest thing because our attendance numbers start to go up because we are seeing the attendance numbers going up because people start sharing this, like this is incredible, what’s going on in this webinar, you have to sign up. Then we just broke the silence, and said, “Okay guys, obviously we are joking, and things like this, but really we want to be able to give you something that is of value, obviously we are going to want money in exchange because that’s what we do for a living, you guys are not idiots, you know that.”

People are refreshed by the idea that you are just being honest with them, and you are just telling them how it’s going to be, and just selling from the start, “Hey there is something that I’m going to give you for sale.” To be honest with you people are actually with that because they are under the impression that they might buy something, they know that, people don’t hate shopping, people like to buy things, but they just don’t like to be sold. They don’t like to be like cajoled into it, and feel like they didn’t make that decision.

By being honest, by transparent, by doing these funny things where you are just being just yourself and just doing things a little bit differently, they feel like, “Okay I’m in control, they are not pressuring me, and if I buy, it’s my choice.”

Steve: What would you say is a good attrition rate from beginning to end?

Omar: A lot of people show up late, a lot of people, lateness is a problem on webinars because there is nobody taking roll, but I would probably say if you can keep it up to about 60-70% that would be very good, but don’t be so hard on yourself, if you are first getting started. Just focus on the value, and focus on making sure that they feel like they got something out of the webinar.

For me that’s really what it is, I don’t think that I can say something or do something special to make somebody buy. If they are ready to buy they will buy, if they can afford it they can afford it, if they can’t they can’t. For me all I’m trying to do is have them leave the webinar and say, “Man that was really good, I’ve never been on a webinar where I learnt so much, I took down so many notes, this is fantastic.”

I just become something in their head, a memory, a thing to remember, so whenever they do want to do a webinar, so whatever I’m selling on the webinar they come back to me, they are not going to shop around, so that’s really what I’m trying to do.

Steve: Actually what I found with my webinar is that sometimes it takes like 2 or 3 attendances of the same webinar for them to buy, do you find that happens to you with yours?

Omar: Yeah, definitely, I think a lot of the times is, I learnt a lot of different things in terms of how to handle questions, because a lot of people they have questions, and some people, a lot of people do Q&A at the end. I actually try to do Q&A periodically throughout the webinar, so I will break 15 minutes into the webinar and take some questions on a certain aspect of that webinar.

Steve: Interesting, okay.

Omar: Like we’ve covered 15 minutes of this topic, any questions, pop them in, and I answer questions, and then some people they have just a burning question, like do you have a paying plan, or like does this integrate with this, they just want to know something and they have just been waiting the whole webinar, and they don’t want to wait to the end to figure it out, they are ready to buy, and sometimes they just give up, and then they will show up to the next webinar, and maybe their question will be answered then, so that’s a technique that has helped me.

Steve: Okay, and then in terms of the post webinar follow up sequences, what are some things that you do with that?

Omar: Well I do a limited replay, so I only offer for 48 hours. I do give the offer, and allow the offer to stand for the 48 hours, but I also give a bonus for those who are on the webinar, so if you buy live on the webinar or during the webinar, you will get something extra, you will get something that is of value that comes along with the purchase, but that bonus wouldn’t come if you bought after the webinar, but the discount or the promo will still stand for 48 hours.

We do follow up emails that’s integrated into WebinarNinja system that really helps follow up and tell them, hey, and we have specific, like our system detects if they were on the live webinar or not, so you can send a specific email that says, ”Hey I know you missed the webinar, no problem, here is the replay. We actually have a great offer, this is what it is. It is only available for 48 hours. If you have any questions, reply let me know, we would like to answer any questions you have.”

And then if they did attend, we say, “Hey thanks for attending, this is the offer,” and just remind them again that this is the offer that you have. You know it’s funny that even though we send a few emails, we send about 3 emails after the webinar, we still get people that ask for the offer when it expires, so like the day after it expires. You never can over communicate a lot, like wow 3 emails after the webinar, yeah, but some people literally just don’t open their emails on the weekends, they are busy, that’s normal.

Steve: That’s interesting, so just through doing webinars and Facebook ads, you have managed to grow WebinarNinja to thousands and thousands of members overtime. Has there been like one thing that has catapulted the number of users for WebinarNinja?

Omar: I have to say that we create a lot of content, like I can’t ignore that Steve, like I do a lot of guest posting, I do a lot of writing, and I have a daily podcast. I have over 740 episodes on the $100 MBA show, so like I’m constantly trying to build new relationships with new people in terms of that podcast, and try to get more listeners.

It helps us a lot to have that consistent content going out, you know trying to build that rapport. I probably would say that’s the strongest thing. Most of people that show up to my webinars, heard of me in some way other than just off an ad. The ads work, but I think they click on the ad because they know who I am.

Steve: Okay, that makes sense, so it’s just you have just leveraged your presence so to speak, and your name, in helping to build up WebinarNinja overtime?

Omar: Yeah, I would have no business without the audience. Everything I have is due to the fact that I have spent some time to…

Steve: Your podcast?

Omar: Yeah, growing their audience, yeah.

Steve: Okay, cool, well hey where can people find you if they want to learn how to put together a good webinar?

Omar: We have a course like I mentioned called the ultimate webinar course, and they can find that at webinarninja.co/course. If they sign up for that course, they have access to over 14 videos, it’s a 7 day course, there are some audio lessons as well. We have some cheat sheets that people love.

They are really well done PDFs, they are downloads, and they’re just these great sheets that you can have handy on your own webinars, so remind you of what to do and things like that. And then if you are on our list, then you will be invited to the next webinar that we do, so you can definitely ask questions live on live webinars.

Steve: One thing I also wanted to ask you was you have a conference too on webinars once a year?

Omar: Yeah we ran WebinarNinja live which was a really, really fun conference that we ran. It’s just been a fun journey, because I’m trying to help people out in this weird world of webinars, and the small world of webinars, and it has been like a really fun journey, and one of the things I loved about the conference is just meeting the people that I have seen on webinars, meeting people that do webinars that are really good at it, and learning from them, people like [inaudible 00:48:55], people like John and Kay from Entrepreneur on Fire, John Cochran.
These people have done some tremendous work with webinars, and it’s just been fantastic together, and just get to know them in person. There is something about the live experience that’s so impressive.

Steve: Yeah totally. Cool man, well hey if anyone has any questions for you personally, what’s the best way to reach you?

Omar: Twitter, my handle is @TheOmarZenhom on Twitter. That’s the best way to contact me; I’m pretty good at that in replying.

Steve: Cool man, hey well thanks for coming onto the show Omar, I really appreciate your time.

Omar: Thank you man.

Steve: All right take care.

Hope you enjoyed that episode. Now if you follow my blog, you already know that webinars have had a huge effect on my businesses, and in fact the first time I gave a webinar, I made $60,000 in 90 minutes, yes it is that crazy. For more information about this episode, go to mywifequitherjob.com/episode140.

Once again I want to thank sitelock.com for sponsoring this episode. If you have an e-commerce store, go there right now, and find out how long it takes to load. Does it take more than five seconds? If so did you know that 60% of consumers only wait up to five seconds before bouncing from a site, never making a purchase?

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And once again if you are interested in starting your own online business, head on over to mywifequitherjob.com, and sign up for my free six day mini course on how to start a profitable online store. Sign up right there on the front page, and I’ll send you the course via email immediately. 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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139: How To Make 7 Figures Selling T-Shirts Online With Kevin Stecko

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139: How To Make 7 Figures Selling T Shirts Online With Kevin Stecko

Kevin Stecko is someone who I met at an ecommerce mastermind retreat earlier in the year. And as luck would have it, I got stuck on a ski lift with the guy and we were forced to chat.

Anyway, Kevin runs an awesome site called 80stees.com where he sells tshirts from the 80s. I was on the site the other day and it brought back memories of youth.

In fact, I used to watch Robotech when I was a kid and I was pleasantly surprised to find Robotech t-shirts! How cool is that? (my wife is shaking her head)

Kevin is one of the very few t-shirt vendors that I know who have been in business for a very long time. Enjoy the episode!

What You’ll Learn

  • Kevin’s motivations for starting this business.
  • Should you carry inventory or print on demand?
  • How the licensing process works and is it worth it?
  • Kevin’s primary source of customers
  • How to rank in search for ridiculous keyword terms.

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Transcript

Steve: Welcome back to another episode of 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 are talking with my buddy Kevin Stecko, the founder of 80stees.com. Now in this episode you’ll learn the keys to running a successful e-commerce store selling t-shirts online.

Now before we begin I want to give a shout out to sitelock.com for being a sponsor of the show. Now if you owned a brick and mortar business, you’d secure it, right? Alarms, cameras, the whole deal, and as an online business you may not think about security as much, but you should, because your customers are. And did you know that one third of consumers hesitate to purchase online due to security concerns. Protect your business and your customers with SiteLock website security.

They offer malware scanning and removal and industry leading web application firewall and more. SiteLock acts as your personal security team. Now visit sitelock.com/mywifequitherjob for more information and get your first three months free. Once again that’s sitelock.com/mywifequitherjob.

If you want to learn how to start your own online business, be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business. So go to Mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email. Now onto 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 Kevin Stecko on the show. Now Kevin is someone who I met at e-commerce mastermind retreat early in the year, and as luck would have it I got stuck on a skid lift with the guy and we were forced to chat.

Anyways Kevin runs an awesome site called 80stees.com, where he sells t-shirts from the 80s. And I was actually on the site the other day, and it brought back memories of when I was younger. I used to watch Robotech when I was a kid, and just out of whim I decided to search for Robotech t-shirts, and I was pleasantly surprised to find them there, so how cool is that?

However when I pointed out to my wife that I was going to pick these t-shirts, I’m going to wear them, she started shaking her head. Anyways Kevin is one of these very few t-shirt vendors or store owners that I know who have doing this for a very long time.

And if you remember back in episode 122 when I had Derek Pankaew talk about his t-shirt business on Teespring, well Kevin’s business model is entirely different, and in my opinion is a lot more sustainable. And with that welcome to the show Kevin, how are you doing today man?

Kevin: I’m doing great, thanks for having me Steve, and I think we have to change the name to my wife is now allowed to give me clothing advice instead of my wife quit her job.

Steve: Actually I was also looking for this t-shirt, there is like this like obscure cartoon I used to watch when I was a kid, it was called Pandemonium. It only had like 10 episodes total. If I had a t-shirt like that I would totally wear that.

Kevin: Pandemonium, I’ll have to check it out, but it doesn’t even ring a bell for me.

Steve: You probably don’t even remember that cartoon; it only lasted one season, a bunch of [inaudible 00:03:30].

Kevin: I think you might have mentioned that on the skid lift.

Steve: Oh still talking about that ha, yeah. So Kev, I’m curious how did you come up with selling t-shirts, it’s like a really hard saturated business model?

Kevin: Right, well actually when I started it was not at all, so it kind of goes back to my college days. There was this little, I guess you might call it a hedge shop in a back alley that I used to walk by to go to class, and they would always have these boot leg t-shirts in the window.

I actually didn’t even know what boot leg meant at the time, but he had a hellion t-shirt and I was like that’s me, I’m getting it. So I wore it around campus and because everyone else at school also sees the same store all the time, no one ever asked me about it or thought it was special in any way.

But when I went home for the summer, I went to the amusement park and like 6 different people came up to me and asked me where I got it, and this was in 1999, summer of 1999. At that point I just had this kind of an idea, and I graduated in December of 99, and basically took a deal with this guy to buy in bulk from him.

I wasn’t even really getting a good deal, but I know I used to make a [inaudible 00:04:50], then I went to Penn State and tried to indoctrinate all of the students in to their software, he gave us free copies of like office to full suite, and so I was able to use Frontpage to create a website.

Steve: And did you sell that initial lot right away?

Kevin: Yeah, and it really wasn’t that many, I mean I had really no money except for just whatever I was able to make part time, so I might have had like 20 shirts that I bought, I think I was paying 13 each. So it wasn’t even cheap, and basically those sold out really quick, yeah.

Steve: So Frontpage didn’t have e-commerce features back then, right? How were you collecting money, just curious?

Kevin: The very first version of the site, it was like eBay in its infancy but less convenient. Basically people would fill out a form that I would get emailed to me, then I would send them instructions on how to mail me a check.

Steve: Oh wow okay, amazing and you sold 20 t-shirts. Were those t-shirts boot legged?

Kevin: They were, and like I said at the time I didn’t know, and they even had low trade mark thing that would indicate that they weren’t, but as I got into the business further I found out there are companies – those were pretty well known Bootlegger.

Steve: Okay, so how did that evolve into 80stees?

Kevin: So my email – I’m sorry my eBay username was 80stees, because it was him and he showed and then I bought like transformers and thunder cuts. I was just basically like well I want to have sort of a theme here, and I was totally an 80s kid, and that basically was like well I’ll do what I loved as a kid as a theme for the tees.

So I launched on eBay, and then had like a not even a real domain name, it was 80stees.hypermark.com, there was a free Frontpage host, and then March of 2000 I registered the domain 80stees.

Steve: Okay, and then what was your first platform then?

Kevin: So it was literally Frontpage, and then it kind of evolved. There was a gold rush in late 1990s for all these free software services, and one of them was an ecommerce platform called bigstep.com.
And so I had the most hacked together thing you could imagine which was using my Frontpage site which ranked well for search terms, and then I would link to this BigStep cart, then I would link back to the Frontpage site. So it was literally like going cross domain from one site to another, but it ended up working, we sold pretty well on there.

Steve: Interesting, so what are you on today?

Kevin: Today we’re on Shopify.

Steve: Okay, and so was it from BigStep to Shopify or there was a bunch of carts in between there?

Kevin: Yeah there was some carts in between. There was something called Storefront 5.0.

Steve: Oh my goodness, okay.

Kevin: And that was dot SP platform, and we ended up actually using that for a long time and modifying it extremely to the point where you wouldn’t recognize it, and then we actually got hacked when we were on that platform. I then switched to a company which due to a legal agreement I’m not allowed to mention, because they completely underperformed, under delivered, and then from there we were on Shopify.

Steve: Okay, just so you guys know who listening out there, Kevin has been doing this for a long time. I would say almost 20 years.

Kevin: Yeah, I’m getting close.

Steve: Something like that.

Kevin: I mean 1999.

Steve: 16years, 17 years yeah. So I’m just a little curious about your t-shirt business, so do you stock your t-shirts, or do you print them on demand.

Kevin: We stock.

Steve: You stock, okay. So that actually opens up a can of worms, so first of all why did you decide to stock that versus just printing on demand with I guess this – I don’t know [inaudible 00:08:53]?

Kevin: Okay yeah so at the time really I was selling licensed t-shirts and I wanted to do it the legit way. So there were a few companies, I think there was only a company like Slapon or something like that that were doing heat [ph] transfers, but for the most part you had to go the sole screening out.

There was no such thing as like a direct government print, so it was pretty much based on — the business model was based on what I had to do in order to offer licensed products.

Steve: I see, so you can’t — I know there is places at the mall where you pick what you want on the show, and then they just press it on right in front of you.

Kevin: Yeah, those are almost guaranteed boot legs.

Steve: Oh really?

Kevin: Yeah, if it was a license product…

Steve: Like if it’s like a sports team?

Kevin: Oh yeah 100%. And the reason that is, is because these are [inaudible 00:09:48] wants complete control of the final product, and if they sell an officially licensed heat transfer, you could put it on whenever, and they lose complete control at that point.

Steve: Interesting wow, so in the mall, so they can get away with it, so does that imply that it’s not really policed that heavily or?

Kevin: Yeah, I think that if they’re getting real with it either it’s generic enough that’s it’s actually not infringing or yeah they’re just not – they haven’t been caught.

Steve: Okay, so does that imply – so everything that you sell today is all licensed, right?

Kevin: Yeah, I mean it’s like 99.9%, there’s a few things that just didn’t need a license.

Steve: Okay, and so by having this license it implies that you can’t print your own t-shirts, like you have to actually just buy them the
way they are?

Kevin: It’s we either buy from companies that have the license or we obtain our own license. So if we had our own license, then yeah we could do print on demand, that’s a model that could work, but to obtain all the…

Steve: Okay can we talk about all…

Kevin: Oh sorry, go.

Steve: No, no finish your sentence.

Kevin: I was going to say to obtain all those licenses though for one company would be extremely expensive.

Steve: Yeah, I was just going to ask that, so what’s the process for obtaining a license, how much does it cost and what are the terms of a deal?

Kevin: It all depends in terms of the costs, so like if you’re talking Star Wars, like which would be the big banner industry, you’re talking hundreds of thousands of dollars that you would have to guarantee and potentially even hundreds of thousands that you would have to pay upfront towards the guarantee.

Steve: No way, because you guys sell a bunch of Star Wars shirts and they are all licensed, so does that imply that you’re paying six figures?

Kevin: No, that implies we buy from companies that have done that.

Steve: Okay, all right got, got it, okay.

Kevin: So we use some control on that aspect, but the good news is we do move a significant volume, so we have vendors that work with us to get us exclusive designs, and so really it’s actually beneficial for us now to have a license in a lot of ways, we don’t have any of that in this sort of overhead.

Steve: Do you have any licenses where you have like full rights to print stuff?

Kevin: Yeah, we do, and there is really no such thing as full rights, so every design has to be concept approved by the brand, and then they have to sample approvals and production approvals. You’re still limited to what they’re going to say is okay, it’s like you wouldn’t be able to put on like a swear word on a transformer shirt or something like that.

Steve: Right, okay that makes sense.

Kevin: In terms of what the shirt shows a typical license deal is you have a time which will just be the length of time that you’re allowed to sell a product. You have the properties, which just clearly defines what properties are on the case like we have Hasbro license, so it defines like transformers 1980 style guide type thing.

So like I couldn’t make the new movies that come out t-shirts, I can only do the 1980 stuff. It also defines the loyalty percentage, the payment terms on that and the territory, so like United States, UK, online, that type of thing.

Steve: What does the loyalty look like?

Kevin: Typically it’s 10%, but it can be higher. I know like NFL was notorious for having a pretty high loyalty. It all depends on…

Steve: Sure, I was just trying to get a range, so 10 to something percent. Is there an upfront fee also?

Kevin: Yeah, it’s not a separate fee from the loyalty, but what it is, is it’s a guarantee towards the loyalty, so like if it’s say that I said I was going to pay – I was guaranteeing at a cost to you or said I’ll pay $10,000 in loyalty. Some companies in order to take you seriously might want to all that 10,000 upfront.

Steve: I see.

Kevin: But then after you pay that off, so let’s say you had a really good first year and you sold $100,000 worth of stuff at a 10% loyalty, so that whole first year you’re not actually sending them a check. You’re just banking that money you’ve already paid them, and doing the accounting later, okay well we owe you $3000 loyalties this quarter, but we already paid you 10, so now we owe you 7.

Steve: I see, so everything is negotiable it sounds like?

Kevin: Yeah, it all depends too on the property. The bigger the property the less negotiating room and the knowledge of the structure is going to be. Throughout we do have a Robotech license actually.

Steve: Sweet.

Kevin: Those guys are – it’s a fairly less structured deal compared to others, and I think that’s primarily because that’s their only property, and they don’t have like a huge team, whereas Hasbro is a public company, and they’ve got a huge licensing team and so everything works a certain way.

Steve: So over there contracts are too expensive like Star Wars you mentioned you buy the t-shirts from a vendor who has a license, and what are the margins on something like that like when you buy shirts from someone else?

Kevin: Well it depends, so if we’re buying like small runs where maybe they’re using the DTG method, the margins, well I mean I guess…

Steve: So what does DTG stand for?

Kevin: DTG is direct to garment, so it’s like literally like an Intel printer for t-shirts, and a new mess in Teesprings for like – Teespring originally was also screened and there always like a fairly high minimum, and now they actually spot the DTG model, so you can really sell one t-shirt via Teespring with that DTG method.

But yeah, so I mean we try to maintain margins of about 60%, but that can get better for instance let’s say we’re able to buy 600 pieces or 1200 pieces, then we start getting a little bit of discount on our products.

Steve: Okay and then you have to stock all these?

Kevin: Yeah we try to avoid the pain of stocking to an extent with the crowd fund model that is very similar to what Teespring does which is basically it’s a fancy pre-order.

Steve: So how do you make the decision on whether to stock something, whether to license something or whether to crowd fund something?

Kevin: Okay, so these are a little different things, so we pretty much bring everything in the stock to ship eventually. So I guess if we take it one piece at a time – if I were to say how do I start the licensing? It would really be a situation where it’s either a huge strategic advantage for us to license it, because no one else is going to do what we’re going to do with it, or going to be able to do it.
So like for instance Robotech, no one else had a Robotech license at the time, and it just made a whole lot of sense for us to be deep placed to go for Robotech t-shirts even though it’s a fairly small fun base.

Steve: Got it.

Kevin: Now Hasbro, I got the license in 2007 and now it’s because at the time our vendor for transformers t-shirts was letting the license expire, and there wasn’t anyone else who was going to pick it up immediately, and as you might imagine for a company called 80stees that’s also had a cartoon t-shirts we needed transformers t-shirts.

Steve: Yeah for sure.

Kevin: So that was a situation where I was I’ll find – I’m really looking at potentially not having a huge important part of my catalogue.

Steve: Okay, and when you have the license, you’re printing these shirts on demand. Do you do those in Asia or do you those in-house?

Kevin: We don’t do a whole lot of on demand; we’re just actually just starting to work with a partner company now. We do domestic printing for all of our stuff though.

Steve: And the reason for that is just control?

Kevin: Yeah, by the time you’d get something printed in China and bring it over, I don’t think it’s that – it’s going to be that big of a cost savings based on freight and everything. It’s just so relatively inexpensive.

Steve: Okay, so I think can we talk a little bit about this crowd funding that you do?

Kevin: Sure, of course.

Steve: How does it work?

Kevin: Okay so yeah we were inspired by all these guys that were showing up on Facebook, and saying, “Hey there is three days left and we have to hit a minimum of 60 shirts or this design won’t get printed,” and that was literally pioneered by Teespring. The reason that they did it that way is because of the print minimums, so they wre only doing self screening and literally it wasn’t worth any one’s time or money to take an order for five t-shirts.

So these sellers had to get a minimum quantity, and so they built their page to basically become a campaign for a certain amount of shirts or a minimum amount of shirts for a limited time. It just had all these nice social signals to it where people kind of feel part of something; it’s similar to kick starter in a way, right?

Steve: Sure, yeah, yeah.

Kevin: You’re part of something bigger than just buying a product, and having the time limited is always nice because that gives the urgency. I love the book the Psychology of Persuasion.

Steve: Yeah, Cialdini.

Kevin: Yeah exactly, it basically in one ecommerce page you hit quite a few where he talks about are the most persuasive things to do for selling. So we’ve said well we can do this type of thing, and what we do is we put the design up, we set a minimum, we set a time limit, and then as we watch for people to take a chance, because literally we might not make it if we don’t hit a minimum, we give them a discount for placing the order during that time period.

Steve: Okay, so literally is a kick starter pretty much?

Kevin: Yeah.

Steve: And this is all hosted on your site?

Kevin: Yes.

Steve: Okay is that a large percentage of your business?

Kevin: No, I mean, I guess it is in terms of the number of products like we have thousands of products but only 20 to 40 on crowd for any given time. So I guess like those 20 to 40 do make up a decent number of sales relative to the size of the catalog entirely.

Steve: How do you decide what to crowd fund?

Kevin: You know it’s really just most new products nowadays. I have learnt that products that I think are awesome aren’t always awesome, and sometimes products that I don’t think are awesome, people think are awesome. So it’s just been a situation where well we put it put there and see how it works, and we really minimize our inventory risk that way.

Steve: Let’s talk about that a little bit, because there is obviously even if you’re just selling transformers, there is a like a bajillion varieties of transformer t-shirts, right? So how do you test to see which ones are going to sell, do you just buy a bunch and then just sell them out there?

Kevin: Yeah, I mean we always have like a hypothesis of we need new transformer shirts, so what character haven’t we not done in a while or what are we missing? And then we make the design, we get it approved and then we put it out there, and then literally the crowd tells us whether it’s good or not.

Steve: How much is like your first run during a test?

Kevin: You mean how many do we have to order or how many do I have to print?

Steve: Yeah how many do you order, so not talking about crowd funding for a second, like let’s say you just put up a shirt on your site, how many do you order for that initial run just for testing purposes?

Kevin: Well just in a more [inaudible 00:21:49] process we do in this crowd funding model, but…

Steve: Oh I see, okay.

Kevin: So if we just list the product without a crowd fund, chances are we can buy it direct to garment and we literally might only buy like 1 or two pieces of each size, and chances are we’ve pre-sold it before we even got it.

Steve: I see okay, so you do it in a way that it’s very little upfront monetary risk?

Kevin: Yeah and we might say, like let’s say we have a design that we sold, I don’t know we might have set a minimum of 30 pieces because we want to at least know that it works and maybe our pre minimum was 144 pieces, but let’s say like it was a home run and we sold 300 of them or 600 of them or something like that.

At that point then now we start thinking, well do we want to get a little more aggressive with how many we order to hit a price discount from our vendor. So it’s literally every single product is a decision unto itself as to how many we’re going to buy.

Steve: What is considered a dud versus a home run?

Kevin: It kind of depends on the property, I guess a dud transformer shirt might be like 20 sales and then a…

Steve: Within like a month you mean or?

Kevin: Yeah, and then a dud of like chips which is a new license one of our vendors just got and we have no idea if we will sell any, like so literally we probably have to sell zero to give up on that entirely. Part of the reason for that too is because we don’t have that fan base to email out and say, “Hey you bought this other chip shirt,” so you have to start from somewhere, so like that’s which we had a bit of the audience over time.

Steve: So yeah, let’s talk about advertising next, because in your case it doesn’t sound too bad to advertise, but in general marketing t-shirts can be really difficult because competition is so tough. So what are the channels that work the best for you?

Kevin: Yeah I mean it can be brutal. Pretty much we spend our money on email marketing, on Google AdWords and Bing to arrest matters as you said and on Facebook.

Steve: Okay, and so can we talk a little about each. So if you are on AdWords, are you doing Google shopping, are you doing just regular AdWords?

Kevin: Yeah so our AdWords are in a bit in a state of flax right now, but I mean shopping is one of the budget.

Steve: Okay and do you – how do you run your shopping campaign? Do you just list all of your products on shopping and then…

Kevin: Yeah, that’s historically – I think we may be pull some stuff based on inventory availability, so that’s one of the problems of stocking products is you might end up with like your most popular sizes out of stock at a point in time. So I think we might pull some stuff out like that, but we’re actually working with a new vendor, and we’re going to try and really tweak the shopping out. I’ll be honest with you we haven’t been doing it very well, and just from looking at the competition they aren’t doing it well either.

Steve: Okay, but it’s mainly been shopping, do you guys do any display ads for Google or?

Kevin: We tried in the past with very limited success.

Steve: Okay, yeah that one tends to be a lot harder. I would think that Facebook would work really well for you, like I would be like your prime customer if I wasn’t married.

Kevin: Oh man the namesake of the blog stop sale, oh my goodness. Yeah Facebook is pretty good for us; we spend quite a bit of effort trying to stay up to date. It literally changes weekly as to what the strategies and tactics are, and I think…

Steve: Can we talk about one that has worked for you?

Kevin: I’m sorry what’s that?

Steve: Can we just talk about a Facebook campaign that has worked for you in the past?

Kevin: Yeah, let me think of one specifically, yeah a specific campaign that has worked for us. Well I guess I can talk about maybe a more general, because that’s kind of our secret sauce is we’re not putting all of our eggs in one basket, where a lot of times it’s spending a few dollars a day advertising like the crowd funds, and just really being – how do I say this, like not passive but the opposite of aggressive with our bidding.

So like we’re going to – and budgeting, so we’re going to say, okay maybe we’re only going to spend 10, 20 bucks a day advertising as our daily budget for a particular product. That way we can – I guess the way we’re doing is we’re not – how am I going to say this, it’s kind of hard to describe I guess.

But by being more conservative with our bids, we’re getting hopefully the crème of the cup, and the most targeted people, because we’re not saying Facebook we want you to spend a whole lot of money. We’re saying, hey we want you spend just a little bit of money, and here is our awesome prospect that we describe for your targeting and everything, and then hopefully they give us the crème of the cup that way.

Steve: So that implies that you are bidding by click then?

Kevin: I usually do CPM a little bit

Steve: Interesting, okay because then you can’t really control your bid, right?

Kevin: Yeah, we control it via the budget more so.

Steve: The budget, okay. And do you typically only run ads for crowd funding campaigns?

Kevin: Yeah, that’s the majority of it just because we do have those social signals on the pages there, but we haven’t tried to do some more collection based ads just because we really want to spread ourselves around the entire catalog as opposed to just in the new products.

Steve: Because I would imagine that’s like a lot of ads that you would have to manage, right?

Kevin: It is yeah, so that’s definitely one of the things that we spend some time on like we think a lot about creating imagery and everything in terms of when we create a product. We’re always creating like a Facebook image at the same time.

Steve: Okay, and then the landing page is just a page to join the crowd funding campaign?

Kevin: Yeah exactly, it’s just a product page, sorry about that phone Steve, that won’t happen again.

Steve: No it’s okay, it’ll get edited out. Interesting, okay so you have a bunch of these campaigns that just lead to a product page. Traditionally the way we have gone on Facebook as well because we take them to like a content landing page, where we either thoroughly describe our value proposition or do a freebie of some sort, but it sounds like you’ve had really good luck sending people directly to a product?

Kevin: Yeah, and sometimes we don’t though, that’s – we kill our crowd funding products pretty frequently, so this is like the – our model is get it out there and see if it works, and then if it doesn’t let’s move on right away to something else. So it allows us to experiment, so yeah I mean there’s times when something just absolutely doesn’t work.

And even though we might say we’re going to crowd fund it for 30 days, like if a couple of days have gone by, we spend a little bit of money on Facebook or we emailed it out to the customer base and they haven’t responded, we’ll just tell the few people that have ordered or maybe even no one has ordered, we’ll just say like, sorry this one had no traction, it was not going to hit the minimum, so we killed it now rather than have this like walking dead products on the site for 30 days.

Steve: Okay, so let’s switch gears, you just mentioned email, do you have like your email list like segmented out by TV shows, and cartoons and what not?

Kevin: Yeah we use Klaviyo. So there is all of our purchase history there, and we actually recently completed uploading old transactions in the Klaviyo. So now we actually can — if you ordered from us three years ago, and you ordered us a Spiderman shirt, then we can specifically target you based on that.

Steve: Okay, and so whenever you release a new shirt let’s say it’s like a Spiderman shirt, you’ll just email everyone who has purchased a Spiderman shirt in the past?

Kevin: Yeah, we try to keep it pretty relevant. We do send out blasts just probably like every other ecommerce company. But those would be less targeted more broad as opposed to like yeah the Spiderman example would be, hey — the subject line would probably say something about Spiderman, and they would specifically be for that product.

Steve: So how much of your email marketing is automated versus broadcast?

Kevin: Well it’s kind of like there is a mix between — so it’s not really broadcast whenever we do the Spiderman one, but it’s not automated either. So it’s like a segmented broadcast I guess you might want to describe it.

Steve: Sure yeah that’s what I meant. So do you send those out — so outside of sending those out when you have a new product, do you have like a monthly broadcast that you do?

Kevin: It’s weekly, we try to do at least one yeah.

Steve: Okay what does one of those email sound like?

Kevin: A lot of times they are based on a forum and it just looks the same. And it’s just an overview of all of the crowd funds that we’ve released. But then every once in a while if we have a special offer or a discount that’s what we’ll post, but basically we don’t email out like, hey don’t forget about us random generic emails. There is always some kind of offer in the email.

Steve: Okay interesting, so most of your campaigns are not automated then? Like when someone purchases like a he-men t-shirt, they don’t have like a he-men specific sequence?

Kevin: No, that’s really good idea though.

Steve: Oh gosh that’s interesting, yeah true it is.

Kevin: It’s awesome, it would take us forever to build, but I can see some value there.

Steve: Or like your best ones like your Star Wars shirts or something like that. Yeah people would eat that stuff up I would think. So do you do any Pinterest work?

Kevin: We do, and I have never been able to get Pinterest to work consistently. I have had occasional blips of success where I get excited.

Steve: Okay.

Kevin: I have never been able to keep it running.

Steve: Okay. So I was just — part of what I do whenever I interview someone is I do the ACM [ph] rush, and I go through their site and see what’s going on. And you guys rank really well in Google for a lot of really hard keyword terms which is pretty amazing. And I know you guys have been around for a long time, but is there anything specific that you do to rank for these keywords?

Kevin: Yeah, I think it all started out way back when I lost with Frontpage. And…

Steve: So is that the tip for everyone use Frontpage?

Kevin: Well maybe the tip is I have no idea what you are doing with the database, because I didn’t. So my page is entirely folder based, and it was entirely hand generated html. And well with data Frontpage of course. But so what I had to do was I had to categorize these pages, so I knew how to find them easily. So I ended up creating like a folder in Frontpage that was 80s cartoons.

And then where do I put the transformer shirts, so I put the transformers page and I used cartoon folder. And then on the transformers page is where all these specific transformer shirts end up, but what it ended up was human readable file structure. And I think that was probably one of the biggest things is that the file structure look great, whereas everyone else that was trying to have like a database driven site, their URLs just look like the gobbledygook.

And obviously nowadays no one looks like that anymore right, like that’s in the past. But I just feel like by having such a strong start at it, we’ve just managed to continue on the same pace. And I’ll be honest with you I don’t do a leak of what most people might call SEO work. Like I don’t pay anyone to build links, I don’t do outreach for links.

And in fact I get really confused when I even think about doing that kind of stuff, because when I think of where can I get a link I can’t even think about of a place worthwhile because most of the blogs like their links disappear over time. And like everything is on social media nowadays.

Steve: I’m going to have to disagree with you there Kevin, because I was looking at your link profile. It seems like you guys have done some contests that have gotten some pretty good links, do you guys still do those?

Kevin: No, when was that?

Steve: I don’t know, I was just looking at it. There were some really high domain strength sites that were linking to your site, because you had done some sort of giveaway or something like that.

Kevin: It’s possible that I mean that might have been something way back when – but I’ll be honest I don’t think it moved the needle.

Steve: Okay and you haven’t done any of that stuff since?

Kevin: No, contests just get your people who want to join contests.

Steve: No but there was the link from that site that was pretty…

Kevin: Yeah I get what you’re saying; yeah there is some value there.

Steve: So if you were to — so of all those traffic sources that we just talked about, what would you say would be your top source, would it be SEO?

Kevin: Yeah, I mean that’s definitely the majority of it. And that’s a little confusing now since Google hasn’t shared as many other keywords. And since we do have quite a bit of brand build up over time, so there are a lot people that literally just use the URL part of typing the 80stees, and is that technically a search? I guess so, but it’s really then just trying to get to us.

Steve: Yeah I mean you guys have really established your brand at this point. From what it looks like you do get a lot of typing traffic for 80stees which is pretty awesome?

Kevin: Yes.

Steve: How do you deal with like inventory and all the sizes? Like you have like eight sizes, the same type for every shirt, it sounds like a nightmare.

Kevin: It is a nightmare. Yes straight up it is a nightmare, and that’s something that we are always working on trying to figure out how to do it better. The crowd funds are something that we try and kind of project like if during the crowd fund we sold a certain ratio of smalls, mediums, large, extra large, we are probably just try and project that same ratio into the future when we do place a print around the order. But you always end up having some kind of other stocks, so it’s just impossible to avoid if you keep stock.

Steve: So how do you manage that? Do you have any special strategies for getting rid of the sizes that are unwanted and that sort of thing or?

Kevin: We’re not too great at that, no actually. What we’ve been doing lately is if the product is something we like we will actually launch a re-crowd fund of it. So we might have say smalls and five XL on stock or whatever. And but we’ll still launch a crowd fund to hit a goal number which will allow us to sell all the sizes as well as give us a nice head start on our primal run.

Steve: Interesting okay. Yeah that just sounds like it can get out of hand real quick unless you have like a really good backend to maintain inventory and projections and that sort of thing. Do you guys use any software, or is it all homegrown?

Kevin: We are using an auto management system that I would not recommend to anyone I suppose, so I won’t mention it. But I think I would probably say the same thing about most auto management systems from what I have heard in different forums and stuff. But yeah we do have a lot of homegrown software that we’ve built, and it’s constantly in development and trying to make our job easier.

Steve: Okay and in terms of vendors like let’s say someone else wants to sell t-shirts and not necessarily 80stees. Like where do you start when you want to find someone to sell your t-shirts?

Kevin: Yeah I mean if you are talking like something that basically you are saying like you want to be a buyer of other people’s products and not do your own development at all, probably go to like Magic Apparel Trade Show in Las Vegas.

Steve: Interesting okay. Like if I wanted to sell like NCWA T-shirts, is that like a huge can of worms?

Kevin: You just have to find the right vendor that will work with you. The hard thing is going to be that like with sports stuff especially it’s all channel separated, so like you probably can’t just go buy NFL shirts if you want to sell them. You might have to have like a shoes store or some — there is going to be some level of authentic business that you already have in order for someone to even sell to you.

Steve: Okay I see, and so like the larger the organization the more red tape you have to go through?

Kevin: Yeah and really what it comes down to is the more the higher percentage of revenue that a business makes from apparel or licensed products in general the tougher it’s going to be.

Steve: Okay, do you find yourself moving more towards like the print on demand model where you don’t have to carry the inventory, you just go to the vendor and say, I want a print like five shirts, so whenever you make a sale?

Kevin: Yeah that’s — a lot of our vendors are going that route. So we are trying to work with them and do that more and more. The great thing about that model is there are no inventory. The terrible thing about that model it’s really not scalable, and it stinks at Christmas time, right? Because it’s great to say well I don’t have any inventory, but then on December 15th you have to stop taking orders, because you’ve literally exhausted your capability just shipping time.

Whereas on December I’m not sure what day Christmas is this year, but like the last shipping day possible to go next day before Christmas most of my inventory would be available for sale, and could get there.

Steve: Is there any quality difference between silk screen versus the printing — the different printing methods?

Kevin: Yeah for sure. Silk screen is definitely the best. But the other print methods do have some advantages in terms of like the color blending and everything you can do is a lot easier with that model, but those prints tend not to last as well. One thing you can — if you hit the right design though you could purposefully just dress it. So if it washes out a little bit then it might actually even be okay.

Steve: So do people copy your stuff?

Kevin: Yeah, I mean it definitely happens on – so Bootleggers do it. They’ll sell on Teespring, it happens on Amazon, there is I’m sure you’ve heard of all the Chinese counterfeiters on Amazon, and we are definitely starting…

Steve: Start with Chinese people, yeah. So but well can you do anything about it?

Kevin: On Amazon I suppose you could, but it’s like Wykamol, it would be a pointless game to play. And if it’s something that we’ve made for one of our licenses we will ask them to send us cease and desist, but it’s even a little bit tricky for us, because we can come up with our own unique transformers design, but we don’t actually own the rights, so it’s not like I can really police that I have to get Hasbro to do that for us.

Steve: Okay, I’m just curious because it seems like I can go on your site and I’ll see a shirt for like 18 bucks, but then hey I’m walking through the mall and I’ll see something for like 10 bucks right. And so do you even bother trying to fight those things, or you just run your business?

Kevin: Yeah, I just pretty much run the business. We are such a small cog in this machine that we don’t have the resources to do that.

Steve: Okay, and then this brand that you’ve built up, is there anything special that you’ve done over the years to instill the fact that 80stees is the place that you need to go for t-shirts?

Kevin: I mean I think it’s really just the concentrated collection of it. I mean you can find a lot of products that we sell other places like Amazon or Target or whatever, but you are not going to find as many at a physical store for sure. Like as many wrestler wrestling shirts or transformer shirts. And if you go on Amazon you might find that, but they are just not concentrating at that niche level like we are. So it would be a little bit harder to navigate at the very least.

Steve: Actually that was my next question; do you guys sell on Amazon at all?

Kevin: We do sell a little bit on Amazon; it’s not a focal point for us due to all the counterfeiters who will come from an unnamed country.

Steve: Plus they charge a lot of fees, right? Is it generally pretty profitable to be selling on Amazon, like if you could, let’s say there were no copy cats?

Kevin: Yes, so we do merchant fulfilled to avoid the FBA fee as well as tax implications, but that 15% definitely takes a huge cut.

Steve: Oh yeah for sure okay. So yeah, so it doesn’t sound like Amazon would be that great of a channel regardless, because of just the nature of how many fees that they take.

Kevin: Yeah, I have competitors though that I mean they do all the Amazon things that you need to do to be successful. They are investigating which products have the best seller ranks and they are doing the FBA. And I feel like they are spending $10 in inventory to make a dollar after the end of the transaction. But I guess they are doing enough transactions that they think it’s worthwhile and since the FBA model have low overhead they can justify that. So I wouldn’t say it’s impossible to make it work, because these companies probably would have gone out of business by now.

Steve: Sure, sure.

Kevin: But it’s just not for us.

Steve: Is there room for creativity in the t-shirts that you have? Like are you allowed to modify designs for your t-shirts? Like can I stick like [inaudible 00:44:49] on a t-shirt and make him say something funny?

Kevin: Yeah to an extent. So we can be creative, and then we have to get it approved. So it’s — we do run in some of that where we think we have an awesome idea, and it just doesn’t fit like the brand. They are like well this is — they are literally called like off brand, this is off the brand message, so we can’t do this.

Steve: Okay, what’s funny about this is I get a lot of emails from people who actually want to sell t-shirts or some sort of printed shirt. Do you have any just advice for those people on just getting started in the t-shirt business?

Kevin: Just getting started. I mean honestly if I wasn’t — if I didn’t already have the resources and stuff that I have, I would pick a different industry, and apply my knowledge there. It just so happens that we are making it work because of the head start. But yeah I would say the thing to do would be to have a [inaudible 00:45:48] of your brand as opposed to like be the prevue of funny graphics shirts right? Because that’s just — there is a million of them.

Steve: That sounds like a nightmare.

Kevin: Yeah exactly.

Steve: I mean I like your niche because 80stees, I actually did some searches for 80stees on Google just to see what the other — what your competition was like. And it seems like you have the largest collection, from what I could tell at least.

Kevin: Yeah I mean we definitely try to be that way too, and we literally look at it like we have to have coverage of a specific category. So like with super Mario we’ve got to have the super Mario two and the super Mario three shirts, because those were also released in the 80s that type of thing.

Steve: Yeah for sure. Cool man, well that’s really interesting. I always wonder how business owners in pretty competitive industries manage to make it work. And it sounds like you found like a really good niche that’s really profitable that you’ve made it work. So thanks for your insights Kev. If anyone can find you who wants to ask you any more questions about the t-shirt business, or if they want to buy some 80stees, where can they find you?

Kevin: Well the domain starts at 80stees for the actual site. And then I’m going to have a site up at Kevinstecko.com if anyone wants to just personally get in touch with me.

Steve: Cool, I actually did not know about that site, I’ll have to check it out.

Kevin: It doesn’t exist as of the time we are talking, but it will.

Steve: Okay all right, it will be up by the time I publish this?

Kevin: Yes.

Steve: Cool well thanks Kev, thanks for coming to the show man, I really appreciate it.

Kevin: All right man, thanks Steve, take care, bye, bye.

Steve: All right, take care.

Hope you enjoyed that episode. If you remember I had another guest on the show Derek Pankaew to talk about his t-shirt business, and it’s just interesting to compare Kevin stories with his, because they operate completely differently.

For more information about this episode, go to mywifequitherjob.com/episode139. Once again I want to thank sitelock.com for sponsoring this episode. If you have an e-commerce store, go there right now, and find out how long it takes to load. Does it take more than five seconds? If so did you know that 60% of consumers only wait up to five seconds before bouncing from a site, never making a purchase?

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And once again if you are interested in starting your own online business head on over to mywifequitherjob.com, sign up for my free six day mini course on how to start a profitable online store. Sign up right there on the front page, and I’ll send you the course via email immediately. 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.mywifequiteherjob.com

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138: How To Make 6 Figures And 30K Email Subs From A Virtual Summit With Navid Moazzez

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How To Make 6 Figures And 30K Email Subs From A Virtual Summit With Navid Moazzez

Today I’m thrilled to have Navid Moazzez on the show. Navid is someone who randomly reached out to me to take part in one of his virtual summits. And because we have a ton of mutual friends like Natalie Sisson, Grant Baldwin, Jd Roth among others, we started chatting.

That’s when I was introduced to the amazing world of virtual summits. Navid is a virtual summit expert and he makes a living putting on online conferences.
If you’ve been following me online, you probably know that I had my first live event in May called the Sellers Summit which was a huge success.

But after talking with Navid, he has really opened my eyes to the world of virtual events and hopefully he’ll blow your mind as well.

What You’ll Learn

  • How to get speakers to agree to take part in a virtual event
  • How to get people to attend
  • How to make money off of a virtual summit
  • The exact flow from start to finish for one of his events.

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Transcript

Steve: Welcome 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 are talking with Navid Moazzez, the founder of navidmoazzez.com and an expert on virtual summits. Now in this episode you’ll learn the keys to running a successful online conference, and how to leverage a virtual summit to blow up your email subscribers while earning lots of money at the same time.
Now before we begin I want to give a shout out to sitelock.com for being a sponsor of the show, and as an ecommerce business owner your website is your business. But very few people actually protect their websites, and on average it takes 197 days for retailers to detect a data breach. Yes, that’s 197 days before you realize that your customer’s data has been stolen.

Now you can prevent data breaches with sitelock website security. Site lock offers a comprehensive suite of cloud based security solutions for ecommerce of all sizes and budgets. From malware scanning and removal to an industry leading web application firewall, site lock has got you and your customers covered. So visit sitelock.com/mywifequitherjob for more information and get your first three months free. Once again that’s sitelock.com/mywifequitherjob.
And if you want to learn how to start your own online business be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business. So go to Mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email. Now onto 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 Navid Moazzez on the show. Now Navid is someone who randomly reached out to me to take part in one of his virtual summits. And because we have a ton of mutual friends like Natalie, Susan, Glen Baldwin, J. Roth among others who I have already had in my podcast we actually started chatting.

And that’s when I was introduced to the amazing world of virtual summits. Now Navid is a virtual summit expert, and he makes a living putting on online conferences. And if you’ve been following me online, you probably know that I had my first live event in May of this year called the Sellers Summit which was a big success.

But after talking with Navid he has really opened my eyes to the world of virtual events, and hopefully he’ll blow your mind as well. And with that welcome to the show Navid, how are you doing today man?

Navid: Thanks so much for having me, it’s a pleasure to be on.

Steve: Yeah so give us the quick background about just your online endeavors, and then how you got started with online summits in the first place.

Navid: Yeah, so it kind of kicked off in 2013 around mid June, and I started actually interviewing people. And the first interview I ever done was with Pat Flynn, I had no experience going into it. But one thing led to another, started interviewing more people and as you hear I’m not native US citizen, or native English speaker.

So what I did was to actually interview people, it felt much better to just learn how to put together these interviews, and also pretty much the document that on my blog in the very beginning like my entrepreneurial journey pretty much. And that led to me putting on a podcast kind of it because I heard a lot of people doing this. John Dumas had a lot of success with Entrepreneurial on Fire around that time. And then I — it took me a little while to do this, but in 2014 I launched Lifestyle Architects Show.

And it was good in the beginning, it built some great relationships and also then it led me to pretty much stumbling across virtual summits. But it was because I didn’t grow my email list that much from my podcast, and I didn’t really generate that much money in the first place from this, but it was as I said good for relationship building. But then I hosted my virtual summit, I just learned a lot about the process of putting one together.

I had no experience with it, but it took me a few months to when I somewhat crossed the summits first with health summits kind of that’s how I got into it, because they were actually making a lot of money, but also growing their email list at the same time and that was very compelling to me. And then I learned about it, and then in November of 2014, not forgetting my first virtual summit, the branding summit more or less because I wanted to position myself as a personal branding expert.

But that I can talk a little bit about it, it was quite broad, if I would have done it over today; I would have probably gone way more niche than I did there. But the essence of it was that I interviewed some people pretty much like my podcast, and then put together this event and people could sign up for free, but then in the backend I sold them all access pass.

That’s how it was in the beginning and I got some great results even from this first one. Before the summit I only had from about 18 months of blogging and podcasting, I had a round 900 to 1000 subscribers. And they were fairly engaged, but then with the virtual summits it took things to a whole another level.

I grew my list, the first one there about 3000 subscribers, and I generated $20,000 in profit, which was just mind blowing to me, I had never had that success ever before. And then it enabled me to quit my job and move abroad, that was late 2014. And then moving into 2015 I got to leave this lifestyle I’m living now, and at the time of this recording I live in Cancun, but I have lived in Barcelona and some other places. I have been in the US, that’s how I got connected more with Natalie as well lived in San Diego for a little while. So that’s how I got started.

Steve: So when you first started interviewing let’s say Pat Flynn, you said that was your first interview. Did you have like a business at that point or were you just designed to put together a podcast interviewing people?

Navid: Yeah, it was not the best, I can I mean kind of in my mind I thought okay I’m having a business, I told people I’m starting this business. I guess more of a side project because I had a part time day job. I was working part time at the bank, I also had — I was in law school actually, but I then a few months after I started my site I dropped out.

And I didn’t have nay success with my business really at that time more than building relationships and making an affiliate sale here and there in 2013. But I still decided to drop out and just have my part time job at a bank, and that just paid the bills, it was not anything fancy. And then I took it from there pretty much, that’s what I did in the early days.

Steve: So if we step back a little bit, given that you didn’t have any prior success or a really large audience, how did you convince someone like Pat for example to go on your show?

Navid: Yeah, in the beginning actually it was I guess I looked for an opportunity there, I think that’s a good way to see it. He actually needed some people to interview him. He actually invited people from his audience to interview him for — yeah his book coming out, his first book Let Go. And he invited people, and I just — I didn’t think he would get back to me. I just thought he would probably get a lot of people reaching out to him.

And I’m sure he did, but he still accepted my invitation, I just was very genuine with my approach. I told him I have been following him for a while. I’m sure he recognized my name since I had been commenting quite a bit on his blog too to just show that I actually read his stuff. I knew what it was all about.

And then I interviewed him, I had no experience. I was like kind of put together the interview. I probably should have done some practice rounds before, but I hadn’t. So it was just like going into it, and I guess that was a good thing that I did. I got just a head start, I didn’t even have my site before I reached out to him. So it was he put the pressure on me to actually launch, because I had been procrastinating for quite a while before that.

Steve: So what are some of the benefits of putting on an online event as opposed to a live event? Like what are some of the pros and cons? Because I have done a live event now, and I’m just curious did it ever cross your mind to do live as opposed to virtual?

Navid: Not at that stage, now I’m more and more. I mean I have actually had a mastermind and stuff like that. So I see the power of live events too, you can connect in person, all that kind of stuff. So it’s very good, but in terms of like the business growth and growing your email list, I think a live event would be very hard to see the same results there for growing your list.

I mean that’s one of the biggest benefits I think of why you should even consider hosting a virtual summit. You can be at the very, very early stage of your business, or you can even be more seasoned. I mean I have helped people starting from scratch grow their email list to a thousand or a few thousand people, where even people like Henry Both takes his — he had 12,000 subscribers when he came to me. And then from his summit he got over 30,000 opt-ins.

Steve: It’s crazy.

Navid: So yeah so it’s like email list growth is one, but also like you can create — I mean the problem is if you are starting out you don’t have a product, but from this virtual summit you can actually bundle up the recordings with some irresistible bonuses and sell that. So that’s like creating a product pretty fast without you doing the heavy lifting. Well you have to put together the event, but you just have to pull out great information from your speakers.

Like when I interviewed you for my upcoming summit listing building school. I mean we just had a great conversation, I just asked whatever I wanted to know for the summit, and that’s what you have to do for it. And then you bundle this up, yes people can you watch it for free during the summit for a limited time, typically like 48 to 72 hours. But then when this time is up you still sell the recordings and you can also — what I do even when they signup they still on this thank you page right after they signup they have the opportunity to purchase right away.

So you actually generate money before the summit even started which is pretty cool. So I really like that too about summits, also the relationship building I guess that goes both hands. When you are doing a live event versus a summit you can still build the relationships. But I guess you can do it on a bigger scale with a virtual summit if you have let’s say 20 to 30 speakers for your first one, and also like the affiliate partnerships you build.

I saw firsthand what happened when Chandler put together his summit. He had some decent launches before, I mean they were not bad. But then with the summit he actually got more people entered word to promote him because it’s easier at least from my experience to get people to promote three events like a virtual summit, than it is for someone else to promote your course, that’s a big benefit I have seen.

I see this first hand now when I’m reaching out to people, it would probably be harder for me to get someone to promote my Virtual Summit Mastery program rather than promoting my upcoming summit list building school. It’s just what I found I have way more partners onboard for this summit than I have for my course.

Steve: I guess one question that I have is let’s say you are like a nobody in the beginning, right? And you want to put together a virtual event, like how do you get speakers to agree to take part?

Navid: Yeah that’s a great question. I mean you have to think a little bit from their perspective, like what do they really want. Of course it’s harder to make it a really big way and you cannot say hey I’m going to promote you to my email list and all that. That’s a little bit harder. But if you have an authentic approach and like you are reaching out to them, like you are building even a relationship beforehand I always say build authentic powerful relationships before you actually need them.

I think that’s something I have done from the very beginning, so when I actually came to the branding summit I didn’t have that much experience leading up to it or that much of success. But then a lot of people like Natalie Sisson, like Selena Soo and a lot of other people, they lined up to promote me, because I’ve added so much value to them beforehand so….

Steve: So give me an example of — so how did you approach both of these people in the beginning?

Navid: I mean for example with Selena Soo it’s interesting because I reached out to her, I think it was in 2013, I wanted to interview her. Actually she said no a few times there, I reached out, followed up again, follow up again I believe she didn’t have time for some reason, she was doing other things. And then I got her onboard for an expert run up post, that’s kind of the first time actually she said yes.

I think I got an introduction there too. And then one thing led to another and I guess it wasn’t around a few months out for my summit she saw what I was putting together. And then she first said she has to check her schedule. And then she finally said yes, so I guess patient, a little persistence followed up and then she said yes eventually, because I added value to her, I like reached out to her, I sent quite a bit of traffic her way this expert run up post I put together.

Same with Natalie, I actually took her 30 day blog challenge on very early stages and shared my results with that, and always that was a good pretty much case study for her. A case study is also a great way to build a relationship with someone that you think it very close almost like a friend if you are building rela — and even if it’s a more of a busy person like Ramit Sethi you can build a relationship if you are like a case study for whatever they are doing, because all influencers are out there they need more case studies for whatever they are teaching, whatever they are selling, right?

So that’s one way I did it quite a lot. And also just finding ways to add value wherever I could pretty much, that’s what I did. And obviously some of the people I reached out to they were also cold, but when you have some people may be getting some introductions for a summit, then you start to snowball, because then you see a friend on the list there. And then you say yes eventually to more and more people getting on there. So that’s kind of how I started, and then eventually for this first summit I got 88 speakers onboard, it was…

Steve: That’s crazy okay. Yes so I noticed like in the email that you sent to me you said these people had already agreed to do it. And then I noticed some familiar names that I knew personally. And so that influenced me to agree to it as well. So it sounds like you are really good at social engineering, have you met any of these people in person before asking them to speak?

Navid: Yeah, a few let me see who I – Yeah Selina Soo I have met in person. I forgot exactly how to reference, but there is a few — most actually I haven’t, I’m pretty sure I haven’t like for example Ryan Levesque, I haven’t met him in person. Ryan Lee actually I met him in person once. I think that helped a little bit to get him on board, but then actually he followed me a little bit even though from a far kind of, because he was in the very beginning doing a lot of virtual summits, and now he is endorsing what I’m doing which is pretty cool.

So he is in my community, he is helping out there from time to time. So it’s been good to get his endorsement, also it was easier to get him on board this way. And also it helps I guess to get other people on board by having such strong names, right?

What I advice to new people is just something I call the ladder strategy. Start with people you know first, or if you have someone in your network that knows someone, get introduction, that’s always the easiest way. And then work yourself up this ladder and then eventually you can get to even bigger and bigger and bigger names.

And it’s not always — you don’t need that many big names if you are just starting out. Actually it’s sometimes better to have some B&C. Let’s just kind of it’s not really that just like a ranking among them, but it’s just like it’s pretty clear, it’s the A list is everyone knows someone in your industry. So they might be harder to get, they might only need two, three maybe four of those, and they will be a big driver for your summit.

But the B&C list is they are more likely to share your summit with their audience because they are not as busy, like an A list is you might you want to build a relationship for years sometimes. And sometimes they will share it, it just depends on how much they connect with your message, or how much of a good fit this is to their audience. And obviously their busy schedule, some of them schedule their promos like six to 12 months in advance.

Steve: Okay, and so what are the benefits to the speakers for example?

Navid: Yeah, so one thing I will do a lot of the times at least, they can for example share a freebie on the summits, that could be a one way if they are not selling something…

Steve: Like a lead magnet you mean?

Navid: Yeah, pretty much a lead magnet so they can grow their list from it. I’ve seen depending on obviously how popular the summit is and also how well this lead magnet is featured. Like that’s also good for a summit host to actually make this lead magnet stand out a little bit, so they can actually — people can actually click on it and make sure the links works.

I’ve seen summits where actually my link didn’t work to my lead magnet, and that’s — then people can’t even check out my website which kind of sucks. But so that’s one way to just do that, and I’ve seen summits where they also let the speaker sell. Like Morrison [inaudible 00:17:16] had summits where they had like a presentation, and then at the end they had a really great offer so they could sell there. And that works also well, obviously that’s typically works best for live summits though.

What I recommended in the very beginning is to actually to be pre recorded mixed in with some live elements like maybe a kick off hangout where you do a live session. And then maybe a closing webinar or keynote where you can maybe summarize the summit or sell even a course which we can get into, but that’s one benefit.

Also another thing I do for my upcoming summit, if it’s a good fit then I pretty much talk to the speakers. I get on a pre call with them, I think that’s pretty much would be the two just to see if it was a good fit, or we could talk about, but also if it sounds — because if it’s a really good fit, then I try to do some training afterwards whenever it works with my schedule and their schedule.

And that’s also a pretty good benefit to them if I can promote something to my entire audience afterwards. That’s how I got some of the bigger names to much agree to promote the summit. So that’s…

Steve: If you have no audience to begin with like how do you convince the speaker that — yeah?

Navid: That’s a good tip, but I think what you can do is to actually say I’m growing my audience with this summit, and then I would be happy to promote whatever you are selling afterwards. And obviously you have to make sure that it’s a good fit, so you don’t do that to everyone. But if it’s a really good fit and you really want that speaker, I mean if you are growing your email list with thousands or few thousands of people from this per summit, I mean you have an audience to promote this influencer too.

And I’m sure they will be happy for you to promote the launch or maybe a webinar to your audience, and that’s something that can work I think really, really well when you are just starting out. In some cases some influencers what I found they also want to give back a lot of the times like Ryan Fishkin, I had him on for the branding summit. And he said like if he doesn’t say yes to someone just starting out in some cases, there might not be another moss.com.

So he actually wants to give. Some influencers they are more strict with that, but he obviously has a multiple of eight figure business, and he says yes to a lot of people which I really respect, because he is the one who started out, so he wants top give back. And that’s why I think it’s just good to reach out in a very authentic way.

Obviously don’t just reach out to everyone. Don’t mass email everyone like you just got to make sure that it’s very authentic. And something can work well and my student got Seth Godin on this way. And she sent video invitations, and she made sure she read pretty much every set of books. And it was just in a very good way.

Seth he says no to pretty much all summits, at least from what I’ve heard of. He even said no to being on my podcast in the beginning, so I know that for a fact, and then I think her approach was just good. He could I guess feel that she read his books and all that stuff, I think that matters a lot, and then he said yes even though maybe he didn’t get too much out of being on her summit, but still he said yes because of her approach which really matters.

Steve: Okay, so how do you get people to attend then?

Navid: Yeah, so the big thing there is actually to — especially if you are starting out, you don’t have a big budget for Facebook ads and all that kind of stuff is to get some of your speakers to promote to their audience. And I think that’s not the first thing you should think about, the first thing you should think about is to have this — make them feel that this summit is really good, like think about the design, it is going to be killer, you know think about the speakers you have on there.

Also think about how you are presenting them on the summit, how the ink you use, or the presentations on the summit. They are going to be really good. I think if the sessions are great, the speakers are more likely to share it, because they are doing pretty much the audience a disservice by not sharing it.

I’ve had many, many examples like that when a big name, he said, “I can’t promote this time.” And then after our session he is just, ‘Hey is there a way I could share this to my audience?” I mean that was after the interview, I didn’t really push him, I don’t really require speakers to promote to their audience. I actually make it pretty low key for them to decide if it’s a good fit for their audience or not.

I usually want the speakers on there because I mean I’m curious to know more about whatever they have to say on the topic not because they have a big audience. That’s pretty much how a lot of people approach it though. They have a little speaker contract, and a lot of fine line in that contract where it says, “Hey you got to promote to your audience in order to be part of it. You need a minimum of 5,000 subscribers to participate.” I mean I never do that; none of my students do it either.

Steve: That would be a big turn off actually.

Navid: Yeah, and I think even speaker contracts, I mean there is a big debate on this, like you know you own your content or not. I mean I’ve never had a problem with this, and I don’t really put together speaker contracts anymore. I don’t like it, and I don’t even sign them anymore. I spoke to Ryan Lee about this recently. He says they are kind of dead.

I guess it depends on the industry, if you are like in a more professional field like you know maybe a lawyer or attorney putting together a summit, yeah you might want to think about this, but I find at least in my industry it is more about the relationship rather than making it so transactional, so you have to sign a lot of contracts.

I pretty much treat it more like a podcast interview. That’s how I think I make the speakers feel more welcome to be part of it and not just being part of something bigger pretty much, so I think that works well.

Steve: When you send out the virtual summit stuff and get people to attend, it is free right?

Navid: Yup, it’s totally free to attend, and that’s kind of — we have a landing page. We have some information there on the landing page, and then you would have a thank you page, and that’s when they actually is thank them for signing up obviously, and then we have a page there with they can purchase the recordings. They can also purchase there some of the system bonuses.

I think where people make a mistake these days is to not have a strong enough offer. I mean already they positioned their summit completely the wrong way. I think that’s when it doesn’t convert, because we’ve seen conversions anywhere from 5, 6% in online marketing space up to even 20% sometimes for the all access pass, and that’s from people who sign up for free.

Let’s say we have 30,000 people sign up for the summit, that would mean if you have a 6% conversion rate, 1000, 800 people will buy, I think. If I’m not, my math is not bad there, I think that’s correct, and so yeah, so that’s pretty good conversion rate. You probably wouldn’t get that from a regular launch for just if you have 30,000 people on your list, it would be very high to get 6% to purchase right, so …

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Can we back up a little bit. So you structured so that the content is free, so what are they paying for exactly?

Navid: Yeah so they pay for like getting access, this is limited time. If you want own the entire package with recordings, audios, maybe transcripts, and transcripts is optional. I didn’t do that for my first summit, but it could be a good idea if you have some extra money to put on transcripts. Then you have also some other bonuses, let’s say from speakers, let’s say a Facebook group can be other things too, I mean I have of courses even from some speakers.

I even trade, I had like my old summit, I spoke to one of my speakers, and she had of course a lead magnets. Like okay, you can use my branding summit for your brand. She has like a branding course, it was a perfect fit, and she just gave me her lead magnets course which is a few hundred dollar value. My summit is a few hundred dollar value, was a great fit, and then I could include into her course for my summit, so it is a good swap if you can do that, that works pretty well.

Even some — I was on Teachable summit, they actually got speakers to just contribute. I didn’t really get anything out of it, I mean at least from what I can see. I mean I got some conditions from the sales I brought in, but other than that I just offered pretty much my course for free on their summit, so I guess that works sometimes to just ask someone, and they might do it.

If it’s a good fit, maybe they have something they are not really actively promoting so much out there. I wouldn’t do it with a flagship course though, but I have definitely got speakers to just contribute their courses and other things, books, and different things they have to offer.

Steve: Interesting, so the people who attend, they get it free, but they have to watch live right?

Navid: Yeah doing so, exactly, so let’s say we start promoting it to your own list, you will start 3 to 4 weeks out just to, if you are doing Facebook ads or you know letting your list know a little bit earlier, that’s always nice, I tend to do that, and then with affiliates and other partners I ask like speakers, then I start around 2 weeks out. That’s what I’m doing for my upcoming summit.

I started like 2 weeks out to promote it, and then it ran since you have like running the affiliate promotion, and then people are going to sign up. If it is a pre recorded summit they can get access. If someone purchased this even on the thank you page before it even started, they can get access to everything that’s available currently in a membership area, so that’s how we do.

It is like a course in membership area and then when the summit starts, yes then it starts you can maybe have a chat or Facebook comments below the pre recording, introduce that. That works really well, we have seen that. My next summit is actually a hybrid; I’m doing live sessions plus a lot of some pre recording sessions as well, so that’s how I’m doing it a little bit differently.

Steve: The money that you make is by selling the all access pass, is that correct?

Navid: Yes, that’s one way to make money. I have a student who made like worth $20,000 in sponsorship. It’s like he made half sponsorship in addition to everything else he made, yeah like I think 70,000 from all access pass, and $20,000 in sponsors.

He was in the insurance space, he had no email list when he started out, grew his email list by 3,500 people, and then from the all access pass I think he got like 460 plus sales or so which comes out through on $70,000 and then 20,000 was in sponsorships, and some other things, but he was in the insurance space, and they tend to pay quite good money.

Also another thing there he was the first to market through the summit, so for professionals it is a fantastic opportunity to do summits like I guess real estate agents, like even attorneys, and different things like that. They can do summits, and just crush it now because a lot of people they are not doing it.

Steve: Okay, so let’s — I’m sure some of the listeners out there aren’t really that familiar with like the flow of virtual events, so personally I’ve never actually attended one. So can we just walk through the exact flow from start to finish for like your last event for example?

Navid: Yeah totally, so I can just tell you what happens, so let’s say you would promote this to your audience, and then your audience they sign up. First they go to a landing page where they can sign up. There is an opt-in form there, they sign up, go to a thank you page, and they are there, they have the opportunity to purchase. They can also pretty much say, “Okay I don’t want to purchase right now.”

They have the option to actually watch the summit sessions live when they go live during the summit, but then after they sign up they get a welcome email. That’s the welcome email thanking them for signing up, and they have I guess you’ll have some information there, maybe the sessions page.

You also have – you’ll have another link to the all access pass, maybe having some reasons why they should even consider it. I mean they can watch it right now, that’s a big benefit if you are doing pre recorded, so that’s how it starts. Then you might have a sequence, a little sequence when they have signed up, you know having a few emails there, how can they get the most out of this summit.

That would be one email, maybe if you have some surprise gift you can share that with them. That’s always good, and also even when they sign up you can also have maybe an e-book or something you want to give them just for signing up. That also tends to do pretty well, so they get something for signing up initially. That tends to convert a little bit better from what we have seen, and then …

Steve: Just curious before we go on, what is the advantage of pre recorded versus live, like why even bother doing the live stuff?

Navid: Yeah, I mean it depends I guess, if you have done really well with pre recorded once for Chandler for example. We did pre-record for the self publish success summit. I mean we had a live kick off hangout like the initial like the Sunday before we start interviews and all that on a Monday, we had like a kick off, and we tend to get a lot of sales there. That’s where we mix in some live elements like a kick off, and then we had at the end like a live element.

That’s it, other than that everything else was pre recorded, and we did around 30,000 opt-ins and $370,000 in revenue. That was last year. I think this year he did even more following the same system, so that works really well, but I think with the live one it just — I think it creates — people can like ask questions right there. It’s very powerful, and if you let’s say you want to have some kind of offer or something else on the session, or like do something fast action bonus, it just works better with live.

I was still very compelled when Teachable did theirs live, and I saw a little bit what they were doing. They did like massive classes, like presentations, like webinars pretty much, but tailored to their summit. They also have some panels, so people can come in there and ask questions live, and I think I really like it.

It is just a little bit more time consuming to do it this way because you have to also plan all the sessions. It’s a little bit tricky to make sure, okay can this person do it this state, and some people might change it as you go, so that’s what I’m seeing now a little bit, but I really enjoy it. I think I have even more to report after I have done my first one. I did it for a client not too long ago for Jesse Klinger, and he worked really well.

People can like come in there, they could ask questions in the chat, and they really enjoyed it, so both can work. It just depends on your preference, but if you are signing out, definitely do pre recorded first with you know just one or 2 live elements, and then that’s about it. You can still do pretty well there.

Steve: In terms of the live stuff, what platform do you use? Is it just Google hangouts or?

Navid: For me I like Google hangouts, it works for the most part at least. I haven’t had any real hiccups, some people have more than I do I guess, but it works great, it’s free which I like, so you can pretty much embed that on a page to codes for the YouTube video. You just embed it on a page and that’s about it. You can stream it; you can have a chat below like chat wing or something like that, it works great.

Steve: In terms of the membership part, like obviously all this has to be behind the pay wall, so what do you use for that?

Navid: I use WishList Member and I have also Infusionsoft. Obviously, so I use that for my shopping cart in affiliate program, but just recently I was in talks with both Teachable and Thinkifics, so they have this course platform. What I’ve seen is that you actually can put all your interviews in there too, like all access pass of your summit.

You can actually just have it on let’s say Thinkifics, and it’s pretty easy to set this up. They also have a simple affiliate program, they have shopping cart, and the only thing you need other than that is an email service ride like ConvertKit for example, and you are good to go. That can be very inexpensive.

Usually these platforms you probably find a deal or something like with Thinkifics or Teachable, and you can sign up there and do it. I mean that’s the best way for a beginner, because you don’t have to think too much about the tech then. The only thing you have to do is to have your free summit, that would be I guess on a WordPress website, and I even created for my students like a template for this because I have found that was a big hurdle like a tech and making sure the design was good.

So I just have my designer like design a good template, and now they can use that with like Thrive content builder. I think Thrive is great because it is so easy to just create the pages in there, and it is also very affordable rather than use something like ClickFunnels where you have like a monthly fee. It can also work, but again you have to pay it monthly, and if you are starting out maybe you want to limit your cost a little bit.

Steve: Okay, and so let’s say I want to throw one of these myself, what is the step by step here? Do I first go after the speakers?

Navid: Actually that’s definitely not what I recommend right away. That’s a mistake you will make to just, “Hey I’m going to start reaching out to my speakers.” First get really clear obviously in your topic, define your profitable virtual summit theme. Make sure it is specific, make sure it is niched. That’s the first step there, and you know something for you would be pretty easy I guess since you already maybe do something like the Seller Summit but taking it online, that would be a good idea.

Then the next thing is to position your summit for success like seeing if there are other summits out there. I mean if you are the first to market or first in your industry to do this, it is a little bit easier like the insurance agent summit. I mean he crashed it because I think one of the reasons at least, it was a great event and all that, but he was first, so people were like really excited.

The speakers they shared a lot, and he had other affiliates, some people on board to just share this out in this industry, so that worked really well like having a great hook. If there is other events in your industry you can think about how you can have maybe different speakers on board, maybe a slightly different hook like for example with Chandler some it was pre recorded.

I did one similar with Jesse Klinger, a book business and brand building summit, and it was a live summit, it was a little different hook there, you know a little different way we marketed it, and what it was all about. Essentially people could get similar value from them, but it’s like people could attend live on his, so it was so different, and the funny thing they ran about the same time, but both were pretty successful, so that …

Steve: How many people actually get to attend 10 live versus buying the pass?

Navid: You mean on the free one?

Steve: Yeah just curious.

Navid: Okay, so if you have like a lot of people, let’s say a big summit like Chandler’s, like 30,000 people, I think you get per session, it dips a little bit, it dips from the first session you typically have the most people attend. There you would get at least a few thousand people watch, I mean in total you get a few thousand like 5, 6000 people watch. We have data a big summit, and then it goes down a little bit.

When it comes to buying the pass as I said, if it’s 30,000 opt-ins they can get at least 1000 plus people buying the pass. I mean that’s — then obviously you have a pretty good conversion rate if you do that, and if you even have a back end they can increase that conversion rate even more, because that’s where we saw like for example $370,000 in revenue didn’t only come from the all access pass. About $110 to 120,000 worth from the all access pass in that case, but then the rest was from his course, so that’s …

Steve: Okay I see, so you had other offers.

Navid: Yes, so it was kind of at the end we had a very aligned offer with the summit, and people would just upgrade or took the offer there, yeah.

Steve: Let me ask you this, so if your things are pre-recorded, but you are displaying them like conference star where it is only on a specific time, do you have software to manage that, or are you just like cutting and pasting YouTube onto a page?

Navid: Yeah, so if it is live obviously then I use the Google hangouts just in embedded, but if it’s pre-recorded, I tend to use Vimeo. People associate YouTube sometimes with free, so I tend to like to upload it to Vimeo, so it only works on that page I want to display it on, or this website. I would have it during this time, and people still — I haven’t had any problems with people complaining over this or anything like that, and people still purchase the pass even though they are available for let’s 48 hours doing it.

You are not saying that hey this is live sessions or anything like that. You can have it like different times you want to go live, but I suggest keeping it simple. Make all the sessions if it’s pre-recorded, go live let’s say in the morning in like 10AM eastern or something like that, and then you just let them go live, and that’s it. You can monitor the comments a little bit, but that’s an easy way to do it the first time. Don’t complicate things too much.

Steve: Okay, so just everyone has access to everything for 48 hours, and then you shut it down, and then you sell the all access pass.

Navid: Yeah, but the all access pass is always available even from the beginning when you start promoting the summit. That’s kind of I guess how we did a little bit different to then. So a lot of people they might start selling the all access pass later, but when people — right away when people sign up, they are prepped to their deal, they are excited, and they might purchase right away that we see a big turn of people actually purchase right away when they sign up from the free one, and they just upgraded right away because maybe they don’t have time to watch everything.

Maybe they just want to own the pass because they see the value from it, and we tend to start either 67 to 97 dollar offer, and with a caveat you have to know your market. So if you are in a different market, you can even charge more, or maybe have to charge less depending on what people are willing to pay for an all access pass.

A great example is the insurance market, they actually can pay more than let’s say 67 to 97 dollar. They actually value it way more if you charge let’s say start with $147, but in another market maybe you have to start at $27 or $47. That’s just good because the pricing is just very strategic so I cannot give advice to everyone there.

Steve: Sure, so people can’t possibly watch all these in 48 hours right, and so that’s why …

Navid: I mean they could, I have people from my first summit, they watched 88 sessions, and they took notes the 88 sessions. Some people are hardcore fans, and some people do that, and they still might upgrade. I had this guy who watched every single session, he still upgraded to the all access pass actually, so because he may want to own it, maybe he may wanted to go back to watch it for some reason, so you can still get some of those people to buy, and it doesn’t really matter.

It’s good to get as many viewers as possible. It is good for your speakers to get; sometimes they get emails from them. That’s good for you and they might get clients from it, it’s also good for you as a host, so all these things are just beneficial.

Steve: In terms of the work involved are you the moderator for all these sessions, or do people just send you the recordings of the videos?

Navid: Yeah so you mean when I’m doing the interviews with someone obviously then I have to …

Steve: So you interview them?

Navid: Yeah that’s it even if I would do like a presentation typically I would be there even if it’s a pre-recorded presentation like with slides, I would be there because it is just more engaging that way. Otherwise it feels like oh they just sent this recording, there is no person there really, so I like to do it that way, and also for a live one obviously, you be there, you ask questions, take questions from the audience.

Steve: Okay, and, hold on, what do you do with this content after the fact? Like you mentioned you had 88 speakers and then it sounds like 88 presentations, and then now you have this. Do you keep the doors open for the ticket sales forever, or do you shut it down, and if you do shut it down like what do you do all this content that you have now?

Navid: Yeah that’s a great question, and I think there’s different things you can do, you can have like a sequence for it. The reason I didn’t do that for my first summit was because I kind of shifted gears a little bit afterwards, so I generally see that as a big part for my sales funnel which is important too.

If it’s not part of your sales funnel then because I thought first of all I would actually go into doing something with personal branding, then I happened to get so many questions about summits, so I created a pilot, and that became my main focus. But what I have seen some people do they give away let’s say 5 of the most popular sessions for free, and they can have a little sequence there like 5 emails or 6 emails.

You have a great sequence on your website, so they could do something similar like that, and then have sprinkling some pictures for the all access pass. Maybe have a great offer again, maybe lower the price to let’s say $97 or something, so you get some sales for new people coming in the door.

That’s a good way to just build, share some value, you have 5 interviews for free there or even like a PDF with some takeaways from the interviews. That can also be a great way to have from this landing page. You modify the landing page a little bit, and then have a sequence for it. That’s a good way to keep getting sales.

Obviously you have to get traffic to it, so you can mention this when you are on podcast, when you are writing guest blog posts, or maybe drive some pay traffic there if it makes sense to you. That could be ways to keep monetizing the all access pass, but other than that I also include my summit as bonuses. I can include it for future summits, and I’m going to actually do that for my list building tools, so if they purchase that they can get my first summit for free.

Also I include let’s say if I’m promoting something as an affiliate then I will include the summit, just like great content include that, because there is a lot of value, but the list keeps going there. I have seen a student, he published a book based on the summit interviews, obviously he polished it up, transcribed it, all that kind of stuff, but it worked well. It was called I think app or [inaudible 00:43:39] playbook.

She did app summit like in the app space, and they did really well. She became a bestselling author, obviously not too hard to do on Amazon, but still was great for her authority to do that, and that’s the way to do it. Also repurpose this when you are writing blog posts, you know if you want to horn in into that market, now you have a lot of content to just repurpose in other mediums.

Even put on YouTube some short videos, keep driving traffic to your summit. The list goes on and on there; you can do a lot with this content. I think, you know even I, I don’t do enough with it, it’s just like you should be doing more, especially if this is summit that directly ties into whatever the main thing you are selling.

Steve: Let me ask you this, and this is just something that just came to mind, like I have this podcast where I interview people obviously. It sounds a lot like the virtual summit that you are already doing, and you have a podcast you said too, right?

Navid: Yeah, I did it before, now I’m not doing it as much anymore.

Steve: You are not doing anymore, but I’m sitting on like 130 interviews for example, isn’t that like a virtual summit in itself?

Navid: It’s like a virtual summit, I mean as you hear it like your interviews are I guess more actionable than a lot of other people’s. Like in this space a lot of people they focus on like the story too much I think, and then it wouldn’t work as well for a virtual summit. I mean that’s worth a lot of practice too, and I think virtual summits they’ve got to be more actionable if you are all paying for this content.

Also maybe in your case you would focus on a specific topic like maybe you wouldn’t have me on your Sellers Summit obviously because I haven’t had an e-commerce store, so yeah it would be a little bit different. You can still do a really high quality summit, and maybe even do a little bit different so you would have let’s say people coming and teach with slides because you have the relationship, maybe it’s easier for you to ask them to do that.

That’s something you can definitely differentiate from a podcast even though you think, “Okay this might be similar.” It’s still not going to be similar when you do it, just doing in a different way for your summit and then you would be good to go.

Steve: In terms of a virtual summit plus a live event, the two don’t really mix right?

Navid: How do you mean there exactly?

Steve: Meaning like if you are going to do a live event you probably do not want to do a virtual event, would you say?

Navid: That’s interesting, I mean I’ve seen for example Social Media Examiner, they have Social Media Marketing World, that’s a big event in San Diego once per year. And they also have in the fall they have social media — I think it’s called Social Media Success Summit. And both really successful, I guess at least they are offline events that brings in millions of dollars in revenue.

And then they have their online event. At least from what I have heard they get like 3000 people, so purchase the pass because that’s actually a paid virtual summit or an online event. So they are doing that, I think it’s because they are not — simply maybe they are not interested to use the free model.

I would argue that if they used the free model they could actually get more people to obviously grow the email list more. Yes they have a massive email list, Social Media Examiner so it wouldn’t be — maybe that’s not their main goal. It’s always important to think what’s your main objective, what do you want to accomplish here.

So maybe they don’t want to dilute it with having the free one simply. But I think by having a free one they would get not only more email subscribers signing up for it, they will also get way more people to watch it and more customers.

Steve: So they charge right off the bat right, you can’t even — okay.

Navid: You cannot attend. So it’s like they have live presentations, and I think they have like customized presentations and all that kind of stuff, but you can do that for a virtual summit too. I mean you could do that for example if you have great relationship with your speakers and all that kind of stuff. And you can ask them that, maybe you wouldn’t be able to do that right off the bat when you are starting out, but definitely it’s something you can do later on.

And then you could do maybe have an offline event, but a lot of people they can’t attend that offline event. Maybe they can’t afford an offline event. And then you’re making it more affordable to people, you can reach more people and more people can watch this content. But then you can also have some great bonuses and stuff like that you’re bundling up. So you just mix the value even most people take action and they purchase, a very high percentage will purchase the all access pass or the premium pass of your summit.

Steve: Interesting. My last question actually involves piracy. Like what’s stopping some of the just downloading all the videos on the first 48 hours?

Navid: Yeah, I mean they could, right? I mean it’s not — if someone knows how to do it, it’s not that hard. I mean just plugging and all that kind of stuff to do it. But I think the people have some integrity and they really want to build a relationship with the host, or at least they value what they have created; I mean it takes a lot of time and all that kind of stuff.

You have recorded this and spending the time to do this, they will purchase if they can afford the $67 or $97 or whatever you are charging. You might also increase the price during the summit but initially it’s very, very inexpensive for the premium pass.

And I think people should just get on there. I have even problems with people. I have found my summit on some other sites they are selling and it’s just nothing — I mean you can do something. You can get your attorney or like some…

Steve: Yeah, it’s probably not worth the time.

Navid: Yeah it’s not too much worth the time for what it is, I mean if it’s not a big problem no.

Steve: Okay well cool Navid, this is very interesting and we’ve been chatting for quite a while. Where can people find more about what you do, and then learn more about how to run your own virtual summit?

Navid: Yeah definitely, I mean I have my personal website navid.me or navidmoazzez.com, you can just go there. I actually have I think by the time this goes live we’ll have like a free virtual summit course, you can just go through that. Signup, check it out, it’s going to be very valuable, it’s pretty much the process we just walked through here. And you also get my sevens step cheat sheet with just kind of the process all my students go through in my programs and so on.

And also I guess something you are part of Steve is my list building school, the virtual summit I’m hosting. So I guess you can have – I don’t know if you have your own link, I mean you can have — just make up your own link and where you can send people there if you want to the summit.

Steve: Okay yeah we’ll do it definitely. I’ll definitely put all the stuff on the show notes.

Navid: Yeah, sounds good, I’m looking forward to see some of you there as well too. Check it out, actually that’s a good way to learn how to do summits even though you might not be interested to get in my course or whatever it is right now. You can at least attend the list building school, this virtual summit Steve and many other Ashpa [ph] [inaudible 00:50:17] Patel, Ryan Lee, Ryan Levesque. We have so many great speakers on there. So you just check it out how it is, how I am running it.

Steve: Cool man, well thanks for coming on the show Navid.

Navid: For sure, thanks so much.

Steve: All right take care.

Hope you enjoyed that episode. Well I just threw my first in person conference at the sellersummit.com, I had no idea how powerful virtual summits could be. And perhaps I will give it a try sometime going forward. For more information about this episode go to mywifequitherjob.com/episode138.
Once again I want to thank sitelock.com for sponsoring this episode. Now if you have an e-commerce store, go there right now, and find out how long it takes to load. Does it take more than five seconds? If so did you know that 60% of consumers only wait up to five seconds before bouncing from a site, never making a purchase?

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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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137: How To Get Free Traffic And Sales To An Ecommerce Store With Neil Patel

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137: How To Get Free Traffic And Sales To An Ecommerce Store With Neil Patel

Today, I’m excited to have the Neil Patel on the show. I’ve actually been following Neil for quite some time. In fact, I remember when I first discovered him back in 2008, I dropped him a comment on his main blog which was QuickSprout at the time.

In fact, just for fun I actually went back through my archives to check. I emailed him on September 19, 2008 about his post on 10 timeless business tips. And he replied in like 10 seconds, checked out my blog and actually gave me some tips.

Anyway, Neil is the founder of many multi million dollar companies like Crazy Egg, Hello Bar and Kissmetrics. He’s helped tons of companies like Amazon, NBC, HP etc.. Grow their revenue. He’s been doing this since he was 16 years old and he’s one of the foremost experts in online marketing.

What You’ll Learn

  • The traffic sources Neil would start with for an ecommerce store
  • How to run a successful ecommerce store blog
  • The keys to content marketing
  • The optimal posting schedule
  • Neil’s strategy for ranking a store in search.

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Transcript

Steve: Welcome 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. Now I’m Steve Chou, and today we are talking with Neil Patel the founder of Crazy Egg, Hello Bar, and Kissmetrics. Now in this episode you’ll learn the keys to running a successful ecommerce blog, and how to generate free traffic to your online businesses.

Now before we begin I want to give a shout out to sitelock.com for being a sponsor of the show, and as an ecommerce business owner your website is your business. But very few people protect their websites, and on average it takes 197 days for retailers to detect a data breach. Yes, that’s 197 days before you realize that your customer’s data has been stolen. Now you can prevent data breaches with SiteLock website security.

Now SiteLock offers a comprehensive suite of cloud based website security solutions for ecommerce businesses of all sizes and budgets. From malware scanning and removal to industry leading web application firewalls, SiteLock has you and your customers covered. So visit sitelock.com/mywifequitherjob for more information, and get your first three months free. Once again that’s sitelock.com/mywifequitherjob.

And if you want to learn how to start your own online business, be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business. So go to mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email. Now onto 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 excited to have Neil Patel on the show. Now I have actually been following Neil for quite some time, and in fact I remember when I first discovered him back in 2008. I dropped him a comment on his main blog which was Quick Sprout at the time.

And just for fun actually I went back through my email archives to check, I mailed him on September 19th 2008 about his post on 10 timers business tips. And he actually replied in less than a minute, checked on my blog at the time and actually replied with some tips. Anyways Neil is the founder of many multimillion dollar companies like Crazy Egg, Hello Bar, and Kissmetrics.

He’s helped a ton of companies like Amazon, NBC, HP etcetera grow their revenue, and he’s been doing this since he was 16 years old. And he is one of the four most experts in online marketing. And with that welcome to the show Neil, how are you doing today man?

Neil: I’m doing good, how are you?

Steve: I am doing good. You know Neil you are really well known online, but before we kind of begin with the gist of the interview, I was just curious what your story was and how you got started with online marketing in the first place.

Neil: Sure, so think of it this way, back in the day I started a website. It was a job I would call Advice Monkey. And I thought when you pop up a website it naturally gets traffic; little did I know I was wrong, I learned that really quickly. I learned what SEO was, I paid a few companies, I got ripped off, got no results.

Through my frustration and from being broke I did not rest but to learn how to do marketing. And funny enough I got better at the marketing part than actually creating online business.

Steve: But you started Crazy Egg, right? Did Quick Sprout come first or did Crazy Egg?

Neil: Neither, Crazy Egg came before Quick Sprout I believe, but before that it was Advice Monkey then which doesn’t exist anymore. Then ACS which was ad agency that we owned, Crazy Egg came out of the ad agency.

Steve: Okay, I think that was the email address that you emailed me from actually, ACS something online or whatever?

Neil: ACSSEO.com.

Steve: Yeah, that’s the one, that’s the one, crazy, this is back in 2008, right?

Neil: Yeah, and the ad agency is no more ad agency, right.

Steve: So where do you focus your time now?

Neil: Honestly just emails, meetings, phone calls, blogging. My life is very boring, it’s just meetings and emails.

Steve: So no more — are you involved in those other companies anymore that you started?

Neil: I am, we have an awesome team that helps out. I do work for all of them, but you have to keep in mind like I’m answering emails for those companies, right? Like it’s really weird when someone would be like, hey we want to partner up? I’m like okay let’s jump on a call or it could be a sales [inaudible 00:04:38] like a big corporation might say, hey we have XYZ customers, we want to see if we can work out a deal with you or maybe, but it’s just my life revolves around my email inbox.

Steve: So it’s less dated A stuff more like strategic and then partnerships and deals, that sort of thing?

Neil: That’s correct yes.

Steve: Okay, and what were kind of some of the first set of experiences that set you off on this journey. Like why did you even start the advice site?

Neil: The Advice Monkey site?

Steve: Mm-hmm.

Neil: I was trying to find a job and I couldn’t find one. So I went, I created a job board because when I was browsing monster.com I realized they are publicly trading company making hundreds of millions of dollars. I’m like if I make 1% of what they make, I’ll be rich.

Steve: Okay, and then that kind of evolved into Crazy Egg, and then after you started Crazy Egg you decided that you wanted to teach others?

Neil: Well so we had — Advice Monkey failed miserably, got to marketing, started ad agency or internet marketing agency whatever you want to call it, started blogging at that point. I was using blogging because I didn’t have enough money to pay advertising like let me see I can generate customers through blogging. First blog was for an advertising, it was technically 100 top blog, did well, I got tired of blogging and marketing, created Quick Sprout which was on personal branding at the time.

And then I started writing again on marketing on Quick Sprout and I realized that I loved marketing, so it was like a full circle, I don’t why I gave up on product advertising. When I gave that blog away I literally just gave it away, it was getting over a hundred thousand unique visitors a month.

Steve: Crazy, so what is the goal with neilpatel.com then?

Neil: So Quick Sprout we are building a software that helps people with their online marketing initiatives and it tries automating everything. Not marketing automation like you are thinking like a Hubspot or Marketo, but more marketing automation like, oh we noticed these SEO errors boom, we just automatically fix them. Now the software won’t do all those kind of things at the beginning, but eventually we want to get there. And it will do that for all types of different marketing campaigns, social media, SEO, content marketing etcetera.

And the problem when you create companies from a blog, and it’s not attached to your name, eventually but sells or something happens I hope not, but if it does I won’t have a blog anymore, right? That’s mine. So creating neilpatel.com, and I should have used neilpatel.com first, but I didn’t own the domain name.

Steve: Really?

Neil: And eventually I was able to get the domain name. Now I’m trying to get patel.com, but the guy who wants to sell it, I offered 150 grand and…

Steve: That’s crazy.

Neil: He won’t sell it, and he does nothing with it.

Steve: So obviously neilpatel.com is not a site that you are ever going to sell, right?

Neil: Exactly, and that’s why I started the blog there. But with Neil Patel I do a lot more experiments. My latest experiment is international expansion to see how well it does and so far so good. I would say within the next two months I’ll get more traffic in Brazil than I will in United States.

Steve: So talk about with international expansion what do you mean? Specifically targeting other countries as opposed to the US?

Neil: Yeah, so I write content in English which is regarding the people who are online. I know people like oh more people speak mandarin etcetera, but you know why if you look at most of content published on the web it is in English.

Steve: That’s correct.

Neil: And when you think about the overall numbers, majority of the population doesn’t speak English as a primary language. So we started expanding into different languages. Right now we have Portuguese; we are going heavy into Spanish, heavy into German. We are slowly studying Italian, we are going into Arabic within the next 30 days, and we are also going to French in the next 30 days.

Steve: I assume this is not just like with Google translate; you are actually really translating it with humans, right?

Neil: I have a team of translators; I think we are like 55.

Steve: Crazy, okay.

Neil: We are cracking out roughly 250,000, 300,000 words per week.

Steve: That is nuts, okay. So Neil a lot of my listeners are in ecommerce, they sell physical products online. So I thought it would be interesting today to kind of get your perspective on how to get traffic and sales to an ecommerce store. And just to make this a little bit more difficult, let’s talk about this from the perspective of let’s say me starting an online store selling something very difficult like jewelry or t-shirt or something like that. What traffic sources would you personally experiment with at first, and what would be your main focus assuming that you have very limited resources?

Neil: Yeah, if it was me the first traffic source that I would go with is social media. So if I was selling like t-shirts, I would go and just try to get free shirts to people on Instagram, have them wear and post a picture and talk about my site. It’s branding, it does extremely well. If it was MVNT watches, movement watches, those guys I believe they are doing over $10 million in our Shopify store. They generate a ton of sales by getting people to just talk about it.

Steve: So watches, do they give those away as well? Like how would you — let’s say they are too expensive to give away.

Neil: But watches are affordable, their watches don’t cost a lot of money to make.

Steve: Okay.

Neil: But in general most ecommerce products if you look at unless you are selling TVs they are pretty affordable to give away, right? It’s like 5, 10 bucks; it’s cheaper than paying for ads. If someone has 500,000 followers, they post about it, that’s a pretty good deal. If you get that in quantity, it really adds up after all.

Steve: So you would go and you would reach out to bloggers and instagramers?

Neil: I have already yes.

Steve: And how does one do that on Instagram for example?

Neil: You direct message people.

Steve: Okay and how would you frame that reach out email or letter?

Neil: I would just say, hey I’m so and so with X, Y and Z Company; I love your Instagram profile and what you are doing. I want to see if we can send you a free t-shirt if you like, and feel free to post a picture of you in it.

Steve: Okay and with no obligation they — you give them the option of posting or not, right?

Neil: Yeah you talk to them like, oh I’d be interested what kind of t-shirt? If they just say okay what’s the address? I would say like hey this is what it is, do you think you’ll like it, would you be interested in posting about it. And I try to like dive into that deeper, because if they don’t ask any questions, they are just going take the free t-shirt and they won’t care to post about it.

Steve: I see, and what is the typical hit rate when you do something like this?

Neil: Typical hit rate…

Steve: Like what would be a good hit rate?

Neil: If you message out a hundred people you get 10 people you’re doing very well. Five on the low end, 15 on the high end.

Steve: Okay and let’s say some of these people do take these shirts and then they post on Instagram, you get a short burst, right? But eventually that dies down, right? Does that imply then you have to constantly be doing this or?
Neil: Well if you do it for six months straight you actually build up a big brand and then it becomes a trend.

Steve: Okay. So let’s say you don’t have the budget to be giving a whole bunch of these away, what would be your next thing that you might think about trying?

Neil: Sure I would look at SEO, SEO works. It’s long-term for ecommerce, but the strategy I would do is go and go find and use Atrust.com, see who links up to my competition and beg him for links.

Steve: So that implies that you are starting some sort of blog then for your ecommerce store?

Neil: that’s correct.

Steve: Okay because in a traditional ecommerce store it’s just products and categories and there is not a whole lot of content on there, right?

Neil: That’s correct.

Steve: Okay so every ecommerce store in your opinion should have some sort of blog even if it’s just physical products?

Neil: It makes it much more easy, but again you can get people to link back to you even if you don’t have like content, right? You can get people to link back to the actual stocks. You go to Atrust you’ll see everyone who links to your competition. And most of them don’t have products. I mean most don’t have content, because ecommerce sites very few people actually have blogs, so modeling the bigger guys do, smaller guys not so much.

Steve: Yeah so how do some of those guys get those back links, like what are some your strategies to build back links?

Neil: Yeah, let’s say you had a blog and you are linking out two, three ecommerce sites an article. I would be, hey Steve I notice you linked out to X, Y and Z ecommerce site, have you also checked our ABNC site? It covers this, this and the other that those other sites don’t cover. You should check it out, and I think you’ll just love it. If you like it yourself, you are free to link to it, cheers Neil.

It’s that simple. If you could get five out of every 100 emails that you send out to link back to you, you are doing a good job. With cold emails it’s not like Instagram where you can get a much higher ratio.

Steve: Interesting so you go through Atrust, find out which people are linking to the competitors, reach out to those guys and then post and ask them if they’ll update the post with your store?

Neil: That’s correct.

Steve: Interesting, and the hit rate you said like a good hit rate would be like 5% based on what you just said?

Neil: Yup, sheer numbers game.

Steve: Okay, so basically all these tactics are based on like good old leg work is what it sounds like.

Neil: That’s correct.

Steve: Okay, do you contract this stuff out when you do your outreach?

Neil: I used to, but I don’t even do the outreach anyone. It still works, it’s just I don’t really do much of the outreach.

Steve: Okay and in terms…

Neil: Also keep in mind that I’ve been around for so long that I’ve so many links I don’t even really need to have.

Steve: Yeah I know you don’t need to do it anymore. I was hoping that you could take it from the perspective of you having nothing though, you know what I’m saying?

Neil: Yeah, so for example I have a buddy named Tim. Tim sells financial products like ecommerce site, digital products like DVDs like physical DVDs, like he is mailing to you right, but it’s digital. And we do the same thing, we hire this guy and– what’s his name? Is it Anderson, he is a good guy. And he ends up charging $4 an hour, for roughly every 100 people that he emails he is getting around like 3.7 to link back. His English isn’t the best, but it’s not bad.

Steve: No way, okay and this is just random cold emails to people?

Neil: Yeah, but in quantity like sending out like thousands and thousands per week.

Steve: Okay, I was just — I get those like every day and I never read them, but I guess there is always going to be some people out there.

Neil: Yeah, how many people don’t know what you know?

Steve: I guess so, okay interesting.

Neil: Plus how many people are willing to link, it’s crazy.

Steve: Does it matter what quality of publication, like do you have some sort of filtering process?

Neil: No just a relevant site that doesn’t spammy.

Steve: Okay so it doesn’t matter, interesting. Let’s talk a little bit about the blogging aspect because I’ve read a whole bunch of your stuff about just content marketing, and you are definitely one of the experts out there.

How would you run a successful e-commerce store blog, because I see a bunch of e-commerce store blogs out there? All they do is they write about their deals and monthly reports, and I don’t really care about that stuff, so how would you structure yours?

Neil: My e-commerce blog?

Steve: Yes.

Neil: I would write on anything that is educational for people, like okay I know this is crazy and probably not the right thing, but this is what comes to my mind, because I was teaching my niece how to wipe her bum in my– we’re getting party drinks. I’m like, I don’t know if this is true, but there is probably a right way to use toilet paper wrongly, but you sell bathroom supplies, why not have a whole article on like how to make your toilet paper last longer.

That sounds crazy, but probably well, I seriously would, right. I know this sounds crazy, but it’s like educational, informational. It applies to almost every single person in the world other than babies.

Steve: When you come up with topics to blog about, is it very deliberate? For example do you do keyword research on a title before you blog about it, or do you just blog about something that you feel might be interesting without even taking that into consideration?

Neil: I just write anything that I think people will really love like that’s the deliberate part, and I make sure it is relevant to my business. Like think about the topic I just gave you, it sounds crazy right, would you agree with that?

Steve: It does, yes.

Neil: I bet it would go viral.

Steve: Interesting, so you’re going for virility as opposed to search?

Neil: Yes, because virility usually means it’s more relevant to people, I’m just helping them out. The other thing that I do for e-commerce I’m going for search traffic. I go to Quota, and I have taken all questions related to the products I’m selling, because then you see the most common ones sorted by votes, and then I write articles with those questions as a headline, and you find that you get a lot of search traffic after 6 to like months, maybe a year max, but it usually takes 6 months plus.

Steve: Interesting, so without building links you would find that these articles will just naturally rank?

Neil: Yeah because it’s really helpful, when people are typing questions and there is not enough good content that has answers.

Steve: You mentioned like you solicit for back links. Are you soliciting for back links to your store or to relevant posts, like you have to be selective, right?

Neil: Yeah, for team we just do it to the store.

Steve: To the store, the front page or category pages or…

Neil: It depends, if someone is linking to like people are selling financial products, then they’ll just link to his own page, but if someone is linking to training videos and they are selling a lot of them, and they have links to 5 other courses then you would be like, “Oh check out this course, it would be very valuable, here you go.” The cool part is one thing that we have seen that helps increase your ratio if you give him a discount code or a coupon code for their readers.

Steve: Do you, so this friend since we have been talking about him, does he have like a back end funnel as well for sales?

Neil: He does, yeah he has a whole sales team.

Steve: Okay, and so is the goal then to get them on this funnel, or is the goal for this just to get the sale right away typically?

Neil: A sale right away.

Steve: A sale right away, okay.

Neil: Yeah, because if they don’t get a sale then the back end funnel doesn’t work.

Steve: Since we are on the topic of links, what is your view of buying links these days, because I still notice like it seems pretty obvious to me like when I read an article on certain large publications that these links, it just seems a little suspicious to me, and so is that still going on and what is your view on that?

Neil: Yeah, with the buying links it’s still going on. It’s not as effective as it used to be. I’m not a fan, I think it is too short sighted, but people do it. I believe if you can create a good product or service, naturally others will just want to link to you.

Steve: Okay, and so back on that topic of what we were talking about with that blog post. I mean obviously the headlines are very important, right?

Neil: The headline is very important, yes.

Steve: What you just suggested had a really catchy headline, but it didn’t really take into account any SEO keywords, sorry or maybe it did, I don’t know, but do you try and mix the 2 like when you are trying to decide the title tag for example, what is your criteria?

Neil: Something that is appealing and it will get quixed [ph] because people love it. I don’t go for ranking on equipment title types.

Steve: So you don’t purposely try to incorporate search terms I guess?

Neil: Eventually yes, once they start ranking, then I will go on to Google search console, you choose your e-commerce site. Once you click on your profile, you click on searching the navigation, then search analytics which is also on the left navigation. If you want to check 3 boxes, clicks, impressions, position, and the default things that they show you is the keywords, then how many clicks you are getting for how many impressions, and your position.

You want to look for a position 5 or lower, better than 10, and you want to look for a low click through rate. A click through because they also have a CTR box, you can check that as well. I look for a CTR box, CTR ratio, that’s below like 3 or 4%.

Now what you want to do is make sure when you adjust these title tags, those keywords in that title tag, it’s really appealing where people want to click on it, and it’s short and to the point roughly 6 words. So when you do that your rankings will start going up, because your click through rate is higher.

If you can increase your click through rate higher than the person above you, what does it tell Google? It’s hey everyone is clicking on the number 6 result, instead on the 5th result. Well, oh, maybe we should put number 6 before 5, right, that’s what happens all the time.

Steve: going back a little bit, you mentioned that your title should have 6 words in it?

Neil: We roughly do 6 words titles. We found that it gets more clicks, I don’t know why, but that’s from the data we analyzed. It can have more or less, but you don’t want to have like 20 words in there.

Steve: Interesting, can you give me an example of one of your best articles that’s 6 words in the headline?

Neil: Let’s see, they are not always right, but okay one is on quicksprout.com, the beginner’s guide to online marketing, links number one for online marketing in the US, and in different regions. I think Dublin I’m number one as well, Canada I think I’m number one too.

Steve: 6 words just doesn’t seem like a lot, but this is based on the data that you have gathered for your sites, right?

Neil: Yeah, I’m not saying don’t do more. You can do like 7, 8 it’s not a big deal, it doesn’t affect that much Google, 6 is just a general rule of thumb. You don’t want to go 10 because if you start going too many it is going to get cut off, so somebody is going to read your title tag and they won’t be able to see it all.

Steve: So once you post your article, is there anything special that you do to promote it?

Neil: What we do is we go to search.twitter.com, or technically we go to basumo.com.

Steve: Basumo, okay.

Neil: Type in the keywords relevant to our space in that article, see the most popular ones, then we click view shares on Basumo, and this is if you have a paid account, it shows you all the people who clicked out. If you don’t have a paid account, take that URL; go to search.twitter.com, put in that URL for free. They show you all the people that tweeted it out, reach out to them, and letting them know that, “Hey I noticed you tweeted out X, Y and Z article, other similar one coming out, let me know if you want to check it out.”

Then a lot of people will say yes, and then they will share it. If you get like 15-30% of the people tweeting it out, you are doing all right. For me I’m averaging somewhere in the 27, it is above 25%, it is below 30%, a ratio of people who tweet it out from the people that you know.

Steve: Do you think people are tweeting it out because you are you?

Neil: That’s why I’m saying I have ratio for getting above 15, it works well, but I have done it with people I have known in the industry.

Steve: What do they get?

Neil: Usually under 20%, but above 15.

Steve: Interesting, so when you put out a publication or an article, do you have any criteria for it in terms of comprehensiveness, in terms of length and that sort of thing to encourage people to tweet it?

Neil: At least 2000 words which means that is a thorough article, actionable with insights. You have an intro, you have a body with headings, sub headings, you have a conclusion. That makes it easier for people to scheme it without reading it, attractive headline. 8 out of 10 people will read your headline, only 2 out of 10 will read the rest of the article, so we try to make the headline really appealing.

Once we do that we go out there, reach out to people and try to get them to share. We also look at the space, like we go to Basumo before hand, before we are writing which is being as we want to know everyone who’s written an article that has done well, and we make sure our article is more thorough, and better, and higher in quality.

Steve: Okay, and so that encourages sharing?

Neil: That’s correct.

Steve: Okay, so really there is a lot of pieces to this, right?

Neil: Yeah people don’t want to share crap, would you?

Steve: No, absolutely not. In fact if I got a solicitation to tweet something, I almost never do actually which is why I’m asking.

Neil: Yeah, but you are not the average person, most people don’t mind. If you tweet our article that says 10 ways to greater e-commerce sales, and I email you and saying, “Hey I have another article called a 101 ways to greater e-commerce sales, would you be interested in checking it out?’

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I will definitely check it out, but if I didn’t know who the person was, my suspicious radar always goes off.

Neil: Okay, but if you don’t know who the person was and you checked it out, and it was really thorough and amazing, would you tweet it out?

Steve: I would probably tweet it because that is a low barrier, right. I would be a little more hesitant to share it on my Facebook.

Neil: Exactly, that’s why we ask for the tweet.

Steve: I see, okay so you are just asking for tweets.

Neil: Yeah, never ask for the shares. It is too hard to get the share.

Steve: Okay that covers tweets, but do tweets get a lot of traffic for your stuff?

Neil: It does.

Steve: Interesting.

Neil: I think for the last 30 days, July I was like 30 something thousand visitors from Twitter.

Steve: What is your greatest source of traffic?

Neil: Google then Facebook.

Steve: Google just SEO organic?

Neil: Aha.

Steve: Okay, and so for the Facebook traffic …

Neil: Google, email, then Facebook, then Twitter.

Steve: For the Facebook stuff that implies people are sharing your stuff on there, right?

Neil: I also have a proper Facebook page, I have like 300,000 plus fans.

Steve: Okay, there is so many ways you can go with this, so the Facebook page, how did you build it up to so many fans over the years?

Neil: I have a strong brand, I don’t think it’s that easy to replicate, but the real reason my Facebook fan page does really well is because the brand speaking of competence, and then I do a ton of paid advertising on Facebook. I probably spend like 50 or 60 grand to build up the fan page.

I have high engagement, like people look at some of my posts, like oh it gets like 50 shares or 100, 200 shares, some of them get post scale like 3, 4, 500 shares. Images sometimes can get well over a 1000, but what they don’t notice is I have fans in different regions.

For example I have over 100,000 fans in Brazil, you yourself will never see it because you probably don’t speak Portuguese, so posts in Portuguese are only seen by people in Brazil, posts from an English blog are only seen by people who speak English, so my fan page is segmented out. My Portuguese posts tend to get more engaged with my English posts, like more likes, more shares, and more comments.

Steve: Interesting, in terms of actual revenue though, do you find that you are making proportionally more money from your Portuguese people?

Neil: No, by far I’m making more money in English, but it’s adding up. I would say within, it’s going to take a while, but I would say within 2 and a half to 3 years the Portuguese blog will generate more value than the English version.

Steve: For your fan page, are you just posting your own stuff, or do you just post any article that you might find interesting?

Neil: Own stuff or shit about me, it’s one or the other, like in one of my interview I did on Chris [inaudible 00:28:35].com, amazing guy, I loved the interview I did with him. I also love the content that he has on his blog, he is a good chill guy, I shared it. It got him extra 120 likes, 11 shares, and 20,000 people reach. It wasn’t bad at all, it was pretty good.

Steve: No, that’s pretty good

Neil: Especially because Facebook kept screwing up their algorithm. Before they did this I was getting like 200 plus likes.

Steve: Yeah, they keep downing it down lower and lower, so you got to pay for it, right?

Neil: Yeah, and I don’t want to pay for it because paying for likes is like come on Facebook.

Steve: Are you still paying for likes, or do you actually just boost articles or whatever and then get the likes from there?

Neil: No I really pay for likes, I don’t like boosting articles.

Steve: Interesting, so what is the rationale for doing that as opposed to posts?

Neil: I don’t like paying per play, I like paying to build up platform or audience that you can keep leveraging, because if you run out of money at least you can keep going back to the same well.

Steve: Even if that well is constantly getting lower and lower percentage of visibility?

Neil: That’s correct, yes because if you look at the algorithm, the articles that are really good, they still get a ton of play. Even if they reduce the visibility, if something was supposed to go viral, it’s still going viral, and it’s still getting a ton of natural likes and shares.

Steve: Interesting, how much do you pay per like if I might ask?

Neil: Which region?

Steve: Let’s do US because that’s where most of the listeners are.

Neil: A dollar per like, I usually don’t do much advertising in the US though.

Steve: I see.

Neil: Unless in the B to B category. Brazil I’m paying on for a really good like around 11 cents, a shitty like around 3 cents. I don’t optimize for numbers, I would like to optimize for engagement. How can you get the least amount of likes and get the most comments, likes on your shares or on your personal shares, because it increases your idling scores which is their algorithm. If you have less fans but you have way more engagement, it’s much more likely to go viral and for Facebook to show it to other people.

Steve: Interesting okay, so buying likes a dollar per likes sounds really expensive. So that’s probably why you don’t do it.

Neil: B to B category yes, but keep in mind some of my customers are worth over a million bucks [inaudible 00:30:40] on B to B, B to C probably not.

Steve: Right okay, so we talked a little bit about ranking a store in search. Are there any things that you care to talk about in terms of what is working, in terms of search engine optimization today?

Neil: The biggest thing that’s working in search engine optimization today is brand building. People don’t go and say, I want to buy this for like protein powder or making a program as an example.

Steve: Sure.

Neil: A lot of times they just go to Amazon and they type in protein powder.

Steve: Yeah.

Neil: And if you notice the companies with the strongest brands, they’ll just kidnap you the most back links, not just the most talked about the most but they are also ranked highly why? Because when people are searching for stuff and they see Amazon and Google search, they click on Amazon list and view the pack if they know it’s Amazon.

Yeah you are not going to create a stronger brand as Amazon, it’s really hard, but you can still create a strong brand within your space, like the reason neilpatel.com ranks so well, I have a strong brand. 18,000 plus people a month click on neilpatel.com by googling my name each month. That’s how many people search, that’s how many people click, right? That’s pretty good for a personal brand.

Steve: No it’s excellent. So when it comes to — since you mention Amazon, when it comes to Amazon versus your own store what would be your strategy there for trying to stand out. Like have your listing stand out over Amazon? Because obviously you make more money if someone buys directly on your site.

Neil: It’s hard. My buddy has a [inaudible 00:32:21] supplements. He was telling me how he keeps making more money; we were going over his numbers yesterday. His Amazon numbers and he is on ecommerce site. He is like damn it, like Amazon is growing faster than a normal site, yeah it should be.

And he is like why do you think so? I’m like dude the other day I was buying your green powder. They had this vegetable powder that it’s like really help you, you put in water. And he is like, oh you bought it? I’m like yeah I bought it from Amazon; I found it on your site.

And he is like, why don’t you buy it from my site? I’m like oh Amazon has prime shipping. And he is just like you really go to Amazon to buy; I’m like yeah I do it for everything. And he is just like — he started laughing. He is like I actually do the same thing too when I find — I go to Amazon to buy, I’m like that’s the problem, that’s consumer behavior in ecommerce.

Steve: So does that imply then that you would focus most of your efforts on Amazon then if you are an ecommerce guy?

Neil: I would do both, but I would actually focus more on Amazon than my own site, but I would do both. I would probably do like 60% Amazon, 40% focus on my own site.

Steve: Interesting. Just to chase the money now I guess the cash flow money, I don’t know I just seem — I feel like Amazon, they keep changing the rules and it’s kind of like a slippery slope, you know what I mean?

Neil: Not necess– yes but that’s with everything, Google does the same thing, Facebook does the same thing, you have to adapt as a business. The beautiful part about them changing the rules is it eliminates competition too. So the way I see it is if you can build up your own site and your own audience you can use that for Amazon.

When I was talking to my buddy, I’m not going to name his site. It could be [inaudible 00:33:53] it could be someone else; it could be the financial guy. But when they sell stuff on Amazon and they got a ton of bad reviews because people are screwing up their listing, they just do an email blast, and they are usually– it’s like look some people are giving us bad reviews, here are the best ones, upload them, right?

Steve: Sure.

Neil: And it helps like people like him would do better on Amazon because they are doing both, because they are able to leverage their website audience for Amazon as well.

Steve: So I have talked to a couple of other guys who sell mostly on Amazon, and what they do is they take their email list and they blast out for people to go buy their products on Amazon as opposed to their own site. How would you feel about that if you were running things?

Neil: I wouldn’t mind with that, I’ve tested it and I have found that it converts better on Amazon. The other thing that we used to do is when you do the Amazon, we would put in their like you score on Amazon. You search for a keyword that relates to your product, then you scroll all the way down to find your product. Click on it and then when you do the email blast and when people buy, your ranking will sky rocket. They’ve changed it, well it doesn’t work anymore, but that worked really well.

Steve: Yeah that used to work in the past, I think they don’t count that anymore. But you can tell someone to go on Amazon, do a search and then click on your product and then buy it, and that still works.

Neil: Yeah but it doesn’t convert as well, because it’s hard to get people to do that.

Steve: Interesting, so you would probably focus more on Amazon sales as opposed to your own site?

Neil: That’s correct.

Steve: Okay and then in the long-term there is no repercussions for doing that?

Neil: Not that I know.

Steve: Okay, that’s interesting.

Neil: All the businesses I have, I know companies who do $60 million a year in ecommerce sales, and they focus more on Amazon than their own ecommerce site, and they are still doing well, big companies.

Steve: And in terms of PPC what would you use?

Neil: I would use Google AdWords, I would use some Facebook ads, Facebook ads would be number three. Google AdWords and Google shopping or shopping bids number one, handling it all together. Number two is Amazon paid ads. Number three would be Facebook.

Steve: Okay and in terms of Facebook ads, so let’s say for Google let’s say we are selling t-shirts or something. That in general is not conducive to an AdWords ad because the keywords are really competitive, right? So how do you kind of structure your campaigns for that example?

Neil: Wait for AdWord ads or you are saying–

Steve: AdWords yeah no, not shopping but just AdWord ads.

Neil: Yeah people typing in if I’m selling computers like a specific type of laptop, I’ll just hit on them and send it to my site.

Steve: Yes but those keywords will tend to be extremely expensive, right?

Neil: Yeah but landing pages are optimized for conversions, you are fine. And you can use sites like [inaudible 00:36:41] I think it’s called that. And it shows you like other ecommerce case studies, and it talks about people improving their conversions, stuff like you do all that stuff then you should get good results.

Steve: So it’s your belief that if you run your campaigns effectively you can make AdWords work for any demographic or any type of products?

Neil: Almost yes.

Steve: Interesting okay. And in terms of your Facebook ads actually when you run for ecommerce, what is your strategy there? Is it for the sale or is it to get them on some sort of funnel?

Neil: No, I first send people to our landing page that breaks down the case study of like what people use the product for, where they did from, and true one not a fake one that people make up.

Steve: Okay.

Neil: Then from there I get them to click through to like our Amazon page where they can buy.

Steve: Okay, and do you entice them with coupons or anything like that?

Neil: No.

Steve: No, okay.

Neil: I hate doing coupons.

Steve: And there are no email signups or anything like that?

Neil: Email signups on the landing page upon exit where they are scrolling away, you capture email.

Steve: Okay cool man, it’s really good to hear this from someone who has just interacted with so many different businesses like all across the board, right? I mean you’ve dabbled with ecommerce businesses, software business all across the board. So I want to switch gears a little bit, I want to talk about your book actually.

Neil: All right.

Steve: What is it called and what’s it going to be about?

Neil: It’s going to be called Hustle, and think of it this way, right now in this day and age everyone feels it’s harder to just succeed. The rich are getting richer, and the people who are the haves are getting everything; the have nots are getting nothing. Would you agree with that?

Steve: Yeah definitely.

Neil: Okay, and what we found is that’s not necessarily the case. I’ve done okay, I’m not saying I’m the richest person, but what did I come with, I was an immigrant. There are still a lot of entrepreneurs these days that are succeeding that have little to nothing to show when they first start. I didn’t have the best education either, and the commonality is when you look at a lot of these things it’s the actions that they take to succeed. In essence we are calling it a hustle.

How can you — well you have to go from point A to point Z, let’s assume Z is success. And it doesn’t have to be financial success I won’t believe you have to go through A, B, C, D and those all these steps. Not necessarily, you can succeed and there is many different ways.

I’m going to give you example of this. In the book we talk about making your own luck. And one of my co-authors, his name is Patrick. His son was Shane was in this like little creek, and they were looking for fish. Patrick looks down and he is like, oh Shane buddy, let’s go home, there is no fish in there.

Shane looks at his dad; he doesn’t say anything, he jumps into the little creek and start shuffling his feet. In essence he manufactured his own luck, and you know what happened when he shuffled his own feet? All these fish started popping up, and he is like oh daddy, look, look at all the fish. We are teaching people you can manufacture your own luck. People aren’t taking the actions to get the results.

Steve: I think this actually ties in well with this podcast interview because a lot of the strategies that you outlined were hustle based, right?

Neil: Yes…

Steve: Doing outreach for back links, doing outreach for tweets and shares, that sort of thing?

Neil: Yeah everyone was telling me, “Neil how do you start an agency and make money?” I was like, “Oh I called Collins. I’m like yeah I called every single person, I was spending a lot on pay per click, just typing random keywords, just Google the most expensive pay per click keywords, then you just go down the list, you Google for it.

Look at people on page 2, and 3 for the paid ads, not on page one, and you just call each and every single person up.” I was calling and be like, “Hey you want more traffic. If I get you results pay me, if I don’t, don’t pay me.” Everyone is like, “You are crazy.” I’m like, “I landed some contracts, they’ll pay me 15 grand a month when I was 16 years old from that. I was just cold calling.”

They are like, “What do you do by your age or any of this,” well objections you hear. I’m like, “I just speak to the phone, I never told anyone my age. I just called. I’m like people think things through too much and they are not willing to take action. You know what it worked, and after that once I started cold calling the business started growing a bit more, and we started building a brand getting inbound increase, I was like, “I want bigger companies.”

I would just go find everyone who is venture funded, these days it’s easier because you can go to Crunchbase, and I would go through all the results of the people recently funded, and I would email out the VC who recently funded them, and I would break down everything that they are doing to screw up their marketing, and I would just give it to him for free in a pedia.

You know what a lot of those people do, they are adventure guy, and then they are just like bored and they would be like, “Hey you should hire this guy, he seems pretty smart.” I got a lot of contracts that’s way.

Steve: Yeah, I don’t want to get into this whole millennial debate because I feel the same way like people just assume that they are entitled to get things without doing the hustle, and without doing the leg work, because I run a class of e-commerce students. They put up the site and they expect sales to come right away, but in the beginning I remember for myself, my online store, I was on the forms pretending to be a woman trying to get people to come back to my site to buy my handkerchiefs, and so a lot of that early work early on is what allowed us to gradually grow.

Neil: Yes, but you know what, you are scrappy, and most people just aren’t willing to put in the effort, but that’s the whole point that we are trying to make out of the book. We are not just trying to say these crappy book going through all the cons, and teaching you how to do exactly what you are doing while I’m doing, and what other people are doing to succeed, because I don’t care if you are rich or poor, you believe you are book smart or you are not, you can succeed if you put in the effort. Yeah you may not be a billionaire, or you may not even be a millionaire, but you will be better off than where you are right now if you use these tactics.

Steve: How do you convince someone to hustle?

Neil: You can’t convince them, they have it in them. They want to have to succeed; they want to have to do better.

Steve: As part of your book is it mostly case studies then, like how are you going to get these people to…

Neil: I want to say case studies, it breaks down like concepts. For example one of the things we break down in the book is how to find your passion. Most people don’t want do anything or hustle or put in the effort, because they don’t know what they want to do in life. We talk about how to find your true passion in life. Most people believe it’s oh I’m born, and I’m growing up, and I know as a kid I wanted to be an astronaut, so that’s what I’m going to be.

When you find out when you are older, what you wanted to be as a kid usually isn’t the same thing, like when you were a little kid, what did you want to be? I’m pretty sure it wasn’t related to selling stuff on the e-commerce or on the internet.

Steve: Absolutely.

Neil: You wanted to be like a doctor, a lawyer or something or…

Steve: Engineer.

Neil: Engineer, all right. I actually wanted to do one too; I also wanted to be doctor.

Steve: Of course, you are Indian.

Neil: There you go, and you are selling stuff on the web, but you know what most people think like, “Oh everyone just knows what they want to do. It doesn’t matter what your age is, you don’t just know what you want to do as you are older.” But as you try things you learn what you don’t want to do and you figure out what you are passion about, and eventually it leads you down the road of this is what I want to do in life. That’s what we teach you in the book, it’s like a trial and error, and we break down the whole process of this is how you figure out what you like and why.

Steve: Cool man, so just backtracking now a little bit, let’s say someone is out there who wants to start a business because they don’t like their job, what is– if you could sum everything up, what would be the best piece of advice for them, that you could give right now.

Neil: Well just do it, go find something you love, go find a problem that you can solve related to what you love, and from that point go and just do it. You may have a lot of questions, how do I start up a business, how do I do this? Figure out on your own. The reason I say that is if you can’t figure out those basic things, you won’t figure out how to succeed because starting up is the easiest part.

Steve: Do you believe that if you are passionate about something you can find some way to monetize it?

Neil: No, not always, because some things are not monitizable and some things shouldn’t be monitizable. I’m also like a hippy in certain ways like it’s almost passion about cancer research, and they figured how to solve cancer, yeah it’s monitizable, but should they monetize it? Hopefully not.

Steve: Okay, and so it does require a certain amount of research.

Neil: Yeah like it does because– what’s a good example of this? If you can create videos and tutorials on how to be a really good knitter okay, yeah you can try to make money selling knitting products, but you can go to YouTube and find so many stuff for free, how can I do it too well?

Steve: But you could probably tie that into some sort of physical product play.

Neil: You can, and that’s a bad example, but the point I’m getting is you are not going to make a lot from that.

Steve: Sure, sure, okay cool man well we have been chatting for 40 minutes, I want to be respectful of your time since you are a busy man. Where can they find you, when is the book coming out, and what conferences are you going be at?

Neil: I believe the book is coming out September 13th, I could be wrong on the date, but I believe it is around 13th. They can find me at neilpatel.com, the next conference I’m at is [inaudible 00:45:54] in Brazil.

Steve: In Brazil? Cool.

Neil: Well because I do it international.

Steve: Really, are you going to be speaking Portuguese or?

Neil: No, it’s funny, last time I was there speaking which was technically a week ago, last week, yeah some week ago I was in Brazil, and I started my speech, and I’m like I was telling them how I love Brazil. I started in Portuguese which I forgot how to say now, and I told them I was going to do my lecture in Portuguese, and they are all excited, and I’m Like, “Just kidding.” But there is always translators there, and so everyone is wearing headphones.

Steve: Oh interesting, okay so they don’t understand you, so someone else is translating on the fly, interesting.

Neil: Yeah because most of conferences that I speak at are international, and almost in all of them there is translators there.

Steve: Actually why is that by the way?

Neil: Like for me it helps me learn more. I know the US market really well. When you go see other random countries that you have never been to, you see the culture, how people interact, how they buy online, the way their society works, and it’s just refreshing and you actually learn a lot, the world doesn’t revolve around the US.

US is a great country, I love it to death, and the opportunities we have. Even our government people complain about it, but if you go to a lot of different regions, it’s hard to set up a business in certain countries, like the US is very pro, entrepreneurship and business. They are helpful in many ways, but you just learn a lot, like culturally on how different things work, and you realize that there are so many opportunities overseas that no one is speaking about.

Steve: Let me ask you this question to close this interview, you are a successful guy, you probably have more money than you know what to do with, so what is your goal from here on out, like what are your projects that you are going to take part in?

Neil: I will start farming, help others out, and that’s really it. I don’t really have an objectives like I got to do this, I got to do that. I just really enjoy blogging, and helping people out. Like when I get an email from a mom who is running a bed and breakfast and cheese, it’s like, “My son had to work at Home Depot, because we couldn’t afford to send him to college and they didn’t want to do loans.

And she’s like now by reading your stuff, my bed and breakfast is like packed all the time. He was able to quit his job, and I was able to send him to college.” That makes me happy. Is she a rich millionaire? No, but impacting that one person’s life for me it’s satisfying.

Steve: I totally know how you feel, yeah after running the class and the blog too, I can totally relate.

Neil: Yeah, it’s an amazing feeling; it’s not about the money. I’m giving away bonuses when people buy my book right now, and I get people even like oh we can’t afford, I’m like, “Here is the bonuses for free.” When they respond back they are like, “Thank you, this has helped change my life.” I’m just happy, I know this sounds crazy, but it’s not about the money, it’s just about helping others.

Steve: Cool man, hey Neil thanks a lot for coming on the show, really appreciate it.

Neil: Thanks for having me.

Steve: All right take care.

Hope you enjoyed that episode. I’ve actually been a huge fan of Neil for a very long time, and I was thrilled to finally get him on the podcast. The man knows what he is doing, and you have to go and check out some of his monster guides that he has written online.

For more information about this episode, go to mywifequitherjob.com/episode 137. Once again I want to thank sitelock.com for sponsoring this episode. Now if you have an e-commerce store, go there right now, and find out how long it takes to load. Does it take more than 5 seconds, and if so did you know that 60% of consumers only wait up to 5 seconds before bouncing from a site, and never making a purchase.

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Once again if you are interested in starting your own online business head on over to mywifequitherjob.com and sign up for my free six day mini course on how to start a profitable online store. Sign up right there on the front page, and I’ll send you the course via email immediately. 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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136: How To Sell An Online Business And Why Spencer Haws Sold Long Tail Pro

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136: How To Sell An Online Business And Why Spencer Haws Sold Long Tail Pro

Today I’m thrilled to have Spencer Haws back on the show. If you don’t remember him from Episode 54, Spencer runs the popular blog NichePursuits.com where he teaches others how to start niche online businesses.

He was one of the speakers at the Sellers Summit talking about SEO. He’s also the creator of Long Tail Pro which is one of the best keyword research tools on the market today.

But recently, he decided to sell that business and being the nosy guy that I am, I wanted all the details. Enjoy the show!

What You’ll Learn

  • Why Spencer decided to sell Long Tail Pro.
  • What services he used to find buyers.
  • The pros and cons of using a broker. How much do they charge?
  • The due diligence process.
  • How developer support works when selling a software program.
  • What he looked for in a sales partner.
  • How the sale was structured.

Other Resources And Books

Sponsors

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Transcript

Steve: You are listening to the My Wife Quit her Job Podcast. If you are new here, it’s a show where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now I don’t bring on these famous entrepreneurs simply to celebrate their success, instead I have them take us back to the beginning, and delve deeply into the exact strategies they used early on to gain traction for their businesses.

Now if you enjoy this podcast please leave me a review on iTunes, and if you want to learn how to start your own online business be sure to sign up for my free 6-day mini course, where I show you how my wife and I managed to make over 100K in profit in our first year of business. So go to mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email.

Now before we begin, I want to give a quick shout out to sitelock.com for being a sponsor of the show. SiteLock is the leader in website security, and protects over 8 million websites by monitoring them from malicious activity 24 hours a day, 7 days a week. So here is the thing, most online business owners never think about security until they get hacked. My online store got hacked long ago, and it was the most miserable experience ever.

I basically lost thousands of dollars as I frantically tried to patch the issues, and get my store back online as quickly as possible. In the event that you get hacked, call sitelock.com, and they will help you out, or even better protect your site before you get hacked. Right now you can get 3 months of SiteLock free if you go to sitelock.com/mywifequitherjob. Once again that’s sitelock.com/mywifequitherjob. 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 Spencer Haws back on the show. Now if you don’t remember him from episode 54, Spencer runs the popular blog nichepursuits.com where he teaches other people how to start niche online businesses. He is also one of the speakers at my first conference the Sellers Summit and he spoke about SEO.

He is also the creator of Long Tail Pro which is one of the best keyword research tools on the market today. But recently he actually decided to sell that business and being the nosy guy that I am, I wanted all the details. So I brought Spencer on the show to talk about the sale and also to see what he is up to right now. And with that welcome back on the show Spencer, how are you doing today man?

Spencer: Thanks Steve, it’s great to be back on the podcast, and I’m doing great. I’m sitting in a new house, we just moved a couple of weeks ago. And so I’m breaking in this office with your podcast here.

Steve: Yeah, we were joking how Long Tail Pro money bought that house.

Spencer: That’s right. Definitely there was a little bit of Long Tail Pro money that helped us decide we should move.

Steve: So we actually covered your bio back in episode 54, and I don’t want to rehash any of the old things that you said. So let’s just jump into the meat of it. First and foremost I am very curious why you decided to sell Long Tail Pro, which was like your baby for so many years right?

Spencer: Yeah absolutely. So I did, I started Long Tail Pro over five years ago. It’s been my baby working on it day in day out for five years. And I am — I was the 100% sole owner. So I decided to sell it for a couple of reasons. One is I had been working on it for a really long time and grown it to a certain point. And anytime that you do that I feel like maybe it’s time — I felt like maybe it was time to take a little bit of money off the tables, right? And just—I had put a lot of effort in and knew that it was a valuable business, and perhaps I felt like I needed to take some cash off the table.

And sort of the other side of that coin, the other reason is when you have so much of your business sort of in one thing, right, Long Tail Pro is doing very well, and I would have hated to see it start to decline. So there is a lot of risk especially when you’re relying on Google, I was always worried — and as business owners maybe we worry too much about things that don’t ever happen. But I always think about what if Google changed how keywords worked and how they ranked websites and that sort of thing.

So I felt like there was risk there. I felt like you know what, I have had a great run, I’m going to take some money off the table, take some risk off the table and hopefully let somebody else take it to the next level. So that was my couple of reasons for selling the business.

Steve: So when you are talking about Google making changes are you referring to just them taking away like the keyword API and stuff like that, that could just totally destroy the business?

Spencer: Yeah that definitely was the prominent reason I would say. If they would have shut down the Google Keyword Planner or yeah any APIs, that’s really where we were getting a lot of the data right? And that would have been devasta