453: How To Uncover Your Competitors’ Secrets And Find Good Suppliers With David Applegate Of ImportYeti

00:00
You’re listening to the My Wife Could Her Job podcast, the place where I bring on successful bootstrap business owners and dig deep into what strategies they use to grow their businesses. Now, what if I told you that you could find out exactly which suppliers your competition were using on Amazon or Shopify? And what if I told you that you could do all this for free? Well, today I have an amazing guest on the show, David Applegate. And David is the founder of Import Yeti, which is a service that allows you to research your competitors’

00:25
And in this episode, we’re going to talk about how to succeed in e-commerce as things get more and more competitive. But before we begin, I want to let you know that tickets for the 2023 Seller Summit are on sale over at SellersSummit.com. And it is the conference that I hold every year that specifically targets e-commerce entrepreneurs selling physical products online. Now, 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.

00:55
Every year we cut off ticket sales at around 200 people and it’s a very intimate event. Everyone eats together and everyone parties together every single night. I personally love smaller events and tickets always sell out far in advance. Now 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.

01:24
go to SellersSummit.com. I also want to thank Postscript for sponsoring this episode. Now, if you’re on an e-commerce business of any kind, you know how important it is to own your own customer contact list. And this is why I focus a significant amount of my efforts on SMS marketing. SMS, or text message marketing, is already a top five revenue source for my e-commerce store, and I couldn’t have done it without Postscript, which is my text message provider. Now, why did I choose Postscript? It’s because they specialize in e-commerce, and e-commerce is their primary focus.

01:54
Not only is it easy to use, but you can quickly segment your audience based on your exact sales data and implement automated flows like an abandoned cart at the push of a button. Not only that, but it’s price well too and SMS is the perfect way to engage with your customers. So head on over to postscript.io slash Steve and try it for free. That’s P O S T S C R I P T dot I O slash Steve. And then finally, I wanted to mention my other podcast that I run with my partner, Tony. And unlike this one,

02:21
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.

02:46
Welcome to the My Wife Could Her Job podcast. Today I’m really excited to have David Applegate on the show. Now, David is someone who I met recently on an Alibaba panel with Keon Ghazari and MetaWorld Peace of all people. He’s the founder of ImportYeti, a free service that allows you to search through the US import records to find the suppliers that your competitors are using. He is also a longstanding e-commerce seller himself on both Amazon and his own online store and a retail store.

03:12
which I believe is what led him to create Import Yeti in the first place, but we’ll find that out in the interview. But David is a wealth of knowledge. And today we’re gonna talk about, you know, how to be successful in e-commerce, which is an industry that’s getting more and more competitive every single year. So welcome to show, David. How are you doing today, I’m doing great, great, doing great, happy to be here. You know, I enjoyed that Alibaba panel as well. It was fun. know, I’m from Southern California and like Lakers are like gone down here. So to on the panel of Ron Ritesh was just, it was cool.

03:42
Yeah, yeah. And I’m a diehard warriors fan. So yeah, yeah. I always knew there was something off about you. Just kidding. Well, a tough loss the other night. Yeah, I know. You know, this is getting a little tangential, but I clay Thompson was one of our neighbors growing up. Yeah. So you’re friends with clay? Yeah, my little brother more so because they were the same class. But dude, that’s awesome. That’s awesome. So David, how’d you get started selling online and

04:12
Tell me about the brand that you run in the retail shop that I think you’re filming out of right now, right? Yeah, yeah. So I got started when I was in my early teens. Much to my mother’s kind of dismay, I was selling tobacco paraphernalia on eBay. Cigar cutters, hookahs, and things like that. And did that for a long time and just kind of kept with it. A lot of failures along the way.

04:41
And then I kind of haphazardly stepped into wrestling work. And that’s been just a blessing, a real, real kind of learning opportunity. then Pandemic Kit, sporting goods is, least high school sporting goods is not the space you want to be in. It’s gotten a lot better now, the pandemic’s kind of eased up. this, Import Yeti is my pandemic project, just kind of meant to fill some of my time and keep my learning and growth going.

05:10
It’s done, you know, just picked up a huge following, which is really cool. I didn’t realize that you started that during the pandemic, like in 2020. Yeah. Yeah. Like literally it was like they shut things down or like March something. It was like that Friday. was like, hmm. And, you know, we we have been using this stuff kind of ourselves, you know, to solve problems. You want to find somebody that makes, you know, a coffee mug. There’s a lot of manufacturers for that because you start to get into harder products.

05:39
and you’re trying to find higher quality suppliers, there’s a lot of challenges using existing tools out there. And this was our just solution of these problems. We built some of our most successful products and found our most successful suppliers using the Bill 8087. Interesting. So for your wrestling store, what were you using before Import Yeti was available? Like how did you find your products? Or were you just primarily carrying like popular brands?

06:08
Yeah, so we do a lot of, you know, reselling, but we would, you know, we go to trade shows a lot. Trade shows are really, really good, like Canton Fair, you know, the Magic Show in Vegas is great. You know, and then a lot of industry knowledge, like when you, if you take any product that you’re trying to develop and you really spend time in that industry, you really start to dedicate yourself to it. A lot of times the supply chains begin to emerge. You just start to understand who’s actually making the products.

06:36
You know, it happens serendipitously. People start reaching out to you. They start being like, hey, we see that you’re selling a lot of these things. We also, we make these things. You know, you get, you know, you get, you know, mail or, you know, you’ll, you know, be at a trade show. Someone will know that you are a company like this that already you see to their buddy, you know, who they know moves the products. And so we were doing a lot of kind of more manual sourcing.

07:02
and then using platforms like Alibaba and stuff as well depending on what the product is. You know what’s funny is we actually get emails like that every single day from mainly Asian manufacturers who wanna sell us stuff. I don’t think I’ve ever responded to any of them. So are you saying that you actually responded to some of those people that approached you? Yeah, we’ve found some killer manufacturers doing that, just killer. Wow, okay. Now that being said, 90 % of them are horrible. Okay.

07:30
So it’s not like they’re all good. when we try to look for a manufacturer, we really evaluate what type of company they are, what capabilities they have. And we do that stuff through Google. if we are, let’s say we’re trying to make widget A, and someone’s constantly emailing us saying, hey, we make widget A, we’re going to start looking for the ones that we think are good.

07:55
Let me ask you this, since you’re kind of unique, you’re a reseller of very popular brands and you have your own private label brands, what is the revenue distribution of each and which is what you focus on more, the reseller aspect or your private label stuff? Yeah, like I understand the question you’re asking, but we think about it a little bit differently. I think it’s better to say what’s the profit distribution of each is the first thing. And almost across the board, private labels can have higher profit.

08:25
ban when you’re reselling somebody else’s goods. And then we also look at things from saying, how can we develop customers that are able to spend more money with us and are really round out product ones? So we don’t look at it as a competitive thing, as much as it’s like, how can we take person A and really service them as much as we can? And there are certain holes that we choose to develop, which is kind of where Private Label falls into.

08:56
All right, so it’s not like you find out what’s selling well from a reseller and then private labeling a version of the same thing. Like Walmart, they know like Robitussin sells well, so they come out with Wal-tussin. That’s not your strategy, right? No, no. With almost everything we try to do, we innovate. I’m put things differently. If you’re in a marketplace where there’s not big people playing, that might be different. But we’re going up against Nike. I’m not gonna beat Nike.

09:24
You know, they’re a great company that creates great products. It’s stupid for me, strategy wise, to try to, you know, compete in that space. You know, so we try to choose things that we can win at and really stay close to that customer list. Give me an example of something that you’re selling in your wrestling store of something you’ve innovated on. Yeah, yeah. So like we need it very heavily as an example on design. That would be like a really strong innovation point for us because we’re closer to the customer and we have different kind of guidelines we’re able to create.

09:53
If it’s a, know, a singlet as an example, singlet designs that are going to very strongly resonate with our consumer. Whereas, you know, ASICS, Adidas and Nike tend to create more of a blank strategy, you know, where it’ll be like, hey, here’s a red singlet, you know, we’ll be able say like, here’s the Mexico singlet. Because the users want that Mexico singlet. And that’s not competing directly with, you know, with those big dogs, you know, we’re not going to win in that game. Interesting. So just for people listening, a singlet is essentially the wrestling uniform, right? Yeah.

10:24
So I imagine there’s standards on what the singlet can be made, right? Or no, I don’t know anything about wrestling, sorry. Yeah, there are some technical specifications with that, they’re easy for us to solve because we’re a wrestling company. We eat, and sleep to sport. Where I think people make mistakes is they’re like, oh, I’m going to try to develop specs for a product that I don’t actually use.

10:49
I don’t actually know in and out. We know the products like crazy. So it makes it real easy to kind of find the right manufacturer, which plays a huge role in your manufacturer as a whole. You’re not gonna find good manufacturers if you don’t know the product. When you’re asking these questions and things like that, they don’t take you seriously. They’re like, this person obviously doesn’t move this product because they don’t know anything about it. You mentioned not being able to go up against guys like Nike. And I can understand in shoes, that’s probably the case.

11:19
But in other things that, you know, where Nike, think, just puts their brand on something, I feel like you could definitely compete on those, especially wrestling specific items, right? Yeah, yeah. Yeah, I’m gonna be very careful with some of the stuff, as I’m sure you can all worry pussy putting around in a little bit. But we, you know, like what makes wrestling our crush is keeping those vendors just super happy. So it is a statement we know against those guys head to head in some areas, we don’t want to really touch on that. Yeah, that’s like, you know, we don’t move any of that volley, quote unquote.

11:49
Yeah, so they’re an important part of your business having those resellers, you because they give you legitimacy, right, which allows you to then move private label products. Okay. Yeah. All right. I can tell you don’t want to talk about that too much. So let’s switch gears a little bit. Yeah, I think that like we talked about, like the product development strategies, that’s like really stellar and like how to find sourcing agents, how to figure out what products to develop that stuff is. Yeah, it’s great. Let’s do that. Let’s do that. Let’s talk about Alibaba. You mentioned Alibaba in the beginning, but

12:15
Something must have made you start import Yeti. Were you not having great results on Alibaba or? I think that Alibaba starts to struggle when you get into very specialized products, which we had problems with. know, like if you’re searching coffee mugs, there’s a thousand coffee mug manufacturers. But if you’re searching, you know, die cast vintage cars and you want to find the company that has the molds for those. There’s a high chance that that’s not on Alibaba to figure out who’s actually making these products.

12:43
And in its core, that’s where we were kind of struggling. Combined with, know, Alibaba is great for, you know, helping you find a large amount of manufacturers, but it doesn’t do as good of a job of saying who is a better manufacturer than this other person, or at least doesn’t paint the full picture. And, you know, the bill laying data sets can really help you understand that, because you can look at things like how much volume do they move? Who are this? Who are like their customers? Do we trust their customers? What’s the product quality of their customers?

13:11
If they’re able to meet the product standards of a big brand that you know and trust and love, they’re likely to be able to make your standards. If they’ve got the green and ESG certifications for a particular brand, they’re likely going to be capable of doing that in-house themselves for you. Yep. Let me ask you a question that I’ve always wondered. So there’s other competing services to import Yeti out there, which I will not name. Yes. But why start your own as opposed to just paying like the couple hundred bucks to use another person’s tool? Yeah. So

13:41
We struggled with some of the way that data was being represented when we used other free tools out there. That was the first kind of data point. For me, when I spoke with other e-commerce sellers, they found that this data was hard to utilize from an action standpoint. You wouldn’t actually be able to get what you needed out of it. You had to really, really understand data science. So we wanted to create something that would be user-friendly so that somebody who wasn’t

14:09
you know, a supply chain, you know, expert who didn’t have a strong understanding of the way big data worked, can go into something like this and be able to make those supply chain decisions as if they did. Give me an example of that. I mean, I’ve actually used all the tools at some point. Yeah. How’s yours different? Like, let’s say you’re searching, we’ll take a big company like IKEA. Now, IKEA, of course, you’re not going to be importing from IKEA’s manufacturers of fat, but

14:36
You know, on the bill laying data set, there are probably 500 IKEA entities, maybe a thousand IKEA entities. So you’re going to search that and it’s going to be like, IKEA, IKEA, IKEA, IKEA, IKEA, IKEA, IKEA. And you have to wait through all of those. You have to figure out which one is the right IKEA that adds your particular product. Right. We do a bunch of fancy footwork that when you search IKEA, there’s just IKEA. You know, and all of their, you know, things, all their vendor table is visualized.

15:04
The fact that when you look at their vendor table, you can understand the volume those vendors are moving. If you’re using the data set in its raw form, you would have to search IKEA, see that, and then search the vendor, tabulate how much that vendor is moving, try to visualize the consistency, compare that consistency across a bunch of other vendors. And that becomes very hard if you’re trying to make decisions around who is the right vendor based off their consistency.

15:31
You basically just want the data process in a different way in an easier to digest manner. Let me ask you this. I’ve had varying success with tools that browse the import database. Yes. Mainly because, you know, if you look for a big guy like IKEA, you’re right. They’re probably not going to work with you, right? So how do you approach like, how do you, let’s talk about how to use your tool actually. So you find a company and there’s a list of manufacturers. What is your strategy for actually getting one of them to even want to work with you?

16:00
So I think that you’re like, the way I like to think about it is that, you know, just like how you look at some customers is bad versus good. You can flip the roles and start to say, if you’re in that manufacturer issues, right? How do, how are they thinking about you? Why would they want to give you a good price? Why would they want to pick you up as a company? You know, why would they want to ensure that your product is super consistent and has no issues, right?

16:29
And when you start to ask those questions, you can then begin to kind of, you know, say, how do I present myself to alleviate those concerns? Like a really common problem I see is people will send out an email saying something like this. My name’s Billy. I’m an Amazon seller. I want to import your coffee mugs. Tell me your MOQ and price. What that email tells a vendor is, hi, I’m an unproven seller. And they think that

16:58
because of the fact that they got 800 other emails that month saying they’re an Amazon seller. Two, you’re gonna be extremely cost conscious because you’re asking about the price in the very beginning and you’re gonna be ordering the smallest amount of stuff possible. Now when you think about that, you would never give that person a good price ever. You just be like, you wouldn’t. You know what you wouldn’t even mention that I’m an Amazon seller. That’s probably a red flag too. I don’t. Yeah, I don’t.

17:26
Now, you put that script in you, if we take the wrestling mart analogy, imagine you make a wrestling product and somebody messages you and they say, Hi, my name is David Applegate. I’m the purchasing director at Wrestling Mart. Right. We’re the world’s largest specialty wrestling store. You know, I’m trying to import product ABCD from you. And, you know, we’re very aware of this product. You know, we’re looking for these specifications. You guys become highly recommended. I’d love to set up a call with, know.

17:55
you know, and your CEO or sales manager, so we can better understand what your company’s capabilities are and see if we might be the right strategic alliance or something like that. And then you’d have a call with the person and you’d start to build that relationship and they would become invested in your success. We want our partners to be like, you know, Wrestling Mart is the best company ever because when that happens, that’s when, you know, you get the best products, the highest quality and best price and all that good stuff. What if you can’t make that claim?

18:25
Like pretend that you were starting from scratch. What would you say? So I think the first thing I would say is that make sure that you’re the things that are inside your control. You understand like the product you’re trying to import. Do not ask questions about like, what is this material made out of? How is what about this feature and this feature? Because that just says that even if you’re a beginner, you don’t understand what you’re doing, you know. And if you don’t understand what you’re doing, learn.

18:51
I’ll even message like this, if I’m trying to import a product, I don’t know everything I’m importing, I’ll message some vendors from a different email address and just ask all those questions and learn all that stuff so that when I message the people I actually want to message, I already have all of that knowledge framework in my mind. So one, first thing, we don’t make any rookie errors around the things that you should be knowing, doing that. And then I think honesty is always the best kind of approach.

19:18
But there’s a difference between being honest and positioning yourself poorly and being honest and still positioning yourself well. So it’s okay to say, I’m a newer e-commerce brand and we’re investigating bringing this and this and this out. I’m looking through these products. In I’d still like to build a relationship. That’s a better thing than saying, tell me your MOQ and price in the first few steps. And I have a lot of friends that have started,

19:48
Amazon brands that have done very well, that have stellar relationships with their vendors from day one. And it makes a big difference. have been none of them are sending out those emails saying, me your MOQ and price in the first 10 seconds.

20:04
My first book, The Family First Entrepreneur, is available for pre-order at your favorite retailer. And for the month of April, I’m doing something crazy. I’m giving away a new bonus for people who pre-order every single week until the book launches on May 16th. And here’s the kicker. If you buy the book before a bonus expires, you get access to it forever. If you buy the book after the bonus expiration date, you won’t get access to that week’s bonus. Here’s just a preview of the bonuses coming up in April.

20:34
There’s going to be a workshop on search engine optimization for e-commerce store owners, which expires on April 6th. There’s going to be a workshop on Chat GPT and how to use artificial intelligence to automate your business, which expires on April 13th. And I’m also giving out a workshop on how to structure your blog post to rank in search, which expires on April 20th. In addition to this, you also get access to my six-week family-first business challenge, access to my three-day print-on-demand workshop,

21:03
and access to my two-day passive income workshop and tickets to any book party that I’m re-throwing after May. Now aside from these bonuses, the book itself will teach you how to achieve financial freedom by starting a business that doesn’t require you to work yourself to death. Because you can in fact achieve financial success without being a stranger to your kids. You can make good money and have the freedom to enjoy it and you don’t have to work 80 hours a week and be a slave to your business just to make it all work.

21:31
I will teach you how to start a business from the perspective of a parent who makes both business and family work. Go to mywifequitterjob.com slash book and I’ll send you all the bonuses, invitations to book parties that I’ll be throwing all over the country and other special offers. Once again, that’s mywifequitterjob.com slash book. Now back to the show.

21:55
So if you were new, would you start out with like an Alibaba or would you consider just starting with, know, import yeti and finding out, you know, who your competitors are using and starting with Atlas first? I’m not a huge Alibaba fan. Alibaba gets a bad rep with some things, you know. I don’t think that it’s as binary as that. It’s a little bit of either or. You know, I would probably be searching the suppliers on

22:23
that find on Alibaba into import yeti and seeing the problem that the volume they actually move. One of the biggest problems that will happen on platforms, and this isn’t Alibaba’s spin-fix, just out there, is like, let’s say, you if you take Wrestling Mars as an analogy, we sell lots of wrestling shoes. We also sell wrestling laces. Now, our wrestling shoe competency is a lot better than our wrestling lace competency, but if we were to list our product in Alibaba, we’d say we sell both.

22:50
So you’re gonna end up messaging Wrestling Mart saying, I buy shoelaces? When we’re the worst shoelace supplier in the world. And by using data sets like Import, you can see what is the company actually move volume up. And when you understand what that supplier specializes in, hey, 70 % of their business is whatever the product you’re looking for is, or a particular manufacturing technology, then you’re gonna have a much higher quality, you’re gonna have a much…

23:19
you know, typically better cost structure because they get the efficiencies of sale of scale tied to that. Yeah. They’re going to have a more trained workforce in that space. They’re going to have, you know, they buy more raw materials. They got lower cost of goods for that type of stuff. See, I don’t think it’s an either or with Alibaba or Import Yeti. I almost always use it. Alibaba at least some stage of my sourcing journey. I think the more important thing is, you know, making sure you have a good product. It’s very rare.

23:47
that I see people that mess the sourcing stage up so bad that that’s the failure of their business. Every single time I’ve had somebody say like, this didn’t work, was because you chose the wrong product. Right. I mean, quality control is a problem. Actually, since we were just talking about that, what are your guidelines for deciding on a manufacturer?

24:11
Yeah, it’s, I mean, for me, it’s a lot of feel. It’s not as hardcore as that. And since I’m building the relationship, it’s the one I feel like is going to partner the most with, you know, our organization. You know, I those people that want our business, because those are the people that are going to make sure that there’s not issues, you know, that are going to make sure that they’re treating us right. You know, you know, we’ve had manufacturers where there are quality issues.

24:36
And if they’re a strong partner of ours who say, listen, there’s a quality issue here and they refund our money or they give us this context or they do right by us. Now, the reason that’s the case is they look at it they go, we want to keep you guys as a client. So it’s not in our best interest to screw this relationship up. Just like it’s not in our best interest to screw their relationship up. And we treat them fairly because there’s been times where it’s like we make an error or something like that. know, yeah. So it’s more about your gut feel on

25:06
how they’ll work with you as opposed to something that you’ll find in like the assessed supplier report on Alibaba or are there things you look for first? Yeah, I think that like maybe I put those as qual the problem where is I use as qualifiers. So I say like, what is my manufacturer need to have like what will be the right potential fit? You know, and if they’re checking those boxes off, then it becomes relationship. So it’s like, okay, I want to find somebody that

25:35
specializes in manufacturing product A, that we’re gonna be a big fish in their pond, that is located in this region or whatever the six things are, that has a stable customer relationships. And then from there, it would be at those two or three, which I don’t message 30 vendors, I pick one or two, sometimes three. I then say, hey, let’s build a relationship. So some of the common questions that I get asked are mostly solved by relationship.

26:04
So I’ll get asked like what’s stopping them from just copying my product and selling to other people? Yeah. And my answer to that is always, you know, once you’ve talked to them face to face, it usually doesn’t happen. What is your answer to that question? Like you have a good relationship. think that one, the copying problem isn’t as big of a deal as I think most people make it out to be. You know, it’s very I have heard of use cases where someone’s like, I was making this product with this manufacturer and then they started selling on Amazon and that has happened.

26:33
But it’s very, very rare. It’s not like I talk to 100 people and 20 of them have that experience. like one. So I think that’s the first endpoint. But the second thing is goes back to that relationship as you’re saying. There’s no way any of our vendors would want to do that because they’re like, okay, we can A, ruin this relationship that is very profitable for us and is win-win. Or B, we can try to make some, know, little bit cash on the side and, you know, it just doesn’t, the math doesn’t pencil out.

27:02
Plus, there’s an organizational competency thing. Most good manufacturers are not Amazon sellers because they’re focusing on manufacturing. You know, that’s a different skill set. Yeah, totally. So we talked about Amazon a couple of times, and it’s getting harder every single year. Yeah. How do you stand out among the crowd looking forward in 2023 for Amazon or DTC? Yeah. So, I mean, I think the first thing is, is I never like to think of

27:32
creating an Amazon business. I feel like that’s trying to say you’re trying to create an app on the app store. That’s not a business, it’s a sales technique, a distribution channel. The correct thing is can you create core business fundamentals that make sense and add value to customers? And if you can answer yes to those questions and you’re creating things people actually want to buy, Amazon’s a great accelerant for that sales.

28:00
You know, I have warehouses, do warehouses are hard. You have to scale. have to have ERP systems like it’s hard. Amazon completely abstracts all of that, which is a huge, huge, huge deal. That doesn’t, you know, make it so that you then magically can wash your hands of the actual business problems, which is how you create value, how you market your product. You know, like I can’t tell you how many Amazon’s I speak to, or I say, what’s your marketing strategy? And they say Amazon PPC. And that’s not

28:29
an entire marketing strategy. That’s one tool you can use out of many. And it’s a hyper competitive one that is getting much, much thinner in terms of value these days. But there’s thousands of other ones that are great, that work stellar. And you can use Amazon’s amazing warehousing and infrastructure to scale the way you never could in the past, which is just amazing. But you have to focus on this core business fundamentals if you want to create something that lasts.

28:56
you know, stands the test, you know, generates money over the like the time. Walk me through your process of finding that product that you know is going to sell well. Regardless of the first thing. Yeah. Yeah. The first thing I do is I try to be a consumer. You know, I really slight like spend time in areas that I enjoy. So like we look right here. Here is a fountain pen. Right. I love writing and I’ve got 10 fountain pens over here.

29:22
And I could tell you about the inks, the different strategies behind inks, different colors with inks, the different oils that go into inks. I know this stuff, but I don’t sell any fountain pen products, but I have considered it because I know what I want. For me, the things that value, that I really like is I like certain color reds. They’re drawn to me and I don’t see them in the marketplace a lot. I also like certain fountain pen holders and things like that. Fountain pen space in terms of the actual pens I’m very happy with.

29:51
I love a lot of pins on the market. I don’t go, ooh, I wish I could create this. But because I’m in this space, and it’s important, there’s a lot of spaces that I try to spend time in, whether it’s fitness or fountain pins or whatever, I begin to see opportunities, things that I would want, that my peers that I’m hanging out with want, that other people online want, because I’m in those communities.

30:21
You know, from there, I began to take what would be a potential product idea. And then I tested out with people. I’d say, Hey, I’m thinking of doing this. What are your guys’ thoughts on it? You know, because I’m in the community, people will give me feedback. You know, it’s kind of a slightly tangential story. A long time ago when was in college, we had a great senior project and everybody in the room had presented an idea.

30:45
And so we’re sitting in like, there’s like 40 of us or something like that. We’re in a circle. And the first person’s business idea is like, I’m going to create a cleaning service for college fraternity parties. And the next person’s like, I’m going to create hangover breakfast. The third person’s like, I’m going to create a book lending service. And the fourth person’s like, I’m going to create a college cleaning process for house parties. know, it’s like everybody had the same business ideas.

31:12
Like literally there was no diversion thinking. And you realize because we were all students and all we were doing was partying and studying. Right. know, and so that was the ideas we had. No one had any money. Nobody was playing around with fountain pens. Nobody was thinking of, you know, the next, you know, boring, you know, Shopify conversion app or something like that. Because they weren’t on Shopify. They weren’t, you know, playing with makeup or whatever kind of passion is.

31:38
So spend time in areas where you think you can actually add value and you’ll see serendipitously where those values can be created by being in that space. Once you have that idea mentioned, I like to test it, really say, hey, I’m thinking of creating an ink. And then I would say, okay, what are the biggest risk areas? Risk area one is are people gonna want to buy it? Risk area two is how am I gonna get in front of those customers? And risk area three is can I even make ink?

32:05
You know, maybe it’s different, but those are my first three that I would think of if I’m trying to make ink. And I would say, which is the riskiest or most, you know, kind of, um, you know, has the highest chance of failure. I have pretty high faith. I could probably figure out how to make the ink, you know, uh, like people I could pay to do that. Like, so I go, okay, that’s low distribution too. I actually don’t have a lot of risk in that area. I, know, I’m very competent at my ability to market on forums. I’ve seen a lot of people do things like this. I understand the way it’s worked in the past.

32:35
But I have no idea whether people actually want to read it. You know, I do. But am I the only one in the room? So I would probably, you know, message 30 people and I’d say, hey, listen, can I buy you a cup of coffee for a 10 minute Skype call or Google meets call and just ask a few questions about your ink purchasing habits. And I would say, hey, here’s my name’s Dave. Here’s what I’m thinking of doing. You know, do you feel that you want to read it too?

33:00
And people are like, they’re like, oh yes, I feel the same way as you. Yes, yes, yes, I’ve been dying for this. And I go, hey, you if you, I did the pre-order today for 20 bucks, would you pay for this? And the person’s like, yes. That’s a huge indicator of interest. And that’s, you know, the way we build everything. It’s the way Import Yeti was built. We didn’t build Import Yeti all in one day. We released a really, really shitty version of it. And people tore it to smithereens. But a lot of people tore it to smithereens, which indicated that people were interested.

33:31
You know, it’s funny, before we hit the record button, you were telling me that, you you run Wrestling Mart, you’re not really a wrestler. And we were just talking about like some of the merits of having a retail location. How do you get feedback from people regarding the next product that you’re gonna launch? I mean, I know you have this retail store. you, would you say that the retail part of your business is a very important component of your product research process? Insanely.

33:59
You know, especially for a sport where like you’re trying things on and stuff. So you get it like, you know, it’s if you’re dealing with like a coffee mug, it’s easier to get feedback from that over the phone. But with certain garments, like you have to be able to look at it person because people can’t describe the way a garment doesn’t fit correctly or whatever the particular thing is. And I actively try to develop, you know, ways to stay in touch with customers, whether it’s answering the phone a lot. Like most people would never answer a customer’s support call. I answer customers’ calls regularly. You know,

34:29
you know, looking at emails, surveys, you know, all that stuff makes a big difference. So what I’m getting at is, if you were to do this all over again, yeah, would you actually start the retail component? Also? That’s a tricky one.

34:48
I’m bullish on certain aspects of specialty retail, but it depends a lot on situations. It varies a lot depending on the kind of individual space. That being said, I think that there’s a lot of magic in retail that’s not being utilized correctly.

35:10
If you were online only, how would you get your feedback? I mean, lots of phone calls, you know, really trying to make sure that you’re plastering your ability to get in touch with customers, you know, just like everywhere’s phone numbers, you know, you’re available all the time. There’s surveys after purchase, like, you know, email addresses are everywhere. You know, you have those monitoring systems and you have all hands on deck meetings with team members so that, you know, people have

35:40
clear ways of bringing problems forward and you can have discussions around things. That kind of stuff makes a big difference. If you’re just starting something out, trying to participate in communities like forums or subreddits, things like that, just really, really being in there makes a big difference. Interesting, are you still doing all that stuff today or is your retail channel good enough?

36:10
Um, you know, I still answer the phone a lot. You know, I’d like to take 10 to 15 phone calls a day is my guess. Any more than that. Okay. You know, and then we, you know, we have like a lot of all hands on deck types of meetings, where it’s like, you know, people are able to disseminate information so that, you know, if someone takes a phone call, and they’re like, Hey, this person, you know, is complaining about this product. And then six other people have the opportunity to go, Oh, I got a phone call about that too.

36:39
or I got two emails and one phone call about that. And that provides a lot of opportunity to kind of make sure that those things are being dialed in and you’re getting everyone sharing information. So what’s funny about this is I’m trying to get information about you, like if you were to start all over. When you’re on Amazon, you don’t get any of that. So what would be the sequence that you would start things if you were to start wrestling all over again? I I would never start on Amazon. Like I know that’s probably a controversial opinion, but like,

37:10
I feel like if you’re starting on Amazon, you’re effectively doing, you’re doing manufacturer arbitrage now, you never spend the time, which is you’re trying to say like, as opposed to drop shipping, you’re just saying, I’m going to buy more units with a longer lead time and then sell the same widget as everybody else at 1 % lower the cost or 10 % more efficient, the PC campaign or whatever the, you know, the, the letter is. And that’s a, that’s a bad business strategy, like really bad business strategy. Because all you’re saying is, is I’m waiting for the next person who’s

37:39
X percent smarter than me or stupider than you will lose money, which is a likely thing that happens to and you know, you’re going to end up, you know, this just doesn’t work out well. That’s a short answer. You know, and in doing things like traditional retail, traditional Ecom are important. You can’t sell somebody on a Shopify store. You’re not going to build a good Amazon store out. The truth, not in the long term, at least not in the long term.

38:10
You could find that manufacturer arbitrage, but you’re not building a sustainable brand if you can’t do whatever. And I’m all for Amazon, I love it. It’s a beautiful platform that completely can accelerate your growth. But people think it’s a business and it’s not, so distribution show. Yeah, I always refer to it as like an ATM machine where you insert products and money comes out, like if someone, everything is a commodity on Amazon, right? People will just copy that exact same thing.

38:37
Yeah. So that’s interesting. I would say a lot of the people who are trying to get rich quick are selling commodities on Amazon. I buy a lot of things like ink that are not commodities. You know, like if I buy, you know, this beautiful Eldenstein, I think it’s how you pronounce it, Topaz Blue ink, which is one of my favorite colors. I got this on Amazon. This is not a commodity. This is a well-branded, well-developed product. Correct. Correct. But it has brand equity, right?

39:07
I’m just talking about when you’re first starting out. You probably don’t have brand equity. So it’s interesting. You wouldn’t start out on Amazon and you would launch your store first and get sales there and get the feedback there and then launch on Amazon later or? Yeah, I honestly probably wouldn’t even start on Shopify first. would buy, with most things I would just say, can I get community sales? So can I go into a subreddit or a forum or whatever and convince people to buy my product?

39:37
you know, you know, or even if it is you give it away, you know, he said no one’s willing to take it or whatever, then you’ve got other warning signs. And I would just from there, really hedge my bets. You know, and take baby steps forward. what are you talking about, like a PayPal button? Okay, that’s a perfect example of it. You know, like a PayPal link. Yeah. Like, hey, you know, like I see a lot of this like Kickstarter, like functions. Yeah, it’ll be like, hey, I’m bringing in this product.

40:07
you know, like I’m trying to sell 10 units of it. And if I do our 100 units, you know, we’ll do this. You know, and those things prove is stellar ways to prove out of market. You’ve mentioned several different ways kind of in passing, like, would just look on Reddit, what are the communities like, where do people hang out in communities? Typically, I know Facebook and Reddit are, are two, are those the two main platforms you use? Or? mean, it varies a lot depending on what the space is. So like,

40:37
And if you’re part of it, you generally get a very quick understanding of where those communities lie. some things, like you take guitars as an example, which is another thing I love, forums are very key with guitars. Probably slightly older demographic, not using younger social Like standard forms, like the old school, like BB press type of forms? Yeah, yeah, yeah, yeah, yeah. Wow, okay. And really tight-knit communities, just stellar places.

41:05
if you’re trying to move a new guitar tune or maybe you can innovate on or whatever the space is. And then Facebook groups work really well for some things, really bad for others. Reddit works great for some things. Some things, it’s physical meetups. I spent a lot of time going to e-commerce meetups. There’s lots of conventions. You just have to say, where are my people hanging out? And if you find where that place is, online, offline,

41:33
Discord, know, wherever it is. Yeah. Walk me through, like if you’re new to a community, walk me through your steps to kind of ingratiate yourself before you start dropping these questions like, hey, would you buy this? Yeah. So I, I almost like nobody ever responds to posts that are like, would you buy this? Like, that’s just like, I’m sure, you know, I focus on, you know, at first, just adding value and being a part of it, you know, and then I generally do reach outs.

42:01
to people after I’ve already built up a reputation, you know, of like a valued member of the community. You know, then people are going to want, because they know me, they’ve seen my screen name, they’re going to want to, you know, participate in that stuff. And there are sometimes some exceptions that were like, you truly have a product that like, is going to be viral, and you already have samples of it, and you’ve got a great post, you can eventually do the post and it’ll probably do well. But at first, I’m starting out just with messaging people and just trying to…

42:30
you know, get inside their heads and understand their worldview. Okay, and then if you can get people to buy it, we already kind of talked about interfacing with the factory. One thing that I forgot to ask you was, in terms of pricing, like, how do you gauge the profitability of the thing that you actually want to sell? So, one people, I think they’re afforded walk into this conversation that changed my views on pricing a lot, is time scum. I used to much more low cost kind of

43:00
You know, thinking so much is my part of resting Mars done a really good job and like saying, since higher prices are good and we’ve seen really good results with that. Um, you know, I think that because Amazon is so price conscious, people have the mindset they need to be the lowest cost. That is how a sale happens. You know, uh, but if you’re focusing more on value, you know, price becomes a secondary thing. Like for me, if we take, back to that ink example.

43:28
I genuinely don’t know what I paid for that ink, but I can tell you there is a 0 % chance I’m not buying it. It’s $9, $15, $19, $29. It’s the same ink. like for me, it’s 20 bucks. You know, like I want the ink, you know, I want the color. I want that color, you know, so I’m willing to pay more money for that. Just like how everybody buys the fancy new iPhone, it three times the price of the Android phone that does the exact same thing. And anyone who’s like my iPhone’s better than an Android phone.

43:57
myself because I have an iPhone and love iPhones is lying to you. You’re buying that because you want to have an iPhone. And that’s the way your products I think need to be if you want to charge those kind of premium prices. And if you are going to say we’re going to be a low cost provider, that’s okay. But you have to have a competitive advantage with that type, that low cost strategy. What doesn’t work is you’re going to say, I’m going to use the same manufacturers as everybody else, get the same pricing as everybody else.

44:26
and sell it for a lower cost than everybody else. That’s a flawed business strategy. If you’re like, I’m able to manufacture these things 20 % lower because I’ve got ADCD technology, or I’m innovating in this space, or I understand this thing. And that allows me to sell at a significantly lower price than anybody else, and still be profitable, that might work. But most people aren’t thinking like, or actually, they’re not thinking like that. They don’t have the opportunity for that. I think going low cost is one of the hardest things that you can do.

44:56
I always tell everyone to just go high end because then it’s not a question. That puts money out of the equation altogether. And having competitors, it kind of makes you more resistant to the competition. If you can put out something that’s really good, you’re right. I pay for stuff where I don’t even look at the price. it makes advertising easier. It makes customer service easier. Because you can just, you don’t care. You just give it away for free or whatever, like if they complain. And that adds to your bottom line. So yeah.

45:26
I actually don’t know that many people who stand the test of time going on the low end route and just, because it’s always a race to the bottom in terms of price. Yeah, my first product I ever sold was that tobacco paraphernalia. And I’m gonna, you know, he’s butchered the numbers a little bit, I would save some work, but I was selling these cigar cutters, and it was like, I was selling it for like 9.99, buying it for 50 cents, and I was charging like $3 shipping. And it was like 13 at times, I don’t sell like 20 of these things a day.

45:55
which when you’re that age with that, this is back in 1992. Like I was literally looking for my Ferrari online. like my first car is going to be a Ferrari type of thing, you know, thinking I was like, this is it. And I do this for like 30, 45 days or something like that. And then I woke up one day and there was zero sales. And I was like, that’s weird. I went 20 of the day before, you know, and then the next day comes around zero sale.

46:23
So I go on eBay search and now some dude selling cigar cutters at 9.50. I’m like, whatever. So I changed my ID to 8.99 and then 20 sales, right? Next day, 20 sales, 20 sales, 20 sales. And this goes on for nine more days. And then I wake up the day and there’s zero sales. And this time immediately go and check and the dude’s now selling them at 7.99. know, and fast forward four months, I’m now selling cigar cutters in a dollar 99 with free shipping and losing 50 cents on every cigar center I sell, with shipping included, you know.

46:53
And that’s the way eBay went back then. Amazon is going through the same thing, although it isn’t quite as extreme yet. If you search my favorite searching exercise rings on Amazon, you will see 195 exercise rings listings that are all from the exact same pair of exercise rings. It’s probably coming out of one of two factories. What do you expect this gonna have?

47:22
My last question for you actually is how do you feel about those people doing Amazon wholesale where they’re using these pricers to just make sure that they get the buy box and whatnot. To me that’s unsustainable but I’m just kind of curious what your thoughts are. Yeah, mean like I know a lot of people that made a lot of money doing a lot of different things online and you know I’ve got you know I’m not gonna use my name and I’ve got a friend that makes a fortune doing things like that. His mindset is I’m gonna be ahead of the curtain. That’s always what he thinks.

47:52
It’s how can I be the first one to figure this out? Push it as hard as I can and then recognize when it stops and take my foot off the gas and move on or next. You know, and I don’t agree with that business model at all. You know, he makes a lot of money doing it, you know, but he has done things like that before. Now, the reason I say that is that obviously people make money doing things like people make money doing retail arbitrage, manufacturer arbitrage and drop shipping.

48:22
whatever it is, but there’s good and bad business models. And, you know, if you, if you focus on what the good business models are and core business fundamentals, you stand the test of time, you actually make the world a better place. And you tend to, you know, have a much easier kind of, you know, time in the long run. The one other thing I’d say about my buddy is he is extremely intelligent, a lot smarter than I am. And

48:50
I think that intelligence serves him well. And if you’re looking at these sorts of opportunities and you’re going, haven’t spent 20 years doing various internet marketing trends and always spinning on the top of the curve, you’re an idiot if you think that this time you’re going to be, you know, because history has said you’re hot, you know, and I’ve tried to do some of those hustles before and sometimes I, you know, uh, wins and I lose, but what I’ve learned is that

49:17
ends up being kind of net velocity at them all together. And that I am investing a lot of time. And so now I, you know, try my best to avoid that temptation. And you know, focus on what’s valuable. For me, it’s about sleeping well at night, actually. Yeah, with those fads and whatever, like you could lose that stuff really quickly. Whereas if you have your own brand, it’s still my drop, but it’s a lot more gradual and you have time to react. Yeah. And it’s I think that’s that’s well said, like especially if your income is depending.

49:45
Like if you’re saying that like I am the wholesale, you know, button buyer guy, like you have to be able to, you know, be able to weather that storm because there will come a day where that would stop. It’s just gonna happen. Yeah. Dave, where can people find about your tool? Ask you questions. Where are you at online? ImportYeti.com. And there’s a little contact us button and the emails go straight to me. And I would love to hear from anyone and everyone about how they use the tool.

50:14
especially if they have ways they can make it better. And I care about especially the granular things like you’re like this, putting this button here makes me want to punch you every time I see it. It’s so annoying, it’s the wrong spot. I want to hear that feedback. You know, it’s the thousands and thousands of Import Yeti users that have made Import Yeti good so far and allowed us to spread and give me opportunities to be on podcasts and stuff like this, which I’m very grateful for. And I love the tool and I love the fact that it’s actually free, which we had

50:42
talked about this earlier, like that core component of the product is always gonna be free. there’s no reason not to check it out. Thanks for coming on Dave. I appreciate it.

50:54
Hope you enjoyed that episode, and if you haven’t already, go check out Import Yeti right now because it’s free. For more information about this episode, go to mywifecluderjob.com slash episode 453. And once again, I 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 next big own marketing platform, and you can sign up for free over at postscript.io slash div.

51:22
That’s P-O-S-T-S-E-R-I-P-T dot I-O slash Steve. I also want to hang out with you in person in Fort Lauderdale, Florida. So grab a ticket to Seller Summit and let’s meet up. Go to SellerSummit.com. That’s S-E-L-L-E-R-S-S-U-M-M-I-T dot com. Now I talk about how I use these tools on my blog. And if you are interested in starting your own eCommerce store, head on over to mywifecouterjob.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.