491: The Future Of Ecommerce In The Face Of AI And Other Changes With Mike Jackness And Toni Herrbach

00:00
You’re listening to the My Wife, Quitter, Job podcast, the place where I bring on successful bootstrap business owners and delve deeply into what strategies are working and what strategies are not with their businesses. Now just got back from Las Vegas where I got to speak in front of 1300 people at the Alibaba Co-Create Conference and it was a fun event. And what’s cool is that I got to meet up in person with my good friend, Mike Jackness and my business partner, Tony Urbach. And you know by now that whenever we three get together, we always record a podcast. So today,

00:28
we are going to discuss the future of e-commerce in the face of AI and other changes in the industry. But before I begin, I want to give a quick shout out to Chase Diamond for sponsoring this episode. Chase is my go-to guy when it comes to email marketing and he runs a successful email marketing agency over at Structured Agency, which caters to many eight and nine figure e-commerce brands. Now, for those of you who can’t afford to hire an agency, Chase offers a pretty good email marketing course if you want to learn how to do email yourself.

00:55
And this course can be found over at mywifequitterjob.com slash chase. Once again, that’s mywifequitterjob.com slash chase. I also want to thank Emerge Council for sponsoring this episode. Now, if you sell on Amazon or run any online business for that matter, the most important aspect of your long-term success is going to be your brand. And this is why I work with Steven Weigler and his team from Emerge Council to protect my brand over at Bumble Bee Linens. Now, what’s unique about Emerge Council,

01:23
is that Steve focuses his legal practice on e-commerce and provides strategic and legal representation to entrepreneurs to protect their IP. For example, if you ever get ripped off or knocked off on Amazon, then Steve can help you fight back and protect yourself. And the students in my class have used Steve for copywriting their designs, policing against counterfeiters and knockoffs, vendor agreements, brand registry, you name it. So if you need IP protection services, go to EmergeCouncil.com and get a free consult. And if you tell Steve that I sent you

01:51
you’ll get a $100 discount. That’s E-M-E-R-G-E-C-O-U-N-S-E-L dot com. Now on to the show.

02:05
Welcome to the My Wife, Put Her Job podcast. It is rare that both Mike Jackness and Tony Urbach and myself are all in the same room together. But when we are, we always like to record a podcast. And I thought we would go a little high level today and maybe just talk about the future of commerce, where the opportunities are. We’ll just leave it at that. Because I know Mike probably doesn’t have anything to say about that. No, nothing. I never have anything to say about anything.

02:32
It’s like it’s cool being back on the podcast so soon. just recorded with you I’m not sure when these episodes go out, but we just got the chit chat So it’s being back here cool being in the same room with you and Tony and looking forward to talk today Well, I didn’t tell you this but I might not air that episode. I don’t blame you. Yeah There’s a lot of whining on your part and you know, that’s all I ever do Let’s whine about something else today So we’re at the Alibaba conference and a big part of it is sourcing

03:01
Let me give you this question to start out. Of all the different factors in the success of an e-commerce business, how would you rank sourcing as part of that? Yeah, it’s one of those things that doesn’t seem important at all until all of a sudden it is, right? Because you kind of just ignore sourcing or take it for granted a lot of times, I think, because you’re looking at things from a marketing perspective. Are you using a tool like Helium 10 or Jungle Scout or something like that and searching for opportunities and just

03:29
looking to like scratch off that that sourcing box. But if you have bad sourcing partners, then also that’s all you can think about because you’re not getting your products in time. The quality isn’t good. They’re delayed. The logistics are bad. Something is broken in that process. You know, they stolen your money. There’s all kinds of things that I’ve gone through over the years. And so it’s like, again, it’s one of those things that you kind of take for granted. Sometimes like your health until all of a sudden, you know, you can’t walk properly, you can’t breathe or you’re sick or you get COVID or something.

03:54
You don’t think about those things until they’re happening. And sourcing oftentimes is kind of that forgotten thing in e-commerce. See, I just wanted a number. A number? Well, you know, how would you rank it on a scale? And then we get this like, this is going to be a long episode, folks. It can be a one or a 10. There we go. Yeah, I was thinking for myself, I think it matters really, it matters a lot just to get started.

04:22
But I’m actually of the belief these days that, at least for your own site, not Amazon, that you can pretty much sell anything with a good message, as long as the quality of your products is good. Yeah. Right. That’s what I’m saying. I it’s like, think a lot of what we do is we’re either using tools to find opportunities or we’re trying to be better at marketing or we’re looking at the digital end of it. I certainly look at e-commerce that way. And the sourcing is like the kind of thing that just you have to kind of go do that thing.

04:51
uh, in order to, in order to be an e-commerce business. And yes, it’s becoming less and less a factor. I mean, we’re at an Alibaba conference. Alibaba is one of the reasons why, right? mean, like these tools like Alibaba are out there where it becomes a lot easier to, to, to find suppliers, to vet suppliers, to work with suppliers. And when I first got started in e-commerce, I had to physically travel to China, uh, and do all that work on the ground. And something like Alibaba has, has made that much easier. So here’s a question.

05:21
Do you feel like you need to go to China anymore? It’s a tough question because we haven’t been in a while, and you kind of keep on doing the same old things. You have a routine. I was going there all the time before COVID and then COVID happened and I had to figure out another way. And for me, that was having a sourcing agent. So I think the reality is do I need to go? No, I don’t think that I need to go, but I think that relationships are super important. And I do think if you’re importing

05:50
a significant amount of stuff and you’re working with relatively few manufacturers, just like anything else in life, it’s probably good to put some FaceTime in and go do those supplier dinners, let them get you drunk at the big lazy Susan thing and do those things just to, because it becomes harder psychologically for people to say no or have hard conversations with people that they have a relationship with. And so if you’re over there and you put that work in, it’ll be more difficult for them to mistreat you. And they’ll also probably

06:19
you know, put you at top of mind over other people that haven’t been putting in that work. So do you have to go? No. Should you go, you probably should still make an effort. It is true because I think about the internet today and you know, a lot of people are posting anonymously, negative comments, but they probably wouldn’t do that to you face to face, right? That’s right. We’re going to India here in a weeks and then we’re going to Hong Kong and

06:46
We’re not actually going to China. We’re going to Hong Kong during the Canton Fair and then our supplier is actually meeting us in Hong Kong. So we are meeting our biggest supplier on this trip. If they weren’t going to come to Hong Kong, I would have popped into China, but they were willing to come to Hong Kong because they had some other things that they wanted to do anyway. So, you this will be my first time seeing them face to face and man, it’s four years. It was 2019 last time.

07:10
Actually, the last time I went to China was with you, Tony. I want to say that was back in 2017, 2018. 2017. I’m actually, I probably need to go back. Here’s the thing, Mike. I actually dread those meals. Yeah. It’s so awkward. But I mean, I, and I try to bust out the Chinese just cause it’s there’s always this language barrier. It’s tough. It’s very tough. And there’s a lot of smiling on my part. then

07:36
whipping out the Chinese as much as I can, them like laughing at my Chinese or they’re responding. But things are always better after that meal. I wonder if they enjoy it actually. I actually think they really do. Like, I mean, from what I can tell, it’s part of the culture, right? I think, because I’ve been over there several times, I’ve had a lot of interactions with suppliers. And at a high level, what I’ve kind of figured out is that there’s kind of like an old school and new school kind of

08:06
faction of suppliers. have like the older, the older generation of suppliers that seem to really love that like wine and dine, that meal, you’re around to in the lazy Susan. I love that environment. It’s just, I wish they had that here in the United States. It would be cool for business dinners. And then the younger guys that I work with over there, they just kind of take you out to a regular restaurant. It’s rare that they even have a beer. If they do, it’s like a drink. They’re starting out there to get you drunk. It’s a much different environment.

08:33
You know, and so I don’t know if it’s, it’s a generational thing or it just happens to played out that way. But I did, I have talked to people over there specifically about that. does seem that like the old way of doing business in China is that’s the thing that they like to do. And they seem to have fun doing it. Like they, I mean, they get really drunk. So I don’t know. I mean, and you know, I, I look back at, at those memories, like what I look forward to going to do that again, like, no, cause it’s, mean, it’s, it’s a big hangover the next day.

09:02
But looking back at it, I do enjoy that cultural thing that I got to be a part of. See, I’ve never gotten completely wasted. No? No. I just have a drink and I just nurture it. They never did the ganbei thing to you where you have to drink the baijiu out of the little Oh no, I can’t handle that. I can’t handle my liquor. I’d be completely dead if I If you say no, they frown upon it. Maybe it’s because I speak Chinese. that…

09:32
So I’m probably like, I’m telling Michelle, so my wife speaks Chinese. And so I’m telling her like, tell them I don’t want any more to drink. Cause she’s probably telling them, give them six. No idea. We both use sourcing agents. And then at the same time, Alibaba has all these cool features now where, you know, they vet the suppliers for you and they had, they introduced a bunch of new features at this event. So do you think that Alibaba is going to replace sourcing agents? What are the pros and cons in your opinion?

10:01
And do you still use Alibaba? Were they going to replace sourcing? I mean, I don’t know. Like I, I think the sourcing agents are still going to have a place. I think I look at it as a tiered system is the way I kind of think of it. So like if you’re just getting started or you’re smaller or you’re working, you’re placing smaller orders with a whole bunch of factories, Alibaba seems to be the go-to place, right? Cause it’s just, have this portal. It’s like a search engine for, for sources or for factories around the world.

10:31
And I think that that’s awesome. Like it really helps people. The buried entry is very small to find that. I think once you kind of graduate to a certain size, you probably would want to use a sourcing agent because you’re looking for more unique suppliers. You’re looking for special things here or there. You’re looking for someone who’s going to have some other edge. And for us, the sourcing agent kind of checks a lot of these boxes. And then I think the final step is like you get large enough, you just

10:59
hire your own full-time people on the ground in China. I kind of think of that as like the three tiers, or whether it’s China or other parts of the world. And so we’re kind of at that sourcing agent stage right now. Like I love Alibaba. I’m grateful that it’s existed. It’s helped us and our community like be able to find suppliers. But I also like having a sourcing agent because I feel like a representative in the middle of this process that is important to me. they, would I pay them?

11:29
provides more value to me and I feel like I make that back and more. And I, it’s an important part of the process for me. Yeah. For me, we’re just lazy. It’s not just a matter of being lazy. You probably, you know, because you do speak some Chinese, you know, have a little bit of a cultural leg up. just feel like it’s, it’s a very different culture. Like, I mean, I’ve, I’ve been to 57 countries and I often talk about how China is the most difficult for me to navigate.

11:58
just from a culture perspective. And that’s even going with someone who speaks the language. I can only imagine not having a wife who speaks Chinese, how much more difficult it would be. And so think there’s like this cultural divide in China that I have not experienced in like Central or South America or Europe or other places that I’ve been. And so having that sourcing agent on the ground that really understands the customs and like won’t let me get taken advantage of there, really they understand pricing better. They understand quality better. In terms of like,

12:27
what you can push back on an inspection, they’re physically there like doing the inspection for me. They, you know, they’re my advocate on the ground. And so I feel like, you know, the, 8 % or so, whatever it works out to that a sourcing agent takes, it’s not just a matter of being lazy. Like, I feel like I’m getting that value and more from them. And yes, the added benefit is I don’t have to fly across the world two or three times a year to go visit suppliers now. So we like our sourcing agent because we’ve, always negotiate.

12:55
piece-per-piece inspections. They literally inspect every single thing comes up and they know what we’re looking for because we had this document that we’ve developed over the years like this is a defect, this is a defect, this is a defect. Whereas if we were to use just like a regular inspector, we’d have to convey that information each time and it wouldn’t be as thorough. Yeah, that’s kind of what I’m saying in terms of advocating for a sourcing agent, right? Because I mean, it’s always a sticky situation with quality in China and this has just been pervasive through

13:25
seven, eight years of doing this. it just, even if you get one batch of the quality, they will always, they’re always trying to like revert back to doing something squirrely, let lower quality, less, you know, changing materials, doing something. And so having, you know, a sourcing agent that you work with on a continuous basis, it isn’t just, like you said, hiring an inspection company that’s just in and out there quickly.

13:50
I think is really, really important if that’s a big part of your business, which for us it is. I think most Westerners, it’s a big part of their business. So you mentioned you’re going to India. Are you currently sourcing there right now? We’re not. I’m going there because my friend, mutual friend Meghla runs a sourcing trip there. I’m super excited about it. It’ll be country 58. So I finally get to go to someplace new. I think it’s going to be another culture shock. So we’ll see how that goes. But I am looking for…

14:15
other opportunities around the world. I I look at kind of some of the geopolitical stuff that’s happening with China. I the terrorist was a big wake up call. You know, it’s just, kind of like, again, sourcing is some of the things you don’t think about until all of sudden you do. And that was one of those days where I’m like, oh my God, this is going to change our business dramatically. And it has, it’s really been, it hasn’t worked out, I think, the way that it was advertised, which is like, this is a tax on China or, you know, something like that. I mean, like really what it is, is it’s a tax on our small business. We have not been able to

14:44
pass through even years later the additional tariffs because no one wants to raise their price. so everyone’s just absorbing that. So it’s really become a tax on small business. I don’t know. It seems like it’s hard to know what the future is going to bring, but it seems like there’s more more tension there. And so looking at a country like India, where there hasn’t been any tension and there aren’t any tariffs and

15:11
The other thing I think is important, at least what I think about is that Wayne Gretzky quote of, skate to where the puck is going, not where it is. It seems like everyone’s already in China. It’s super saturated. They’re really good at it. China is really great at manufacturing. There’s platforms like Alibaba that make it really easy to find all these manufacturers. I think back to eight years ago when we first went to China and it wasn’t as saturated with e-commerce and finding these niche opportunities, I feel like there’s probably more of those types of opportunities.

15:40
in India and I’m excited to go check it out. I didn’t realize you got hit by the tariffs. The ice wraps got hit. And the business that we own together was with the tariffs. And there’s very few categories really that had been immune to it. There’s definitely some. We have some products that haven’t had the additional tariff. Right. But yeah, and it was a 25-35 % extra, which is very, very substantial.

16:09
If you haven’t picked up my Wall Street Journal bestselling book, The Family First Entrepreneur yet, then now is the time. My book will teach you how to achieve financial freedom by starting a business that doesn’t require you to work yourself to death. After all, most online business gurus constantly preach that you have to hustle, hustle, and hustle some more just to get ahead. Well guess what? It turns out that you can 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.

16:38
and be a slave to your business just to make it all work. I will teach you how to start a business from the perspective of a parent who makes both business and family work. Not only that, but I’ve made it a no brainer to grab the book because I’m still giving out $690 in free bonuses. And here’s what you get. You get instant access to my three day print on demand workshop. In this workshop, I’ll teach you exactly how to get started running a print on demand e-commerce store. And I provide you with a free website theme as well.

17:06
You also get access to my two day passive income workshop where I’ll teach you how to make money with blogging, podcasting, or YouTube. Go to mywifecoderjob.com slash book and I’ll send you the bonuses right away. Once again, that’s mywifecoderjob.com slash book. Now back to the show.

17:25
All right, so let’s switch gears now because Tony has been crazily silent. I’ve been enjoying. I kind of, I kind of enjoy this silence. Usually Tony’s like, so let’s switch gears and talk about D to C versus Amazon. Now, I think the last time you were on, not the one that we recently recorded, I think, did I have you and Dave on? I can’t even remember, but the conclusion, at least from Dave’s perspective was all in Amazon, right? I’d be curious if he feels the same way today.

17:55
I’m not sure. I’m curious what Tony’s feeling is on this in terms of Amazon versus other platforms. I’m definitely not all in Amazon, as you guys know. In fact, I was sitting there yesterday in the Alibaba session when they were unveiling all their new technology for sourcing, finding products, some of their AI tools. And I thought, well, this is just making it even easier for people, right? So I love things with a high barrier to entry because I feel like it weeds out competition, at least on the initial stages.

18:24
So I thought, you know, cause with Steve and I, like we host like Friday Q and A’s and things like that. Most people’s problem is finding their products, right? Like they know what they want to sell, but they don’t know how to get it. And I feel like the easier it becomes for those people, then the easier it is for people to sell. And then the more competition there is, even though it’s probably not the same quality. So for me, Amazon is sort of that like, there’s such a low barrier to entry, although it’s gotten much harder since when I was selling on there, it’s changed a ton.

18:52
But to me, just felt like yesterday felt like, well, here we go again. Like, here’s a bunch of people that don’t know anything that are going to be able to, which I like the tools, like I think they’re great. But to me, it was like, well, yeah, I’m sticking with D to C because I feel like that’s just such a much higher barrier to entry for people. Yeah. And it’s but you have to have the right type of products. That’s right. You know, the tug of war here. Like, I mean, a lot of people that are on Amazon are looking like get off Amazon. People that are off Amazon are looking to get on Amazon. There’s really

19:21
If you put a Venn diagram together, there’s very few products that have an overlap that do well on both platforms. It does exist. are, you know, when you’re looking at trillions of dollars of sales, there’s a large volume of money that does transact or companies that do well on both platforms. But the reality is, is that very few things really that do well on both. And so if you look at, you know, I guess the kind of question is like, what does the future look like here? I think it’s, you a of times it’s good to look at the past and just kind of see like, what is the trend then?

19:51
And Amazon continues to grab market share. They are the world’s largest product search engine. They dominated Google in this space. They’ve built a insane footprint across the country in terms of warehousing and their own deliveries vans. And I think it’s going to continue. No matter how badly somebody wants to go beat Amazon, even some like Walmart, it’s really difficult to like…

20:19
recreate that infrastructure that they’ve put together, it would be really, really difficult. And at the same time, 100 million people, or whatever heck it is, have their credit card already stored at Amazon in the United States. So the buried entry of the transaction is very low. And now you look to Amazon for Amazon Prime, like you kind of like for the television aspect, and then they have Whole Foods. it becomes more more difficult for someone to cancel that membership and go away from Amazon.

20:48
And once you have that membership and you’re on Amazon, now you feel like I have to get my, it’s like the all you can eat buffet. I have to get my value. So you’re more stuff off the Amazon. And so, you know, the commodity things, I quick products. just do not see going anywhere. No, I agree. mean, on Amazon, you want paper clips, want, you know, whatever rubber bands, something like that, light bulbs, you’re going to go to Amazon. The DTC thing. I think, you know, you’ve also seen a kind of a resurgence of that now because

21:16
There’s these micro brands or niche brands that people are going back to the story and the family or whatever that kind of created those products. And I think that that’s going to have a place and start to increase because social media, especially like a TikTok, has made it so much easier for those brands to get quickly viral, get out those stories and those products. And I think overall, e-commerce is going to continue to increase.

21:43
And so I think, you from a macro standpoint, those are some of the things that seem to make sense. Yeah, I wouldn’t. I mean, I think you should sell on Amazon. I’m definitely not. I mean, it’s not my favorite place to sell. It’s definitely my favorite place to shop. And now they’ve even introduced the buy with prime, right, which integrates with Shopify. So they’re basically becoming your logistics, you know, fulfillment process and also integrating with the payment and everything else. So they’re trying to pull people who maybe don’t sell on Amazon.

22:09
Right. And in fact, they just introduced a Clavio integration a couple of months ago. they’re definitely, think Amazon’s definitely trying to infiltrate everything. Which I would too, if I was, you know, it makes sense. But yeah, their logistics is amazing. We’ve talked to Walmart, you know, we all have, and I think they’re trying to build something great, but they just, at this point, there’s no competition with Amazon. Yeah. No, it’s definitely.

22:35
The only thing constant is change it. So at some point in our lives we’ll look back and most likely be like, remember when Amazon was the big thing, just like my parents like talk about Sears or whatever. I mean, things will change and it’s interesting how there’s a lot of thoughts on how, know, AI and just the shopping experience is going to change things quite a bit. Like I had someone the other day speculating that there won’t even be a search box anymore. You know, it’ll just be like, they kind of just know what you want or, so I mean, it’s, think that that’s kind of

23:05
who knows, that’s a little far fetched. like, the point is that things will probably be very different. You don’t really know until it comes. But like, I think that things are about to change dramatically in terms of the shopping experience or the results experience. I right now it’s like you type in something, whether it’s on Google or Amazon, you’re all used to these, like you get 20 results and you kind of sift through them. I do think that that’s going to change significantly. And so the thought is like keywords are going to be different or the…

23:33
less people are going to be buying or more people are going be buying for fewer spots in these results. And it’s going to be more difficult to compete there. And I’m not sure exactly how that’s going to play out. I mean, I don’t actually don’t think you’re far off when you say that you won’t have a search bar. I think you’ll have some sort of search. But like if you think about your Netflix experience, and I don’t know what your Netflix account looks like, it’s probably a good thing. But like in my family.

23:55
In my family, we have like six accounts, right? So each kid has the account. So one day when I logged in, it’s like I get a certain amount of recommendations from Netflix, right? And I was curious one day, I like, wonder if my kids are like, I wonder if they’re just promoting the top 10 shows to me, right? My kids see a completely different thing based on their watching experiences, right? So I don’t think it’s that far off with Amazon, not doing away with search, but having something much more.

24:21
specialized you, you, I mean, you already see that now, right? Like continue where you left off, you know, all the things that you looked at before you closed the browser, all that stuff on Amazon anyway. I think my biggest hangup with Amazon is I feel like when you’re doing DTC, there’s just a, there’s a, there’s a formula. There’s a formula for building a brand. Obviously it changes based on what you’re selling and new things like TikTok, right? Making short form video or promoting your products in a different way.

24:50
But overall to me, feels very familiar. Whereas on Amazon, feel like every couple of months things change drastically and you’re rewriting your listing descriptions or you’re changing something with PPC. And to me, I don’t like that hamster wheel feeling of constantly. I mean, I like learning new things, but I don’t want my whole entire business to be based on scrapping everything I know and relearning it every six months to one year.

25:17
Yeah, but I feel like that happens in DTC as well. mean, at least on the ads part of it. Yeah. How to get the traffic because like, you know, when we first really got started in DTC, we were all in on Facebook and now Facebook’s like, you much more difficult to make the numbers work and everyone’s moved over to TikTok. So you’re learning something new from that perspective. But I get what you’re saying and point well taken in terms of your your on Amazon’s hamster wheel for sure. Yeah.

25:46
I was shocked that one of the things they’re testing right now is hiding the bullet points. Like I just saw this week. Like it’s like learn more about this product. You click that then the bullet points appear. And so it kind of goes to what I’ve always theorized is that people never really read this stuff because if they’re testing hiding it, they probably realize that no one’s really reading the bullet points. Maybe they don’t matter as much as you think they do. And the imagery is where it really is at. Right. You should be focusing more on your imagery because people look at stuff but they don’t read stuff. Yeah. So

26:16
I mean, not just another example of maybe there’s going to be a giant shift in Amazon of like, we spent all this time putting all this effort into bullet points and overnight they might just become irrelevant. That’s a pretty big development, right?

26:33
What’s your next question? Okay. Apparently Tony has run out of questions. All right. So I wanted to ask this way back, but I didn’t want to interrupt you guys. So what types of products work well on DTC versus Amazon? Yeah, I think this is actually pretty easy to answer. So the things that work best on Amazon are things that people are searching for. You know, they’re typing in that product, right? It’s like, I just mentioned paper clips and rubber bands. We’ll stick with that or light bulbs.

27:02
And so that’s a typically a pain point of like, I need this right now or very soon. So it’s like, I can wait till tomorrow. So I’m not going to go drive down the staples and go get those paper clips or whatever, but like, and then I mostly just don’t even care what the brand is. Like I just need some paper clips and, you know, whatever. so whatever that might be, I mean, we, we sell ice raps. So I’ll, mention that as one of these things that does very well on Amazon because like someone is in pain right this minute.

27:30
probably a week beforehand, they didn’t realize that they were going to need it, or they just got an operation, or there’s like, there’s a need in their life at that moment that just kind of popped up and they need to solve that problem. They type in what that product is. Again, brand is not as important here in this. mean, there are situations on Amazon where brand does matter. so I’m not advocating to like not do branding. But for the most part, it’s like, I need this, I’m searching for it, I’m going to get it within one to two days. Brand isn’t super important to me, price is the most important thing.

28:00
you know, I want the Amazon experience. And so those types of things do really well. can, then conversely as a e-commerce seller, if you’re putting stuff up on Amazon, you’re looking at search volume of particular keywords and like there’s opportunity to sell products that fit those keywords. D2C does very well on an emotional trigger. So it’s like you’re looking at a TikTok video, you’re looking at a Facebook ad and literally 10 seconds beforehand.

28:26
You were never thinking about this product. You never thought you were going to buy this thing today. You never thought you needed it, but you just saw someone like with a really cool ad and this worked really well for our coloring company where I can now advertise to a group of people that aren’t searching for that stuff right this minute, but we know that they have an affinity to coloring books as there was an audience for that. And so you show them an ad triggers this emotional response. The price point’s low enough. The part is something’s unique enough about it.

28:52
I’m going to give this a try.” of a sudden, they pull their credit card out and they’re making a $10, $20, $30 purchase that, five minutes beforehand, was like, if you asked them the question, you’re to buy coloring books today, 0 % chance that that was going to happen. so there’s a lot of products that do very, very well in that DTC environment. then also, can, things that have a really good brand story or like it’s an emotional hook of like, maybe like eco-friendly or you’re like, you’re trying to go vegan or, you know, you have coffee beans that are like, you know,

29:22
single source or like something that like triggers it relates to you and things that you believe in or care about where like there’s lots of other people who don’t care but as an advertiser you can really get in front of the right people. DTC I think will continue it does work really well with that right now and will continue to work well there and by the way a lot of those things I just mentioned you take those exact same products and throw them on Amazon and they won’t succeed. Like you try to put this really unique single source coffee thing on Amazon

29:51
It’s probably going to be much higher price. People are typing in coffee on Amazon. Are they really going to go buy this other thing? It’s a much harder road on Amazon. Not impossible, but certainly works way better in that and other environment. I mean, you will get the halo effect from your own marketing on Amazon, right? Because some people just like buying on Amazon. I just wanted to mention something that you just said, though. On Amazon, you said the brand doesn’t matter as much. Doesn’t that imply that someone could just copy your product almost exactly throw it up since brand doesn’t matter?

30:20
And then eventually just kind of becomes a race to the bottom. That’s what I’m dealing with right now. This is the problem. This is the hamster world that I want to get off of. Okay. Right. mean, I just, uh, and so again, think it’s skate to where the puck is going. I love the book, who made my cheese. I got very cognizant. Podcast would not be complete if Mike did not mention who moved.

30:42
This author like should give me a kickback. It’s old book. It’s an old book. It’s a good book. Someone handed it to me when I was in my 20s in corporate life. And I just think that it’s, you know, it’s always applicable. The story is applicable. You know, it’s, I can sit here and whine and cry about how it isn’t fair. And I put all this work into this business and I used to make all this money and blah, blah, blah, blah, blah.

31:05
None of that matter. No one cares about any of that. The reality is that I have to reinvent myself. I have to either reinvent my product, my brands, my company, myself, or get into something new and reinvent completely differently. But I think that that’s where we’re at. The reality is that people probably don’t care about my brand of products. Now, there are branded searches that we get. It’s great. We do work on this, and it is important. I think we do a better job than a lot of people on Amazon.

31:34
But the reality is that Helium 10 or Jungle Scal or Data Dive or whatever tools that are out there are going to show that there’s an opportunity out there to go sell this particular type of ice pack. And then you go on Alibaba and you can find 70 manufacturers that will make that ice pack. And it’s going to look and feel exactly like my product, know, or very, very similar. It’ll be indistinguishable from someone that was looking at a results page and quickly trying to fix that pain point thing that they have. They just got their wisdom teeth extracted. They need wisdom teeth ice packs.

32:04
They’re typing that in. Everything looks kind of similar. They haven’t done any. They haven’t done any research. They’re not going to do any research for this $15 product. Their freaking mouth hurts. They just got their wisdom teeth out. They want that ice pack there quickly. You put it in the freezer, it gets cold. It’s not going to be revolutionary. it’s, I’m thinking about where I can build another moat. Like where, and it’s not going to be in these types of products. And so, you know, right now we’re continuing to work on this business because we have

32:33
a business that sells millions of dollars of products and I’m positioning it to put it in the best spot to sell it in a year and a half or so. And so I’m going to work on that for right now. But I’m thinking about what the future might hold. And I think what you said is dead on. that’s the reality is that it’s going to become more and more difficult. the million dollar question is, Mike, where is this cheese going to be? I mean, again, I don’t

32:59
I’m pretty, I’m a pretty open book with a lot of things. don’t want to give my next idea away quite yet. I talked to you personally about it. But like in general, in broad strokes, what I’m thinking about is a silly margins, right? want way better margins, whatever product I’m going to be working on next. Like I think I look at your products, great. Your products check a lot of these boxes, right? It’s got really good margin, right? Because you have customization. You’re doing some final thing here in the U S that

33:29
is a moat. Like is someone going to go buy a sewing machine or embroidery machine or whatever does that, you know, that extra thing like adds some moat. And so I’m thinking about things like that. And one of the things that I really want to get into is something that has intellectual property, which is kind of like another step over and above that, you know, repeat business. There’s a lot of things that like I look at that is important to me when looking at like, cause literally what Tony just said, you like the barrier to entry, right? I want that.

33:56
The complexity to me is the opportunity. The bare entry is the opportunity. want to get into something that not everyone can do. And so I’m legitimately prepared and ready to go get another warehouse in Nevada. We live in Las Vegas. I’m back to that again and have, not know that. Okay. I think that this is what’s going to be necessary. You know, that final assembly thing or doing something in the U S at the, you know, kind of at the last touch point.

34:26
We had this similar thing in the business that we own together. You know, and I just saw it like as much as I hated having a warehouse previously and all the things that that brings, I know I’m going to have to go through that again. But like the problem is like, I need something that’s going to help again, dig that mo and make it deeper and deeper and wider and not have someone else that’s constantly, cause someone else is constantly coming back with a dump truck and backfill on that thing like every day. Right. And so you have to, and right now the mode’s getting filled in way quicker than I can.

34:56
anything about it with the products I’m talking about. so having that warehouse, having some sort of machinery here in the US that does some type of final something to the product, or even manufacturer the Holy on thing maybe, or, but in my case, it’ll be, you know, kind of, I create or finish the products here and get them into Amazon or sell them on demand basically as needed. Similar to what you’re doing. You have the blank handkerchiefs and someone has a wedding you put

35:25
the final touches on it. That adds the value. Most people aren’t willing to do that. Most people can’t do that because you have a warehouse. You have employees that are sitting in front of that machine. You’ve also spent all the time getting the traffic and building a brand and doing those things. if someone else wants to go do that, they’re not going to just go find it off of Alibaba. The barrier is much different. So that’s the type of stuff that I have put a lot of thought into. I think Colorate has been a

35:54
a big inspiration for me for that, where we had the intellectual property part of it, where we had highly defensible products and we had a brand that people really cared about. So I can take that and kind of marry it with some of the stuff that you’re doing, know, things I’ve seen, you know, and I’ve done some stuff like this in the past. And also things I learned from the business that we own together, we had this, this facility in North Carolina. It was the best business I owned like through COVID and all the other mess that was going on because having that facility there, can keep low amounts of inventory.

36:24
in Amazon, had the facilities to store extra inventory, we had the ability to be nimble and make the stuff to order basically that was necessary at the time as things were shifting during COVID. And I see this as something that’s going to be really important moving forward if you’re willing to put the extra effort into it. It’s interesting because whenever I’m, whenever someone asks me, I’m like, don’t start your own warehouse. It’s a pain in the butt. It is a pain. I am not looking forward to it.

36:53
But I mean, one of the things that we talked about in the last episode we recorded, like it’s getting, for me increasingly more difficult to work with employees. And those types of employees are traditionally the hardest ones to work with. And so, yeah, I’m not looking forward to that, but I see it as a, I see it as a necessary evil, right? I mean, this is like what entrepreneurship or entrepreneurship is all about. It isn’t like every one of us, every single part of every day is doing everything that we love at all times. Like there’s a lot of crap we have to deal with in indoor.

37:23
as a part of the ultimate goal of success that we’re reaching for. I don’t like having to deal with employees or accounting or there’s just a bunch of things that come up from time to time, lawsuits or whatever. It’s annoying, but I deal with it and put on a smiley face every day because it’s a part of, without those things, I can’t go do the other things that I do enjoy. And so I think warehouse is probably back on the list of things that

37:52
or a necessary evil to achieve the bigger goal. I mean, I think my philosophy has always been optimized for sleeping well at night. So that’s why we bought the warehouse earlier this year, because then, because our rents were going up 30 % every year. And then even if everything were to completely collapse, I think it would happen much slower with our business than it would on Amazon. So I can sleep at night knowing that I wake up the next morning and not everything’s just going to go to crap right away. And again, I think

38:22
This is almost exactly what I’m talking about, right? Like it’s a highly defensible business. You know, it’s probably, it’s not recession proof, like recession resistant. Cause when people get married, they do stupid things. People are going to get married in a recession. They’re going to spend a little bit less money. They’re still probably going to want a handkerchief. mean, like, you know, in some type of personalization or something. And so, you know, and I think that.

38:46
And now you own the building so that rents are going to be stable. It’s a great investment regardless. I think it’s a really good move no matter what. And so yeah, I think that I look at this, I think it’s super important because I did not sleep well for a long time. I’m sleeping a lot better now because we have less going on. And even though the one business we have is very susceptible to a quick change on Amazon, we have more cash in the bank and it just makes it less pressure.

39:16
But yeah, I don’t like owning a business where in the back of my mind any morning I can wake up and find that it’s gone. I’ve been there before. It’s like, I know how that feels. It’s happened multiple times. And so I’m trying to think through what are some things that can be doing? Cause I want to stick with e-commerce. What are some things that can be doing? And the things that we just talked about, including having a warehouse really is one of those things, right? Cause like, mean, if, if something goes drastically wrong is a macro thing in e-commerce, which is like,

39:45
and you have something that less people can do, then if you’re in one of the few people left, then it’s actually a good thing that there’s kind of a reset or whatever. I mean, I don’t know. It’s not going to happen at least for another year because I do want to position this other business for sale, but it’s certainly the direction I’m heading right now. So where does that leave the beginners then who are just starting out? Yeah, that’s an interesting question. Wow, that’s a tough one. You know, I think that

40:16
you know, again, intellectual property, unique products, working on branding, having something that’s unique. If you can be thinking about things that have a moat, you don’t have to have a warehouse like that. If I was doing the same business idea that I have right now and I was just getting started, I would do it in my garage to start with. I think that you can do things on a different scale. just, you I only have, you and I have known each other for one time. I have one speed.

40:44
Right. It’s, like, although your, your, your speeds have changed. have, I have downshifted little bit, but like still, I’m still in the highest gear that I could be. And when I go do this thing, um, and I really believe in myself, right. mean, like I, I have, uh, 20 years of experience doing this stuff at this point, like 20, it’ll be 20 years in January. It’s nuts. quit my job in 2004. So I mean, it’s, it’s going to be, it’s really weird. It’s like where the hell did 20 years go? That’s a long time.

41:12
But at the same time, like I’ve developed a lot of skills and I have a lot of confidence in myself. It’s not cockiness or something like that. I think it’s just that like, I’m going to go do this thing, whatever this next thing is. And I’m not going to be reckless with my bets or what I’m going to go do, but I’m not going to like tippy toe into it either. Right. It’s like, I’m going to go do it. You know, I could do it out of the garage and I have to like move it, you know, a few months later and then get the warehouse. I’d just, I know.

41:40
what this life cycle is like, right? So it’s like, I’d rather just get the building now, I’ll rent it, I won’t buy it to start with, but like, you know, get the facility now and have everything there. So like, if, if and when things start to ramp up, I’m not having to move and disrupt that process and deal with those things at that time. And the thing that I’m looking at doing requires some light machineries. So I’d have to actually do some modifications to my house to make it work there, which my wife would prefer that I didn’t do. That’s probably the biggest thing.

42:09
All right, let me ask you this following question that how much money do you think to start this business that I’m looking to do is going to cost about 150,000. Wow. 200,000 all in to buy the machinery and, and, and, know, let’s say just have like a year’s worth of capital for the, for the facility and stuff. What about for the person starting out? I mean, that’s an intimidating number, right? Yeah, no, it is. But like, again, for me, I like that number.

42:38
I’m in a different life cycle because I want that barrier to ensure that Tony was mentioning. To me, it’s just enough. It’s in my comfort zone, but it’s way out of someone else’s comfort zone. Can someone else go do it? Yes. Will I have competitors? Yes. For someone just getting started, I would look at trying to check all the boxes I just mentioned without needing to make that extra step. It’s going to eliminate a few other opportunities, but there’s still plenty of other things out there that you can do.

43:07
that check all the boxes I mentioned without having to actually have that machinery. And I think the only thing that’s really important that people, I had this conversation with someone at seller summit, the first seller summit that I went to, because they were in analysis paralysis phase. I think the most important thing if you’re just getting started is just to get started. It doesn’t matter what you’re selling, just pick anything, whatever ID you have, it literally does not matter because even though…

43:33
that product might fail, it probably will fail because like if it’s just something you haven’t thought all the way through or whatever, that is still gonna be the cheapest education you’re ever gonna get. You’re gonna learn how to create your Amazon account or launch your Shopify store. You’re gonna learn how to do Amazon ads. You’re gonna learn to ship inventory on Amazon. You’re gonna how to label your stuff. gonna get your trademark. You’re create a listing. You’re gonna figure out who to get listing images from and who to work with graphics for and have those resources. And again, if you’re doing things

44:01
D to C you’re going to learn some Facebook ads or tik tok ads and learn how to get your payment processing done and you get your LLC set up I mean there’s like a ton of other things that you have to do before being successful and so like picking the product I would just go get started like learn the ropes of e-commerce over the next three six twelve months and You know for me like all these things I just talked about are all connected dots from day one the very first thing that I sold online which was fitness equipment treadmills

44:29
and learn like what to do and not to do. And all through the school of hard knocks, right? And so like, and we were successful, we were lucky that we were successful in most of the things that we did, there were definitely some failures along the way, but most of the things that we did, okay, we were successful at this, you the timeline kind of ran out, or I felt like I could do better in something else. And so we pivot a little bit, then you pivot to something else. And now, you know, I feel like we’re going to make a pivot to like, the best thing that we’ve ever done. All I wanted was a dollar amount.

44:57
Oh, a dollar now? know. I’m just kidding. Yeah. mean, think, you know, realistically, you can get started for a thousand dollars. I mean, we start for 600 something bucks, but yeah. It’s the really the perfect example. Like, again, I love, I mean, we know each other for a long time. We’ve talked about this for more than once, but like, it is the perfect example, like the perfect success story example of an e-commerce business. Cause again, you can start with very little money.

45:24
handkerchiefs don’t cost a whole lot of money, like the blanks or I would imagine pennies each or maybe a dollar at the most. And I can’t imagine they cost that much. Like said, $600 is what you got started for, but you had, you you can look, the riches are in the niches, right? And so like, this is a very niche thing. Like it’s almost like I always still make fun of you for it. It’s like you sell handkerchiefs. It’s like almost laughable. It’s like such a weird corner of e-commerce. Like you’re never going to sell a billion dollars worth of stuff or you know, whatever, but

45:53
No one else is looking there because it’s not the thing that pops up on the tolls because it’s just below that radar. People that do find it like, that’s a good opportunity. It’s like, oh, it’s just enough extra work to create a little bit of a barrier of entry. You are able to, you know, build a really good brand and, good search presence and good repeat business and has some defensibility and a moat all from something that costs $600 to begin to start with. So it’s like literally what I’m talking about, just the thing that

46:23
that I want to do is, I mean, you probably have now bought some equipment and things. a lot of equipment now. And so I’m just going to make that investment to start with, like, cause you know, if I was just getting started, I would do exactly what I’m talking about for a thousand dollars, right? Right. It’s just that I’m willing to like skip those initial steps. Cause I, again, I have the confidence in myself and I’m willing to, be wrong and lose that money if it doesn’t go right. Because again, 20 years of experience and I feel like I’ve really nailed this idea, but if you’re just getting started,

46:53
600 bucks, like you said, like gets the job done. It’s kind of crazy. Cool. Well, Mike, I guess we’ll have to have you on when you do the big reveal. I’ll do the, give you the exclusive Tony. Anything else? I think Mike talked us out. Okay. I’m just not used to hearing you so silent for so long, but, uh, yeah, let’s wrap this up. Mike. Um, I imagine you’re going to reveal it on your own podcast before you read a little on mine. So I want to tell everyone whether you can get the scoop first.

47:23
Well, I will promise that I’ll come do it on your podcast. Okay. But you can come with me, come here anyway. All right.

47:34
Hope you enjoy that episode. Now it’s always interesting to hear what Mike’s perspective is and I can’t wait to get more details on what he is going to work on next. For more information about this episode, go to mywifecoupterjob.com slash episode 491. And once again, I want to thank Emerge Council for sponsoring this episode. If you sell on Amazon FBA or your own online store and you want to protect your IP from theft and fraud, head on over to EmergeCouncil.com and get a free consult. Just mention my name and you’ll get $100 off.

48:01
That’s E-M-E-R-G-E-C-O-U-N-S-E-L.com. I also want to thank Chase Diamond. Chase is my go-to guy when it comes to email marketing. And if you want to learn how to run your own successful email marketing campaigns, check out his class over at mywifequitterjob.com slash chase. That’s mywifequitterjob.com slash C-H-A-S-E. And if you are interested in your own eCommerce store, head on over to mywifequitterjob.com and sign up for my free six day mini course. Just type in your email and it’s in the course right away. Thanks for listening.