466: Outdated Ecommerce Tips You Should NOT Be Doing In 2023 – Family First Friday

00:00
You’re listening to the My Wife Could Her Job podcast, where I teach you how to start a business or side hustle from the perspective of a father with two kids. Welcome to a new segment of the show, which I’m calling Family First Fridays in honor of my Wall Street Journal bestselling book, The Family First Entrepreneur. Now in this episode today, we’re going to talk about what not to do when it comes to starting a business. And the problem with learning how to start a business on YouTube, Google, or TikTok, or listen to a podcast, is that there’s just too much content to consume.

00:30
and a lot of it is outdated and worthless. So to help you sort through the junk in this podcast episode today, I’m going to tell you about all the outdated e-commerce strategies and tips that no longer apply. So number one, stop relying on Amazon, eBay or Etsy for all of your sales. Now relying on a single platform for all of your sales can be risky because it leaves your business vulnerable to changes in that platform’s policies or algorithms, which can instantly tank your sales. Also,

00:58
Diversifying your sales channels can help you reach a wider customer base and increase your overall revenue. Let’s start with Amazon. First off, Amazon does not care about you at all. For as long as I’ve been selling on Amazon, there are thousands of malicious sellers on the platform who game the system and try to sabotage your sales. For example, my friend Kevin Williams started a company called Brush Hero. He’s actually a guest on the podcast talking about this. He sells cleaning brushes and an evil seller in China

01:27
decided to knock off his entire product line, including the box with his picture on it. Now this Chinese company sold a crappier version of his product on his listing at half the price and totally destroyed his multi-million dollar brand. Now when Kevin complained to Amazon and showed them his patents and copyrights, they ignored his problem and did not suspend the malicious seller. And in fact, it took him two years and multiple million dollar lawsuits for him to get Amazon to take action.

01:55
Now for my store over at Bumblebee Linens, every year we have sellers who try to buy out all of our inventory over the holiday season to prevent us from selling and then return all of our merchandise in January after the holidays. My friend John Rampton lost his multi-million dollar container business when Amazon decided to ban his account for life. In fact, I recorded an hour long podcast episode with John about this that you can actually listen in in the show notes below.

02:22
Now Amazon is also getting harder and more competitive every single year. Roughly 3,700 new sellers join Amazon every day and it’s a very cutthroat marketplace. Now I’m not telling you not to sell on Amazon, eBay or Etsy, but you should never put all of your eggs in one basket, especially on a platform that you do not own. The only thing that they care about is their stock price and they are constantly raising their prices to make it harder for sellers to make money. And in this day and age,

02:51
You must have your own website and a property that you own and control. Now, the biggest disadvantage about selling on third-party platforms is that they hide all the customer information from you. And the heart of any business is repeat business. Now, the number two outdated strategy is to stop dropshipping from AliExpress. AliExpress dropshipping is an e-commerce business model where you take orders online and the orders are fulfilled by AliExpress.

03:19
Now products are much cheaper on AliExpress than they are in the US or Europe, so you can make a profit on the sales without ever seeing the product or touching any inventory at all. Sounds easy, right? Well, it’s not. Do not choose this business model because here are the disadvantages. AliExpress is based in China, so shipping times can take several weeks or even months. Now can you imagine ordering something online and having it delivered in 60 days or more? These shipping times alone will kill your business before it even gets started.

03:49
If you need faster shipping, the shipping costs will often cost far more than the product itself. Now most sellers on AliExpress have poor quality control measures in place. And most of the stuff that you find on AliExpress is just cheap junk that is made in China. You want to build your online store and brand on top of quality products and not garbage. Some products on AliExpress are counterfeit. If you end up selling counterfeit products by accident, then you are liable for the damages, not AliExpress.

04:19
There’s also low profit margins. Lots of people are using Aliexpress to drop ship the same junk. As a result, prices are road quickly and you end up having to jump from one fad to the next. There’s no longevity when it comes to drop shipping from Aliexpress and you constantly have to find the next trending product. But most importantly, it’s actually against terms of service to drop ship from Aliexpress on Amazon, eBay or Etsy. If you are caught, you will be suspended. Now, since we’re on the topic of drop shipping,

04:47
I also want to say that dropshipping overall is not a good long-term business model. Sure, it’s easy and cheap to get started, but your margins are low and you’ll probably not make life-changing money with it. Once upon a time, dropshipping was a lot more viable, but Amazon basically killed this business model. Outdated strategy number three is to stop using Amazon Automation. Amazon Automation is a service where a business owner outsources all the processes of their e-commerce store to a third party.

05:17
Basically, you pay a company tens of thousands of dollars and they go and find you a product to sell, list it on Amazon, and you split the profit. Now, when I first saw these ads all over YouTube, my Spidey sense started tingling immediately. Why would a company start an e-commerce business for you from scratch and split the profits when they could just do it on their own and keep all the profits? Amazon Automation had scam written all over it and it’s proven to be true.

05:42
Now I’m not going to call it any specific Amazon automation businesses in this episode, but all I can say is that if something sounds too good to be true, it usually is. Now, even if some of these Amazon automation companies were legit, most of the Amazon aggregators actually went bankrupt during the downturn and it’s an extremely difficult business model. The next outdated business model is to stop running Amazon giveaways or soliciting reviews.

06:09
Now over the years, Amazon has majorly cracked down on solicited reviews. It is now extremely difficult to get people to inorganically leave a review on your products, so just don’t do it. If you are caught, then you risk a product or an account suspension, and it’s just not worth it. The best ways to get reviews now are through Amazon’s backend, where they allow you to send a single, canned email to ask for an unbiased review. And the same goes with giveaways. Once upon a time, you could spam giveaways to increase your sales velocity and rankings, but these no longer work.

06:39
You also want to stop using public rebate sites. Once upon a time, people were using rebate services to get sales on Amazon and then reimburse them through PayPal. And this allowed sellers to get a full price sale, which helped boost rankings while attracting many buyers looking for free products. Essentially, it was like running a giveaway, except you get a real sale. Now, Amazon cracked down hard on these rebate sites when one of the most popular rebate giveaway tools, RebateKey, was suspended. Anyone who used a rebate service

07:08
was also sent a scary letter warning against these actions going forward. Amazon changed their terms of service with the following new wording. Manipulating sales rank, such as by accepting fake orders or orders that you have paid for, or making claims about sales rank in product titles or descriptions is against terms of service. Now, there’s still Amazon sellers using rebates, but definitely not with a paid service. It’s just not worth the risk. You also want to stop spending all of your efforts on customer acquisition

07:38
and sell more to your existing customers. Now, when most people run a business, most people focus on spending all of their money to acquire new customers and often neglect their existing customers. Well, let’s face it, we’re in a downturn and there are many reasons why you should be focusing on selling to your existing customers more. It is 66 % less expensive to sell to existing customers than to acquire new ones. After all, existing customers already know who you are and they trust you. They already opened up their wallets once.

08:08
As a result, the cost of getting someone to buy again is super easy. Just send them an email or a text. Existing customers are more likely to make repeat purchases and spend more over time, which means that you can greatly increase the lifetime value for each customer. Repeat customers are also much more likely to be loyal to a brand, which can lead to more positive word of mouth and referral marketing. And this is saying that on average, every happy customer tells at least nine people about their experience.

08:36
So by focusing on your existing customers, you can gain a better understanding of their needs and preferences. For example, with our store, once I started communicating with existing customers, I actually discovered that many of them were event and wedding planners. And by getting on the phone with them and offering them coupons and special treatment, I could get them to buy in bulk from our store forever. The other thing you also want to do is to stop focusing all on ads and more on content. Paid advertising is expensive.

09:06
and it’s getting more expensive every year, and the traffic is short-lived. Platforms like Google and Facebook are getting more expensive every year, and this is even taking into account iOS 14, which pretty much decimated the effectiveness of Facebook. The best way to attract long-term sales for free is by creating content. Three years ago, I started a YouTube channel, and let’s just use that as an example. Right now, if you go to my YouTube channel, and you watch a video, and you absorb the tactics and strategies that I teach you, I’ve gained a little bit of your trust.

09:36
And by trusting me, you are far more likely to buy a product that I have for sale. Now the beauty of content is that it’s free to produce and the effects are everlasting. Videos and blog posts that I wrote 10 years ago are still generating me traffic today. YouTube videos that I created years ago are still making money. And in fact, my YouTube channel makes over 300K on ads alone. And my blog makes seven figures on affiliate marketing and core sales every single year. And in this day and age, it’s all about building a brand.

10:05
which requires you to create content. After all, you can’t really build a brand unless you can get your message in front of customers. So just pick a medium, whether that be blogging, YouTube or social media and start posting on a regular basis. Because once you’ve gained someone’s trust, you can easily sell them products that you create. Another e-commerce strategy that you guys should be focusing on is email marketing and SMS. Now in this last section, I talked about creating content to build a brand.

10:33
Well, the average conversion rate in e-commerce is only about 2%, which means that 98 % of people consume your content and then bail. Now, the best way to bring these visitors back is to grab their email or their phone number. Create a lead magnet. This could be something as simple as giving out a coupon or free shipping in return for their contact information. And here’s the beauty of email and SMS marketing. Visitors may not be ready to buy from you right this second, but by emailing them and contacting them on a regular basis,

11:02
you’ll keep your company in their minds. So when they are ready to buy, they will buy from your store. Email and SMS marketing can also be used to promote products, offer discounts, and provide valuable content to subscribers. And the best part is that these are customers that you own and no one can take them away from you. Now my next piece of advice is to just stop doing what’s easy. Because if you go with what’s easy, there’s going to be more competition.

11:28
Now one of the most common questions I get asked is, Steve, what is the easiest way to make money online? Steve, what is something that can start and make money today? This is the absolute wrong mentality and let me just explain why. If you go and start something that is easy, that means that thousands of other people are going to be doing it. And when you do something easy, there are no barriers to entry and the competition is going to be fierce. Let’s take dropshipping as an example. It’s pretty easy to start dropshipping online because you don’t have to carry inventory.

11:56
and you can start selling immediately. But guess what? Chances are there are thousands of other people drop shipping your exact products. Now as a shopper, let’s say I find 10 stores selling the exact same product. I’m going to buy from the store with the cheapest price. So when you do something that is easy, the price always spirals to the bottom. So instead of asking yourself what is easy, you should ask yourself what is difficult or a pain in the butt to start. What unfair advantage do you have

12:26
over other people. For example, with our store, we do custom embroidery. We have five machines that cost over 10K each to do customer embroidery for our customers. And not only are these machines expensive to buy and maintain, but it’s actually a major pain in the butt to embroider something. Not only does the thread break all the time, but the machines need to be recalibrated and the machines chew up product all the time. Furthermore, it requires someone trained to operate them. And because doing custom embroidery is such a pain,

12:54
there are very few people who would try to copy me. Sellers in China can’t copy us because they can’t offer the service from 20,000 miles away. So instead of asking yourself what is easy, ask yourself what’s hard that you’re willing to tackle. Now my final piece of advice, it’s to stop throwing up random products to sell online. Because back in the heyday, you could go on Alibaba, find a product for cheap as is, listen on Amazon and make a killing, but those days are over. Now to be clear, you can still make money this way.

13:23
but only for a short time. Especially on Amazon, sellers are constantly using research tools like Jungle Scout to find good products to sell, and eventually someone will find your product and copy it. That is, unless you have a strong value proposition and a brand. A unique value proposition, or UVP, is what makes your product different or special, and your product doesn’t necessarily have to be better, it just needs to be different. For example, my brand over at Bumblebee Linens,

13:50
offers the largest selection of handkerchiefs on the internet. And I’m pretty sure that companies can’t make this claim because we specialize in hankies. My friend Dave over at Saddleback Leather sells bags which are a huge commodity. But his value prop is that his bags last forever. His slogan is that they’ll fight for it when you’re dead. So instead of throwing up random, disparate products to sell, think in terms of niches or families of products that you can build a brand around. You can start with a single product, sell it well,

14:19
and then expand into related products or accessories. This way, you are creating a business that focuses on a specific area, which will eventually lead to a brand. So that’s just a list of things that you should not be doing today. Don’t fall for the get rich quick schemes and be prepared to stick it out for whatever business you decide to start for at least one year.