452: Meet The Man Who Makes 8 Figures Selling Baby Shoes With Cole South

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You’re listening to the My Wife Could Her Job podcast, the place where I bring on successful bootstrap business owners and delve deeply into the strategies they use to grow their businesses. Today I have an old friend, Cole South on the show, and Cole sells moccasins for kids over at Bird Rock Baby and BJJ uniforms over at Gold BJJ. And what’s cool about Cole is that we have similar philosophies on business. And in this episode, we’re going to talk about what it takes to grow a footwear business. But before we begin,

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I want to let you know that tickets for the 2023 Seller Summit are almost sold out over at sellersummit.com. It is a conference that I hold every year that specifically targets e-commerce entrepreneurs selling physical products online. And you all know me well enough by now to know that my event has zero fluff. Every speaker I invite is deep in the trenches of their e-commerce business and not high-level guys who are overseeing their companies at 50,000 feet. Every year, we cut off ticket sales at around 200 people.

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and everyone eats together and everyone parties together every single night. I personally love smaller events and tickets always sell out. If you’re an e-commerce entrepreneur making over $250k or $1 million per year, we also offer a special mastermind experience where we break up into small groups, lock ourselves in a room and help each other with our businesses. The Seller Summit is going to be held in Fort Lauderdale, Florida from May 23rd to May 25th. That’s S-E-L-L-E-R-S-S-U-M-M-I-T dot com.

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I also want to thank Postscript for sponsoring this episode. Postscript is my SMS or text messaging provider that I use for e-comm and it’s crushing it for me. I never thought that people would want marketing text messages, but it works. In fact, my tiny SMS list is performing on par with my email list, which is easily 10x bigger. Postscript specializes in text message marketing for e-commerce and you can segment your audience just like email. It’s an inexpensive solution, converts like crazy, and you can try it for free over at postscript.io slash Steve.

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That’s P-O-S-T-S-C-R-I-P-T.I-O slash Steve. And then finally, I wanted to mention my other podcasts that I run with my partner, Tony. And unlike this one, where I interview successful entrepreneurs in e-commerce, the Profitable Audience podcast covers all things related to content creation and building an audience. No topic is off the table and we tell it like how it is in a raw and entertaining way. So be sure to check out the Profitable Audience podcast on your favorite podcast app. Now onto the show.

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Welcome to the My Wife Could Her Job podcast. Today I’m really happy to have Cole South on the show. Cole is someone who I met at Ecommerce Fuel and the Seller Summit in past years. He is a former poker player turned entrepreneur, which is something that I’m actually finding increasingly common over the years. There are a lot of poker players who actually go into business. Cole is an eight figure seller who runs two brands, Gold BJJ and Bird Rock Baby. He is also working on a software tool for Ecom as well.

02:54
Now, since I’ve always known Cole for his baby moccasin store over at Bird Rock Baby, this is a business we’re gonna focus on today. And I just have to say that selling any kind of shoes, especially kids shoes, I would say is tough. It’s capital intensive, you have to carry a bunch of styles and a bunch of different sizes. So in this interview, we’re gonna learn how Cole grew this business from the ground up. And with that, welcome to show, Cole. How you doing today, man? Thanks for having me on, Steve. Yeah. Hey, so I…

03:21
out of all the products that you could sell, why did you choose Baby Moccasins? It seems like shoes are competitive, saturated, there’s lots of brands that sell these. Yeah, totally. Well, when we started this e-commerce business, we didn’t really have any clue what we were doing, there wasn’t a ton of thought into it. Aside from that, we wanted to start the business around products my business partner and I were personally using. And at the time, he had two young kids, and his wife just wasn’t crazy about the shoe options. They were either 65 bucks and like,

03:48
you’d lose one with kid throwing out the window or losing at the playground, just kind of impractical to spend that much money on a pair of shoes that your kid’s gonna outgrow really fast. Or like six bucks from AliExpress, drop shipped in a plastic bag where you feel like, this even safe to put on my child? So that was the initial idea. Maybe we can do like a mid-market baby shoe, backed by an American company, safety tested to beyond all standards. That’s how we landed on baby shoes. Interesting. So you mentioned AliExpress and Wanna. Are these made in the US then?

04:18
Our shoes are all made in China. They’re all made in China, okay, okay, right. And so you just have tighter quality control and whatnot. Exactly. So did you do any testing on this? Because like I said, it’s competitive. Or maybe it wasn’t as competitive when you got started. But how did you know that these shoes were gonna move? Well, we could tell from all the typical Amazon and SEO tools that there was a lot of demand for this type of product, leather baby shoes, baby moccasins. And again, it was kind of just seeing that gap in the market.

04:48
a lot of these very cheap items were selling a ton of units. And then there were some brands with some expensive baby shoes selling a ton of units. And kind of just use a little bit of logic thinking that, there’s probably a space for a mid-market baby shoe in this category. So as a poker player, you probably calculated the expected value of launching this product. Yeah, mean, certainly a lot of skills translate well from poker to e-commerce. I think the biggest one is just like being okay with.

05:14
risk and comfortable losing. If it didn’t work out, it’s not like we had mortgage or houses for this business. How much did you invest actually to start it? Man, I want to say we opened the LLC. My business partner and I, and I putting in five or 10 grand. Of course, as the business grew, e-commerce is a super capital intensive business. And so I loaned the business some more money to finance inventory. And then eventually as we became more established, we started getting other.

05:41
financing options through Amazon or Chase. I am curious, when you first launch, like, do you have to launch with multiple styles, multiple sizes, or did you just launch with one style? I believe we launched with four colors in four sizes, something like 16 skews. Okay. And then how do you actually, this is something I’ve always wondered about anything related to sizing. Like, how do you know what to order or how much to order in what? Yeah, that’s tricky. And I feel like, especially on your first order, it’s so hard to tell. And there’ll be some

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some specific colors where the baby size just crushes in that color. But a different color, people are only buying that for two year olds. So it’s hard to kind of translate that from style to style. So our approach has been just order a ton on the first order so you don’t run out of stock because the second you’re out of stock, all your forecasting goes haywire. And then try to use that cushion from that first order to place more accurate orders going forward. What do you consider a ton? How much was your initial order? Oh man, the initial order was probably

06:40
two brand of shoes. Of each style and size? No, total. Yeah. Oh, total. We started off really small. Yeah. I mean, we started our e-commerce business as a side project where my business partner and I both played poker for a living. We were pretty burnt out on it looking for something new. We like, let’s just start something to get some experience doing any sort of business outside of poker. And that’s how we land on e-commerce launching brands around products we personally use. Okay. And so you ordered 2000 pairs, I assume evenly split because you had no idea.

07:10
what was gonna sell. And then what was your first market, was your Shopify store your first or were you on Amazon at first? No, strictly Amazon. I’d say that first year sales was 99 % Amazon. Okay. And then I imagine you did all the keyword research and whatnot and did you do anything special to rank those? Yeah, so, you know, when we started the e-commerce business, was kind of like learning poker all over again. We just devoured every Amazon e-commerce podcast and blog we could find.

07:39
to try to learn how to market for e-commerce. And we definitely were lucky to kind of catch the wave of Amazon and e-commerce at the right time, where in 2016 we put this product up on Amazon. And I think on the first day we sold two or three units, you know, without ads or anything, turning on ads or anything. Yeah. Okay. And then over the course of that first year,

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customers really liked the product and we just had enough organic traction that we’re like, okay, I think we’re onto something here. And then we quit poker and went into this full-time. Oh, I didn’t realize you were still doing poker at the time. Did you have your website up then or was it just strictly Amazon? I think we had a website up, like a very simple commerce website or something. But if we did more than five sales on the website the first year, I’d be surprised. Oh, okay. So it was literally all Amazon. And I am curious, are you guys in retail at all or?

08:31
Yeah, so we just broke like 500 wholesale stores. My wife runs the wholesale program. It’s all small independent mom and pop boutiques around the country. But yeah, it’s a cool part of the business. Very different from online marketing. To get those, did you literally just walk, go door to door to these mom and pop shops? We’ve tried a few different things. Some of it has been outbound where my wife just has stores she likes that she thinks would be a good fit and reaching out to them with a very personalized pitch.

09:00
and then trying to use those to find similar stores in other cities, something like that. We’ve also used wholesale platforms like Fair, which has been great for customer acquisition. And we’re starting to do a little bit more on the outbound side of things. But I also think there’s a lot of aspect of just getting your product out there. And people who own boutiques that sell baby products, they need products that parents like on the shelves that sell through. So they find our product and just inbound reach out to us and stock in their store. I’ve always been curious. what is your minimum order from one of these small mom pop shops?

09:31
I believe 250 bucks and they get a 50 % discount. Okay, so it’s not very much money at all. And then it’s a different beast, right? You have to keep track of them and then maybe remind them to reorder or do they keep track of all that stuff? We have not done an amazing job at the customer relationship management side of wholesale. Okay. But you know, we do at least have like a customer database for wholesale customers that we’re sending email campaigns to and trying to send out reminders when they haven’t ordered in a while.

09:58
I was just chatting with my buddy about this because sometimes you got to argue for where your stuff is displayed to. But I guess it doesn’t happen in boutiques. Maybe that’s more for the big box stores. Yeah, for us, it’s all, you know, they’re paying upfront for all the inventory or for all their orders. So it’s not like we’re financing an order in a big box store where we have some risk or if it doesn’t sell through, we’re taking the product back. We had a fitness brand as well that we sold to one of the large Amazon aggregators. And for that brand, we had our products in Best Buy.

10:28
And so we learned a little bit about big box retail. Best Buy was launching like a connected fitness section where they had to like pelotons and treadmills and they had one of our fitness products in there. you know, totally different model where we’re being paid on net 90. Yeah, 90. Crazy, right? Yeah. Just wild. Yeah. Can you walk me through just like the sourcing process? I know a couple of my buddies, they source shoes from like Mexico. Did you look in different geographies?

10:58
Yes, we have looked at Mexico as well. There is a big shoe industry in Mexico and it’s specifically something we’ve been thinking of as tensions between the US and China have kind of ramped up for the past couple of years. We want to make sure we’re not, you know, totally locked into manufacturing there. Although we do, have great relationship with our partner there. I think we first found our, all of our manufacturing partners on the baby side through Alibaba. Nice. Okay. Just got a ton of different samples and

11:27
worked out who we felt comfortable working with. And were you designing your own designs at that point? Or were you just kind of taking what they had? We always want to do something like a little bit different from what everybody else was doing. So we would try to take an existing design and add at least like three customizations to it. Give me an example of a customization. Oh, sizing is huge for baby shoes. So a lot of the existing brands I just had like totally off the wall size charts, whether it was like Chinese

11:55
sizing or just something totally custom. So something where like we, you know, use a traditional sizing chart and made the fit of the product like a way more standardized and better customer experience, lower return rate, that sort of thing. you give me an idea of like what the return rate is for shoes? Is it like apparel? Yeah, say probably like in the 15 to 20 % ish range. Okay, so less than apparel, but still pretty high. Basically.

12:24
Also, our products are being worn by people who can’t talk yet. So to some extent, they can’t complain too much about the Well, the parents are the loud ones, right? Yeah, I guess so. And minimum order quantities for shoes, I you can just get by getting like a couple thousand units, huh? Yeah, when we first started with our manufacturer, yeah, I think our initial order was, yeah, just, it might’ve even only been a few hundred units, might’ve been 500 units, something like that. Have you switched factories over the years?

12:53
No, we’ve worked with the same one the entire time for our main products and grown our business a ton with them and it’s been just an awesome relationship. Wow. Okay. So we’ve never been there either. As you’re selling these shoes, I’m just kind of curious what the margins or shoes are like. Are baby moccasins similar margins to just like people selling shoes? Or I’m just kind of curious what the margins are like. Yeah, you know, I don’t really think of it too much, like within the shoe category. I just think of it as like running a healthy e-commerce business in general. And specifically like, you know, we’re talking about wholesale. We’re like,

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If you need to make your wholesale business make money, if you retail a pair of shoes for 30 bucks, the wholesale customer is paying 15. You really need a 50 % markup on that wholesale to be running a healthy business. in general, think to run a healthy e-commerce business, you need to have like a 4X markup on your cost of goods, kind of bare minimum.

13:44
you know, to make it work. I would say bare minimum. So I’m just kind of curious because you have a let’s say you have a return rate of 15%. You kind of have to factor that in as well. Presumably you can’t resell the returns, right? You know, it’s hit or miss. I’d say probably half of returns we can resell. Okay. And then prior to starting the recording, like you’re recording from your warehouse right now, right? And, and I had mentioned I just bought a warehouse.

14:12
And then I told you like, hey man, if I could go with the three pill, I definitely would. It seems like your products are pretty ideal. They’re small because they’re baby shoes, pretty light. I would imagine a three pill makes sense. Why are you, why did you invest in your own warehouse in California of all places? Uh, just like me, right? I mean, I could share my story, but I’m curious what, your reasons were for sure. mean, so the main one is just the sheer number of skews. think most three PLs do really well with a small and light product that is like,

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supplement where you maybe you have a line with 10 SKUs, but for our baby moccasins, we have, you know, 50 different styles each offered in six sizes. The, you know, number of SKUs compared to the actual inventory of each SKU is kind of crazy. And we have tried to use several 3PLs. I just don’t think we were a great customer based on how many SKUs we had. And so it never really worked out well. I really just like running our own warehouse too. It gives me like a sense of control over the business. And for something like wholesale, it allows us to, you know,

15:09
get a wholesale order boxed up personally by our team, sent out to the customer quickly. I feel like that was a real big pain point using a 3PL, trying to do something like wholesale. See, for me, I like the control too, because I’ve just heard so many nightmare stories of 3PLs losing inventory. Our mutual friend, Mike Jackness, he actually had to fly to his 3PL and dig through all the stuff and find his inventory. Presumably stories like that are few and far between.

15:37
But I’ve never heard anyone like running a warehouse actually. And I know you’re in California. Do you have problems finding workers who are willing to do that sort of work at a reasonable cost? You know, I think part of it is just finding employees that do a really good job and then overpaying them so they stay and running a relatively lean team. I feel like one thing we’ve learned in our warehouse is the difference between an A player

16:06
and a C player is not like 2X, it’s that the A player is like working 10 times more efficiently and the B player or the C player is like literally pulling your business backwards. So try to like get a small squad of those A players, do everything you can to make sure that they’re super happy in their job and keep things running relatively leanly. How big is your warehouse? curious. 5,500 square feet. 5,500 square feet and how many people are in there? It’s like five of us.

16:34
on daily basis. Wow, and so you’re picking and packing, running an eight figure business with five people. That’s nuts. Okay. Yeah, you know, mean, Amazon is roughly 60 % of our sales. those orders are all fulfilled by FBA. So that’s just going out the door, direct to Amazon in bulk. And the other stuff, I feel like we’ve got good enough processes with the way things are laid out that if anything, we’re running a little bit below like our

17:02
bandwidth capacity just because we’ve learned that like, if everybody’s running nonstop and you feel like you’re always playing catch up in the warehouse, that’s when projects start piling up, people start getting grumpy. So we always try to like leave ourselves a little bit of a buffer on our bandwidth. I completely agree actually, because the holiday season comes around. You need a little bit of buffer like I go in to the warehouse and I’m like packing orders and answering phones over the holiday season. Because in the past, we used to try to hire like temporary people over those periods but

17:31
Training them and getting them up to speed was actually problematic. we kind of just suck it up now. Do you guys do anything special over the holidays? Nope, it’s just all hands on deck. Yeah, just like you’re saying. We’re all in here trying to get everything out the door and also accepting that like, look, over the week of Black Friday, orders might go out in three business days instead of one and like we’re selling apparel here. It’s not like life or death supplies that need to be get to the customer the next day.

17:58
Let’s talk about the D to C side of your business. And it’s interesting that you sell kids shoes and I was looking on your site and it’s still pretty much baby, right? So do you get a lot of repeat business? Yeah, we do. think we do. We try really hard to catch people at the beginning of their customer lifecycle with us, whether that’s marketing towards people who are expecting or have a newborn so we can get several purchases out of them in our sweet spot of ages zero to two. And then people who have one kid, you

18:27
relatively frequently have another. As a new parent myself, I’m always talking to other parents about baby products they like. I think there’s a big word of mouth aspect to the business. On the DDC side, what is your primary acquisition channel? So we were spending pretty aggressively on Facebook up until roughly six months ago. And then I feel like the iOS privacy changes just wrecked the profitability of everything. And we just had a phase in the business where we had

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spent enough to kind of get the initial snowball rolling of customers to where we could really dial back marketing spend and try to run things a little bit more profitably with an eye on the bottom line as opposed to top line. Yeah, I mean, over the years, we’ve started focusing a lot more on our existing customers and our own marketing list.

19:16
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21:06
I’m curious though, so now that Facebook isn’t as working as well, and it’s not an uncommon thing, like I’ve talked to many e-commerce business owners where when the iOS updates happen, like Facebook ads kind of went to crap, what are your new things that you’re trying to acquire new customers? Yeah, I’d say kind of our approach is do the 80-20 of a lot of different areas. You we do focus on SEO, Google ads, but we’re not like all in on like, okay, we got to figure out TikTok this quarter.

21:34
and we’re gonna spend all of our ad budget there. I really feel like at this point, the business is somewhat organically growing just through word of mouth, existing customer base spreading it. it feels like for a long time there, we were pushing the rock uphill and now it’s starting to roll downhill a little bit and this is kind of growing on its own a little bit. Plus the retail probably helps with that, right? I would imagine. Absolutely. Being in a lot of boutiques. Can you walk me through the retail side?

22:03
So are you allowed to run discounts on your website? Can you like undercut your retailers and price? how does all that work? So we try to focus on purely retail retailers with a physical brick and mortar store. Okay. Where, you know, want to sell the product on their website. We’re not going to tell them they can’t do that, but like we’re not working with e-commerce only businesses. Okay. So that’s been our approach where we don’t feel like we’re competing with them really, cause they’re, you know, focused on walk-in traffic to their store, buying the product. So do you have the freedom to sell things cheaper than

22:32
Like the brick and mortar price? Yeah, I mean, we run sales and we allow our brick and mortar customers to run sales too. We’re not super strict on, you know, map pricing for our products as long as they’re not going and like selling them on their website cheaper than us and bidding a bunch on like branded Google ad terms. Actually, that was my next question. So they have to obey a map price. Yeah, but you know, we’re not super strict about it again, most of the partners we’re working with are physical brick and mortar stores that don’t do a lot of online sales anyway.

23:02
So, A, how are we gonna enforce this? we gonna go around running? Yeah, you can’t really. That’s I was asking. Yeah. Yeah. And if they wanna sell the shoes for $20 instead of $30 in their own brick and mortar store and they’re still paying us $15 for them, go for it. Yeah, so presumably the wholesale price is 50 % of what you sell on your site, like retail. Exactly. 50 % of retail. probably these people aren’t internet savvy. They’re probably not running campaigns that are competing against you.

23:31
I would imagine Okay. On the so on the deed, and we do our best to screen for that too. And like, we make sure that like our, we can both get our ideal customers and we set those policies very upfront. Like the number one thing is just you cannot sell on Amazon. Right? was actually my next question. Yeah. Okay, because you they could like piggyback on your listings. Okay. Got it. But again, they’re not particularly, you know, Amazon savvy. Business owners, we are if somebody tries to piggyback on our Amazon listing, we notice it real fast. You know, we have a

24:01
you know, one very frank discussion with the person. And then if it’s an ongoing issue, you know, we’re brand registered, trademark sellers, we know ways to protect ourselves. Well, you just cut off their supply. mean, totally. That’d be the end of it. What about social? Is that a big part of your strategy? It is, but it’s something my business partner’s wife works on. She runs Instagram and email marketing. And it’s not something that I personally have my hands in too much. Well, I’m just trying to.

24:29
gather like what your primary, like what’s like the main driver of new business now? Just on the DTC side. Yeah, on the DTC side, I really think it’s just the business kind of growing based on word of mouth. Like we have all these individual channels like SEO and email marketing that are getting that existing base customers and some new customers going, but I wouldn’t say we have like one specific channel that’s driving a bunch of new customers. Can we talk about SEO real quick? are you going for

24:59
Content that attracts like moms and dads or you doing like product focus content or a mixture of both? Okay So we have like an article on how to size baby shoes Which is a problem that every you know new parent has and you know We rank number one in Google I think for how to size baby shoes and we also try to rate rank our collection pages So if you search baby moccasins in Google, we’re I believe we’re number one in that right now as well that’s been through combination of on-site optimization stuff as well as

25:28
PR has kind of been the biggest thing for us. hired a PR agency that got us a bunch of exposure, high authority backlinks. That’s interesting. Walk me through the PR because I’ve known a number of people, like I’ve never used a PR agency before, but I just get mixed reviews on that. is the main benefit for the backlinks or has some of the PR exposure directly led to a lot of sales? Yeah, great question. So I think it’s really

25:56
matters on what your approach to it is. If you are approaching PR as like, this is a performance marketing channel and I need to pay my PR agency three grand a month and they have to drive 5,500 a month in sales to make this work. Like it’s not going to be a good fit for you. But if you approach it as like brand and awareness marketing and like asset building of, Hey, you know, I’m going to run a six month PR campaign. I’m going get all these cool features that I can use as amazing social proof that, Hey, our product has been featured on motherly and all these popular outlets for new moms, pregnancy magazine. And I’m getting valuable backlinks from all the sites that are just

26:26
building our SEO authority, then I think it really makes sense. I do think there’s an aspect of it where any PR agency has their kind of core group of connections that are super valuable. And they kind of turn through those for the first like six, 12 months of a campaign. So don’t know if it makes sense to have permanently for small business, but I think like a three or six month PR blast is pretty underrated for an e-commerce business. I can imagine all it takes a couple of backlinks actually to really boost your domain authority.

26:56
You know that post you mentioned that you’re ranking number one for? How to size a shoes. Does that actually lead to sales? At least in my store I can tell you this like the articles that I have that target the customer I just try to get them on the email list and maybe they’ll convert the ones that convert directly to sales are like buying guides or reviews or comparison posts. I’m just curious how your content converts and what your strategy is. It does it doesn’t convert to sales like a

27:25
collection page ranked in search does. But we’ve been trying to do content that’s like pretty tightly wrapped up in the buying experience. Like how to size baby shoes is the next step in that is where am gonna buy the baby shoes? It’s not like seven tips for putting your newborn down for the night or something like that, you know? Where that’s a little more disconnected from like the shoe buying process. We’re not focused on stuff like that. And that article that you’re talking about, it like an advertorial? Like is there a like a link to your?

27:54
your shoes at the bottom or? Oh, of course. Yeah. But I mean, we try to make it like a valuable piece of content to like we have a printable size chart that obviously has our logo on it. And like, you know, our products are interspersed throughout the article. But even if you weren’t going to buy our, our product, it is a good guide on how to up issues. Let’s switch gears to Amazon. I know it’s gotten a lot more competitive over the years. And I’m presumably you have a lot of competitors now on Amazon. Right? Absolutely. Yeah.

28:22
How are you adjusting to the increased competition, the increased costs of FBA knockoffs, evil sellers and that sort of thing? Yeah, it’s certainly been a lot of that. We did a price increase this year. I think that was probably long overdue and that helped subsidize some of increased FBA costs, just increased costs that we’ve experienced across the board in our business. Advertising has gotten more expensive on Amazon. I’d say, you know, three years ago we were probably spending

28:52
six or 7 % of our total Amazon revenue on advertising, and that’s maybe doubled. Really? To 15, 10, 12%. 10, 10, 10, 12%. Something like that. Okay. Are you guys doing DSP or? No. No, just straight sponsored product ads and brand ads? Sponsored products, video and search, headline display, but no DSP. Okay. And then these days, presumably, can you walk me through your launch process when you have a new style? For sure.

29:22
So we really have not focused on launching many new products. We’ve been trying to continue to drive demand for our core product of Baby Mocsins where we have really strong product market fit. We have tried to launch other products like a diaper backpack, other types of baby shoes, and we just really haven’t had as much success with that. And I feel like the kind of standard way to grow an Amazon business is to launch a bunch of products once you have this formula figured out. I feel like for us, our penetration in the actual market of baby shoes is so small.

29:52
And we have this one product that just has really clear product market fit. People just love these baby shoes that I don’t think it makes a bunch, makes much sense for us to keep branching off instead of just to push this ball further and further, faster and faster. I love that policy actually. Cause a lot of people are, I mean, I think launching new products is actually the hardest way to grow the business. It’s much easier to focus on maybe increasing.

30:18
the average order value or increasing the number of times that someone buys. What are your goals with this business actually? Are you trying to grow it or are you kind of, I don’t want to say taking your foot off the pedal so to speak, but it sounds like it’s not like a VC backed company where you’re trying to grow at all costs. Totally, yeah. mean, so the first five years it was like, we need to double this business each year to get it to the point where, you know, it’s just like,

30:47
a relatively self-sustaining operation. But now that we are kind of at that point, yeah, we’re trying to do a modest 15 % a year growth sort of thing, actually be making money from this business rather than reinvesting it all into taxes and more inventory. So yeah, would say taking our foot off the pedal is a reasonable way to describe it. I also have two young kids and other hobbies and like, I want to make sure I’m living a lifestyle where I’m not totally burned out on this business and I actually enjoy running it.

31:14
And in terms of like your focus on Amazon versus DTC versus retail, how do you treat each of those? for me, I focus all my efforts on DTC. Amazon is just like a bonus. It seems like you’re split a little higher on Amazon. How do you view all those different marketplaces and traffic sources? Sure. So from year one, you know, when we were 100 % Amazon to now we’re at 60 % Amazon, like even just breaking off that 40 % of the business was a ton of work.

31:44
Um, but I feel like now that we’ve kind of gotten to that point, we run each part of the business relatively siloed where, know, have my Amazon Asana board where I, you know, pop in her ad campaigns, make sure Amazon inventories replenish that sort of stuff. Then I have like the DTC silo of things. And then my wife runs the wholesale side of things. So really try to run the three, uh, sales channels of the business somewhat independently. Um, so we have a little diversification. Nobody feels like they’re.

32:13
having to work on every aspect of the business, that sort of thing. So the reason why I’m asking that is like, do you ever use your email list to launch a new product in Amazon or drive people to Amazon or is it always to like your own online store? Nope, always to our own online store. Again, if it was one thing where like our strategy to grow the business was to launch a new product every week on Amazon, for sure we would be doing something like that. But that’s just not how we’re operating the business. Okay, cool. I like that. I like that.

32:39
You’re different from some of the other people that I talked to where they’re always just constantly trying to scale, scale, scale. It seems like you guys got a pretty good balance with the way you guys are running things. Let’s switch gears again. And with the fact that Amazon is a lot more competitive, I understand you guys have developed some in-house tools to help you with that. What are these tools and why does it give you an advantage? For sure. So yeah, I’m working on an e-commerce software tool called Synchronize.

33:08
And it allows e-commerce sellers to use their data from Amazon Seller Central, Shopify, Facebook ads, directly in Google Sheets. And the way this started off is from inventory management. We manage our inventory in a big Google Sheet. And every six months or so, we would try using some sort of hosted inventory management tool. And they just never were a great fit for our business. There’s so many different quirks of how each individual e-commerce businesses ran that I felt like they all box us in. And we would just end up right back in the Google Sheet.

33:36
So can you actually before you go on, I’m curious about this too. What are some of the problems you’ve had with standard off the shelf inventory software? Handling multiple sales channels and multiple warehouses. So, you know, we have FBA and our San Diego warehouse and we have Amazon, Shopify and wholesale sales channels. And there are some really good Amazon only inventory management tools and the other inventory management tools that try to take everything into account. It almost feels like

34:05
for the first two years, they got 10,000 support tickets with a bunch of different requests. And now the tool is just 800 check boxes on every page is impossible to like untangle to like actually get what you need for your business out of it. Okay. And so you’re, you’re managing all that stuff on a Google sheet, which seems a little bit on, I don’t know, I’ll let you go on. Okay. So you’re doing this on the sheet. I’m curious what this sheet looks like. Cause I know what our inventory looks like and we actually, my wife is an Excel.

34:34
Like she’s an expert in Excel. So she actually manages it in Excel. But to me like looking over her shoulder It looks like a disaster. So I’m curious how you guys do it. Yeah No, that’s the beautiful thing about a spreadsheet though because you can perfectly customize it for how you run your business Yeah, so I mean, I’m happy to send over a screenshot of her sheet An example if you want to put in the show notes But basically the way ours is set up is we have like one tab That’s the master inventory dashboard that you know has a list of all our products and tells us

35:02
when we need to reorder it, how much runway we have. And then a bunch of other tabs that are like our manage FBA inventory report and our Shopify sales from the past 30 days. All that sort of thing. We have an employee that every day goes into Amazon, exports the inventory reports, the sales reports, same thing from Shopify, uploads it into those data tabs that the main dashboard pulls from. Because if you’re forecasting inventory, it’s critical you’re working with up-to-date information.

35:31
But it’s such a manual process that no matter how careful you are, it’s only a matter of time until you’ve filtered for the wrong date range when you exported the report or uploaded it the wrong tab. And in our experience, these mistakes, they weren’t always immediately obvious. It’s not like it would totally break the spreadsheet. You would just be working on a reorder of something. You’re like, that number just doesn’t quite look right. And then you realize that, it’s ignored one sales channel for the past three weeks, and now you’ve drastically underordered.

35:59
And those mistakes are super expensive for an e-commerce business. So we started by hiring a developer to build an internal tool for our business to allow us to connect our Amazon and Shopify accounts. So instead of, you know, importing that Amazon manage FBA inventory report, we just have a custom function that’s equals Amazon inventory MySkew. And that’s a continuously refreshing value of the units available at FBA or equals Shopify sold units MySkew T30. And that’s like an always up to date.

36:29
value of the number of units sold over the past 30 days of that SKU. And this was super helpful for us to eliminate a lot of that manual work and make sure our inventory dashboard was always working with up-to-date data. like that. I actually had a similar problem in our company too where we do personalization and every morning someone had to cut and paste the personalization into another tool so it could be digitized and sent to the machine. And you’re right, inevitably someone cut and paste something wrong.

36:58
and then you have an unhappy customer. So I wrote something that automated that entire process. It sounds like it’s something similar to you on the inventory side, right? Totally. Yeah. So we’re scraping all these reports from Amazon and Shopify, putting them in a central database that we host and then allowing you to query them in very useful ways in your Google Sheets for something like inventory management, know, all sorts of other stuff to it. Cause we have like return reports or marketing reports to kind of keep an eye on all that sort of stuff. So any sort of dashboard that you’re already doing in a spreadsheet.

37:26
This is kind of supercharging it and removing the manual work of getting that data into it. So this spreadsheet is something that is shared among your team and it’s considered like the golden document of all the accurate inventory measurements in your company. Exactly. And I just feel like I’ve talked to so many other e-commerce store owners who are in the same boat where they tried these inventory management tools and they just end up back in Google Sheets. So we figured, you know, if this tool is useful for our business,

37:53
how hard it could it be to turn into something that other people can connect their Amazon and Shopify accounts to. Turns out that was way harder than I expected, but that’s what I’ve been working really hard on. conceptually, it sounds simple, right? But when you get into nitty gritty. Man. Let me ask you some more questions. So this sheet, how do you do inventory projections on, like, does this sheet have a bunch of formulas that help you project? Exactly. So, you know, the important numbers are the number of units I have available at our San Diego warehouse, the number of units I have available at FBA.

38:23
and the number of units I have in production. That’s on the inventory side, right? Then on the sales side, I need like my average daily sales from Amazon, Shopify, and wholesale for that SKU. I’m kind of using that in combination with the lead time for that product to make sure that I always have a bit of a cushion, you know, that I have an order in progress before I’m running out of stock. Does it take into account seasonality, like holiday season? Yes. Okay. We basically have an adjustment column where you can

38:52
in our sheet, adjust any one SKU sales velocity by a percentage of your choice. We go through and kind of look at previous year’s sales. We also look at like, has this SKU been out of stock? Because if it’s been out of stock, any sales projections I have based on like its trailing sales aren’t gonna make sense because it’s sold zero units since it’s been out of stock. So that’s something that we’ve got like some custom formulas for in our tool where we can say, hey, this SKU has been out of stock.

39:21
for 60 % of the last 30 days, you don’t wanna trust a sales velocity number based on trailing 30 day sales. Yeah, I guess the next level to this is to issue alerts, right, when all this stuff’s happening. Exactly, so that’s kind of the next step of this to have some actions where, if sell D2 drops below 100, create an Asana task saying reorder product and sell B2, that sort of thing. that’s kind the next step Yeah, cool, I like it. For anyone who’s listening who actually wants to sell

39:50
shoes or moccasins, like what were the hardest part of your business? Oh man, that’s a tough one. Cause I feel like running an e-commerce business, you’re, you’re juggling so many different balls in the air. for us, it hasn’t been like one specific area of the business that has been constant headaches. It’s more like we’re just playing whack-a-mole on a bunch of different things. Um, I think the hardest part of any business is just finding product market fit, like having something that people actually want and are really excited about. And if you can figure that out.

40:19
it makes marketing so much easier. makes inventory forecasting so much easier because you know, people are going to continue ordering it and that sort of thing. So if that’s the one thing I would stress on, it’s like focus less on the e-commerce hacks of, I can pump this product through some search, find, buy campaigns, number one on Amazon. And then I can use that to leverage an insert to pull people over at my website and then trick them to buy this. And it’s like, no, just like focus on the core aspect of a business, like having a product or service that people really love and want to pay for.

40:48
And that just makes everything so much easier. If you were to start all over again, would you do shoes with all the sizing requirements? I was going to ask you actually, what do you deal with? How do you deal with like all this excess inventory of sizes that you can’t sell and that sort of thing? Would you do it all over again? I well, I think part of like picking your business in general is like identifying where or how developed the market is. And it’s like when I played poker, I started poker at the start of the poker boom and like

41:16
rode that wave really well. And then that kind of started to die out. And when we started our e-commerce business in 2016, I think it was a really good time to start an e-commerce business. I don’t think I would necessarily try to start an e-commerce business selling shoes from scratch in 2022. So I think that’s kind of on the market cycle thing. the actual product, I do think there’s some aspect of complexity being a moat in your business. And if you’re selling garlic presses that anybody can find on AliExpress, you’re going to have a lot of

41:45
competitors right off the bat and something like baby shoes where the more complex the business is, the more value there is for the customer and that like, we have so many styles and sizes. It’s an amazing selection that like somebody else can’t just open up an Alibaba account, spend 10 grand and immediately be competing with us. I do think that’s a moat that’s becoming more more important as e-commerce gets more competitive.

42:07
I’m a firm believer in barriers to entry. You know what’s funny, I’ve been doing this for a long time and I teach a class, everyone always asks me, what’s the easiest way to get started? What’s the easiest way to do that? I mean, if it’s easy, then anyone can do it and you got tons of competition. Whereas if you just take a little bit of time and produce something that’s hard, like this is why we do embroidery. I can’t, I don’t know if you guys do custom embroidery on your stuff, but the machines break all the time. It’s a pain in butt to maintain the machines. And it’s actually my least favorite part of the business, but I do know that that’s actually

42:37
one of the main revenue drivers for our business too and our moats, so to speak. Totally, you have to have something that is your unique competitive advantage that’s hard to replicate. And on our jujitsu side of the business, we have a lot of jujitsu academies that buy our uniforms and stuff. And a lot of them want the uniforms to be embroidered with their academy pattern. So that’s a goal of ours to get done next year. Oh, you guys are going to do embroidery? I think so for the jujitsu side of things. Yeah, it’s just such a common request where

43:06
an academy wants to 150 uniforms, but they have to have the Academy logo on them. It makes sense. Cause you can charge a huge premium for those also, which is what we do. sure. And it’s just one more thing that is like, it’s very hard for an overseas seller without a presence in the U S to offer something like an embroidery turnaround, an embroidery program where they can turn around 150 yeas in a week to a Jitsu Academy. And then you’ve got your product in a ton of people’s hands right off the bat. Yeah, absolutely.

43:35
Well, hey, so Cole, you’ve got three main things going on, right? You got the BJJ store, you got Bird Rock Baby, and now you have this SaaS company. And I’m guilty of this too, like I got a lot of stuff going on too, but how do you split your time and your focus? And do you have this belief that if you work on too many things, you can’t focus on either one as well as you could? Totally, but at the same time, you gotta know who you are. like, I am.

44:03
someone that likes working on a lot of projects. And I feel like that kind of almost prevents me from getting burnt out on any specific one, where especially if I have a strong team working on that project, like our e-commerce business, we’ve got really solid people and processes in place. Or if I’m just getting burnt out on something, okay, maybe I’ll go spend a little more time on the SaaS tool for a little bit, or switch from brand to brand. So I get what you’re saying, but for me personally, I like working on multiple projects. So do I. It’s a curse though. I feel, I don’t know.

44:33
I go back and forth all the time like, hey, you know, if I had just focused on this one thing, could I have blown that up? But you’re right. Like I need constant stimulation and I do get bored of certain things and thank God I have other things to keep me occupied. So. Yeah, it’s kind of like think about what your goals are. Like if your number one goal in life is to like blow one thing up massively and build this massive business. Yeah, then for sure. Focus is probably the number one thing. I like kind of like the four burner theory that you talk about like.

45:01
you know, there’s some aspect of that in business too, where like, it’s not all about building the biggest business possible. Like that’s not my approach right now. Right. I want to work on things that I find interesting and feel like I’m not being totally burnt out in a pursuit of a goal that like isn’t really my ideal big picture. Cool. Cool. Where can people find you if they want to learn more about any of your brands or your new SaaS tool, inventory? Sure. You can find me on Twitter. My handle there is coal south.

45:30
And if you’re interested in trying out Synchronize, you can go to synchronize.com slash slash Steve and we’ll have a special offer for my wife, quit her job listeners. Sweet. Did you get the blue checkmark? Yeah. Yeah. It’d be interesting to see if that program is still still live by the time this podcast goes live. It sounds like it’s kind of haywire. I don’t see any value in it whatsoever. They don’t even verify you. Right. Anyone can get it. So.

45:58
Yeah, it seems like it’s been a rocky start for him. Cool. Hey, thanks for coming on, man. Appreciate it. Thanks, Steve.

46:08
Hope you enjoy that episode. Cole is a very successful entrepreneur and there’s lots to learn from his strategies and philosophies. For more information about this episode, go to mywifecoderjob.com slash episode 452. And once again, I want to remind you that my annual e-commerce conference will be held in Fort Lauderdale, Florida on May 23rd to May 25th of 2023. I really want to hang out with you guys in person, so let’s meet up. Go to sellersummit.com. That’s S-E-L-L-E-R-S-S-U-M-M-I-T.com.

46:38
I also want to thank Postscript, which is my SMS marketing platform of choice for e-commerce. With a few clicks of a button, you can easily segment and send targeted text messages to your client base. SMS is the next big own marketing platform and you can sign up for free over at postscript.io slash dv. That’s P-O-S-T-S-E-R-I-P-T dot I-O slash dv. Now I talk about how I use these tools on my blog and if you are interested in starting your own e-commerce store, head on over to mywifecoderjob.com and sign up for my free six day mini course.

47:07
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