Audio

259: How To Rank For Competitive Keywords In Google Search with Jimmy Daly

259: How To Rank For Competitive Keywords with Jimmy Daly

Today, I’m really happy to have Jimmy Daly on the show. Jimmy runs Animalz.co, which specializes in content marketing for SAAS companies. They are responsible for ranking many of the successful SAAS companies out there in Google search and clearly know what they are doing.

In this episode, Jimmy and I are going to discuss the most important aspects of content marketing and how to rank in search.

What You’ll Learn

  • How Animalz was founded
  • How to formulate an effective content strategy
  • Keyword research and SEO factors to consider
  • How to come up with great titles
  • The myth of building an audience
  • The biggest mistake content marketers make

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
Klaviyo

Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
Privy

Avalara.com – Handling sales tax is complicated. Fortunately, Avalara simplifies sales tax with real-time tax rate calculations and automatic return filing. And the best part is that Avalara already integrates with your existing accounting, e-commerce and marketplaces like Amazon, so it’s super easy to setup. Click here and get a FREE TRIAL.

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

Coming soon

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258: A Recap Of Sellers Summit 2019 With Toni Anderson

258: A Recap Of Sellers Summit 2019 With Toni Anderson

We’re doing a special episode today. Sellers Summit 2019 just ended so I brought my partner Toni Anderson on the show to do a recap of the event.

The Sellers Summit is a conference that we throw every year. This is our 4th time and the show is all about bringing ecommerce entrepreneurs together and learning new strategies on how to sell physical products.

Today we’re going to talk about what worked, what didn’t and some key takeaways.

What You’ll Learn

  • The theme for this year’s event
  • What we did differently this time
  • How we improved the conference in 2019
  • An overview of the speakers and sessions
  • Where Sellers Summit will be next year

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
Klaviyo

Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
Privy

Avalara.com – Handling sales tax is complicated. Fortunately, Avalara simplifies sales tax with real-time tax rate calculations and automatic return filing. And the best part is that Avalara already integrates with your existing accounting, e-commerce and marketplaces like Amazon, so it’s super easy to setup. Click here and get a FREE TRIAL.

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into the strategies they use to grow their businesses. So I just got back from my annual e-commerce conference the Sellers Summit last week, and after sleeping for the past seven days to recover, I am finally ready to do a recap of the event in today’s episode. Now, overall it was easily the best Sellers Summit that we’ve ever held. And to help me out, I invited my partner in crime Toni Anderson back on the show to help me with this recap.

Before we begin, I want to give a shout out to Klaviyo for sponsoring this episode. Always excited to talk about Klaviyo because they are the email marketing platform that I personally use for my e-commerce store and I depend on them for over 30% of my revenues. Now Klaviyo is the only email platform out there that is specifically built for e-commerce stores, and here is why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send out an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, piece of cake, and there is full revenue tracking on every mail. Now Klaviyo is the most powerful email platform that I’ve ever used and you could try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to give a shout out to Privy who is also a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now, Privy is an email list growth platform and they manage all my email capture forms. And I use Privy hand-in-hand with my email marketing provider. Now, there are a bunch of companies out there that will manage your email capture forms but I like Privy because they specialize in e-commerce. Right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store and customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%.

I’m also using their new cart saver pop up feature to recover abandoned carts as well. So bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve, now onto the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast. Today we are doing a special episode because I’m not interviewing anyone on the show. Now instead, I brought Toni Anderson back on the podcast to do a recap of Sellers Summit 2019. Now if you don’t know Toni by now you probably haven’t listened to many episodes, she is my partner in crime for the event. And this is actually appearance number six I think for her on the show.

Anyway, Sellers Summit is a conference that we throw every year. This is our fourth year. And the show is all about bringing e-commerce entrepreneurs together and learning new strategies on how to sell physical products online. And today we’re going to do a recap of the event, what worked, what didn’t and some key takeaways. And with that, welcome back to the show for the sixth time, Toni, how you doing today?

Toni: I’m doing great. Do I get a special sticker for sixth time alumni?

Steve: You get an Oh Gee sticker, perhaps?

Toni: All right, all right.

Steve: Well, I haven’t gotten any negative feedback from you coming on yet. So until I do, I’ll keep you coming back for more.

Toni: All right, keep up the positive emails guys, come on.

Steve: So I haven’t actually had a chance to look over our survey results. Every year after the event, we send out a survey. But I know you probably have, you’ve probably been very diligent about looking at it. How was the feedback for this year?

Toni: Well, I think as usual, we received a lot of positive feedback from the event. Most people say that it met or exceeded their expectations, which always makes me feel really happy. And I think the main reason why we get that feedback every year, and this is actually they say this in a survey, is it’s the small group mentality that we have about the event.

Steve: Absolutely. I mean, in terms of networking, we actually haven’t really strayed from the original formula since we first started, right, a really small, tight, intimate event.

Toni: Well, I think that is what makes people feel comfortable at the event and makes them — I think it helps them learn even more, because not only are they learning in the sessions, but they now have friendships that they’ve built outside of just going to the event. These people communicate with each other all year round and so they’re able to catch up with old friends. And then after the sessions, talk about the things they’ve learned and continue to learn, even though there’s not a speaker actually presenting it.

Steve: And you know community building isn’t exactly my forte, but I think we’ve built like a pretty good community. What do you think?

Toni: I like them? I think they’re pretty cool.

Steve: Yeah, I like everyone there, which is strange for me, it’s unusual for me.

Toni: It’s not strange for me, I like everybody. But it’s really fun I think for us too thinking back on that first year. And we did something really cool this year that was mostly your idea to recognize…

Steve: It was?

Toni: Yeah, I think so.

Steve: Okay.

Toni: Recognize our original members I guess we’ll call them are people that have come to Sellers Summit every single year. And to me, that was a really big deal because our first year even though I had done events in the past, we had never done an event together and I’d never done an e-commerce event. And so these people took a big risk I think with us the first year giving us their money and expecting to learn something, and hopefully we delivered for them because they keep coming back. But it was cool to recognize that core group of people that have been coming back for four years.

Steve: Yeah, we gave out these cool t-shirts that said Sellers Summit oh geez for the people who had been all four years. And then all of the alumni who had come back before, they had special stickers on their badges to denote that they’d been there before.

Toni: And we had I think a core of maybe 12 or 15 original four time attendees, but our three time attendees is actually a pretty large group of people. I would say that’s 50 to 60.

Steve: Oh, wow. Okay, I didn’t realize that. I didn’t have the numbers in front of me.

Toni: Yeah, we’re not going to be able to afford t-shirts for them. They’re just going to keep getting stickers. But it’s cool to see those same people like Rick and Natalie and those people come back year after year, because they really do feel like friends at this point.

Steve: Yeah. And as usual, we stuck to the standard formula. We catered lunch every day, everyone eats together and we have cocktail parties every single night. We also make sure no one eats alone. So we have these dinner signup sheets where people can just have dinner together and arrange their own meals. So this past year, I think that was one difference that the reason why I enjoyed this year more than past years, I feel like the caliber of attendee was even better than all the prior years. Would you agree with that?

Toni: Oh, absolutely. I actually, I’m just getting all these facts together. So they’re a little bit fresh in my mind. But I think we have 77% of our attendees are selling full time already. So this is their real job. This isn’t a side hustle. And I think 81% of our attendees, or maybe it’s higher than that have been selling for more than a year. So the experience level with our attendee has really skyrocketed from our first year.

Steve: Yeah. And what I like to see is like everyone who I’d met in prior years, their business had grown significantly this year. And it was just really fun to kind of talk about what they’ve done to grow their businesses. And some of the people who have attended, their business has really blown up, like three to five x in just a single year, and that actually made me feel really happy.

Toni: Yeah, it’s fun to catch up with those people. I think one of our oh geez, Chris Nelson, when he came in the first year, he had his — I think he had already purchased business or started business. But he was doing I think a couple of thousand a month, which isn’t bad. That’s a great start to a business. But I mean, at this point, he has his own building. He’s got I don’t even know how many employees now, I think 13 or 14, he’s doing seven figures. And it’s cool to see his progression over the past four years. And we have a lot of people like him in our group.

Steve: Yeah, it’s been really amazing. Now, before we get into the key takeaways, anything we did differently this year than last year?

Toni: We expanded our masterminds, so I cannot remember how many we had in 2018. But this year we had six mastermind groups. So it’s almost half our attendees were in a mastermind, which is pretty cool. And we expanded the amount of 1 million plus masterminds. So I don’t remember what we had two years ago, but this year, we had four masterminds dedicated to sellers with a million or more in revenue. So I think that was something that we did new this year.

Steve: So just for the benefit of the listeners who don’t know what the mastermind is, we sell a special pass where we actually screen attendees to make sure they made at least $250,000, or $1 million, respectively. And what the mastermind is, is we lock ourselves in a room, we cater and food and we spend the entire day helping each other with their businesses. Everyone gets a chance to be in the hot seat where they can tell the group what’s working with their business and then one question that the rest of the group can help them with.

And then everyone basically in the group helps that one person a lot of time with their issue. Personally, the mastermind is the most rewarding part of the conference for me, and I just really love how open and comfortable everyone is, and how willing everyone is to reveal their problems and their triumphs.

Toni: Absolutely.

Steve: Sorry, I interrupted you, where were you going?

Toni: No, that’s okay. No, I agree with you. And I think it’s interesting because that’s what I’ve received the most feedback on post event. I’ve got people emailing me, messaging me on Facebook saying, we love the mastermind. We want more, we want more, can we have more days? They want it, they want have a mastermind for a week I think. So that’s really cool to see these people that have been with us for a couple of years too and in the masterminds just continuing to want to continue those relationships with each other, continue growing with each other, and that they feel comfortable enough to want to continue those relationships even outside the Sellers Summit.

Steve: And what was your personal opinion of this year’s mastermind compared to last year’s?

Toni: Actually, what was interesting to me is that I think this is another a little bit of a change for us is that at least in my mastermind group, we had a lot more people that weren’t primarily Amazon sellers. So I think in my group, we were 60% off Amazon, completely off Amazon, so some of these people have never sold a product on Amazon at all. So I think that was the biggest change for me is seeing people in the group that are really smart with marketing and content and email and Facebook ads and being able to have those conversations in addition to all of the Amazon conversations that we have at the event.

Steve: You stole my answer.

Toni: Oh my gosh, I’m sorry.

Steve: You always do this to me; you always steal what I was going to say. So basically Amazon is getting a lot more cutthroat. In my keynote, I mentioned that over 40% of the top sellers are now based in China, there’s rampant piracy. I think one of the statistics I quoted was one in three listings, at least in the clothing category are counterfeit listings. And so there’s now a big impetus for people to get their listings off Amazon and establish their own audience. So a lot of my mastermind this year, at the one that I ran at least was focused on building a presence outside of Amazon and building your own brand.

Toni: Well, and I think part of the reason why we have the same answer is because I gave both of our groups a lot of non-Amazon sellers. I think you and I love all the other side of things, too. And so for our personal knowledge, I think we are able to contribute a lot more on the off Amazon space as well for that group.

Steve: Yeah, no, absolutely. And I don’t want to just focus on the mastermind. So for the regular attendees who have a regular pass, we also have kind of — I don’t want to call it a mastermind, but it’s kind of like a pseudo mastermind, right with the roundtables?

Toni: Oh, absolutely. It’s just a shorter version basically, where we get our speakers and other mentors. Some of them are former speakers at the event. And everyone leads a small table discussion for about an hour to an hour and 15 minutes, where attendees and speakers and some of our sponsors lead them to get together and discuss in-depth the topics that the speakers talked about during their session, or even topics that we didn’t get a chance to cover in sessions. Like this year, I did one on content marketing, which we didn’t really cover in a session, but it allowed people to sit around and talk about how do you start a blog? What kind of content should you be creating? How do you get that content out there? And we do that every year. And that’s one of the things in the feedback that I get when I read these surveys that people want more roundtables more time, because it really facilitates more small group learning, which is what we love.

Steve: Yeah, this is actually the first year I didn’t give a breakout session, mainly because writing the keynote just takes a whole lot out of me. And so I decided to focus my efforts on the round table. And this year in the round table, I covered SEO and conversion optimization. And what was interesting was that Andrew Youderian, he’s a buddy of mine, buddy of ours, he runs the Ecommerce Fuel forums. Every year, he takes a survey of all the merchants in his community. And what was interesting is that almost everyone in that community, their top traffic source was SEO. So SEO is a great way to get free traffic. And in the past two years I would say, I’ve been focusing a lot on SEO, and it’s starting to pay dividends now. And so I kind of went over all my strategies on how to do so.

Toni: Well, and I’ve noticed too, and I think it’s your Profitable Online Store private group, people are starting to ask a lot more questions about that as well. So it’s definitely a topic that people are wanting to learn more about.

Steve: I mean SEO is not dead. And definitely conversion optimization is not dead because a lot of people are driving traffic to their sites when their sites are not quite ready, and then that’s when they fail. And then they blame it on like the ad platform like Facebook ads is dead or Google ads, it’s just not working for me.

Toni: Right. And I think especially with Facebook ads becoming more expensive. If your site is not ready for that traffic, you’re almost wasting your money.

Steve: Yeah, no, absolutely. So one other thing that I forgot to mention is these roundtables, they’re all run by the speakers. And one thing that is really cool about the Sellers Summit is that every speaker hangs around the entire event and mingles with the attendees. And it’s not a big event. So you’re going to see everyone multiple times during the day, including the speakers.

Toni: And that’s another thing that we hear all the time in our post event survey is that they love that everyone is so accessible at the event. And honestly, we’ve had opportunities to have some I would say big name speakers at the event that we’ve decided against having them because we know that they like to show up and then leave. And that’s okay, that’s their thing. But we’ve actually shied away from that because we feel like I mean, I know you are a total believer in this that most of the learning happens after the event at the bar.

Steve: Well, yeah, how would you know that, you never stay up that late?

Toni: I know. I have to get mine in during the session because I’m in bed.

Steve: Yeah, that’s the reason why we have these cocktail parties every night. It is true, that’s my MO. What I’ll do is I’ll get a speaker or someone I want to get to know better to the bar; I’ll get them a couple drinks. I will not drink however. And then I will just simply ask the speaker to reveal everything to me.

Toni: So if you’re coming next year, that’s how you can learn everything.

Steve: Yeah, so I’ll order like two vodka shots, except one is going to be a water shot, which I take and then yeah. It works really well.

Toni: But I totally agree. And that’s actually — and I know we hear this and I know this is tough you and I have been to a ton of events together that we don’t run, it is hard sometimes to have those conversations because it is loud. And no matter where you do them, it’s going to be loud because you have 150 people talking, which is why I think the dinner groups are great additional way to have those conversations because it is a little bit small and quieter. It’s a little bit of a smaller group. And then you can continue those conversations at the networking event later on. But the dinner groups are a way to get your foot in the door.

Steve: Yeah, absolutely. I mean, for me, I’m much better in smaller group situations when it comes to being social than it is in like one large group where you can barely get a word in edgewise.

Toni: For sure. I have one more thing that I noticed that we did better this year. I don’t know if it is did better. But one more change that I thought was cool this year is we had a lot more females at the event, which people were very — all the females were very excited to see more females at the event and we’ve had more female speakers. So I think that’s a cool thing because there’s a lot of really amazing female entrepreneurs out there that are doing cool stuff. And it’s fun to get them on stage and get them in front of our group of people.

Steve: That is interesting. Do you know what the breakdown was?

Toni: Of attendees I do not. But everyone agreed with me at the bar that it was more.

Steve: Okay. Well, I didn’t notice like lines for the women’s restroom this time.

Toni: Yeah.

Steve: Well, it wasn’t like that before. So yeah, clearly there was more females, and the female speakers kicked ass. We’ll get to that in a little bit. So we switch gears and talk about like key takeaways.

Toni: Sure.

Steve: Are you ready?

Toni: Yeah.

Steve: So first off, I started off the conference with my keynote by talking about how Amazon’s growth is slowing. So Amazon has been growing like gangbusters, but believe it or not in Q1 of 2019, they only grew by like 16% or something really low like that. Meanwhile, the percentage of Chinese sellers had been increasing. Last year I think was like at 25%. This year it’s at 40%. And as I mentioned earlier in this podcast, there’s rampant piracy all over the place. And so it is more important than ever to create a strong brand. But a lot of people, they throw on this word brand but specifically what I’m talking about is a brand that is hard to copy.

What I’m talking about here in the keynote is a brand that relies on developing a community of rabid fans. So, all the talks for 2019 were specially curated to help you succeed in 2019 for stuff that is related to strengthening your brand. So Toni and I, unfortunately, we don’t get a chance to attend all the talks, because we’re each in a different room monitoring them. But I thought it’d be interesting to just kind of go down the different talks, and just give our opinion and our key takeaways on some of these talks; do you want to start Toni?

Toni: Absolutely. So, one of my favorite, favorite Sellers Summit speakers is Dana Jaunzemis. And what I love about every talk she’s done for us is that it’s all based on logic and math.

Steve: So that’s what you like about it? I thought you weren’t a math person.

Toni: I do. I’m not a math person, but I like when other people talk about it. But what I love about Dana is that she is very strategic in her business. And this is something I think she used Amazon as her example. But you can use this, whether you sell on or off Amazon. And she basically talked about finding those profit heroes in your business, those products that are the most profitable, and maybe those aren’t your best sellers, which is something to think about. Your best seller might not be your most profitable product. And so she went through this whole process that she uses to evaluate her products.

And so she doesn’t get distracted by other sort of — my gosh, I’m blanking on what they are called, you chasing the rabbit, I can’t think of the right word.

Steve: Shiny objects.

Toni: Shiny objects, yes, she doesn’t get that shiny object syndrome, because she’s so focused on the bottom line and finding those products that are the most profitable and then optimizing those. Things as simple as updating your listing, making some changes and she actually asked a question in the group, how many people go and update their listing on a regular basis? And less than half the room raised their hand. So what I loved about that talk was just sort of going back to the basics that in the back your mind you know you should be doing but most people aren’t. And just walking you through the whole process of how she does that to identify these items and these products in a catalog. And then what she does to sort of optimize them and maximize her profit with those products that are the most profitable for her.

Steve: I wasn’t in that talk but I saw the slides. And one thing that I’ve just noticed in the e-commerce community in general is everyone just talks about revenue, revenue, revenue which is a vanity metric, very few people talk about profit. And that is actually what Dana focuses on. And that’s what everyone should be focusing on really, right. At the end of the day, it’s about how much money you actually get to keep.

Toni: Exactly, exactly. And actually she did a similar talk a couple of years ago and I actually went in and made some adjustments. And I’ve seen my most profitable product increase in sales just based on some of the things I took away from her talk a few years ago. So I’m excited to implement the things that she shared this year, and hope to see more profit growth as opposed to revenue growth.

Steve: Yeah. And while you were in Dana’s talk, I was in Ed Ruffin’s talk on scaling Amazon advertising for growth. And what was interesting about his talk is he was — he kind of outlined his story about how his Amazon PPC strategy has evolved over time. And I don’t want to go into specifics on Amazon PPC in this podcast. But let’s just say that he found a new method that is working much better than the old traditional methods that you may have been hearing about just kind of online or what people have been writing about. And what came out of Ed’s talk, afterwards, I went to talk to him, I said, hey, I would like to switch over to this new strategy.

And so what we’re doing now is Ed and the Seller Lab’s team, they are going to go through my account and convert it to the new way. And we’re going to do a case study; we’re going to document all the numbers and the increase in sales as a result of switching over the strategy. And that’s going to go on the blog.

Toni: All right. And his recording is also available too if you’re interested in since we’re not going to talk about it.

Steve: Yeah, I don’t want to go through the specifics because it can be a little technical.

Toni: For sure.

Steve: But yeah, excellent talk. It was eye opening for me, because I’m not using that strategy right now.

Toni: Awesome. Yeah, I didn’t get to see that one so I’m excited to watch it.

Steve: And then after that, I think you were in Michael Paulson’s of Jungle Scout’s talk.

Toni: I was in; I actually didn’t get to hear all of it. I was running around a bit. But first of all, he’s a great speaker, he was substituting for Greg this year for us and he did a fantastic job. But I think this is — the talk was interesting to me the part that I got to see only because for my business, we’ve had tons of supply issues with our manufacturers. And so I’m always trying to find new suppliers. And this was a whole new strategy on how you do that. And it’s very simple. It’s nothing. It’s something that everybody can do. And something really fun that I don’t think will convert well on the video is he actually had everybody playing a game at the end, where you had to answer questions about importing products and cost of goods.

And it was actually pretty fun to see. And all the results were coming up live on his screen on the big screen in the room. So I hope that conveys well on the video. I’m not sure if it will, because it was a fun — it’s fun to see how much people thought they know and didn’t know about cost of goods and products and things like that. So unfortunately, I didn’t get to hear the whole talk. So that’s another one that I’m waiting for on the recording.

Steve: And while you were in Michaels talk, I was in a talk about the Google Display Network with Ilana Wechsler. And Ilana, it’s a funny story how we met, we met at Traffic & Conversions at the wicked reports booth. And we were both trying to extract information from the guy running the booth and I don’t think we were getting the answers we wanted. And we just ended up talking to each other. And then that’s when I discovered that she knows a lot about advertising. And a lot of people, they’re running Facebook ads, but most people are not running Google Display Network ads.

And so Ilana gave a really great talk. And it got really high reviews in the survey too about how to leverage the Google Display Network, which actually has a much larger reach than Facebook. And one key point from her talk which I’ll reveal is that a lot of your ads that you’re running on Facebook can be used with the Google Display Network with equal efficiency. And so you can easily expand your reach just by adopting some very simple principles with the Google Display Network.

Toni: Yeah, her talk was I think, one of our attendee favorites based on the survey. So I’m excited for that one as well.

Steve: Yeah. And then next up, Mike Jackness gave a talk about how to extract max value from your customers. I wanted to moderate that talk, because I gave Mike a really personal introduction, since we’re good friends. But he delivered. Basically, when a customer comes, he basically documented the entire journey of when a cold customer comes onto your site, how to nurture them into a warm customer. And then once they make a purchase, how to keep them buying over and over and over again. So I think that got really good reviews as well.

Toni: It did. And if you’re not familiar with Nathan Resnick, how old is he? I just have to ask, 22, 24, he seems so young.

Steve: I think he’s 26. I’m not positive. He had his birthday again right during Sellers Summit, as he…

Toni: That’s right. Yes, he did. Yes. We’re so kind to invite him to Florida on his birthday. He actually, every time I hear him talk, I’m just amazed that he’s as young as he is, with the amount of knowledge that he’s gained. And I think he did — I think his story is that he lived in China right as an exchange student when he was a teenager, and is fluent in the language and created a product?

Steve: He speaks better than Andrew for sure, yeah.

Toni: Well, that’s our standard, come on. But Nathan is always very impressive with his knowledge. And I know that we just had a big — I think you actually posted or he might have posted about it in a group about tariffs going up. And so he basically shared a strategy that he’s using to avoid some of those tariffs, by basically bringing your goods through, can I say where? I don’t know what we’re allowed to say and not allowed to say.

Steve: I don’t know. Just go ahead and say it and if we can’t say it, I’ll just edit it out.

Toni: You’ll bleep me out; you’ll just do a big bleep. Basically, by bringing your goods through Mexico and avoiding some of the terrorists and there’s a whole strategy to do it, which we don’t have time to get into on the podcast. But if the tariffs are something that’s really affecting your business right now, this is a talk you must listen to, because it’s a very once again, a very simple strategy, but one that will work and it’s totally legal. And it was funny at the end of the talk, and

I’m not sure this part was recorded, a couple people asked him what I would consider maybe some like black hat strategy things and he was not going to comment. He was not going to — we don’t endorse any black hat at all, from the stage for sure, and I think you and I don’t endorse it on our businesses, either. But people were very interested in being able to use his strategy. And he kept saying to these people that were asking is you can do this and avoid the tariffs, you don’t have to try to trick the system basically, because there’s a whole legal method of how this works.

Steve: Yeah, I don’t think it’s worth the black hat method. And Nathan and I actually talked about this over drinks, of course, and he was telling me they are black hat ways but if you get caught, the penalties are very steep.

Toni: Right. And that’s what he was saying in his talk is it’s not — there’s a system that works legally. So why not try that as opposed to risking, it could be a big risk for your business.

Steve: I mean that the timing of that talk was awesome, because I think like the week before Trump had just raised everything to 25%. And I don’t actually foresee an end to this trade war anytime soon now that they started blocking some other companies like Huawei and SMIC. So, all right, so next up, we had firing on all cylinders, high powered Amazon business sales with Brad Moss. If you guys don’t know who Brad moss is, he’s been on podcast a couple times at this point. He is the former head of Seller Central.

And basically, he did a breakdown of how he analyzes Amazon businesses to basically maximize their sales. And he talks about all the things you have control over and how to analyze different aspects of your numbers and adjust your inputs accordingly. I know that’s kind of vague. It was actually a very detailed talk that I plan on watching over and over and over again to make sure I get every last nugget out of it.

Toni: Which is funny because that’s exactly how I would describe Matt Sanocki’s talk as well. He talked about email deliverability. And I think even when I introduced to him; I said something about this is a talk that you’re going to watch three times before you get all the information, just because he packed a ton in in the 50 minutes. But basically, obviously it’s about email deliverability. And I think for all of us, it stinks to build your list and then have the emails not get to your customer. So he talked about some strategies that you can use to make sure that you’re in the inbox, which is getting harder and harder.

And he talked about different email service providers and the different strategies and how they work with each one. And I actually had a conversation afterwards telling him that like you and I have had issues with Sellers Summit emails not even getting to like Hotmail addresses. And so he had a lot of strategies for what you can do with the emails that are not being delivered. And then also what you can do with the email addresses that are sort of fallen off, so they aren’t opening your emails, they’re sort of dormant and the things you can do with those emails before you just get rid of them all together. So it’s definitely one of those talks that you’ll watch two to three times before you are able to implement everything that you learn.

Cool. I just wanted to take a moment to thank all the sponsors for the Sellers Summit. Without these sponsors the conference would not have been possible. So in no particular order, I want to thank Klaviyo my email marketing platform of choice, HYC Logistics, a freight forwarding company that will hand hold you through the entire process. BigCommerce, my fully hosted shopping cart of choice, Payoneer, the payment platform that I recommend when you’re doing international sales, Viral Launch the keyword tool that I recommend to all Amazon sellers, Privy the email list growth platform that I recommend to all of my students, Avalara, the sales tax platform that I recommend to all e-commerce merchants to handle all their sales taxes, Product Labs, a company that helps six, seven and eight figure Amazon sellers grow exponentially.

Seller Labs, they offer a bunch of tools that I use, including Scope and Ignite, which will help you manage your Amazon PPC. FEInternational, the company that I trust to buy and sell businesses, Second Office, the Filipino VA firm, where I actually found my Filipino VA to which I’ve used for the last year or so and she’s been great. TotalTM and EmergedCounsel, which is the service I recommend to get your trademark, and Drip, the email platform that I use for my blog. It is a superior email marketing solution if you’re in the blogging space.

PickFu which is a polling platform that allows me to make decisions on my product listings like soliciting feedback from real humans, Jungle Scout, which is the de facto standard for Amazon research tools, Gorgias, which is the tool that I use to handle all my customer service, Urtasker, which is a firm that allows you to outsource all of your Amazon tasks. And I used this from recently and they increased my sales over 30%. And finally FreeeUp which is a freelance marketplace where you can find a freelancer that specifically specializes in e-commerce. Once again, I just want to thank all these companies for making Sellers Summit a success this year. Now back to the show.

Next up, we had the four part formula that will explode your business and create a future proof brand with Scott Voelker. You know what’s funny about this is this is actually the first time that I’ve seen Scott speak at Sellers Summit. I mean, he speaks every year, but this is the first time I actually was there to witness the true power of this man. He has tons of energy online. And over the years, he’s changed his focus over to building a brand. And he talks about his framework about building an audience prior to even deciding what product you want to sell. And it is actually the way to go going forward today in e-commerce in my opinion, too.

Toni: Well, and it cracked me up because I was sitting in Brett Curry’s Google Shopping talk and I get a text from you that says something like Scott Voelker has amazing energy or something like that. And I had forgotten that you had never seen him speak live. And is because I’m always in his session and I thought, well, yeah, why do you think I always put him after lunch? But anyway, it cracks me up because I almost laughed out loud in the middle of Brett’s session when I got that text from you, because I’d forgotten that you had not seen him before.

But Brett, he actually did a similar talk last year on Google Shopping. And last year, I went home and I tried to implement it and I got really angry. I think I probably yelled at you Steve and then I gave up. And so this year, he did his talk that basically, if you got stuck last year from his talk, you will be unstuck this year. He basically went step by step through the process of how to set up your ads. And they’re actually pretty inexpensive when you compare them to Facebook, although one caveat he did have in that talk was that they don’t scale the same way so just something to be mindful of if you are interested in Google Shopping ads. But he basically walked us through lots of examples in his slides, lots of best practices. So if you’re interested in Google Shopping, definitely one to watch.

Steve: Yeah. I mean, if Toni can follow it then…

Toni: That’s right.

Steve: That says something right there.

Toni: There is a lowest common denominator for me in that but it was good. And I think you actually maybe talked to Brett during the year and said, hey, we just need a little more information. And it’s a tough subject to cover in 50 minutes if you have zero knowledge of it for sure. But he did a really good job this year in an overview but enough information where you can go do it on your own.

Steve: I mean, this was based on feedback from last year. Last year, I actually told him to do it advanced Google Shopping talk, mainly because that was the talk that I wanted to see for myself. But it turns out that a lot of people are actually aren’t even running Google Shopping. So this year, I asked them to do a more basic talk. And it sounds like it got better feedback this year than last.

Toni: It did. Because if you’re not familiar with Google Shopping at all, which I wasn’t last year, it definitely cleared some things up because there are a few I don’t want to say tricks, but things that aren’t intuitive in Google Shopping.

Steve: Yep. So that was actually all the talks for day one. Day two, we kicked it off with Bill D’Alessandro on how to scale past solo partnership. And I know for me, this resonated with me, because I’ve been a solopreneur almost solopreneur I should say. And a lot of things that Bill said about how he actually succeeded in obtaining the four hour workweek but then he became miserable, because he was making all this money and he had all this free time but it wasn’t satisfying him. And I’ve started to feel this way a little bit in the past year as well. And so I don’t know, did his talk resonate with you at all?

Toni: I actually did not hear all of his talk but this is my recommendation for his talk. As you know or some of you guys know, my nephews are our AV team. And so they film all of our sessions for us. And I heard and they’re in their 20s, they’re early 20s, they’re 20, 22 and they loved this talk. And I feel like anytime you can resonate a talk with a 20 year old who’s just on the first steps of being an entrepreneur, you’ve really hit a home run. So I’m looking forward to watching that one. People were buzzing about this talk afterwards. It was crazy. I could hear people walking out of the room talking about it. So I’m sure it’s worth. I can’t wait to watch it.

Steve: I mean, if you want to grow your team, and basically get past solopreneurship, Bill’s talk was awesome. It was incredible. The only reason I reacted the way I did was because Bill and I we – you know what’s funny about this is we actually had this talk before he created this talk at Ecommerce Fuel. We were kind of debating the merits between solopreneurship and what he’s trying to do, which is build a huge company. And so it was just interesting for him to put all that in an organized fashion in a talk, very valuable. And I know most people actually want to build a big team and a big company. So I’m probably in the minority there.

Toni: You are definitely in the minority.

Steve: Yes. Next up, we had Ezra Firestone talking about Facebook chat bots. What can I say about Ezra man? That guy is an excellent speaker. It was it was funny, it was informative. There was one point actually during his talk where his mic kind of fell off. And Todd, who runs our AV, he was motioning to me; he is like, hey, go and fix it, go up and fix it. And so I went up there. So his shirt had become unbuttoned. So in the middle of this talk, I just walked right up on stage, I buttoned shirt, he kept on talking. I buttoned the shirt, adjusted his mic, and that was that, he didn’t skip a beat.

Toni: That doesn’t surprise me at all.

Steve: But it was an excellent talk about Facebook chat bots. It turns out a lot of people haven’t been using chat bots. So it’s actually a great primer for it.

Toni: Well, and I think the interesting thing about that is that so many people that we talked to throughout the week were — they’d started their business on Amazon, which is pretty typical, and were really either seeing the writing on the wall or feeling the need to diversify. And so I think people were really interested in some of these off Amazon talks, because that’s going to be such a huge component in building their own online store. And so I think that’s one of the reasons.

I mean, Ezra is an amazing speaker, and I know he always does a good job. You and I have seen him at other events. But I think people really were super interested in the email marketing talks and the Facebook marketing. And those sort of talks were really resonating with people, Scott’s and Brett’s talk because so many people are looking at their Amazon sales and looking at the competition and looking at the Chinese competitors and realizing that they have to make a change in their business.

Steve: Absolutely. How’s the email segmentation talk?

Toni: Oh, she’s the boss, Alexandra. She’s amazing from Klaviyo, she just talked about segmentation. And this is actually something that I feel like I’m pretty good at. So I might suck at Google Shopping ads, but I’m pretty good at email. And it was interesting because some of the things that she talked about were so granular, but easy to do, especially within the Klaviyo platform that I’m not doing and it was like these little light bulbs. And I actually spent most of her talk texting other people that I knew in the room saying we need to do this, you should do that.

Think about this for your product, even down to like, if you sell anything, I’m trying to say if you’re like a fashion or jewelry or anything that has colors involved, you can even segment on the colors that people are buying and then creating emails that actually have those colors in them. So if you have a customer that always buys your gold jewelry, right, say you’re selling jewelry, and you can create emails where everything that email is gold tone, including the buy button, right at the VMware button. And so she just gave a lot of tips on how to think about segmentation, which I think I thought that I was doing a great job and thinking about versus…

Steve: You always think you’re doing a great job Toni.

Toni: I do, I do only on email, really. So but I was thinking segmenting on order value or products that they’re purchasing or frequency of purchase. But she got so much deeper and I thought that was really cool. And I think for a lot of people who have multiple SKUs, it’s something that you should be thinking about, and it’s a great way to improve your conversions on your emails.

Steve: Yeah, I mean, a lot of people come and ask me, why should they spend the money on Klaviyo? And her talk is the reason right? You can segment very granularly with all of your emails, and that’s what makes it so powerful.

Toni: For sure. And she knows her stuff. So there was — there’s nothing she didn’t cover either that or in the Q&A. So it’s definitely, it’s one of those other ones that you’re going to watch two to three times to get all the information.

Steve: So how was Trent’s talk about scalable wholesale businesses on Amazon? I asked him to talk because I know that there’s actually a bunch of attendees that sell wholesale, and so I thought I’d asked him to just give his perspective on it.

Toni: I’m not going to lie; I had no idea what he was talking about when he got started. I didn’t really understand the whole wholesale on Amazon business, which I’m sure it’s not shocking to you. But he did a really good job of breaking down from how do you get started into like how do you negotiate the contracts? How do you deal with other sellers? And so he did a really good job of walking people through the steps from if you were like me, and had no idea what wholesaling on Amazon was, to being able to actually, you could take that talk and get started.

Steve: Okay.

Toni: And not — I don’t want to say very easily because it doesn’t. It definitely seems like a difficult process. But it’s definitely a doable thing if that’s something you’re interested in. And it was actually a really well attended talk. I think maybe people were interested in maybe branching out.

Steve: Yeah, absolutely. I mean one thing that’s great about Amazon wholesale is that it is a low risk. I mean there’s always pros and cons to wholesale versus private label. But in general, in terms of monetary risk, Amazon wholesale is a little bit more favorable. You don’t need as much money to get started.

Toni: Yes. And he gave a lot of strategies on the negotiation side, which I thought was good, because there is a lot of negotiating that goes on when you’re trying to get a customer. And so he gave some actual, I don’t want to say they were scripts, but it was close to a script on how you actually approach people and close the deal, which I thought was great.

Steve: Yeah. And while you were in Trent’s talk, I was moderating a panel on transport and tariffs, product sourcing, and protecting your IP from theft. Because I think, I want to say that most of the questions were involved in protecting your own IP, because people are getting knocked off left and right. And what was great about — what came out of that panel was that one, patents are not the best way to protect your product for a variety of reasons. And then Stephen Wagner suggested alternate ways that are a lot less expensive in protecting your IP.

And we also had a bunch of questions about tariffs and getting cheaper prices out of your freight forwarding that both Pam and Nathan Resnick were able to answer. And then Greg, the reason why we had Greg on the panel was because he has all this practical knowledge, because he still sells, I want to say six figures per month in terms of product. And so while everyone else was talking about IP theft and freight forwarding, Greg was actually giving knowledge about what he actually does with his Amazon business. And so it was actually really well done I think.

Toni: Yeah, that should be a good one to watch too, because I actually, I talked to Stephen afterwards. And I think we needed to give him a cough drop or something. He was very talked out after that session, which was great.

Steve: Well, you know me; I got down to every last detail. So if they gave a vague answer, I actually went in just pressed on it until they got tired of talking about it.

Toni: You didn’t let them get away with…

Steve: I didn’t let them get away with vague answers.

Toni: There was no it depends.

Steve: Yeah, you got to test it. Well, no, I don’t want you to tell me what the actual thing is.

Toni: That’s right.

Steve: All right, and then Casey Gauss, you want to come on his session?

Toni: I actually did not get to see a lot of it. I was getting ready to set up for the roundtables that came right after that. But if you’re familiar with Casey, if you’re familiar with Viral Launch, Casey packs in a ridiculous amount of information in a very short period of time. I think this year he had 80 slides. So I have to go re-watch it because I only caught the very beginning of his talk, but he’s so knowledgeable in getting products on Amazon, ranking, driving sales. Their case studies are pretty phenomenal, if you’ve ever taken a look at some of the things that they’ve done at the company. But yeah, he gave a talk on basically how to get your product on Amazon, how to get it to rank without having to give away tons of products.

Steve: One thing I like about Casey is he always talks about his suggestions or his tips and tricks based on data. Because he runs Viral Launch, he actually has tons of data from all the sellers that use his product and that sort of thing. And what he does is he compiles all that information into real strategies that you can implement with your Amazon business.

Toni: And he gave a lot of examples in his talk for the time that I was in there. So it’s definitely one that you want to take a good look at the slides because a lot of that data was on slides in his talk.

Steve: And while you were in Casey’s talk or not in Casey’s talk I should say.

Toni: I was setting up cards on tables.

Steve: Toni is the one running the event and she has to run around while I enjoy myself. At least that’s what she’ll tell everyone. But I was in Molly Pittman’s talk about Facebook ads. And I don’t know about you guys but Facebook ads has changed dramatically in just the past year. Because a lot more people are using the Facebook platform and it’s become a little bit more saturated, Facebook has been — well, they’ve been getting a lot of flak also with all these data leaks and that sort of thing, also. So they’ve really made a change in terms of the way ads work to favor more engagement. And so Molly just outlined a whole bunch of examples of ads that are working for her that have changed dramatically in just the past year. It was a must watch talk.

Toni: Awesome. And we got a lot of good feedback about her talk as well. And it’s that same theme that we’ve seen this year, of people are just very interested on driving sales off Amazon.

Steve: And this year to close the event, we actually got a closing keynote.

Toni: Well big time. We’re big time now.

Steve: Yes. What do you think of Craig’s talk? Did you stay for this one at least?

Toni: I sat in the front row.

Steve: Oh you did, okay.

Toni: Yeah. I mean, we saw Craig at Ecommerce Fuel Live. And he did a talk on shipping rates, which totally was not relevant for me at all. But he was such a good speaker and he has that Scott Volker personality I feel like.

Steve: He’s different than Scott Voelker, though.

Toni: Well, different but he’s got the same energy level on the stage.

Steve: Yeah, yeah.

Toni: So he’s very engaging. When Scott talks onstage, you pay attention, when Craig talks, you pay attention. And actually, my nephews once again, their feedback was, he’s one of the best storytellers they’ve ever heard and they would listen to him all day. So I actually really enjoyed his talk since I asked him to speak on it.

Steve: You want to tell him what the topic is?

Toni: I’ll let you talk because you actually were a little bit shaken up after his talk it seemed, shaken up is not the right word.

Steve: Okay, so he talked about becoming a purposeful business, basically going beyond just making money and helping the community. And it was just amazing what Craig has done with the community. A lot of us we start our businesses to make money and we don’t really think about like a higher purpose. And I actually talked about this in my keynote, like there’s businesses like Toms, who gives away all these shoes every single year. And the reason why people are loyal to businesses like Toms is because they actually help the community. Now, I’m not saying that you should do it just as an ulterior motive, but it really makes your business a lot more meaningful. And so when stuff gets difficult or whatnot, knowing that you’re actually helping the community will actually keep you going through the hard times.

Toni: And I think one of the interesting things that he talked about is it also gives your employees a reason to stick it out to and I think that’s an interesting tie in that he made in his talk. I think he might have done that in the other talk we heard from as well, but just that they they’re working for something bigger too. And I think that is important. And I thought it was cool too in Sellers Summit with that talk, because I feel like for two or two and a half days, people are just bombarded with information, and strategies and tactics, but at the end of the day, you have to figure out, you have to weed through all of that and figure out what you need to do for your business. And if you have like a bigger goal or a bigger purpose in mind, it helps you sort of weed through the noise and figure out what your business should be doing for your goals and your vision.

Steve: And After Craig talked, that was the official end of Sellers Summit, but we had a bonus session, which was the 5 Minute Pitch live finale. If you guys aren’t familiar with 5 Minute Pitch is a Shark Tank like show that Mike Jackness, Scott Voelker and Greg Mercer now we put together where we gave away $50,000 to one lucky business. And we had five companies come and pitch the audience of Sellers Summit live. And then the audience voted to see which pitch they liked the best and they narrowed it down to the final two. And then we had a panel of seven judges, where we voted to see who the winner was. And we actually handed out a big $50,000 check on stage. It was incredible.

Toni: Yeah, and I didn’t get to go because they had this rule where if you weren’t in the room at like 4:55, they locked the doors and actually had someone guarding the doors because everything was being recorded for your show. And so I actually didn’t finish up with Sellers Summit till later. So I actually wasn’t able to get in. And actually our keynote, Craig couldn’t get in for a while. He stood out there waiting. But what I heard from everybody was that the tension in that room was like palpable, right? People were like sweating and nervous. And this was in the audience, not even the people pitching.

Steve: I was really nervous because over the course of the season, I’d become emotionally attached to these people. And with so much on the line, I could tell they were really nervous. I don’t know, I felt something, I was whispering to Jackness during the thing, which probably got picked up on the mic. I was like, oh man, I’m so nervous for all these contestants. So we’re actually turning that into a podcast, which will be available I think in the next couple of weeks or so. So if you want to catch up and binge watch and all the episodes, they will be available on iTunes pretty soon.

Toni: But it was a packed house for that. And I heard it was amazing. And congratulations to the winner who I don’t think we can say yet, but congratulations.

Steve: We cannot say yet, but it will be revealed soon enough.

Toni: And I have to say like I’m most bummed that I missed the giant check. I really wanted to see a giant check in real life so I’m bummed that I did not get to see that.

Steve: Okay, well, that’s kind of unusual. I can buy you a check if you want.

Toni: Do you watch the Office?

Steve: I do of course.

Toni: Do you remember when they did the fun run and they were going to present the giant check that the giant check itself cost like $300 and they’d only raised like $500?

Steve: The giant check is kind of pricey yeah.

Toni: I just wanted to see one in real life after the Office. It’s a bucket list. I just need to see a giant check.

Steve: Give it to Toni to not want to see the talks; she just wants to see the giant check.

Toni: That’s right. And how cool for the winner though. I mean, that is a really cool experience for everybody. And I’m glad that Sellers Summit got to be a part of that this year.

Steve: Yeah, absolutely. So I hope you guys who are listening are interested in these talks, we are going to continue to sell the virtual pass. When do we usually close those? I don’t even remember.

Toni: We don’t keep them for sale forever only because the content is constantly changing or the information is constantly changing. So we want the content to be fresh. So I think we keep them for sale for about six weeks.

Steve: Yeah, for about six weeks, I would say. So maybe in August I guess we’ll close on those sales. But those tickets are available. If you want to check out all the sessions, if you didn’t get a chance to attend the event, we’ll keep that card open for six weeks or so. And I can tell that the reception for this year’s event was good because right now we’ve already sold a bunch of tickets for the following year, which is always a good sign.

Toni: Last year we sold out — well for 2019, our tickets were gone by mid-February. So a lot of conferences pretend like they’re sold out but then they have held tickets back. When we sell out, we sell out; we don’t have any extra tickets. And it actually got so bad this year that Steve had to post in our Facebook group needing an extra ticket, because I would not sell him a ticket because we were totally maxed. So if you’re thinking about going for 2020, grab your ticket now. One, they’re not as expensive; the price goes up as time goes on. But we never have another sale. So it’s not like the price is going to be low on Black Friday or anything like that.

Steve: Yeah, we don’t do that.

Toni: The price is the price. We don’t mess around. Like that’s how it works. And two, don’t be like Steve. Don’t be in the Facebook group crying in March saying that you need a ticket because the gatekeeper is not going to get you one.

Steve: I think you just wanted to see me beg.

Toni: I did. I did. I didn’t have a ticket, though. I really didn’t.

Steve: I think you enjoyed it because prior to posting on the Facebook group, I was like, come on, I just need one, give me one ticket woman. And then you were like, I don’t know. Maybe I could be pissed.

Toni: Here’s the thing, though, here’s the thing, I am loyal to our attendees. And the one thing that we hear every single year, the reason why people come to Sellers Summit again and again, is because they love that it’s small. So if I keep selling tickets, we don’t stay small. So I have to be loyal to the people that are loyal to us. And that’s why.

Steve: Now you’re making me out to be the bad guy trying to expand this conference.

Toni: I know, but I do think that’s why people love it. And I think that’s why people keep coming back because it’s so easy to meet people. And it’s so easy to connect with the speakers. And it’s easy to connect with the sponsors, like everyone is just like – it’s like silly, but a big happy family.

Steve: We’re going to keep it small. If anyone asks, we are not increasing the size of the event. It’s going to stay small, intimate, we’re all going to eat together still. And that’s just the type of conference that I want to attend, quite frankly. And all the sessions are going to be strategy focused. There’s not going to be any fluff, and that sort of thing because that’s just the way that we like things.

Toni: well, I think for us personally, when we attend events, it’s time away from our families. It’s money that we’re spending. If this isn’t going to help us grow our businesses, it’s probably not worth our time and money investment. And so that’s how we feel for our attendees as well. So that’s why we keep creating a conference that does and Sellers Summit does.

Steve: So Toni, where’s the event next year? I know we have everything booked already.

Toni: It is. It is in Fort Lauderdale. So all of you who we’re not a fan of the elevators in Miami, that will be a problem no more. All of our sessions are actually even on the same level next year. So we are in Fort Lauderdale in May, we are May 6th to the 8th and it is the same hotel, The Westin that we’ve been at before so it is right on the beach. There’s actually a walkway directly to the ocean. People like Kevin [inaudible 00:54:19] can get their morning swim before the event and tons of restaurants, everything is really walkable. So we are back at the Westin in Fort Lauderdale.

Steve: Awesome. And by the time this episode comes out, the sales pitch should be up over at SellersSummit.com. Anything else you want to add Toni?

Toni: I hope to see you guys next year.

Steve: Yeah, same here.

Hope you enjoyed that episode. Now we are selling virtual passes to Sellers Summit 2019 for the next six weeks. So if you want to catch the recorded sessions for yourself, head on over to SellersSummit.com. For more information about this episode, go to Mywifequitherjob.com/episode 258.

And once again, I want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful, you can basically trigger custom pop-ups for any parameter that is closely tied to your e-commerce store. Now if you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

I also want to thank Klaviyo which is my email marketing platform of choice for e-commerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. So head on over to Mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s Mywifequitherjob.com/K-L-A-V-I-Y-O.

Now I talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast where we’re giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.Mywifequitherjob.com.

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Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

257: The Right Way To Outsource Your Business With Nathan Hirsch

257: The Right Way To Outsource Your Business With Nathan Hirsch

Today, I’m really happy to have Nathan Hirsch on the show. Nathan is the founder and CEO of FreeeUp, a platform that connects businesses to freelancers and virtual assistants that specialize in ecommerce and digital marketing.

In his prior life, he bootstrapped 2 multi-million dollar businesses and at one point he was managing over a half a million products selling on Amazon with over 1000 suppliers.

In this episode, you’ll learn the best way to scale your ecommerce business and how to outsource.

What You’ll Learn

  • How to manage your products and suppliers
  • The best tasks to outsource
  • The most common tasks that everyone should offload to a VA
  • How to hire and integrate freelancers into your Amazon business
  • The biggest issues Amazon sellers run into while outsourcing
  • Hiring freelancers vs employees

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
Klaviyo

Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
Privy

Avalara.com – Handling sales tax is complicated. Fortunately, Avalara simplifies sales tax with real-time tax rate calculations and automatic return filing. And the best part is that Avalara already integrates with your existing accounting, e-commerce and marketplaces like Amazon, so it’s super easy to setup. Click here and get a FREE TRIAL.

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into the strategies they use to grow their businesses. Now today I’m thrilled to have Nathan Hirsch on the show. And Nathan is the founder and CEO of FreeeUp, one of the premier e-commerce outsourcing platforms around. And today we’re going to talk about the best ways to find help for your business.

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. And right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%.

You can also use Privy to reduce cart abandonment with cart saver pops and abandoned cart email sequence as well at one super low price that is much cheaper than using a full blown email marketing solution. So, bottom line, Privy allows me to turn visitors into email subscribers and recover lost sales. So, head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve.

I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. Klaviyo is the tool that I use to build real quality customer relationships with my e-commerce store. And because all my transactions and email correspondence is tracked in Klaviyo, I can easily build meaningful customer relationships by listening, understanding and taking cues from my customers and delivering personalized marketing messages.

So for example, with one click of a button, I can easily send a specific and targeted email to all customers with a lifetime value of over $100 who purchased red handkerchiefs in the past year. Now, it is for this reason why over 10,000 brands have switched over to Klaviyo. And you can try them for free over at Mywifequitherjob.com/K-L-A-V-I-Y-O. Once again that’s Mywifequitherjob.com/K-L-A-V-I-Y-O, now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle so you can spend more time with your family and focus on doing the things that you love. Here’s your host Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m really happy to have Nathan Hirsch on the show. Now Nathan is the founder and CEO of FreeeUp, a platform that connects businesses to freelancers and virtual assistants that specialize in e-commerce and digital marketing. And in his prior life, he bootstrapped two multimillion dollar businesses. And at one point, I think he was managing over a half a million products selling on Amazon with over 1,000 suppliers. And how is all this possible? It is because Nathan has mastered the art of outsourcing his e-commerce businesses. And with that, welcome to show Nathan. How are you doing today man?

Nathan: I’m doing great Steve, how are you?

Steve: I’m good. How are you?

Nathan: Great. Thanks so much for having me.

Steve: Yeah, thanks. Thanks a lot for coming on Nathan, because you have a really interesting story. And I’m actually very curious about your background and your path on how you kind of started that first company to your other e-commerce company and now to starting FreeeUp.

Nathan: Yeah, so growing up, my parents are both teachers, and I kind of had that mentality that I would go to school, get a real job, work for 30 years and retire, just like they did. And I had all these summer jobs. And I quickly realized how much I just hated working for other people. So when I got to college, I kind of looked at it as a ticking clock. I had four years to figure out something to create some business or else I was going to get thrown into the real world and be miserable for the rest of my life. So I started hustling and buying people’s textbooks to make some extra side money. This was back in 2008 before there were courses and gurus and everything about Amazon, no one really knew what Amazon was at the time.

And I started experimenting selling books on Amazon, and then realizing that they were so much more than a bookstore. And just from trial and error, I mean, I tried sporting equipment and DVDs and computers and stuff that a normal college guy really likes, and I just failed. And the only thing I could get to sell were these books until I came across the baby industry. And that’s when my business really took off. So if you can imagine me selling millions of dollars of baby products as a 20 year old single college guy, that was me.

Steve: Where did you get the products in college?

Nathan: So it was all research. I mean, I didn’t have a warehouse, I didn’t have any money to buy inventory. So I came up with the concept of drop shipping years before I even knew it was called drop shipping, the idea that I could sell something I didn’t have at a marked up price. Whenever I got an order, transferred over to a supplier, a retailer, a vendor, that would ship it for me and I would make the difference. And that was really the concept. I would find these baby products online. There was no SEO or creating listings or figuring out Amazon’s algorithm back then. It was more post stuff on Amazon and see what sells and what doesn’t.

Steve: I’m just curious, like when you were contacting these drop ship companies, why would they take a chance on a college dude to establish relationship with?

Nathan: Yeah, it’s a great question. I mean, I started off with these smaller retail sites that were kind of the in between of wholesale and retail. And as I started to sell products from there, I started to go around the websites and contact the manufacturers and say, hey, we’ve had some success selling these products, or hey, we think we have a lot of potential. And it’s kind of like how I do sales outreach now to get on podcasts. You see what works and what doesn’t work and you keep tweaking your pitch until you find that value proposition. And back then that value proposition was, hey, you don’t understand Amazon, there’s a lot of potential there. We have this store with great reviews. We have great customer service; we’ll make it easy for you. We have a process; all you have to do is give us access to your inventory.

Steve: I’m just curious what your views are on this Amazon drop shipping business today. It’s been a couple years since you’ve been out of it, right?

Nathan: Yeah, I stopped last January. I mean, it’s definitely tough. It’s a much different ballgame than it was back in 2008. I did it for eight years and had a lot of success. But at the same time, I have a lot of clients now that do drop shipping, and they hire freelancers and virtual assistants from FreeeUp, and they have a lot of success. And it all really comes down to quality assurance. Amazon is always changing the game on the merchant fulfillment side, whether it’s your cancellation rate, your return rate, your defect rate, all that stuff is incredibly important. And the people that succeed are the ones that are very strict with their suppliers.

You have to be able to do XYZ. And they’re pretty quick to stop working with people that — or working with suppliers that won’t hit those metrics. And that’s what we did back in the day. I mean, back when I started, it was me and two other people on every listing. Now you have a lot of competition out there. And Amazon has gone pretty overboard on the quality assurance as well. So it’s a lot harder, but it definitely still exists.

Steve: So let’s talk about your drop shipping company a little bit. How did you possibly manage? So were those numbers, accurate, 500,000 products and 1000 suppliers?

Nathan: Yeah, that was at our peak. We did about five to $6 million of revenue a year for 7, 8 years.

Steve: So how can you possibly manage that many products? And kind of what was your process for doing so?

Nathan: Yeah, so when you’re doing drop shipping, there’s a ton of moving parts, right. You got to answer every customer service email, you have to update prices, you have to change inventory when stuff goes in and out of stock. So we really used virtual assistants that we would teach to specialize on one thing. We would have a VA that would log in every morning at 9am. And they would adjust prices, or they would get emails from manufacturers and say, hey, we need to get these products down.

We created an onboarding team. So whenever we would get a new manufacturer, they would have a process that they would take them through. So we would get their files and their pictures. And we would go through and say hey, these are the products we definitely don’t want to list on Amazon. Maybe they were too big, or they had a risk of harming someone, whatever we thought it was to try to get only the best products up there, and then once they were up monitoring what was good, what was worth selling, and what was kind of a waste of our time, to take them down.

So we started off very manual. I mean, I’m not a developer. So it was all manual processes. And as we got deeper into it, probably year four and five, we started hiring developers to create a software where the manufacturers could send us files to upload into the software. It would actually monitor the prices, it would monitor the inventory, and it would relay it to Amazon’s API. So it’s kind of cool how it went from a lot of manual process to a combination of manual and automation.

Steve: So I don’t know how good your memory is. But if we could kind of rewind back to the beginning, like what were some of the first things that you knew you need to outsource? And how did you kind of chronologically get to where you were at your peak?

Nathan: Yeah, so customer service was always the core of this. I mean, I had a lot of customer service training in the internships that I had. And when I came to Amazon, that’s one thing that I wanted to really take pride in. And with drop shipping, it’s tough; you don’t have a lot of control. So having great customer service is key. And we used to have it so clients or customers will get responses within hours or minutes. And that was one of the first things that I had to take myself out of because you’re getting emails 24/7, seven days a week. And I had to get someone that could do it at my level without me having to be there so that I could focus on the sales, getting new manufacturers and expanding the company. So the first thing was really customer service to get off my plate. And I still remember that first day that I woke up and I said, wow, I don’t have to answer any customer service emails today.

Steve: Can we kind of talk about the process there and the different types of help that you can get to do that, specifically on the lines of getting someone local versus someone in the Philippines and kind of what is your process for vetting a customer service agent?

Nathan: Yeah, it’s very similar to — I have assistants now that monitor my Skype, my emails, our live chat 24/7, and it’s really that same process. I’m a big fan of going remote. I mean, I’m biased; I opened up an office with the Amazon business around year five, had it for a year and a half and actually got rid of it because I realized that I didn’t love driving to work every day. I thought bringing people together actually caused more drama. I was competing with a lot of other businesses for that same talent that was in my town or town around me. And I thought that I kind of lost a lot of that competitive advantage that I had being a remote business. So I tend to hire remote now.

And back then, I mean, I really structured it so I had a US customer service rep who would handle a lot of the higher level issues, a lot of the management, and then I would have people in the Philippines that would handle a lot of the repetitive tasks, the tracking, the questions, hey, can you tell me about this product. And what I would do is create a blueprint of hey; here are all the different types of situations that we would get, the returns of tracking. And I would kind of break them down, hey, here’s a return that’s not our fault, here’s a return that that is our fault, or manufacturers fault, which really means our fault.

And I would kind of break it down to, hey, here’s canned responses for each one and here’s the level of person that can handle these type of emails. So once it got to past a certain point, that’s when it would get forwarded to that US customer service rep would be able to maybe talk to them on the phone or, or calm down an upset customer. And there was always the point where if the person was really upset, it would get escalated to me. So having that breakdown of all the different types of situations that come in, and as you find new ones, you can always add more situations, and really leveling out to who goes to what is incredibly important in terms of how to vet them.

For me, I’m looking for someone who’s really passionate about customer service. And those type of people are hard to find, the people that no matter how angry the customer is, no matter how irrational they are, they don’t get aggressive, the meaner they get, the nicer that customer service reps get, that is really what I’m looking for. And obviously the other factors like being able to write English at a high level, being able to clearly communicate, showing up on time, stuff like that.

Steve: How do you test that personality attribute? Do you like yell at them during the interview or personality test or how do you do that?

Nathan: Yeah, it’s a great question. So with FreeeUp, and it’s the same hiring process I had back with my Amazon business, we quickly realized that you can’t just vet people for skill. Too many people, they have great resumes, and then you hire them and it kind of blows up in your face. So we like to vet for the attitude and for the communication. And the attitude is where that one on one interview comes in.

And we like to challenge people. We like to have people really prove to us that no matter what we say, and we’re not yelling at them, they’re not going to get aggressive, they’re not going to get agitated, that they’re actually that type of personality that we want to work with. Because I think we’ve all worked with someone who has taken something in the wrong way or they’ve taken something personally, and that kind of stuff really doesn’t work in customer service. The last thing that you want to do is find yourself in the middle of a customer and your customer service rep. So you really have to find the right type of person that no matter what you say, no matter how you challenge them, they’re always going to get nicer and nicer and more rational.

Steve: Can you comment on why you have that US representative and what the breakdown is and whether you have considered having that US job in the Philippines as well?

Nathan: Yeah, so with FreeeUp, we don’t have a US representative. My entire team 12 people that monitor all my Skype and emails, they’re all in the Philippines. The main reason we had it with the US side is when I was in college, I didn’t know anything about outsourcing. The first people I hired were in the US, they were other college kids. And when I graduated, I took the US person and we made them a full time customer service rep at our company. And then when we found out about outsourcing and the Upworks and the Fiverrs and we added people in the Philippines, we didn’t want to fire that person. We just escalated him to the higher priority issues and then we inserted the people in the Philippines underneath. I’m a firm believer that you can have an entire customer service team in the Philippines. It’s not for everyone, but I have a lot of large e-commerce sellers that do it just like I do it for FreeeUp.

Steve: Okay. And then the pros and cons are as far as your experiences go.

Nathan: Yeah, I mean, the pros are obviously price point and having someone that can work different hours. I mean, for me, I have someone that works while I’m sleeping, and then it’s no big deal. It’s tough to get someone in the US that’s going to work overnight. I mean, the cons, it is more of the culture than anything else. Because I would put my top customer service reps against any US customer service reps out there in terms of ability to speak English and communicate and problem solve.

That really depends on the person more than where they’re from. But there’s always going to be those culture differences and it comes up a lot of times in customer service where a client might say something, and it gets a little misinterpreted on the other side by the non US rep. We kind of treat those as lessons. And it’s pretty easy to jump in and say hey, my assistant is in the Philippines, let me just clarify what’s going on here. But that’s definitely the downside.

Steve: What about voice customer support? Do people tend to — do they mind the accent?

Nathan: That’s the thing. With the people in the Philippines, for the most part, their accent is not as prevalent as let’s say someone from India or Pakistan. So it’s not as big of an issue. Of course, there’s always going to be someone who only wants to talk to someone in the US. But again, I have lots of clients that do phone support that will hire four people in the Philippines and the clients on the other end have no idea.

Steve: Okay, so customer support it sounds like was the very first thing that you outsourced? And then once you had that done, what was kind of like the next step in your Amazon business that you wanted to outsource?

Nathan: Yeah, two things. One was bookkeeping. I used to pay all my manufacturers via credit card. So at the end of every month, every quarter, I would have these sheets of just credit card invoices or bills that I would have to go through and input into QuickBooks, which was a huge waste of time. I remember my business partner, Connor and I used to sit there and he would read me a number and I would enter it in. And we would do that for hours every month, until we actually outsourced that and got someone else to put it into QuickBooks. And the other side was updating prices and inventory. I mean, it just got out of control where we were working with so many manufacturers that we were always changing things that we hired a small army of people in the Philippines to update everything as soon as emails came in.

At first we had an inbox where manufacturers knew they could email anytime anything was out of stock or a price change. And the VA would go in, they check the email, they updated on Amazon and mark it as red. And that eventually turned into our software where the person would get the email, enter in our software and move on to the next one, which is a lot easier for the manufacturers that didn’t go to our software directly.

Steve: So on the lines of bookkeeping, are you just going out and looking for like accounting firms? Because I know there’s a bunch of services out there that will find you a bookkeeper. Is that process different?

Nathan: Yeah, it’s a great question. For what I was doing, it was just data entry. So we just hired someone to put it in, we had a system, hey; do A, B, C, D, and then you were done. On FreeeUp, I mean, I have a US accountant, I have a US bookkeeper and then I have the person who handles our billing, a team of people that are in the Philippines that do a great job. And that’s a lot of times how I encourage clients to set it up, to have a US accountant, but have someone different for the actual bookkeeping, and we have a lot of non us bookkeepers that are very good. And they’re a lot more than data entry, they actually understand the US laws and US taxes and how to organize everything. So it’s not a big mess when you’re trying to do your taxes at the end of the year.

Steve: And in terms of just giving them sensitive information, was that something that you had to get over?

Nathan: Definitely, I mean, when I first — my business is growing, right. I’m 20 and it’s time for me to pay taxes. And I meet with my accountant or an accountant for the first time and the first thing he asked me is when are you’re going to hire your first person? And I kind of shrug them off, like why would I do that, they’re going to steal my ideas, they’re going to steal my information. I’m going to have to teach them, it’s going to mean money out of my pocket, just endless excuses that I think a lot of entrepreneurs have. And he just laughed in my face. And he pretty much said, you’re going to learn this lesson on your own.

And sure enough, my first busy teasing came around, and I just got destroyed. I was working 20 hours a day, answering every email, filling every order. And come time for January, I kind of realized I have to get over this fear, I have to start hiring people. And one thing that I’ve kind of realized over the years, and I tell clients this all the time, there’s always going to be a risk, right? There’s nothing I can do to make that risk zero. Even if you hire your best friend to sit right next to you, there’s always a chance to do something stupid. But I’ve been hiring for eight plus years, I’ve never had a serious issue. We bill 15,000 hours a week. I’m sure eventually something will happen, because that’s just real life. But the percentages are a lot smaller than people think.

I mean, these freelancers, these virtual assistants care a lot more about providing for their family, growing their freelance business than they do about stealing your information. And you can have them sign every NDA in the world, but are you really going to chase them across the Philippines to enforce that? Probably not. And what I do recommend is just building relationships with the people that you’re giving sensitive info to because there’s really no substitute for that. And I’ve had people that I fired who have quit on me, and I didn’t want to hurt them. They didn’t want to hurt me because we kind of built that relationship. So that’s kind of my advice.

Steve: I guess what I’m specifically asking you is like, is there a division of what you give to your Filipino bookkeepers versus the US? Because what you don’t want is like your numbers getting screwed up and not having anyone accountable for it, right?

Nathan: Yeah, there’s really not. I mean, on the back end with whether you’re using PayPal or a credit card or on Amazon, you can always give user permissions. And I essentially give them permission so they can view stuff and get access to what they need for the bookkeeping, without actually changing or taking money or anything like that.

Steve: And in terms of managing your entire product portfolio, do you just kind of split up all your products into categories or something and then you just form them out to different Vas?

Nathan: In terms of like managing it from the manufacturer side?

Steve: Yeah, like managing 500,000 products? How is that even structured? Let’s say you have like 20 VAs, how do you have them — do you just have each one of them handle like 100,000 or 50,000?

Nathan: Yeah, so we would mark our best manufacturers. So those are the ones that we would give to the people who have been there the longest. And then from there it was every single manufacturer was set up differently. Some of them, they never went out of stock. They made everything very custom made. So those were very low maintenance, maybe we would check in with them every quarter. And then you’ve got the ones that are updating prices all the time, and you have someone that’s constantly checking those emails and updating, and then you have others that are once a week or once a month. So for us, we’re really structuring it by the type of manufacturer and how often they change prices and inventory, then more of that, okay, you got a rep with us that’s in charge of 50 manufacturers a piece.

Steve: Can you also comment on freelancers versus just having someone on your staff because the term Freelancer implies that they have a whole bunch of other different customers that they’re kind of handling at the same time, right?

Nathan: Right. And this is kind of how I structure my business. My day to day operations, the customer service, the billing, that’s all outsourced. These are people that are part or full time. But for the most part, they’re working just with me and that’s kind of in substitute of having the office with 10 full time employees, but all the higher level stuff, the writing for my blog, the running my Facebook ads, all that is US either freelancers, or agencies. And most of the time, I don’t need them just dedicated to me. It’s totally fine if they have other clients, as long as my work gets done at a high level. So that’s how I kind of structure my business. The things that I need full time that are more repetitive, that are day to day, I’ll outsource to the virtual assistants. And the stuff that’s more project based or more high level, but not full time, that gets put on to the freelancers and to the agencies I use.

Steve: One other concern that I just thought of is if you want them to help you out with their Amazon business, they’re going to need a login. And if they’re logging in from like all over the place, and perhaps they use an IP where someone else got banned, is there any risks there?

Nathan: Yeah, I’ve been hearing that rumor forever. To be honest, I’ve yet to actually see that happen. And I’m not saying it doesn’t. But I work with thousands of Amazon sellers that use VAs that work for lots of other Amazon sellers both inside and outside FreeeUp, and I’ve yet to ever see that happen. And I think from Amazon side, they expect you to hire people, they don’t expect every amazon seller to be a one man operation. Yes, you should give the user permissions and make sure that you’re not giving someone the main access. And if you want to take it a step further, you can have that hide their IP and give them a VPN. But I think it’s a concern that’s been well overblown in the industry. I’ve really not seen that happening. I know with my own Amazon store that I did it for eight years with VAs. They were working for lots of other sellers at the time as well.

Steve: Okay. Okay, so as far as you haven’t seen anyone get affected in that way?

Nathan: I really haven’t.

Steve: So what are some of the biggest issues specifically in the e-commerce space that you’ve seen people who’ve been hiring freelancers, like what are their main issues and how do you overcome them?

Nathan: I think the biggest issue is setting expectations right from the beginning. I mean, you have to remember that freelancers like you said, they work for a lot of different clients. And what’s good for one client might be bad for another, what one client really likes might be another client’s pet peeve. And I see too many people that will hire a freelancer and just get them started with the work and then check in three weeks later or whatever it is, and they’re not happy with it, for whatever reason. And for the most part, that’s all about setting expectations up front, hey, this is how we’re going to communicate, this is what the goal of the project is, this is what constitutes success or failure.

I even tell the freelancer what it’s like to work with me because I know that I’m unique compared to other business owners, I talk fast, I move fast I, I don’t do voice calls. I do keep everything in writing on Skype. So I really prepare people what it’s going to be like working with my business, working with me, and what the expectations are on that project. And the more time that you spend up front before actually getting started setting expectations, the more time you’re going to save down the line on the he said she said or not getting the type of work that you want.

Steve: In case you haven’t been following the latest e-commerce news, most of the states in the US are now requiring you to collect sales tax even if you don’t have a physical presence in that state. And as you can imagine, keeping track of every state sales tax rules can be a nightmare. Now instead of pulling your hair out, you should let a tool like Avalara take care of your sales tax headaches for you. Avalara simplifies sales tax with real time tax calculations, and automatic return filing.

And the best part is that Avalara already integrates with your existing accounting, e-commerce and marketplaces like Amazon, so it’s super simple to set up. So even if you have no idea how to get started with sales tax, Avalara can help you get registered in a snap so you can focus on getting back to business. Join over 20,000 businesses already automating sales tax compliance. Simply put, Avalara is tax compliance done right. Find out more at Avalara.com. That’s A-V-A-L-A-R-A.com. Now back to the show.

One thing I also want to ask you about is just talking about the cultural differences in a Philippines employee as opposed to like a US employee, for example, and how to navigate that. So what are some things to expect? And what are some things that you preempt we do to make the transition easier?

Nathan: Yeah, I learned this the hard way back in the day. I hired this really awesome lady Cheeks [ph] who still works with me today seven, eight years later, whatever it is. And after her, I made a bunch of hires; I invested my time, my money into training them, and getting them set up, only to have people quit on me. And I couldn’t figure out why is everyone keep leaving; I’m treating them the same way as I’m treating the people in the US. They don’t seem to be quitting on me. And I really just asked Cheeks, I said, what’s going on? Well, why do people not want to work with me? And she told me that the way I talk is very direct.

And people in the Philippines, you can’t generalize everyone, but for the people that I was working with, and my personal experience with people in the Philippines, they tend to be more emotional, they tend to take criticism a little differently than a lot of people in the US. So what I had to do was change my approach. I had to change how I would talk to people, how I would give feedback, how I would give directions. And just by making those small changes on how I would send out an email or how I would send a Skype message or how if someone did something wrong, I wouldn’t call them out in a group with other people, I’d keep it more private. Stuff like that went a long way into decreasing my turnover. So that’s one of the biggest things that I’ve seen is they just tend to take things a little bit more personal, less on the business and logical side, if that makes sense.

Steve: Interesting. And then what are some other cultural differences that just kind of affect the day to day? So why would you go for — I guess, aside from the price, what are some of the pros and cons?

Nathan: Yeah, I personally have had a great experience hiring people from the Philippines. I think they’re really hard working, I think that they’re looking for an opportunity, that they want someone that they can — they want something reliable that they can grow with and be a part of, and I think what I try to do is make them feel a part of the business because at the end of the day, that’s where they are. FreeeUp is growing that and they’re growing too. And I think getting more into that mentality where you might have someone from the US that is just interested in the paycheck, but could still do a good job for you. If you get someone from the Philippines for the most part, I try to make them feel included, make them feel like it’s a family, make them feel like I had their back at all times. And that’s how I’ve seen a lot of success. And yeah, like I said, they can be incredibly hardworking and dedicated to you if you treat them correctly.

Steve: How is the vetting process different?

Nathan: So what I mentioned with FreeeUp is we vet people for skill, attitude and communication. So we get thousands of applicants every week, we take one out of every hundred, and let them on our platform. For skill we have different skill tests that we give. If someone’s a graphic designer, we look at their work, if someone’s an Amazon expert; we have the Amazon tests that we give them. And we’re not looking for someone who’s a 10 out of 10, you can be a seven out of 10 or a four to 10 as long as you’re priced accordingly, and you’re honest about what you can and cannot do. So the first part is skill.

The second part is attitude, which we briefly touched on before. We want people who are passionate; they’re not just in it for the payments. They actually care about their clients; they don’t get aggressive the second that something doesn’t go their way. And we do one on one interviews for attitude.

Steve: I guess I’m just trying to get the distinction between the — because someone who’s using a Philippine worker for the first time, they might be kind of surprised, or there might be some ways that they interact with you that are kind of different. And so I’m just trying to ask you what the expectations are. It’s funny, I had John from Onlinejobs.PH on the podcast a while back, and we were just talking about some of the cultural differences and how to navigate those. And that’s what I’m trying to get out of you.

Nathan: Yeah, I mean, I kind of briefly touched upon it. It’s weird. I’ve had like a very great experiences working with people in the Philippines, I haven’t seen something where it’s like, okay, you need to watch out for this. A lot of it too is just talking to the people that you’re working with and saying, hey, what do you like? What does not make sense? What’s confusing? How can I communicate better? And that’s how I’ve kind of figured out how to work with people, regardless of their location?

Steve: Or do you work with them in the exact same way as you would a US employee?

Nathan: For the most part, yes. I mean, I tend to talk to everyone, no matter where they’re from in that same light. And I tend to only hire people that can work with me in my environment. I try to stay away from people that wouldn’t be a good fit for the kind of way that I work with them because I mean my team right now is 40, 50 plus people. If I have to work with everyone different, I’m going to go crazy at the end of the day. So I try to find people that are a fit for me rather than me trying to become a fit for everyone else.

Steve: Well. So one thing you mentioned earlier is you’re less direct with your Filipino employees, right? So can you give me an example of how you would soften the blow on — so I mean, apparently you do treat them slightly differently, right, just based on that?

Nathan: Yeah, it’s funny, once I got that feedback and I started to adjust how I would talk to them, I kind of adjusted how I talk to everyone to kind of more like preventative maintenance. But yeah, so I had an assistant who I hired, he was really smart. And he kept making these small little mistakes. And I kept tagging him in a group chat, like, hey, watch out for this, watch out for this. And he couldn’t, for whatever reason that just wasn’t effective. And I finally pulled him aside and was like, hey, what’s going on? How can we keep making these errors? I keep calling you out. And he pretty much said that he was embarrassed that I kept calling him out in front of other people. And it made him nervous, and it made it so he couldn’t focus and so he couldn’t work.

And so what I would do separately is say, hey listen, you’ve done a great job on XYZ. Here’s a few notes on things that weren’t done properly. Let me know if you have any questions. You’re doing great, just kind of keeping it much more positive, if that makes sense.

Steve: Can we talk about outsourcing tech, because I know a lot of people in the US including my students, they have problems making little adjustments to their website and whatnot. And so when it comes to outsourcing tech, any tips there?

Nathan: Yeah, I mean, that’s something that I learned way back in the day, working with developers is really hard. I mean, for someone like me that’s not a developer that has more of a business mindset, trying to bridge that gap between what is going on, on the code side and what’s going on the business side is hard. For me, it’s all about communication and not assuming anything. I have two developers in India right now, one in the US and we go over things to the T. What might be assumed on the business side, like hey, it has to have this function for the client is not assumed on the dev side.

And what might in my mind be a small project might be a big project, or vice versa. So before we get started, we spend extra time going through everything, making sure that everything is in writing that it’s hey, this is due by x date. So there’s no confusion. For the most part, I don’t do any voice calls with my tech people. It’s all in writing. It’s all clear, ready to go.

Steve: Do you use any software to help you out to describe the app? I mean, I can’t imagine not having a voice call. Are you drawing flow charts? What does the document look like?

Nathan: Yeah, we use a software called Jira. It maps out every bug, every revision, every new update, and it really lays it out for them. Yeah, that’s what we found to be effective. I mean, for the most part, I’m not doing voice calls with anyone. I’ve found that by dealing with people from all over the world, the most effective way is to keep everything in writing at all times. So nothing gets lost, calls don’t drop out and there’s always something to reference back to.

Steve: What is your communication tool of choice? Are you using email, Slack, Asana?

Nathan: Yeah, I keep it pretty basic. I use email, I use Skype, I use Trello for projects, I use Jira for developers. And that’s really it.

Steve: Wow. Okay. And so can you just kind of describe your day to day and how you manage all your VAs. Like, what does your typical week look like?

Nathan: Yeah. So Monday morning at 10am we have a meeting with all the VAs, we go through the week before we go through what’s coming up this week. For example, I’m traveling this week. So I update them on that, the different projects that each team is working on, each one gives an update. And then throughout the week, we have different meetings. So my customer service team has a meeting, my billing team, my social media team, and my business partner Connor and I, we’ve really split up the teams. We have very different skill sets, he handles the developers, he handles the social media, the content. I’m handling the customer service, the billing, more of the business structure type things. So we split those up, we have different meetings throughout the week. And then…

Steve: So by meeting it’s not a voice meeting or?

Nathan: Nope, it’s group chats on Skype.

Steve: Group chat. Okay.

Nathan: Yeah, so we’re going through those, and then people will cover my Skype, my email and all that while I’m doing podcast, doing client calls, whatever it is, and then as issues come up, anything that needs to be handled within the next hour or so that gets sent via email, anything that’s urgent gets sent via Skype. And that’s really how we differentiate that.

Steve: And can you comment on the price difference between getting a VA in the Philippines versus the US and how much basically all the different things cost? Like, for example, how much is a customer service rep that you’d expect to pay versus a dev versus like a bookkeeper?

Nathan: Sure, so outside the USA, it’s usually in that five to $10 an hour range ballpark. There’s obviously going to be people that are cheaper or more expensive. For that mid-level, that’s kind of where you see the difference where you can get that mid-level specialist in the Philippines for maybe somewhere between seven and 15 an hour, where in the US, it’s more on that 20 to $30 an hour.

Steve: What is your definition of mid-level?

Nathan: Yeah, so basic level is people that are followers, people who can follow your systems, your processes. Mid-level are more specialists, the bookkeepers, the writers, the graphic designers, where you’re not teaching someone to be a graphic designer, but they’re not consulting with you either. They’re doers. And then the experts are that maybe 15 in non US and 25 and up US who are bringing their own expertise to the table, can console, can execute high level gameplay and stuff like that.

Steve: So we’re looking at like a price differential of like two to one then Philippines to US?

Nathan: Yeah, a lot of times.

Steve: Okay. And oh, can you comment on the writing? Like, do you ever outsource any writing?

Nathan: Yeah, if you go to the FreeeUp blog, made up of both US and non US writers. And, again, it comes down to the person more than location. We have some really talented non US writers on the blog. Do they compare to the US? Maybe not. A lot of times the US can far exceed anything they can do, but they’re very solid, especially if you’re a startup and you’re running on lean, and you need to get a lot of content out there.

Steve: Okay. So Nathan, I want to kind of end this interview with just some common pitfalls to avoid, just some general tips that people who want to outsource and try to help them avoid some of the common mistakes.

Nathan: Yeah, I mentioned the three levels. That’s where a lot of people go wrong; either hiring someone for five bucks an hour and say, hey, run my Facebook ads, run my Amazon PPC, and then they have a bad experience. Or maybe hiring an expert who has their own system and process and trying to make them follow yours. That’s where a lot of people go wrong. I mentioned the setting expectations, not diversifying. What a lot of entrepreneurs will do is because hiring is hard, so they’ll make a lot of bad hires.

And they’ll finally find someone they really like. And they’ll load that person up with everything. And it just makes your business incredibly risky. If that person quits or gets sick or you have issues with them, it can really set your business back months or years. So those are kind of the three things that I would encourage you to do is make sure you’re hiring the right level, make sure you’re setting those expectations up front. And make sure as you grow, you’re diversifying and not putting all your eggs in one basket.

Steve: And then I did want to give you a chance to talk about FreeeUp a little bit. And specifically, I’m curious how is FreeeUp different from like an Upwork for example?

Nathan: Yeah, so I used all the other platforms out there. And I really wanted to build my own that was better taking what I liked and changing what I didn’t like. We get thousands of applicants every week, we take the top 1%, let them in, make them available to clients quickly, rapid fire whenever you need them. We have clients who get started within hours or minutes of putting in their request. On the back end, we have 24/7 support to make sure that you’re taken care of. And then we also have a no turnover guarantee. If someone quits for any reason, we cover replacement costs and get you a new person right away. So that’s how we’re different, the pre-vetting, the speed, the customer service and the protection.

Steve: Interesting. How can you find someone so quickly actually, you said within a couple of hours?

Nathan: Yeah, so we’re not recruiting. So it’s not like you put in a request and we go out into the world and find them. We already have these people in our network ready to go. We get about 4,000 applicants a week to get on our platform. So we’re constantly adding people to the platform. And once you submit a request, that request is going to the people that are already there ready to go looking for work.

Steve: I see. Cool. Well, Nathan, where can people find you online if they have any additional questions?

Nathan: Yeah, go to FreeeUp.com with three E’s, my calendar is right at the top. If anyone wants to book a time with me, mention this podcast, get a $50 credit to try us out. And definitely check out the FreeeUp blog and the FreeeUp YouTube channel for a lot of other great content about hiring.

Steve: Cool. Well, Nathan hey, I appreciate you coming on the show man. It was good to finally connect and chat.

Nathan: Yeah, thanks for having me.

Steve: All right, take care.

Hope you enjoyed that episode. I’ve actually started making use of VAs in the past couple of years and it’s actually made a huge difference to my businesses. For more information about this episode, go to Mywifequitherjob/episode257.

And once again, I want to thank Klaviyo for sponsoring this episode. Klaviyo is my email marketing platform of choice for e-commerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all these sequences that will make you money on autopilot. So head on over to Mywifequitherjob.com/K-L-A-V-I-Y-O and sign up for free, once again, that’s Mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any parameter that is closely tied to your e-commerce store. Now, if you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

Now I talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce store, head on over to Mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast where we’re giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.Mywifequitherjob.com.

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Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

256: Sunny Lenarduzzi On How To Start A YouTube Channel

256: Sunny Lenarduzzi On How To Start A YouTube Channel

Today, I’m really happy to have Sunny Lenarduzzi on the show. Sunny and I met at Social Media Marketing World where we were both speakers and she has over a decade of experience as an award winning video, social media and brand strategist.

She helps entrepreneurs elevate their businesses on YouTube and her clients have generated over 5M in revenue from organic YouTube traffic.

In this episode, we discuss using YouTube to grow an ecommerce business.

What You’ll Learn

  • What type of videos work well and how to think about getting traffic on YouTube
  • How rank a video in search
  • How to build an audience on YouTube
  • How to turn YouTube subscribers into email subscribers
  • How to promote new videos

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into the strategies they use to grow their businesses. Now today I have Sunny Lenarduzzi on the show. And Sunny is a YouTube expert. And what’s interesting about today’s interview is that the advice she shares with us today is actually very different from the last YouTube expert that I had on the show. Stay tuned to find out why.

Before we begin, I want to thank Klaviyo for sponsoring this episode. Supper excited to talk about Klaviyo because they are my email marketing platform that I use for my e-commerce store and I depend on them for over 30% of my revenues. Now Klaviyo is the only email platform out there that is specifically built for e-commerce stores, and here is why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send out an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, piece of cake, and there is full revenue tracking on every email sent. Klaviyo is the most powerful email platform that I’ve ever used and you could try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to give a shout out to Privy who is also a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now, Privy is an email list growth platform and they manage all my email capture forms. And I use Privy hand-in-hand with my email marketing provider. Now, there are a bunch of companies that will manage your email capture forms but I use Privy because they specialize in e-commerce. Right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store and customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%.

I’m also using their new cart saver pop up feature to recover abandoned carts as well. So bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve, now onto the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m really happy to have Sunny Lenarduzzi on the show. Now, Sunny is someone who I met for maybe five seconds at Social Media Marketing World where we were both speakers. But I did see her on stage and I was very impressed with her YouTube knowledge. Anyway, who is Sunny? Sunny helps entrepreneurs elevate their businesses on YouTube. And she has over a decade of experience as an award winning video, social media and brand strategist. She’s helped clients generate over $5 million in revenue from organic YouTube traffic. And she was named as a must watch YouTube channel for business by Forbes and Huffpo. And with that, welcome to show Sunny, how are you doing it?

Sunny: Thank you. I’m good. Thanks for having me.

Steve: So Sunny, give us the background story and your motivation for doing what you do. And why did you quit television actually?

Sunny: Why did I quit television? Good question. So I think my motivation is really intrinsic to even when I was a kid. I always wanted to help people and educate people, while also doing it in an entertaining way. I grew up as a total arts kid. I danced and I was an actress and did all that stuff. And I think the through line was that I really loved telling stories that can make an impact. And I knew that’s what I wanted to do for the rest of my life. So my original thought, because obviously social media was not always the thing was that I was going to be a journalist and I went to school to be a journalist. My big goal was to work at the 2010 Winter Olympics and I achieved that goal.

Steve: And you did, didn’t you?

Sunny: I did yeah. I achieved that goal and that was pretty much right out of school, which was very lucky. And it was happening in my hometown of Vancouver. And I went up and lived in Whistler for the entire duration of the games, and was filing stories every day. And the thing that really struck me was that on a very logical level, I was on this amazing path. I was, oh my gosh, I was like early, early 20s when the Olympics were going on. And so I was on this pretty fast trajectory. And if anybody knows me, they know that that’s not a coincidence, it’s how my life works. I’m very impatient and I do everything fast.

But in this case, I was like, cool, okay, I’m here, I’m at the Olympics. This is amazing. I’m getting this once in a lifetime opportunity. This is really my first big gig out of school, which is crazy. But it still didn’t feel right. And I thought logically in my head, this is it. I’ve done it, check, moving on to the next thing. And my vision of what I wanted was to be the six o’clock news anchor in Vancouver, the major market and I was like, hey, well, I’m going to have to move to a small town. And that’s okay, I’ll do that. I’ll get my experience, then it’ll come back. But when I had this light bulb moment when I was at the Olympics, and it just did not feel right to me and I wasn’t feeling inspired.

I was feeling a little bit frustrated. And I just was more than anything feeling stifled. My whole purpose of getting into journalism and TV was to be creative and to tell stories in a way that I wanted to tell them. Whereas I found the opposite to be true was, I was being told how to edit things. I was being told how to say things; I was being told how to dress. And I kind of just realized it wasn’t for me. And on my way home from the Olympics, I had this crazy idea of starting my first business which I have never started a business, I do not have any business knowledge. I did not go to business school. And I decided to start an online magazine, which at that time was also insane, because not a lot of people were doing that. And I built the entire thing up using Twitter, Facebook and YouTube and just naturally figured out how to use all of them. This time, Instagram wasn’t even a thing.

Steve: Right. You’re dating yourself by the way but yes.

Sunny: I know totally. I think it’s also important for people that are saying like I’ve been around the block for a while; this is not new to me. But I just didn’t talk about it for a very long time. And so I basically did that. I started this business and I built up a team of 10 writers. I executed everything on my end. We built up our email list pretty fast, like everything grew fairly quickly. And I really got good at building brands with social media. And so, all these other companies started to take notice because it was so new. And they basically asked if they could hire me to do their strategies, do their management on social.

So then I built this little tiny consultancy, one woman show, did it for five years, traveled, worked for my laptop. And one day, it just got to a point where I was very lucky that by word of mouth, I was getting new clients, but as a solopreneur, you hit a ceiling and I hit that ceiling. And I basically realized I can’t keep answering my clients’ questions individually and going to these meetings to talk about their questions about social media. I have to figure out a way to answer these without having to spend more time because I need that time to work. So pure desperation, I sit down, I film a tutorial on one of the biggest topics at the time.

One of the biggest questions my clients were asking me, which is all about Periscope. It had just launched itself by Southwest that year. It was this huge phenomenon and everyone wants to know how to use Periscope and livestreaming for their business. I sat down, filmed a video, sent it to my clients, thought nothing of it. I had no subscribers on YouTube, but my channel was full of old demo reels and family videos. That was it. And the next morning I woke up and I went and looked at the video and it had 2,000 views on it. And I was obviously shocked. I didn’t know where the views had come from, I was so confused. But I also again had a light bulb moment and realized, okay, well if I did this for a year, I wonder what would happen?

So I kind of just went in with a sense of curiosity. And I made a new tutorial on a social media topic every single week for a year. And in that first year, I grew to 50,000 subscribers, 3 million viewers, and I built my email list completely from scratch to tens of thousands of people on it, which was nuts to me. I didn’t even really know I wanted to be talking about YouTube specifically. I created my first digital product, which was about social media in general, did a launch for that ,learned about online business, learned what an online course was, all this stuff. And everything changed. I always say YouTube changed my life because it really, really did. It changed my business for sure but it also changed my life.

I got a ton of speaking engagement offers. My very first speaking engagement was actually at NATO’s headquarters in Brussels, because of their social media manager found me on YouTube and reached out on LinkedIn. And they flew me out to Brussels to present on how to leverage video for their delegates and for the people that they were inviting to this conference. And so it really was a game changer for me. And I think the motivation has always stayed the same. I light up from helping other people understand how to leverage communication tools like social media to make an impact. I want to empower anyone who comes in contact with my content to get their message out there. Because everyone in my opinion, and I think this is the journalists in me but everyone in my opinion has a story to tell.

Everyone has an angle in their life that no one else can speak to and that’s what makes you unique. That’s what helps you build a really powerful brand. And it all starts with this. I just tried, I just tried it. I was curious, I didn’t give a crap about metrics, I did not care about vanity numbers. I just tried to put out good content that wasn’t even highly produced. I used a webcam and a window.

Steve: Today your videos are very polished though.

Sunny: Thank you. Yeah, but now I’m at 200 and some thousand. So again I think that’s a really important thing for people to understand. Like I grew to 50,000 subscribers using a window for my light and an $80 webcam that I touched my computer and I edited the videos myself on IMDB. So and that grew my email list to like I said to tens of thousands of subscribers that allowed me to do my first launch. It brought on thousands of new customers for us through a digital product. So it doesn’t have to be perfect, you just have to try.

Steve: So Sunny, you got me really excited now. So when it comes to YouTube and today’s podcast, I want you to kind of address the crowd as if we were starting from complete scratch. And I don’t want to talk about any equipment at all, let’s just assume that people know how to take good quality video from a technical perspective. So I would also like you to take the spin of kind of using YouTube to grow an e-commerce business because a lot of my audience is into e-commerce. So let’s start first with the very basics, like what type of videos work well? And how do you actually start getting traffic on YouTube.

Sunny: Okay so the best way to start getting traffic on YouTube is and this is going to go against probably what a lot of people listening are thinking right now is starting with educational videos, because you have to keep in mind, YouTube is a search engine. And people are searching for answers to their questions and solutions to their problems all day, every day. And if you can show up and as entrepreneurs, we are problem solvers, as business owners, we are problem solvers. As an e-commerce store owner, you are solving a problem by providing a product that’s either going to help somebody or have some kind of an impact in their life, whether it’s something little and fun or something monumental and related to their health, it’s there for a reason.

And so you have to keep in mind that by doing tutorial based content, you’re allowing your content to show up to people who have never heard of you before, which is the magic. I went from zero people and 10 clients max in my little consultancy to 3 million people knowing about me and tens of thousands of people on my email list in a year. And that’s why my business grew so fast. So it’s understanding that tutorial based content is always the best way to start. Then once you have an audience, of course, you can start going after different kinds of content, you can create more lifestyle content, you can create content that’s maybe a little more interesting or diverse. But I still to this day, if you go to my channel, the majority of my content is tutorial based, because I’m constantly generating new leads and a new audience that are going to be interested in my products and services.

Steve: Do you do keyword research then to figure out what to film?

Sunny: Oh, yeah, a lot of it. I always say research before you record. I think it’s my number one rule that I have when it comes to YouTube. And I reiterate it to my clients and to our students all the time, mainly because if you’re not, you’re kind of just throwing up videos and hoping they succeed. And that’s not really fair to anybody, because you’re putting time and effort into these. And we’ve all had those moments where you post a piece of content, and it’s like crickets, and that just doesn’t feel good. So I use a couple of different tools but the easiest tool to use is called Keywords Everywhere. And it’s just a free Google Chrome plugin. And it will tell you the search volume of any term, any long tail phrase, or just individual keyword that you type into either Google or to YouTube. So you know what kind of search volume is behind the topic that you’re going to be making a video on and whether not you have an audience for it.

Steve: How do you determine how competitive that keyword is though?

Sunny: So it’s changed a little bit recently, because the easiest way was I had a formula where it was basically search volume versus search pool versus views and velocity. So what I mean by that is, it was basically the search volume is obviously the amount of search display in behind that keyword.

Steve: And this is on Google, right? Not necessarily YouTube, is that correct?

Sunny: It can be on both. I mainly focus on YouTube, because it is a little bit different. But it shows you how many people are searching for a specific topic every month. So that’s your search pool, and then you do your search volume. And then your search pool is the amount of other results that show up. So I used to be able to see this really easily, there’s a couple different hacks that you can see it now. And it will say like 2 million results, 1,000 results. So that means 1,000 other videos have been made on this topic. You’re trying to look for a topic that there’s been fewer videos made on because if you’re trying to compete, especially as a new channel with millions and millions of results, you’re going to sink to the bottom of the sea and never get found on YouTube.

So and keep in in mind that YouTube is a ranking game. So your best bet for actually building momentum in traffic is to rank number one. And in order to do that, you need low competition, high search volume. So I used to do it with just looking on YouTube search results. Now since it’s gotten a little bit trickier, you can actually use a tool called TubeBuddy, it’s a great tool. And it will show you the competitiveness and it will say you’re rating basically from poor, fair, good, very good or great. And so you’ll know if it’s worth going after based on that rating system.

And then the views and velocity is say there’s three videos ranking at the top for the topic, how to get more views on YouTube. And those videos have been up there for five years, and they have a handful of views. That’s going to tell you right there oh, that’s probably not a very good topic to go after because the top ranking videos only have a handful of views. So you want to go after topics where the first couple of videos actually have a high amount of views on them because that’s a topic people are actually going to be wanting to watch and searching for.

Steve: So assuming you’re not using TubeBuddy, do you have any guidelines in terms of how many videos you’d like to see for a given keyword topic?

Sunny: Yeah, I mean, it’s not really a guideline, because it’s totally dependent on the niche. And we’ve worked with people in thousands of different niches, but I just always say the smaller the better. That’s kind of the general rule. And if you’re just starting your channel, try and keep it under 50,000 video results that you’re competing against. And if you’re a more established channel, of course, you can go after bigger topics because you built more authority, but yeah, the smaller the better.

Steve: All right, so let’s say you found the right topic, and it has less than 50,000 videos on that particular topic. Is there a process that you use to actually get it to rank once it’s been published?

Sunny: Yeah, I mean, there’s so many things to that. So in our program with YouTube for bosses, we teach it in a four phase system. So really, first is the research portion of it, which does take the longest, but it’s also the most important because then you’re making videos that you know are actually going to get views on them, and have potential to rank. And then we go into scripting and filming. And scripting and filming is really important to ranking as well and not a lot of people talk about that.

I created something called the hot script formula, which gets you into the meat of the content as quickly as possible. Because again, your goal on YouTube is not to just serve your existing audience, the goal of YouTube and the magic of it is that you are capable of bringing in a brand new audience all day every day. So you want to make sure that you’re doing your videos in a way where if someone has never heard of you before, they’re going to stay tuned for the entire video. And it’s going to give you high retention because that’s the number one ranking factor on YouTube is people watching your whole video. So you want to get to the meat of the content as quickly as possible.

Steve: Yeah. Can we talk about some of the guidelines as part of that? So you said get into the meat as soon as possible? These are new people also viewing you. So do you give like a brief intro about yourself and your credentials also or no?

Sunny: Yep, so the hot script formula is hook. You’re hooking the viewer and then you give them the outcome of the video so they know exactly what they’re going to learn. They know they’ve landed in the right spot, they know what’s clickbait, they’re not going to waste their time. And then the testimonial or something like if I were to do this for a video, I would say the hook would be in this video, I’m going to teach you how to rank number one on YouTube. The outcome would be by the end of this video, you’ll know exactly how to write the perfect description so that you’ll get found in your search results. And the testimonial would be I’ve helped my clients go from scratch to 100,000 subscribers in 10 months and 10 million views leveraging this formula.

Steve: Hmm, nice. Nice. And that sounds pretty concise actually also.

Sunny: Yeah, you want to keep it under 30 seconds ideally, but if you can do it under a minute that also works.

Steve: And then how long of a video do you typically target? You mentioned that retention is very important. Does that imply that shorter videos work better?

Sunny: Not necessarily. I get that question a lot. People are like, what’s the perfect length? There really is no perfect length. I have videos that are 15 minutes. As long as it’s a tutorial with no fluff, no filler, people watch the whole thing because they’re trying to get the outcome. So of course as concise as possible, no fluff, no filler but there’s no really specific length, because if it takes you 30 minutes to explain the outcome and how to get to the outcome the viewer is looking for, people will still watch that for 30 minutes.

Steve: Because the reason why I asked that question is sometimes I don’t actually have 20 minutes. And maybe I won’t finish the video even though it’s really good. So is there some ideal length in your mind or does it really not matter at all?

Sunny: It really doesn’t matter at all to be honest, because I think you have to think of the mindset that people are in. If you really want to learn something, whether you watch the entire thing in that sitting or you come back to it later, you’re going to want to watch whatever video that it is in order to learn the outcome that you’re looking to learn.

Steve: And are there any tricks to get people to watch until the very end?

Sunny: Yeah, I mean, my scripting formula works pretty well. We usually give them an incentive to stay tuned until the end and it might be something like I’ll give you a special invite to my community of e-commerce sellers so you can get support from other people who have done this like yourself. So that will be like a Facebook group. But you don’t give them the information until the end of the video or you tell them, we actually have put together an entire guide on how to sell your first $100,000 worth of product, stay tuned until the end. So there’s a lot of different ways to do it. But yeah, giving them some sort of an incentive, also doing it step by step because then people have to watch the whole video in order to again get the outcome they’re looking for.

Steve: Interesting. And that incentive you talk about at the beginning of the video?

Sunny: Yeah, you tease it; you tease it at the beginning of the video.

Steve: And then to get them to watch other videos I hear is also another metric used to rank. Is there anything that you do at the very end of the video also?

Sunny: Yeah, I think I call it complimentary content. And this is something fairly new in the last year or before. This wasn’t weighted heavily but of course, every social platform at this point wants to keep you on it longer. So watch time on your channel. But watch time just on YouTube in general is very, very important. So basically, what I do is I kind of alternate so one video, I’ll send people to a guide. One video, I’ll send people to another video that’s like complimentary. So for example, I have a video on how to get really comfortable on camera. From that video, I’ll be like, okay, great. Now you’re comfortable on camera. Now let’s make your first video, here’s how to make videos with your phone. And then I’ll send them to my video on that topic. So I just kind of alternate to increase both watch time on my channel and my authority, but also build up my list, build up my community.

Steve: Okay, and then once — assuming we followed your scripting formula, do you do anything else to actually get the video to rank? Do you give people … okay yeah.

Sunny: So step three is actually optimization and uploading. So of course, you have to upload your video in the right way to optimize in the right way. That includes doing end cards, adding clickable cards throughout the video, doing your titling and your description in the right way, your title has to have your keyword up front, or also it will not get found. Your description needs to be done in a very specific way. I have a bunch of videos about that. And then tags and of course, your thumbnail. There are so many factors to getting your video to actually stand out on YouTube and those are the things that you need to do in phase three.

And then phase four of our program is all about distribution. So this is often a misstep, people just put the video on YouTube and hope it’s going to get seen. But with how much video is uploaded to YouTube on a daily basis, your biggest unfair advantage if you do have an existing audience, or even if you have an audience of 10 people is to share that video on platforms where people are already following you. So when I got started, I had like a couple of thousand people following me on Twitter. And I would share every video that I put out within the first 24 hours on Twitter. And then when Instagram came around, I started sharing every video on Instagram, Facebook same thing.

So I share it on all the platforms, I send it to my email list. So we have a whole checklist in our program of where exactly you want to be sharing your content and how to do it and why you need to do it in the first 24 hours, which is because YouTube really pays attention to that first 24 hour period and how much engagements, how many comments, likes, shares the video gets. And the more comments, likes, shares the videos gets, the more YouTube is going to go, wow, this must be a really good piece of content, I’m going to push it up even higher in not just the rankings, but also in suggested, meaning it will show up in the sidebar, when people are watching YouTube, and it’ll be a suggested video for them to watch.

Steve: So does the thumbs up matter as well as the comments?

Sunny: Yeah, that’s the like, yeah.

Steve: You know what’s really hilarious about this Sunny, I actually just interviewed someone on YouTube who does this for a living as well. And what’s funny about this is your strategy and his strategy are completely different.

Sunny: Oh, interesting.

Steve: He was saying that none of that stuff matters. It’s just all about retention. And the keywords in the description don’t really matter, either. But I think mainly it’s because he produces non tutorial based video.

Sunny: Yeah. Is he doing more blog stuff?

Steve: Yeah, more blog stuff yeah.

Sunny: It’s just a different beast in both. But I’m still saying like retention really for me is the most important metric. And it definitely isn’t last year on YouTube. But I’m also I think it’d be silly not to make sure everything else is done right because those things are very important for your rankings as well. So yeah, I think there’s obviously differing opinions. But I know what’s worked for me. And I’ve now helped over 2,000 people grow their channels very rapidly, so I know what works for other people too.

Steve: Sure, of course. And in your description, does it pay to create a nice, long, rich description?

Sunny: That part doesn’t matter as much anymore. I’m not really one to do like an essay in the description, especially because a lot of the times, it can kind of defeat the purpose of the video. I often see people put every single step that they include in their video in the description. I’m like, why are you doing that? Because people are smart, and they’re going to go down there, read that instead of watching the actual video, and that kills your retention. So I do about 200 to 400 words. And it’s really just a reiteration of what we’re talking about in the video and doing the primary keyword saying that over again, and then also adding in your secondary keywords as well.

Steve: And what about the keywords in the video? Are those important or do you just populate them just kind of by default?

Sunny: Do you mean like saying them verbally or?

Steve: No, no, you know how underneath the video you can type in the topics?

Sunny: Oh, like a tag?

Steve: Yeah, the tag, sorry.

Sunny: Yeah, I do recommend paying attention to your tags. And I mean, I don’t think you need to go crazy with them. But you do want to reiterate again your primary keyword and the tags as well.

Steve: Okay. All right well, let’s talk about — you mentioned building an email list from YouTube many times. Can we talk a little bit about how you do that?

Sunny: Yeah, totally. So I mean, my best way to do it is to just keep it hyper relevant. And I think that the more that you understand that people if they’re taking the time to watch your video, they’re invested. And YouTube is really a lot of warm leads, because they’re already in a place of needing the answer that that they’re searching for. When they find you, so when you deliver it, of course, they’re going to want to learn even more from you. So for example, we have a video on how to get more views on YouTube. That video now has well over half a million views on it. And it’s built our email list and continues to build our email list even though it’s three years old, and I’ve made updated versions of this video, it’s building our email list by about 300 leads a day. And those are all being funneled into our programs and our product offerings.

Steve: Is that done via a link beneath the video or within the video itself?

Sunny: So both, so I always talk about it at the end. And that’s part of my scripting formula, it’s my call to action at the end is it’s just extra relevant information. So the video is on how to get more views on YouTube. Our lead magnet that we have attached to it, which is basically a PDF download that has extra information about how to optimize your videos, it’s called views release news and it’s a YouTube SEO checklist. So it shows you how to optimize your videos in the correct way to actually rank them.

Steve: And when you decide your call to action at the end, you mentioned earlier, sometimes you refer to other videos, and sometimes you take them off to sign up for your email list. So you just kind of keep a balance because both are important?

Sunny: Yeah, exactly. Both are important yeah.

Steve: Okay, and kind of talked about a lot of things. You did mention the thumbnail, how important is the thumbnail?

Sunny: Thumbnail is vitally important, especially now just because there are so many videos on YouTube, so really dialing in a thumbnail strategy is super, super, super important for your videos to stand out.

Steve: So do you have any tips? What’s your style?

Sunny: M style has changed. I was doing — I don’t know I was doing like three words, three or four words and I still recommend it. If you’re a newbie, and you’re just starting on YouTube, no more than four words on your thumbnail is really, really important and having big bold text because you have to keep in mind if people are searching on mobile, which a lot of traffic on YouTube obviously comes from mobile, it’s teeny, teeny, tiny, tiny, the thumbnail. So you have to really make it pop on a tiny little green with a tiny little thumbnail. But now because I have an audience, I use a lot of thumbnails that don’t have any text at all. And it’s just more of like a big bold picture of myself in like a bright background.

Steve: Interesting. Yeah, I’ve heard conflicting things about thumbnails. Some people advise that you always keep like the same style so when someone is scrolling through, they immediately recognize that it’s you and they want to click on it. And then there’s other people, they just try to be really bold, really bold colors, really funny facial expressions.

Sunny: Yeah, totally. I mean, there’s so many different styles you have. And I think the thing is like, I’m constantly changing it, I’m constantly testing it. But if I were to start all over again, and I just did a video on this, I was like, if I were to start my channel from scratch, this is what I do. And I would go back and I would start my channel with thumbnails that have three to four words maximum, that are very like punchy headlines for whatever the video is about.

Steve: Okay, and for the distribution part, when you’re starting from scratch, and let’s say you don’t have anything, what are some of your advice there in just kind of jump starting the process?

Sunny: Sorry, what was that, sorry?

Steve: Let’s say you have no audience to start like you’re starting from nothing.

Sunny: So still same thing applies. I mean, I would still just — I would do the research. And we have a lot of people that come in through our programs who have no experience, have no audience and are starting from scratch. And I think the thing that I just always reiterate is like, this is not an overnight game. YouTube is a long game, we do have clients who have grown insanely fast and built massive businesses in a very short period of time. But I think it’s important to set the expectation that every video is helping you, every video is getting you where you want to be. So if you don’t have an audience, do the research, still do the research, figure out how to script and film your videos in the right way, optimize them and upload them in the right way so they can actually be discovered in search. And then of course, distribute them where you can.

And here’s the thing, when you’re a beginner and you don’t have an audience, you can pull from other people’s audiences. So there are so many Facebook groups and forums out there and I did this at the beginning. I would go to Facebook groups and forums that were dedicated to social media marketing and filled with other people in the marketing space. And I’d ask the admin or I just get the approval to be able to share and I’d say, hey, I do these videos, is it okay if I share them? And then even a lot of times that there’s tutorials in groups, there’s going to be people asking questions about specific things. If you have a video that answers that question, that’s so helpful. So I think as long as you understand you can build an audience even if you don’t have one right now by getting really crafty with where you’re putting your videos.

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So Sunny, let’s switch gears a little bit and talk about some specific case studies that you’ve done or clients that you’ve had in e-commerce space, and how you’ve managed to help them build an audience. Do you have any case studies handy for physical products?

Sunny: Yeah, so Stone Coat countertops. This is a really interesting one, we just worked with a company called Stone Coat countertops, and they sell epoxy products. And we brought them in through our intensive program and they worked with us for 90 days. And they started with us at about 70,000 subscribers; they already had a good start. But they came to us because they didn’t really understand the entire process of YouTube and they didn’t understand how to continue the momentum. They were finding that they were kind of getting stalled. So we worked with them for 90 days, we doubled their subscribers to 140,000. They’re now close to 200,000.

And we also helped them pay off the investment of that program, which is not small, but it’s worth it if in the first video, you are generating close to $20,000. So their first video that they did with us, they’ve generated close to $20,000 in product sales. And it was a live stream. And it’s something that we do with a lot of our clients to kick off the momentum of their channel. It’s our live launch strategy. And yeah, they generated about 20k in sales, and then they had their highest revenue month ever in the first month of working with us, and like I said, doubled their subscriber growth as well. So they doubled their revenue and doubled their subscriber growth.

Steve: Can we kind of talk about like the exact video that was produced that generated this money?

Sunny: Yeah, it was actually a live stream video. So it was the very first video that we did with them in the program and we advised them to go live to basically do a live demo of how their products work and treat it like a launch, treat it like a product launch. And they had extremely high retention. It was super interesting and engaging how they set it up. It’s on their channel if you want to go check it out. I can’t remember the exact title to be honest. But it is on their channel if you want to check out how they set it up.

Steve: I can see how that would work. It’s an epoxy right, so you can demonstrate how good it is. It’s kind of like an infomercial or like a QVC type of commercial.

Sunny: Totally yeah, yeah.

Steve: What happens though if your product doesn’t really solve a problem and it’s kind of like a vitamin?

Sunny: Oh my God, that’s huge. There’s such a big opportunity for say you’re selling a vitamin. Okay, what is the vitamin for? Do we have an example of like what the vitamin?

Steve: No, I just kind of came up with that at the top of my head. But let’s say it’s like vitamin C.

Sunny: Okay, cool. Cool, so I would be making videos on all — I would create basically a list of all the benefits of what vitamin C can do for you and then I make tutorials. So let’s say that vitamin C helps build up your energy, or helps you get better sleep at night or helps you have a better complexion. I would do a video on how to get clear skin with vitamins. And then I would talk about all the steps that you follow. And then I would say actually, one of the things that I use is this product, which is something that I’m actually selling now. Vitamin C, whatever the brand is, you can grab it in the link below.

Steve: How do you get over people who have camera fright? Do you have to have your face on the video?

Sunny: You don’t have to, but it works a lot better when you do, yeah. It’s called YouTube for a reason. They want to see you on YouTube. And I just know because we’ve worked with so many people now and I get this question a lot. And the thing that I always say is, I’ve been through this too, I mean, and I came from working on a multi-million dollar set in Morning TV to going on to YouTube. And you think it would be easy for me because I had done so much TV before this. But it was really hard because I was like, I don’t have the lights. I don’t have a team. I don’t have a producer. I don’t have a director; it’s just me in a webcam. Why would someone want to watch this?

And I also really battled with people thinking I was going to be an egomaniac because I was putting myself on camera. And so I just got to a point where I was like, the thing is, I’m helping people. And if I focus on the value of my content, the nerves really go away. I’m not focused on what I’m looking like or sounding like and getting so caught up in that, I’m more so focused on like, I’m a genius at what I do and I’m going to share that out to the world. And everyone is a genius in their own right; everyone has something that they’re really, really good at talking about. And you naturally are talking about it anyways.

I’m sure for you, you talk about e-commerce left, right and center because you’re passionate about it and you know a lot. So if you were to write down — and this is a good tip for anyone listening, if you write down a list of all the things that you’ve mastered in your business, that’s a really good place to start for topics. So you write down a master list of like, I know how to optimize videos, I know how to write a description on YouTube, I know how to sell products through YouTube videos, I know how to build an email list on YouTube. I know how to build up my Instagram following, I know how to double my engagement. Cool, all good topics, then I do the research. So starting with just like a brain dump of these are all the things I’m really good at and then doing the research and the process that I talked about earlier to figure out how to actually get them up and out there on YouTube.

Steve: Sonny, I know you have a podcast as well. What’s your opinion on putting your podcast episodes on YouTube?

Sunny: I really don’t like it.

Steve: It actually will hurt your channel?

Sunny: Yeah.

Steve: It will.

Sunny: Yeah. Well, it depends on how you do it right. So there are really cool strategies of how to do it in a way where you’re still getting higher retention. But that means you’re doing basically short clips from a podcast. So I think it’s actually Jordan Harbinger who’s just on my show, but he does a really good job with repurposing it. And he basically takes like little mini tutorial clips from his guests, and he turns them into tutorials on YouTube. So he just takes that clip, puts a thumbnail on it, does it the right way for YouTube uploads and for YouTube, and it does it really well for him.

Steve: Okay, yeah, that guy lives like right down the street from me.

Sunny: Yeah, he’s so awesome.

Steve: Yeah, it’s so funny because he does video as well. So he’s taking video clips, right?

Sunny: Yeah, exactly.

Steve: He knows. Okay yeah. And what is your opinion on Facebook video actually compared to YouTube?

Sunny: Facebook video is great. I think the thing to understand is that video of any kind on any platform works in an amazing way for you, it’s the best way to build that like a trust factor with people, if people can see your face, they can see how you react to things, they can see your eyes, they can see how smart you are and trustworthy you are on camera. My thing with Facebook video is that it’s not evergreen. It’s cool for viral velocity and it’s cool for engagement in the moment. YouTube and why I love it so much is because it will continue to build your business in your sleep, it will continue to bring in leads for you in your sleep as long as you’re getting your videos ranked. And it you will continue to generate videos for years to come if they’re high in the search rankings.

Whereas on Facebook, you post it, you get a couple days’ worth of engagement velocity, and then you have to make something new. So I love YouTube because it’s a little bit of a lazy strategy. It’s like I make one video, that’s free advertising for me bringing in leads for me. I don’t even need to touch it, the channel is going to continue to grow, subscribers grow, leads grow on my email list and I’m good to go.

Steve: No, laziness is good. So just kind of curious then, when you produce a YouTube video, how do you repurpose that content?

Sunny: So when I produce a YouTube video, we repurpose it into Instagram stories, we repurpose it onto our Instagram feed usually through a graphic and image and a really interesting caption about why the audience there should go and watch it. We send my email list; we put it on to our Facebook page as basically we used to do a native teaser. So that strategy worked really well for a long time, where we would do like a 30 second clip of the beginning of the video and then we’d say to watch the full video, go to YouTube. Now I mean the best way to do it is to do a live stream because it gets so much attention on YouTube or on Facebook. I go with live sometimes, and I’ll just be like, yeah, check out this new video that we have up on YouTube, you’re going to learn X, Y and Z. It gets an immediate high level of attention from your audience and drives a ton of traffic over to the channel.

Steve: I see. So you’re actually not trying to get an audience on Facebook, you’re driving everyone over to your YouTube video?

Sunny: Exactly.

Steve: So how do you feel about embedding YouTube videos into like a blog post and driving people there? Is that the same as driving it directly to the YouTube page?

Sunny: It’s not. So our strategy has always been drive people directly to YouTube for the first 24 to 48 hours. And then we’ll switch out the links and we’ll send people to my website. But the reason that we don’t send people to the blog, or the website in the first 24 to 48 hours is because that you don’t — a lot of that traffic doesn’t count and you’re not getting engagement. People don’t go to a blog and then click on the YouTube video and give you a thumbs up, a comment, and a share. That just doesn’t work that way. People are lazy, which I get. So you want them going directly to YouTube to give you them the signals that you need so that YouTube knows it’s a good piece of content. So this is a huge missed opportunity for a lot of people when they just embed the video on their blog. You want to send people directly to YouTube first, give them a thumbs up, a comment, a share, a subscribe, super, super important.

Steve: Okay, wow, this is so interesting just because I interviewed the guy and he said that stuff wasn’t important at all. So the thumbs up and the comments, okay. All right, so send them directly to the YouTube video and then also embed it on your post and maybe later on, you can refer people, but that first 24 hour period you’re saying is crucial.

Sunny: Crucial. Yeah.

Steve: Okay, do you have any key analytics that you look at for your videos?

Sunny: Retention is my main analytic and then I will say…

Steve: What’s a good retention number?

Sunny: I’d say anything about 50% is good because you have to keep in mind people’s attention spans and also understand that there’s going to be a lot of people dropping off in the first couple of seconds just because things happen. It’s okay, that’s normal. But as long as it’s a pretty flat line throughout the entire video before you see a drop off. And for most of my videos, if I look at the graph, so I can actually tell when people go off of my videos because there’s a dip. And it’s usually when I say and this is the goal is when I say yeah, go grab our guide, or click this link below to go join our Facebook group or whatever it might be. And at that very moment, I can see in the graph on YouTube in the back end, people are dropping off and heading over there. So that’s a pretty powerful method for people to stay on the video.

Steve: Okay and if my videos are unlisted and I change them to public, does that 24 hour timer start then or when I actually…

Sunny: Yeah, it starts when you actually make it public?

Steve: Okay? And what are some of the most common mistakes that brand new YouTubers are making?

Sunny: Oh man, there’s so many. And I actually just did a video about this, because I get asked all the time. So I mean, the biggest one is people think they need to be doing a video a day. And that’s just like painful because it’s all about quality. If you can do a quality piece of content every single day, all the power to you. But if you can actually create something that’s going to be impactful, meaning it’s going to inspire, educator or entertain, you just don’t, you don’t need to be posting it, it’s not going to benefit you in the long run. It’s not like an Instagram or a Facebook where you constantly have to be active. It’s about quality over quantity. So that’s the biggest mistake, I would say. And then…

Steve: Let me ask you this, if you have a bunch of crappy videos, would you recommend deleting them then and keeping your channel tight?

Sunny: No, I think you can keep them up. I don’t think you need to necessarily like have them public but I think you can keep them on the channel. I think people ask that a lot too and they’re like, do I need to delete all my old videos? And I’m like it’s kind of a waste of time. I’d rather just you focus on moving forward and doing things in the right way there. And honestly, we’ve had a lot of people have success with re-optimizing their videos in a way with old videos and seeing those old videos go to the top of the rankings and generate more views for them.

Steve: Interesting. So if we were to look at your channel, we would see all the old videos as well?

Sunny: Yeah, they’re all there, good and bad.

Steve: I will definitely link those up then.

Sunny: Yep.

Steve: Sorry, you were in the middle of talking about another mistake. I apologize.

Sunny: I actually don’t remember what I was going to say. Oh, the other biggest mistake briefly. I’m sure peeve people off but it’s just that people think like, oh, I look at someone like Casey Neistat or I look at someone like Peter McKinnon or I look at them like a Gary Vee and I’m like, okay that’s the model. I got to follow that model. That’s what I’m going to do. And it’s not. You have to do what makes sense for you, the niche you’re, what your capabilities are. Casey Neistat is a world class filmmaker as is Peter McKinnon.

Gary Vaynerchuk has a team of 20 plus on his brand team, dedicated full time editor and videographer. So like, be realistic about where you are and what you’re capable of, and how you can bring the best forward with what you have, instead of trying to copy other people’s models because no one’s ever going to supersede the original. And it’s important to hone in on what makes you unique, because that’s what performs the best on YouTube.

Steve: I’m just curious, what does it take for you to produce a video today, like who’s on your staff?

Sunny: For us, we now have — we just actually like this month brought in an in house videographer. But she’s also doing more than just YouTube. She’s doing all of our video content internally for like our courses, and then also for our programs and then also for like promotional ads, and then YouTube as well. So it’s actually still to this day, very easy. We for the most part are doing one shoot every month or one shoot every two months. And I bang out four to eight videos in about four hours. And that’s it. That’s all I do. And then my team takes them and edits them and creates the teasers for them for the other platforms. And then distribution is up to myself and then the other members on my team, where we make sure that it gets sent out via email and social media.

Steve: Okay, and so you just batch it all and it’s just one video a week.

Sunny: Yep, yep.

Steve: Well, Sunny, we’ve been chatting for quite a while. I want to give you an opportunity to talk about your services and your course.

Sunny: Well, thank you. Yeah, so YouTube for Bosses is the best place to start. If you go to my website, SunnyLenarduzzi.com, you’ll be able to find it under the work with me section. I’ve had thousands of students come through this program. See incredible results. We’ve had one student go from, like I said, zero to 100,000 subscribers in 10 months, and she built a multiple six figure business. She’s done well over half a million in her first year of business, starting from complete scratch with no email list nothing when she began with us on YouTube. So that’s one of our best case studies out of YouTube for Bosses. But we have so many more. We have clients growing by thousands and thousands every single day, whether they started with one subscriber on their channel, or they started with a more established channel.

So it really does show you everything you need to know to succeed as an entrepreneur on YouTube. But I think that something really important to understand is that there’s a big difference between being a daily blogger, a creative and an influencer, versus being an entrepreneur on YouTube, and really checking in with your objective and your goal for it before you get started on your strategy. But our strategy has worked for entrepreneurs, but it also has worked for personal brands, it’s worked for bloggers, it’s worked for people in all different niches because it’s a formula. It’s not like it’s something that’s customized to every single person. It’s a formula you follow. If you follow the formula step by step, you’re going to see insane results. And then we also have a consulting program, both group and one on one and we have an agency see as well.

Steve: Do you handle smaller clients as well?

Sunny: Our smaller clients usually come through our group consulting program.

Steve: Okay. Okay, cool. Well Sunny, I really appreciate you coming on the show. I learned a lot today.

Sunny: Thanks for having me.

Steve: All right, thanks a lot.

Sunny: Thank you.

Steve: Hope you enjoyed that episode. Now because I’m in the midst of starting a YouTube channel with my kids right now, all of this information is super helpful. For more information about this episode, go to Mywifequitherjob.com/episode256.

And once again, I want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any primer that is closely tied to your e-commerce store. Now if you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

I also want to thank Klaviyo which is my email marketing platform of choice for e-commerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. So head on over to Mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s Mywifequitherjob.com/K-L-A-V-I-Y-O.

Now I talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast where we’re giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.Mywifequitherjob.com.

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Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

255: How To Make 6 Figures Selling Clothing For Moms With My Student Tsippi Gross

255: How My Student Makes 6 Figures Selling Clothing For Moms With Tsippi Gross

Today I’m really happy to have Tsippi Gross on the show. Tsippi is a student in my Create A Profitable Online Store Course and I distinctly remember her first sale when she sold 12 dresses just by showing off her samples!

Today, Tsippi runs a 6 figure business at HavahTribe.com where she sells trendy apparel for breastfeeding Moms without using Amazon at all.

In this episode, Tsippi and I discuss the triumphs and the struggles of entrepreneurship.

Want To Learn How To Start A 6 Figure Ecommerce Store?

Create  A Profitable Online StoreDid you enjoy listening to Teri’s story? If you would like to create your own profitable online store and join a community of like minded entrepreneurs, then sign up for my full blown course on how to create a profitable online store.

My course offers over 100+ hours of video and includes live office hours where you can ask me questions directly.

If you want to learn everything there is to know about ecommerce, be sure to check it out!

What You’ll Learn

  • Tsippi’s motivations for starting her business
  • How she validated her niche
  • Which platform she chose to sell on
  • Where to find clothing suppliers
  • How to make your first sale
  • Her biggest challenges in starting her store

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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Avalara.com – Handling sales tax is complicated. Fortunately, Avalara simplifies sales tax with real-time tax rate calculations and automatic return filing. And the best part is that Avalara already integrates with your existing accounting, e-commerce and marketplaces like Amazon, so it’s super easy to setup. Click here and get a FREE TRIAL.

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into the strategies they use to grow their businesses. Now today I’m thrilled to have Tsippi Gross on the show. And Tsippi is a student from my Create a Profitable Online Store course, who has created a six figure maternity fashion company from the ground up, and today she’s here to tell her story.

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%.

You can also use Privy to reduce cart abandonment with cart saver pops and abandoned cart email sequence as well at one super low price that is much cheaper than using a full blown email marketing solution. So, bottom line, Privy allows me to turn visitors into email subscribers and recover lost sales. So, head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve.

I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. Klaviyo is the tool that I use to build real quality customer relationships with my e-commerce store. And because all my transactions and email correspondence is tracked in Klaviyo, I can easily build meaningful customer relationships by listening, understanding and taking cues from my customers and deliver personalized marketing messages.

So for example, with one click of a button, I can easily send a specific and targeted email to all customers with a lifetime value of over $100 who purchased a red handkerchief in the past year. Now, it is for this reason why over 10,000 brands have switched over to Klaviyo. And you can try them for free over at Mywifequitherjob.com/K-L-A-V-I-Y-O. Once again that’s Mywifequitherjob.com/K-L-A-V-I-Y-O, now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle so you can spend more time with your family and focus on doing the things that you love. Here’s your host Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m really happy to have Tsippi Gross on the show. Now Tsippi is a student in my Create a Profitable Online Store course. And after joining my class, she launched her online store HavahTribe.com selling trendy apparel for breastfeeding moms. Now Tsippi is actually one of my favorite students in the class, mainly because she is so communicative. And I still distinctly remember her very first sale, which came in September of 2017, where she was just showing off some samples and I think she made 12 sales just like that.

Anyway, fast forward to today and she now runs a six figure business without using Amazon at all. In any case, I’ve been looking forward to this interview for quite some time and I asked Tsippi to come on the show today to keep it real. We’re going to talk about the triumphs and the struggles of entrepreneurship. And with that, welcome the show Tsippi, how are you doing today.

Tsippi: Hi Steve, thanks so much for having me on. This is quite an honor.

Steve: No, it’s an honor for me to have you on. And hope I didn’t butcher the timeline or your name or your store details.

Tsippi: I’m pretty impressed with you remembering all that. That’s pretty cool.

Steve: So please let the audience know about what you sell in your store and how you got started.

Tsippi: Okay, so we sell apparel for nursing women, and it’s actually could really be worn by any women. And it really is, that’s the truth, a lot of just any woman buys it. But the point is that we wanted a line that would be specific that any breastfeeding woman could buy it too and wear and feel comfortable while they were breastfeeding. So how we started out was basically I had just had a baby and I have these like horrible pregnancies. I have HG where I’m like on IV the whole time, like my whole entire life basically shuts down every time I get pregnant. And then I’m like, after that I’m like, oh my god, what am I supposed to do?

I have to start rebuilding a life and I looked into different jobs. And I was like, I don’t want to just like work for someone. And I was like listening to all these podcasts about, I don’t know, parenting. And then I was like, there’s got to be a podcast about starting a business. So I was scrolling through. And then I saw My Wife Quit Her Job. I was like that’s so cool; whoever that is, is awesome. So I just started like binge listening. And it’s so interesting, because the first podcast I heard was your student who had started a clothing business online. And I was like, so inspired, I was like, oh my gosh, if she could do it, maybe I could do it. And I was like, I just remember being like so, so inspired, I listened to it like 10 times probably.

And at the same time, I just didn’t have anything to wear. As a modest mom, I just couldn’t find any clothing to wear while breastfeeding. And I didn’t want to send out my baby. So like everything that your class and podcast stood for, I was like, okay, this is going to be my life from now on. So that’s really how I got started.

Steve: So let’s talk a little bit about your product, because it is kind of unique. And just for the benefit of some of the males out there perhaps, can you describe what your value proposition is with your product?

Tsippi: Yeah. So our value proposition is that we make clothing that women could wear through any stage of their life. So instead of having to buy clothing when you’re pregnant, when you’re nursing, and after that, we have one item that you could wear throughout all stages. It washes well, it fits well and you could just feel really good and confident. So that’s our value proposition. And sorry, what was your second question?

Steve: It was okay, so I’m just going to put words in your mouth here because I don’t think you’re doing your product justice. So basically, if you’re out in public, and you need to breastfeed, there’s nice convenient zippers and claps where you can discreetly without like completely undressing breastfeed your child.

Tsippi: Exactly. Because I was finding that we have to like take our clothes off physically when we’re breastfeeding. And especially if someone’s wearing a dress, I mean, you got to go find a public bathroom, it stinks and it’s just seems so pleasant. And it just felt like the fashion world was like kind of punishing these women who were having babies. It was just like crazy. So that’s how.

Steve: So let’s talk about just designing clothing. Do you have any experience prior to this?

Tsippi: Nothing.

Steve: Okay, so how did you go about designing these pieces?

Tsippi: So I just want to say that when this idea came to my mind, I interviewed, I surveyed like 100 of my friends just to see if they wanted it. And this is when I was still like, should I buy Steve’s course? Should I not? I was still like toying with the whole thing. And I was like you know what; your major value prop is that you okay everyone’s idea. So I was like, I really just need to make sure this is a good idea before I get into it. And I was sure that it was and then I emailed you. And I was like, hey, so what do you think about this? And you’re like, I really don’t recommend clothing.

Steve: Yes.

Tsippi: And I was like, oh my God, I really want to do it. I think it’s going to work. I have 100 women who said that they will buy and you were like, listen, I really I don’t think it’s a good idea. But the keywords are good. So I guess if you’re like dead set on it, you could try. I just want to say coming full circle that I agree with you clothing is a bad idea. We’ll get into that later. But I had no experience and I really just followed your steps in your course of how to find a manufacturer, how to find a supplier. I kind of like sent them really bad videos of my daughter kind of like super glued tissue paper onto her shirt and made her lift it so I could make a video and showed — we stapled stuff to send them videos. Can you do this? And they were like, yeah. So that’s how we started.

Steve: Interesting. So did you communicate with the vendor via Skype? Oh no, you sent them video you said.

Tsippi: It was WeChat?

Steve: Yeah, WeChat. Okay, great. And how many vendors did you have to go through before you found the ones that you’re working with today?

Tsippi: We found this one pretty much right away. And we also were working with another one who failed their inspection so we stopped working with them, but yeah.

Steve: Let me ask you this question. Why did you decide to go to China right away, as opposed to someone in the US?

Tsippi: Yeah, so we actually didn’t, we started off in the US. And while I was toying with joining your class, I was already doing my own, making my own samples in America. And I realized really quickly that the cost of production here would be about like 65 or $75 an item. And I just didn’t think I could sell them for much more than that. So I still did make a first run here in America. And also, it was so difficult, like the fashion world in the US is so hard to navigate. You have to order your fabric from one place, your buttons, your zippers, you have to have your pattern made by someone, your sample made by someone else, the factory then has to make another sample of it, the tags have to be somewhere else, the whole thing is crazy. And in China, they do everything in one place. And I was like, oh my god, I need that. I don’t have time for this.

Steve: So you made your first run in the US. Did that imply that you had a pattern then that you sent to the Chinese manufacturer?

Tsippi: We didn’t actually end up sending it because I was so unhappy with the US quality actually.

Steve: Interesting okay.

Tsippi: Yeah. So we didn’t, we started from scratch with China.

Steve: Okay, so the China vendors were better than the US vendors in your experience.

Tsippi: They were like eager to please. They had had so much experience working with other customers. And I don’t know, I guess we really lucked out with this factory.

Steve: Okay. And what was your initial run? How many pieces because with clothing and the reason why I don’t recommend it just for the benefit of listeners is there’s so many sizes you have to worry about, and the return rate is much higher.

Tsippi: Awful exactly. So when we started in America, I think we made something like 50 units total.

Steve: Of one style or multiple styles?

Tsippi: No multiple, because here in the US, maybe it was more, it might have been 100. In the US they’ll make as many as you want, they’ll just charge you a lot more. And in China, our first run was probably about five to 700 units.

Steve: Okay, wow, that’s okay. That’s the number of units. And how did you distribute the sizing?

Tsippi: It was awful. Oh, this was actually really funny. So since I had just had a baby, and my sister who was helping me had just had a baby, we were the models. So we tried it on, we were like, yeah, this kind of fits like a medium. But we were like so off because our bodies were not back to their regular sizes. So our first run of production, everything ran a size too big. So it took us like a while to figure that out when all the customers started complaining that everything was a size too big. But we rolled with it.

Steve: Yeah, let’s describe that. I mean, especially when dealing with someone who’s pregnant or just gave birth, that must be really difficult, right?

Tsippi: Yes very difficult.

Steve: What was your — was it just trial and error then?

Tsippi: Yes. And we have such exact measurements on our site and a guide explaining like how to measure and we still have like insane amounts of customer service questions about this, like how many centimeters? I’m this big on top and this big on the bottom, what size do you think I should get? And I’m like I don’t know, like measure again.

Steve: So do you have a phone number where you’re handling these calls then or are they just via email?

Tsippi: Mostly email, we use Facebook Messenger. And then yeah, some people kind of find our number, but I don’t know how.

Steve: Okay, all right. And how did you know that it was going to work before you ordered five or 600 units? Like how did you validate it?

Tsippi: Well, I think that’s what you were talking about the trial before. So basically, when I was still in the niche hunting stage and wanting to validate, I bought a bunch of dresses from a fellow manufacturer here in America. And we literally like sewed zippers in and cut holes in certain places. And I put up the worst landing page you have ever seen. Somebody that I did not know at all off the internet sent me a message saying like, hey, I saw your landing page, I just want to let that you screenshot the picture and I could see your battery level at D on the picture. You might want to change that. And it was so bad, but people bought them. And then I knew that we could do this.

Steve: Wait, did I see this site or no?

Tsippi: No, no. This is like before we had even started talking.

Steve: Oh okay.

Tsippi: It was right after but I hadn’t like actually asked you anything yet.

Steve: Wait, so let’s talk about the site really quick. So did you just – is it just like a one page site or?

Tsippi: At the time it was, I don’t I don’t even remember what I used. I think, oh, it was like you know that Shopify $9 a month plan you could do.

Steve: But that requires a website right?

Tsippi: Well, I think I like hooked it up to Facebook somehow.

Steve: Oh yes you can, that’s correct.

Tsippi: Yeah. So I think they were buying it off of Facebook primarily. And now we just have a regular Shopify site.

Steve: Right, right. Yeah, I’ve seen your site now. So and then Facebook, you just posted pictures of your product and then with these buy buttons using Shopify Lite, and then people bought your samples. That’s great.

Tsippi: Yes.

Steve: Who did you sell to for that initial run?

Tsippi: So I really went — I had done this sample like survey thing when I was just trying to see if anyone wanted this.

Steve: That’s your friends or?

Tsippi: Yeah. So I emailed them all again, just telling them about it. And they kind of sent it to their friends. Again, this was like a needed item in my community where modest women and there was like nothing out there. And it’s becoming, I guess until now people just didn’t care and didn’t — were just like used to like, I don’t know, making do. And now I think like with this millennial era, people are like well, I don’t want to live like that anymore. I need something I can wear.

Steve: I remember when my wife was pregnant; she had this big smock I guess you could describe, yeah. Were all these 100 people, were they all pregnant or did they just give birth?

Tsippi: It was like a mix yeah.

Steve: Just a mix. Okay all right. And so by the time that sold, you were pretty confident that you would hit on something that was going to work?

Tsippi: Yes.

Steve: All right. So after that you had your first run. Where did the website kind of come into play here?

Tsippi: Basically while we were waiting for the stuff to get here, I made the site.

Steve: Okay. And which platform did you choose?

Tsippi: Shopify?

Steve: Shopify. Okay. And would you describe yourself as a technical person?

Tsippi: No and you know this.

Steve: I did, I just thought I’d ask you live on air though. So I wanted to ask you about your experience. On a scale of one to 10, how much of a pain was it?

Tsippi: Okay, it’s like learning a new language. So it seems like really scary before but then as you do it, you’re like, okay, I could do this. I probably called Shopify for hours at a time. And if I had to do it again now, I would be scared again. But I know that I could do it. And like, I would just figure it out again, it’s just I don’t like to.

Steve: Yeah I know, I mean, that’s one thing that I really liked about you. And in our conversations, I knew that you were not technically inclined. In fact, I’m surprised we’re having this interview right now. But you pulled through and in fact, we did a website critique. And you actually went ahead and implemented all those changes. Did you have a designer or did you do those yourself?

Tsippi: No. I did not have a designer. Yeah, I had a friend who kind of knew Canva type of thing. No.

Steve: Okay. No, that’s great. That’s great. So let’s talk about some of the more difficult parts about getting your business off its feet. So let’s say you have your website, what were some of your first challenges?

Tsippi: Well, we immediately realized that China kind of takes the six weeks break in the middle of nothing.

Steve: Like right now actually.

Tsippi: Yes. And so it was a month after we launched our winter line and it was time to order summer. And I was like, oh my God, they are not going to have time to make our summer stuff because we didn’t even think about it yet, I was so busy launching winter. I was like, oh my gosh, what do we do, and by the time they get back, it would just be way too late to get started with that collection. So my husband and I, and all of our kids got on a plane and went down to Mexico and found this manufacturer guy that had come really highly recommended by like random friends, a whole crazy thing.

And I went to see his factory, I spent days with him. And then once I felt really confident with his work, I saw he sells his own line of clothing for children. So I was like really confident with his work. And then he sent us samples and they were like really great. And he spent probably like 20 or 30 hours on the phone with me going over the details and everything. And then we made a huge order. And when it got here, it was all garbage, top to bottom. We lost like $30,000 in our second month of business.

Steve: No. Oh my gosh.

Tsippi: It was horrible, awful, awful, awful.

Steve: That Mexican vendor, I guess you didn’t hire an inspector or they didn’t take returns or?

Tsippi: Yeah, it’s still an ongoing; it’s still like a back and forth like is it worth the legal cost? Is it not worth the legal cost because it’s Mexico? It wasn’t like, I mean, I’m so comfortable working with China, and I know what to do and how to do it. I have no idea of how to do this Mexico thing. And having come back, everyone is like, oh yeah, never do business with Mexico. And we were like, oh, thanks for telling us now.

Steve: Interesting. So I’m just kind of curious, how did you find this person in Mexico?

Tsippi: So through a friend’s dad who had made clothing in Mexico with this guy a couple years ago, and they gave us the name and then we were like, don’t trust us, go see him, go meet him yourself. And we were like, okay, so it was a lot of calling, we like called everyone we knew basically that had Mexican connections.

Steve: And this had to do with the fact that it was Chinese New Year?

Tsippi: Yes.

Steve: Okay. But then so after this whole debacle happened, you just stuck with the Asian vendors then?

Tsippi: Yes, definitely.

Steve: Okay. And so the only reason you actually went to Mexico was just for timing reasons really?

Tsippi: Yes.

Steve: All right. Can we talk about how you found your first Asian vendors? Did you use Alibaba or did you use…

Tsippi: Yes.

Steve: Okay. You did.

Tsippi: I did.

Steve: Okay. And you just followed the rules.

Tsippi: Yes.

Steve: Okay, amazing.

Tsippi: I really did then I looked up on Panjiva and found out that they were also a supplier for like a really well-known brand here in the States. And I was like, oh, that’s awesome. I was like, really excited about that.

Steve: So just for the benefit of the listeners, Panjiva is a tool that allows you to basically find out where companies are importing their goods from, like what factories they’re using.

Tsippi: Yes right.

Steve: Okay, so we already covered your first sale. So how do you generate sales for your shop?

Tsippi: So that’s a really great question. I think my whole vibe with my brand is community and kind of creating like a space for moms. And the reason why is because oftentimes, the moms are so busy putting everyone else’s needs first and taking care of everyone and not taking care of their own lives. I really like focused a lot on that. And in doing so, I’ve even used that in advertising. So I really, really try to support all the women within our community.

And I’ve honestly asked them like, hey, would you mind posting our sale? Or would you mind posting about X, Y and Z, our new collection on your page, on your Facebook groups? Would you pass this along to any of your friends? And the do and that has really been a huge way that we’ve been driving traffic is really word of mouth and people like sharing our content online, sending the emails, forwarding them, posting on Facebook groups for us. And I think it’s like a lot about the ask, they wouldn’t if I didn’t remind them to, but once I do, they’re happy to.

Steve: So when you talk about your community, is this a community that exists via your email list or is it Facebook groups?

Tsippi: Instagram.

Steve: Instagram?

Tsippi: Yeah, major Instagram.

Steve: So let’s talk about your Instagram strategy. How often do you post and what types of content do you post?

Tsippi: Oh, Instagram, I try to post about five days a week and I really story also. I found that that has made like a really big difference with people like identifying with the brand and feeling connected, is seeing a lot of the behind the scenes and knowing I’m just a mom just like you, I’m going through all the same stuff as you. This is what’s going on in my day and asking them for their feedback and input. And I even have them design stuff. Like I’m like, hey guys, what do you want to see next season? And then they’ll send me pictures and ideas. And I’m like, oh, that’s cool. I like that. I’ll make that. Okay, cool. So that’s basically where I hang out.

Steve: How did you get your Instagram page off of its feet?

Tsippi: A lot of giveaways with minded influencers who were micro influencers at the time 1,000, 2,000, 3,000 followers. And then just, I would say, a lot of that, a lot of I had — I would ask other people to come be featured on my page to do a takeover and then they would tell their followers about it. And I’ve done several loop giveaways as well, which I found kind of 50/50 about that.

Steve: Let’s talk about these giveaways. So actually no, let’s talk about the influencers first. So when you approach them, what do you say?

Tsippi: A lot of them at the time had approached me and by a lot, I don’t mean like 1,000, I mean, a couple. We’re not — it’s not like I have 300,000 followers, I have about 12,000. So, a lot of them had approached me, and they’re like, hey, I just had a baby, do you want to do a collab? Do you want me to post about you and you give me a dress? And I’m like, well, I would love to collab but maybe not opposed, let’s do a giveaway, because that’ll get a lot more engagement and get people to my page. So those are the giveaways that I like the most, because the people who enter them want my product as opposed to like enter for a chance to win a $3,000 amazon gift card, like I don’t know who’s entering that. And I’ve done those, but I feel like it’s dead weight and I wish I wouldn’t have done that.

Steve: How does your contest work? Are you using like a platform for that?

Tsippi: No, comment below, tell me why you want this dress or tag a friend who could use this to follow this other influencer. We both have to — they have to follow both accounts to be able to join the giveaway. And it’s super easy. And I think giveaways are getting a little bit outdone now like everyone’s doing them and people are getting tired of them. And my followers have been like can you stop with the giveaways? And I’m like, yeah, it’s getting a little annoying. So I’m trying to make them a little bit more spread out and more special and for special occasions.

Steve: Interesting. So how many followers would you get in a given giveaway? And what were you giving away?

Tsippi: So I use — my most successful giveaways have been just for my followers, or just with one other brand, follow both of us; get a dress and a candle or whatever it is that they sell. Or if it’s just my followers for our anniversary, I’ll be like, hey guys, our anniversary, we’re doing a giveaway just to appreciate you, we’re going to give away five dresses to five of you. Tag a friend below who might be interested in a dress and tell us why you love being part of this community. So those have done really well and we would gain somewhere between 100 to 1,000 followers from those. And then one of these like paid giveaways where you’re joined — they’re getting a gift card or a stroller will gain also somewhere between 300 to 3,000, just depending on the giveaway, and then again you know that some of them will fall off after this.

Steve: Of course yes. And for those people, did you make any money during the giveaway?

Tsippi: I don’t. I mean, like you’re saying, did I see a sales increase?

Steve: Yeah, I guess it’s really hard to measure with Instagram, right? Can you track? You can’t track your sales exactly right?

Tsippi: No, but with each giveaway, I would notice a new bunch of people who started engaging with me, and then I would see their names on like sales. So in my mind, I think it definitely covers the cost. And I see the engagement going up in general, and the page views and the story views and all that kind of stuff going up.

Steve: So does your strategy translate into Facebook as well?

Tsippi: I haven’t worked much with Facebook, because I hate tech and I hate all these things and I’m like, I finally understand Instagram now. But we just opened a Facebook group for our breastfeeding moms, because I wanted somewhere that they can interact and ask each other questions and kind of support each other through their journey. And that’s been really cool. But our page on Facebook is like an afterthought. So not – yeah.

Steve: Let me ask you this question. So when you’re breastfeeding, at least my wife only breastfed for a year, so which kind of means that your customer base is constantly evolving, right?

Tsippi: Yes.

Steve: So how does that work?

Tsippi: So my philosophy has always been to create a brand and not just a product. So like my content is not very much about breastfeeding. It’s very much about being a mom. So it’s because I want them to stay because I want them to be part of my community, which is not the best strategy when you want to sell clothing, because I’m not marketing to my target market. So that’s an issue that I have had and if I would have been smarter, I probably wouldn’t have done that. But I mean, the real truth Steve just to be open and honest with you is, after doing this for a year, I kind of took a step back.

And it’s — you don’t know this, but when we were talking about doing this podcast interview, we were talking about doing it in January. And I was like at that time going through a whole like, oh my god, do I want to keep doing this. And I was like, I can’t go on his podcast and talk about this because I don’t know if I want to shut down my business because I don’t like clothing very much. And I was like I need another month to figure out what I want to do.

So I kind of took a step back at that for all the reasons that we had talked about, the return rates, and the sizes, and the colors and all that kind of stuff, which is we take a lot of pride, we write handwritten notes in every single package, we package it with care. And then when 30% come back, which is the standard industry average, is hard. We do it all ourselves. So okay, I want to change the business model, because I have an amazing community and I want to do other things with the community. And I don’t really want to sell clothing for much longer. So I’m kind of changing things around right now.

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What I was just going to say is once you have that community to moms, I think there’s a huge percentage of purchases. I can’t remember what the exact statistic was, but most people who buy stuff are moms.

Tsippi: Yeah.

Steve: So once you have that community, I mean you can easily branch out to other products, like what you’re selling now is just kind of like a stepping stone.

Tsippi: Exactly, exactly. And I still think I still love the service that it provides to women. So we’re not going to entirely stop making clothing, but I’m going to move it to like a wholesale model so that that way, I know like twice a year we do this whole like going out, showing our stuff, selling it to stores. And then the rest of the time, we could focus on other things. I don’t have to deal with that one on one customer service.

Steve: That’s great. I’m so glad that you mentioned that because all these things as I was asking these questions, they’d all kind of come through my head. And we’ve communicated quite a bit on email.

Tsippi: Yes.

Steve: And I think I’ve — I don’t think I was very direct in mentioning some of these things before. But I’m happy that you have this community. And once you have this community, you can do whatever you want with it. And that’s the best thing.

Tsippi: Yes, yes, exactly.

Steve: I want to switch gears a little bit. And let’s talk about Amazon, have you considered selling on Amazon?

Tsippi: Yeah, I consider selling on Amazon; I’ve been back and forth about it. I think it would probably be a good idea to give it a try. But I’ve done a lot of research with Jungle Scout. And while there’s not much competition on Amazon with this product, there’s not many sales. So, I would kind of rather not have to. I cannot ever compete with our pricing of some of these companies selling for so inexpensive that I just can’t imagine that the work involved and the costs involved would be worth it with the return rate being what it is.

Steve: I mean, if you’re competing on price, you’re probably losing in general is my philosophy, especially with a small niche shop.

Tsippi: Yes. And if you’re getting like a 30% return, then that I would imagine would kill you on Amazon.

Steve: Yeah especially since you’re paying for the FBA fees.

Tsippi: Exactly, exactly.

Steve: Just curious. How do you mitigate that?

Tsippi: In terms of?

Steve: The return rate.

Tsippi: What we do is I mean, it’s not — it’s something that I really don’t like. I kind of like go on this whole thing of like we should stop allowing returns, but we can’t stop allowing returns. We only accept things that are really unworn, unused, and then that we can sell again. If it seems like I couldn’t sell it again, I couldn’t accept it back. And yeah, we do end of season sales and then those are like final sale because they’re getting it discounted then we’ll just do final sale for that. So yeah, I think it’s because of that I just, I’ve had a lot of people come to me and be like, hey, can you help me start a clothing business and I’m like, unless you’re like are diehard fashion person, you have to really love it, or have a store or something like that where you don’t care about all the stuff that goes into it.

I just want to say another thing about clothing because the other thing is that the seasons change, so you only have three months to sell each season before it goes on sale. And then it’s not like you could keep selling the same thing each year, because people want new fashion and new trends, especially wholesalers especially like repeat customers, they don’t want to see the same stuff they saw last year. So your window to sell is so small. So that’s kind of why if somebody loves fashion, and that’s your calling, I’m like go for it. But if you’re doing this just as a way to make a living, like, I’m not sure that fashion is your best bet.

Steve: Let me ask you this question. So you’re saying that if you have a design this year, you can’t sell it next year? Meaning there’s not a subset of customers who don’t even follow these things and wouldn’t buy it?

Tsippi: I mean, if you are not a fashionable buyer, then you probably could, but people know that the colors of the season and the styles of the season. So we’re constantly updating new fabrics and new trends and adding this trim or that lace or whatever it is.

Steve: Okay, okay. I’m going to ask you a bunch of rapid fire questions really quickly. How much money did you start with to start this business?

Tsippi: 500 bucks.

Steve: 500 bucks. Wow. Okay, that’s a lot less than I was anticipating.

Tsippi: For just to do the initial market research.

Steve: Yeah, the initial market research. How long did it take to create up your site and how much did you spend on your website?

Tsippi: I guess just whatever the plugins cost it at the time, like we went with Klaviyo right away from the beginning, because I was listening to your podcast. And I was like if he’s recommending that, I’m going to do that. Probably, I mean, it took me probably a week or two.

Steve: Wow okay all right. So this is where we say that Tsippi was exaggerating how she’s not technically inclined?

Tsippi: No, no, no, it was like a week of being on the phone with Shopify.

Steve: In terms of finding your niche, did it take you a while?

Tsippi: So I kind of skipped that stage, because I knew right away what I wanted to do. And I felt the need myself after having the baby it was just a matter of seeing other people wanted to.

Steve: Okay. And has most of your marketing just been organic traffic from Instagram?

Tsippi: No, we definitely rely on Facebook ads for some things. I wouldn’t say Facebook ads work very well for us. And I obviously know it’s just because we haven’t done enough testing. But for cold market traffic, I haven’t seen it do very well. I think it’s because our product is not an impulse buy and it’s not a high end product either. It’s in between. So I think people are like, if they don’t know who we are, they’re like, I don’t know. For retargeting, our Facebook ads do really, really, really well.

Steve: Okay, yeah, that’s not unusual actually. And in fact, Facebook costs have gone up tremendously in just from 2017, 2018. It’s, I think they’re just running out of inventory. So

Tsippi: Oh yeah, okay that makes sense.

Steve: And okay, so for the benefit of the people listening who haven’t gotten started yet, and are thinking about starting a business, what sort of advice would you give them since you’ve gone through this?

Tsippi: I think, first of all, and I’m going to make a plug here for Steve’s course and he didn’t know I was going to do this. But I just want to say that my entire family knows your name. I’m like, well, let’s see what Steve says about this. I have learned so much and I couldn’t have done anything without this. And even like I have my assistant here just watched the course on Amazon so that you could test it for a couple of weeks, or watch the email marketing course and that’s how we roll around here.

And I’ve spoken to Facebook agencies and different agencies, they’re like, it’s this much money. I’m like, dude, I have the course, it’s okay. So that has really, really given me a lot of confidence and being able to reach out to you and ask questions, I would say, like has helped me so much. But really, I think you just have to start, you just got to take a step, you just have to make a decision, just go for it. Things will change. You’ll figure it out as you go, you’ve got to start.

Steve: What was your biggest challenge early on starting your store and how did you overcome it?

Tsippi: I think having kids. A lot of fashion is getting out there and having people try stuff on and it was really hard for me to get out there. So I was really only relying on website traffic. And you know how it is when you start a store; there are days where nobody comes to your site. That’s just the reality if you’re not advertising, and you’re kind of like, but I have all this stuff sitting here. So I think that as a young business was really hard. Why aren’t people coming today? I think that the creation of all the technical stuff, it’s just like a lot for a business owner to do. But yet, you don’t want to give it to someone else, because they don’t have that same passion. So I think that that, I think that just like trying to juggle all the pieces and make it work with life. But I would never ever give it up because it gives me so much freedom.

Steve: On the flip side, what’s worked really well for your business? And what would be your advice on what someone brand new should start out first, or how to find that avenue that really works?

Tsippi: I really think that going through the steps of trying to find something that makes sense and is profitable and feel someone’s pain point, if it fills a pain point, you’re probably good. So there’s so many companies that I talk to now, they’re like, well, nobody is buying. I’m like well, your product isn’t necessarily helping their life, it’s just pretty or whatever. So I feel like those would be the best way to start. And yeah, that would be my advice is value prop.

Steve: And you mentioned that you spoke with a hundred friends about your products. And one thing that I found personally is that when I ask my friends, they’re just nice to me. How did you kind of adjust for that?

Tsippi: Meaning that they weren’t honest you’re saying?

Steve: Yes, or were they honest?

Tsippi: Well, they were all honest in telling me that they think I will never succeed.

Steve: Really? Okay.

Tsippi: Yes. They were like Tsippi honestly, you’re not in fashion, and you’re going to start a fashion company, okay. And I was like, yeah, I’m going to do. And they’re like, who’s going to design the clothes? I’m like, I’m going to do. So that was a great boost of encouragement from them. But now they’re all like, whoa, how do you do that?

Steve: Yeah, actually, this is one of the things that I really liked about your personality. You’re just willing to just keep sticking with something until you get it done. I mean, throughout the technical challenges and whatnot, I mean, over time, if you just hammer on it long enough, it’ll get done.

Tsippi: And that’s what I’m seeing from other entrepreneurs is it’s not necessarily about being the best or having the best thing. It’s just your persistence and just moving forward, making your things better as you go. We just had a complaint that one of our dresses was shrinking. We’re like, sorry, we’ll do better next time because there’s not much we can do about that now. So yeah, just say move forward and keep getting better.

Steve: Yeah, I mean, clothing shrinks, right. It’s just part of life.

Tsippi: Yeah, people complain about that.

Steve: So Tsippi, I want to give you the opportunity to tell people how to find your store and how to reach out, how to join your community.

Tsippi: Okay, thanks, Steve. You know what; I actually had one question for you. Is that okay?

Steve: Yeah, go for it, yeah.

Tsippi: I’ve been meaning to ask you this for so long because I want you — one of the things that drew me into your community and what you’re doing is that you had not only this e-commerce half of your brand, but you also have a blog and a podcast and a whole area of knowledge that you’re giving over and I read your content, and I listen to your podcast. How do you have time or do you have a content strategy where you’re able to, because it’s high quality, high level things, how do you just get it all done and balance that with your e-commerce side?

Steve: So number one, I have a very good wife. So we shouldn’t discount that at all. She actually does the operations for the business, which allows me the freedom to just work on marketing and my other stuff. So let’s be clear about that. It’s a two person project. So I can tell you my schedule, on Sundays for four hours while my kids are in math class, I write, for four hours straight out. Yeah, so four straight hours in the coffee shop. And that’s pretty much my one blog post for the week.

Tsippi: Okay. Okay.

Steve: During the week, I usually do just one podcast per week that takes about an hour or so, and the rest of the time is doing customer service for the course, like I get a ton of those niche critiques, as you know. And I’m busy putting out new videos and new curriculum. So that takes some time. And I would say one, or one and a half days of the week, I work on trying to grow the e-commerce business. And I mean, I really don’t put out that much right, one podcast a week, one blog post a week and I do that one office hours for the class every week.

Tsippi: Yeah, I guess I was just wondering, because of the level of the blog posts and you still have your emails going and the working with the students and you have your new Go Brand Win, and you have all the other stuff.

Steve: Yeah, so just to be clear on that too, I have a great partner with Go Brand Win. And she helps a lot with the heavy lifting. Likewise, with my conference, I had that same partner, and she does, our bargain is basically I sell the tickets, get the speakers and get the sponsors. And she does the rest, like I show up at the event.

Tsippi: Oh that’s amazing.

Steve: Which is really amazing and it’s hard to find. So I hope I’m not like demystifying myself.

Tsippi: No, I really, I think it’s important like at a certain point to be able to grow to be able to take on partners like that and helpers like that. It’s just that I think it’s like a level that you reach at a certain point, I guess.

Steve: I actually spend a lot of time just sitting there thinking and doing nothing. And the reason why is because I find myself to be more productive once I kind of have a game plan instead of just waking up and going, okay, what am I doing today?

Tsippi: Interesting.

Steve: So at least one day of the week, I would say.

Tsippi: Okay, interesting. Wow.

Steve: So nothing special. I mean, just like everyone else in terms of productivity, I just have like a kind of like a set schedule for everything.

Tsippi: Okay, so interesting. Okay, I’ve been meaning to ask you that forever.

Steve: I don’t think you talked about how to reach you and your site.

Tsippi: Okay. So my clothing site is HavahTribe.com. And that’s spelled H-A-V-A-H-T-R-I-B-E.com. And we’re on Instagram @HavahTribe, or I am actually launching a new podcast myself in a couple of weeks, which I’m super excited about. And it’s talking about how the mindset struggles that moms go through as they start their own businesses and run their own thing. So that’s really exciting. And that’s called The Stunning Success. And that’ll be out in just a couple of weeks.

Steve: I think it’s going to be great. And you’re a very eloquent person and just knowing your drive, I’m sure that podcast will be successful.

Tsippi: Thank you, Steve. And just one last thing to end it off is that the one thing that has kept me going and that I have passed on to people within my community from you this entire year is one blog post that I read that you wrote, where you said that your tip was to do one thing every single day, no matter what. It could be tiny, it could be big, one thing every single day. And literally on days where I’m exhausted or whatever I’m like, I’ll just make one phone call, just make one email. And just before I got on this podcast, Instagram, or just Instagram me and DM me, and she said, I just want you to know how much that tip has changed my life. Because of you, my website is about to get up and running. And I’m taking huge action with my business because I do one thing every day. And I was like, that is so cool, because I got that from Steve. So I had to put that out.

Steve: Wow, that’s awesome. Sometimes things come out of my mouth, and I don’t realize I guess. Thanks for sharing that with me.

Tsippi: Yeah, I have that taped above my desk. So thank you for that.

Steve: Well Tsippi, thanks a lot for coming on the show. I had a blast and it was awesome.

Tsippi: Thanks for having me Steve. It’s an honor.

Steve: All right. Take care.

Hope you enjoyed that episode. Now Tsippi story is yet another example of how heart and hustle is what it takes to start a successful e-commerce business. Now, in the interview, we alluded to a website critique that I gave Tsippi for her site. And as part of my course, I regularly do full video critiques of a student site and sometimes I end up redesigning their entire site in Photoshop. So if you’re interested in joining, check it out over at profitableonlinestore.com. Now for more information about this episode, go to Mywifequitherjob/episode255.

And once again, I want to thank Klaviyo for sponsoring this episode. Klaviyo is my email marketing platform of choice for e-commerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all these sequences that will make you money on autopilot. So head on over to Mywifequitherjob.com/K-L-A-V-I-Y-O, once again, that’s Mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to thank Privy for sponsoring this episode as well. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any parameter that is closely tied to your e-commerce store. Now, if you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

Now I talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce store, head on over to Mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast where we’re giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.Mywifequitherjob.com.

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Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

254: Meghla Bhardwaj – Global Sources Vs Alibaba And How To Find The Best Suppliers

254: Meghla Bhardwaj On Global Sources Vs Alibaba And Finding The Best Suppliers

Today I’m thrilled to have Meghla Bwardhaj on the show. Meghla is the head of content marketing at Global Sources, a company that helps entrepreneurs find Asian suppliers online.

In addition, Meghla coordinates the annual Global Sources Summit in Hong Kong where they provide incredible content for ecommerce entrepreneurs.

Today, we’re going to discuss product sourcing, trade shows and everything supplier related.

What You’ll Learn

  • The benefits of attending a trade show
  • How to ensure the quality of your suppliers
  • How is Global Sources different from Alibaba
  • Tips on preparing for a trade show
  • The best way to request a sample from your vendors

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
Klaviyo

Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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Avalara.com – Handling sales tax is complicated. Fortunately, Avalara simplifies sales tax with real-time tax rate calculations and automatic return filing. And the best part is that Avalara already integrates with your existing accounting, e-commerce and marketplaces like Amazon, so it’s super easy to setup. Click here and get a FREE TRIAL.

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into the strategies they use to grow their businesses. And today I have Meghla from Global Sources on the show. And Meghla is the head of content marketing over at Global Sources, which is one of the premier places to find Asian suppliers online. And today we’re going to talk about product sourcing, trade shows and how to deal with suppliers.

But before we begin, I want to thank Klaviyo for sponsoring this episode. Always excited to talk about Klaviyo because they are my email marketing platform that I personally use for my e-commerce store and I depend on them for over 30% of my revenues. Now Klaviyo is the only email platform out there that is specifically built for e-commerce stores, and here is why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send out an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, piece of cake, and there is full revenue tracking on every email sent. Now Klaviyo is the most powerful email platform that I’ve ever used and you could try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to give a shout out to Privy who is also a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now, Privy is an email list growth platform and they manage all my email capture forms. And I use Privy hand-in-hand with my email marketing provider. Now, there are a bunch of companies out there that will manage your email capture forms but I like Privy because they specialize in e-commerce. Right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store and customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%.

I’m also using their new cart saver pop up feature to recover abandoned carts as well. So bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve. Now onto the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m thrilled to have Meghla Bwardhaj on the show. Now Meghla is the head of content marketing at Global Sources, which is one of the leading companies that help entrepreneurs find Asian suppliers online. And in addition, Global Sources runs an annual conference in Hong Kong right before the Canton Fair, which provides incredible content for e-commerce entrepreneurs. And once again, Meghla coordinates this event every single year. Now Anyway, I’ve known Meghla for quite some time now. And today we’re going to talk product sourcing, trade shows, and everything supplier related. And with that welcome to the show Meghla, how are you doing today?

Meghla: Hey, thank you so much for having me Steve. I’m doing great.

Steve: So thank you for accommodating me today and the time change that I did last minute. I was hoping that you could just give us a brief background about your role at Global Sources, and basically kind of talk about what Global Sources does.

Meghla: Okay, sure. So let me talk about what Global Sources does, first of all. So Global Sources is actually a B2B supplier platform. And not many people know this but we were actually established in 1971.

Steve: Wow.

Meghla: So we were like the very first supplier platform out there. And at that time, you started with magazines. And then in the 1990s, we launched our website. And then in the early 2000s, we launched our trade shows. So we primarily help overseas importers find and meet suppliers in China and also in other countries in Asia. And there are a couple of ways we do that. So first of all, we have an online supplier directory at Globalsources.com. And we also host sourcing trade shows in Hong Kong every April and October. So the exhibitors at these exhibitions are basically suppliers, manufacturers from China and other countries. And then me personally, I have been working with Global Sources for almost 18 years now.

Steve: Wow.

Meghla: That’s a long time I know. Did I give away my age?

Steve: I was at my last company for 17 years. So we’re probably the same age then.

Meghla: Yeah. So I’ve worked in India and the Philippines, in China and I’m currently based in Singapore. I lived in China, specifically Schengen for almost 10 years. And I’ve been working with manufacturers and importers for a long time. And there’s been hundreds of factories in China and India working on research reports for Global Sources. And more recently, I’ve been working with e-commerce sellers, trying to help them source products more effectively from China. And as you mentioned, I’m the organizer of this conference called Global Sources Summit that we host in Hong Kong in conjunction with our shows every April and October.

Steve: Yes, which is an incredible feat. I don’t know how you do it, because this show is really large, right? I mean, compared to Sellers Summit, you got vendors, you got attendees, you got speakers, it’s quite a task.

Meghla: Yeah, that’s correct. And so we have a separate team that manages the exhibitions. And they’re like hundreds of people there in that team. So there’s the sales team and the marketing team, the logistics team and everything. So and then we have a separate team for the conference for Global Sources Summit. But the idea of organizing a conference together with the trade shows is that when people attend the conference, they can learn all about sourcing and selling on Amazon and network with other e-commerce sellers. And at the same time, they can put that education into practice at the show floor and start sourcing their product at the same time.

Steve: Yeah, that’s really smart. I know that a lot of people tend to get Global Sources and Alibaba confused. So I was hoping you could just kind of describe why it’s different. I have my own answer to this question. So I’m just kind of curious what you have to say about that.

Meghla: Okay, sure. So first of all, for Global Sources, one of the key advantages is O2O what we call O2O. And O2O basically means online to offline, which means that we also host trade shows whereas Alibaba is more only online focus, they don’t have their trade shows, Global Sources also has trade shows. And the benefit of sourcing at a trade show is that you’re actually — these suppliers tend to be a little bit more reliable, because they are investing in attending a trade show and they’re putting themselves in front of buyers. So typically, they’re more reliable than suppliers online. And also many of the exhibitors at our shows are also on our website. So you can source products from exhibitors on the website too.

And then another difference is that there is a higher percentage of manufacturers on Global Sources, whereas on Alibaba, you’ll find a lot more trading companies. And of course, there are tons of manufacturers on Alibaba, for sure. But sometimes it becomes difficult to differentiate the manufacturers from trading companies on Alibaba. Whereas in Global Sources, it’s easier to do because suppliers tend to be more transparent on Global Sources, like if they are a trading company, they’re more likely to say that openly on their profile that hey, we are a trading company, and these are the products that we do.

And then one of the reasons for that is because we work very closely with each supplier to try and write their company profile and try to identify the USPs of each company so that company profile is posted on the website, and buyers can get a better understanding of what that company specializes in and what the company is all about. The other difference I would say is that Global Sources tries to curate more products. So we try to focus on making it easier for buyers to identify new and innovative products, because I think this is one of the biggest challenges that all types of buyers not only e-commerce sellers face when sourcing products, everyone is trying to look for their best seller and the next big thing.

So we try to help buyers with that by curating products. We have something called analysts choice, where we actually identify new innovative products, and then give them the analysts choice badge on the website and at the trade shows as well. And then we have other lists such as the top 20 most trending products, top 20 most popular products. And then we also have new from exhibitors. So there are different categories of products that are curated. And even at the shows, you’ll find things like millennial zone, for example. So we’ve actually curated products that millennials would find appealing and would easily buy. And then we have a design award, for example. So we’ve got external judges, and they’re actually reviewing products and awarding products that are unique and innovative.

Steve: So one thing I’ve noticed when using Global Sources versus Alibaba is that there’s a lot less what I call riffraff on Global Sources. The vendors that you do find will tend to be legit, whereas Alibaba you’re never sure whether it’s just like trading company, or even something less than a trading company, like some guy who’s just going off and buying stuff that they find and delivering it, so which kind of leads me to my next question. I know you guys have a vetting process, what is that like for the companies that you have on the directory?

Meghla: Okay, so we believe in trust, but verify. And I think that’s something that importers who are sourcing from China or anywhere actually should also believe and trust, but verify. So we check and verify our suppliers and the information they post as much as possible. For example, business registration details of all of our advertisers are verified by independent third parties such as Dun and Bradstreet, or Ease credit, Experian. And then similarly, all of the suppliers at our trade shows are also verified. And the other thing that we do is we make it easier to identify actual manufacturers on the website by this verified manufacturers label that we assign companies.

And the way that we assign this label is that we check the actual license that has been given to them by the relevant government departments that allows them to manufacturer products. So that doesn’t necessarily mean that they manufacture all the products that are displayed on their website, but it basically means that they have the license to set up a factory and manufacture products. And it’s very common in China for companies to manufacture certain product lines in house and then outsource other products from different manufacturers. But when you see this label, you at least know that it is very likely that their primary product category is manufactured by themselves and that they are a factory.

Steve: Okay and this is something you do for everyone who applies to be a part of the directory. Is that correct?

Meghla: Yes, correct. So if you don’t have a business, if you don’t have a proper business registration, you cannot go up on the site.

Steve: Okay. And that is probably one of the other differences as well.

Meghla: Yes it is.

Steve: So when you are interacting with a vendor, let’s say I’m a brand new shop, and I’m interacting with the vendor, what are some no nos that you shouldn’t do when contacting someone for the first time? And how do you make sure that you get a reply from them?

Meghla: Okay, so first of all, you have to keep in mind that just as buyers are vetting suppliers, suppliers are also vetting the emails that they receive. And in fact, Global Sources, we get so many complaints from suppliers saying that, hey, we’re not getting good quality inquiries. And these buyers are just looking to buy samples, and they’re not serious buyers. So what’s the most important thing is to communicate that you are a serious buyer, and you understand the product.

And the way to do that is first of all ask very specific questions about the product. Don’t just give very vague and very broad messages or emails, don’t just say that, okay, I’m looking for this product, send me your catalog. That is something that suppliers don’t like at all. And that’s a red flag for suppliers. And that tells them oh, this buyer is very new. And he’s probably he doesn’t know what he’s talking about. So you’ve got to make sure that you send them very specific details about the products that you’re looking for.

Steve: Do you have an example off the top of your head have a good initial contact letter?

Meghla: So, for example, you could say something like, hey, I’m looking for I don’t know, garlic presses. And yeah, and I saw that you manufacture whatever, stainless steel garlic presses, and I want to source a garlic press in so and so stainless steel, and I would order whatever, 100 pieces initially. Once I’m able to establish this market, I will be increasing my order volume to so and so. And I am importing into the US, so I need to make sure that you have such and such certifications for this product. Can you please confirm if you have those certifications or something like that?

Steve: Okay, so very specific questions about the product to show them that you’re really serious, and you actually know what you’re trying to source essentially.

Meghla: Exactly, yes. And also, it helps to give a bit of background about your own company. So I mean, even if you’re just starting out, you don’t have to say that I’m a new seller, and I’m just starting out, but just say that I’m an online seller, and this is a product category that I specialize in. And here’s my website, if you have a website. That’s another thing that suppliers want to look for the buyers website to see what kind of other products the buyer is selling.

Steve: One thing I noticed about using Global Sources is that the MOQs tend to be on average higher than Alibaba. And so I was just wondering like if you’re brand new starting out, are there actually a good number of vendors that are willing to do let’s say, 500 units or less?

Meghla: Actually, nowadays there are. And because of this, we’ve actually launched a new feature. I mean, it’s not new; it was launched maybe last year or so. But this is a new filter that we’ve launched on the site for small orders. So if you search for any product, on the search results page, right at the top of the search results, you’ll see a filter accept small orders. And once you check that, you will see the list of suppliers that are willing do smaller orders.

Steve: That’s very convenient. What is the definition of a small order?

Meghla: So we leave that up to the supplier because of course, it’s very different for each product category right? But in general, it’s about I’d say 100 pieces or so.

Steve: Oh, okay. Okay. Yeah, that is definitely a small order. Okay, that’s great. And so you filter all those out and this is based on whether the vendor decides to check that box whether they want to show up for small orders, is that correct?

Meghla: Yes that’s correct yeah.

Steve: Okay. And then it’s up to you, obviously, to still ask what the MOQs are for a specific order.

Meghla: Yes, that’s correct.

Steve: Okay. And okay so as vendors are vetting you, how should you be vetting the vendor? Now, you guys have done a lot of the work already, but what are some other things that buyers should look for as well?

Meghla: So, of course, each buyer is different, because you’re sourcing products for your own specific market, right. So the most important thing is to know what the requirements are for your market, and then find an ideal supplier for you. So the first thing that you need to do is find out if there are any regulations for that product, and then try to identify suppliers that have those regulations or suppliers that export to your market because if you find suppliers who export to your market, then they’re more likely to already know the regulations and the requirements for your specific market. So I think that’s very important. If you’re sourcing for the US, then make sure that the supplier has experience exporting to the US. I think that’s one thing.

And then also, you have to decide whether you want to go direct to a manufacturer, or you want to source from a trading company, because sometimes sourcing from a trading company can be advantageous because you can get smaller order volumes, because trading companies source products in higher volume from manufacturers, and then they can sell products into smaller quantities to buyers. Especially if you’re just testing out a product and you’re not able to find a manufacturer who’s doing a lower MOQ, you can just go to a trading company.

Steve: When you filter out based on small orders, will more trading companies tend to pop up on Global Sources?

Meghla: It’s likely but I think increasingly, there are more manufacturers. I think manufacturers are kind of adjusting their supply chains and their product runs and assembly lines to cater to smaller orders, because that’s where — that’s the need of the market nowadays. I mean, not only e-commerce sellers, but even larger importers, they tend to order in smaller quantities, because they want to test products as well.

Steve: So when it comes to like the regulatory requirements of a product for the US, for example, if a vendor says that they’re certified, are they to be believed?

Meghla: Well, it depends. I would say like, if it is a larger kind of more established company, they tend to be more — you can trust them a little bit more. But if it’s a very small workshop and factory has just started out and doesn’t export a lot to the US and doesn’t have a lot of big buyers that they already sell to, then I would be a little bit more cautious. But if you see an exporter who is already selling to Disney, or some of the more well-known brands in the US, then I think they’re a bit more trustworthy. But if you’re scaling your product, and if you’re sourcing a new product line, then I think it always helps to do your own certification, like your own independent testing. So you just need to buy a sample from the supplier and then send it to a testing laboratory for testing,

Steve: Do you have any good resources on what certain products require certain regulatory requirements in the US or any other country?

Meghla: No, we don’t have any resources on the website, but I think this information should be available online, or a lot of the inspection companies also offer this information. So for example, Asia Inspection, you can always just, if you’re looking at a product, they should have all of this information in there on their website, or you can just contact them and ask for it.

Steve: So one common concern of brand new sellers are that they’re worried that their intellectual property or the brand will get stolen. What are some things that you can do to prevent that from happening with the factories that you interact with?

Meghla: So I think that’s always a risk that that might happen. But some of the things that you can do is sign an agreement with the supplier. And this agreement is not a guarantee that the supplier will not go ahead and sell your product to another buyer or sell it themselves on Amazon. But it basically, it will make them think twice. I think that’s the main thing to consider. If a supplier is rogue, and that’s what they intend to do, they will go ahead and do it regardless of a contract, but it will just make them think twice.

And then the other thing to do is you have to also keep in mind that it is less likely that the supplier will copy your products. I think it is more likely that sellers, like other sellers would copy your product because most suppliers, they don’t like to do B2C, because that’s not where their profit is. I mean, they are manufacturers, so they would prefer to manufacture high volumes and sell to buyers, rather than sell 10 pieces on Amazon. So it’s more likely that the sellers that you have more competition from sellers in your country or in other countries.

Steve: Are there any questions that you would ask a vendor to kind of weed them out, like the good from the bad?

Meghla: So I think there is no real definition of good or bad for a supplier.

Steve: Sure.

Meghla: it totally depends on what your specific needs are. So it comes back to listing your own requirements, identifying the criteria that is important for you, for your ideal supplier. I think once you do that, then it becomes very easy to weed out suppliers that are not right for you.

Steve: Okay, and one thing that I’ve noticed kind of happening with some of the manufacturers that I work with is that some of them are actually listing their stuff on Amazon, and you just mentioned that a lot of manufacturers don’t want to do B2C, but I have been seeing more and more of that happening. What are you seeing on your end?

Meghla: So what we’re seeing is that, yes, you’re right. I mean, there are some manufacturers who are doing that. But by and large, I think it’s third party sellers in China who have access to these factories and to wholesale markets in China, they are the ones selling products on Amazon directly. By and large, we’re seeing that manufacturers they still want to do high volume orders.

Steve: Okay. So Meghla, let’s switch gears a little bit and talk about trade shows. So why should someone fly all the way to Hong Kong to attend Global Sources? Is the directory that you guys offer enough?

Meghla: So I think in most cases, sourcing online is enough, but I feel that there are certain advantages of sourcing at a trade show. First of all, you can be the first to source a new product, because a lot of the suppliers don’t post products online, I mean, new products. They usually launch products at trade shows, because when they post products online, they’re afraid that other suppliers will copy the product. So if you’re at a trade show, you’re more likely to see products that are new in the market. And then it speeds up the sourcing process. I think that’s another advantage.

Like if you’re sourcing online, you’re searching for products online, contacting suppliers, asking them to sell send samples to you. And that in itself takes a couple of months. Whereas when you’re at a trade show, then you can actually touch and feel the products and ask all the questions about the supplier and about the product and get a lot of information. And you can compare products from various manufacturers just in a couple of days. So it really speeds up the sourcing process. And then you can touch and feel products. I think that’s the biggest advantage. You can’t do that from behind the computer screen. You can look at the product and get all of information. But touching and feeling the products is something that really tells you for certain product category, especially, it tells you a lot about the product quality.

And then sometimes you can get better pricing when you’re at a trade show. So many of these, the exhibitors at the trade shows, they tend to take you more seriously because you are at a trade show, because they know that you are real, you’re a serious buyer, you’ve come all the way from your country and spending a couple of days here. So they will take you more seriously. And even when you’re sourcing even a couple of cents or a couple of dollars can make a big difference to your bottom line. So, you can get better pricing when you’re at a trade show, better payment terms as well.

Steve: Do you have any tips on how to negotiate this?

Meghla: Yeah, I think it’s easier to negotiate when you’re at a trade show, that’s one thing. So I don’t think you should start by negotiating the price. I think what you want to do is portray to the supplier that you are serious about the product, you’re a serious buyer, you’re going to buy more quantities for them, you’re going to place repeat orders with them. And once you’ve placed a couple of orders with the supplier, build a relationship with them, I think that’s the time when you can ask to lower the price or negotiate for better prices and better payment terms.

Steve: Would you advise negotiating before your first large order or after the first large order?

Meghla: I think you can try to negotiate before the first large order, especially if you’ve tested the product, and you’re confident that the product will do well and you’ll be able to place multiple large orders moving forward. If you can convince the supplier of that, it doesn’t hurt to negotiate before you place a large order. And in China, it’s very — suppliers expect you to negotiate actually. So there’s nothing wrong with that.

Steve: Yeah, sometimes my wife and I get a little bit too into it actually. About samples, I remember before we were just talking about some new feature that you guys have in regards to getting samples, what is that new feature?

Meghla: Oh yes, this is something that I’m really excited about. So this is a new filter that we’ve launched on the website, and it’s a new service, actually. So accept samples, or you can buy samples from the website. So this is a new service. It’s still in beta, we’re working on enhancements, but basically what this allows buyers to do is to buy samples directly from suppliers. And we have this whole section on the website at Globalsources.com/buysamples, and there are about 100,000 products currently listed on this section. And these are samples that are ready to buy at a single click, at the click of a button.

And so this basically makes samples very accessible without the need for long discussions and negotiations with the seller because I mean, currently, if you want a sample, you contact the supplier and say, hey, do you have a sample of this product? No, I don’t have a sample but I have one in of this other model, would you like this? And then there’s a lot of back and forth for samples. But here you have all the samples displayed. And then you just click on whatever, whichever sample you want to buy. And then you can just buy it directly. So these are samples that are available from suppliers.

Steve: Interesting okay.

Meghla: And the other thing is that pricing that’s displayed on the website that includes shipping to anywhere in the world. So I think that’s a big — it’ll be very convenient for buyers because they don’t have to negotiate the shipping price or anything like that with suppliers.

Steve: Okay, so it’s kind of like Amazon.

Meghla: It’s kind of like Amazon yeah for samples. But of course, prices will of course be higher than what you would actually pay for when you buy at wholesale. But what I’m seeing is that many samples are actually lower cost, because we’re encouraging suppliers to offer prices, to offer lower prices and treat this as a marketing cost. Because what we found is that higher sample costs, it actually turns off buyers more instead of just filtering out sample hunters. So whereas typically, you’d see suppliers offering a $1 product for $100 or so, but on this section, you’re more likely to find the price between say 50 to $60 just as an example. Of course, it varies from product to product.

Steve: Okay.

Meghla: And then, yeah, I mean, suppliers decide which products they want to feature here in this section depending on availability of samples, and what products they want to promote. And we encourage suppliers to feature new and hot products over here.

Steve: So usually — oh sorry, go on.

Meghla: Now, I was just going to say that there’s also filter on the search results page. It’s accept small or accept sample orders. So when you do a search result, you can just use this filter to display suppliers that have ready samples of that product.

Steve: Okay, that’s very convenient.

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I was just about to say that when I get samples, usually I make my modifications first and get a custom sample made. It sounds like this feature is much more useful when you’re just kind of select between the manufacturers first to see what their initial quality is of their existing products are before you customize, is that accurate?

Meghla: Exactly, yes. Yes, that’s accurate. Yeah.

Steve: And so all this stuff from what I’m gathering is already premade and you can just add a click of a button, it gets shipped almost immediately.

Meghla: Yes, it gets shipped within two days; the shipping is done by the supplier. So we’re not holding any inventory or anything. It’s shipped directly by the supplier.

Steve: And one thing that I sometimes do is I just have this sample kind of comped on my first large order. Do all those rules kind of still apply if you use this feature?

Meghla: Absolutely yeah.

Steve: Okay. So we got sidetracked a little bit, because we were talking about trade shows, it seems like all these features that you’ve added to the main website make it a little less necessary for you to attend a trade show. So given all the new features, how do you kind of decide whether you should go to a trade show or not? And what would make it worth it to you? First of all, does it cost any money and who’s allowed to attend the show?

Meghla: So it doesn’t cost any money if you preregister online, the trade shows are totally free. But if you don’t register online, I think at the venue it’s about 50 Hong Kong dollars or 100 Hong Kong dollars.

Steve: It’s very little.

Meghla: It’s not much, very little yeah. So generally, what I advise people is to do most of the sourcing online, but visit a show at least once a year or once in two years. And then at the same time, when you’re visiting a show, you should also try and visit your factories. I think that is something that makes a huge difference when you’re sourcing from China and you’re trying to build a relationship with suppliers, visiting their factory and seeing how the products are manufactured.

So there are a couple of trade shows that are held in Asia and they’re held during the same time so every April and October. And the dates of the trade shows are exactly the same April and October. So it’s easy for people to remember. And they are timed in a way to make it convenient for buyers to go from one trade show to another. So there’s not a lot of overlap between shows offering the same kind of products.

Steve: What would you say that Global Sources, the exhibition specializes in, what type of products?

Meghla: So there are four exhibitions that we host every April and October. One is consumer electronics. The second one is mobile electronics. The third one is lifestyle products, which covers gifts and home products. And the fourth is fashion. So I would say that Global Sources specializes in electronics products, those are our biggest exhibitions because we have two shows dedicated to electronics. So if you’re sourcing electronics products, then this is definitely a must attend show. And then Canton Fair, which is held in Guangzhou, which is about two hours from Hong Kong, it’s in mainland China. So Canton also has a couple of three phases basically.

The first phase is more electrical and electronics. The second phase is gifts and home products. And the third phase is fashion and textile kind of products. And so I would say that most Amazon sellers attend phase two of Canton Fair, which is the gifts and home products. And of course Canton Fair is much bigger than Global Sources, and especially the phase two of Canton Fair. But for Global Sources fairs, we try to focus a lot more on curating products. And so we are a smaller show, but we try to make it easier for buyers to find new and innovative products.

Steve: And I’ve heard the huge advantage is the conference itself. When does that take place in respect to the exhibitions?

Meghla: So that takes place during the lifestyle and the fashion show which the dates for the upcoming conference are April 27 to the 29th. And it’s held in conjunction with like I said, the lifestyle show, which is the product category that most e-commerce sellers, Amazon sellers are most interested in. Yeah, so it’s a three day conference and we’ve got about 23 speakers, mostly from the US and from China. We’re going to be covering topics related to product selection, sourcing, driving traffic, driving sales, doing a listing. And we’ve also got a lot of trade show time built into the agenda so that you have enough time to attend the trade show while you’re at the venue attending the conference.

Steve: So for someone who’s going over to China and Hong Kong for the very first time, do you have some tips for kind of traversing a trade show because I know that at least with the Canton Fair, you don’t want to just go and walk around and bum around right?

Meghla: Absolutely. And especially Canton Fair, because it’s so huge, it’s just easy to waste so much time there.

Steve: Exactly.

Meghla: So I think the first thing to do is list all of the products that you are interested in, or at least the product categories and at least know what products, what kinds of products you want to source. And this will help you focus and save time when you’re at the show. And then the other thing to do is list all of the product features and all of your requirements. If you already source certain kinds of products, or you know what you want to source, make a list of all the specifications, the functions, the features, the quality standards, certifications and any other information that’s important to you, and what kind of supplier are you looking for, trading companies, manufacturers.

And then it becomes very easy for you to filter out exhibitors that are not right for you. And you can just ask a couple of basic questions at the booth and then quickly move on to the next booth if the supplier is not right for you. The other thing that you can do is get estimated prices online before you go to the show for the product categories that that you’re interested in so that you can at least benchmark prices and compare prices at the show from prices that you got online.

Steve: Is there an exhibitor list online for Global Sources?

Meghla: Yes, yes.

Steve: Okay perfect.

Meghla: So yeah, that’s what I was going to say next. You should actually shortlist exhibitors online before you go to the show. And that makes it much easier. You can get a map of the show floor and then actually identify where each booth is and kind of make a walking route for you so you will save time. And then definitely get a lot of business cards printed, because it’s very common in China for people to exchange business cards. And then if you’re going to China, then get a VPN because a lot of the websites including Google, so all of Google’s websites and YouTube, Gmail, all of them are blocked.

Steve: That’s not true of Hong Kong though, is it?

Meghla: No, it’s not. Hong Kong, all of the websites are accessible in Hong Kong and you don’t need a VPN. Yeah. And then get a high capacity power bank, comfortable shoes, since you will do a lot of walking. And then I would also suggest to schedule factory tours when you are visiting the trade shows, because that really helps build relationships and takes things to the next level with your sourcing. And then do some sightseeing as well. And China is such a beautiful country, there’s a lot to do. Even Hong Kong, they’re very beautiful heights in Hong Kong.

Steve: Yeah. Like the Peak.

Meghla: The Peak yes. Have you done that?

Steve: I have yeah.

Meghla: Okay, cool. And then…

Steve: No, I was just going to — a common thing that people are afraid of when going to China is the language barrier. So if you were to go to Global Sources trade show, English is fine, right?

Meghla: Yes, English is fine, because Global Sources trade shows are held in Hong Kong. And most people in Hong Kong like even taxi drivers would speak English, some basic English so that’s not a problem at all. Whereas yes, you’re right, in Guangzhou and Canton Fair, there are fewer people who speak English in China for sure. I mean, taxi drivers do not speak English at all, not even a word of English. So you have to make sure that you have your hotel address with you in Chinese at all times so you don’t get lost.

Steve: Yes. I mean, in my opinion, Hong Kong is so much more fun than going to China. And so I don’t know. I mean, and there’s no language barrier, either. And it’s just like it feels like a more modern city to me, lots of great food and everything as well.

Meghla: Totally. And you don’t feel lost in Hong Kong, right. I mean it’s so easy to get around.

Steve: Exactly.

Meghla: All of your restaurant menu cards are in English, the information, signs, everything is in English.

Steve: It is not intimidating at all to go to Hong Kong; it’s slightly more intimidating to go into China and the Canton Fair.

Meghla: Exactly. Even the exhibitors at our shows, especially the electronics suppliers I found, they are better at English than other product categories, because multiple electronics factories are based in the Pearl River Delta region, which is closer to Hong Kong. So they tend to have better English speaking skills than people in factories and interior cities.

Steve: Can you talk a little bit about how you go about scheduling a factory tour because factories can be all over the place right?

Meghla: Yeah, so of course it totally depends on where your product is being manufactured and what product you’re sourcing. If you’re sourcing electronics, then it’s most probably going to be somewhere in Shenzhen or Guangzhou, which is in the south of China very close to Hong Kong. So Shenzhen is about one hour from Hong Kong and then Guangzhou is about two hours by road from Hong Kong. But if you’re sourcing, let’s say, I don’t know spatulas, plastics spatulas, they’re most likely to be in Zhejiang province, which is further north. Zhejiang is on the east of China. And it’s likely to be in a city called Ningbo that does a lot of the appliances and other products.

So I think what you have to keep in mind is that pick a city where you want to do a couple of factory tours because in China what happens is that there are production hubs for certain product categories. And so if you’re in that city, it’s easy to go from one factory to another, because they’re all in that city, and they’re nearby, whereas if you’re scheduling factory visits of different cities, you’ll be spending a lot of time traveling from one city to another because China is huge. So I think just be aware of where the factories are located for the products that you are sourcing. And yeah, make sure that they’re not too far apart.

Steve: So can you kind of describe the process in your experience, like would a vendor actually come and pick you up? Do you meet at the factory? What are the logistics?

Meghla: Yeah, it’s very common for the vendor to come pick you up from the airport. And so you just need to like communicate to them that okay, we’re coming at this time, and they’ll have somebody at the airport holding a sign board with your name on it, and then they’ll take you to the factory, they’ll take you around. They’ll most probably take you out for lunch or a meal.

Steve: Sometimes they’ll take you drinking, yes.

Meghla: They’ll take you drinking. Yeah. And they’ll make you drink baijiu.

Steve: Yes.

Meghla: That is really very strong. I would not recommend having more than two shots.

Steve: Yes.

Meghla: Yeah. And then if you want to go to another factory after that, they will even, if the factory is nearby, they will even drop you to the other factory because sometimes transportation can be very difficult in the interior cities of China. I remember I was traveling to this one factory a long time ago and there were — we were literally on a motorcycle taxi. There were no regular taxis no nothing, just a motorcycle taxi from going from one factory to another. That was not fun at all.

Steve: So Meghla, if it’s your first time, what would you recommend?

Meghla: So if it’s your first time and you’re sourcing, let’s say you’re sourcing gift products or home products.

Steve: Okay, so that’s third phase right.

Meghla: Yeah, that’s second phase.

Steve: Second phase okay.

Meghla: Second phase of Canton Fair.

Steve: Third phase is textiles.

Meghla: Yes, correct. So what I would suggest is visit both shows, Hong Kong Global Sources and Canton Fair. So Canton Fair is held right before Global Sources lifestyle fair. So what you can do is fly straight into Guangzhou if there is a direct flight to Guangzhou, because many times there aren’t direct flights, you have to go via Hong Kong. But if you can find a direct flight or even go to Hong Kong, that’s fine. But attend the Canton Fair first, and then come to Global Sources. If you want, you can attend the conference as well, and attend the trade show. And then you can go back to Canton Fair for phase three, if you do want to source fashion and textile products or you can go into Mainland China to visit your factories.

Steve: You what’s funny Meghla, I would recommend the opposite itinerary. I would recommend staying in Hong Kong, because it’s a lot more fun, the food is a lot better. And then if you want, go into take the train over to the Canton Fair, and then come back to Hong Kong.

Meghla: Yeah, but it depends. I mean, if you do want to visit factories right.

Steve: Of course.

Meghla: You go back to Hong Kong.

Steve: I just like Hong Kong so much better.

Meghla: Yeah that’s true. And then you also have to keep in mind that if you are going to go back into China, you want to get a multiple entry visa for China. So that’s very important to keep in mind. And many people have got stuck because of this. And you do not require a visa to go to Hong Kong, like most nationalities don’t. But for China, you do require a visa. So make sure that you get your visa at least a couple of weeks before you plan on going to China.

Steve: Yeah for sure, for sure. Well, hey Meghla, we’ve been talking for quite a while and I don’t want to keep you because it’s part of your work day there. It’s late at night over here. Where can people find more information about Global Sources and the exhibition and the trade show?

Meghla: Yeah, so for the exhibitions, people can go to GlobalSources.com/exhibitions. That’s where you can get all of the information about all the various trade shows that we host. For the summit, its GlobalSources.com/summit, that’s the URL.

Steve: And do you have a sampling of some of the speakers that are going to be there this year in April?

Meghla: Yeah, absolutely. So one of your judges at 5 Minute Pitch Mike Jackness.

Steve: Nice.

Meghla: He is a speaker this time yeah.

Steve: He’s great.

Meghla: He’s actually spoken a couple of times.

Steve: He’s a great speaker.

Meghla: He’s amazing. I love yeah, I love his part. And then we have Kevin King, who’s coming to speak, David Bryant, who is Mike’s partner. And then Lilan Hirschkorn, Tim Jordan. He does a lot of good stuff related to sourcing. And then we have Sophie Howard from New Zealand. She’s actually — she has her own course and she does a lot of sourcing from India and Vietnam and other non-China kind of locations. So that’s something that we’re seeing a lot of interest in, and we’re covering the topic of that. And then we’ve got CJ Rosenbaum is also coming.

Steve: Aha, the Amazon sellers’ lawyer yes.

Meghla: Amazon sellers’ lawyer, that’s correct. And then we have Sean Smith, Chris Rawlings from JudoLaunch. I’m looking forward to his presentation.

Steve: Cool.

Meghla: Yeah.

Steve: It sounds like a rock star speaking lineup.

Meghla: It is yeah.

Steve: Well Meghla, thanks a lot for coming on the show. I really appreciate your feedback and your advice on sourcing and trade shows and the like and I think all the listeners will benefit from it.

Meghla: Thank you so much Steve.

Steve: All right. Take care.

Hope you enjoyed that episode. Now the Global Sources Summit is actually going on right now. So if you’re in Hong Kong, make sure you look for Meghla and say hi to her. For more information about this episode, go to Mywifequitherjob.com/episode254.

And once again, I want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subs. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any primer that is closely tied to your e-commerce store. Now if you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

I also want to thank Klaviyo which is my email marketing platform of choice for e-commerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. So head on over to Mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s Mywifequitherjob.com/K-L-A-V-I-Y-O.

Now I talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast where we’re giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.Mywifequitherjob.com.

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253: How To Make Millions Teaching Blackjack Card Counting With Colin Jones

253: How To Make Millions Teaching Blackjack Card Counting With Colin Jones

Today, I’m happy to have my friend Colin Jones on the show.

Colin was a professional black jack player and made over $4 million dollars by counting cards at casinos. But today, he runs a successful online business teaching others how to beat the casinos over at BlackjackApprenticeship.com

Today, we’re going to talk about his entrepreneurial journey and how he’s created an incredible business based on his previous hobby.

What You’ll Learn

  • Colin background story on how he became a professional gambler
  • Why he decided to teach blackjack
  • How he gets paying customers to his program
  • How card counting works and your advantage over the casino
  • How to build an audience on YouTube
  • How to turn YouTube subscribers into email subs and messenger subs

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. Now today I have my buddy Colin Jones on the show. And Colin is a successful card counter who has made over $4 million playing blackjack. And today he’s created an incredible business teaching others how to count cards, and we are going to learn how he did it.

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%.

You can also use Privy to reduce cart abandonment with cart saver pops and abandoned cart email sequence as well at one super low price that is much cheaper than using a full blown email marketing solution. So, bottom line, Privy allows me to turn visitors into email subscribers and recover lost sales. So, head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve.

I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. Klaviyo is the tool that I use to build real quality customer relationships with my e-commerce store. And because all my transactions and email correspondence is tracked in Klaviyo, I can easily build meaningful customer relationships by listening, understanding and taking cues from my customers and delivering personalized marketing messages.

So for example, with one click of a button, I can easily send a specific and targeted email to all customers with a lifetime value of over 100 bucks who purchased a red handkerchief in the past year. Now, it is for this reason why over 10,000 brands have switched over to Klaviyo. And you can try them for free at Mywifequitherjob.com/K-L-A-V-I-Y-O. Once again that’s Mywifequitherjob.com/K-L-A-V-I-Y-O, now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle so you can spend more time with your family and focus on doing the things that you love. Here’s your host Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m really happy to have my buddy Colin Jones on the show. Now Colin is someone who I’ve hung out with on multiple occasions at various conferences. And he actually even wrote this guest post for my blog, I want to say almost eight to 10 years ago, but Colin has a really interesting story. The man used to play blackjack professionally and he made over $4 million by counting cards at casinos.

And today he runs a successful online business teaching others how to beat the casinos at blackjack over at Blackjackapprenticeship.com. And today what we’re going to do is we’re going to talk about his entrepreneurial journey and how he created an incredible business out of — I don’t want to call it a hobby but how he used to make money before counting cards. And with that, welcome to show Colin, how are you doing today?

Colin: I’m great. Thanks so much for having me.

Steve: So Colin, I know you got a lot of funny stories to tell. But take us back to when you first started playing blackjack. First of all, how the heck did you end up doing this professionally?

Colin: Yeah, so I graduated with a math degree and pretty much no ambition, no idea what I was going to do for work because with the math degree, you either teach or you go back to school, can become an actuary, but that’s going to take years of tests and I just didn’t want to really do any of that. But a friend of mine said, hey, Colin, you’re a math guy. I’m teaching myself how to count cards, and he loaned me these books and he was a smart guy. And he wanted someone to get into it with him. And I thought I could probably do this. And so while I was doing a combination of working at Red Robin and substitute teaching, I read these books and practiced it, decided to give it a go, convinced my wife to take $2,000 of our savings and which was not enough, but I just kind of got lucky off the bat and the rest is history.

Steve: Okay, so 2,000 bucks. Was that like a significant portion of your savings?

Colin: I think we had six grand in the bank but were, I think we lived off of something like 1,500 a month at the time and so it kind of felt like go for it, what’s there really to lose? I could get another job if I needed to. She didn’t think it was going to work but she thought I get out of my system and it did work.

Steve: So was Red Robin like your only job ever then?

Colin: I mean, I had some jobs in high school and I was substitute teaching when basically the deal I worked out with my wife was if I didn’t get called into substitute teach, I could go play blackjack, which sounds awful. But I’d honestly never been in a casino until I’d spent at least dozens of hours practicing card counting and I spent, I don’t know probably at least 100 hours practicing before I went in a casino. But she agreed, hey, if I don’t get called into work, I wouldn’t just sit at home, I’d go and count some cards.

Steve: So, before we get into the details of your business, I’m just kind of curious about card counting in general, can you just kind of give a brief high level overview of how it works? And can you actually consistently win when you count cards?

Colin: Yeah, so I mean, first off, I always have to tell people, it’s perfectly legal, because you’re just using your brain in the casino and fortunately, it’s legal to use your brain. And the analogy I like to give is it’s a mix between chess and extreme couponing. So it’s this game of skill. But it’s kind of this hack where casinos created a game that it’s the only game in the casino where future events are dependent on past events. So if a card comes out of — if they’re dealing, and let’s say a queen comes out, you won’t see that Queen again until they shuffle. Every other game is all independent events. And so someone, a mathematician figured out that this kind of this hack and you can absolutely use it to your advantage.

It is basically a system of just keeping track of what kinds of cards have been played. And that will impact your betting. And then you have to learn the playing strategy and a bunch of other things. But it’s not rocket science; it’s just a system that takes a couple hundred hours to perform. And you don’t — it’s not like the casino has become an ATM where you just walk in with 100 bucks and walk out with 1,000. But it is a very consistent system. If you get in a few hundred hours, you’re pretty much guaranteed to be in the positive. And it scales, like a lot of other investments, where with 2,000 bucks, I was making maybe like $7 an hour, but when we had 20,000 were making $50 an hour, when we had a couple hundred thousand we were making three, four or $500 an hour playing blackjack.

Steve: What is the true advantage percentage wise from a probability standpoint?

Colin: It’s between one and 2%. It depends on how good of a game you’re playing and how good your game is but between one and 2%.

Steve: That actually does not sound like a lot, which implies that you could lose a lot of money before you start winning right? Like, do you have any crazy up and down stories while gambling?

Colin: Oh, yeah, absolutely. So, compared to — I tell people that compared to the stock market, it’s more consistent. If you get in, let’s say a professional card player plays 500 to 1,000 hours a year, you’re going to be in the positive, and you could actually calculate how much you’re expecting to make. But it’s not a large advantage, like you’re going to win every night. You win kind of like 55% of the time and lose 45% of the time. So it’s really important to get enough hours for the math to work out. But as far as myself, I mean, my first trip to Vegas, I had been a card counter for about a year, first time ever went to Vegas. I lost about $40,000 in like three hours and got kicked out of all MGM properties. I was told I couldn’t walk into MGM property and play blackjack again, which is a little bit like…

Steve: Wait, you lost money and they kicked you out? That doesn’t make sense.

Colin: Yeah, well, it’s because they think the same way a card counter does, which is they’re not looking at the short term results, they’re looking at, do I have a winning game? And of course over a long enough sample size, I won all that money back plus a lot more in Vegas, but it was a pretty, pretty rough first trip. And I think that’s like the worst single day I had losing 40 grand, but I’d had other days where I won, I think my best day was about $45,000 in a couple hours and I just couldn’t lose. But again, we’re not looking at the short term. Like any business you want to say, well, what’s this going to do over the long term?

Steve: Okay, and then I always see like in the movies, whatever, like they’ll pull people aside into like this back room and beat you up. Does that actually happen?

Colin: Yeah. I’ve never been pistol whipped for card counting. That’s all Hollywood. I mean, if they even said that you had to go into a back room and you said I don’t want to and they forced you to, you’d have a six figure settlement. So that’s all Hollywood, but they have a right to refuse service. It’s like the no shirt, no shoes, no service thing, a grocery store can say, hey, if you don’t wear shoes, we’re not going to serve you. Well casinos can say, hey, if you’re a winner, not a loser; we’re not going to serve you. And it generally is something like Mr. Jones; your game is too good for us. You’re welcome to play any other games but no more blackjack. And you take it with a grain of salt, you move on to the next casino or even go back to that same casino three months later and they’ve forgotten about you.

Steve: But have you been taken to the back room ever or any sort of side room?

Colin: Yeah, well, only once. There was another time where a guy was demanding I go in the back room and I knew better. I said, no, I’d like to cash out and leave and he huffed and puffed for a while and then he said, cash him out, I want him to leave. But there was one time we had $140,000 in chips to a casino, one casino that we’d just been absolutely clobbering. And when we went to cash it all out, we actually – it was really dumb of us. But it was a team of four of us, and we’d been playing for four days. And we won a whole bunch of money, and we sent one guy to cash out all the chips.

So we thought, if they’re going to back off one person, let’s have it — or back off anybody, let’s have it be this one guy. But it was dumb done to send one guy with that amount of money. So of course, they say, well, how do you have this much money? Are these real chips or are they fake or whatever? And so they said he had to go in the back room. And then basically an hour later, all four of us are there saying, we want to get our money, we’ve got a flight to catch. And it’s the craziest thing, but the casino didn’t even know what card counting was. They’re saying, how did you cheat us? We’re like, we didn’t cheat. We were counting cards.

They said, well, how does that work? And we’re explaining it to them. And then they’re saying like, well, how do how much to bet? And one of the guys on my team says, I’ll tell you for a fee. He was asking casinos to pay him to tell him how we know how to bet. And long story short, they eventually cashed us out. And they sent the letter in the mail saying that we’re not welcome on their property again.

Steve: Okay. Okay. But so you’ve never been like physically harmed or anything or detained.

Colin: Oh no.

Steve: Okay all right.

Colin: I know a couple of guys that have been detained against their will and they’ve all gotten large settlements for it.

Steve: Interesting. My next question actually is you have this business now that teaches people how to count cards. If this system is scalable, why not just continue to do it?

Colin: Yeah, that’s a really valid question. I’d say it’s scalable to a degree. But one of the things that got me really thinking of doing something — well, first off, I didn’t get into card counting to be a card counter for my whole life. It was like a way to not have to go back to Red Robin, and not have to go back to School. Sorry go on. Yeah, I’m a happy customer. So, I wasn’t looking to do it forever. And it was really, really fun when I was playing the first two years and scaling something. I’d never known I could do something entrepreneurially. But then it started to feel like a grind. And then me and the guy I got into it with, we started a team and we ran this team that, like you mentioned won roughly $4 million between the different teams we ran.

And that was really fun for a while, but then it only scales to a degree. You can’t bet tens of thousands of dollars ahead, casinos just can’t handle that kind of money; you’re going to get asked to leave way too quickly. And once we kind of reached its limit, I realized I created a job for myself not a business, it wasn’t something I could sell, or if I got hit by a bus, my family couldn’t sell off the business or anything. So I was looking for something more passive.

Steve: Okay, no that makes sense. And in terms of running the groups, I guess you could have scaled it that way, but it would have been probably a lot of trouble, right?

Colin: Yeah, it was really fun for a while, but then it really started to feel like a grind and I started having more and more kids. I wanted to be traveling less and probably wanted something I could just do from my basement.

Steve: Yeah, I’m just kind of curious. Like, I’ve seen the movies where people have like wads of cash strapped to them. Was that something you had to deal with too?

Colin: Oh, yeah.

Steve: Why do you have to deal with cash? Why not just deposit it in like [inaudible 00:13:19] or something?

Colin: Well, you’d have two reasons. One is you’d have to only travel during bank hours. If you want to fly into Vegas, you can’t fly in Friday night; you’d have to fly in during the daytime. But the second thing is we used to try that and banks would freak out. They’d say — we’d say hey, I’m here to withdraw the $80,000 that I have in my account, and they’d say, well, we don’t have that kind of money or why do you need your money? And it was a huge hassle and so just cash is king. If you show up in Vegas on a Friday night with $80,000 strapped to you, you can just head straight to the strip and start playing and casinos will always take cash.

Steve: What about leaving Vegas, though? Can you deposit it in a bank in Vegas and not have to do that?

Colin: Okay, so the reality is I’ve been backed off from three banks. I’ve had three banks close my account and say, we don’t want your business because they’re so freaked out about cash. And I’ve said, hey, we’ve got accountants, we’ve got lawyers who’ve got a business license, and they say, we don’t care. You’re depositing and withdrawing tens of thousands of dollars every week, and we don’t feel comfortable with it.

Steve: Ah, interesting. Okay.

Colin: But cash is king.

Steve: All right. I was just kind of curious if all the stuff that I see in the movies is true, but I guess there is some merit to some of that stuff.

Colin: Yeah, totally.

Steve: All right, so let’s get into Blackjack Apprenticeship. So first of all, what do you sell? How do you get paying customers? And what does the product look like first of all?

Colin: Yeah, I’d say that our main product is the membership, but we have products from $5 all the way up to $6,000. But we’ve got an iOS app that’s five bucks. But our main thing, the majority of my income comes from selling a membership. And it’s not very different from what you sell. So we’ve got a video course, we’ve got a forum, we actually have training software that we’ve developed, we’ve got a casino database so you can know the blackjack game of every casino in the country. We’ve got premium podcast, stuff like that. And then we have a higher end product which is a live training. So people fly to Vegas for two days of training with me and a group of other card counters. And then the highest product is private training with me where I’ll work with someone for a couple of days, but that’s six grand.

Steve: Oh, wow. Okay, but do you actually train them in Vegas and then take them to the casinos too for the highest paying tier?

Colin: Well, wherever, it’s more if they want me to fly to them, but if they fly to me in Seattle, I’ll go to the — we’ve got hundreds of casinos here in Seattle and I’ll go, I’ll watch them play, after I work with them for a couple days and see how they do in the casino.

Steve: Okay. Now it’s one thing like when you were gambling for this, did you start this business with a list of people who are interested in learning already, or did you kind of start this from scratch?

Colin: Yeah, absolutely from scratch. And we kind of timed it — of course we were behind schedule, but we timed it around the release of 21 the movie, like we knew that movie was coming out, it’s like we got to get this thing up and going. And we got kind of lucky that we got the number one YouTube video for how to count cards and we just kind of rode that wave for a while. But as it started to die down, I was like I’ve got to figure out this SEO thing. And just spent a few months devouring anything about organic traffic and was able to grow and we’re now all the way up to the word blackjack. We’re bouncing around the top three results for that, but that took many years to get to and YouTube has become a huge part of our inbound funnel in the last year.

Steve: So let’s talk about how you have you managed to rank for blackjack, which I imagine is crazy competitive. What are some things that you do in the SEO front?

Colin: Yeah. So I mean, early on, I went for lower hanging fruit just little bit longer tail search terms, but stuff that I thought we could compete for. But at the same time, we would create a page on something higher up like blackjack strategy or how to count cards, and just try to have well optimized pages. Basically, I stepped back and said, how can I create the best page on the internet for this phrase, and really worked on the best content, the most authoritative, the best images, all that stuff. And we’ve created and kind of set it and forget it, while at the same time going for a little bit lower hanging stuff and working on and I would do guest posts and broken links, anything to get quality links, while creating the best content and that stuff just started popping up over time.

Steve: Can we dig deep into like what search volumes you were targeting? Like when you’re first starting out, for example, and you had nothing, what sort of keywords in terms of volume and competitiveness were you going for?

Colin: I think things in the gosh…

Steve: I don’t know, what tools do you use actually first of all?

Colin: So it’s funny because I’ve been out of the SEO game for a few years now, because I have someone that does that stuff for me, he’s part of my team. But I used Google Keyword Planner, I would at times have a membership to Moz and just look at competitiveness, and we would just look for anything we could and do a combination. Most of it was lower, easier to rank for stuff. But we would create these pages that if one day we could get in the top 10 for some of this stuff, it would be amazing. And now we’re in the top three for all of those things.

Steve: And in terms of — I mean, oftentimes writing the best content isn’t good enough. So did you have a specific link building strategy?

Colin: Yeah, so it was a combination of guest posts, so we’d reach out to people. That’s the way it was. I had some e-commerce stores back in the day and that’s why I wrote a guest post for you. I’d reach out to people. I tried to write like the best thing I possibly could and then pitch it to people.

Steve: What was your hit rate actually? I think I can’t remember why I accepted yours because I didn’t even know you at the time.

Colin: Yeah, it was something like how to how to be Amazon’s SEO or something like that. It was like I would niche them or I don’t even remember, but I had like five bullet points and send it to you and I couldn’t believe you accepted it.

Steve: Yeah, I mean, looking back, like I wouldn’t do that ever again, to be honest with you today. But I’m just kind of curious when you were doing that, what was your hit rate like? How many people would you have to hit up in order to even get one yes?

Colin: Oh, I don’t know. Maybe 20 people but we just create a list and I think you were one of those like, well, I’ll go for it. I’m sure he’s going to say no, but apparently it piqued your interest. And I think having that just kind of that, I’d say one thing about card counting is you aren’t going to make it if you don’t take it incredibly seriously and have really thick skin. And I’d say it’s the same for SEO or e-commerce or anything like that, you have to work really hard at it and you have to have thick skin. A lot of things aren’t going to work but you just keep grinding. So it is a combination of guest posts and finding broken links.

Steve: I haven’t had that much luck with broken link, asking people to replace broken links. Has that been a really good strategy for you guys?

Colin: I wouldn’t say really good but it’s been a thing we’ve gotten some good links for. I’ve created one infographic ever but we created an infographic on how to play blackjack and that actually worked pretty well. We got quite a few links from that. And then we started getting lucky with some things. Like Ben Affleck got kicked out of a bunch of casinos a few years ago. He was actually — yeah, so we kind of used that to create an article about why and how does card counting work, why would casinos kick him out and got some links from that. And just trying to keep coming up with ideas and try things and keep reaching out to people and created some training drills that got us some links, and then some YouTube videos would get us some links. And it was just kind of a combination of efforts.

Steve: So this is just like an ongoing thing that you had. Do you have any goals in regards to how many links you build in a quarter or whatever or is this just kind of like this ongoing thing that you’re doing every day?

Colin: I wouldn’t say every day, but I would say maybe like, every year we make an effort of okay, hey, let’s put some work into this, whether it’s on page optimization, because SEO is kind of always changing. Then there was the page speed stuff. When that changes, we got to up our game with our page speed because sometimes it would be like an algorithm update would come out and we would lose some ground. And whenever we would improve things, we wouldn’t just recapture where we were at, we’d actually do even better than that. So until I felt like we really had a good grasp on the traffic piece, we’re always trying to improve either the user experience or the on page or the link building.

Steve: So has Page Seed really made a huge difference, though?

Colin: Yeah, I would say so especially was it in August, there was an algorithm update that came out. I don’t know if there’s a name for it, but we got kind of hit with that, which was, I felt pretty confident in our traffic and our rankings. And talk to Deacon [ph] I don’t know if you’ve had him on the podcast, you can hear that.

Steve: Yeah I will.

Colin: Yeah. And he was like, well, it looks like the two big things with this update that they’re focusing on his page speed, and kind of user experience. And so we really kind of stepped back and the page speed, I thought we’d really solved it because we redesigned the whole site to be faster, but we had just some really heavy assets on some of those pages. And by fixing that stuff, we saw our traffic come back pretty quickly, and then went even quite a bit higher and so kind of kicking myself that we didn’t fix that stuff sooner.

Steve: Interesting because I got hit in August also. I’m almost recovered, but I didn’t do anything with page speed. I’m just — I think my site is okay, but it’s probably on the slower end. What did you do to improve the speed outside of removing images and that sort of thing?

Colin: So I’m very different from you in that I hire a lot of stuff out. So I could give you the name of the guy I used, but man for a few hundred bucks, he got things blazing fast, combining JavaScript and image assets and setting up a CDN and just some stuff that I don’t know how to do.

Steve: Okay, fair enough. Cool. So that made a difference in recovering from August.

Colin: Yeah, we’re at all-time highs by far, like considerably in the last couple months. And so we really focused on that. We got hit in August, we spent three months really working on every phase of SEO and it’s been well worth it.

Steve: Cool. Maybe I’ll hit you up for that guy after this.

Colin: Yeah.

Steve: All right, so in the beginning you were getting business through SEO. Did you have a the YouTube channel from the start?

Colin: Yeah, we had the YouTube channel from the start. But if I could do that over too, I would have put more effort into it. But we kind of got lucky in the beginning. And then I focused on SEO and I’d go through phases of filming a bunch of videos and putting them out on YouTube, but I didn’t think it was a viable — I didn’t think it was going to convert to customers. I thought YouTube would be some college bros would watch my videos and wouldn’t be interested in dropping 200, 300 bucks for our membership. And it was actually about a year and a half ago, there was a scammer guy on YouTube that was claiming to be a card counter. He didn’t know what he was talking about. And people kept sending me his videos and, and I was like, oh, this is such bad information.

I thought well, I’ll kind of just start putting some good stuff on YouTube again. And we have a little survey when someone buys our membership, and we ask them, the first question is how did you first hear about us? And that YouTube went from about 10% of our paying members to about 50% became YouTube. And so I started really focusing on it. And it’s been, I’d say, the last year and a half. So at first I started doing a YouTube video every other week, because I’m just kind of lazy or don’t like working a whole lot, a video a week sounded like too much work. But when it started working, I decided you know what, for six months, I’m going to do a video every week. And for my business it has been one of the best decisions I’ve made.

Steve: How were people finding you through YouTube? Did you ask them or was there link tracking or?

Colin: Yeah, just this post purchase survey. So that’s the first question is how did you first hear from us? And now it’s over 50% is from YouTube, even though I thought maybe we could grow from 10 to 20% would be YouTube traffic but the thing is video trust is so much faster than written content. When someone sees me and gets to know me, they say — the goal of video is that people can get to know, like, and trust you. So first they have to get to know who you are and they get to know you so much better through video than through a blog post.

They get to like you because they get to know your personality more, and they just build trust a lot more through video. So in the last year, I’ve gone from not wanting to focus on video because I don’t like it. It’s a lot more effort and I don’t like being on camera, but it’s become I’m a pretty big evangelist for using YouTube or using video for your business.

Steve: So for what you teach, I imagine, how do you make sure that what you’re teaching for free on YouTube doesn’t completely encapsulate what you teach in the class?

Colin: Yeah, I was actually pretty worried about that. And I talked to Tim Schmoyer, he runs Video Creators. Actually, I’ve known that guy for like five or six years, and he’s helped me with some of my YouTube strategy, but he said Colin, you got to put some of your best stuff on YouTube. Not all of it, but some of it. But with that being said, I would say, I teach some of the lower level concepts, but I try to do a really good job of it, really high quality, that’s part of it is I don’t give away the best stuff. And then some of it is even like lower level than I would ever put on our video course so just more basic concepts.

But then periodically, I even will post one of our membership videos on YouTube. So it’s some of our best stuff, maybe once every month or so, I’ll post one of those and people get a taste and we’ll put in the comment or in the description hey; this is from our video course. But the second thing I’d say is it’s upped my game for our paid video course. As I’m putting better stuff on YouTube, I feel like I’ve kind of circled back around to our video course and said, hey, how can I make that content even better and so then I’m serving my paying members even better.

Steve: I just want to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you are interested in starting your own online store, I put together a comprehensive six day mini course on how to get started in e-commerce that you should all check out. It contains both video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online. Now this course is free and can be obtained at Mywifequitherjob.com/free. Just sign up right there on the front page via email, and I’ll send you the course right away. Once again, that’s Mywifequitherjob.com/free. Now back to the show.

So I guess I don’t really know anything about card counting, but is it involved enough that you can put out one video a week about it? Because you mentioned earlier that it was fairly straightforward what the strategy is.

Colin: Yeah, so I mean, that’s something I’m going to have to figure out is, can I continue putting out a video every week. But some of it is I can interview other people or I think if you sit back and — I’ll put it this way, I’ve been at it for a year and a half of a video week or a video every two weeks, and I’m still coming up with good ideas. And not all of them are. Some of them are just like blackjack strategies that don’t work. And then at the end, I say, if you want a blackjack strategy that does work, you need to learn card counting. And so I can get kind of broader and some of the stuff can be more like how this stuff applies to life or whatever and just get creative with it.

Steve: So can we talk about like how you come up with the YouTube stuff? Like do you do keyword research? Are you very deliberate in what you’re going for, or are you just trying to put out good content?

Colin: So YouTube is really different and that was one of the things that Tim Schmoyer told me, he said, you don’t approach YouTube like you approach SEO. So that’s how I was initially. I was coming up with keywords and YouTube is basically it’s like cable service. There’s all these different channels and YouTube doesn’t want people ever leaving YouTube. So it’s less about ranking for keywords and more about being the content that they serve either on the sidebar or someone gets to the end of a video and then the next thing that auto plays or the suggested content, so which has less to do with keywords and more to do with if someone is interested in these sorts of things, so for you, it’d be some people that are interested in e-commerce. Well, hey, Steve’s channel has really good watch time, really good audience retention; they’re going to serve your videos.

So I thought of it less in terms of keywords and more in terms of, well, what stuff would serve my audience anyway? And then how do I make this video have really good audience retention, like it’s not boring, it’s got good B roll, it’s got good, interesting content, people are going to want to watch all the way to the end and then get people into playlist so they watch video after video. And then I sprinkle in some, just things that I do want to rank for that keyword like how to count cards, how to play blackjack, but that’s more like 10% of it. And the rest is just how do I create really good content that would serve my audience and get people watching on YouTube.

Steve: You know what’s really funny about this column is, so I interviewed Tim on your recommendation.

Colin: Oh, yeah.

Steve: The episode hasn’t released yet. But I also interviewed someone else. I think her name is Sonny, who also does YouTube. And they had completely opposite YouTube approaches. So it’s funny, as she was saying, you got to be very deliberate with your keyword research and whatnot. Whereas Tim was more like, hey, just put out good content with a long watch time and everything just kind of works itself out. I would be curious to see, actually get them both on the podcast at the same time and argue it out at some point.

Colin: That would be great. And I’d say that there’s like I said a bit of both. And I went to Tim’s live event and it’s like kind of like a conference for about 20 or 30 video creators and the guy that kind of led my little mastermind session said, hey Colin, you actually do need more searchable content. Not like that should be my primary focus. But that was a huge boon was to actually say, okay, our last video on something as basic as how to count cards is like 10 years old and so I read them that and that’s done really well. And so it’s I’d say it’s a combination of those things.

Steve: All right and so you have these videos and you’re getting people in the door, how do you actually convert them into sales?

Colin: Yeah, so I spoke at a conference the last time I saw you about this idea, but I kind of stepped back and I had — I used to have like an eBook like a lot of people have, but I saw what some other people are doing with video mini courses and it just kind of made sense to me that I sell a video course. Most people buy our membership for the video course. So why isn’t my free, my lead magnet videos? And so I created this card counting mini course and it’s like five videos and it walks people through kind of gives them a paradigm shift and teaches them a bit and lets them know kind of like separates people that should or shouldn’t become a card counter or shouldn’t buy our membership. And that I think has something like quadrupled our conversion rate, it has been something that forced me to add video to more parts of the website and eventually to say, hey, if this is working so well on the website, why am I not doing this on YouTube also?

Steve: And so that eBook basically is no longer there and you’ve just broken apart that eBook into videos essentially.

Colin: Sort of, I kind of stepped back a little bit. The eBook actually did worse than a previous version of an eBook. And I was like, what’s wrong with it? I asked a few people, they’re like, hey, you’re kind of like overwhelming people with information. And so when I kind of scripted out the mini course, I went a little bit bigger picture and not so much information and that seems to work better. But yeah, the eBook it’s, I don’t know, maybe it exists somewhere, but it wasn’t that effective. The main course was – go ahead.

Steve: So the mini course doesn’t teach you exactly how to count cards, it’s more the higher level like is this for you, and what your goals are for doing this?

Colin: Yeah, so I really want to start with a paradigm shift that card counting is not gambling. We think of it as investing and really like diving into that. How is the card counting thing versus a gambler, and when people get that paradigm shift, they’re either like, oh well, I like gambling, or they’re like, oh, this is for me . And then by the third video, I actually I’m doing some teaching so that people kind of can trust me that I can teach them. But I don’t go too deep into the teaching, because that’s really what the paid course is for and I don’t want to bug people down. I want them to realize yes, I want to do this and then go from there. And there’s plenty more content where I’m teaching throughout the website and YouTube channel that they can digest that if they really want to.

Steve: So your membership site, is it a monthly paid membership?

Colin: No, we used to have both a monthly and annual thing but with a video course, some people they pay like the minimum out and then just binge watch the videos and then cancel was part of the problem. But the other problem is it attracted people that weren’t really committed because you’re not going to learn card counting in a month. And so we kind of scrapped the monthly. And it’s kind of the 80/20 principle where we got rid of a large portion of our members, but they were the biggest pain in the butt customers. They were the people that weren’t really going to become card counters and like the college kid with 19 bucks, not someone that had what it took to really become a card counter.

And when we switched from monthly to annual, our revenue went up and with fewer members. And this has probably been the same for you as you raise prices every six months or a year; you have fewer people but probably more income and focus on people that are really going to follow through.

Steve: Oh, yeah, absolutely. I mean raising prices was actually the best thing that I could have done because the quality of people improved dramatically.

Colin: Yep, yep.

Steve: So in terms of your YouTube videos, do you have like a certain target length or any just kind of higher level strategies that you try to do for each video?

Colin: Well, when I script it out, it’s all stuff you can learn from smaller or other experts, but I try to hook them at the beginning. And I want to provide content all the way the end of the video. But what I used to do is a sort of wrapping it up thing for the last 30 seconds, but people are just going to leave your video. You want to be giving all the way the end. And my videos used to be like three to five minutes and I was encouraged to actually make them longer and I thought three to five, that’s as long as I would want to watch. But it’s actually been good to make them a little bit longer. They’re in the six to nine minute range. I would say longer than that, I think would be a lot of work for me. So I don’t generally go longer than that.

And adding B roll, it’s amazing. You can see in the retention graphs where people are dropping off. And so not having too long of time of just me sitting there talking helps people stick around longer. So a lot of B roll and getting better at storytelling, not just content, but also anecdotes and things that keep people engaged.

Steve: Okay. And I know earlier when we were kind of chatting, you have a book coming out, how does that factor in the overall strategy? So first of all, what is the book about and what are your goals with the book?

Colin: Yeah, the book is about card counting. And I would — the way I really thought about, it’s not memoirs, and it’s not a like comprehensive how to, it’s kind of my best advice so that someone that’s either interested in card counting or actively counting cards, this would be the best resource they could have to either learn or to have success as a card counter. And the reality is the world’s changed a lot where with the internet, people don’t need something that like fills in every single gap. But 20 years ago, if someone wants to learn a subject, they go to a bookstore and find something that’s everything. Well, now people are going to watch videos on YouTube, they’re going to read online about things.

So I didn’t want to fill it up with things that are all over the website, but with the best advice, best stories I could provide. How it fits into our funnel, I’m not exactly sure yet, but I don’t know. I would say there’s probably no entrepreneur out there that hasn’t thought about writing a book. And it was just kind of an idea. And then, I was part of a mastermind group, and the guys kept saying, oh, Colin, you got to write a book about this stuff. And I don’t know, it just sounded like a fun project. So I wrote it and pitched it to one publisher, kind of my dream publisher, which ironically, this publisher when I told him I was thinking about writing a book, he said, oh, don’t do that. You’re not going to make any money at that. There’s too many blackjack books. But once I’d written it and sent it to him, he was like, hey, we’d like to publish it.

Steve: Nice okay.

Colin: Yeah, so that was I mean, that was kind of a dream scenario. I was going to self-publish if he didn’t want it, but they did want it. And I think it’s going to work in a few ways. One is, people, there’s just — the reality is a lot of people want a book on a topic. They don’t want to just read blog posts or watch YouTube videos, and so it’s going to bring in a different audience. Secondly, it’s going to, I think it’ll actually lead more people to buying memberships, because we’ve got a $5 product and then we’ve got a $250 product. And this will be the $20 product for someone that’s like not ready to drop 250 bucks, but it’ll kind of prime the pump for some of those people to say, okay, I want to do this. And the website will provide the training and the community and all those things that a book can’t provide.

Steve: Does it read more like a narrative or is it like tips?

Colin: It’s kind of a combination. So I tried to use as many stories as I could, but at heart I like teaching people, so it’s really advice and teaching and with as many stories as I could all along the way.

Steve: One thing I kind of forgot to ask you was along your funnel, is it primarily like an email funnel or do you use Messenger or do you use push notifications? Like, what’s your best medium?

Colin: Yeah, it’s email. So even from YouTube, I’m trying to get people into our card counting mini course, which is an email campaign and that’s just always been pretty effective.

Steve: So in terms of YouTube, you mention the link in your video, but what works better links in the video or do people actually click on links underneath the video in the description?

Colin: So we have an end card, and we put that the maximum length it can be, so I think it’s like the last 30 seconds of the video. And in the end card, I’m still teaching, I’m still giving valuable information so people aren’t leaving, but they’re seeing next steps are like other YouTube videos of ours, which will help our channel out, or a mini course, or a subscribe button. So every video, we’re promoting that mini course and just getting some percentage of people over in. And honestly, some people, they don’t go to the mini course, they just buy membership because I built enough trust through YouTube. But I’m always trying to get people into that mini course so that I can kind of nurture that lead further.

Steve: Cool. So what are your plans looking forward for this year in 2019?

Colin: Well, yeah, I have the book coming out. And that should be in March or April. We’re definitely getting pretty far along the process with that. And I want to promote that well and do a good job of launching that. But beyond that, I think I’m going to — I’ll keep doing the things we’re doing for inbound. But I think my personal energy is going to be stepping back and saying how can I serve our existing members better and grow our lifetime customer value? So if someone — get more people keeping their membership for year two, year three, year four, year five, rather than just saying how do I get more people in and out?

Steve: Okay. Yeah. I’m just curious, like I’m just trying to think if I was taking a blackjack class, I would think a year would be enough, would it not?

Colin: Well, that’s where we’ve developed some of the resources that are ongoing. So we’ve got a forum and card counting can be a lonely thing, you want other people that you can say, oh, man, I had this crazy night, whether it’s winning or losing, or hey, what do you guys do in this scenario, there’s a lot of subjective stuff. And so a forum is valuable for that. But we also have a casino database that as long as you’re a card counter; it’s helpful to know where to play, where not to play. And we have some betting software. And so basically, some of it, that’s kind of the software as a service component of the business, not the informational part. So people join for the information, but stay for the software.

Steve: Interesting. That’s a cool model.

Colin: Thanks.

Steve: Well Colin, this is all really interesting stuff. And I’m sure the audience is really intrigued by card counting, because I know I am. Where can people find you online?

Colin: Yeah, I mean, I’d say the best place is Blackjack Apprenticeship and that free mini course. Or if you’re a video guy, we’re at BJ videos for Blackjack Apprenticeship, BJ videos is the YouTube channel and currently putting out a video a week unless I get bored and drop it down to every other week. But those are the best places to start. And the book will be a good resource for people if they’re a book reader.

Steve: It’s funny, we’ve been talking about your sequence now, people should just go and sign up for it and watch it for themselves.

Colin: Absolutely.

Steve: All right Colin. Cool. Well, I’m really glad that you were able to come on the show, and I believe I will be seeing you in a couple of weeks as well, so looking forward to that.

Colin: Yeah, absolutely. I can’t wait and thanks so much for having me on the show.

Steve: All right man. Take care.

Hope you enjoyed that episode. Now Colin’s story is just the perfect example of how you can monetize any skill set you have no matter how bizarre. For more information about this episode, go to Mywifequitherjob.com/episode253.

And once again, I want to thank Klaviyo for sponsoring this episode. Klaviyo is my email marketing platform of choice for e-commerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all these sequences that will make you money on autopilot. So head on over to Mywifequitherjob.com/K-L-A-V-I-Y-O, once again, that’s Mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any parameter that is closely tied to your e-commerce store. Now, if you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

Now I talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce store, head on over to Mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast where we’re giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.Mywifequitherjob.com.

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252: How To Create A 9 Figure Ecommerce Business With Dustin Robertson Of Drip

252: How To Create A 9 Figure Ecommerce Business With Dustin Robertson Of Drip

I’m really happy to have Dustin Robertson on the show. Dustin is the CMO of Drip but in a prior life, he executed the digital marketing strategy for BackCountry.com and helped grow it to over 350 million dollars in revenue.

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What You’ll Learn

  • The largest contributor to BackCountry.com’s growth
  • The best way to build an email list for an ecommerce store
  • How to tag and segment emails for a large organization
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Other Resources And Books

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Sellers Summit

Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrap business owners and delve deeply into the strategies they use to grow their businesses. Now today I’ve Dustin Robertson on the show, and Dustin is the CMO of Drip. But before taking on that role, he actually built an e-commerce business from the ground up to over nine figures in revenue. And that is what we’re going to be talking about today.

But before we begin, I want to first apologize for the sound quality for this episode. Normally, I use Skype to record my interviews. But when I recently upgraded the software, my recording software all of a sudden stopped working and I had to scramble to find a brand new one. So thanks for your patience. Meanwhile I want to thank Klaviyo for sponsoring this episode. Always super excited to talk about Klaviyo because they are my email marketing platform of choice that I use for my ecommerce store and I depend on them for over 35% of my revenues. Now Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send out an email to everyone who purchased a red handkerchief in the last week, boom. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, piece of cake, and there is full revenue tracking on every email. Klaviyo is the most powerful email platform that I’ve ever used and you could try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to give a shout out to Privy who is also a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now, what does Privy do? Well, Privy is an email list growth platform and they manage all of my email capture forms. And I use Privy hand-in-hand with my email marketing provider. Right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%.

I’m also using their new cart saver pop up feature to recover abandoned carts as well. And bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve. Now onto the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Hey Dustin.

Dustin: Hey Steve.

Steve: Hey, I’ll just let you know we’re not doing video today because sometimes the extra bandwidth breaks up the audio.

Dustin: Okay, cool.

Steve: Cool. So how are you today?

Dustin: Well, it’s snowing like crazy here.

Steve: Oh is it?

Dustin: Yeah.

Steve: Where are you at again?

Dustin: Park City, Utah.

Steve: Ah perfect, so you’re going to hit the slopes?

Dustin: I would except I have a herniated disc in my back so.

Steve: Ouch.

Dustin: Yeah, just got an epidural injection on Friday to calm down the sciatic nerve and apparently to start the healing process, but normally yes.

Steve: Hey Dustin real quick, I notice there’s an echo. Do you have headphones by any chance?

Dustin: Yeah, let me go downstairs and go grab them.

Steve: Okay.

Dustin: Okay, how’s that?

Steve: It sounds better on the audio but did you switch microphones by any chance because it sounds a little muffled now.

Dustin: Let’s see, I don’t normally use Skype so let me get into the settings here.

Steve: Okay. But yeah, all the background noise has disappeared, which is good. Welcome to the My Wife Quit Her Job Podcast. Today, I’m really happy to have Dustin Robertson on the show. Now Dustin is the CMO of Drip, which is the email marketing provider that I’m using for my blog over at Mywifequitherjob.com. And we are also using Drip for Go Brand Win as well. But we’re not here to talk about Drip. I have Dustin on the show because of his e-commerce expertise. And back in the day, Dustin executed the digital marketing strategy from the ground up for Backcountry.com the preeminent outdoor retailer online to generate over $350 million in revenue.

He’s also served as the CMO at armada skis and Vegas.com and advises several brands like Lyftopia, Altitude and RallyMe among many others. Anyway Dustin has a wealth of knowledge when it comes to growing e-commerce businesses to up to nine figures, and especially what it takes to win in the age of Amazon. And with that, welcome to show Dustin, how you doing today?

Dustin: Great. Thanks for having me Steve.

Steve: So Dustin, give us a quick background story about your entrepreneurial history and how you ended up at Drip actually.

Dustin: Yeah, it’s kind of an interesting story. So if it goes back to when I was in grade school, I was always trying to have a hustle, so actually sold candy at school to make money. And that was like my first business. And then through college, I was just lucky, I moved to Utah to go to school because the [inaudible 00:06:47] Utah was 27 miles from Alta Utah, which is one of the best ski areas in the world. And that’s how I ended up here and kind of focused my life around that passion. And then I was lucky to meet entrepreneurs here and we basically started Backcountry.com as ski bomb at the ski resort working in room service. So that was kind of how that started. That was in 94. So e-commerce and the internet was new at that point.

Steve: Oh yeah, that’s a long time ago.

Dustin: Yeah, it was really — I got to give credit to my buddy John because he’s the one that threw it out there and said we should sell avalanche beacons on the internet. And that was this obscure piece of equipment for backcountry skiing but back in the 90s, to get them you had to order them from Europe and it was really difficult. We basically got them from the ski patrol at the resort was normally where we could get them. And when we got a delivery of them one year, that’s when he said we should sell these on the internet. It was 94. So that’s kind of how we started on that path. And I’d gone to school for marketing.

And what really appealed to me about the internet was the fact that all the marketing we were going to do was measurable, kind of I was studying marketing in school and advertising. You learn these big theories and kind of reaching audiences and impressions, but they don’t teach you much about if it’s working or not. And so really, that’s what drew me to the internet was just thinking I can track everything I was doing. And from there, we were able to track what we did. But also we were able to build a brand with 100% native to the internet, never had a physical presence.

Steve: Was email a huge part of your strategy back then for Back Country?

Dustin: Yeah, we had it right from the start, so call it 2000 we were mailing. I think the platform was called WhatCounts. That might still be around. And yeah, back then it was a lot different, right?

Steve: Sure.

Dustin: There wasn’t as much spam and you got a better open rate and engagement. But yeah, what we learned pretty quickly is we were kind of opening marketing channels as they started. So when we started, there was no — Google.com wasn’t something that we could be on and we definitely didn’t advertise on it. So, as soon as it became the place everybody went, but it was only organically, we got really good at making sure we were indexed. And then as soon as AdWords came about, we got really good at making sure that we were really good at placing in that and converting.

And so that’s kind of how we built the customer base and then we would engage them with email but the reality is we engaged them because we were selling something that was their passion. And so that was kind of Back Country secret is we connected people to their passions, and our customers concern themselves athletes. So, somebody might be a dentist for the profession, but they’re actually a cyclist. They would say, I’m a cyclist first, I do dentistry. So that’s kind of how our customers described themselves and we were able to tap into that vein.

And then a lot of the lot of the things that we did that made it successful was it really always in this just one step behind Amazon. So we started to have community content really early on, we built our own review system and that was to drive SEO, because we knew if we had fresh content being posted to the product pages that Google was going to index more frequently and the best way to do that was to get the customers to do it. And then we added questions and answers, then we added photos and videos. And then we created this community leaderboard for contributions and kind of gamified the whole thing. And this is all before 2005. So that’s really what got the brand going and got the customer base really engaged.

Steve: So you left Back Country in 2013 and then he left Vegas.com in 2017. And so you have a whole lot of experience, like all throughout, and I was just kind of curious how has e-commerce changed? I mean, it changes very rapidly. So if you were to like do it all over again, what would your strategy be? And I know like Amazon, I think the latest 2018 numbers came out. And I think they have like 51% market share of the online retail market. So how would you handle e-commerce if you were to start from scratch today?

Dustin: Yeah, the biggest challenges have kind of been removed, right? There’s a new challenge with Amazon, but the fact that the technology component is removed — so back in the early 2,000s, we were having to build our own e-commerce platforms, we were having to host our own site, and scalability and solving those problems is really challenging. And so now with the Shopify, that’s just table stakes and you can focus on building your brand and connecting with your customers. And so that’s where you’re like, okay, but how do I keep them from going to Amazon? And so, that’s the, I guess hard trick today.

And the tool we have that we didn’t have, back in the early 2,000s is we have unlimited data storage and unlimited compute power that Shopify store can buy for $49 a month, through the various platforms out there. And so that’s how you’re going to take on existing names in the world, you’re going to leverage all that data, and you’re going to have a relationship with your customers that Amazon won’t. Amazon – I’m sorry, go ahead.

Steve: No, I was just going to say can give me some examples of what you would do, specifically with the data that you would get from a Shopify store that Amazon obviously wouldn’t have.

Dustin: So Amazon obviously has all the data that they want. But what they won’t do is they’re not going to take the time to bring any context or timing or guidance or expertise to the conversation. And so that’s where Amazon solved buying things, right, they made buying things really easy. They have not solved shopping. And so if you want to shop and actually engage in a category, right, so if you want to buy an avalanche beacon, and learn everything about avalanche beacons, and figure out which one is the best for you, and how to use them, and what other things do you need if you buy the avalanche beacon, that’s not going to happen on Amazon.

So that’s where that as soon as the shopping experience requires, or the buying experience requires one extra step, Amazon is no longer the best place to do that. And that’s where all the specialty retailers have an opportunity to excel. And then if you can layer on a brand that the customer want to engage with, and use to represent who they want to be on top of that, now you’ve built kind of a moat that Amazon is not going to be able to penetrate.

Steve: Can you give us an example of either one of your consulting companies or Back Country, can you give an example of how a store has done this what you’re describing right now?

Dustin: Yeah, I mean, that is what we did at Back Country. So every category we sold there, whether it was rock climbing, trail running, back country skiing, or camping, there was a bunch of guidance and expertise that we could bring to the purchase experience. And so once you bought from us in one of those categories, we would then engage you to find out what else you needed or what else you wanted to know about that category and then continually feed you that information. And we would go as far as we would have people actually call and reach out. So they still have this today. It’s kind of like a VIP shopper experience. They call it their gear heads.

And essentially, these are actual people that are experts in that category. And you have them on speed dial the customers too. So you can text them, you can call them, you can email them, or you can just follow them and they’ll just reach out and send you all their info and what products they think are good.

Steve: Interesting. How is this scalable? So if you’re calling your customers, can you kind of describe like the sorting process? I mean, you can’t call everyone right?

Dustin: Yeah, no, you can’t right. So it’s they’re segmenting the customer base by LTV. And it’s the 80/20 rule, right? 20% of customers are going to deliver 80% of revenue. So those are the ones that you’re calling and it does scale. And again, Amazon is never going to do that.

Steve: This LTV process, what are some ways that you can calculate it? So what is the process for calculating it because it can be kind of complicated, right?

Dustin: It can be super complicated. And so, again, with the SaaS platforms coming out, I think more and more of them are going to start to calculate it for you and I have no doubt that it’ll probably be native on Shopify soon. But essentially, you could just do gross merchandise value through the door and how much got returned. And some people get more complex, they’ll go, what did I spend to acquire those customers? What margin did I make when they came through? So it’s really — I think the key is you start, now would just do a count of orders. So you do — it’s called RFM, it’s a really old direct mail concept, recency, frequency, monetary, [inaudible 00:16:05], how much they’ve spent and do your RFM scoring on your base.

Steve: So can you do that — like what tools would you use to do that today? Would you just kind of do it by hand with a spreadsheet?

Dustin: Yeah, I would just do it. We might yeah — so I have a small Shopify store. We did do with the spreadsheet.

Steve: Okay. And then when you’re contacting them, I imagine you’re contacting other than voice too right, you’re probably using email. And what other avenues are you using? Are you using Facebook Messenger or?

Dustin: Yeah, so the other kind of big change in the world that’s just really becoming front and center and accessible to smaller retailers is your customers want to be contacted in a way that they choose. And they’re not going to tell you, right? Well, they’re going to tell you, but they’re not going to explicitly say, hey, don’t email me. They might opt in an email, but they never open the emails. And so the merchants got to be savvy enough to understand that like, okay, this person never opened emails, they only read the text messages we send or they only engage on Facebook. And so that needs to go on the customer profile. And then you guys have your automated flows going to that person. Maybe still email them but you have to follow up on Facebook.

Steve: Right, right. I mean, one of the big advantages of having customers in your own store as opposed to Amazon is that you have an email list. And since you’re on Drip, I thought we focus a little bit on email for the remaining part of this interview. So I guess question number one, let’s say you’re a brand new shop, and you mentioned you still have a small Shopify store, what are some strategies that you use to kind of buildup that email list as fast as you can?

Dustin: Yeah, it’s not the most articulate way to do it, but it works, right? You just offer them that first purchase discount. And that’s what my store does currently. I recommend that people try to find a contextual content offer. So don’t immediately choose to come to the website, just pop up and say, hey, you get 10% off if you give me your email, that works, and that’s why we all do it. But it’s much more graceful. And I think if you can do the work and figure out once somebody has clicked in a page or two, and you have some context on what they’re doing, you offer them content around that.

So like Lyftopia’s example, you’re shopping for a ski trip, they know what ski resort you’re looking at, they can pop up and say, hey cool, you want to go to Snowbird, do you want to know the 10 best runs at Snowbird? We’ll send you the secret guide. And then you get their email. And it’s in context to what they’re looking at. And they’re like, oh, that’s really cool. Yes, I need a guide. And now you have their email, and you can find all the data and they’re not really powerful, you can append the trip date to know, okay, they’re going to go in April, now we can set up a flow that communicates with them about their trip that they haven’t booked or if they have booked, and we can communicate with them about the purchases they can make.

Steve: Is this guy that you’re talking — this hypothetical example here, is this Dripped out via email or as a PDF guide? Like what does Liftopia do?

Dustin: Yeah, you would send them a — you can send them a PDF, or you can just send them a link to a blog article. Or you could possibly deliver the content right on the page.

Steve: And then would you go for — do you actually try to go for the sale in that sequence or is it just purely just building goodwill with the customer?

Dustin: Yeah, I think it depends on the buying cycle. So a trip like that people generally research and plan for 45 days. So this is your first touch with them, you wouldn’t immediately try to close the deal.

Steve: Okay, and so you just Drip it out and maybe when it comes close to time for them to actually go on their trip, then give them some sort of offer at the end of the sequence.

Dustin: Right, the 45 day research window is closing. And so then the flow starts to get more aggressive about hey, have you booked? Okay, yeah I have not booked. Well, then we can help you, and probably you can start to reach out and say, hey, we can call you or offer those little more high touch moments.

Steve: I know that a lot of people who do email, they get a lot of the stuff correct, right? They have a simple abandoned cart sequence, a pre purchase sequence and a win back campaign. But let’s say someone is on your pre purchase sequence and they never end up buying, what is kind of your strategy? What do you do with those people who are kind of done with your sequences in the beginning?

Dustin: Yeah, first, I’d look to see if they’re engaged. So you got people that are opening every fourth communication, clicking through, but never buying. And so, I would make that a segment of engaged users, but not customers and then try to figure out what commonalities are happening there. And so maybe it’s a certain type of content that they always click on. And you can start to figure out what they’re actually interested in why the rest of it is not encouraging a purchase. If you just put everybody in abandonment sequence, I don’t think you bring in enough of that context to what they’re doing to help move them through the process and kind of really start to build that relationship with them. So automation is awesome but if you rely on it too heavily, you’ll miss these opportunities, right? And so people engage it all the time but they’re not buying and why is that? Simple abandonment sequence and you’ve got to pick that up.

Steve: Actually, let’s talk about these segments. So you just mentioned one, like people who have engaged with the content, but haven’t purchased. What are some other segments that you can think of that you’d want to bucketize your list with?

Dustin: So the biggest bucket, the most valuable are the people who bought once. They made one purchase, they never made the second purchase, and really trying to figure out what can be done there. So most retailers fall in this metric, so essentially, if you can make that second purchase within the first 90 days, the probability that that customer becomes one of your best customers goes up like 90%.

Steve: Really, okay.

Dustin: Pretty much everywhere that I’ve worked, and we’ve done ridiculous amounts of data to figure out how many days is it, it’s always in that 90 day window. And so, most retailers that have done this analysis put a lot of effort into trying to get that second purchase out of their customer in the first 90 days. And so you should for sure have some type of automated flow that’s trying to encourage that. But again, if it’s kind of a one size fits all, it’s probably not going to work as well as opposed to figure out okay, this person shopped in women, this person shopped in men, this person bought shoes, this person bought jeans, what’s going to get them to buy their second purchase is probably totally different based on what their first purchase is.

Steve: Can you just kind of give us an example of a post purchase sequence of one of the companies out of that you advised or Back Country? How do you guys do it?

Dustin: Sure. So you bought — we can go through like a campaign scenario, because there’s lots of ancillary purchases. He bought a tent and so the first thing we do is we would follow up, probably about seven to nine days later, and just make sure you’re happy. So I think a lot of those in e-commerce, we immediately go for the next sale, and you got to remember that this is the customer, they just bought, you need to make sure they’re happy because if they’re not happy, you’re not going to get a second sale. So you got to check that box, make sure they’re happy. Do whatever you can to ask for a review, just simply ask them if they’re happy. Maybe they do an NPS score or something like that.

And then once they’re happy, maybe follow up with — in this category, we can follow up with maintenance advice, the back, hey, great you got that tent, here’s some things you can make sure it last you a lifetime. And at that point, maybe you could sneak in a small $10 item like hey, here’s a solution, you can scan it, keep it waterproof. And you actually get that second purchase and it’s only a $10 item and that generally would work. We just needed them to go through the purchase process. Again, it didn’t actually – they didn’t have to spend another $400.

And if again, if that didn’t work, then probably keep kind of enriching the content. And then you can start to find out if they have other items that go with the tent. And so we can start to send them content and then track what they’re clicking on. So we could send them a sleeping pad guide, like forget about the pant, let’s send them sleeping pad guide to engage them. That might be an indication they’re in the market leading cloud. And once we have that, and we know we’ve marked that, okay they are, let’s see if we can get them to buy this sleeping pad, maybe offer my special deal. They bought a family for per person tent, so offer him a deal on for a sleeping pad.

Steve: Interesting. So at this point, I guess you’re just tagging people based on the links that they’ve clicked on in your emails. And then you’ll — I guess you just branch out the further emails based on what they’re interested in. This can get pretty intricate pretty quickly, right if you have a lot of skews in your store?

Dustin: Yeah, it definitely requires orchestration. And again, like you can get it to where it’s ridiculous or you can just stick on the big bucket categories, right? So it’s not realistic for most small stores to build out 1,000 of these [inaudible 00:25:53].

Steve: So maybe just your biggest cash cow categories.

Dustin: Yeah. In the big stores, they’re able to do this because they have a big team, and they’re uploading all these flows through a spreadsheet and tracking them.

Steve: Okay, so you’re trying to get them to make their second sale. So what happens once they buy the second time? Do they go into a different bucket and what do you do with that bucket?

Dustin: Yeah, once they’ve bought a second time within 90 days, they would move into your high LTV customer bucket. And then at that point, those for like Back Country that meant they were going to buy four times that year. And so essentially that’s what usually just happened. But obviously once they’re in that bucket, now you’re just doing your normal targeting on them, okay, they’re interested in this category, not that, make sure that they’re getting that content, kind of doing the basic personalization.

Steve: So what does that look like, actually? And you can talk about how Back Country does it. So once they become a high LTV customer, what type of updates do they get after that?

Dustin: So after that, they’re engaged with the brand and they’re shopping frequently. And so we’re just sending them content that’s based on what they’re interested in.

Steve: Content or offers or a mixture of both or?

Dustin: Yeah, both. Back Country does — their offers are usually content focused. So it’ll be — so if you’re interested in the camp category, you bought the tent, were like, hey, we’re going to send you kitchen information. So you might get the stove guide. And then there might be an offer within that. And then what Back Country does now, which I think is just limited from their email platform, but they also just continually send all the weekly promotions out too and so that’s one thing I would not do. If you’re engaging, and you want to get email from me twice a week, that’s fine. But I would still make sure the offer was somewhat relevant to what you’re doing.

Steve: I see, so you would not just blast the same offer out?

Dustin: No, they do that right now. If they have a sale on a brand, the whole brand is on sail, then they just send it to everybody. And it’s not usually relevant to what I’ve been buying.

Steve: Can we talk about that? Like, what is the negative aspect of doing it that way? So let’s say someone doesn’t open, it doesn’t cost anything to actually send the email. So what negative effects would you see from doing it that way?

Dustin: Yeah, so the more you contact your customers with things that aren’t relevant to them, the less they engage, until you’re going to slowly see that open rate drop, and that click through rate drops. And as opposed to like, looking forward to that once a week email from Back Country and getting one every three days. And so I’m starting to not open all them and I get busy and kind of delete everything in my promotions folder, and I don’t get a chance to look. And then when you send me something that’s actually retargeted, I don’t see it. So it’s that — yeah, we’re all have limited time. And I think we need to be considerate of our customers’ time. And when they engage that they’re choosing to do that, so we need to make sure it’s relevant.

Steve: I guess the mentality of a shop owner when they’re blasting like that is, hey, there’s an off chance that someone is going to take advantage of that promotion. And if I don’t send it to them, let’s say they were segmented wrong, then I may be missing out on potential sale. How do you reconcile that fact?

Dustin: Yeah, it’s really hard because if you do the cast and blast, it always generates revenue. And it takes a while before that revenue starts to decline, and you start to wonder what’s happening, especially if your store is growing really fast, you can actually mask the fact that you’re just kind of churning through your customers, because you’re continually adding new ones. And they want to be casting blasted for the first couple of months of the relationship. And then they eventually stop opening too.

Steve: So what do you do with the people that start opening less? I imagine you segment those folks as well.

Dustin: Yeah, so that that goes back to ideally under segmentation dial, then you’re monitoring the content they’re opening, and you’re making sure that they’re getting more of that or less of that. But if people aren’t opening, you got to stop mailing them so much. Like, that’d be the first thing. One of the tricks out there that does work that it’s really easy to do in Drip is to resend to people who didn’t open. Super basic, but it works really well because — and this is just in general in the population. Obviously, you’re looking at a segment somebody hasn’t opened a long time and can be different. But anything you send, you should always reset to people who didn’t open and then if they haven’t opened and you’ve been doing that continually, like okay, I have an unengaged user here, but just so we check that box that you should resend to people that didn’t open because sometimes the second time is a charm. We usually see about 15% increase in revenue, when people send to the people who didn’t open.

Steve: That’s interesting. I was talking to someone else about email, and they only recommend resetting to unopens for your most important campaigns because when you do it too often, it tends to have a negative effect on the overall deliverability rate. I don’t know what’s your opinion on that?

Dustin: Yeah, I think it’d be really hard to tie that activity to deliverability rate, but that logically makes sense. And again, that’s where you got to be looking at who you’re mailing. And if they’re continually never opening, then sending them a resend to them because they didn’t open is not a good idea.

Steve: So when do you just finally say, hey, I’m going to kick these people off? Like, what’s your threshold for that?

Dustin: I don’t think you should ever kick people off unless obviously they’ve asked to be removed. So, at this point, the email address is kind of the golden ticket to digital marketing on the internet. Now, if you have an email address, it can enhance your marketing across many platforms, not just Facebook. And so if they never open their email, you don’t ever want to delete their address or not use it, you want to still append data to it, and use it to market across the Internet, and try to get them to reengage.

Steve: Okay, and what are some ways that you would do that?

Dustin: So obviously, Facebook and Instagram are the ones that are built into the platforms. Google is slowly opening their networks, if you have an email address, you can increase your bid for AdWords. You can obviously do Gmail advertising. And I believe, I’m not sure if the retargeting works out, the email doesn’t, I don’t think it does. But just AdWords and Gmail, those are the two biggest places people go to search. And so if you have an email address, then you can enhance your bid, when someone searching, that’s part of your customer base. That’s pretty powerful. So I think the email address is kind of the key to how you’re going to spend and get ROI. And so if you can’t send them an email, it doesn’t mean that email address isn’t worth something.

Steve: So the people that aren’t opening or haven’t opened in extended period, you just stop sending those people and you just use those as retargeting audiences?

Dustin: Correct?

Steve: Okay. Would you ever just occasionally try to email them again and see if they respond? Or what is kind of your threshold for that?

Dustin: Yeah, I think once a quarter; you should try to come up with something to see if they engage or something like that. And again, just make it targeted and maybe make it an offer to have a call or something if they’re category enabled, that they may want some totally different conversation with you. Or maybe they’re really angry and they want to vent. I don’t know.

Steve: I know a lot of store owners, they have this like one gigantic monolithic list that isn’t segmented. So, so far, we’ve talked about different buckets, like they’ve purchased once and high lifetime value people and people who aren’t that engaged. How else would you go about taking this one monolithic list and just kind of breaking it apart after the fact assuming you didn’t tag when you were sending the emails?

Dustin: So and there’s no data as it is, it is just a list.

Steve: There might be data appended to it I guess from previous, I guess it just depends on which email provider but yeah, let’s say you do have some data about previous sense of content and offers.

Dustin: Yes, I would just start at the simplest segmentation, the highest level you can come up with. And so whether it’s category, or it’s just recency from when they’ve engaged, like, okay, this is what people who in the past 90 days were engaged like, okay, those are strike while the iron is hot concept, those people are probably your best bet. And then start to bucket it out from there, llike, okay, these people have a bottom 24 months, and then figure out what goes on with your product category. That would imply, okay, 24 months have gone by, why haven’t they come back? It’s like, okay, maybe they’re right. In travel, a lot of people only take a trip every 24 months. So actually Vegas, people who hadn’t bought 24 months was a valuable list because they’re ready to come back.

Steve: Interesting okay.

Dustin: And feedback, hey, it’s been this long since you’ve been on a trip, I bet you’re ready to take another one, let us help you find one. Those types of conversations you can have there. When you sell physical goods, again, you have to figure out the characteristics of what you’re selling.

Steve: And in terms of guidelines, do you have any in terms of like determining whether you’re doing well? Like what’s a good open rate? What’s a good click through rate?

Dustin: I really think that is — looking at averages out there is really difficult, because so many people email poorly. I think the average e-commerce open rate is like 15% or something. But I’m sure your listeners and people on Drip, it could be much higher than that.

Steve: Of course.

Dustin: And it’s because they’re sending targeted messages with data right? And so, yes, that’s a tough one to answer without knowing what people strategies are. Throughout my career I’ve seen 15% with really bad practices.

Steve: Well, let’s flip it. What is considered a poor open rate where you definitely need to start looking at what’s going on?

Dustin: Yeah, I would say 15% is kind of the Mendoza line where like, okay, that’s probably average for people that don’t do it very well. And if you get below that, then something is wrong. The content is not resonating, the list isn’t segmented, maybe you’re just simply mailing everybody too much. I don’t know. But we like to — if you have a really engaged audience, and you’re sending them relevant content, you can see 40% open rates.

Steve: What’s funny about not emailing the people that haven’t opened in the past is that if you’re not emailing them anymore, you’re not actually giving them a chance to perhaps open an email. And so I’m just kind of curious how this — is this life cycle emails that you’re talking about here, is it mostly automated, meaning like as soon as they drop down a bucket, they are given a separate sequence and as soon as they’re upgraded to like the high LTV bucket, is there a separate autoresponder sequence? Or are you just using those buckets mainly for broadcast that you’re setting up?

Dustin: No, ideally your customer list is segmented by LTV and they’re dropping into their automation based on that, and then you’re going to do a broadcast, I think that’s a separate exercise where you determine if you’re going to dump everybody in or not. Does that makes sense?

Steve: Yeah. So the broadcasts depending on for example, if you have a certain sale in a segment — okay, actually, let’s take that example. Let’s say you have all your buckets that we’ve already talked about so far and you want to do a broadcast of a specific item. Do you send that broadcast to everyone who you think might be interested in that item or has shown interest in that item across all of your segments? Or do you just do it to your, I guess, your better segments to people who have purchased before?

Dustin: Yeah, I would think it would depend on if it was a special offer, a limited edition item, or something like that, how deep you want to go because when you have a really compelling offer, that’s probably the time to try to wake up the sleepy part of the list. I would just calculate it based on that, like okay, this is a good time to talk to the people who haven’t bought for 24 months, but had interest in this category? Or is this a limited, I only have 20 of them and I want my best customers to have first shot at it and kind of create a scarcity and exclusivity messaging for that segment.

Steve: Okay. Outside of email, what are some of the other growth strategies that have worked well with the companies that you’ve advised in terms of getting people to just buy more often?

Dustin: Yeah, so after we’ve acquired them as customers, obviously?

Steve: Yes, that’s correct. Yes.

Dustin: Yeah, treating them as a person, and kind of not always trying to sell them is definitely the best method. And so I’m pretty lucky I don’t deal with a lot of companies that just sell commodity widgets, there’s always some passion or something behind it. And so once the customer comes in, you want to welcome them into the family and make them feel like they’re part of the movement. And that’s generally the best way to build loyalty and kind of really get them to be your fan and promote you. And that’s kind of what all the brands I work with focus on. So once they’ve had that transaction with them, we then work through all the ways to enroll you in the brand. And frankly, a lot of that happening through email, but then you just have to track what they do, right? And getting them to contribute content and write reviews and things like that are really key today.

Steve: You bring up a pretty good point there. I think just even determining what you want to sell or how you want to structure your own business going forward, you probably want to choose an item that is conducive to having a following right, and is conducive to having like a fanatical audience, as opposed to selling like just regular widgets online.

Dustin: Yeah, I mean, either you’re going to celebrate the widgets like the Shopify store I have sells reading glasses. That’s about as regular of a widget as you could get but we built a brand and a movement around it that is working. And so, we sell these reading glasses for people that don’t want to wear reading glasses essentially.

Steve: That would be me actually; I’m starting to get farsighted. Tell me about this movement actually. How have you created it?

Dustin: Yeah, it was my buddy’s idea. And he essentially — same problem you’re having right? He’s like having trouble reading menus. That’s how it starts. Then your kids are like dad, your arms must be long enough to hold the menu far. Yeah, anyway, so he went to go solve this problem, he is like, wow, the only option is to go to the optometrist and spend a ton of money or go to the drugstore and buy granny readers. He’s like, none of those appeal to me. And so essentially just build a brand around people that wanted — that had to solve this reading glass problem but weren’t willing to kind of sacrifice I guess style is how we frame it.

But basically, he made it into a movement about aging awesome. And so we’re all Generation X. And basically, none of us are willing to stop doing what we’ve done our whole lives. And that’s really what the whole brand is about. So he’s gotten influencers into the brand, and we kind of launched it with four models, the glasses, influencer movement, and it’s worked incredibly well.

Steve: Interesting. So, this audience that you have isn’t necessarily interested in glasses, but it’s the targeted demographic? And your content, I imagine it doesn’t have do with glasses most of the time, right?

Dustin: Yeah, it’s a side project for everybody; we’ve been really slow to get the content going. But you’re correct; the monthly broadcast would have nothing to do with glasses. It would have everything to do with ageing awesome and just really cool things people are doing in life.

Steve: Okay, right, right, right. And so that way people actually would be very conducive to opening those emails. I know I would as someone who’s starting to get farsighted, but just that whole bucket of aging awesome; it’s almost like a blog at that point, right?

Dustin: Yeah, essentially, that’s a very good way to look at it, even we created a blog audience and there’s products behind it that help them kind of be part of the movement.

Steve: And this store, I imagine it’s not limited to just selling reading glasses, right?

Dustin: It’s not; it only sells reading glasses today. But the way he’s built up the brand and age awesome, it opens itself up to other categories pretty easily.

Steve: Nice. Does he sell on Amazon? Or this is your store too; do you guys sell on Amazon?

Dustin: Yeah, we put it on Amazon just to see what would happen. We didn’t put much effort into it, honestly. So yeah, just for — sure that numbers, no big deal. We do about 50 orders a day and we would get one order a day from Amazon.

Steve: How do you reconcile that? So let’s say you were making like 100 orders a day on Amazon, how would you kind of reconcile like where to put your efforts? Do you just put all your efforts on the highest paying channel or would you still focus more of your efforts on the store?

Dustin: Yeah, I would focus efforts on the store. Amazon, selling on Amazon is just a cash flow exercise. So if you need to convert your inventory into cash, it can be beneficial there. But you don’t get the customer, and so other than you’re getting your product in the customers’ hands, but if they bought on Amazon, they’re probably going to go back to Amazon to get it again. It’s really hard to enroll them in the brand.

Steve: Do you ever point people — in this reading glasses store, do you ever point people to Amazon or do you always point — the reason why I ask this is some people just always buy on Amazon, right?

Dustin: Yeah, I think people buy on Amazon until they don’t, right until they need more info to make the purchase. So, finding really cool reading glasses is just not something people would even think to start that search on Amazon for. And I think that’s why we didn’t sell that many there because if you’re going to look for reading glasses on Amazon, you’re most likely in the mindset you’re going to pay $12 for them and ours cost 90.

Steve: Right. Okay, that makes sense. Cool. Well, Dustin, that I just kind of want to end this by giving you a chance to talk about some of the companies that you work for or promote or whatnot. And where can people find you online?

Dustin: Yeah, you can find me on LinkedIn and Twitter. It’s just @DustinRobertson. And then obviously, if you want to learn more about how we’re appending data and enhancing the e-commerce shopping experience, check us out at Drip.

Steve: I do want to say a couple of things about Drip. I mean, one of the reasons why I use it for my Wife Quit Her Job is because of its tagging abilities. Basically, you have at your disposal what any person has done. And as soon as they click on a link or interact with something, you can tag them appropriately and then do some of the things that we talked about in today’s interview. So Dustin, thanks a lot for come on the show. I really appreciate your time.

Dustin: Great. Thanks for having me, Steve.

Steve: All right, take care.

Dustin: Bye.

Steve: Hope you enjoyed that episode. Now for everyone who thinks email is dead, well guess what? Email is not dead. And the key to a successful email strategy relies on the proper segmentation. For more information about this episode, go to Mywifequitherjob.com/episode252.

And once again, I want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any primer that is closely tied to your ecommerce store. Now, if you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. So head on over to Mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s Mywifequitherjob.com/K-L-A-V-I-Y-O.

Now I talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast where we’re giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.Mywifequitherjob.com.

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Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

251: Tim Soulo Of Ahrefs On How To Rank Any Website In Search

251: Tim Soulo On How To Rank Any Website In Search

Today, I’m excited to have Tim Soulo on the show. Tim is the Chief Marketing Officer at Ahrefs, an industry leading SEO tool powered by Big Data.

He has 10 years of practical experience in SEO and digital marketing. He loves to share his knowledge of SEO and he speaks at industry conferences all over the world.

Enjoy the episode!

What You’ll Learn

  • What’s working with search engine optimization today
  • Tim’s main strategy when it comes to ranking a site in search
  • How and where to promote your content online
  • How to rank an ecommerce store in search

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
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Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into the strategies they use to grow their businesses. Now today, I have Tim Soulo on the show, and Tim is the CMO at Ahrefs, which is the best all in one SEO research tool out there that I actually use multiple times per week. And today we are going to discuss how to rank websites in Google search.

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%.

You can also use Privy to reduce cart abandonment with cart saver pops and abandoned cart email sequence as well at one super low price that is much cheaper than using a full blown email marketing solution. So, bottom line, Privy allows me to turn visitors into email subscribers and recover lost sales. So, head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve.

I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. Klaviyo is the tool that I use to build real quality customer relationships with my e-commerce store. Now, because all my transactions and email correspondence is tracked in Klaviyo, I can easily build meaningful customer relationships by listening, understanding and taking cues from my customers and deliver personalized marketing messages.

So for example, with one click of a button, I can easily send a specific and targeted email to all customers with a lifetime value of over $100 who purchased red handkerchiefs in the past year. Now, it is for this reason why over 10,000 brands have switched over to Klaviyo. And you can try them for free at Mywifequitherjob.com/K-L-A-V-I-Y-O. Once again that’s Mywifequitherjob.com/K-L-A-V-I-Y-O, now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle so you can spend more time with your family and focus on doing the things that you love. Here’s your host Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m excited to have Tim Soulo on the show. Now Tim is the chief marketing officer and product advisor at Ahrefs an industry leading SEO tool powered by big data. Now he’s got 10 years of practical experience in SEO and digital marketing. And what I like about Tim is that he loves to share his knowledge of SEO. And in fact, you’ve probably heard him speak at industry conferences all over the world. And on a personal note, I’ve been using Ahrefs for a while now. And it has been invaluable for helping me perform an SEO site audit for both my blog and my online store. And today, I actually don’t even write a blog post at all until I’ve run the tool. So I’m super excited to have him on the podcast. And with that, welcome to show Tim. How you doing today, man?

Tim: Hey, Steve, I’m doing fine. Thanks a lot for inviting me to the show. And thanks a lot for that awesome shout out to Ahrefs, I’m super glad to hear that you’re actively using it.

Steve: You know, I’m so glad to actually get this interview in the books because I know it’s kind of difficult to schedule an interview with someone in Singapore. So I’m really happy it worked out.

Tim: Yeah, thanks. Thanks for being flexible with your time really.

Steve: So some people in my audience probably don’t know who you are. So if you wouldn’t mind just giving a very brief intro about how you got started with SEO and the history of how you kind of became involved in Ahrefs, that’d be awesome.

Tim: Yeah, so I started in SEO, I think 10 years ago now. So yeah, I basically landed a junior SEO job at my hometown back in Ukraine. And from there, I was simply learning everything I can. I was trying out my own websites to rank them to make money from them and then gradually progressed. And I would say just by accident, because I was kind of working on my own projects and kind of trying to promote myself as a marketer trying to promote my own projects. Ahrefs CEO kind of noticed me; he noticed what I was doing online.

And he — at first he hired me to do some kind of freelance work for Ahrefs, but eventually it ended up that I came to Singapore and he made me marketing director, it was three years ago. And I was actually marketing director with no marketing department, because when I joined Ahrefs, there were only 15 or 16 people and I was the only marketing person. Yeah – so I was marketing director with no one reporting me. Yeah, and today, we’re at 45 people in our team. And so I think our marketing team was like 10 people or something, depending how you count, because I kind of feel there’s some kind of convergence between our support and customer success department and the marketing department, because the roles are quite similar to those. So yeah, but yeah, our marketing department, I’d say is like 10 people.

Steve: Cool. Well Tim, hey, let’s talk about SEO. So can we talk about first, what is working and what is not working in terms of ranking in search today?

Tim: That’s an amazing question.

Steve: it’s a loaded question but yeah.

Tim: Yeah. And like for anyone who’s listening and who is getting ready for me to start plugging a lot of technical SEO jargon or some concepts that people won’t understand, it’s not what I do. Actually, I’m not like a super technical SEO, I don’t like to get really deep into it, I prefer the basic concepts. And I think that on the surface level, SEO is like super simple. All you need to do is you need to figure out if people are searching for whatever you have there.

So if you want to write an article, you need to figure out if people are searching for the topic of that article, and then you need to build links to it. So these are the only two things that you need to nail and you’ll be good. All the other like Hreflang, and like multi lingual SEO and schema.org and blah, blah, blah, blah, blah, it is it is complicated and it only helps a little. But you need to nail those two foundations.

Steve: Okay. Actually, let me start by asking you a question specifically. So recently I performed an SEO audit where actually eliminated, I would say maybe 35, 40% of the posts that just were not very good. Have you found that SEO site audits where you’re eliminating bad content has improved search rankings for your clients?

Tim: To be honest, I cannot tell you exactly if it does help or not, because we’re not an agency.

Steve: Sure.

Tim: So we work on our own blog. We don’t work on blogs of other people at scale. So we didn’t have an opportunity to test for example, you have two similar blogs. And one of them, you will delete a lot of content that doesn’t bring search traffic and redirect those articles to some other relevant ones, and on the other blog you will leave things as these and see which blog will perform better. So we didn’t do this kind of experiment. But on our own blog, we are continuously and constantly deleting any underperforming articles.

Steve: But just let’s say the content wasn’t outdated, it just wasn’t performing that well, you would still recommend removing it, or redirecting it?

Tim: If the content is good, and the article is not doing well, what I would recommend is first to check if there’s a surge demand for this kind of topic, this is something that I just said. You need to make sure that people are searching for whatever you’re writing about in your article, and that your article is kind of tailored towards this search, so that you’re matching the search intent. And the second thing, if article is not performing, it needs more links because links is what is the kind of primary ranking factor in Google, it is what gets you to the top of Google.

And then like I said, what we’re doing at Ahrefs, if we publish a great article, and then it doesn’t end up ranking well in Google, the first thing that we’ll check is if we’re matching the search intent, if our article is what people searching for something specific want to see. And then we would probably rewrite it with some new information, we would make our headline for example, more better and have some more interesting promise within the article, add some information, remove some information, maybe actually make the article shorter, if we decide that people are probably reluctant to read a lengthy piece.

So we will try to figure out how to kind of please our potential readers, and then we will relaunch the article as if it is entirely new, you will send it to your email list, we will promote it with Facebook ads, we’ll send some outreach emails in the hopes that people might link to us. And usually after an update, after a kind of clever update, quite a few articles start performing well. But sometimes it takes us I don’t know, three to four updates to finally figure out what the article should look like and to finally accumulate enough links to that article for it to be able to rank. So yeah, we don’t look at our content as one off pieces, we’ll continuously go back, review how the articles are forming and if we should invest time into updating and re-promoting them.

Steve: So what is your process? So you mentioned a bunch of things there, right. So search intent, what is your process for determining whether your article matches the search intent?

Tim: It’s just like common sense. So it’s hard to explain because there’s no like process in like instead like do you do this first, do the second, I’ll just tell you what recently happened with one of our articles. And I think if people will be able to understand how we do it here at Ahrefs. So we published an article on the topic of what is SEO, because a lot of people are searching for things like what is SEO and blah, blah, blah, then you want to direct them to the article. So we thought it would be kind of smart to reach out to the most prominent people in our field, ask them this question, what is SEO? And we kind of knew that everyone would give different answers, because there is no specific definition for SEO, everyone understands it as they want.

So we got a lot of interesting answers. We kind of created our article. Now on top of these answers, we created what people were telling us, the structure we did nicely and created an article what is SEO based on what prominent people in our field told us. We promoted it, some of these people tweeted it because they had their quotes there. But the article didn’t end up ranking in Google. So when we posted this article on our kind of internal Slack channel and started discussing, why didn’t the article perform that well? It was actually our CEO, who said, are you sure that people are searching for what is SEO in Google? They’re looking to get quite advanced answers from the top people in the SEO field, maybe they’re just looking for super basic explanation what is SEO like on the most, most surface level, instead of going into deep details and complex thinking process that those experts had offered us?

And so right now you’re thinking, yeah, probably when people are searching for what is SEO are getting high quality, complicated answers from top people in the field is probably not what they want. So yeah, this is how we kind of make sure we nail the search intent. We just try to put ourselves in the shoes of searchers, and figure out what could they — like what do they need when they search for something? What do they mean when they search for x? So this is our process.

Steve: So let me ask you this, though, you keep using the word underperforming. So what are the metrics that make it under performing in the first place? Like do you look at your analytics data? Do you look at bounce rate, time on site? What do you look at?

Tim: Yeah, this is a great question. And for me underperforming is I simply search for something in Google, I take the top ranking articles, I put them into Ahrefs, and I look at how much traffic these articles get in total. So, whenever we publish an article, and we see that this article, first of all, it doesn’t rank on the first page of Google for the terms that we wanted it to rank for, and second, if that article is not getting as much traffic in total as those top 10 ranking articles for the topic, we consider it underperforming. We don’t — yeah sometimes when like with that article about what is SEO, we might go to Google Analytics and look at the time on page, are people actually reading this article?

And if time on pages low, it means that we are failing to make people interested in that article. And so we need to rewrite it. Maybe we need to put better information, or if the information is already good, maybe the actual writing style is not kind of up their alley. So yeah, probably time on page is the best indicator that readers are not interested in the article. And in terms of performance, like your goals, what kind of goals you have with the content marketing, we look at how well the article ranks in Google and how much search traffic it gets in total, because article doesn’t rank for a single keyword, it will rank for a lot of search queries.

Steve: Actually, you know what? So when you’re talking about time on site, what is your baseline for comparison? Do you look at like your average time on site for an article or what are your metrics?

Tim: There’s no baseline actually. And usually, the time on site would be either like super small, like less than a minute. No one can read a lengthy article in less than a minute. Or it can be like three minutes plus, and it means that it’s okay, because it’s average. So some people will read the article till the end. But some people will read only a little bit and bounce and this way skew the average number to a lower one. But usually, the time on page should be relative to the length of your article. So I think the average reading time is 200 words per minute I think, I don’t remember, I need to Google it. So just calculate what is the average time to read your article and then look at your average time on page for that article and you’ll see if people manage to read it till the end within the time frame.

Steve: Okay, you know, this question actually Tim just came into my mind right now, should I be indexing my podcast episodes? Now there’s a transcript, but most of my podcast episodes never end up ranking, because there’s no structure to the content. So do you recommend people index their podcast pages on their blog?

Tim: This is a good question, so yes and no. So on one hand, for example, with these podcasts; I don’t really see what kind of search it would fall into. Do people search for interviews of Tim Soulo? I’m afraid I’m not [overlapping 00:17:12] means or whatever, for people to be searching for interviews with me. So probably you won’t get any search traffic out of it. You could try the ranking for I don’t know effective blogging strategies. If that’s not too competitive, you could kind of call your podcast effective blogging strategies, have all the transcripts there, and probably, you would be able to get some traffic towards it.

But if your podcast names are generic, and if during the podcast you discuss a lot of different topics with each of your guests, it would be really hard to rank for anything, since you’re covering so much stuff in one podcast episode, so the page will be relevant to too many things at once. So yeah, he you should either go for more focused episodes that talk only about a single topic, or I don’t know, no index your episode so that Google won’t see a lot of pages that don’t have any traffic from search and don’t really don’t have specific topics.

Steve: Great answer. So, Tim, you also talked a lot about backlinks right in terms of ranking. So what is your blog’s strategy for building backlinks?

Tim: I’m not sure that our own strategy would be relevant to people because we have a large enough audience and we have a good enough budget. So our strategy is simply send email to all our email subscribers, post our article a few times on Twitter, Facebook and everywhere where our friends and our customers are following us, and also put like $300 plus into Facebook ads. Some of it goes through retargeting past blog visitors, some of it goes to reaching new audiences. And simply by doing these things, we reach enough people to have a high chance that some of these people because we are also in internet marketing niche, which means that almost everyone in our niche has a website, some people have like three to five websites, some people have 10 websites.

So basically our audience is audience of people who have websites, and simply by reaching this audience with our articles, we have a high chance that we’re going to get backlinks. So we are frequently mentioned in different roundups, people post our articles on different forum discussions, etc. etc. So we don’t need to be kind of proactive in terms of building backlinks. And we also have kind of a trusted brand right now. So it also helps. So our strategy would only be relevant to companies who are kind of at our stage, who have their audience, who have their brand, and who have some budget in terms of paid promotion of their content. But for people who are just starting out, there is no better way to promote your content to get backlinks other than reach out to people in your niche who have websites.

So like I said, for the most part, you can only get a link from a person who has a website. If a person doesn’t have a website, it is unlikely that you will get a link from them unless they will post it on some public forum or whatever. So a good strategy is to simply make a list of all websites in your niche. So for example, if you’re a travel blogger, you should have a list of all other travel bloggers, you should have a list of all other travel websites, you should have a list of websites or e-commerce stores that sell some travel stuff, etc. etc.

You should know your kind of online niche. And whenever you publish an article, you should out of all these websites that you know, you should create a list of people who might be interested in reading that article, and who might be interested in linking to that article from their websites, and just reach out to them and show them your article. And if your article is any good, if it is relevant to these people, there’s a high chance that they will link to it, maybe not immediately, maybe simply going forward in a month, in two months but you might lend the link.

Steve: I was kind of curious how you’re going to answer that because I was going to give my answer to that question.

Tim: Sure.

Steve: So for me, I feel like SEO, at least the back linking part is all about social engineering at this point. So you really have to go out and try to meet people, other webmasters become friends with them and basically you help each other occasionally when there’s a post that you want to rank. And like you said, you can’t — it’s really hard to just cold email someone and get them to link to your site. But if you already have a relationship with them, the likelihood of it happening is much greater.

Tim: Yeah, exactly. Actually, I look at marketing overall, as an interaction between people. Some people like to think of marketing, as I don’t know, in terms of campaigns or in terms of growth hacks, but what I see it’s all about relationships. When you want someone to read your article, it’s not mechanical, it’s not that you use some mechanical or I don’t know, psychological trick to kind of persuade that person to tweet your article, it doesn’t work this way. You should you should have an amazing article, then you should have some kind of connection to the person, for them to even care about reading your email or listening to you.

And when you’re marketing to your audience, you’re marketing to individual people as well. So it’s not that you could use some tricks or some mechanics to somehow bring tra — a lot of people think of traffic to their website as just numbers. I think of traffic to my websites as individual people, as real people. So yeah, it’s all about interactions. It’s all about building your relationships. It’s all about building community, building your brand. So I totally agree with you.

Steve: Yeah. So Tim, let’s switch gears a little bit. And let’s talk about everything that you do before you put down a blog post, like how you do keyword research, how you determine whether it’s going to be easy to rank for or not, what is your process?

Tim: It is super easy. So I’m using our own tool, I’m using Content Explorer, because I don’t think I saw this feature in any other keyword tools. So basically, what they do, whenever I have an idea of any article, I will just formulate a search query without even thinking of it. So for example, for what is SEO article, I could write into keywords Explorer, like how does SEO work? Or what does a show mean? Or what does SEO mean today? Or how do you study SEO in 2018? So I can come up with any search query at all, without thinking if other people around the world will search the same way as me.

And the reason I do this is because our tool keywords Explorer, what it will do, it will pull the top 10 ranking pages for any search query that I put into it, just like Google. So you basically can do this with Google, not with keywords Explorer. But the only difference is that keyword explorer will then show you the total search traffic to each of the top 10 ranking pages. So we don’t need to know the exact keyword like the most popular way of how people search for something, I only need to search it in my own words, and Google will still rank the most relevant page and Google will rank the same page for all the search variations that other people would use.

So wait, I’m only interested in the total search traffic potential of the topic. And that’s basically, a lot of people; they look at the search volume of individual keyword, which obviously correlates with the total search traffic that you’re going to get from all different search query variations that other people will use. But sometimes, there are cases where the individual search volume of individual keyword would kind of discourage you from making an article on the topic. But in total, the top ranking page would get a lot of traffic from all the keyword variations. So yeah, I don’t just look at the individual — on the search volume of an individual keyword, I always explore the top ranking pages and how much traffic they get in total. And this is what kind of drives my decision if I want to pursue this topic or not.

And in terms of figuring out the difficulty, so first of all, I try to simply ask myself for a question like, will I be able to create a better page on whatever topic I’m targeting than those pages that already rank there? What would be the value for searchers, for people? How am I going to stand out? Why would Google consider ranking me above those pages that are already there? So if what I’m going to do is take those top 10 pages, rewrite them in my own words and put my own article, that’s not going to work, I need something original, I need something new. I need something that will stick with people more than the top ranking pages.

And if I know that I’m able to come up with a better piece of content than those top 10 ranking pages, the last thing that I would look at is the number of backlinks that they have, and specifically the number of unique websites that are linking to each of the top 10 ranking pages. If I see that most of the top 10 ranking pages have, I don’t know 50 plus backlinks, backlinks from 50 plus pages, it means that the topic is quite competitive, especially if they have like 100 plus backlinks to each of the top ranking pages.

But if I see that most of the top ranking — top 10 ranking pages don’t have many backlinks, it means that it would be easier for me because I’m kind of estimating my own chances to get as many backlinks with my own article. And I know that getting like 10 backlinks for us at Ahrefs is like super easy. We don’t need to bother about it at all. But if we need to get like 200 backlinks from 200 websites, I know this is quite challenging. So we won’t be able to rank within those search results that easily.

Steve: Doesn’t the quality of the backlink matter? I mean they could have 200 backlinks from crappy sites, right?

Tim: Yeah, that is true and quality does matter. But for our own process, we don’t really spend that much time researching. So we don’t really dig into the quality of backlinks of the top 10 records. So if you’re analyzing top 10 ranking pages for the keyword that you want to rank for, and each of the top 10 ranking pages has 200 backlinks from 200 and plus websites. So this means 200 times 10, it would be 2,000 backlinks that you need to review to even make a decision if you want to write article about this. So in our case, it is quite different. We simply decide if the topic is important enough for us to go and wrestle with those big guys.

And if it is important to us, we will still write an article even if we see that the top ranking pages are super competitive. But then we’ll use their backlinks, we’ll use their like 2,000 backlinks of that top 10 ranking pages have in total to piggyback from them. So we’re going to see who is linking to them, we’re going to reach out to all these websites, we’re going to show them our content, hoping that those same websites will link to us as well, because they linked to these pages.

Steve: What’s your hit rate when you try to do that? I imagine you’re reaching out to strangers, right for this.

Tim: Yeah, we’re reaching out to strangers for sure. But again, here at Ahrefs, we have kind of a rule, we don’t explicitly ask for a link. So we don’t reach out and say, hey, I saw that you’re linking to this article from your article about this, can you please put a link to us as well? We never do that. We consider it kind of sketchy or we consider it stupid I would say. We simply try to impress people with our articles. So what we will do instead, we will reach out and say, hey, I found your website, I see that you’re interested in this topic. Now I recently wrote an article about this and the cool thing about this article, or the interesting fact from this article is that, this and this and this. So if you’re interested to learn more, if that was interesting enough to hook you, you can read the entire article here at this link.

And so we simply track if people are opening our emails, if people are replying to our emails. So if a person will actually reply to our email and say, yeah, that was like an interesting fact, I never thought that I could consider this topic from this angle, and blah, blah, blah, we then might reply to that person and say, oh, it’s awesome that you enjoyed our content. Well, if you ever find a chance, if you ever have a chance to link to that article, we’ll be super grateful but that’s it.

I just wanted to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you are interested in starting your own online store, I put together a comprehensive six day mini course on how to get started in e-commerce that you should all check out. It contains both video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online. Now this course is free and can be obtained at Mywifequitherjob.com/free. Just sign up right there on the front page via email and I’ll send you the course right away. Once again, that’s Mywifequitherjob.com/free. Now back to the show.

Steve: What is your hit rate? Because I know I get emails like that almost every day and it never works on me, like never even if the article is awesome. So what is your hit rate?

Tim: The hit rate is pretty low. I think out of a hundred emails, we might get five backlinks within the week.

Steve: That’s too bad actually, that’s higher than I was expecting.

Tim: Yeah, but that’s because we have a brand and a lot of people in our industry know us. And that’s because we often try to create amazing content that is better than anything what’s already there. So if people are trying to reach out to others with kind of average articles, and without having any brand at all, I guess it will be harder for them. But still, if I were starting out again, I would still do this because by doing this, you’re putting yourself on the radar of a lot of people. And even if you reach out with the first article and no one replies, you then write a second amazing article and then you reach out to more people. And then you write the third amazing article and then you reach out to more people. And some people start noticing and sure, that you just said that it doesn’t work on you.

But I’m absolutely sure that you’re noticing that there are certain people who produce amazing content; you see a lot of people that reach out to you with stupid content with simple articles that you’re not interested in. But sometimes you see that someone is really promising. For example, back in the days when I just started working on Ahrefs blog this way, I actually found a few kind of guest writers for our blog, because people reached out to me with articles that I enjoyed. So by reaching out to people in your industry, and by making sure that you are only reaching out to them with your best content, you’re putting yourself on their radar. And even if they won’t link to you immediately, they might still kind of make a mental note that there’s this guy who creates amazing content on this topic and they might reference you in future. So it might help you in the long run.

Steve: That’s a really good point, actually because there have been some people even though I didn’t link to them, I now know who they are and I’m probably more receptive to them going forward. All right, let’s switch gears once again; let’s talk about e-commerce sites. I know you don’t have a lot of experience ranking e-commerce sites. But as you’re probably aware, most e-commerce sites, they’re bear on content, right? You got a product description; you have a category page sometimes with little or no text. How do you rank those pages?

Tim: Yeah, it’s like you rightly said, I’m not an expert in e-commerce. I don’t think I ever had an e-commerce website. But because a lot of our customers, a lot of people for using Ahrefs, they have e-commerce websites, I had quite a few kind of meaningful conversations. So I think I know that if I were to start an e-commerce website today, what I will do. So first of all, if your product, if you want to rank your product pages and they don’t have a lot of content, then it is kind of obvious that you need to try to put content on those product pages. And they like — the only reason why people don’t make — reach an awesome product pages is I think they’re probably they’re just lazy. Because whatever product you take, you can invest in making for example, awesome photos of this product.

And I’ve seen a company that sells car parts, and everyone in their niche, they were using the standard photos that the manufacturer of the car parts was giving them. But this company, they approached it differently, they set up a small studio, and they were reaching out to all the car part manufacturers and asking them to send them samples. And they were making their own photos. And their product pages were all already looking better and people stayed longer on their product pages, simply because they could click more images of the car part from different angles. And that improved time on page and this is something that Google likes.

In terms of product descriptions, that same company, they hired quite a few different automotive bloggers, people who are interested in cars, and all that stuff. And they asked them to basically post good descriptions, good reviews of those different car parts. And eventually they had rich product pages that could generate a lot of traffic. So if people are saying that they have product pages, and there’s lack of content, then I’m sorry, I don’t have any advice for you, it will be hard to rank with those product pages. And whatever tricks you use to rank those product pages, whenever someone will create a store and create rich product pages, with awesome photos, with awesome description and with even customer reviews, you will get outranked by those product pages.

And then so in terms of building links to your e-commerce store, it is also quite challenging, because people generally don’t tend to link to products directly. But for example, what I’ve seen when I was shopping for wakeboards, I saw that one of the e-commerce shops for online e-commerce shops for wakeboards, they created a sizing guide. So you should buy a different wakeboard based on your head, based on your weight. You also have to determine your shoe size and all that stuff. And so they created a nice guide, where you could pick the right size of wakeboard for you depending on your height, and how much you weighed. And this kind of resource generated at tone of backlinks.

And they simply funneled that link juice that they got to this resource to different product categories. And from these categories, the link juice flowed further to the actual products. So if you struggle to build backlinks to the product pages or category pages, which I’m sure is the case for any e-commerce store, you should think of creating kind of valuable resources for shoppers, for people who are interested in buying whatever you have, and then building backlinks to those valuable resources and then funneling the link juice that you get to those pages towards your category pages and towards your product pages. And this will help them rank better.

Steve: Do the social factors matter in ranking based on your data? You guys have a whole bunch of data right on all these backlinks and everything. Do social shares make a difference?

Tim: Yeah, we have a little data. But whenever we do a study, we always say that correlation is not causation. So we can kind of study, like if top ranking pages tend to get a lot of social shares. But we can’t really say that it is social shares that help them rank because once you rank at the top of Google, you consistently get search traffic. And as you consistently get search traffic, it means that some of these people will treat you right. So it’s kind of a vicious circle. Do you get a lot of social shares, because you rank well, or do you rank well because you get a lot of social shares? So overall, I don’t really think that social shares in terms of numbers do matter. So if you just go on Fiverr, or whatever website sells tweets, and shares, and whatever, and buy those “signals,” I’m pretty sure that won’t help you.

But if your article kind of naturally generates buzz, if people visiting your article to read it to their followers, and some of their followers see the tweet and click a link and go back to the article, and then some of them tweet it again, Google, I’m pretty sure that Google can kind of see this dynamic. They might not see even directly as a kind of tweets, or Facebook shares, or whatever, but I’m pretty sure that Google can see that your article is taking off, and that your article is generating word of mouth, and then it does help your article to rank especially it helps it to rank immediately.

So I mean, we had quite a few cases where we would publish an article at Ahrefs blog and the piece was a little bit controversial. So it starts to generate a lot of buzz on Twitter, on Facebook, etc. etc. and we had a huge traffic spike. And what we saw is that the article ranked in the top 10 for its keyword within less than 24 hours. So less than 24 hours, and Google was able to see that our article is generating a lot of buzz on social media that it was getting a lot of traffic, and Google would put our article at the top of the search results. Later, when the buzz faded and the traffic to our article faded, Google will also put it lower and use probably some different signals to figure out if they should put us back in the top 10 search results.

But I’ve noticed it quite a few times that whenever your article takes off, whenever it initially performs and generates more buzz than your average articles, Google somehow will be able to see this and it will also support it by ranking it at the top of the search results immediately. But from my experience, that affect it never stays for long. So eventually, Google will drop your article from top 10 search results unless you will be able to consistently generate buzz and unless your article will get more backlinks so that it will have a stable position within Google search results.

Steve: Is that why you pay for Facebook ads for every article that you post?

Tim: Yeah, yeah. First of all, we pay for Facebook ads, because that’s like, it’s crazy but it’s one of the ways to bring our own audience back to our content. So we have our email list, but as I’m sure you know and many people know, whenever you send an email to your email list, the open rate is pathetic. It’s like 30%, 20%, I don’t know, maybe the best email list, they get 50% open rate, but you cannot reach 100% of your audience. Same on Twitter, you might have like 10,000 followers, but whenever you tweet something, you get like 15 clicks. So you’re not reaching like all 10,000 of your followers. And same with Facebook, whenever you publish something on your Facebook page, only a few friends will see this.

So our primary goal with paying for Facebook ads is to simply reach our own audience because it has no way to do this. And secondary benefit is yeah, we try to generate traffic and buzz to our article to kind of show Google that it is something important and that is something that people like. But then what we don’t have control over is time on page. And I’m pretty sure that Google is also looking at time on page. So we can throw like I don’t know $3,000 into bringing Facebook traffic to our article. But if Google will see that people don’t stick, that people open the article, they scroll a little bit, they see that it’s not interesting, and they will bounce, Google will not rank it.

But if Google will see that people come to the article, they stay for long, they read, and then people will also tweet it and bring their friends and article is taking off, it will quickly get to the top of search results and stay there for a while. At least that’s from my experience and from the articles that we publish at Ahrefs blog.

Steve: Just curious, how long do you run that ad for when a new post comes out? Or is it kind of indefinite?

Tim: Yeah, great question and we actually have some kind of system there. So initially when we release the article, we have a fixed budget of anywhere from 200 to $300 into promoting that article, and it goes equally, like half a week goes to retargeting our previous blog visitors and half of it goes towards trying to reach brand new audience who have never visited Ahrefs blog before. And from there, once we’re out of the budget, once we out of $200 or $300, we compare the performance of that newly published article to the past articles that we promoted the same way.

And if we see that the cost per click — for us, the threshold is less than 30 cents. So if we get clicks for less than 30 cents, we would throw even more budget into that article and we’ll probably try to optimize audiences to get even cheaper clicks, we’ll try to create additional ad copy, maybe even additional image to see if we can get even cheaper clicks. And then if we see that the article consistently performs well, and it gets us consistently cheap clicks, we’ll move into the category that we call evergreen articles. These are the articles that we kind of promote indefinitely. And we will throw more and more budget for them from month to month to month because we see that these articles are bringing us cheap traffic.

Steve: And in terms of — do you do analyze how well the traffic does in terms of converting into email subscribers or whatnot?

Tim: That’s interesting, because we don’t do this. But the only reasons why we don’t do this is because I don’t think there’s even a single article at Ahrefs blog that doesn’t mention the awesome use cases that we can and that doesn’t teach people to use Ahrefs. So whatever topic we’re covering, within the article, we try to show people how to solve that issue with the help of Ahrefs tools and how Ahrefs tools actually make solving that issue easier and more convenient. So, I don’t need to kind of track the conversion rate of these articles. I just know that these articles convert well, based on the fact that we’ve been blogging for the past three years, and we were growing our blog for the past three years.

And our annual recurring revenue is also growing quite well. And I see a lot of tweets that literally say that Ahrefs team is like super good at plugging their own product within their content and explaining their readers how their product is awesome. So we don’t even need to track the conversion rate because if I know that the conversion rate is 7%, or 15% of 5%, it doesn’t matter to me at all, I just know that people do convert, so it makes sense for me to promote that content and get more customers.

Steve: Okay. My final question here on my list is do you guys even bother using the disavow tool anymore or removing any bad links from your site? Is that a thing anymore?

Tim: This is an amazing question. And honestly, I don’t know the answer. Again, I can speak for ourselves. Recently, I saw that we had a negative SEO attack. So someone was trying to build thousands and thousands of low quality links to one of our pages. And actually I posted this on our internal Slack channel and asked for opinions of other guys. And I actually even emailed a few of my friends asking them what should we do, should we care about disavowing them or not? There were different opinions. Some people said, yeah, you should disavow all these backlinks.

Other people said that you have a strong enough brand, and you have a good enough back link profile. So Google should be able to figure out that this is some kind of negative SEO happening, and it shouldn’t affect you. So what we ended up doing is we did nothing. And so far, nothing happened. We didn’t get any penalties. And the page is actually — that page that was kind of negative SEO filled with bad links is actually now ranking number one for its term. So probably the person who was trying to negative SEO us, they actually helped us. But I don’t know, maybe within one month, Google algorithm will figure out what’s happening and ban us, and then we’ll have to disavow but so far, we didn’t disavow.

So for us, right now, based on this specific case that happened just I don’t know, three months ago or something, I feel that we have a strong enough website that we don’t care about disavowing bad links. But as I speak to a lot of agency owners, they do actively disavow to prevent whenever bad links are being pointed at the websites of their clients. And obviously, you should disavow after you get the low quality backlinks penalty or artificial backlinks penalty.

Steve: Sure. Sure. Yeah.

Tim: That is like 100% obvious if Google told you, hey, you have those artificial links, you should do something about it, then yes, obviously, you need to try to remove them in the first place. And then those that you can’t remove, you have to disavow. But should you disavow preventively? For us, it doesn’t make sense. For other people, there are mixed opinions about this.

Steve: Okay, so final question, Tim. And this kind of goes out to everyone who has a brand new blog with no authority whatsoever, what would be your best piece of advice to people just starting out?

Tim: To people just starting out, my best piece of advice would be to do something extraordinary. This is the best to way to kick start your blog and this is the best way to get traction. What I see — the most common mistake that a lot of bloggers make whenever they start a blog, they simply start writing about the same things that all other bloggers in their industry are writing. So they would go read 10 blogs, they would learn something and they would go and post an article about the same thing that they just learned from other blogs. There is no value in that I’m afraid.

So if you’re starting a new blog, you should figure out something unique that you can do. Like, it might be even as simple as after reading advice from those 10 blogs, don’t just give the same advice in your article, do this. So if you’re if you’re following weight loss blogs, and all of them tell you that there is a recipe of like healthy breakfast and blah, blah, blah, blah, blah, blah, then start eating this breakfast for 30 days. Track everything, track your weight, track your health, track your mental performance, I don’t know, and write the article with your results. So don’t just write an article that here’s an awesome recipe of healthy breakfast that I read elsewhere. No, just do it, try it and write your own results. And then you can say that okay, so initially in this recipe there was celery, but I think that celery didn’t taste good. So I replaced it with this. And it felt better.

So by doing this, by actually doing something before blogging, you’re creating unique content that is amazing that people want to read. People don’t want to read reversed articles. They don’t want to read the same advice they’ve read elsewhere, they want something unique. So if you’re starting a new blog, you should first and foremost think about things, about unique things that you can do.

Steve: So just to kind of sum it up, just great content that’s kind of personally tailored and putting your own spin on something.

Tim: Yeah, but again, putting your own spin. Like I said, you can just read 10 articles and create your articles with your thoughts. So based on reading these articles, you think that something will work or not work. From my experience, what you think, no one cares. Everyone cares about for results, what you do. So actually do something, get the firsthand experience, not your thoughts, but your actions, and then blog about it. So this is what works.

Steve: That’s great advice, Tim. Thanks a lot for coming on the show. I just want to give you guys a chance to plug Ahrefs. What do you guys do, what’s the tool good for?

Tim: Well, first of all, I would like to plug that Ahrefs is not just a set of SEO tools. These days, we have a blog where we have a lot of awesome materials about SEO, about marketing, about content marketing. So people should definitely visit Ahrefs blog.

Steve: And a YouTube channel too, the YouTube channel is excellent.

Tim: Yeah, we also have a YouTube channel where we share tutorials, and where we teach people awesome marketing and the sales strategies. And then we also have a Facebook group where our customers are helping each other, answering each other’s questions. And our team also tries to always be helpful and jump in and help people. And as for Ahrefs, Ahrefs is a set of SEO tools. But Ahrefs is not some magic button that you press and it will do SEO for you. You need to understand what you’re doing because we only give you information and then you need to act on this information. This is why I’m saying that you should read Ahrefs blog and watch Ahrefs videos because you need to understand how marketing works and how you can apply different strategies to your own business. And then you’ll probably go to Ahrefs and use some of our tools.

Steve: Sounds good, Tim. Thanks a lot for coming on the show. Really appreciate your time.

Tim: Thanks a lot for inviting me. I hope I was able to share something valuable to your listeners

Steve: No, absolutely. Take care.

Tim: Yeah.

Steve: Hope you enjoyed that episode. SEO is a huge part of both of my businesses, and Google actually brings me tons of free customers every single year. For more information about this episode, go to Mywifequitherjob/episode251.

And once again, I want to thank Klaviyo for sponsoring this episode. Klaviyo is my email marketing platform of choice for e-commerce merchants. And you can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all these sequences that will make you money on autopilot. So head on over to Mywifequitherjob.com/K-L-A-V-I-Y-O, once again, that’s Mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to thank Privy for sponsoring this episode as well. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any primer that is closely tied to your e-commerce store. Now, if you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

Now I talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce store, head on over to Mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast where we’re giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.Mywifequitherjob.com.

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If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

250: How To Win Any Argument And Influence Others With Victor Cheng

250: How To Build a 7 Figure Personal Brand With Victor Cheng

Today I’m thrilled to have Victor Cheng on the show. Victor is someone who I met at Billy Murphy’s annual retreat. He’s a former McKinsey consultant, a Stanford graduate, and he’s been on tv a number of times on Fox Business and MSNBC.

Victor advises CEOs of small businesses and Inc 500 companies and is well known for his website CaseInterview.com where he teaches others how to get jobs in the consulting field.

In this episode, Victor shares many of his secrets to building a personal brand including special tips on how to win any argument. Enjoy the show!

What You’ll Learn

  • How Victor went from Mckinsey consultant to advisor, to author and to the owner of CaseInterview.com
  • EQ vs IQ – How to Develop Your Emotional Intelligence (EQ) to Advance Your Career
  • How to sell your ideas
  • How to build a personal brand
  • How to get traffic for your site

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into the strategies they use to grow their businesses. Now today I have my buddy Victor Cheng on the show. And Victor is a fellow Stanford grad who has turned one of his specific skills that I would never have thought would be monetizable into a successful online business. And we also talk about how to build a personal brand and the difference between EQ versus IQ.

But before we begin, I want to give a quick shout out to Klaviyo for sponsoring this episode. Always excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store and I depend on them for over 35% of my revenues. Now Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send out an email to everyone who’s purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they bought, piece of cake, and there is full revenue tracking on every email sent. Klaviyo is the most powerful email platform that I’ve ever used and you could try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to give a shout out to Privy who is also a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now, Privy is an email list growth platform and they manage all of my email capture forms. And in fact, I use Privy hand-in-hand with my email marketing provider. Now, there are a bunch of companies out there that will manage your email capture forms but I like Privy because they specialize in e-commerce. Right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%.

I’m also using their new cart saver pop up feature to recover abandoned carts as well. So bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve. Now onto the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m thrilled to have Victor Cheng on the show. Now Victor is actually someone who I met at Billy Murphy’s mencation. And I’m really glad that I did because he’s got some really interesting experiences to share. He is a former McKinsey consultant. And like me, he is a Stanford grad, go Cardinal. And he frequently advises CEOs and small businesses and Inc 500 companies. He’s been on TV a number of times on Fox Business and MSNBC.

He’s also the author of a bunch of books, including Extreme Revenue Growth, The Recession Proof Business, and Escaping the Self-employment Trap. And he’s also well known for his website CaseInterview.com where he teaches others how to get jobs in the consulting field. Overall, Victor has accomplished so much that to be quite frank, I’m not even sure where to begin with this interview. But let’s start with an intro. Victor, welcome to show how are you doing today, man?

Victor: Thanks Steve. Thanks for having me on. I appreciate it and feel very honored. I’m doing great and excited to talk about a wide variety of topics.

Steve: So Victor, let’s start with your story in case people don’t know who you are, of how you went from McKinsey consultant to advisor to author and to the owner of CaseInterview.com.

Victor: Yeah, so many years ago, more years than I care to remember, I graduated from Stanford, got recruited into one of the top consulting firms McKinsey, was there for a couple years. I was sort of a rising star at the time, and decided too that really wasn’t for me for the long haul. This was back around the dot com boom, around the year 2000. And decided to leave and start my own company and sort of went down this very windy, entrepreneurial path for a couple of years, worked for some big startups for a couple of years in tech, and sort of worked myself again. So I would say over the last, I guess 25 years or so if I can count correctly, I’ve been working on my own for probably about 17 of those years.

Steve: Oh, wow. Okay. I didn’t realize it was that long.

Victor: Yeah, yeah, three different iterations starting in 98. And I’ve worked for others for probably about six or seven years in consulting and then in the software industry.

Steve: Just curious, how did you come to the conclusion that you wanted to be self-employed?

Victor: Steve, I was having kids. I was at the time, yeah, I was an executive in a tech software company. And that’s since been bought by Oracle. I was traveling 50% of the time, I was on a path to really becoming a CEO of a tech company at some point, was sort of the momentum of my career trajectory at the time. And we had our first kid on the way. I’m like, I’m going to be a dad, the kind of dad I want to be if I’m traveling literally like 25, 26, 27 weeks a year. And I just didn’t see how that would work. And so decided I just need to be working from home. And then, so jettisoned my career at the time and said start over and like what are my options? And that was the starting point for all that.

Steve: So just for the benefit of listeners, Victor and I, we were just chatting before this interview started how we are tutoring our kids in math right now. And Victor spends several hours per day tutoring their kids, which would not be possible, obviously, if he had a full time job.

Victor: Yes, yeah very true. So I think a full time job would be easier than pre-algebra. But hey, it’s what it is, right?

Steve: So let’s talk about that. So you quit your job. And you decided to build a personal brand, right?

Victor: Yeah, I would say I quit my job, I wanted to earn a living. I built a personal brand somewhat by accident, I’m more conscious of that now. But it became a necessity to building up the kind of business I wanted to build. But it wasn’t the goal from the outset.

Steve: Oh, it wasn’t okay. So what do you mean by accident? And what was your plan when you quit?

Victor: Well, to get clients. So when I quit, I wanted to get clients and customers and I’m very good at selling in person. And the problem was to sell in person in the fortune 500 means jumping on an airplane. So I needed to talk to someone running a billion dollar business, very comfortable in that environment, I could talk to them, but I have to go there. So when I started to work from home with the one self-imposed constraint of not having to get on an airplane anymore, then that meant I can only communicate with prospective customers through direct mail, online or the telephone. And so really, I ended up using the internet as a marketing medium. And it became very hard to get customers unless they knew of you. And so, the building of a personal brand sort of evolved with a desire to be known as a way to get clients. So getting clients was the goal, personal brand became the vehicle for doing that.

Steve: Okay, and so what did you start out doing then? How did you do it, what was the process like?

Victor: Yeah, I think very early on, I gravitated towards what today would be known as content marketing, in the sense of just helping other people out online. I remember the very first person that I helped out was — this is pre internet years, this was probably like 98. And back then there weren’t really message boards. They were like using that I think forums; I forget the terminology we used back then.

Steve: You’re dating yourself Victor but yeah go ahead.

Victor: Yeah. Yeah, totally I mean, I was in Stanford when the web browser got invented, right. So I’m ancient, I guess, in terms of [overlapping 00:07:49].

Steve: Actually does that mean we overlapped? I think we overlapped because that was around when I was there too actually.

Victor: I finished 95. When were you there?

Steve: Okay, I finished in 97. So you only got two years.

Victor: Oh okay. All right, so we did overlap.

Steve: We just both date ourselves, but go on.

Victor: There we go. All right, with geriatric here. And my first taste of it was, I was on this sort of email list serve used net group forum kind of thing and we were talking about business. And I was just sort of riffing on just some — someone asked a question and then I answered it. And my answers tend to be fairly extensive and thoughtful, and particularly in areas I know very well. And then lo and behold, a random person reached out to me and said, hey, I really liked what you wrote the other day. Well, yeah, sure. No problem. Thanks for that. I’m like, no big deal, would love to pick your brain on some other issues. I’m not sure, no problem, I’m having nothing else to do. And so we got on the phone.

And turns out the guy was one of the newest billionaires on the Forbes 100 list.

Steve: What?

Victor: Yes, yes. And he really resonated with – he was sort of eaves dropping on this forum. He had just made the list and he had started a software company, was looking for advice and some help on some I don’t know the topic, some topic I was talking about. And we had a phone call, right? So it’s interesting when people ask like what do you do when you call like a CEO to get a meeting, and get through the rest of system, get through the gatekeeper? And there’s a phone script that works 100% of the time.

And it’s very simple. So let’s say Steve, I’m calling you, you’re the head honcho of a fortune 500 company, I’ll say — and your assistant answers. I’ll say, hi, this is Victor Cheng calling for Steve. And then she’ll say, or he’ll say, so what is this regarding? I’ll say, oh, I’m returning his phone call. That’s my script. And it has to be true. So the trick, what I do is I get people to call me first. And then I call them back and I get a meeting or a phone call every time.

Steve: Okay, elaborate please, how do you get them to call you first? Yes.

Victor: Sure, that’s where the content comes in. So, when you put content out there, then it resonates with people and take an intrigue, and you give them some way to come out and reach out to you. So content marketing in it’s early for was writing a book, right? If you wrote a book on a business topic, it was a New York Times bestseller, fortune 500 CEOs will reach out to you, they want to try to hire you, get you involved in some way, shape, or form. Public speakers do the same thing. People with blogs today do the same thing.

You’re doing the same thing, right with the podcast, right? You’re putting on information on the topic, you’re getting known in the field around a particular idea. And when people think of that issue, that problem or topic, your name pops up. Okay. And so that’s essentially the process. It has been around for literally for probably hundreds of years, and the digital form the last 20 years, but the process has always been the same.

Steve: So let me ask you this, how do you make sure that the person you want to contact has actually read your stuff?

Victor: You don’t always know, you can put up filters. One simple way is just to charge for your time. So if you’re on the Fortune 100 list, I don’t particularly care, you got my stuff, you just called me, I’ll take the call. If you’re some random person, you can either qualify them so you can use the qualification process …

Steve: That’s actually not what I meant, how would you get someone on the Forbes top 100 to actually read your content, like in your case that story you just told was by accident, right?

Victor: Yes, yes. So there’s a couple of different ways. So if it was literally someone like on the Forbes 400, or Fortune 500 CEO type person, they’re harder to reach. And I mean, the simplest strategy is write an article and then FedEx it to them and I’ve done that. Or get an article published in a magazine and then get a clipping of it, and then FedEx it to them. It helps a lot if the content is being read by someone they know, that passes along to them with a recommendation. So I will often tell my friends, oh, if you’re struggling with this issue, you got to read these three books, they’re like by far the best books on the topic. And that’s one way to get your material to the right people. You can’t always target super precisely, but you want to be in the ecosystem that they operate in. And you want to write about issues or create content around issues that they care about. And so if you’re on the right ecosystem, that’s kind of a pretty straightforward process.

Steve: The reason why I was asking is I just interviewed someone, I think, a couple of months ago, and what he does, and he compiles all the emails of all these publications of people he wants to reach, including CEOs and owners. And then he creates a custom audience on Facebook, and he just bombards them with content on Facebook, Facebook ads, and Instagram ads.

Victor: Or you can target by individual.

Steve: Well, once you have a large enough email list, you can create a custom audience on Facebook, and then you can just target those people.

Victor: Got it. I was not aware. I don’t use Facebook all that much on the targeting site.

Steve: Yeah, and so yeah, that was good. I was just kind of curious if you did something similar.

Victor: That’s clever. No, no, I think for me, I’m old school. I sent FedEx.

Steve: Well, apparently it works.

Victor: Yeah, yes, send a Fed — write a book, send it via FedEx. FedEx always gets opened.

Steve: So can we talk a little bit about the content in this case that attracted that Forbes top 100 guy?

Victor: Yeah, in that particular case, I actually don’t even remember the topic. I mean, this was 20 years ago, I since use the process for lots of different prospective clients. But really is you want to write or create content around a problem your target audience has, so be clear on who your target audience is, then you think about what are the top three headaches they have? And what can you do that can help them? So in your case, you have a podcast for people who are either in the process of thinking about starting a business to a hobbyist who have already started one, and they’re trying to grow it. There’s a certain set of problems and headaches people in that situation have.

And similar to what you’re doing is you’re trying to find thinking the case of your podcast, people who have expertise that would be beneficial to your audience. Some cases you are the content creator, and you’re creating content for or one could create content for your audience based on what they’re struggling with. So really, it’s just like, what are your headaches and just try to find solutions. One of the favorite exercises I have that I have for my clients when they do market research, is I tell them to go to a trade show or a conference or anywhere where your prospective customers gather and then listen for complaining.

And normally our society, when we hear complaining, we went the other way. I don’t, I run towards people who complain, particularly people who complain about money to solve for complaints, right? So, rich people with money, who complain a lot, those are a good customer base in general. And just listen for what they’re complaining about and take mental notes or literal notes or recordings or whatever you can do to capture that information, obviously in a legal way. And think, okay, well I can solve that problem, I can solve that problem. Oh, that’s another problem. That’s interesting. I could solve that with either a product or a service or with information, or knowledge or expertise. And that’s a great way to start a business is you find some with a headache who’s willing to pay money to solve the headache? And then you become like this Tylenol for that particular problem.

Steve: Can we talk about CaseInterview.com? Is that how you got started with that?

Victor: It is in a roundabout way. I did create content around the case interview. For those who aren’t familiar with it, the case interview is an interview process used by management consulting firms like McKinsey, Bain or Boston Consulting Group. And it’s a hypothetical situation interview, so a case study type interview. And so that was very unusual. Most employers, most industries don’t use that particular approach particularly when I started the site. And I went out to Harvard to do a one day a lecture on that, I recorded it, I put it up on YouTube and put all the videos on this one page website called CaseInterview.com. And then I kind of I wanted to teach the topic, I kind of did it and I kind of let it sit there.

And I kind of left and forgot about it for a couple of years until three years later, my web host contacts me saying they’re shutting down my account because my web server keeps crashing due to the amount of traffic it was getting. And I’m like, but my regular websites at the time, my corporate website, there’s no traffic, not a lot of traffic, right, it’s nowhere close to crashing the server. And then I went, I checked on my log files related to this project that had CaseInterview.com from three years ago, it was sitting on the server this whole time, but we forgot about it. That was just generating tens of thousands at the time visitors for the billing period. And it would crash the account, I had to upgrade. And then fast forward about, I don’t know, eight or 10 years, it’s millions of people, over a million people a year who read my work on that set.

Steve: So it’s just completely by accident. And were people just finding you from Google, or was it referrals or?

Victor: It was a lot of word of mouth. So what happened is people — I think like 10 people that first month found the site, however, they found it, and they used the material and then they got job offers. And for consulting, for the consulting industry, coming out of undergrad these days, if you got a job offer from one of the top firms, it would usually be about 90,000, $200,000 for someone who is 21 years old. These are big deal job offers, and they would get it. And then a year later, a lot of their friends who were a year behind them in school at places like Harvard and Stanford would say, hey, I want to pass this case interview thing. How did you do that?

And they said, oh, there’s this guy named Victor Cheng, he has a website called CaseInterview.com and there’s like six hours of free tutorials that are on the homepage. And I just followed the videos, and I just did what he did. And now I have a six figure job offer. And like really, like yeah, it worked. And so they go ask multiple people, multiple mentioned my name. So then that year, twice as many people would get job offers, because there were now twice many people who were aware of it. Then the following year, it just sort of grew exponentially.

So every year, people would ask the people ahead of them in school, hey, what are the good resources? And then now to the point where in about 100 countries around the world, probably 80 to 90% of all the new hires of McKinsey, Bain and BCG, these are the top consulting firms, their recruitment, I believe 80, 90% of them are people I’ve taught one way or another.

Steve: No way. That’s crazy. How do you make money doing this, then? Are you selling the materials now?

Victor: No, no, it’s the same materials, it’s been free for, I don’t know, eight or 10 years, whatever it’s been, those continued to be free. I operate on a freemium model. So free, sort of the word free plus premium. So it’s a 90% of my content is freely available. I think you mentioned before our podcast started that you have read 250 of my articles, I think there’s like 700 on there now. That’s all free, this would be 8, 10 hours of videos, PDFs, there’s all kinds of things that are free. And then a small percentage of our content I create is for fee or at a premium fee. So if it works…

Steve: So people are getting jobs with your free content, I’m kind of curious how you separate out the premium from the free, like what does the premium stuff look like?

Victor: So the premium stuff would be, so for example, the free version is 8 hour, 6, 7, 8 hour tutorial on how to pass the case interview. A premium version would be 24 hours of actual interviews being recorded with play by play analysis by me on what particular candidate is doing well, and what they’re doing incorrectly and how they could have turned around performance with reenacting what a better answer or a part of the answer would sound like. So, this is two different versions.

Steve: Is there is a one on one instruction that you provide, is that like personal instruction?

Victor: Yeah, yeah.

Steve: Okay.

Victor: Yeah, we do that. So I have a staff of — a team of former interviewers from the top firms. And I think have delivered 9,000, almost 10,000 individual one on one Skype based practice interviews since about the year 2011. So we have the largest case interview coaching organization that I’m familiar with in the world, particularly on a particular, one particular approach, the case interview so a unified approach. Yeah, and so that’s been in over 60 countries, I think over that time period, as well.

Victor: And I just want to emphasize to the readers out there, just head on over to CaseInterview.com. I’m not saying this to be mean but it’s not like a beautiful site but the content is fantastic, to the point where I literally spent several hours last night reading his posts, and I actually want to get into some of those in a little bit. But I’m just kind of curious, Victor, like how you — it sounds like you kind of stumbled upon this by accident, right?

Victor: Yeah, I think I’ve been trying lots of different things over the years. But I think the one thing I — this particular project worked out usually well, and that was a bit by accident, but I was prepared for it too. I did my part in terms of being prepared.

Steve: So if you were to be more deliberate about this today, how would you kind of redo CaseInterview.com? Would you do it the same way?

Victor: I would actually yeah. So I think there is a lot of value in — and it’s written — I back up, it’s very counterintuitive, because this does not work well in the offline world. But it works really well in the online world. Giving stuff away for free works really well as a marketing strategy. It works for crack cocaine dealers, right? The first it’s free. It works for Mrs. Fields cookies, right? The first bite is free. But if you want the rest of the cookie, you got to buy it. It works for enterprise software that cost a million dollars, they give it away to college kids, college students to learn programming, and then when they get out in the workforce, then you have to pay a million dollars for the company and employer to buy the software.

So free, is by far the single best strategy for marketing when you have a good product, when the product is exceptional, giving it away as a free sample works really well. If the product isn’t good, then it doesn’t work very well. So I’ve always been very interested in creating things that were exceptional in everything that I do, but from a traditional marketing standpoint, if I say, hey, Steve, my product is exceptional, you’re not going to believe me, right?

Steve: Well, I would try to believe you.

Victor: You would well, yeah. If you didn’t know me, you would say, oh, well, doesn’t everyone say their product was awesome. And then it’s very hard to tell. And it creates a lot of risk for the consumer or the customer. So when you give things away for free, take away a lot of the risk. So I would probably start a business or a project, particularly with more expertise based around giving away content for free.

Steve: Which is an actual case study because I know you told me earlier that you started a new site called Firsttimeceo.com.

Victor: Yeah, yeah. So I am expanding the executive coaching portion of my business. And I work with a number of insider type CEOs, companies who are over a million in sales growing at least 50% per year, year over year and have, I think at this point, made six clients over the past couple years who made the Inc. 500 or Inc. 5,000 list. So I’m starting a new project called FirsttimeCEO.com. It is a brand new site really geared towards trying to draw more people who are in that demographic into my universe. And so what I’ve done, I literally did this yesterday, is I took a lot of content I had sort of in my archive server and the server of almost everything I’ve written over the many, many years. And I found a couple of pieces of content that would really click with, resonate well with someone who’s building that kind of multimillion dollar business, and put it up on the site.

And that’s the same process I used to start CaseInterview.com years ago. Those will ultimately be videos because it’s a more visual world these days than maybe a decade ago, and convert some of into slideshow, so lots of different formats to be consumed. But the general idea is to give away free stuff, get known to a particular audience, use something called permission marketing, which Seth Godin talks a lot about that. It’s as a great strategy to build a relationship. And then there’s many, many options, what you can do with that either from a monetization standpoint, or just getting known in a particular field. But that’s kind of the overall approach, it works very well.

Steve: What is your strategy for disseminating that information? Like right now, I just went to the site, and there’s a bunch of content on there. How are you getting the word out about it?

Victor: Yeah, well, since the site was only 20 hours old [overlapping 00:24:07].

Steve: It’s like a case study, right?

Victor: Yeah, totally. It’s a case study. So here’s the blueprint if you will, and I’ve done parts of much of this myself, and I would absolutely have no hesitation to repeat the process. So you get all the content up there first, you want to get at the summit into multiple channels, if you can. So it’s video which would be on your site, and it should be on YouTube. If it’s audio content, it should be like in iTunes, all the podcasts players, and also on your site as well. So the first that content has to be accessible. Once it’s accessible, it has to be good. And when it’s good, what you get is word of mouth. So you get one person on there who sees the article and says this is amazing. And then they email it to like two other people. And then you get this exponential growth curve, right? Every visitor who comes tells two other people about it at some point for the next couple of months, that is a sign of good content.

So that gives you the ongoing growth, when the content is good enough to get to trigger word of mouth. And then to sort of get the ball rolling, there’s a couple of options that come to mind. One is if you already have a mailing list, you just sort of let people know in the mailing list. Or if you have a social media following, you post it and say, hey, there’s a new content I produced that might be of interest to you and here it is. If you don’t have that at all, and you’re starting from scratch, then the other way to get traffic really to your content is to participate on other people’s either social media or blog presences. So it is going to someone else who say is better known in your field, if they have a blog, and commenting on the articles, and contributing in some value added way, like be helpful and add comments, add examples, add links to resources, be helpful in your community.

And particularly in the digital world, when you’re helpful to one person, there’s like 10,000 other people who are witnessing the process, right. And a couple of things that happen in that particular approach, you get known by the bloggers, bloggers we know, we read the comments on our blogs. And when people write something really interesting, we tend to notice, particularly if that happens more than once. And it can build a relationship with that particular blogger. Writing guest content on other people’s sites is probably one of the best strategies for getting content known, getting your own content recognized because you can link back to that. That’s essentially what I’m doing right now Steve, other than the fact that I like you, which I forgot to mention on our pre conversation.

Right now I’m getting – I’m exposing your audience to my work, right? They may know who I am. And I’ve mentioned my website more than one time Firsttimeceo.com, and that’s spelled either way, numerically or alphabetically. And some of the people who are listening in are going to come and check out Firsttimeceo.com, and they will see some of the content, some of them will really like it a lot. They may tell their friends, they may sign up to receive more information from me. And then that process is, basically that’s the whole process I’m talking about in a nutshell.

Steve: I just wanted to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you are interested in starting your own online store, I put together a comprehensive six day mini course on how to get started in e-commerce that you should all check out. It contains both video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online. Now, this course is free and can be obtained at Mywifequitherjob.com/free. Just sign up right there on the front page via email and I’ll send you the course right away. Once again that’s my Mywifequitherjob.com/free. Now back to the show.

So let’s switch gears a little bit and talk about some of the content because I did read like 250 posts, and I actually enjoyed a bunch of those posts that were relevant to me. One of those was how to win any argument. I don’t know if you remember some of these posts, but it had to do with a way that you kind of approach arguing with somebody, not necessarily to — you’re not trying to shut them down, but you’re trying to kind of influence them to see your point of view. I don’t know if you remember this post, but I’d love for you to go into a little bit more depth on it.

Victor: Sure. I think one of the easiest ways to be influential to somebody and have them hear your words and really receive them well is to listen to them first. And one of the great ways you can confirm that you heard them is when you first speak, you speak back what they’ve already said and believe to be true. So if you and I are arguing about something, and it doesn’t really matter what the topic is, and I really want to convince you to my way of thinking, when I respond to whatever you say, I will not begin with what I think. I will begin with what you think and feel very strongly about. So, I’ll say something like, Steve, it sounds like what you’re saying is — and then I’ll make your argument for you, that you just told me.

And I’m going to argue your point of view so passionately, so articulately, so clearly, so well-reasoned and stated that you’ll be nodding your head like well, yeah, totally. All I’m doing is I’m repeating back what you told me, but perhaps in a maybe hopefully a bit more clearer kind of way. So that opens the door to the other person listening, because the beginning of the conversation is their own words.

Steve: Even if you don’t agree with it.

Victor: Even if you don’t agree with it. Yeah. You don’t have to say you agree with it. Easier to say, I heard what you’re saying is, pick some controversial topic, I hear you saying is that this is the case and for these reasons, and this is why you feel so strongly about that. Steve, did I hear you right? Is that what I heard you correctly saying? And then if you did a good job, and sort of actually paraphrasing what they said, they’re going to be number one paying a lot of attention because people in an argument are expecting a fight. They’re expecting you to disagree with them. So it’s very disarming when you can repeat back what they said, and particularly very clearly.

Steve: So [overlapping 00:30:09] basically the argument for them.

Victor: Yeah, you summarize their argument for them better than they could have said it themselves. Then suddenly they’re quiet because what do they need to say, you’ve already said everything they’ve just said and you said it really well, and really clearly and very convincingly? So that’s the opening of this kind of approach to influence. And then suddenly, they’re paying attention. And then they’re very open-minded. And so what you want to do though then is you then want to say, what you just talked about, I think really, it really clicks with me, I see what you’re talking about. But I think there’s one area that I think – I think you’re mostly right, it’s the phrase I often use, I think you’re mostly right, but there is one little piece that I’m just not quite sure about. I think I have a slightly different point of view on that.

And sometimes I’ll ask, particularly if they’re more senior person in a position of authority, would you be open and interested in hearing this other different point of view? So I use the word different a lot. I never say you’re right or wrong, because right or wrong implies that someone has to win, right? And so what I often do, particularly as I’m often talking to people with more power than me, I often ask for permission, are you open to hearing something, a different point of view? Not are you open to hearing how you’re wrong? Not do you want to hear why I’m right. I’ll phrase it specifically as are you open to hearing a different point of view, or a different perspective, or a different opinion on that particular issue?

Steve: it’s a very humble way it seems of arguing, right?

Victor: it is, and here’s why it works, because most argument occurs at two levels. One is at the actual logic of the argument, and the other is at an emotional level. And most emotional arguments usually have some element of power dynamics involved. So if it’s husband and wife, it’s who’s got more power in the marriage, right? If it’s between two peers in a corporation, it’s who’s going to be next in line to be CEO. So underlying a lot of arguments is a power dynamic, right. And so this is why you’ll see like a lot of corporate politics gets a bad name, is because people are using the company issues as a way to jockey for power, and sort of dominate one person over the other.

So when you have a more humble approach, you’re saying that I’m not disputing the power differential hierarchy here. So, if I’m a junior person, I’m not going to challenge the CEO and say you stink as a CEO because you’re wrong. I’m going to acknowledge the CEO’s power by saying; do I have your permission to share another idea? Would you be open to hearing a different point of view? That question has a couple of things baked into it. Number one, is it says, the only person in this relationship that can decide whether I speak is you Mr. or Miss CEO? Okay. That’s why I’m asking. I don’t have the authority to tell you what to do but I only have the authority to ask you if you’re interested in hearing, so I’m asking for permission, and you only ask for permission, when the other person has more power.

So it’s a very humble way of acknowledging that they have the power and not trying to challenge it. When you say words, like I have a different point of view, then you’re not saying they’re wrong, right? People in power don’t like to be told they’re wrong. People in marriages don’t like to be told their wrongs.

Steve: I was going to say, this is like marital advice here.

Victor: It’s the same down there. The CEO is in the boardroom one day and in the bedroom at night, right? So husband, wife, it doesn’t matter. It’s all about people. Same thing with kids, no one likes to be told what to do. And no one likes to be told that they’re wrong. So you never say that, and it’s very disarming. And then they let their guard down because they know the argument is not about power based combat, it is actually hearing the ideas. So a lot that’s very subtle. I learned this sort of in the corporate world, dealing with people who were literally 40 years older than me, having 40 years of experience when I had like one year of work experience and influencing someone who runs a billion dollar company when I’m 22, you don’t have a lot of power, right? So it’s very differential, but yet still hold from [inaudible 00:34:08].

Steve: So along those same lines, I really enjoyed your posts on how to kind of present yourself to be taken seriously by others. And I believe you used the term gravitas, right? So first of all, define what that is, and what is your way of getting people to listen to you even though you might be really low on the totem pole.

Victor: Yeah, so gravitas is sort of a Latin phrase that really means executive presence. So one of the challenges in the corporate world is sometimes the person with the best idea is not the one that gets paid attention to. Often it’s the person with the most seniority; they get paid attention to even if their ideas are terrible. And oftentimes, the smartest person in the room is the one that’s getting ignored, or the most knowledgeable person in the room is getting ignored. So executive presence is about how you present and how you create a context so that your ideas get taken more seriously. And there are a couple of strategies for doing that.

A very simple way, two or three simple strategies, number one is to know your material. So if you are not competent in your stated area of expertise, you don’t deserve any executive presence. So that’s the first things, you have to know your material core. And that’s just the entry point. But to get taken more seriously, there is a couple things you can do, two strategies in particular that come to mind. One is to, particularly if it’s within a company for example is to build relationships with the people that are in their audience, and building those relationships offline. So if there’s a big presentation, or a big decision meeting, oftentimes, the person with gravitas or executive presence has invested in the relationships with the key people who are in the room.

So much like I talked about earlier about getting to know somebody else’s point of view and position, when you already know what everyone else is already thinking and they know that you’ve taken the effort to learn from them, they are far more open to hearing your ideas because you heard their ideas first. And so, I have a friend of mine who recently got promoted to Chief Financial Officer of a company and it’s her first CFO position. She knows the finance side of things core, they have been doing it for a very long time. But her question to me was, what do I need to know as an executive? I’ve never been a C level officer before it.

And I told her this exact same thing is get to build relationships with every person, know every functional areas, key issues and concerns and how they see the business and what they’re concerned about, and be able to argue all their issues, and all their perspectives and know them so well that you could argue their departments needs more eloquently than they can. When you do that, then you go put that in your financial plan as a CFO, they’re going to listen, because they have confidence that you’ve already listened to them. So, one way to get taken seriously is take others seriously first before like a big thing. So that’s sort of one strategy.

Steve: How does that translate to the online world by the way?

Victor: To the online world, I would say it would be if you are trying to build a relationship with someone like a blogger or a YouTuber, someone with a lot of influence, one of the things that works really well is when you’ve read all the material, and you ask them intelligent questions that aren’t already on their blog or YouTube channel. So Steve, you done your homework, you read my articles, you’re mentioning things that — apparently something I forgot I wrote, like, oh, shoot, okay, Steve’s done his homework, right? Like respect to you, you put in your effort to build a relationship here, or extend our existing relationship and that means something.

I mean, I get like thousands and tens of thousands of email requests all the time. And the ones I dislike the most are the ones where, hey, I want this, I want a job that pays $200,000 a year. Where do I start? I wrote like 700 articles, there’s 1.5 million words I wrote on that topic. And the person hasn’t gone to Google; they haven’t gone to my site. They haven’t gone to YouTube, they haven’t read my books and they want me to do all their work for them. So those are kind of like, I’m not the human Google, right.

The questions I appreciate are, I read your book, I read every article, I looked through all the videos, but there’s one issue I still stuck with that I can’t seem to figure out. I’m not sure I’ve missed it. But what do you think about this? And then I’ll go shoot? No, I actually never answered that question. That was a really good question. They did their homework and they’re asking for help. And then I’m happy to help because they’ve done their part, they met me more than halfway. So with building a relationship it’s know their work first, don’t ask questions that you can find the answer to about them on Google, read their LinkedIn profile, read the last blog post, read the last thing, a social media post, kind of do the basics. And unfortunately, people don’t want to do that.

Steve: Since we’re talking about relationships, one thing that I found extremely provocative about your blog post was your notion of EQ versus IQ. And we’re both Asian here, right?

Victor: Yes.

Steve: We emphasize a lot on I guess book learning and intelligence. But it seems like in the real world, the relationship aspect, and what you call the emotional intelligence quotient is a lot more important. And if you wouldn’t mind, just kind of define those two terms first, and what you mean by that.

Victor: So IQ would be what we would traditionally think of someone who is smart, right? Gets good grades, can do math, that kind of thing. So IQ test is where that term comes from. And emotional intelligence would be more around someone’s emotional savvy at relationships and interacting with other people. And the reason why EQ tends — and there is research on this why EQ tends to be responsible for greater levels of success is because most senior roles either within a corporation or when you’re an entrepreneur and you have people working for you, as you progress in your career to greater levels of responsibility, usually, the people doing the work are people who work for you, not yourself.

So I would say IQ is very important in your sort of first job if you would, because you’re like an individual contributor, like doing work individually. But as you progress to a manager, or director or VP, or founder or CEO, or business owner, then quite often, if you look at the amount of work being done in the company, you’re actually doing very little of it yourself. And you’re managing or leading others to doing. So the ability to work with other people becomes more important. So a new engineer has to be good at engineering, the VP of engineering doesn’t have to be good at engineering. The VP of engineering has to be good at managing people who are very good at engineering and is a different skill set. So EQ is about building those relationships and being very effective and managing relationships to reach your particular objectives.

And so my big take, and this is especially the case because I’m Asian American is the culture I grew up on. Really overly, I think my opinion overly emphasize IQ, probably to a fault. There’s value even in that, but there’s a limitation to it too. And in my experience happiness in life, a successful career at some point transitions over to having EQ being more important. So that’s kind of my take in terms of definitions and why I think it’s so important.

Steve: And in terms of business, at least to me, it seems like EQ is way more important than IQ.

Victor: I would agree because in a business to survive, you need clients, or customers and buyers. And a lot of EQ is about understanding the world from their point of view. So when I visit a website, I am able at this point to try to imagine what it feels like for that particular customer when they see a website or when they see a product or a service. So one of the things I asked you for example when preparing for our call today, or our podcast call was like, hey, Steve, who’s the audience, who is this going out to? And you kind of give me your description, I have a mental picture of who they are, what they might likely care about. I’ve been in many of those positions before and it’s been a while and I can try to put myself from that vantage point.

And a lot of what I’m saying is geared towards my picture of who that person is and what they might care most about. And so that’s an EQ skill, putting yourself in someone else’s shoes. And that’s super important in business from a sales standpoint, how you convince somebody, a marketing standpoint in terms of what words to use, what messages will resonate with them. From a product design standpoint, from a personal brand building standpoint, it’s seeing things from the other person’s point of view, like that’s one of many EQ skills that’s very vital in business.

Steve: So the question is, how do you develop these skills?

Victor: So the EQ development comes from a couple of different places, the foundational elements of EQ starts with being emotionally self-aware and here’s why. In order to recognize feelings that other people have and that’s coming across to you, the only way to recognize for example, if someone’s irritated at you, is when you recognize when you’re [inaudible 00:43:11] at somebody else, and you remember what it felt like, and you remember the behaviors you did, right? So if I’m irritated, I might cross my arms, I might squash my face kind of like I’m kind of irritated kind of look, my voice might change. I might say things like fine.

The word fine literally means okay, right? So Steve, you asked me, hey, is it okay if we extend our podcast another two hours? I might say, fine. So the word says yes. But you laughed because my voice intonation and I can tell you have very high EQ. I’m not really saying fine, right? I’m not saying okay. My nonverbal say I’m not okay but my verbal says okay. And you laughed because you picked up I’m different, I kind of exaggerated a little, sometimes it’s more subtle. And so the ability for you to recognize that I was not really being honest about my feelings was because you recognized the feeling, right? You’ve sensed frustration in my voice, you sensed sarcasm, you sensed many little things that tell you that there’s an incongruence between what I said and what I meant.

And the only way you can do that and see that in others is if you recognize it in yourself, right. And it doesn’t mean you have to do the behaviors, but it means you have to have the impulse too, and you recognize the feeling, maybe wanting to say okay, because it’s not polite thing to do. But really feeling like I don’t really want to, and I’m feeling a little conflicted. And I just expressed that conflict in a sort of a passive aggressive way. And you picked up on that because you had that awareness. So EQ starts at home if you would with yourself. And one of the exercises I have people do when they’re trying to build up their EQ skills is to set an alarm on their phone for every hour, and there’s some apps that will do that and just ask yourself every hour, how are you feeling? Because if you can check in with yourself to see how you’re feeling, you can get better at noticing how other people feel as well.

Steve: So it sounds like to just kind of summarize what you said, just being a little bit more deliberate about recognizing how you feel based on the actions that have taken place and being able to relate that to others.

Victor: Yeah, yeah, very much so. And I think you can notice it and others and then when you can notice feelings and emotions in yourself, you can notice in others. And then you can put those feelings and emotions on the table in terms of a conversation with others. And so a simple example, that would be like empathy, right? So you hear that word used a lot. And the empathy is really about if you’re having a rough day, I might notice that because I’ve had rough days before and I kind of see similar signs. How am I saying that Steve? It sounds like you’re having like a really rough day. And that’s like empathy.

And the reason I can be empathetic is because I too, have had bad days. And I remember what it felt like, even though your bad day is quite different than my bad days, at least in the past, the feeling is awfully similar, right. And so it’s interesting, as I’ve traveled around the world, meet lots of different kinds of people, the heat, the surface level experience we have are quite different, but the human emotional experience is quite similar across cultures and across time. So when some person in some far flung third world country loses a child to death, that child gets killed, I don’t know that person’s role. I don’t know the culture, I don’t know the language.

I mean, I can be able to communicate with them in any common language, but the feeling of loss, like I felt loss in my life, right. And I can just – I can experience that, I could share that feeling, and my heart can break because I’ve felt loss and I recognize when someone else feels loss. That’s an example of being empathetic. And so all this builds, starting with yourself, noticing your feelings, noticing other people’s feelings, and then making the feelings being a part of the conversation. And the way that relates to businesses, because most people who make any kind of decision, personal or professional are doing things for two reasons. One is like the intellectual reason, like I need a new car, because the old one is broken, that’s an intellectual reason.

And then there’s an underlying emotional reason that often does not get expressed verbally. The real reason I want that Ferrari is because I’m middle aged and feeling poor about myself and I want to look good, right. And I may not admit that publicly, because it’s kind of embarrassing, but I really want the Ferrari comfortable kind of thing. And so when you sell or when you work with employees, there’s always the stated reason, that’s usually intellectual, logical, factual, reasonable. And then there’s the emotional reason. And so when you can get some insight into the emotional reason, and then you address people’s emotional needs, you’re far more influential.

So a simple example is the person might not want to buy your service because they’re really afraid that if they buy it, they might get fired if your product or service fails. They might not ever say that, but they’re going to say, no, it’s the deal. They’ll invent some kind of reason of like, your price is too high or whatever, some kind of reasonable complaint about your offering. But really, the underlying reason they’re not buying is they’re scared. It’s their fear. So if you have high EQ, you might pick up on the fear, and try to find some sort of face saving way to address that fear without calling them a scared cat, because that’s kind of offensive.

So that subtlety is what allows, for example, very large deals like multimillion dollar deals, the one to 7 million in sales for one transaction. Those deals, a lot of it is driven by emotion, but it’s often never stated out loud this undercurrent, and people with high EQ can pick up on that, can pick up on opportunities, those with only high IQ, don’t ever even see.

Steve: That actually reminds me of when I used to work, people would come to try to sell us their software. And oftentimes our decision came down to who we liked better in terms of who is going to support us?

Victor: Absolutely. That is right. Over a million dollars in particular, you’re buying the salesperson. Yeah, you trust them to take care of you after they get the deal. And that is very, very right, you’re not you’re not alone in that.

Steve: So Victor, I would love to talk to you for two hours more, but you said fine. So I’m afraid, I’m going to go ahead and let you go. But I do want to mention your new site, First Time CEO, are you going to be talking about these things on that side as well, because I find this customer or human psychology element very interesting?

Victor: Yeah. Yeah. So First Time CEO, again, is geared towards people who are growing a bigger business, generally over a million dollars in sales, growing 50% a year or more. And I talk about sort of the technical aspects of scaling growth, as well as the human interactions pieces, right. So leading a team, working through others rather than doing it yourself, all these factors become important and that’s something I’ll be covering on that site as well.

Steve: Cool. And the site is up. I’m actually on it right now. And there’s actually a number of good articles on there already that I encourage everyone to go check out. So Victor, thanks a lot for coming on the show. Really appreciate your time.

Victor: Thanks for having me, appreciated.

Steve: Hope you enjoyed that episode. My conversation with Victor really made me think about what makes a person successful in life, and how anyone can take their knowledge and monetize it. For more information about this episode, go to Mywifequitherjob.com/episode250.

And once again, I want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any primer that is closely tied to your ecommerce store. Now, if you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, and basically all these sequences that will make you money on autopilot. So head on over to Mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s Mywifequitherjob.com/K-L-A-V-I-Y-O.

Now I talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast where we’re giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.Mywifequitherjob.com.

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If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

249: How To Manage Cashflow Issues With Your Ecommerce Business With Victoria Sullivan Of Payability

249: How To Manage Cashflow Issues With Your Ecommerce Business With Victoria Sullivan Of Payability

Every physical products business requires capital in order to grow. And cash flow can often be a problem because you need to invest a large amount of cash upfront to pay for inventory.

In today’s episode, Victoria and I are going to discuss different methods of raising money along with the pros and cons of each.

Victoria Sullivan is a marketing manager over at Payability and she’s an expert when it comes to raising funds for your ecommerce business.

What You’ll Learn

  • Why financing is so important for an ecommerce business
  • Why it’s hard to get a loan from a bank
  • How does Payability work
  • The primary advantage using Payability
  • The Different funding options (Bank loans vs SBA Loans vs MicroLoans etc.) and the pros and cons of each

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
Klaviyo

Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. Today I have Victoria Sullivan on the show and Victoria works at Payability and is an expert when it comes to keeping e-commerce companies fed with a constant stream of product. And today, we are going to discuss how to deal with cash flow issues when it comes to selling physical products online.

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. And right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%.

Now, you can also use Privy to reduce cart abandonment with cart saver pops and abandoned cart email sequence as well at one super low price that is much cheaper than using a full blown email marketing solution. So, bottom line, Privy allows me to turn visitors into email subscribers and recover lost sales. So, head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve.

I also want to give a quick shout out to Klaviyo who is a sponsor of the show. Klaviyo is the tool that I use to build real quality customer relationships with my e-commerce store. And because all my transactions and email correspondence is tracked in Klaviyo, I can easily build meaningful customer relationships by listening, understanding and taking cues from my customers and delivering personalized marketing messages. So for example, with one click of a button, I can easily send a specific and targeted email to all customers with a lifetime value of over 100 bucks who purchased red handkerchiefs in the past year. And it is for this reason why over 10,000 brands have switched over to Klaviyo.

And right now, they have this cool docuseries called Beyond Black Friday where they discuss successful marketing strategies that their customers are using that you can emulate with your business. So, head on over to Klaviyo.com/beyondbf to check it out. Once again that’s K-L-A-V-I-Y-O.com/beyondbf, now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle so you can spend more time with your family and focus on doing the things that you love. Here is your host Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast. Today, I’m really happy to have Victoria Sullivan on the show. Now, Victoria is a marketing manager over at Payability and she is an expert when it comes to raising funds for your ecommerce business. And as you probably know, every physical products business requires capital in order to maintain your sales, and cash flow can be a huge problem because you need to invest a large amount of cash up front to make money. So, Victoria and I are going to discuss different methods of raising money today, along with the pros and cons of each. And with that, welcome to the show Victoria. How are you doing today?

Victoria: Hey Steve, thanks for having me. This is great.

Steve: Hey, Victoria. You know, I’m sorry; I’m used to call you Vicki, Victoria sounds so formal. Is that what you normally go by, or?

Victoria: I normally go by Vicki but it’s fun to get called Victoria.

Steve: So Victoria, please give us your background story and how you got into this business of financing.

Victoria: I don’t come from a financing background common with sellers. I think a lot of them don’t come from business backgrounds, and yet run these awesome ecommerce businesses on Amazon. I came from an advertising background, and I was [inaudible 00:04:02] ad agencies here in New York and I really was looking for a change. I wanted to go in house. And I had some experience with technology, working on ad campaigns for Samsung and Skype. We’re actually on Skype right now. So, I decided to apply for Payability. I wasn’t sure how it would go since I don’t have any finance experience, but ended up being a great match. And I’ve been here for over a year now and I’m really loving it.

Steve: Cool. So, can we kind of talk briefly about why financing is so important for e-commerce businesses. And maybe you can talk about some of the customers that you’ve dealt with, why is it more important for e-commerce in particular, as opposed to some of the other business models out there?

Victoria: Financing is super important in e-commerce, especially on platforms like Amazon and Walmart, as you probably are aware; these platforms have really created unlimited demand among consumers. And you really need to keep up with that demand in order to scale your business and make every sale you can possibly be making.

Steve: Yeah, absolutely. And I know like for us, we run an e-commerce business, every time we place an order of a container, that’s a huge initial cash outlay and sometimes we haven’t even sold out of all of our existing inventory. And so oftentimes, we’re just piping and all that money back into the inventory and sometimes if our businesses growing, we need even more money. And so, it’s definitely a huge factor, especially in e-commerce when you have to put all this money up front for your inventory.

Victoria: Yeah, absolutely.

Steve: So, what I’m hoping to do today is talk about some of the different financing options out there. And I figured let’s start with Payability first before going down some of the other routes. What does Payability do?

Victoria: Sure, so we’re financing company, and exclusively for Amazon and e-commerce sellers. We also have financing solutions on Walmart, Shopify, Etsy, Tophatter and a bunch of other different marketplaces and we plan on adding even more marketplaces this year. Financing products are created exclusively for the needs of e-commerce sellers. And we have two different products; our first product is our daily payments product, which is called Instant Access. So, instead of getting paid every 14 plus days, like you do on Amazon, you’re going to get paid your daily cash flow and get paid every day. So you always have money on hand to place an order, to pay your employees, or order shipping materials or whatnot. So, that’s just like continuous cash flow to grow your business.

Steve: So you’re getting paid every day, but what is the cost of getting paid so often?

Victoria: Sure, so for that we charge a 2% fee on the gross, the total sales.

Steve: Okay, so I’m sorry, you get paid every single day 2%. And so if you amortize that out to a year, do you know what the yearly interest rate comes out to be?

Victoria: Since it is a factoring product, there are no interest rates; it’s a flat fee, yeah.

Steve: Okay. And so can we contrast this then to like getting a traditional bank loan?

Victoria: I would say it’s completely different as far as any traditional loan, and that’s more like financing your business with someone else’s money. But this is financing your business with your own money. So you’re assuming a lot less risk. And again, it’s your own money; it scales up and down with you. And so, it’s very different from a traditional loan, but it can be used alongside a traditional loan.

Steve: Interesting, so let’s talk about that a little bit. So, is there like a monthly fee to use the service then? Because let’s say, I don’t make any money that month, does that mean I don’t owe anything?

Victoria: The fee is based on how much money you’ve made. So, it’s just a flat 2% fee on your gross sales and on your total sales. So yeah, it is contingent on how much you’ve made.

Steve: So, do I need to do anything to qualify for this? So, let’s say I come in, and I’m only making like $1,000 a month. And then there’s some months where I don’t make that much at all, is it just completely variable?

Victoria: So you do need to make a certain amount of sales in order to qualify. We require around 90 days of a consistent selling history and an average of around $2,000 a month in sales. You need around $100 to cash out every day so that’s why we structure it that way. But again, so it’s a pretty small minimum, you definitely don’t have to be a big seller to use it and start scaling your business. Another thing I should point out about all our products, and kind of what makes us unique for e-commerce sellers is that we don’t check your credit.

We don’t ask for tax documents. We don’t ask for any bank statements like our more traditional financing company would, it is all based on your Amazon account health and sales performance. So again, no credit polls, and you’re just going to get rewarded with financing for being a good seller, because Amazon does provide us with data to see how you’re performing and how good a seller you are and that’s kind of how we evaluate you.

Steve: Interesting. So what are the minimums actually in order to qualify?

Victoria: So for daily payouts, it’s an average of $2,000 a month in total sales.

Steve: Okay, it’s not that much at all, okay.

Victoria: And around 90 days of sales history.

Steve: Okay. And if there’s certain months of very low sales, then it doesn’t matter, right, once you qualify, you’re pretty much…

Victoria: We evaluate each customer individually. But yeah, once you’re on, if you have very low sales, then what usually happens is we do sunset those accounts, but usually that doesn’t happen.

Steve: Okay. So, all right so if we’re contracting like a traditional bank loan, where you’re getting this loan upfront that you need to pay back, there’s the potential that you can’t pay back the bank loan and then they can start repossessing stuff. Whereas with Payability, you’re just taking a percentage out of someone’s earnings on Amazon and so there’s no real risk of a default per se, because it’s not really a loan. Is that accurate?

Victoria: Yeah, it’s totally accurate. This is a factor; they get automated factoring service for Amazon and e-commerce sellers so there really isn’t a lot of risk on your part. It’s just getting your own money faster, and putting it to work faster.

Steve: Okay. And then 2%, that sounds like kind of like on the order of like a credit card charge, right? Like, if I was taking credit cards through Stripe, I get charged 2.9%, you can kind of think of it analogous to that in terms of fees?

Victoria: Yeah, absolutely. It’s definitely equivalent to like your payment processor that you would pay if you had a physical store that was accepting visa cards; you can definitely compare it to that.

Steve: So, why would someone use this as opposed to just like credit card financing, which is readily available, like you don’t have to go through any application process, you can just max out your credit cards?

Victoria: Maxing your credit cards also does create a lot of risk. And like I mentioned before, demand on Amazon, a lot of people sell, even if they do have really high credit limits, if they have a really hot product, a lot of people sell a lot more than their credit limit will allow. So they really need to catch out every day or more often in order to pay those credit cards down and keep ordering the inventory that they need to keep scaling their business. It’s all about just getting every sale you can possibly get.

Steve: So in terms of payment, how does it work and how do you enforce that the seller is going to pay you?

Victoria: So, how it works is when you sign up for Payability for a daily payments product, you switch out the bank account on your Amazon account to our account. So, you would get paid by Payability every day. And then we would get paid by Amazon.

Steve: I see. Okay and so that’s why you have such a high approval rate, right? You’re just doing it based on Amazon sales, you get the money first and then you pay out to the seller.

Victoria: So yeah, so we advance the seller on the money that we see in the Amazon account each day, and then we get paid back by Amazon. So you don’t have to go in and write us a check or anything like you would with a more traditional loan, it’s just directly in the flow of funds.

Steve: Can we talk about what happens for refunds, suspensions, and some of those special cases.

Victoria: So as far as refunds, we only advance you 80% of your payout every day and that’s to cover returns and charge backs. So, that usually covers that and then we release that 20% to you when we recruit the funds from Amazon usually at the end of the 14 day period. As far as suspension, when you are suspended from Amazon, you are also suspended from Payability; we don’t continue to send you any more funds until you’ve worked it out with Amazon. Well, it’s like we will have advanced to you some of your Amazon payment go to you, hey, you got suspended from Amazon, pay us back that money right now. We don’t do that, but we do put a hold on those funds with Amazon. So in case your account doesn’t get reinstated or we can’t get ahold of you, we are able to recoup the money that we advanced you.

Steve: Okay. And how invasive are you guys into the Amazon account? So for example, let’s say I was a seller, and I was doing some sketchy activity like buying reviews or whatnot, and I was just counting on the immediate payout from you guys to get the money before I was suspended, for example, in the worst case, do you guys monitor the health of the Amazon accounts?

Victoria: So, we do have over two years of machine learning that kind of picked up on these behaviors of people who have defrauded us in the past if that makes sense.

Steve: Yeah.

Victoria: So, our system runs — the computer runs 24 hours a day and a lot of times, it’ll spot these behaviors and flag that account. And sometimes something is indeed going on and sometimes nothing is going on, the seller has perfectly reasonable explanation as to what happened. But we usually stop advancing funds until we get ahold of them to talk about what’s going on.

Steve: Okay, can we talk a little bit about just like Payability versus like Amazon loans. I get these emails all the time where Amazon will just loan me a set amount of money based on the amount of sales that I’m generating. And I guess if Amazon is just willing to give me a loan without anything, they’re obviously pretty confident that I can pay it back. So, what are the pros and cons and why would I go with one or the other?

Victoria: You can definitely go with both. We work really well in conjunction with Amazon loans, about 40% of our customers have Amazon loans and we work really well to accommodate that. That’s also a great tool you can use to grow your business. So definitely it doesn’t have to be one or the other, especially with our daily payments product, they can really complement each other.

Steve: I see. So people are getting loans up front to fund their inventory and getting their money back immediately they can funnel back into the inventory?

Victoria: Yeah, absolutely or other aspects like paying your VAs.

Steve: Let me ask you this, I’m just thinking kind of like on my feet right now. Typically you get paid out from Amazon fairly often. So what can you do with an extra week or two weeks’ worth of money? Like what are some scenarios where you’ll need the money like that quickly and that immediately?

Victoria: So, with a lot of the bigger sellers, I think they find it challenging where they have hundreds if not thousands of skews and they have many different suppliers, all of which that want their money at different times on different terms. They don’t have to worry about constantly having to put this on a credit card and borrow here to cover all of those orders at different times of the month, they’re just able to cash out every day, cover the order, pay cash and not think about it.

Steve: I see, can you give me some examples of maybe some of your customers where this is like an absolute necessary thing?

Victoria: Sure. Yeah, we’re actually shooting a video with a customer in Atlanta and they came out with a private — they have a private label allergy test product for pets and people, a really cool product. It’s really taken off on Amazon and they have no other financing, no other loans, no investors, and they finance their entire operation really just off daily payments. They had a lot of surprises before where they had the inventory, but sales are spiking in December or during the holiday season and they need to order a bunch of shipping materials at the drop of a hat. They can just cash out that day, cover that order and they’re done. They’re not thinking about it, they’re not putting a little bit on this credit card, maybe borrowing a little bit from parents, may be borrowing a little bit from here in order to scale the business and cover that order, they’re just cashing out and not even thinking about it.

Steve: I see. So for these customers, like even within like a couple week window, they need the cash quickly?

Victoria: Yeah, absolutely just with the demand of Amazon, and then they want to scale their business quickly. So, that’s why they’re cashing out and really benefiting from being able to pay different people at different times, being able to order supplies at the drop of a hat, make payroll, hire extra people. It really gives you more flexibility around your business because you’re not dependent on that payment coming in order to cover these expenses; you’re just going to be able to cover them.

Steve: So, I’m just curious, and I’m not sure you will have the answer to this question. But if you were to do like a case study of someone who has the funding and who does not, I’m just wondering if you have any statistics in terms of growth where you’re funneling everything quickly into your business versus not.

Victoria: So Marketplace Poll actually did a case study over a year ago, I’m going to bring it up here on my computer and I’ll read you some of those statistics. But it’s like you said, people who got paid sooner did scale there businesses a lot faster, and in ways you wouldn’t think. It’s not just growing their catalog of products; their positive reviews also went up as did their overall rank within Amazon. Because as you probably already know from selling on Amazon, stock out can be really detrimental to an Amazon business in that and you’re not only just losing sales today, you’re also losing sales tomorrow because you are going to lose a lot of your rank within Amazon and you’re going to have to kind of get back to where you started. So, because of that a lot of people have been able to avoid stock outs and they’ve increased their marketplace pulse rank because they haven’t had to play that game of catch up.

Steve: Right. I should have warned you ahead of time that I was going to ask this. What else does that study say? I’m just very curious.

Victoria: Sure. Yeah, I can certainly send you the link. It’s over a six month period of setting Payability to customers versus non Payability customers. And Payability customers increase their rank by an average of 26.4% after six months, while non Payability customers decrease their rank by an average of 22.1% after six months.

Steve: So, I’m just doing some mental calculations in my head right now. If I were to pay 2% of everything, if you kind of treat it like a loan and amortize it over like an entire year, it seems like the rate overall is significantly higher than getting a loan right? And so, I was just kind of curious of what are kind of like the ideal businesses for this? When would you choose to get a loan or even do crowdfunding and that sort of thing versus Payability, and when do they work well together?

Victoria: Sure. So yeah, I mean like you said, Payability definitely is not the cheapest way to fund your business but it is the fastest and most flexible way and it is a product designed for e-commerce sellers. So yeah, a loan or a credit card is definitely probably going to be cheaper for you, but this gives you more speed and flexibility. For example, because we don’t pull credit or anything, we’re able to approve people I know in less than 24 hours. We have another product called Instant Advance which is kind of like a merchant cash advance but for Amazon and e-commerce sellers, and here’s a good case city on that and how it gives you more speed and flexibility.

We had a seller that was on daily payments, it’s a Walmart seller actually and his supplier was having a huge sale. So he gave us a call Friday morning saying, I need 15 grand to buy from my supplier sails which he warehouses and he wants to sell me this inventory super cheap. So, Friday morning, we were able to approve him for a $15,000 instant advance, and he got his money that afternoon. He went to his supplier Saturday and bought the inventory. And with a bank, that’s going to take you at least two weeks and require a ton of paperwork, and by then somebody else has bought the inventory. So, that’s kind of what the benefits are. If you really need that speed and that scalability as a lot of sellers do, that’s where Payability comes in.

Steve: Actually no, that makes a whole lot of sense because getting a bank loan, sometimes you don’t even qualify right, sometimes you need a huge track record of sales in order to get a bank loan especially if you’re like a six figure seller and you don’t even have like a two or three year track record, it can be difficult to get a blown actually in my experience at least.

Victoria: Yeah, we hear that all the time and banks don’t really understand FBA or anything like that; they’re going to want to hold your inventory as collateral. And when you tell them my inventory is across 18 different FBA warehouses, they’re going to say, I don’t understand that, I can’t give you a loan based on that. But where capability is different is we’re actually looking directly at your Amazon account, seeing that you have the sales, seeing that you have even more potential and getting your money in 24 hours, no credit checks.

Steve: Okay. So, it’s okay, I think I’m getting a better picture of this now. So, it seems like if you have the time and you’re not in any urgency, perhaps a bank loan is a cheaper choice, but as you’re just kind of running your business, you’re going to run to these cash flow issues and Payability just helps smooth everything out for you.

Victoria: Yeah, absolutely. Yeah, if you can get approved and you have the time, a bank loan is probably the way to go. But a lot of our customers again do use both; they use both the daily payments and get bank loans too for bigger inventory.

Steve: Can I ask if there’s any sort of ideal business for this certain funding model? And immediately comes to mind actually is like a parallel, right? I need to outlay a large amount of cash for all these different sizes and all these different skews, especially over the holidays. That would be like the first industry that comes to mind. Are there any patterns in the types of customers that you have for this that is ideal for this service?

Victoria: Yeah, I haven’t really seen like a certain type of business or a type of category that’s really big into this business, we just see a business that seeing growth on Amazon and wants to take it to the next level, but it needs additional financing to do so. So, really just fast growing e-commerce businesses, but I haven’t seen a certain category or anything as far as our customer base.

Steve: And are most of your customers, are they larger businesses or their smaller guys too that have been taking advantage of this?

Victoria: We see everything from people who are doing around $2,000 a month to people who are doing well over a million a month benefiting from our service depending on their business model.

Steve: I’m just curious, for someone who’s just doing $2,000 a month, why would they need the money so quickly? Have you interviewed any of these people? I’m just kind of curious.

Victoria: Sure. I think a lot of them are doing retail arbitrage to just kind of get started. And even if you’re getting only $100 a day, if you go to Walmart, you can definitely buy a lot of inventory there.

Steve: Okay. That makes a whole lot of sense actually, because I was thinking of private label and oftentimes you have to make your order two to three months in advance, so even if you were to get the money sooner rather than later, it might only save you a couple of weeks. But retail arbitrage, you need the money every day, pretty much. So that makes a whole lot of sense.

Victoria: Yeah, I love them. I started retail arbitrage just to get going on Amazon and then I can go into wholesale and private label.

Steve: So, if I’m a seller and I’m looking for funding, and we talked about a bunch of different ways to get money. There’s also micro loans which we kind of haven’t talked about yet. Those are where it’s kind of a way to raise money where a whole bunch of people contribute, there’s like Lending Club and those sorts of services, can you kind of talk about why you’d go with one or the other in terms of that as well?

Victoria: I would say that probably the same thing with speed and scalability. I’m sure [inaudible 00:27:11] a while for all of these different loans to come together. But if you come to Payability, and you decide that’s what you want to do, we just take a look at your Amazon account and within 24 hours we can get you paid. So, I think again, if you have more time, that might be a good option for you.

Steve: Does this only work for Amazon? Like if I’m running my own e-commerce store, can I also use it?

Victoria: We also have, we have clients across at Walmart, Shopify, Etsy, Tophatter, Newegg. And we keep adding — Jet, we keep adding new marketplaces. So absolutely not just for Amazon, it’s for general e-commerce sellers.

Steve: How does Shopify work, is it the same thing like the money gets deposited into your account, and then it gets paid out?

Victoria: So, we don’t have daily payments on Shopify, we just do instant advance on there since they do pay every day or every other day. And it yeah, it works very similarly. We’re always directly — we like to stay directly in the flow of funds just to make it easier for us and the customer that way, you’re not writing us a check like you would on a loan. It’s just you’re making the sales, you’re scaling your business and we’re getting paid.

Steve: Okay. It seems to me after our conversation today, I think the biggest factor with your service at least is peace of mind, right? You don’t have this debt hanging over your head; it’s just kind of taken out of your existing funds, and there’s no worry factor, I guess.

Victoria: Yeah, that’s why a lot of people use us, they don’t want to worry about the, again, the debt hanging over their head, or if all of a sudden their sales scale up, they have the inventory, but they need to order a lot of shipping materials in a short amount of time, they don’t have to think about it. So, it’s two minutes of your day to manage cash flow, just going into the Payability app, and — well we don’t have an app yet, but website and cashing out. So, it cuts a lot of time for customers. They said they used to spend hours a week figuring out how they were going to pay for different expenses of a growing business, and now they don’t even think about how they cashed out that day and they paid for what they needed to pay for, and they just continue their growth.

Steve: Okay. So if I were to just kind of sum up our conversation today, it sounds like if you have a lot of time, then it’s probably in your best interest to try to get a loan. But oftentimes, in the spirit of running a business, it’s never going to be that smooth, and you can never predict things in advance. And so, it’s fine to combine both of these services. But as you run your business, if you need money, and it’s busty at times, Payability helps smooth everything out.

Victoria: Yeah, absolutely, I mean opportunity cost is huge in e-commerce and you don’t want to be missing out on sales.

Steve: And the two services work well together. Is there any way for me to like pause it from time to time when I don’t think I need the money that quickly?

Victoria: So for [inaudible 00:30:25], you can’t turn it off day to day, week to week; we just have a 30 day cancellation policy. So you absolutely can — so it is flexible, not as flexible as I don’t need it this week, you’ll turn it off, but it is a 30 day cancellation policy. So, a lot of people do use it seasonally. They only need it in Q4, they cancel December 1st, and by January 1st they’re no longer there.

Steve: That was my next question because that makes a whole lot of sense. Like, I definitely might want to turn this on during the holiday season, where things are just absolutely crazy. But then when it’s slower, maybe like during the summer months, I might want to turn this off.

Victoria: Yeah, there’s no cancellation fees or penalties for canceling, just the 30 days.

Steve: Okay. And in terms of the 2%, is there any wiggle room there?

Victoria: Sure. Yeah, we do have, again, we evaluate each account individually, amateur sellers doing 50 K or more a month, if they qualify, we often are able to bring that down a little bit, so yeah.

Steve: Okay, cool. Well Victoria, thanks a lot for kind of clearing this up. You know, we’ve talked in the past and I was never 100% clear on like some of the use cases for the service. I understand that you have a special offer for the listeners?

Victoria: Sure. If you go to go, that’s go.payability.com/Steve, you can sign up for Payability and get a $200 sign up bonus.

Steve: Interesting. So that’s like free money.

Victoria: Yeah.

Steve: Okay. Yeah, so hopefully the listeners out there, if you feel like you’re going to come to a cash flow crunch, at least talking with you today Vicki has mitigated some of my main concerns. It seems like the ability to turn this on and off during peak periods from a month to month basis is very attractive. And just for peace of mind, for your ecommerce business, it can make a lot of sense, especially if your business is busty.

Victoria: Yeah.

Steve: So, Vicki, thanks a lot for coming on the show. I really appreciate your inputs.

Victoria: Cool. Thanks for having me.

Steve: All right. Take care.

Hope you enjoyed that episode. Now I thought it was really interesting to break down the different options when it comes to raising money for an e-commerce business. And there’s some amount of peace of mind when you use a service like Payability because you can avoid going into debt. For more information about this episode, go to mywifequitherjob.com/episode249.

And once again, I want to thank Klaviyo for sponsoring this episode. Klaviyo is my email marketing platform of choice for developing real customer relationships. And right now they just released a cool docuseries called Beyond Black Friday where you can learn successful e-commerce marketing strategies from real companies using their platform. Now, this docuseries is free and you could check it out at Klaviyo.com/beyondbf, once again that’s K-L-A-V-I-Y-O.com/beyondbf.

I also want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any primer that is closely tied to your e-commerce store. If you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

Now, I talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast where we’re giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.Mywifequitherjob.com.

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If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

248: James Clear On How To Create The Right Habits To Grow Your Business

248: James Clear On How To Create The Right Habits To Grow Your Business

Today I’m thrilled to have my buddy James Clear back on the show. James’ most recent book, Atomic Habits, hit the New York Times bestseller list and the last time I checked, it was the #8 best selling book on all of Amazon.

In today’s episode, we’re going to take it up a level and discuss how to build good habits and break bad ones when it comes to business. We’ll discuss tactics that James has uncovered over the years from studying the habits and routines of entrepreneurs, artists, athletes and high powered individuals.

What You’ll Learn

  • How to get on the New York Times Bestseller list
  • How to develop the proper habits to follow through on a business idea
  • The best way to start a new habit
  • How to make a habit easy to adopt
  • How to fight procrastination

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into the strategies they use to grow their businesses. Now today I have James Clear on the podcast for the second time. And if you don’t remember James, he is a New York Times bestselling author and an expert on habits. So in this episode, we’re going to talk about developing good habits in the context of growing a successful business.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Klaviyo is the tool that I use to build real quality customer relationships with my e-commerce store. And because all my transactions and email correspondence is tracked in Klaviyo, I can easily build meaningful customer relationships by listening, understanding, and taking cues from my customers and delivering personalized marketing messages. So for example, with one click of a button, I can easily send a specific and targeted email to all customers with a lifetime value of over 100 bucks who purchased red handkerchiefs in the past year.

And it is for this reason why over 10,000 brands have switched over to Klaviyo. Right now they’re running this cool docuseries called Beyond Black Friday where they discuss successful marketing strategies that their customers are using that you can emulate with your business. So, head on over to Klaviyo.com/beyondbf to check it out, once again that’s K-L-A-V-I-Y-O.com/beyondbf.

I also want to give a shout out to Privy who is also a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now what does Privy do? Well, Privy is an email list growth platform and they manage all of my email capture forms. And I use Privy hand-in-hand with my email marketing provider. Now they’re a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in e-commerce. Right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this. And when I implemented this form, email signups increased by 131%.

I’m also using their new cart saver pop up feature to recover abandoned carts as well. And bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve. Now onto the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m thrilled to have my buddy James Clear back on the show. And in case you missed him last time, James is on the podcast back in Episode 202, where we broke down his strategies on how to build a blog that gets millions of visits per month. But in today’s episode, we’re going to take it up a level and discuss how to build good habits and break bad ones, tactics that James has uncovered over the years from studying the habits and routines of entrepreneurs, artists, athletes, and high powered individuals. And I’m proud to say that James’s most recent book Atomic Habits has hit the New York Times bestseller list. And at one point, I think he was the number eight best-selling book on all of Amazon. And with that, welcome to the show James. How are you doing today?

James: Yeah, I’m doing well. Thanks so much for having me back. It’s good to talk to you.

Steve: Yeah. So first off congrats on the book.

James: Thank you.

Steve: I’m actually just curious what it takes to hit the New York Times bestseller list these days. Is there a strategy for doing so? Is there a way to game it?

James: So, there are two answers here. So the first answer what does it take? I can only tell you what it took for me. So, the kind of high level was I wrote two articles a week on Jamesclear.com starting in 2012. I did that for like three years and build my platform up and got an audience of I think it was around 200, 250,000 email subscribers around that point after about three years. And I leveraged the size of that platform that audience to get introduced to agents and publishers. And we put together a book proposal that took about three months and pitched it to, I think 17 or 19 publishers, I think it was 19. And I think we got meetings with seven.

So I flew to New York for a week, went and met with all these publishers with my agent. We were lucky; we had a good amount of interest. So we got bids from four and then ended up selecting our favorite one out of the bunch. And then I signed the contract to write the book in a year, became very apparent that I needed more time than that. And so, I went back and asked for an additional year and they very kindly gave it to me. So, it took me two years of writing and research. That was easily the hardest part, like the biggest and the most suffering. I felt like it was really hard to write under contract. I felt like there were a lot of expectations to produce something great. I was really worried that people wouldn’t enjoy it or that the publisher wouldn’t think it was good enough.

I handed that in actually three months late from the extended deadline, so two years and three months of writing and then we spent nine months planning to launch and marketing and prepping and doing interviews and all that stuff, getting the book on the publisher side. They were getting it type set and printed and all that type of thing. And then the book released, the three months before launch, I did 85 interviews in like 10 weeks or 12 weeks, something crazy like that, a bunch of blog posts, emails to my own audience, basically any and every favor I could call in, I was like working on that.

And that culminated with a bunch of exposure on launch day. I was on CBS This Morning and did a TV segment. So just like a ton of marketing push, in addition to trying to write like a really fantastic book. And all of that came together and we had a really great launch week and then ended up hitting the New York Times bestseller list and then we hit it again. So, the first time was we were number five in advice and how to, and then the second time and still right now, it’s number three in business. And so yeah, the book the launch has done really well but that’s what it looked like for me. So that’s the — really and I give that whole process because it was definitely not like a one week thing, I mean it was like…

Steve: Oh, yeah, I know that. I was just kind of curious how many books you actually have to sell. It’s in like the first week, right?

James: Yeah. So they have two different types of lists. The first one is calculated weekly and the second one is calculated monthly. And so we ended up hitting both, so one is based on weekly sales ones based on monthly sales. For weekly sales, it does depend on what category you’re in. So some categories like general nonfiction like memoirs, and things like that, I’m not sure what the numbers are for that. I think they’re actually a little bit lower from what I’ve heard from people, but I don’t know for sure than what you need in like advice and how to, which is the category I was in.

And this gets a little bit to your question of like is there a way to game it or not? Certainly, many people have tried, I was not really interested in doing some of those things that are I guess you would say like on the margin of like, oh, is this allowed or not? Some people, some speakers will try to do things like buy — I won’t name any names but there are people who bought like 10,000 or 20,000 copies and then have them sitting in their garage. And so they’re like they bought the book so that it would look like that number of sales came through during the first week and they could get on the list but they didn’t actually go to readers or anything like that.

So I was like really adamant about every copy we sell needs to go to an actual person, or stuff like you’ll see a lot of speakers will trade their fee for books. So, they’ll say I’ll come talk but if you do it in these three months when I’m prepping for launch then you won’t have to pay me, you can just buy 500 books instead or something like that. So people will try to do stuff like that. There’s some really weird services that you could hire. I don’t actually know if they still exist because I think the New York Times became savvy to them but for a while, people would pay like they’ll pay a service, I don’t know, 10, 20, $30,000, I don’t know how much it was, it was definitely in the tens of thousands.

And that company would have like a bunch of little — they would have people go out to different stores and buy individual copies of books or place individual orders on Amazon. Now, you were really buying like 10,000 copies through that company, but they would have their employees place them all as individual orders. So, they all looked like they were individual people buying and they would spread them out across the country and stuff. And all of that stuff is just like a lot. I mean, first of all, I just don’t know it’s a good way to spend your time or whether it’s ethical or not. But also it’s all just an effort to try to get on the list.

Now some of the bestseller lists like I think USA Today, we hit the New York Times, the Wall Street Journal bestseller list, the USA Today list, Publishers Weekly, the Independent Booksellers list and some of them are strictly based on sales. Like I’m pretty sure the Publishers Weekly list and the USA Today list are like whatever book sells the most copies that’s the number one book. Now the New York Times list is a little bit of a black box. I mean it’s the most elite list to be on and nobody quite knows how it works. But from what I can tell, you as a seller how many copies you need to sell, I think 10,000 is roughly the minimum kind of rule of thumb you’ll hear people throw out.

Now that doesn’t guarantee you’re going to get on because it depends on what week you’re launching and how many copies other books are selling that week. But as a rule of thumb, if you do 10,000 in a week, then that’s kind of the bear in the game. Now, just because you have that many sell does not mean that you’re going to get on the list, and the New York Times will sometimes make an editorial decision and say, this is not the kind of book that we want to have on here. Well, we think that the way you got these sales looks a little suspicious.

And so, like I’ve heard from people who, I heard from one author who sold 4,000 individual copies, and then they had one company that purchased 6,000 copies. So they thought, hey, I sold my 10, like, I should be in the running here. But I think the New York Times looks at that and they think, well, really, you sold like 4,001 because you just had like one big customer that said, yes. And so, if they’re comparing, say that person to somebody else who sold 10,000 individual orders, I think they tend to give the nod to the person who has the more individual readers.

Steve: Interesting.

James: And so, authors love to complain about it because there are a lot of authors that think they should have been on because they had certain number of sales, they didn’t know they got taken off or whatever. And whether that was true or not who knows, because nobody knows exactly what numbers The New York Times is getting each week and how many sales other books made. But once you make it, now I’m like, yeah, it’s great. I love that. I think it’s awesome. So it’s funny to be on the other side.

Steve: I felt comfortable asking that question because I knew you’re not the type of person to game the system.

James: A lot of people do it and I guess you could make an argument for it. If you were like, well, if I get on the list then and my main thing is speaking, like for me, speaking is a small portion of my business, I don’t really do that much of it. But I guess if you were like a full time one, people find ways to rationalize it. They’re like, oh, well, I’ll just buy my way in the list for 20 grand and then I’ll be able to charge more at every speaking event into the future because I can say I’m New York Times bestseller. So I think people rationalize it that way.

But for me, again separate from the ethical considerations which I think are questionable in themselves but could you really be proud of it? I don’t know. Like I mean, I just spent six years building an audience and three years writing a book and planning this launch. I mean, I put everything I possibly had into it. And it felt great to hit the list because there was so much sacrifice before it. But if I knew that I had just gotten there because I wrote a check, I feel like it would be a totally different experience.

Steve: I hear you.

James: And so in a sense, I wouldn’t have wanted to do it anyway, even if I had a good business reason, which I don’t. But even if I did, I feel like it would have taken away from it. So anyway, I’m kind of going on about it. But it’s a little bit of a black box, but I can say that it feels fantastic if it works out in your favor.

Steve: So let’s switch gears a little bit and talk about habits. And what I wanted to do actually was frame our talk in the context of starting or growing a successful business because a lot of my readers and listeners, they start out strong, but they kind of fizzle out in the long run if they don’t see immediate gains. And so, what I was hoping to do actually is maybe use your book as a framework. How does one develop the proper habits to follow through on a business idea until things finally start taking off?

James: Yeah, that’s a great question. So I mean, first of all, just from a high level, I like to think about habits is what I call like the compound interest of self-improvement. And the reason I like that phrase, habits are the same way that money multiplies through compound interest, you save up a little bit, it doesn’t feel like much in the beginning. In many cases, that compound interest curve is like really flat, almost like a plateau and then the hockey stick portion is only years or decades down the line. So it doesn’t feel like much at first, but then you turn around two or five or 10 years later, and it’s like, wow, this really added up. I think habits are kind of like that as well.

The same way that money multiplies through compound interest, the effects of your habits can multiply as you repeat them over time. And on any given day, the same way that saving 10 bucks doesn’t really feel like much, making a choice that’s like 1% better or 1% worse, a little bit improved, a little bit better habit or a little bit worse habit, it doesn’t really feel like much. What’s the difference between eating a burger and fries for lunch, or eating a salad? It’s not really a whole lot on any given day; your body looks the same in the mirror at the end of the night the scale doesn’t really change. But it’s only when you look back five or 10 years later and you’re like, oh wow, that choice of what I ate for lunch really does matter.

And so, this is one of the core philosophies of Atomic Habits, one of the core ideas in the book, this idea of how can we try to find ways to get 1% better each day? And if you can capture those small advantages, if you can master those little habits day in and day out, then you can end up with a really remarkable or powerful result in the long run. And I think that not only applies to our lives, but it certainly applies to our businesses. If you can just try to find a way to get a little bit of a 1% margin for improvement daily in something you do or monthly in the financial state of your business, I mean, that can really add up over the broad span of time.

Steve: And what does that look like in the context of a business? Like what is like a 1% gain or something that you might do? You can talk about your blog, or how you built up an audience for example.

James: Sure. Yeah. So I think the first thing is, you don’t need to do something more than what you’re already doing. You just need to find a way to show up more consistently than you have before. So, in other words, you don’t need to increase the intensity. I’m not saying for then, this is I’m focusing on the very beginning. Now, what’s the first thing I do? Like I’m not saying well, you need to write a radically better blog post, or you need to become massively better at sales calls, or you need to massively improve your skills at writing a sales page. What I am saying though, is let’s find a way to make it easy to show up and do those things more consistently than you’ve done before. So it’s kind of like yeah, you could do the same workout at the gym, but let’s just make sure you miss fewer workouts. So, that’s the first piece.

So in the context of my business, I wrote a new article every Monday and Thursday for the first three years and it was really that consistency, it was really that writing habit that set me on a different trajectory as a writer and an entrepreneur. And that was the thing that made it possible for me to build this audience and get the book deal and so on.

Steve: Okay, so I mean it’s easy to say that right? But how do you make sure you start that schedule? How do you have self-control to do that?

James: Okay, so I want to answer this in two ways, I want to come back to the self-control piece. So, the first part is I like to suggest people utilize what I call the two minute rule. So you take whatever habit you’re trying to build, whatever habit is relevant for your business whether it’s writing blog posts or making podcasts or making sales calls or whatever and scale it down to just the first two minutes. So, read 40 books a year becomes read one page, or call 20 clients every month becomes make one sales call, or do yoga four days a week becomes take out my yoga mat, so whatever the habit is you scale down to just the first two minutes.

Now, sometimes it sounds silly to people because especially with like health examples, I’ll say something like there’s a reader of mine, he end up losing over 100 pounds. And one of the things he did was he went to the gym but he didn’t allow himself to stay for longer than five minutes. It feels like well, that sounds ridiculous, like going to the gym for five minutes isn’t going to get you in shape. But what you realize is that he was mastering the art of showing up and this is a crucial thing about any habit business related or otherwise, a habit must be established before it can be improved.

And so, if you don’t become the type of person who goes to the gym for five minutes, you don’t have a chance to be the type of person who works out for 45 minutes, four days a week, or if you don’t become the type of person who makes one sales call, you don’t have the chance to be the person who makes 20 sales calls every month, month in and month out. And so we’re trying to scale it down to that I guess we call it a gateway habit, the thing that initiates the response. And let me give you maybe another example here. So, I like to refer to these moments as decisive moments, these two minutes that kind of determine the next chunk of time or get you moving in the right direction, get a little bit of momentum.

So for me, there’s a moment every morning where I sit down at my computer and either I open up Evernote and I start working on the next article I’m going to write, or I go to ESPN and I check latest sports news. And what happens in the next hour of my day is really determined by what happens in those like 45 seconds. It’s like if I can master that decisive moment of opening up Evernote and starting to write, then I’ve got a productive hour in front of me. And I think that no matter what your business looks like, they’re going to be four, five, maybe eight or 10 of those decisive moments throughout each day. And if you can just put your energy into mastering that, then you can have a productive day, you can have a more effective time working on your business. So that’s the first lesson master those decisive moments.

The second piece comes back to your question about self-control. And this is I think the common narrative for habits, for productivity, for effectiveness is you just need to want it more, you need to try harder, you need grit and perseverance. You need to work smarter. You need to make sure that you try to optimize things. And certainly working hard is valuable and it’s an important skill. But if you look at some of the research on self-control, and I cover this more in chapter seven of Atomic Habits, a lot of the research will show that the people who exhibit the highest self-control who you look at from the outside and you’re like, wow, they must have a lot of willpower, actually, the thing that distinguishes them from most other folks is that they operate, live and work in an environment that has fewer temptations, so they are able to exhibit more willpower simply because they’re being tempted less.

And I think that that is the lesson to take away from this is what’s the best way to improve my willpower? What’s the best way to make it more likely that I’ll show up and do the right thing each day? It’s not to push harder, or to just try harder or to say work more. The solution, the best lever to pull is to redesign your environment so that you’re tempted less. Put the objects that prompt your good behaviors in more obvious locations, reduce the friction of taking a good task, and put the objects that derail you or distract you in less obvious locations and reduce or increase the friction of doing something unproductive. And we can talk more about that.

Steve: It’s funny because I’m just thinking about all this in the context of raising my kids right now. And we were kind of picking and choosing our kids’ friends based on like both their personality and their work ethic because we want our kids to hang out with those other kids who are trying really hard hoping that it’ll just kind of rub off on them really. It means, it’s the environment that they’re in.

James: That’s actually a brilliant strategy because children are master imitators which anybody who has a two year old can tell you that, right? Like you say a cuss word and then they pick it up instantly, even if you don’t want them to, or they imitate whatever you do. But as children age, they continue to imitate but they tend to stop imitating their parents as much and start imitating their peers much more. And so there’s a great book called The Nurture Assumption by Judith Rich Harris that talks about the influence of peer groups on how children grow up.

And parents have a significant influence too, but that influence is largely genetic, it’s largely passed down through the genes. But the way that parents can influence, one of the best levers they can use to influence their children is by choosing what city you live in, where you go to school, what extracurricular you’re a part of, in other words, choosing what other kids they get exposed to. And so, your strategy there of trying to pick their friends by what their friends’ habits are is a smart one. We pick up all kinds of habits from the people around us, and often we want to do the things that our peers are doing. And so that’s a good way for parents to subtly shape or at least influence in a little way the habits of their kids. You can’t control it totally, but that’s actually probably more effective than trying to force them to do something you want.

Steve: But you’re not always going to be in the ideal environment, right. So there’s got to be a little bit more to this.

James: Yeah, absolutely. So in the book, I offer four different strategies for building good habits and breaking bad ones. And I’ll just go over real quickly here. There are tons of examples in the book of course, but we can go over a few of them as they relate to business in this conversation. But before I do, I’ll just say that not all four of these will always be working for you. And so, you can really look at them as like a toolbox or a set of strategies that you can rely on. And when one thing isn’t working in your favor, maybe you pull on the other three levers, and that’s enough to get you to do the more productive or more effective action.

Steve: Let me cut just a little bit. One common thing, at least that I have a problem with is procrastination.

James: Yeah. So, let me give you all — let me give these four and I’ll give you some examples related to procrastination. And procrastination is a really broad topic, right? Like, there’s a million ways you could procrastinate, but I’ll just go over some common ones. So, the four stages that I like to break a habit into, and again, this is all in detail in the book. But just real quickly, I break a habit…

Steve: Better to hear it from you the man himself.

James: Sure, yeah, yeah. Well, so cue, craving, response, reward, these are the four stages. So, there’s some kind of cue that precedes the habit, which is like a prompt that gets you to pay attention to what’s going on, something that’s happening in your environment. There’s a cue that picks up your attention. I’ll give you an example in a second. Second, there’s a craving there’s some kind of interest rotation of that cue, what it means. And based on what you think it means, you take a particular action. So that’s the response, which is the third stage. And then finally, your action delivers some kind of result. There’s some type of reward or consequence that comes after that.

So for example, let’s say you walk into the kitchen and you see a loaf of bread on the counter, it’s in the morning, so the loaf of bread, visual cue, so that’s first stage. Your prediction is, oh, I want to make some toast or that would be tasty. And so you take out a piece of bread, put in the toaster, that’s the response, pops up a minute later, you get the toast, you get to eat it. That’s the reward. Okay so cue, craving response, reward. No you can just as easily imagine that at a different time say, 10 minutes later after you’ve eaten breakfast, you walk back into the kitchen and you see that loaf of bread.

And now the cue has a different meaning, your state has changed, you’re full instead of hungry, and so you interpret that cue in a different way. Now your craving is not there, it’s not existing, interpreted as so there’s the bread but I’m not hungry now. And so you don’t take the same response. So, this type of thing is happening all day long. We’re taking in cues; we’re making predictions about what to do next, or taking action, and then getting some kind of outcome or result. So, from those four stages, we can have a step for each stage for making it easier to build good habits and harder to fall into bad ones. So, I call these the Four Laws of behavior change.

And the first law is to make it obvious. So you want the cues of your good habits to be obvious and available and visible. The second laws to make it attractive, the more attractive a habit is, the more likely you’ll fall into it and perform it. The third law is make it easy. So the more easy, frictionless, convenient a behavior is, the more likely you are to do it. And the fourth law related to reward is make it satisfying. The more satisfying and enjoyable an experience is, the more you want to repeat it again in the future. And if you want to — so those four make it obvious, make it attractive, make it easy, make it satisfying explain how to build a good habit.

And if you want to break a bad habit, you just invert them. So rather than make the cues obvious, you want to make it invisible, make it unattractive, make it difficult, make it unsatisfying. And so, let’s go through a couple of examples of what this looks like for procrastination since you mentioned that.

Steve: Real quick though, making something attractive, the thing here is a lot of what’s involved in creating a business kind of sucks, right? It’s boring. So I’m kind of curious, maybe once you address the procrastination question, how do you make something that’s really mundane and boring, attractive?

James: Yeah, it’s a great question. Well, so I’ll just answer that right now then we come back to procrastination is a larger topic. So, make it attractive, there are a couple of different things that influenced this. So first of all, let me answer and I’ll give you a quick tactic before I talk about the kind of the overarching thought here. So, quick tactic for making something more attractive, you can use the strategy that’s called temptation bundling. And so, the idea is you stack something you want to do, something you enjoy doing with the thing that you know you need to do.

So, one of the examples I give in the book, there’s this guy, he was an engineering student, and he knew that he needed to be exercising more but he also knew that he liked watching Netflix and probably liked it too much. And so, he linked up his computer to a stationary bike so that Netflix would pause if the bike was not running. So happy cycling the whole time if you want to watch a 30 minute show or something. And that’s a good way of forcing yourself to do the unattractive thing or making the unattractive thing which in this case was cycling more attractive because it meant hey, now I get to watch Netflix.

And you can do that with a bunch of things like if you are really bad with your email inbox and you feel like you never focus on that. I heard of a woman who she only gets a pedicure if she works on overdue emails while she’s getting it. So like reward yourself by doing the thing you don’t want to do. Another one, Katie Milkman, who’s the researcher at the Wharton School, University of Pennsylvania, she was the one who came up with this name temptation bundling. And she realized that she really wanted to read The Hunger Games. She got like really obsessed with the book series when it came out. And so she made a rule for herself where she was only allowed to read The Hunger Games while she was on the treadmill at the gym.

And so, those kinds of strategies are ways to make the unattractive thing more attractive. And you can do that in different ways. Like the one that’s real, I think some habits that are really good; this is really good for what I would call habits of avoidance, so things like don’t drink alcohol for 30 days, or don’t spend money on Amazon, or don’t go out to eat and stay at home and make a meal instead. And habits like that are inherently difficult, because you’re just resisting temptation. It’s like all you’re doing is not doing something and so that doesn’t feel good. You just have to sit with this craving. But you can flip it on its head a little bit.

And so one of my readers, he and his wife, they wanted to eat out less and save money by cooking more. And so normally they’re just resisting the temptation to go to dinner to go out to eat at the restaurant. But instead, what they did was they set up a little savings account and they labeled it trip to Europe. And then anytime they stayed home and cooked dinner instead of going out to the restaurant, they would transfer $50 over to the savings account. And so, they still had to put the work in of cooking the meal, but they got the immediate enjoyment of seeing the savings account grow. And that’s really the ultimate lesson that I’m sharing here with this temptation bundling strategy is how can you give yourself a little bit of an immediate enjoyment from something else while you’re doing the difficult thing.

And so, there obviously this depends on what is enjoyable to you. But like from a business standpoint, there was someone that I worked with who he hated taking these meetings, these calls, and he really just didn’t like being inside all day, he didn’t like being hunched over to his desk. And so he changed it so that he only took meetings while going on a walk through the park that was near his office. And so taking a meeting meant he got to go outside and go for a walk. And it can be in large or small ways, but anytime you get an immediate bit of satisfaction and enjoyment with it, suddenly the unattractive thing becomes a little more attractive.

Steve: I just wanted to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you are interested in starting your own online store, I put together a comprehensive six day mini course on how to get started in e-commerce that you should all check out. It contains both video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online. Now, this course is free and can be obtained at Mywifequitherjob.com/free. Just sign up right there on the front page via email and I’ll send you the course right away. Once again that’s my Mywifequitherjob.com/free. Now back to the show.

I’m just looking back in my childhood right now and I think my mom did this to me. I really hated piano, I hated it. But she would take me to ice cream after every single piano lesson. And after a while, I started looking forward to them just for the ice cream.

James: Yeah, playing piano meant getting ice cream.

Steve: Yes.

James: It’s like reframed what that cue or what that habit meant in your mind. That’s really smart.

Steve: My parents were good.

James: Yeah, so that’s one way to think about how to make it attractive. But there’s a broader conversation here, which I think is really important for entrepreneurs, certainly it was very important in my business kind of narrative and story, which is that the social environment really changes what habits are attractive to us and which ones are unattractive. Like when I was a kid, and I don’t know that any kid grows up thinking, wow, I’d really like to think more about email funnels and like workflows thing.

No kid is thinking that, but now it’s kind of exciting and interesting to me. And part of that is because my skills have improved. But another big part of it is that I get rewarded for having a big email list, and not just like financially with the business, but also people will praise you for it or congratulate you on it or ask you, how did you do that? That’s interesting, how did you grow that? And all those social signals increase the attractiveness of thinking about the conversion rate and how I design forms and how can I improve this a little bit more.

And so, my point is the thing that we’re rewarded for, the thing that we get little markers of social status for or respect from others for naturally becomes more attractive and that is dependent on not only on your results, but also on the group or tribe that you’re a part of. Like I could be around a bunch of people, like people I went to some of my friends from college or things like that, they don’t think about email list, they don’t know about it, they don’t care about it. And so, in that group, I can throw out a number and they’re like, well great, I guess that’s good for you but it doesn’t mean anything; it doesn’t have any status associated with it.

And so, it would be less attractive for me to work on those things when I’m hanging around that group. We hang out for other reasons, but it’s not as important there because I’m not as rewarded for it. And so…

Steve: So that kind of just circles back to your environment point that you made earlier.

James: Yes. But earlier, when I was giving examples, I was talking mostly about the physical environment. And this, I would say is mostly about the social environment, and both are crucial factors for building better habits. So, let me come back to the procrastination question you asked and I’ll give some physical environment examples. But just to wrap up the social environment idea, we are all part of multiple tribes. Some of those tribes are large, like what it means to be American, or what it means to be French, or Australian. And some of them are small, like what it means to be a neighbor on your street, or a member of your local CrossFit gym, or a volunteer at the local school.

And all of those tribes, large and small, have a set of shared expectations for how you act as a member of that tribe. And you can see this in people’s habits all over, all day long. So, you walk onto an elevator and you’re in this little tribe of like three people. And the expectation is you turn around to face the front, if you face the back of the elevator it’s a little weird, it’s not what people are expecting. Or you go to a job interview and maybe there are four people interviewing you, and you’re sitting there and the expectation is you’re going to wear a suit and a tie or a dress or something nice. Now, it doesn’t have to be that way, you could face the back of the elevator, or you could wear a bathing suit to a job interview. But we don’t do that, because it violates the shared expectations of the group.

And so, the point here is that when habits go with the grain of the tribe that you’re in, they’re very attractive. And when they go against the grain of the tribe that you’re in, they’re very unattractive. And so one way to kind of hack your habits or to increase the odds that you’ll do the thing you want to do is to join a group where your desired behavior is the normal behavior, because if its normal in that group, then it will become attractive for you to do it because doing so helps you fit in. And this was huge for me as an entrepreneur because I did not have any entrepreneurs in my family and really didn’t have any close friends who were entrepreneurs either. I kind of vaguely knew that some people run businesses but I didn’t have anybody to look to.

And so, for the first like three to six months that I started out, I just emailed a ton of people well over 100 that were already doing the kind of thing that I wanted to do, but they were already full time. And I just asked if they wanted to chat on Skype. And most of them said no, but I would say like, maybe 30 or so said yes. And so, by the time I got six months in, now I had a few dozen people that if I had a problem, or if I was dealing with — had an idea, I could go to them with the questions I had. And I could also see what like what are they doing normally, what are their habits daily? And I didn’t have to consciously ask that question, right? You just kind of soak it up as you’re part of a tribe, as you’re part of a group, you see what everybody else around you is doing. And then you start to imitate and do those things because that’s the normal thing to do there.

You see this all the time, people jumping like across the gym, and then they start to eat paleo and they buy a certain type of knee sleeves and a certain brand of workout shoes, and they’re picking up all these other habits that they never really thought about doing but that’s just what people do in that particular tribe.

Steve: Yeah, in the context of business then, that’s why it’s key to go to conferences and events where you can meet other likeminded entrepreneurs. At least that’s how I started taking off in my business. It started when I started going to events.

James: 100%, and so I did those Skype calls. Then I went to my first conference about six months in. And what was really nice for me in that case was that I already knew like maybe 10 people from those Skype chats and those emails that were going to be there. And so I didn’t go in cold. I had like a couple people I can hang out with or talk to at least, which was nice. And then of course, I met a bunch of other people from those conferences. So, I did some conferences for the first two or three years, and then the last couple of years I’ve started to host my own events which are small usually like eight people or so. But it’s a really great high touch way to see, soak up all of that kind of implicit knowledge that everybody else has about what they do and why they do it and all that type of thing.

But the overarching point there is, no matter what habit you’re trying to build, the habits that are normal within your tribe will be attracted to you, because they help you fit in, they help you belong. And we all have a deep desire to belong.

Steve: So James, I don’t mean to skip around, but this question just kind of popped into my mind also. One thing that I see among people who are just kind of starting out in business is they’re looking for quick wins. And oftentimes, the payoff is like many years later, but it’s painful for those many years, right? You got to get used to what I call like the suck. So how — if you’re not getting immediate gratification, how do you train yourself to kind of persist?

James: Yeah, that’s such a great question. And it’s really it’s not just business, I mean, it’s central to all habits, right? There’s kind of this plateau in the beginning. So the analogy that I like to use, the metaphor that I like to bring up is the story of an ice cube. So, say you’re in a room and the room is cold, it’s like 25 degrees, ice cube sitting on the table and you can see your breath and slowly the temperature starts to increase 26, 27, 28, 29, still this ice cube is sitting there like nothing’s changed 30, 31, and then all of a sudden you get to 32 degrees and you hit this phase transition, the ice cube begins to melt.

There is one degree shift, no different than all the other one degree shifts that came before it but suddenly something new happens. And I think that in many cases, the process of achieving a change or building a business, it’s like that because you’re stuck on this plateau of latent potential early on, you’re putting work in, your banking reps and effort and time and energy and you don’t really have anything to show for it. The ice cube still hasn’t melted. But if you’re willing to stick with it, then you hit this phase transition. And so the question that you had is like, well, how do you get through that period?

I think first of all, just knowing that it happens is helpful. It helps reset your expectations a little bit, because a lot of the time we think that progress should be linear, that we put a little bit of work in and we get a little bit of results. So if we put a lot of work in, we’ll get a lot of results. But actually, it’s not this like 45 degree angle linear progression. It’s more like that hockey stick or compound curve that I mentioned before, where you’re kind of stuck on this plateau for a while, and all the greatest gains are delayed. So that’s the first thing.

The second thing though, I think that this is one of the reasons that small habits really matter, perhaps the deeper purpose why they matter, which is they reinforce a particular type of identity, they reinforce being a certain kind of person. And so, like in the book, I use this phrase, the goal is not to run a marathon; the goal is to become a runner. The goal is not to write a book, the goal is to become a writer. And I think we could say that about entrepreneurship as well. Like the goal is not to build a business, the goal is to become an entrepreneur, to be that kind of person, to be a creator, or to be financially independent or to have that identity.

And I think the way to foster that identity is through small wins, through small habits on a daily basis. And so in a sense, every action you take is kind of like a vote for the type of person you want to become. It’s like you’re these little habits, or how you embody up being a particular type of person, or having a particular type of identity. So, every day that you make your bed, you embody the identity of someone who’s clean and organized, or each time that you write one sentence, you embody the identity of someone who is a writer, or every time you make a sales call, you embody the identity of someone who is good at selling. And so, on any given day, those little actions don’t count for very much, but each time you do them, it’s like casting a vote, building up a little mound of evidence that this is who I am.

And I think that ultimately, true behavior changes identity change because it’s like it’s one thing to say I want this, I want a million dollar business, I want to have a best-selling book, I want to have a popular blog, but it’s something very different to say I am this, I am an author, I am a blogger, I am an entrepreneur. Because once you believe that about yourself, you really aren’t even pursuing behavior change anymore. You’re just acting in alignment with the type of person that you already believe that you are. And so, I think the way to get through those, to get through the suck as you call it, to get through those periods where it’s really difficult and you don’t have the results that you want is to focus on fostering that identity.

Even if you’re not happy with how your body looks, and you still want to lose weight and all you could do after a long day of travel was five pushups before you collapsed on the bed, well, maybe that’s not the result you want. Maybe you’re still in the suck from that standpoint, but you did those five pushups and at least you’re the type of person who doesn’t miss workouts. At least you’re the type of person who foster that identity. And I think that on the hard days in business, that’s what I try to remind myself of like how can I show up and cast a vote for the desired identity even if the results are still long in the future.

Steve: So, it means you just try to show up, even if showing up in this particular case isn’t spending a lot of time or whatever, you’re just out of habit working on your business, even if it’s not a whole lot at that given moment?

James: You’re trying to cast a vote for being the type of person that you want to be, rather than worrying about what the results are in that moment. And I think that there are all kinds of ways that you can show up in small ways, and I think we all either have done this or know someone who does this where you waste time on frivolous things. You just like putter around and do a bunch of little things that don’t make much difference and that’s different than what I’m talking about, that feels like a waste of time. But what I’m talking about is taking a small action that reinforces your desired identity, the long term identity of you or your business that you want to foster and the type of person you want to become.

Steve: It sounds like step one is to actually figure out what that is right?

James: I think so. And that’s what I talk about in chapter two of the book. I think it’s a very central question to ask yourself. Now, the good news is, I don’t think it needs to be that hard. I think most people know, they may not — questions like what identity do you want? Or what are your values? Those are like big questions and sometimes they’re hard to answer. But I think most people do know what kind of results they want. So you can just say, well, do you want to — maybe you want to lose 40 pounds in six months, or maybe you want to double your income this year, or something like that.

And once you get a pretty clear picture of the result that you want, then you can sort of reverse engineer it and ask yourself, well, who is the type of person that could lose 40 pounds? Well, maybe it’s the type of person who doesn’t miss workouts. Or who’s the type of person that could double their income? Well, maybe it’s the type of person who creates one new product each month or something like that. And once you reverse engineer the outcome, and ask yourself that question, who is the type of person that could achieve that, then you become a little more clear on what that identity might be.

Steve: Like if I want to become a New York Times bestselling author, I would probably follow in your footsteps and then set aside time to write two days a week and be consistent about that for three years, for example?

James: That’s a great example of scaling it down. It is like, who is the type of person that could write a New York Times bestseller? Well, it might be the type of person that has a really big email list, like hundreds of thousands of people that they could tell about the book when it comes out. Okay, well, who is the type of person that could have an email list of 500,000 people? Well, maybe it’s the type of person that writes every week. And so then that becomes the identity that you’re trying to build. I just want to be the type of person who writes every week.

And that line of questioning I think leads you more — it leads you a little bit away — what it does is it clarifies the fact that your outcomes in life are a lagging measure of your habits, right? The number of email subscribers I have is a lagging measure of my writing habit, and your weight is a lagging measure of your eating habits, your bank account is a lagging measure of your financial habits, you’re really just trying to figure out who, how do I need to show up each day to get that long term outcome that I’m looking for?

Steve: Right. And then adopting the little detailed habits of that individual to get what you want, or in the case of writing a book, the writing part is just one little habit, and all these little habits that you do if we were to delve deeper into your life James, all that add up to where you are today.

James: Right. And the things that we were talking about earlier, like optimizing your environment, or choosing the right tribe, or tweaking little elements of that, the two minute rule and scaling it down, all of those are strategies for building those habits that surround that core identity of I want to be the type of person who writes every week.

Steve: Right. James, I think that’s actually a good point to conclude this interview because we’ve already been chatting for quite a while. Where can people find more about your book? Where can they get it?

James: Yeah, thanks so much for chatting, I enjoyed the conversation. So, the book is called Atomic Habits and you can get it at Atomichabits.com. And on that page, I have a couple like bonus downloads and stuff too. There’s a guide on how to apply the ideas to parenting, a guide on how to apply the ideas to business. There’s a cheat sheet for kind of the core ideas in the book and just kind of like a one pager you can look at and review a template for tracking your habits. Anyway, so all of that is at Atomichabits.com.

Steve: What’s funny about this is just our little chat today has kind of reinforced my parenting style a little bit because I’ve been pushing my kids hard because I want to get into the habit of feeling like they’re smart and at the top of their class. And I talked to certain people and they think I’m crazy, but maybe that just means I need to change my environment a little bit.

James: Nice. Well, congratulations. I’m glad that habits are on top of mind and important for you. I think there’s something all parents should think about deeply and really all people. I mean, they impact all of our lives.

Steve: And just for the benefit of listeners here, I’ve actually read James’ book and it’s excellent. And I was just kind of playing dumb in the interview today because I want to highlight some of the key points that resonated with me. But thanks a lot James for coming on the show. I really appreciate your time.

James: Wonderful. Thanks Steve.

Steve: All right. Take care.

Hope you enjoyed that episode. Now when it comes to being successful in business, consistency is the key and the concepts that James talked about in this episode will allow you to make your business part of your routine. For more information about this episode, go to Mywifequitherjob.com/episode248.

And once again, I want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any primer that is closely tied to your ecommerce store. Now, if you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. So head on over to Mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s Mywifequitherjob.com/K-L-A-V-I-Y-O.

Now I talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast where we’re giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.Mywifequitherjob.com.

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247: How To Automate Your Amazon Wholesale Business With Trent Dyrsmid

247: How To Automate Your Amazon Wholesale Business With Trent Dyrsmid

Today I’m thrilled to have Trent Dyrsmid on the show. Trent is a serial entrepreneur, husband, and father who owns 3 companies, an Amazon ecommerce business, an SOP software company called Flowster and BrightIdeas.co which is a popular podcast and entrepreneurship publication.

Together, these companies generate millions per year in revenue. I invited him on the show today because we share the common goal of maximizing income without negatively impacting family life. He is a master of systematizing businesses and we’re going to learn his business secrets. Enjoy the show!

What You’ll Learn

  • How Trent became an entrepreneur
  • How selling Amazon wholesale works
  • Where to find products to sell and wholesalers
  • The margins for an Amazon wholesale business
  • How to scale an Amazon wholesale business

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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Ahrefs.com – The best all in one SEO tool out there that I personally use to improve my search rankings for my blog and my online store. Click here to win a FREE 3 month membership.
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SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
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Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. Now today I have my friend Trent Dyrsmid on the show, and Trent is an expert when it comes to systematizing businesses through SOPs. Today we’re going to talk about how he’s completely outsourced his Amazon wholesale business to various virtual assistants all across the world.

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. And right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%.

Now, you can also use Privy to reduce cart abandonment with cart saver pops and abandoned cart email sequence as well at one super low price that is much cheaper than using a full blown email marketing solution. So, bottom line, Privy allows me to turn visitors into email subscribers and recover lost sales. So, head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve.

I also want to give a quick shout out to Klaviyo who is a sponsor of the show. Klaviyo is the tool that I use to build real quality customer relationships with my e-commerce store. And because all my transactions and email correspondence is tracked in Klaviyo, I can easily build meaningful customer relationships by listening, understanding and taking cues from my customers and deliver personalized marketing messages. So for example, with one click of a button, I can easily send a specific and targeted email to all customers with a lifetime value of over $100 who purchased red handkerchiefs in the past year. And it is for this reason why over 10,000 brands have switched over to Klaviyo.

And right now, they have this cool docuseries called Beyond Black Friday where they discuss successful marketing strategies that their customers are using that you can emulate with your business. So, head on over to Klaviyo.com/beyondbf to check it out, once again that’s K-L-A-V-I-Y-O.com/beyondbf, now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle so you can spend more time with your family and focus on doing the things that you love. Here is your host Steve Chou.

Steve: All right. Welcome to the My Wife Quit Her Job Podcast. Today I’m thrilled to have Trent Dyrsmid on the show. Now, if you don’t know who Trent is, he’s a serial entrepreneur, husband and father with three companies, an Amazon e-commerce business, a software company called Flowster.app which does SOPs, and Brightideas.co which is a popular podcast and entrepreneurship publication which together generate millions of dollars a year in revenue.

And profit magazine named Trent’s first company as one of Canada’s profit 100 fastest growing companies for two years in a row before he sold it for seven figures in 2008. Anyway, the reason Trent and I resonate so well is because we share the common goal of maximizing income without negatively impacting family life or lifestyle. Also, Trent is a master of systematizing businesses, and today we’re going to find out how he does it. And with that, welcome to the show Trent. How are you doing today?

Trent: Very well, Steve, thanks very much for having me on, I’m so thrilled to be here.

Steve: I feel like we’ve been talking like a lot lately.

Trent: Well because we have.

Steve: So Trent, give us a quick background on your business, how you kind of got into entrepreneurship and what your e-commerce business is all about?

Trent: Sure. So, let’s start with how I got into becoming an entrepreneur that dates back quite a few years back to 2001. I had a really high paying job, I was making close to about $200,000 a year back then as a guy in my 20s. But unfortunately, the job was kind of boring, and I wasn’t intellectually stimulated and I know some people might be thinking, well, who cares? You were making a pile of cash. But the funny thing about money is, is after you were making it for a while, it’s not fulfilling in unto itself. And so, I decided that I wanted something more.

And so, I quit that job. I sold my house, I cashed in everything I had, and I put it all into starting a company that ultimately was ranked as one of Canada’s Profit 100 fastest growing companies. And that’s a whole another story for another day. But that’s how I got into becoming an entrepreneur.

And since selling that company, I’ve pretty much been focused on making my living on the internet, so I could always be location independent, in other words, I can run my business from any place that I choose. And approximately two, two and a half years ago, thanks to a number of my what I call my internet friends, in other words, people who I’d interviewed on my show and developed something of a relationship with a couple of them, a fellow named Spencer and another friend of mine named Country, we’re doing quite well doing Amazon private label. It’s something I knew nothing about, and they were both strongly encouraging me to give it a shot.

So, we were running a digital marketing agency at the time, my wife and I and a team of contractors and it was going quite well. And I said to my wife, I said, you know, I’m going to take a little hiatus and — I’m going to close the tab, it is making that noise, sorry. I’m going to give this Amazon thing a go and see if I can become successful at it because I’d always been in service businesses and I really wanted to try a product business because as a lot of people will know, a product business is much easier to scale up than a service business. So, I was completely and totally not very successful at private label after four or five months due to picking products that were too competitive.

I was making sales, I was doing 25 or 30,000 a month in revenue, but I was having to spend so much money on Pay Per Click and run so many promotions to try and get that sales velocity that I wasn’t making any profit at all. And to be honest with you, I was extremely frustrated. And right around that time, one of our biggest clients at the agency was starting to let us know that when their contract came up, they weren’t going to renew and so I was starting to get pretty stressed to be honest with you. And right, right around then fortunately, I interviewed a fellow on my show named — two guys actually. One guy by the name of Eddie and another guy by the name of Dan [inaudible 00:08:11] and both were doing some version of this Amazon wholesale thing that I knew nothing about.

And when Eddie explained it to me, it wasn’t too terribly appealing, because he’s a single guy with no kids and he spends his life going to trade shows to find his products. So he’s on the road all the time. And I thought, no man, I don’t want to do that. And then when I talked to Dan, and I interviewed him, he did the whole thing without any travel at all. And suddenly I realized, oh, man, that’s what I want to do because wholesale compared to private label is substantially less risk and we can dive into that further if you like.

Steve: Yeah absolutely.

Trent: That’s how I got started. Short Story, within five months, we were doing over 100 grand a month. We did just under 1.1 million in our first year and we’ve never looked back.

Steve: What are your margins on that 1.1 million?

Steve: So we operate on a gross margin of around 20%, which sounds thin but it’s actually enough because you can do a lot of revenue per employee in this model.

Steve: Okay, so let’s start by talking about the wholesale business as compared to private label. So how does the wholesale business work?

Trent: So wholesale is simple, but not easy. Simple, in that you buy products wholesale from US manufacturers, and you resell them on Amazon. And simple because unlike private label where you’re trying to launch a new product and get traction and get reviews and all that, with wholesale, you’re simply using available software tools to look for products that already have an established sales velocity and then you’re trying to buy those products at a price that would allow you to make a margin, so simple, but there’s a lot more to it than that.

Steve: So, I see a couple of immediate disadvantages. I see a whole bunch of other people selling the exact same thing. And I also see you having to fight for the buy box on Amazon. Is that correct?

Trent: In theory, you’re correct but there are ways to mitigate those two risks. So, predominant — when we started, those were big issues for us. And back then our margin was less and the race to the bottom was a big issue for us. And because of changes in our business model, those are no longer issues and those changes are very simple. We look for suppliers who have already restricted the number of authorized sellers of their products on Amazon.

Ideally, we’re the only seller. Almost as ideally, the brand is one seller and we are the other seller and there is no one else. When you get that and we that’s predominantly how we do it, there is no race to the bottom. You know exactly what percentage of the box you’re going to get and your margins are maintained. The only issue can be obviously competitive threats from other brands, that’s just the nature of the beast.

Steve: But private label will experience that as well.

Trent: Correct.

Steve: So how do you go about finding these vendors, then?

Trent: Wow that is the tough part. So, when we started off, and we continue to do this to this day, but of course, we evolve as we grow as every business does. We use basically simple math equations to identify products. So, we’re looking for products that have an estimated profit per month within our parameters. And that’s simply a function of looking at, well, what’s the sales velocity of this product? How many current and sellers are in competition for the buy box? If we were an additional seller, would we get enough share of the buy box to sell enough units at a 20% margin for it to make it worthwhile for us to carry this product?

And then if it is, we’re going to reach out to the brand that owns that product and try to establish a relationship with them. And we grew at 20% per quarter for the first two years doing just that approach, sending a lot of emails and that’s where the whole SOPs thing factored in.

Steve: How do you determine what percentage of the buy box you’re going to get?

Trent: So we look at, let’s say there’s a widget on Amazon and it’s 19.99, and there’s three sellers at 19.99. And if we’re going to be a fourth, we just assume we’re going to get 25% of the buy box.

Steve: Okay. Okay. And you mentioned before that the way you do it now is you’re basically only competing against the brand owner. So now, do you kind of exclude anything where there’s more than one seller?

Trent: No, we regularly go after brands that have multiple sellers because we strongly believe those brands would be better off to have fewer sellers and oftentimes there’s a gap in their understanding, or they’re just not thinking about it. Because what you have to remember with a brand is that in all likelihood, Amazon is only 10 to 15% of their total sales because they have brick and mortar distribution across the country. And so, that is a much larger portion of their focus. And so, Amazon it’s almost a pain in their ass and there’s a lot of problems that come, typically unauthorized sellers and MAP violations. MAP stands for minimum advertised price.

And when that happens on Amazon, it causes the brand quite a bit of grief because they’re brick and mortar partners. Let’s say for example, a brand is selling their widgets to Walmart. Walmart is 40% of their total revenue, MAP for those widgets is 19.99 and they’re on Amazon for 18.50, do you think Walmart is very happy about that?

Steve: Absolutely not.

Trent: No, they are not. And do you think the brand is stressed about that?

Steve: Absolutely. So, I guess the brand has to make sure, I guess does the brand have a say in that? Can they say, hey, and kick you out?

Trent: Well, if they put the correct policies in place, yes absolutely, they can get Amazon under control. And this is what most brands or many brands don’t understand, or maybe they desire to do it, but they don’t know how to do it. And that is the biggest problem that we end up solving for brands. As an example, right now at a recent trade show that I attended and that is another method of finding brands by the way is go to trade shows. I entered into a discussion with a sunglasses brand, a $200 million a year brand and their number one problem is unauthorized sellers and MAP violations. And they said, man, if you can fix that, if you can help us fix that, we would authorize you to become a seller. And I am reasonably close. I haven’t got the yes yet, but I am reasonably close to getting it and that’s why because we understand how to solve that problem.

Steve: Okay, so let’s back up a little bit. Are you comfortable sharing some of the metrics that you look for in a product?

Trent: Sure.

Steve: Okay. So what is the minimum profit that you would expect, and what are some things that make you attracted to a certain product over another?

Trent: So let’s talk about what we did in the beginning and then we’ll compare that to how we do it now because now we’re a little bit more mature and we have far more resources than we had in the beginning, so we go after bigger elephants now. But in the beginning, we were very happy to carry even just one product from a brand as long as we could make 300 bucks a month or more, or if we carried a couple of products from the same brand, if that one account would make us 400 bucks a month or more. And these are just rules of thumb; you can pick whatever number you would like.

These are not the correct numbers; they’re just the numbers we used. Then we would carry that brand because a small brand like that, I mean, once you have a relationship, all you’re doing is reorders. So, the amount of labor involved is really, really low. And so, if you could get 3, 4, 5, 6 or 10 of those products that are like that, now you’re making three, $4,000 in gross profit each and every month, and that’s a heck of a good start. And so, for anyone who’s listening who obviously still has a full time job, and they’re thinking about doing this part time, that is not an insignificant amount of income and someone could easily manage that on a part time basis. Now, it’s a little bit more work to build it, of course, but there are ways to help reduce labor on that and we can talk about that more later, but in the beginning, that’s what we focused on.

Steve: So just to be clear, you’re actually buying these products also and shipping them into FBA, right?

Trent: Yep.

Steve: Okay. And what is the minimum buy? I would imagine a lot smaller than private label, right?

Trent: Yeah, it is. This is one of it, so one of the things that appealed to me so much about wholesale versus private label is risk of loss. So, when I did private label, MOQs were typically two to $3,000, and if I screwed it up, if I picked the wrong product, it’s quite possible I could lose the lion’s share of that money. In wholesale, that scenario is virtually impossible because you’re buying products that have established sales velocity. So, it’s not a question of are they going to sell? It’s only a question of are they going to sell profitably, or at breakeven, or maybe a small loss. And so, MOQs depends on the brand, I mean, a thousand bucks, I think we put in first orders for 700 bucks. Typically now we’re doing bigger than that. We’ve had initial orders that were 20 grand.

So, it’s all dependent upon the brands that you’re pursuing. The big thing to understand is it’s way less risk and the time to market for private label is measured in months because by the time you think, do all your product research and get samples and talk to factories and put your order in and get it shipped over and create your listing, and get your Photoshop, blah, blah, blah, blah, blah, a long time goes by. With wholesale, you can literally have products in Amazon’s warehouse as soon as a week or two after your first phone call.

Steve: Right. I guess the other disadvantage though also is you don’t own the brand, you don’t own the product and I guess vendors probably come and go periodically, right?

Trent: They do but you own the business and you own those relationships. So, there is a number — I mean probably one of the biggest in the space is Netrush. Netrush does over $100 million a year doing what we do, and they don’t own any other brands. But do you think network is worth a fair amount of money?

Steve: Yeah, I mean, it’s just like a traditional retailer, right? Like Target carries most other people’s brands, they have their own brands but…

Trent: Correct.

Steve: It’s just a traditional wholesale business.

Trent: Correct.

Steve: Cool. So, can we talk about how to land a vendor? So, it sounds like you’re getting exclusive vendors now, so what is your negotiation, how does it look like?

Trent: So, that’s always the goal but you don’t necessarily start there. So, yesterday I was speaking with a brand owner and he’s the sole seller, does about 200,000 a month on his line and he’s a little bit overwhelmed right now. So he’s a small company, he doesn’t have enough boys to do all the work and so some things are falling through the cracks. So there’s the opportunity for us. And so I said to him, I said, look, why don’t we start off with instead of trying to get this guy to sign a contract with me on day one granting me co exclusivity on his entire product line, which is a big decision and would have a long sale cycle, I make it easy. I say, look, let’s just pick a product or two and you let me order enough so that I’ve got inventory to last a couple of months.

We’ll do a test order first just so I can verify all the volumes that our tools are estimating to make sure that we know how much this thing actually sells and then let me place enough orders so that I’ve got inventory for 60 or 90 days and let me show you what we can do. And we’re going to run Pay Per Click campaigns and we’re going to optimize the listing and we’re going to respond to negative product reviews, maybe we’re going to create some bundles, there’s all sorts of things that we can do to help increase market share which is one thing brand owners want to see.

The other thing that we could be doing during that period of time in the case — now, the story I’m telling is not a good example. But another example where there’s multiple sellers, and there’s unauthorized sellers. We can also then over that period of time work to reduce the number of unauthorized sellers and restore MAP pricing. Now, if you do that well on a couple of their products, you’re golden. They’re going to say, hey, obviously, you guys know what the hell you’re doing. This has been a great experience. Now you can present them with a contract. And now you can say, look, I want exclusivity on your entire line of products. And that is a far easier yes to get.

Steve: So to be clear, these brand owners are not selling themselves on Amazon, right? They don’t want to be dealing with the Amazon side of business. And so that’s why they’re soliciting I guess third party sellers?

Trent: They’re not necessarily soliciting. Some are, I remember we won an account a year, a year and a half ago. They were actively looking when they got our email and we won and that was a huge account. So yes, they were soliciting but many times like this particular guy, he’s been solicited before by a number of my competitors, and either I had better timing or I caught him on a good day or I had a better pitch. Because either way, he’s now getting ready to hop on an airplane and come and see us because he’s committed to, or he seems committed to moving forward into a relationship with us.

Steve: Okay. And in terms of finding these vendors, you mentioned going to trade shows, but I would imagine that’s not how you get the bulk of your vendors, is it?

Trent: It can be. As a matter of fact, I just interviewed a guy on my show by the name of Ryan Grant, who’s on episode Number 246, and he does get the bulk of his from trade shows. But here’s the silver bullet of trade shows, you need to have a name to drop. So, I recently attended the Outdoor Retailer show which is a very large show, a lot of big brands there. I did my homework beforehand so I had my shopping list. I knew I had a virtual assistant go through all the exhibitors list, figure out what their Amazon revenue was, stack ranked them in order of the best to the least. And then I figured out which ones were in my sweet spot, and I made sure I went and visited all of those companies.

So, I talked to about 40 different companies over a three day period. The number one question I was asked is who are you working with in our niche now? And that was a new niche for us. So, my answer was, well, no one yet, but this is going to be a niche we want to focus on blah, blah, blah, blah, blah, blah and I’m working on winning. I have out of all of those 40 companies; I’m really only in an active discussion with one or two. Now, once I get the one or two, it would be much, much easier and that’s what Ryan told me. He says once he had a name to drop, so we do actually have a big brand name in the health and nutrition niche. So, we’re going to be now starting to go to shows for that niche and name dropping that company’s name because they are a huge player in that space and everyone will know their name and that’s a lot of social proof.

Steve: What is the brand’s motivation for not selling themselves on Amazon?

Trent: Some of them do it and some don’t. And if they don’t, it’s just because they consider themselves a wholesale company. And oftentimes, they don’t want their retail distribution partners, their brick and mortar partners to see them selling on Amazon because then they’re like, hey dude, you are competing with me, what the hell. Whereas other brands they do, they are a seller themselves. We have relationships like that, where the brand and ourselves are the only two authorized sellers and sometimes what those brands will do like our largest account right now, in the beginning, we split the buy box evenly.

And after a while, I pitch to them and I said, why don’t you guys just step out of the buy box and we’ll do some extra stuff for you with this extra profit that we’re going to make? And they said, sure. So let’s say the product was at 20 bucks. They raised their buy box or their price to $26, they get now no percent of the buy box because the Amazon algorithm is never going to rotate them in when I’m at 20 and they’re at 26. And essentially, we would get 100% or we got 100% of the buy box as a result of that.

Steve: That’s interesting. I’m just wondering why they would want other people selling if they’re selling as well. Like, what’s the motivation there?

Trent: So, there’s a couple of things. One is if a brand has 100% of the buy box and they split it with us, it actually only reduces their net profit by 10%. And the reason that is because the other half of the buy box we’re still buying those products wholesale from them and we’re paying Amazon fees that that they would be paying on that other half of the buy box and we operate on a 20% gross margin. So, 20% down with half the buy box equals 10% is all it costs them, so why would they do it? Number one is mitigation of risk. If they are the sole seller and for whatever reason their account were to get suspended, or they were to run out of inventory or if anything happens to the BSR and their products.

Steve: I see. Okay.

Trent: And so, that’s reason. That’s one of the reasons. The other one is that we have a higher level of expertise on the Amazon platform than they do; we have more resources than they do. And we say to them, we’re going to help you to do things that are going to take sales to a higher level than they are at now. And so that’s another way of adding value.

Steve: I just wanted to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you are interested in starting your own online store, I put together a comprehensive six day mini course on how to get started in e-commerce that you should all check out. It contains both video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online. Now this course is free and can be obtained at Mywifequitherjob.com/free. Just sign up right there on the front page via email and I’ll send you the course right away, once again that’s Mywifequitherjob.com/free. Now back to the show.

Okay, so Trent, one of the reasons why I’m having you on is because you’ve completely automated this Amazon business through SOPs which are standard operating procedures. So, this is kind of why I asked you about the trade show thing early on, do you actually have your employees go to trade shows on your behalf?

Trent: So I did, so we had an employee that I hired who was in charge of sourcing that he left recently, so I’m temporarily wearing the hat until I find a replacement for that individual. I’m actually now in a more active role in the business which is why I went to that trade show but he had gone to the ones previous. So this individual, he was the one sending all the emails, dealing with all the replies, talking to the brands, looking at price lists, sending them the contracts to getting them signed. I had no for over about a year I had absolutely no day to day role in the company whatsoever because of our SOPs and because of the team. And like I said, because of his absence now, I’m temporarily back in, but only until I find a suitable replacement.

Steve: Okay, so can we talk about your SOP process, how these are created, how everything works?

Trent: Yeah. So that was the big differentiator for us. People ask me, gosh man, how did you get to 100 grand a month in just five months? And I said, well, I sent how many emails, it was thousands of emails to prospective brands. And that sounds simple to do but when you break it down, there’s actually a boatload of work in sending that many emails because you’ve got to find competitive sellers, that takes labor. You’ve got to extract their storefront into spreadsheets, that’s more labor. You then have to run math on every single one of the products that are in those spreadsheets, more labor, then you have to for the ones that pass your filters, you have to identify well, which company, who is the right person at that company? What’s their email address? And you got to get all that data into HubSpot, and then you got to send out an email.

That is a lot of work. And so, when I started off because I’ve always been a big believer in creating documented systems, before I started to do any of the labor and like roll up my sleeves and do work, I instead I sat down and I designed a system for all of those steps that I just described. And then I document that system. And then I hired a number of virtual assistants from the Philippines at three bucks an hour and I simply had them do all of that grunt work so that with essentially no labor of mine, and a small amount of labor from one of my employees, I was able to send out two to 300 emails a week, that’s two to 300 leads, new product leads each and every week, week after week after week.

And all I had to deal with and this was before I hired anyone else and I was the guy in charge of sourcing, all I had to deal with was the replies. We’d send those two or 300 emails, I’d get a lot of replies and then I’d be replying back and forth and moving those conversations forward and filling out account applications and getting price lists and negotiating on prices and ultimately issuing a purchase order. And without the SOPs, I never could have done that volume of emails.

Steve: So, are those processes of replying, are those outsourced as well?

Trent: No, the replies, we didn’t outsource that because now you’re in a conversation, now we have processes that guide me and guide my team in that, but it’s not outsourced to a virtual assistant.

Steve: So, all this outreach and that sort of thing, is it all rote meaning like there’s no creativity that’s involved in drafting one of these emails?

Trent: Correct, it’s pure carpet bombing.

Steve: Okay.

Trent: Now, that’s not the only way that someone should source but it worked extremely effectively for us. And so, it is one of several arrows in your quiver that you should use. And the reason that’s important is I’ll use this brand, they’re no longer with us, they were with us for only a year, a year and a half. They were a supplement company and they got one of our many emails. I mean this is how we landed all of our brands, and if you’re not sending a lot of emails, you’re not giving yourself the opportunity to find a brand that has already decided they’re looking for a third party seller.

Steve: Can you kind of describe your carpet bombing process, like what are your filters like on how you do research and how you decide who to carpet bomb I guess?

Trent: It’s kind of what I described before. We would find all these existing sellers who met certain criteria.

Steve: Are there SOPs for that as well?

Trent: Yeah there’s SOPs for everything. In my office, the going joke is you can’t even fart unless there’s an SOP for it, so everything is defined. So, one virtual assistant would be in charge of making a list of sellers, competitive sellers, other third party sellers because our thinking was simple, if they can carry the product, so can we. And if they’re making money, so can we. So, we started with that, then there was another SOP for extracting their products using a tool called price checker too into a spreadsheet. So for a given third party seller, they might have 100 products, they might have 3,000 products; we’re going to dump all those products into a spreadsheet.

And there’s another SOP for that spreadsheet. And there’s a spreadsheet template that would cause excuse me math to be done on each and every row automatically since we paste everything in to calculate our estimated profit per product. And the labor, there would be a VA would have to manually go and see for each product how many sellers were in contention for the buy box because there was no really great way to automate that one little bit, but for three bucks an hour, I don’t really care. I’m happy to pay for it.

And so, then that spreadsheet would give us a list of leads. We then figure out who the contact was for each one of those leads and a VA is doing that via LinkedIn and something called Snovio which helps us to find email addresses and then we import them into HubSpot. And then we use another tool called GMass and we send these hundreds of emails out. And that’s how it goes.

Steve: What is your hit rate like? I’m just kind of curious.

Trent: Low, less than 2%.

Steve: Less than 2%. Okay, but it’s worth it right. Once you land one of those, that could be like a six figure account.

Trent: Hell yeah, absolutely.

Steve: How many people do you have running this business?

Trent: So, right now there are three but they’re not all. So my wife works around 25 hours a week. She’s the COO. We have another fellow who is in charge of inventory management and reorders which my wife used to do. And then we have another woman who splits her time about half between my information products business, the Bright Ideas business and the Amazon business. So, I guess you could say if you consider on an FTE basis, it’s run by about two full time people. And then to make it grow, you need another one which right now temporarily is me, but the goal is to hire another person because you always have to be looking for new brands because you’re going to have attrition. So if you don’t, if you’re not putting food in, obviously shrink. So to run it two, to make it grow three.

Steve: So, can you kind of describe the — so what you’re describing sounds great, but it also sounds a little bit overwhelming. So, what is your process for getting these SOPs created? How do you even deploy these SOPs properly? It sounds like in my mind, you might have like this bundle of SOPs but how do you kind of coordinate what everyone is doing?

Trent: It’s not actually as complicated as you think. So, the old expression, how do you eat an elephant one bite at a time? So, when I started there was no SOPs. So, I sat down and I thought, well, what are the steps to do find a competitive seller, and I simply created a Google document. They don’t live there anymore. They’re not in Google anymore. We’ll get to that in a minute. But in the beginning, I just created the Google document. It says, do this and then I’d have a screenshot with big red arrows, and then do this and have a screenshot with more big red arrows and that’s one SOP. And then you just keep adding more and more and more and more SOPs.

Now, of course, now we’re at, I don’t know, 70 or 80 SOPs, and we’ve got people on a team, Google Docs isn’t cutting it anymore. So we actually built our own software called Flowster, you can find it at Flowster.app, and that is SOP software. And the reason that you need software is as you have more and more SOPs that are kind of in progress and because each SOP is kind of like a mini project, right? Every time you’re doing a competitor extraction, that’s a mini project, you’re just doing it over and over and over and over again.

And we don’t have SOPs just for product sourcing; we have them for PPC campaign management. We have them for shipping and receiving. We have them for purchasing. We have them for inventory management. We have them for listing optimization. We have them for HR, we have them for Amazon account health, and we have them for everything. So, the benefit of having them in software is now each SOP can be kind of like Trello. You can assign members to it, you can give it a due date, you can give it multiple due dates, because if an SOP has like 15 steps, maybe there’s different due dates for the different steps, you can assign those steps to different people. And the software is then sending alerts to everyone saying, hey, you’ve been assigned to this task, the due date is this, click here to begin? It’s what brings cohesion to having what would otherwise be just this huge, fragmented pile of SOP spaghetti.

Steve: Right. No, that makes sense. Actually one question I have as I’m thinking about those right now is when you’re having people look for products, sometimes there’s some gut feeling there. Like, it’s not always about the raw numbers, because I’m thinking about when I’m looking for products to sell, there’s always some amount of intuition involved. And how do you kind of document that?

Trent: So, we don’t really worry about documenting intuition and I’ll explain why. So, let’s say that we send 300 emails in a week. And the product sourcing agent, which is currently me, but I’ll be replaced by one or two plays, they will be trained over time to have the intuition. So they’re looking at, all these emails go out; boom, and then they’re getting replies. And when they get a reply, that’s when they start doing a deeper dive, do I really want to, let’s say a brand replies and they say, well, we don’t want any more Amazon sellers, which is a very common reply. Okay, so now is the product sourcing agent with the intuition, I’m going to look at that brand and I’m going to look for some key attributes.

I’m going to look at, well how much does the brand do in total? Are their sales up year over year? How are their sales over the last quarter? How’s their distribution among their products? What does their product listings look like? And for the main keywords, where do they rank in the search results? Well how much market share do they have relative to their competitors? Do I think there is room for us to help this brand make improvements? And does this brand carry the type of products that we think are really great products and that we’d love to have a relationship with? What’s their social media presence look like?

But there’s other things that the intuition part of it factors in and then that would then allow the product sourcing agent to make a decision of how aggressively or not they’re going to pursue that brand to try and get them to change their mind from a no we don’t want any more Amazon sellers into a yes. And that is where the skill comes in. So, this really large brand that we have, the one that’s got the great name in the fitness niche that is exactly what happened. I picked up the phone and I called them and no, I don’t want any more Amazon sellers. And I started asking the usual questions that I asked. He gave me the answers that I was expecting. I explained to him how we could solve the problems that he was having. And by the 18 minute mark of the phone call, he said, you are approved.

Steve: Nice. I would imagine that’s a lot to do with your skill as a negotiator. What happens when you’re just first starting out and you got nothing?

Trent: So when you’re first starting out and you got nothing, you go for the low hanging fruit. You’re going to pursue like we did smaller brands. Much of the transaction, much of the conversation is going to happen over email. Like we landed plenty of brands in the beginning, I shouldn’t say brands, products; we landed plenty of products in the beginning. We didn’t have exclusivity back then, we would just buy the product if the numbers made sense without ever talking to any human being on the phone. Everything was done over email. The purchase order was sent and we made money on the product.

What happened over time though is you’ll outgrow that as you get bigger and as you get more working capital and your appetite for relationships with brands will trump your desire to just add more products because if you have too many products, it can become difficult to manage because you’re going to have races to the bottom. So those products are going to churn. If you’ve promised brands to do things, but you have too many, it can become overwhelming. Maybe you don’t have enough margin to hire enough people. It’s a great way to get started and that’s how I got to 100 grand a month focusing on products. But now we don’t focus on products. Now we focus on brands.

Steve: What is your process for looking at your portfolio and eliminating the products over time?

Trent: Pretty simple. So again, you have to first of all decide whether you’re product focused or brand focused because if I’m brand focused, and let’s say a given brand has two dozen products and they want me to carry them all, and the 80/20 rule will probably apply. And if 20% of them are making 80% of money and that’s a good healthy account for me; I’ll still keep stock of the ones that aren’t selling, because that was part of the commitment to have the relationship with the brand.

Steve: Okay. And by just keeping them in stock, you’re just keeping them in the warehouse. They might not sell, but you’re just keeping them in there and you’re paying long term storage fees potentially?

Trent: Potentially. But I mean, let’s define how many I’ve got in stock. If they’ve got a product they want me to carry, and it’s not selling very well, I’m not going to own 400 of them. I might own 12.

Steve: Right, that makes sense. That makes sense. And in terms of — I imagine you have like a minimum profit level before you stop carrying a certain product, right?

Trent: Yeah, again, it depends if you are product focused or brand focused. If you’re product focused, I wouldn’t carry a product that makes me less than probably 200 bucks a month because there’s still a small amount of labor in looking at it and doing the reorder and carrying the inventory and 200 bucks a month is not a lot of money. But if you’re brand focused, it’s all about just how much money is this brand making us in total? And that’s always what we look at when we make a decision of whether to continue or not.

Steve: How did you make the transition from product focused to brand focused, did something happen?

Trent: Well, we got to the point where we had cash flow credibility resources and a team. And so, now we could more credibly pursue relationships with bigger brands. And we’re literally at that inflection point right now where I did some analysis of Netrush and a few of the other really fast growing third party sellers that are doing 100 million, 80 million, whatever and I said like, okay, I want to be as big as those guys, what are they doing? And they were carrying much larger brands than us, so we made a decision to place our focus more on now going after bigger brands.

And in order to do that, you better have some credibility. And we have that credibility now, because we’ve got that one really great big brand name, plus we’ve got all of our store reviews, plus we’ve got our revenue and our team and we own our building and blah, blah, blah, blah, blah. But we didn’t have that in the beginning.

Steve: So, what is your pitch now to larger brands, and has that differed from the beginning when you were just pitching individual products?

Trent: The pitch is pretty much the same. You still need to demonstrate to a brand that you’re going to help them solve problems, and that you’re going to bring value to the table. So, it’s not the pitch that changed, we just pointed the gun at bigger targets.

Steve: Okay. But I would imagine you have a set, you have set things that you say that are very convincing, right?

Trent: Yes, the number one pain by far is identifying and ultimately removing unauthorized sellers, especially those that are violating MAP, that’s the biggest problem. There are other problems, but they’re a small problem relative to that one. And then the other thing that’s not so much a problem is just a benefit is and will help you to increase market share, because maybe we can run Pay Per Click campaigns more effectively than you can because we have higher levels of expertise and dedicated people and we pay for expensive software than you do. So, if we can get more market share by doing that, or maybe we’re going to create like one of our this big brand, we create bundles of several of their products that drive entirely new sources of revenue for them and they love that.

Steve: And how do you go about removing these violators of MAP to get these people kicked off?

Trent: Yeah, that’s more of a trade secret because it took us a long time to learn, and there are ways to do it.

Steve: Okay, there’s nothing you can share that’s low hanging fruit?

Trent: No.

Steve: Okay that’s your secret sauce. Well Trent, your secret sauce is also SOPs. I want to give you an opportunity to just kind of talk about what you have to offer and where people can find you online.

Trent: So, what I have to offer, I spoke at a conference on wholesale a year and change ago and I didn’t have anything for sale to help other Amazon sellers at that point in time. And I talked about all my SOPs much like we’ve done today. And a lot of people came to the mics afterwards and said, man, oh man; I don’t want to have to recreate what you built, would you just sell it to me? And so, we decided to take our SOPs and we did turn them into a product called WEBS which stands for Wholesale E-commerce Business Systems. And WEBS are available for sale currently twice per year, and the next time they’re going to be available is actually October 22, so the interview is relatively timely. If people would like to be able to learn more, all they need to do is come to Brightideas.co, become an email subscriber and you will definitely be marketed to, these SOPs will be offered to you.

You can attend the live webinar, you can learn all about them. You can read the FAQ, you can watch the videos. All that stuff kind of starts happening, I think the webinar is October 17th and then the cart will be open for one week. And if someone believes that they’re a good decision for themselves, they can buy them during that week and if they choose not to, then they’ll have to wait for the next time.

Steve: And Trent also has a podcast called Brightideas.co of which I was a guest not too long ago. And Trent is actually going to be speaking at the Sellers Summit next year in May.

Trent: I will indeed.

Steve: So, Trent thanks a lot for coming on the show. I really appreciate your time.

Trent: Thank you very much for having me on Steve, it’s a pleasure.

Steve: Take care.

Hope you enjoyed that episode. Now, I actually had the chance to meet Trent for the first time at the Ecommerce Fuel Live event in New Orleans and we hung out for most of the weekend. And in addition, Trent will also be speaking at the Sellers Summit in May. For more information about this episode, go to mywifequitherjob.com/episode247.

And once again, I want to thank Klaviyo for sponsoring this episode. Klaviyo is my email marketing platform of choice for developing real quality customer relationships. And right now they just released a cool docuseries called Beyond Black Friday where you can learn successful e-commerce marketing strategies from real companies using their platform. Now, the docuseries is free and you could check it out at Klaviyo.com/beyondbf, once again that’s K-L-A-V-I-Y-O.com/beyondbf.

I also want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any primer that is closely tied to your ecommerce store. If you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

Now, I talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast where we’re giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.Mywifequitherjob.com.

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If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

246: Everything You Need To Know About Sales Tax With Martina Chavez Of Avalara

246: Everything You Need To Know About Sales Tax With Martina Chavez Of Avalara

Martina Chavez is an expert in sales tax compliance over at Avalara and I invited her on the show today to clear the air in regards to everything that is happening with Amazon and nexus when it comes to paying sales tax.

Ever since the decision of the supreme court case Wayfair vs South Dakota was handed down, states may now charge tax on purchases made from out of state sellers even if the seller doesn’t have a physical presence in the taxing state. This has enormous implications to ecommerce.

What You’ll Learn

  • Martina’s sales tax background
  • Do you have pay sales tax in all 50 states?
  • What states does Amazon collect taxes on behalf of sellers and how does that work?
  • How are my Amazon revenues taxed for sales from customers in states that require sales tax?
  • The easiest way to file your sales taxes across all states

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
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Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into the strategies they used to grow their businesses. Now, today I have Martina Chavez on the podcast, and Martina is an expert when it comes to sales tax compliance. And as you know, the entire e-commerce world has been in utter chaos ever since the Supreme Court decision of Wayfair versus South Dakota ruled that states may now charge sales tax on purchases made out of state. Anyway, today we’re going to talk about what’s going on in sales tax land and how to be compliant with your e-commerce business.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Klaviyo is the tool that I use to build real quality customer relationships with my e-commerce store. And because all my transactions and email correspondence is tracked in Klaviyo, I can easily build meaningful customer relationships by listening, understanding, and taking cues from my customers and deliver personalized marketing messages. So for example, with one click of a button, I can easily send a specific and targeted email to all customers with a lifetime value of over $100 who purchased red handkerchiefs in the past year.

Now, it is for this reason why over 10,000 brands have switched over to Klaviyo. And right now they have this cool docuseries called Beyond Black Friday where they discuss successful marketing strategies that their customers are using that you can emulate with your business. So, head on over to Klaviyo.com/beyondbf, once again that’s K-L-A-V-I-Y-O.com/beyondbf.

I also want to give a shout out to Privy who is also a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now what does Privy do? Well, Privy is an email list growth platform and they manage all of my email capture forms. And in fact, I use Privy hand-in-hand with my email marketing provider. Now there a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in e-commerce. Right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%.

I’m also using their new cart saver pop up feature to recover abandoned carts as well. So bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve. Now onto the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m really happy to have Martina Chavez on the show. Now, Martina is an expert in sales tax compliance over at Avalara. And I invited her on the show today to kind of clear the air in regards to everything that is happening with Amazon and Nexus when it comes to paying sales tax. And as you may or may not know, there was a huge uproar over the collection of sales tax ever since the decision of the Supreme Court case Wayfair versus South Dakota was handed down.

Well, states may now charge tax on purchases made from out of state sellers even if the seller does not have a physical presence in the taxing state. Now this is huge and extremely important to understand the implications for e-commerce and I’ve got a ton of questions for Martina today. And with that, welcome to show, how you doing today Martina?

Martina: I’m doing very well Steve, thank you so much for having me; it’s good to be here.

Steve: So, Martina, give the audience a brief bio in regards to who you are and your background in the area of sales tax compliance.

Martina: Sure, happy to do that. So hey everyone listening, thanks for joining. So like Steve said, I’m with Avalara. I have actually just celebrated my five years at Avalara, which is very exciting. Avalara is a global sales tax compliance software solution. We also offer a whole lot of other ancillary compliance options including professional services. So we’re not just software but primarily software. And when I started with Avalara, I knew nothing about sales tax. So, I definitely didn’t go into working at Avalara with some form of expertise.

I came from a company that I was doing accounting actually at, and we were using Avalara as a sales tax software to help us sort it all out on our end for billing, and definitely had many calls with customers who would say, hey, this isn’t my sales tax. And then I would get to click into the Avalara dashboard and be like, actually, according to this jurisdictional breakdown, here it is. And so, it was really cool to be able to have that direct experience with our product, and then later move into the world of talking about it on a daily basis and learning about it on a daily basis.

So, started with Avalara in business development, working with our technology partners, so helping partners integrate our solution into their platforms or build an API so that their customers could utilize our service because most people don’t want to get into the mess of learning or trying to offer a solution for sales tax. It’s really, really complex and it’s changing constantly as I think everyone listening probably knows to a certain degree.

Steve: We’re going to dig deep into the mess.

Martina: Yeah we definitely are. So yeah, so that’s kind of how it all began and then over the years, it’s something that I’m constantly being confronted with. And now I’m working very specifically with the marketplace channel. I’ve been working in and around the world of Amazon and supporting Amazon sellers for the last four years that I was at Avalara. So I’ve kind of been growing up with this new trend of sales tax compliance for the online seller or the Amazon seller, the marketplace seller or whatever category you want to put yourself in.

Steve: Let’s start by talking about Amazon actually. So how does Amazon collect taxes today? I’ve heard that they collect in certain states, but it’s your responsibility to pay the IRS. Other times they pay depending on the state and you’re still responsible for filing. How does it work right now?

Martina: So, right now when it comes to sales tax, which is different than income tax, I just want to make sure there’s that distinction. When it comes to sales tax, Amazon does have a calculation engine that they use to support the seller on their platform which is great. It’s a free tool for the seller to use but the seller is still obligated to determine where that sales tax needs to be collected. So, if you’re living in California for example, then it’s a pretty much a no brainer that because you live here that it is your home state and therefore you’re obligated to collect sales tax here. And because you’re selling on Amazon and maybe you’re using FBA, your inventory could be in a lot of places. And before last June 21st, which we’ll get into what that date means and kind of everything that’s happened since June 21st of 2018, but the rules in each state are different around why and when you need to collect sales tax.

So, Nexus is this fancy term for physical presence that is used throughout every state throughout the US to identify who is obligated to collect sales tax. And again, each state has a little bit different variation on who they think is liable. So, a state that doesn’t collect sales tax like Oregon, you wouldn’t be obligated to collect sales tax there ever because there’s no sales tax. So, that’s an easy one, right? But if you’re living in California and say you sell into Washington, that’s an interesting one because Washington is one of the marketplace fairness [ph] states.

So, the state of Washington has ruled that Amazon and other marketplaces have to remit the sales tax that’s collected on behalf of the seller, but the seller is still obligated to register and file that that sales tax was collected. So, the seller is actually not completely off the hook. And I think that there’s a little bit of confusion there. I get that question a lot. We get that question through the sales team a lot, customers who are coming to us seeking our support. So Washington is an example of that. And then there’s going to be other states like South Dakota, which, this might be a good segue to kind of start talking about the economic Nexus side of things, but there’s other states that have different rules about when you’re supposed to collect sales tax and the seller is obligated to do that.

Once you as a seller have said, yep, I’m getting registered and you get your ID, your identification number to tell the state that you are collecting sales tax. Then you can set it all up in Amazon in your seller central profile, and then Amazon will in fact just start that calculation process for you so you don’t have to do anything.

Steve: So, just to kind of sum up what you just said, right now, Washington is one of those states where Amazon will collect taxes on your behalf when you sell into Seattle or Washington. However, you still have to do some work. You still have to register in that state, even though Amazon is still paying sales tax on your behalf.

Martina: Correct, that’s exactly right.

Steve: Okay. And there’s only a handful of states that are currently like that, right? Do you happen to know which ones off the top of your head or?

Martina: I have a handy dandy map in front of me that our company actually keeps up to date all the time. And so the crazy thing is, there’s so many different changes all the time that I’m constantly having to reference that. It’s hard to keep it all in on the top of the head, but yes, I do.

Steve: I’ll just post that maybe underneath the podcast in the show notes.

Martina: Yeah, that would be great. So I’ll send you that link for the map because this has just a ton of information on it, and you’ll be able to identify exactly which states are technically what collecting or I shouldn’t say collecting, remitting on behalf of the seller and then which states have economic Nexus and which states have affiliate or click through Nexus. And so, there’s some other forms of Nexus that sellers should be aware of.

Steve: Now, in terms of the states that are not remitting on your behalf, what do you have to do?

Martina: So, states that are not remitting on your behalf, which is most of them and majority of states are not remitting on behalf of the seller. You have to do that yourself. So in addition to filing, you also have to send in the money. So that’s really the only difference which I think is — I actually think for most people, the filing portion of it is the more challenging part because that’s the part where you have to aggregate your data and you have to know exactly how much sales tax you collected in what state and what jurisdiction it’s supposed to go to. And then you’re supposed to say, hey, state of wherever, State of California, here is my document saying that I collected all of the sales tax and it is due in XYZ location. And also here is the money.

So, really the only thing that the state of Washington now is requiring Amazon and marketplaces to do is to send them the money. Yeah. All the other complexities of it still rely or still live with the seller.

Steve: So a common question that I’ve been getting asked is, let’s say I live in California, but I don’t have a physical presence in New York, for example, why should I have to pay sales tax in New York? And I think this is like a good segue to that court case. So, if you wouldn’t mind kind of summarizing what happened in June 21st of last year, that’d be great.

Martina: Sure absolutely. So last year was a very, very exciting year in the world of sales tax. And so, what was going on prior to June 21st was there was a case of South Dakota versus Wayfair Inc. And it was presented to the Supreme Court, and basically the case involved South Dakota saying, hey Wayfair, you because you sell into our state, you owe us sales tax, we want to enact an economic Nexus rule. And it was specifically in relationship to Wayfair at the time. And so, they were saying even though you don’t have a physical presence, you don’t have warehouses, you don’t have employees living here, your headquarters isn’t here, you haven’t gone to trade shows, those are all examples of what could potentially trigger a physical presence in a state.

The Supreme Court ruled in favor of South Dakota. So, they said, yeah, South Dakota you’re right, you actually we agree with you, we think that Wayfair Inc. should be paying sales tax or should be collecting sales tax I should say for any of the sales that they’re making into your state. And so, thereby there was economic Nexus was then ruled to be a law. So, all of a sudden South Dakota is this first state doing that and all of a sudden all these other states started to enact the same law. They’re saying, oh okay, South Dakota just got that ruling; we’re going to do the same thing. And so, it’s been kind of this slow but not that slow process of lot of new states then coming to enact the exact same law.

So, economic Nexus and in the State of South Dakota to start, what they’re saying is there’s threshold. So it’s not every single person who makes a sale ever like if you’re selling something and you sell something one time and it was a $20 sale, you’re not all of a sudden obligated to start collecting sales tax in South Dakota. So they did create threshold triggers. So in South Dakota, and I can go over the triggers that come up for other states as well. But in South Dakota specifically, it was $200,000 or — excuse me, no $100,000 or 200 or more separate transactions or both.

So, if you sell more than $100,000, or if you make more than 200 transactions, so those transactions could be $10 each but there you are, you’ve then triggered this economic Nexus obligation which means that as a seller whether you’re selling on Amazon or you’re selling through your online store BigCommerce, Shopify, whatever platform you’re selling through, you are now obligated to register and start collecting sales tax going forward. So, one thing to also just be aware of, is when you register for sales tax collection in a state, you’re basically saying, okay, so I hit that threshold this year. So I’m registering to collect sales tax for basically ever for the life of my business. So even if the following year you don’t hit the threshold, you’re still registered, you’re still telling the state that I am going to collect sales tax, so that that process has already happened.

Steve: Because you have to pay sales tax in all the different states now, it seems like for a small business owner that burden is tremendous.

Martina: Yeah, yeah so great question. So yes and no, I think it depends on the case, right? So, if a seller has been selling for let’s say a year or more, and they’re only collecting currently in their home state, and maybe they’re selling it through FBA, so they have a lot of inventory and a lot of places and they already have a physical presence obligation and let’s say they’re a top seller. If they are top seller, and they know that that revenue marker is a kind of an easy threshold for them to have already hit or hit very soon, then yes, they’re going to have to start thinking about what economic Nexus means for them in a very real way.

The good news is because economic Nexus is something that just passed; it’s not something that they would have to be worried about for five years of back taxes for example. It’s something that in the case of South Dakota, that legislation though it passed, it wasn’t enacted, it wasn’t June 21st, 2018. The process takes some time to actually make it a viable ruling. So, there are other states though, that have followed suit. And California and New York are the most recent ones and those are huge states that most people are selling into. And so, I think that those two states in particular are the ones that I think are the kind of the biggest triggers for people.

Steve: Can we talk about California real quick? Mainly because I know a number of the students in my class, they got notices from California to start filing and they came to me asking questions, and I was just kind of curious what your take is. When you get one of these notices, what do you do?

Martina: Rule of thumb; don’t ignore it, so ignoring it is not going to help. California is a really aggressive state, they will keep coming after you and they’re pretty real repercussions on not being in compliance and it goes far beyond. It can go far beyond just your business, this can affect your family from credit and liens and that sort of thing. So, it’s not something to ignore. You want to talk to somebody, talk to a ideally a state and local tax expert, an accountant who really does have the expertise in state and local taxes, who can say, okay, so here’s you got this notice.

What does this mean for you? Do you start collecting sales tax? Do you register and start collecting sales tax as of today, or do you have back taxes that you should have been collecting for over the years? And if so, do we do a voluntary disclosure agreement with the state? So there are things, there are ways to move forward successfully as a business, but definitely the one thing not to do is don’t ignore it.

Steve: Since I live in California, I know that there’s like 25 different sales taxes, depending on the region. Are they really expecting a small business owner to take care of that stuff?

Martina: So here’s another piece of good news for you. You don’t actually have to keep track of the different kinds of or the different sales tax jurisdictions, because Amazon as a platform and other software solutions like Avalara will take care of the calculations for you. So, that includes knowing when there’s a jurisdiction change and knowing the tax rate in X, Y, Z location. And you’re right. There are a lot of different jurisdictions, there’s over 600 in the United States. I mean, there’s tons, we have another map that we can share with your audience to kind of give you an idea of all of the different tax rates that exist. And then, and it’s just an example. It’s just a visual example of, yeah, this thing is, it’s a beast, it’s complex, and it’s different everywhere, and the rules are constantly changing.

So, the point is that you shouldn’t have to do it manually, there’s software out there to help you with that. So, from a calculation standpoint, I wouldn’t be worried or concerned about that side of things, because Amazon already takes care of it. If you’re using another platform, like a BigCommerce or Shopify, good news, again, Avalara is actually embedded into both BigCommerce and Shopify platforms. That’s at least the calculation engine is free in both of those platforms, powered by Avalara. And then we have integrations to over 500 e-commerce and accounting platforms, so there’s really kind of no place that we wouldn’t be able to support or some other form of support wouldn’t be available.

Steve: So, I think your answer might be a little biased but let’s say I just started selling online and hopefully you won’t be biased, but do I really need to register in all 50 states?

Martina: That is a phenomenal question and the answer is no, and I’ll say this with confidence because first of all we know that there isn’t sales tax in all 50 states. So, you at least 46 states are not sales tax worthy, you wouldn’t have to collect in the in those.

Steve: 46 states.

Martina: So 46 states but the answer is no. So, if you’ve just started selling, most often you’re selling into — and let’s use Amazon FBA as an example just because it’s an easy way to kind of think about this, most often your inventory is living in maybe two to three states to begin with. And it really depends on what the demand ends up looking like and what your total inventory ends up looking like. And so, usually start with a few states because that’s where your inventory is actually living, so you start with your home state, get registered there definitely, that’s no brainer and get registered in your home state assuming you have sales tax in that state.

And then you would have to track where your inventory is landing, so you have to also abide by the physical presence rules, so those don’t go away just because economic Nexus is now a layer on top of that. And then the next thing to track is how much revenue you’re driving from individual states that have enacted this economic Nexus rule. And like I said, we have a resource for you so we have a map and then below the map is this really great breakdown of all the different states, when they have had economic Nexus enacted and what the thresholds are.

And so, you’ll be able to determine, okay, so I’m selling in California, and I know my inventory lives in Texas and in Florida let’s just say, so start by registering in California, get registered in Texas, get registered in Florida, start collecting there, watch where your sales are going. And if you see your sales going into a state that has economic Nexus, for example, South Dakota, keep an eye on where that threshold limit is at. So maybe you only sell $25,000 into South Dakota and you hit 100 units let’s say, no sweat, you do not register. You did not hit the economic Nexus.

Steve: It just sounds like such a huge burden. So, thresholds every state has different thresholds, right? Like how am I going to do frack all the thresholds of all my sales? It seems like I would need like a dedicated person to do that.

Martina: Yeah, so again, this is where software comes into play. And of course, I’m biased. I believe wholeheartedly in the software that Avalara has to be able to track all this, but there are other software options out there. And so, at the end of the day what it comes down to is there is an obligation for the seller to take their business really seriously when it comes to sales tax compliance, and unfortunately states in the US has not made that an easy burden. And it’s interesting, what I think is so interesting about the marketplace channel and one of the reasons that I love working with Amazon sellers and other folks selling online is because this is like the new frontier.

This is global commerce is changing and it’s changing super-fast and anyone selling online is a part of that change. And states have traditionally relied on sales tax coming from brick and mortar stores to support them, so whether that’s keeping the roads safe or putting in those traffic lights or whatever other services, and we all experience every day that we all benefit from like our police officers and our firefighters like sales tax is a part of that revenue. And so, states of losing revenue because people are buying online and not buying in the stores in the same volume that they used to. So, that’s why states have started coming up with all of these new ways to collect the sales tax. And it’s smart on their end, but it’s hard on the hard on the business owner. And so it is something that’s very real. But again, software is available to help all of these processes.

Steve: So, do you have any insights on where the legislation is going or what’s going on right now? I would imagine there’s lawsuits going left and right, or discussions going on and how states can possibly enforce all of this stuff.

Martina: So, good question. I actually don’t have a ton of insight into any of that. What I have insight into is just as it comes, the new legislations that are passed and new states that opt into economic Nexus. And that’s something that we keep up to date through the website at Avalara.com. But aside from that, I’m not in the rooms with the lawmakers so I don’t know. I do, I definitely know, I’m very aware that there are a lot of Amazon sellers and probably others but I feel like Amazon sellers maybe are just the most vocal in kind of expressing their upset about these new legislations and the impact that it could have on them and their business.

And so, I know that there’s some folks who are getting together to kind of try to fight it and there’s definitely two sides of the camp I think. There’s some folks that I talked to who are like, yeah, I just got into compliance and I’m using software to support me and it’s fine. I would rather be in compliance then be a risk of my family potentially being harmed by me not kind of following the rules and then having a state like California come after me and my home and that sort of thing. So that’s literally, a conversation I’ve had with a number of sellers before.

And then there’s other conversations I’ve had where sellers are like, yeah, like, I’m not doing anything, they have to come after me, they have to come after me for me to believe this. And that’s, it’s a choice and it’s a business choice. And I think this is one of the things that we do talk about this when we talk to sellers is you’re measuring your risk in involved, right. So it may be that the risk of not being in compliance doesn’t outweigh the flip side of being in compliance. So being in compliance, what does that mean as far as time and resources and maybe some financial burden as well, at least in the initial stages. It does cost more money to get registered and in states and it definitely takes time.

But going forward, once you’re registered, it’s just a pass through the, you’re not actually — sales tax is not your money. It is the customers’ money; it’s the consumers’ money. So, it’s passing through you, you end up being becoming kind of the tax man and in a weird sort of way. But then on, the other side of it is for some people, they are of the opinion of, yeah, I’m not going to get registered, I don’t really sell that much. It’s just not huge enough. So, if they do come after me, and I owe a penalty, it’s not going to be a penalty that’s really that harmful to me or my business. And so, that’s something that can be weighed. And it’s always a business decision.

Steve: So, if you can take off your Avalara hat for a minute, let’s say there’s a company that’s been selling for five years, they only collect sales tax in their home state because that’s where they have Nexus, what would you advise that they do, and how do you come up with these decisions on whether to wait till they come after you or be proactive about it?

Martina: It’s hard to take off the Avalara hat because this is what I’ve been doing for the last five years. And I do have to say, I’m not a tax advisor. So I have opinions but I’m not — I definitely wouldn’t want to be held accountable for someone making a decision based on my…

Steve: Of course, absolutely that’s a given. That’s a given.

Martina: Disclaimer, disclaimer yeah. So you’re saying you are, let’s pretend it’s you. So Steve, you’ve been selling for five years, you’ve been collecting in your home state?

Steve: California yep.

Martina: In California. Good that’s great. I’m glad you’re collecting in California.

Steve: I know right. The most aggressive state yeah.

Martina: Of any of the states, California, Texas, and Florida are pretty aggressive yeah. Colorado actually is or Denver is. Yeah anyways, we could get into all the different states, but so you’re collecting in California and you’re selling on Amazon. Is that — was that the?

Steve: Yeah. Let’s say you’re selling on Amazon.

Martina: Okay. So, I mean, there’s information you should have. This is kind of the stance that I have. I think it’s about you being armed with information so that you can make those decisions. But my opinion would be, look, if you really care about your business and you want to keep doing this business, it would behoove you to seek some professional advisement around your sales tax obligations. So, there’s accountants that you can talk to who can give you the kind of the right information but there’s options for you. You can either get voluntary disclosure agreement if your sales tax obligation is so big across many, many states.

If it ends up at the end of the day determined that you have a physical presence that you should have been collecting sales tax in, let’s say, five states plus economic Nexus thresholds have been hit in another four or five states, and you have suddenly have 10 more states that you’re needing to collect and remit sales tax and potentially should have been for four or five years, that’s a bigger case. I think most people aren’t going to be in that situation.

A lot of times, when we’re talking to folks especially, and I’m going back into Avalara hat land, but when we talk to people and we have accountants in the conversation, a lot of times the experts that we’re engaged with are of the mindset that it’s okay to start collecting from now on and you’ll just move forward because at the end of the day, the states are really just looking for people to start giving the money. They’re like, can you just start collecting sales tax, but sometimes it’s bigger than that and there’s nuances there. And that would just be something that you’d have to work with an expert on.

Steve: Okay. Have you heard of any cases where a company has just gotten totally busted and ruined as a result of this?

Martina: Yeah, unfortunately, yeah. I mean, it was like three years ago maybe, there was an entity that came to us, and a lot of times, people who come to us just kind of going off on a tangent here for a second, but a lot of times when people come to us, it unfortunately is not a proactive thing. People are becoming more proactive now, but a lot of times it’s because they’ve just gotten audited or other, and so they’re kind of like man okay, we need help. So, we’d like to promote that preventative method. But yeah, we’ve had a few sellers come to us in the past saying, hey, this is my situation. I’ve got states coming after me, they’re getting the letters.

Once you get the letters, the states know, if you’re getting a letter, the state knows that you have an obligation to collect sales tax and they are going to come after you. That is what they’re telling, they’re saying, we know, we have people on staff who we’ve hired to do this job to basically come after you and others. And we had a seller who it would have been over a million dollars for him to actually get in compliance because there was so many back taxes and that was with a voluntary disclosure agreement.

So, what’s crazy is that that’s like a long time that’s many, many years of selling and not collecting in a lot of states at high volume, at high revenue and never collecting the sales tax and not remitting anything. And so there were penalties and interest, and even though with a voluntary disclosure agreement, those penalties and interest get minimized to a certain degree, you have to pay a big lump sum all at once just to kind of be like, okay, here is all the money, it’s not 100%, all of it, you’ve given me a little break on the penalties and interest but here’s a lot of it all at once. And this person was would have owed all at once over a million dollars. And that puts them out of business. It’s just like it was too much.

So yes, so there’s unfortunate circumstances. The good news is that’s rare. It’s actually like not — it’s not the everyday scenario. Most people don’t have that kind of massive volume in their sales as online sellers, and so if they’re doing a voluntary disclosure agreement, it’s a much more manageable amount to pay. And then if that’s not necessary, then really all that they’re looking at is the immediate expense that comes along with getting registered and starting to collect and pay going forward.

Steve: Right. Okay. Yeah, fair enough. Well Martina, thanks a lot for coming on the show and lending your expertise. If anyone wants to find you with more questions, where can they get you?

Martina: They can find me at Avalara.com. You can get a lot of information online but you can email me if you have questions, Martina.Chavez@avalara.com. If you’re going to be at a show coming up, we’re going to be at Prosper, we’ll be at Sellers Summit, so we’ll hopefully see some folks there as well. I’m looking forward to that Steve and yeah, we float around a lot of different places so find us in many places, but you can reach out to me directly at Martina.Chavez@avalara.com.

Steve: Awesome. Well Martina, I really appreciate your time.

Martina: Yeah. Thanks so much Steve, I appreciate it.

Steve: All right. Take care.

Martina: Okay, you too. Bye-bye.

Steve: Hope you enjoyed that episode. Now, I probably get asked about sales tax at least three times a week. So, hopefully this episode with Martina has answered all those questions. For more information about this episode, go to Mywifequitherjob.com/episode246.

And once again, I want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any primer that is closely tied to your ecommerce store. If you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce merchants where you can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. So, head on over to Mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s Mywifequitherjob.com/K-L-A-V-I-Y-O.

Now, I talk about how I use both of these tools on my blog, and if you’re interested in starting your own e-commerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast where we’re giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.Mywifequitherjob.com.

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245: A Student’s Candid Journey Selling On Amazon And How To Email Jeff Bezos

245: A Student's Candid Journey Selling On Amazon And How To Email Jeff Bezos

Today I have a special guest on the show, Maria. Maria is a student in my Create A Profitable Online Store Course who is making 6 figures with her business and last week, I invited her to come talk to the other members of the class about her experiences starting her ecommerce business.

But instead of celebrating her success as an entrepreneur, I asked her to provide a candid account of her experiences including all of her struggles, her triumphs and how she overcame various obstacles on her journey.

This is a very raw episode and in fact, my chat with Maria was not intended for the podcast. But it got such rave reviews from the other students in the class that I decided to publish it for your enjoyment.

Enjoy!

What You’ll Learn

  • How Maria found her niche
  • How Maria found her vendors
  • How to negotiate low MOQs
  • How to email Jeff Bezos and get a resolution
  • How to establish great relationships with your suppliers

Other Resources And Books

Sponsors

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Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. Now today I have a special guest on the show, Maria Finch. Now Maria is a student in my Create a Profitable Online Store course who is making six figures with their e-commerce business. And last week, I invited her to come talk to the other members of the class about her experiences starting her e-commerce business.

But instead of celebrating her success as an entrepreneur, I asked her to provide a very candid account of her experiences, including all of her struggles, her triumphs and how she overcame various obstacles on her journey. Now, this is a very raw episode, and in fact, my chat with Maria was actually not intended for this podcast. But it got such rave reviews from the other students in my class that I decided to publish it for your enjoyment.

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%.

You can also use Privy to reduce cart abandonment with cart saver pops and abandoned cart email sequence as well at one super low price that is much cheaper than using a full blown email marketing solution. So, bottom line, Privy allows me to turn visitors into email subscribers and recover lost sales. So, head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve.

I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. Klaviyo is the tool that I use to build real quality customer relationships with my e-commerce store. And because all my transactions and email correspondence is tracked in Klaviyo, I can easily build meaningful customer relationships by listening, understanding and taking cues from my customers and delivering personalized marketing messages. So for example, with one click of a button, I can easily send a specific and targeted email to all customers with a lifetime value of over $100 who purchased handkerchiefs in the past year.

Now, it is for this reason why over 10,000 brands have switched over to Klaviyo. And right now they have this cool docuseries called Beyond Black Friday where they discuss successful marketing strategies that their customers are using that you can emulate with your business. So, head on over to Klaviyo.com/beyondbf to check it out. Once again that’s K-L-A-V-I-Y-O.com/beyondbf, now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle so you can spend more time with your family and focus on doing the things that you love. Here’s your host Steve Chou.

Steve: I have Maria in the class and I’ve spoken to her in the past — I think — was it a consult that we had or something like that?

Maria: It was after I hit 3,000 points.

Steve: After she hit 3,000 points. And you’ve been in the class for two years, three years.

Maria: So I started in March of 2016 so almost three years.

Steve: March of 2016, yeah, so almost three years. And what I liked about Maria is one, she’s very well spoken, two, She’s very competent, and she knows what she’s doing or she’s a quick learner. Over time, she’s developed a lot of skills. And what I wanted to do is I get asked these questions all the time from the students. And one of the main problems is that once someone becomes successful in the class, a lot of times they tend to clam up because Amazon especially is a very competitive area. And there’s always this fear that if you reveal your product, other people might jump in and copy and that sort of thing.

So, you’ll notice that whenever I go on the podcast with the students or whatnot, it’s almost always with someone who already has a solid website and their own following. And Maria has been doing very well in the past couple of years. And so, what I thought and she was gracious enough to come on office hours and kind of talk about her experiences, kind of like her struggles, her triumphs and what she’s gotten stuck on, and that sort of thing. And I don’t want to do all the talking here Maria, if you want to give a quick intro to yourself, that’d be great.

Maria: Sure. I mean, so I have been doing this since March of 2016. I found Steve’s class after doing extensive research because it was really important to me to find a class that would be thorough, that was detailed and given by somebody who had a presentation style that I could stomach. I looked at a lot of different classes and some of them I was like, okay, it might be good content, but I don’t like to hear this person talk. Steve has it all, and I love that you always are refreshing your content, etc. So that was where I began at. I began with research on Jungle Scout, I ran it by Steve and I — are you still doing that?

Steve: I do, I do it for a lot — I am actually overloaded with them. So by the way, just quick aside, if you’ve submitted a niche critique for me, please be patient. It takes me like two or three days to do it and I have a whole bunch of them. So and I like to think about a little bit and do a little bit of competitive analysis before I respond. That’s why it takes a little longer, sorry, go on.

Maria: Well, so I will tell you that I came up with the niche and I ran it by Steve and Steve said, this looks like worth investigating further. He didn’t say yes, this is going to be successful because it’s like you’re giving it your best guess. But that really mattered to me. And so from there, I ordered a test market amount of products. I put them up, I sold them in a few days at a higher price than I thought I could and then I was like, okay, here’s my niche.

Steve: That’s great.

Maria: And I’ve just gone from there. And I mean I can give you all kinds of detail.

Steve: Well, you know what? Let’s start from the beginning. So you bought your first batch. And how large was it again?

Maria: I did about 10.

Steve: Ten okay. And then what did you do with those 10?

Maria: So, I had them air shipped to me because I wanted to put them up quickly. I put them up on Amazon. And in the meantime, I looked — so I ordered something that existed. So it was like, I went on Alibaba, I found something that existed. I said, okay, I’m going to try this. As soon as I got it, I decided how I wanted to modify that product. So, I put them up on Amazon to sell them and then I started making my own design. And then I went back to the manufacturer with my own design. I had them produce 20 of them and I ran a test market with my own design, and that went better than I could have imagined.

Steve: So let’s back up a little bit. So that first one that you just listed as is, how did that do, and did you run ads and whatnot for that first batch of 10?

Maria: I didn’t, I just put it up and those they sold but while that was up and selling, I started working on the other design. And I did a pretty quick turnaround to get my own design on there. My own design sold faster.

Steve: Right. So what I was trying to — so at this point, you were still trying to figure out whether this product had legs or not, right?

Maria: Yeah.

Steve: So did you get any initial sales that kind of convinced you of that fact for that first batch of 10?

Maria: Yes. But it was really when I got the batch of 20 that was my own design and they sold very quickly that I said, okay, this is good.

Steve: Okay, so let’s talk about that second batch of 20 then. As soon as you put it up, did you do anything to promote it, or did it just kind of sell on its own?

Maria: I didn’t do anything because I didn’t yet have any reviews. What I did, I had a couple friends buy them and put up reviews for me. And then this was — I mean, I wasn’t offering a discount or anything. These were just friends of mine who were helping me out. So I had a couple reviews but I didn’t do any PPC, I didn’t do anything like that. But I sold out of them in eight days, and I increased the price by $12 over eight days.

Steve: Okay, someone in the class is asking what was your original budget?

Maria: So, I didn’t — I had money that I was prepared to invest in this business. And so I wasn’t going from a budget. I just said, I’m like, okay, I’m going to start out with 20 of these. I’m going to see what happens. So, that initial 20 plus the air shipping, etc. cost me a couple hundred dollars.

Steve: Okay.

Maria: And so basically, I was making a couple hundred dollar decision to decide, am I going to dive deeper into this?

Steve: And those changes that you made with your product, can you kind of describe that process?

Maria: So, I’m just going to go ahead and reveal what I do and I’m going to ask the people in the class, don’t copy me. So, I sell [inaudible 00:08:50] and I have lived overseas in multiple places in the world where [inaudible 00:08:56] were essential for life. So, when I got the first [inaudible 00:08:59] right away, I was like, okay, here are the things that I would change based on my own experience with using this. So, it was a pretty personal decision about what I decided to change.

Steve: Oh, that’s not what I meant, actually. How did you work with the manufacturer to make those changes?

Maria: Oh, okay, sorry, I misunderstood you. So, first thing is on Alibaba I chose only gold level. I made sure they were trade assured, I did all of that stuff. I initially sent emails to maybe five different manufacturers saying, here’s what I want to do, can you do it? I followed one of the things that you had put out. And then the manufacturer who I felt like gave me the best answers, that’s the one that I bought the original samples with, which was an as is, and then that’s the one that I started corresponding with and saying, here are the changes I’d like to make, do you have this ability? And they were great and I have worked with them ever since.

Steve: So, were those changes, you just described them in words or did you — like how complicated were these changes?

Maria: They were simple enough that I could describe them in words and drawings. So, I made some drawings and then I was really careful in how I said things. And we had quite a bit of back and forth. I mean, the manufacturer was really good at asking me detailed questions, which I appreciated.

Steve: And then, how many samples were produced back and forth until you kind of came up with your final one?

Maria: One.

Steve: Really, okay, that’s amazing. Even for me for a handkerchief, it sometimes takes a couple iterations.

Maria: Yeah, I mean, with later products that I’ve done, I’ve had more back and forth but the first one they just got it right, right away.

Steve: Okay. And then did you have any quality issues at all?

Maria: No, I have been really lucky. So, I have everything inspected in China before it’s shipped and I use Asia Inspection. So, I have found that Asia Inspection almost always fails everything, but then when I go in and I read the details, I find that what they’re failing are not really things that I would fail for. There has only been once that they came up with a defect that I was like, oh, this really isn’t okay. And this was a lot later in my journey. And I emailed the manufacturer, I said, hey, sorry, this is just not acceptable. And they actually on their own dime, they went back and they corrected every single one. And they sent me photographs, they sent me a video of them doing it, but that was because I have put a tremendous amount of energy into building really good relationships with my manufacturers.

So they’re invested in me in the same way that I’m invested in them. And I really feel like this was such a good example. Like I said, this is not going to work and they said, oh, we’re so sorry. I had been very clear. So when I place an order, I make a list and I say, these are the things you’re going to be inspected on, and so you should be paying attention to these things as you make them. So I always do that beforehand. And in this case, they said you told us this and we blew it. So it’s on us to fix it, and they fixed it.

Steve: When you get your inspections, do you get it done on the line, at the end, or both?

Maria: I’ve only done them at the end.

Steve: At the end. Okay, so when you caught this error, they had already produced a bunch of them?

Maria: They had already produced 4,650.

Steve: Wow. Okay, so clearly if this was your first order, that might not have come out the way that…

Maria: Oh, it would not have, it would have been a total disaster. So, I think that a couple of things, number one is, I would never start with a big order. I would start with smaller orders and build up even though you’re going to pay more, who cares? It’s better to pay a little more and have the security of knowing that you’ve got a manageable amount to inspect and you can feel confident that the inspection is valid, etc. So I’d start small and build up.

Steve: Okay. And so, a question from the class; was it hard to find a manufacturer who would allow for such a low order number? You mentioned you only produce 20 of your custom design? How did you convince them to just produce 20?

Maria: So, what I did was I said, this is — I explained that I was going to do a test to market and that to do a test market, I needed a small number and that as long as this went well, that I would be ordering a lot more and they believed me.

Steve: Okay, did you have a voice contact or was this just through email?

Maria: All email?

Steve: Really? Okay. That is amazing. You must be very convincing. Usually to produce low quantities like that, I would have to get on the on the phone with them or like on Skype or whatever with them. So it just depends on the manufacturer. Do you remember the language that you used to get such a low number, or was it just exactly what you said?

Maria: I can go back and find it because I sent it by email. But I mean, I don’t remember off the top of my head. This was years ago.

Steve: Of course.

Maria: I mean, I can find the language, I can send you the language if you want.

Steve: Okay, what was I going to ask about that? Okay, so first of all, how much do you pay per inspection? And then, because of that incident, did you start changing your inspection towards like the front of the line as opposed to all at the very end?

Maria: So the inspections are, I’ve done sort of the same level; it’s like level two or something in Asia Inspection. If you go in, you can see their pricing, so it’s like $360, something like that. And so, it was my most recent order where this error happened that they fixed, and I haven’t ordered again yet, so I haven’t changed anything yet. And honestly, I don’t really think I would, because I feel like I have such a good relationship with this manufacturer that if I’m really clear in saying this is what I expect and this is what you’re going to be inspected on, I mean, it seems like they’ll honor it.

Steve: Right. Yeah, I mean, I’ll just tell a quick story. And you guys might have heard this on my podcast with the handkerchiefs where we got fabric that was all kind of slightly blue, and we couldn’t sell it. Now, ultimately, the manufacturer, we have a great relationship, they were willing to make it right. But that was like another four or five months gone, right? We weren’t going to get product. And so what we started doing now, and this is kind of why I was asking you is we front load the inspection to just grab like the first couple pieces off the line. And so that way, they haven’t made a whole bunch yet and we catch it now much earlier.

Maria: So, one of the things that I do is they send me photographs, they send me detailed photographs of the first ones they make.

Steve: Okay, yeah, so for us, the photograph would not have actually exposed the problem. It would have had — it’s like a slight shade of white that’s different. So we would have had to have seen the product in hand. So that’s just something extra we do now just because we got burned. This was just, the vendor has been rock solid for many years, over five years and then all of a sudden this happened.

Maria: So how much do you have to pay for that initial?

Steve: It’s the same price. It’s basically essentially an inspection at the front end and then one in the back. It’s actually cheaper if you only want them to pull like a couple pieces or so.

Maria: Right.

Steve: Yeah, because they don’t have to go through like a huge bunch. Okay, so another question for you. At what point did she start private labeling and customize your packaging like for those initial 20?

Maria: I did it with the initial 20. The only thing I ever sold that wasn’t mine was the first order of 10 where I was just testing by themselves. So it was an as is. As soon as I did the order of 20, I put my company name and everything on it.

Steve: Okay, so as soon as those 20 started selling, what did you do to kind of increase your sales and what was your process like?

Maria: So, you mean front — well so the first 20 sold and then I placed a big order.

Steve: Okay. So what was your size of your big order?

Maria: It was 3,000.

Steve: 3,000 okay.

Maria: Yeah. So it was basically a container full. And then I learned the hard way that when you lose your sales momentum, it sets you back. So, it took me a while to gain that sales momentum back. And I did PPC, I had some friends buy them, I did different things to like get that momentum back.

Steve: Did you do anything special to kind of boost sales outside of just Amazon PPC, for example, did you do anything to get reviews?

Maria: The only thing I did to get reviews and I only did this a few times was I had friends review things for me. And actually, one of the things that I did that I think works really well especially now where Amazon is paying attention to buying reviews is I traded reviews with some people. So, I bought their product, I reviewed it, they bought my product, they reviewed it.

Steve: Interesting. Okay another question; you did FBA for even those initial batches, right?

Maria: Yes.

Steve: Okay. And Sandra is asking, what do you mean by lose your sales momentum? I was actually kind of curious about that too because with 20 units, you don’t really have that much sales momentum right?

Maria: So, I just — so when I sold 20 units, they sold quickly and then I had a dead zone where I didn’t have any more products to sell. I left one in there and I jacked the price way up so that it wouldn’t just go to zero. But then when I restocked, I thought they would just sell quickly again and they didn’t. It took a while for that to get going again.

Steve: Okay, just for future reference for the class, you probably shouldn’t jack up your price on those last units. You should probably just let it sell out and then…

Maria: I know that now. At the time, that’s what I thought, was the right thing to do. That was three years ago.

Steve: Three years ago. Yeah, no, I’m not criticizing you. I’m just saying.

Maria: Yeah I know, I’m just saying.

Steve: Okay. And so all right, so things started going well. And I want to kind of shift gears a little bit and talk about some of your struggles. Like, it wasn’t obviously all smooth sailing. And I just kind of want to highlight some of the things that you had to go through.

Maria: So, I ended up switching freight forwarders. I had a freight forwarder who gave me quote, who basically there was like a big miscommunication and it was just a total nightmare. And then I was like, okay, I have all this product here, but I’m not going to ship with this freight forwarder. So then I was out searching for another freight forwarder. That was one big challenge in the beginning.

Steve: Well, can you share who you are using now?

Maria: Yes. So who I use now is called Bestocean Worldwide Logistics, they’re in California. They have been great; they give me great prices for shipping. They also do warehousing, and they have a warehouse system that’s actually like computerized so that you can do everything online and you you can see exactly what’s going on as opposed to like some third party warehouses where you’re hoping they know what they’re doing. So yeah, Bestocean Worldwide Logistics, if anybody wants the name of my rep I can provide.

Steve: You mentioned that, do you take advantage of their warehousing?

Maria: I do.

Steve: So, do they do any prep work for you before they send it off to Amazon?

Maria: So, I am only sending case packed cartons to Amazon so they’re coming from the manufacturer case packed, so all the warehouse is doing for me is putting the FBA label on and sending them in. And the great thing is their warehouse is located right by the Ontario California Amazon fulfillment center. So, usually things get there in a day.

Steve: I see. Okay, so when you make that larger, you have it shipped over to their warehouse and they do the flooring to the Ontario warehouse.

Maria: And I do it that way because my product is seasonal, so in the offseason I don’t want a lot of things sitting in Amazon that I’m just going to pay storage on. I pay less money in storage at my third party warehouse than I would pay if I just stored everything there. So, I manage my inventory that way. I watch on Amazon, as it’s getting low, I have my warehouse send in more because I want to be paying Amazon less. Amazon charges more for storage than my warehouse charges, so I do it that way.

Steve: Yeah, so that’s just a quick tip for the students out there. Amazon over the years, they’ve just been jacking up their storage fees especially over the holidays, it’s like three x higher. And if you do your research, you’ll find that warehousing can be like up to six times cheaper than what Amazon charges to hold their products. So the way that Maria is doing it, having it stored in a warehouse and having it kind of shift piecemeal so that you don’t have too much stuff in Amazon’s warehouse at any given time will save you money.

Maria: Yes.

Steve: Does your manufacturer also create your packaging for you or do you have another person do the packaging for you?

Maria: They do it all. They outsource the packaging. So, in the manufacturing time, one of the things that can make your manufacturing time longer is they’re getting different pieces of the package from different places. So for example, there’s an insert, there’s a plastic bag, there’s a cloth bag, each of those is coming from a different place. So, they’re managing all of that, but it can just affect timing and you want to make sure your manufacturer knows how to do it. I have two manufacturers, they’ve both been great.

Steve: Okay, does your warehouse do any labeling for your product or are they just boxing stuff up and sending it in?

Maria: So, they are not boxing anything, the boxes are coming packed from China, all they’re doing is putting an FB a label on it, but they can do anything and everything. They can label individual products, they can do individual product fulfilling, they can do it all.

Steve: But for your purposes, each one of your products are individually labeled with your FNSKU, right?

Maria: Right. I have an insert that has that on it. So there’s no labeling involved. It’s all; the only label is the label that goes on the carton to send it to Amazon.

Steve: Okay Kathy, I will post all the information about Maria’s freight forwarder below this video so that everyone can have access to it. All right, so more on struggles, sorry. So we were talking about … Yeah, we got sidetracked there.

Maria: So I mean, the majority of my struggles have been dealing with Amazon, like Amazon has overcharged me fees. Amazon is taken down listings when they shouldn’t have; Amazon has done all kinds of things. And I have been — the number one thing I can tell you about selling on Amazon which Steve’s on blog posts said about a week ago is you have to watch them like a hawk. And that means you got to play around with all their silly reports and find the reports that give you the data you really need. I have like Seller Central; their customer service drives me insane. So, multiple times I have emailed Jeff Bezos himself, and I’ve been successful in speaking with his reps, and that’s how I’ve gotten things fixed.

So for example, they had overcharged me a fee for one of my products for like a year and I just fought and fought and fought and I got to Jeff Bezos his person and I said, this has been overcharged, I can prove it. She tried to argue with me but then she reimbursed it all.

Steve: Can you talk about what that fee was?

Maria: It was the FBA fees, so not the percentage that they take, but the fee that they charge for doing FBA.

Steve: Did your item get misclassified somehow? Is that why it happened?

Maria: They never said so. I had I think I started out saying this needs to be re-measured, and they came back with the measurement but it’s still based on what was on their website and then what this person was telling me, they didn’t add up. So, I just kept sending her a link to the website saying this is not what your website says. And so, I don’t know if she blew it or if something on the website was incorrect, but I could prove that they were overcharging me. So they reimbursed me for all of it.

Steve: How many interactions before you decided to email Jeff?

Maria: I only email Jeff if it’s something that I think is like a bigger level Amazon issue. So, I’ve emailed him about this fee change, because I think that to me was like, is there something wrong in your algorithm that’s overcharging this on a Prime Day? So on Prime Day in 2017, when my sales were going like gangbusters, they took the prime tag off of my listings.

Steve: That actually happened to a lot of people. I feel it was on purpose.

Maria: I went straight to the top; they came back, so it took a while. It usually takes like two weeks to hear back from one of Jeff’s reps and they told me that they can do whatever they want with the prime badges. And I said, okay, that’s fine but the problem was you guys sent out a media guide saying, here’s what you should do on social media to promote Prime Day. And I had followed that. And so I said, essentially what you did was you made me spend money to drive traffic to Amazon, but then I didn’t get to benefit from that as a seller. And they said that because I had made a business decision based on information that they sent me, they gave me some money.

Steve: Okay, so you’ve had pretty good luck emailing Jeff.

Maria: I have. I mean, I’ve had other times where I’ve gone straight through and I have had them say, we do understand where you’re coming from, but we’re not going to do anything. I’ve gotten compensation multiple times. And I think that I mean, I’m very careful in how I structure emails to him. I make them very factual and make sure that I’m giving data that can actually be acted upon and not giving any opinions, not putting any emotion to it and making it really scientific. So somebody can read it and be like, oh, wait a minute, this doesn’t make sense. And those get responses.

Steve: Would you be willing to share one of those emails?

Maria: Sure.

Steve: Okay, cool. Once again, I’ll post it below the video if Maria can find it. A question from the class, you mentioned you now sell multiple products. Did you just grow in your niche, or do you have a diverse selection of unrelated products now?

Maria: Yeah, I’m only in my niche.

Steve: Can we talk about some of the specific Amazon struggles that you’ve had and which ones have impacted you the most?

Maria: I mean, I feel like every struggle I’ve had with Amazon has impacted me. Like when I figured out that they were overcharging me this fee, I was so angry because I was just like why are they being so dishonest? And how can — when I went back and forth with Seller Central and they always come up with strange things like some of them. One of the reps I talked to reimbursed me like a couple of cents, but they weren’t really paying attention to what I was saying, they weren’t following the detail. And then when I finally got to Jeff Bezos, his rep, and then it got fixed, he was like, okay, that was worth my time. And then I go on.

So, I kind of feel like with each struggle with Amazon, I go through a phase where I’m really mad at Amazon, I think I’m crazy to be on Amazon, I think it’s time to shift over to my own store, etc., etc. And then I force myself to get over it and go on. And the truth is, I mean, this has happened to me multiple times. And I think it’s just the price of doing business on Amazon. I mean, I’m in touch with people who are much bigger sellers than me, and they have the same thing. I think it’s just part of the nature of the business on Amazon. Has that been your experience?

Steve: Absolutely, which is I think the class pretty much knows this either through the podcast and whatnot. But whenever an Amazon issue pops up, my wife just gets a really bad mood and it last for weeks, or however long it takes. So, that’s why we’ve made a conscious effort to focus more on our own shop. Actually, that’s my next question for you, Maria. You’ve gone through all this stuff. And it’s a struggle and it’s come out good for you. You’ve gotten resolutions, but how much time and mind share has that taken you to get to that point? And are you focusing more now on your own site or are you still all in on Amazon?

Maria: So, I’m my goal for 2019 is to get as much business off of Amazon as I have on Amazon. And that’s my absolute focus. So I am, like it’s the beginning of the year. So I’m doing kind of a re-optimization of my listing on Amazon doing a re-work of the keywords etc. As soon as that’s done, I’m going to let Amazon fly a little bit. I mean, you got to always watch them like a hawk. But I’m going to try and reduce the amount of time I’m spending dealing with that and really put my efforts into I’m focusing on business to business sales.

Steve: I just want to take a moment to thank Ahrefs for being a sponsor of the show. Now, I’m a huge fan of their tool and in my opinion Ahrefs is the best all in one SEO tool out there to rank in Google search. And recently, I completed a search engine site audit for mywifequitherjob.com and Bumblebeelinens.com and Ahrefs was indispensable. For example, I used Ahrefs to do a deep dive into all my posts to find the highest volume, lowest competition keywords to target in search. And in fact, recently, I used Ahrefs to rank a blog post in Google from position 20 to position five for a big time keyword in the span of just one month by switching around my title and H1 tags.

I also use Ahrefs to spy my competitors’ sites to see what keywords they are ranking for, and then I write a more comprehensive post and eventually outrank them in search. Now those of you who know me know that I hate spending money on tools, but I actually pay for Ahrefs and that should say something in itself. Right now, I’m giving away nine three month Ahrefs memberships for free. To sign up, head on over to mywifequitherjob.com/giveaway, once again, that’s mywifequitherjob.com/giveaway to win a three month Ahrefs membership. Now back to the show.

Yes, I was just going to suggest there’s probably a lot of organizations that will buy from you in bulk.

Maria: Yeah, yeah. And I’m not interested in doing individual sales off of Amazon because I don’t want to be doing customer service etc. But I want it business to business like individual sales Amazon can do that but the rest I want.

Steve: Can we talk a little bit about mindset here, especially if you can remember when you first started out, just taking those risks. Did you just go into this saying, hey, I’m going to invest a couple thousand dollars in this and whatever happens? How did you finally just be willing to take that first leap and place that first $4,000 order or 4,000 unit order I should say?

Maria: Yeah, so I’m really good at research. I had watched like so many things in your library. I had corresponded with you to ask you questions, I felt reasonably confident. Another thing that has been absolutely key in my journey, though, is that I started meeting with another student once a week, and we’ve met once a week for almost three years. And our relationship has been essential because we help each other, we figure out what’s working, what’s not, we make suggestions. And then, another student in the class, we don’t get together regularly, but she’s also been really key in helping me feel confident.

I am a very determined person. So, I just decided, I’m like I decided I’m like, based on all of the research that I’ve done, based on all of the webinars that I watched, this should work. So it’s going to work. And then I just worked really hard to make sure that it did. And that meant paying attention to a ton of details. It meant continuously learning because it shifts so often. So, I mean, I still put a lot of energy into hearing the latest changes and whatever, and then adapting accordingly.

But basically, from the beginning, I just decided, like, I’m doing this and I’m doing this all the way. I will say that if in 2017, if 2017 hadn’t been as successful as it was, I might have said, oh, maybe I should switch niches. But 2017 was very successful and so it was just confirmation in like you’re doing the right thing. And then in 2018, I grew by 77%.

Steve: I’m just trying to get an idea of where your mindset was. Let’s say the first batch of 20 didn’t sell out immediately, let’s say you sold maybe four units, would that have been enough to push you over the edge, or would one sale have done the trick for you?

Maria: No, it definitely mattered that I sold them all quickly and that I was able to raise the price significantly while they were selling. Like every day I raised the price by the dollar or more. Had that test market not gone so well, I may have revisited the niche. I probably would have contacted you and said, hey, what else should I try? I mean, really, that test market made a lot of sense to me. The other thing is that because this product is kind of personal to me, like I had done a lot of research about just the global environment and sort of how does this product fit into the global environment and I was really confident that there would be a market based on that research as well.

Steve: All right, I think the reason why I’m asking you that question is because these days, it’s a lot more rare for you to just throw something up and then sell out 20 units. You have to do a little bit more these days. And so I guess you’ve launched several products since then, right?

Maria: I have three products and three products have made me a six figure seller.

Steve: Right. So for those other ones, I guess at this point, you’re already confident and so you probably just put them up and then just started running ads and it was all peachy, right?

Maria: So for the second two, yeah. I put them up, I had a couple of friends by them so that I had two reviews and I started running PPC right away. And I also, my timing was really good. If you were to start with [inaudible 00:35:48] today, it would be much harder because there’s more competition. So, I had the advantage of having gotten in when I did. So that’s something to consider like if you want to get in on something I think before it becomes to popular in theory.

Steve: Sure. A couple questions from the class. Where are you located, and is this a full time business for you now?

Maria: I am in Alexandria, Virginia, and yes, it’s a full time business.

Steve: And were you working when you started this?

Maria: No.

Steve: All right, so we’ve talked about struggles. We’ve talked about how you got started; do you have any tips for some of the students in the class who are just kind of starting out?

Maria: So, I think one of my tips would be when you’re doing product research, I mean, I know there are sort of two lines. One is to fall in love with the product that has the best numbers and the other is to find a product that somehow speaks to you. So for me, it worked where a product that had good numbers happened to also be a product that spoke to me personally, so spoke to my own life experience. And I really think that that connection was very helpful. So, I think if you can find a product where you get good numbers, but it’s also something that inspires you or is connected to you some other way, that’s a good thing to pursue.

Steve: So, given that you just said that, if things weren’t going so hot in that first 20 units, would you have probably just kept with it for a while longer because this niche kind of spoke to you?

Maria: I might have I mean, I might have tried a different design, so I might have said, okay, maybe this first design I came up with wasn’t the best one to try. I mean, because looking at the bigger picture, saying what’s happening in the world? So, the temperature is only going up, bugs are only getting worse. That was a pretty good impetus for me to say this seems like a logical thing to get into. If I wasn’t looking at that bigger picture, then if something didn’t sell right away, I might say probably not a good choice. But I’ve always been looking at this from a big picture but then also from details, looking on both sides.

Steve: Are there any mistakes that you made early on that you’d care to share and that other students would hopefully avoid going forward?

Maria: I actually think that the first order that I did of 3000, I think I was overly ambitious. I think I probably should have made that first order a little smaller, because as it ended up, that model sells less than the two models that I did later. I mean, it’s still a good model, but it’s just kind of interesting how that went. I don’t have any regrets because I learned from doing it, but I think if you can get a manufacturer — so like if I had first ordered 1,000 of that model, I might have made modifications to it. I might have decided I didn’t want to continue with that model and that other models would make me more money. So yeah, and the thing is hindsight is 2020. At the time it totally made sense to me to go ahead and order a container of them and go forward, but now when I look back I say, that was pretty ambitious and it would have been okay to start with 1,000 and then reorder.

Steve: It’s funny that you say that because whenever students asked me how much they should get for their first order, if it’s anywhere close to the holidays, I usually advise them to get more than they think that they’re going to need which is kind of what you…

Maria: But I mean close to the holidays I would agree with you. I mean if I was in the season, so had my timing been different, had I’ve been ordering those 3,000 that’s in March and they had arrived in May, I probably would have sold them like gangbusters. Instead, I did my test market during peak season but then the order production time took Time and so I didn’t actually get those until the fall when they were starting to get [inaudible 00:40:07], so some of it was timing. So that’s another thing to think about is timing especially if you have a seasonal product. I absolutely agree with you, if you have a product that’s going to sell hot over the holidays, then yes, buy more than you think you should. I agree with you 100%.

Steve: This is a lot of people are usually squeamish about that first order. So they’re like, hey Steve, should I just get 200 units. I’m like 200 units is not going to last you.

Maria: Yeah, I mean, I think there’s a couple things. One is, even if you do a test market and your test market is successful, you may decide that there’s something you want to change if it’s your own design. And so if you start out with fewer, you can change that design quicker. But if you’re not in that scenario, then it’s totally, then I think I would look at it very differently. So, only from a design perspective would I say start a little smaller, double check your design, make sure there isn’t anything you’re going to want to change further and then go into a bigger order. And by small, I mean like 1,000.

Steve: Okay, are there any things that you’re doing now for your later product launches that you weren’t doing in your first launch because you figured a few things out? Are you doing anything differently today to launch a product?

Maria: I’m not.

Steve: Okay. So it’s the tried and true formula of creating a really good listing, Amazon PPC, anything else that you’d care to share?

Maria: I think the key is have — so I know that now apparently Amazon is connecting friends with friends. So have friends of friends buy things and put up a few reviews for you. I pay people, so I will say if you’ll buy this for me, I’ll send you a check for the product if you put up a review, like I will do that because that gets you your first reviews. It gets you on the board and then start PPC. I would do that with two.

Steve: Right. Okay.

Maria: I’m not talking about doing this with 10 or 100 or whatever.

Steve: Of course.

Maria: Start small because it’s just kind of getting the ball rolling. I’m a big believer in, you got to get the boulder in motion. And once the boulder is in motion, physics takes over. So, get the boulder in motion and then, do all you can to support it.

Steve: Okay. Does anyone in the class — I mean, we’re almost close to 50 minutes here and I don’t want to keep you too long here. Does anyone in the class have any other questions for Maria? I’ll continue talking but if you have any questions, just post them on the live chat because Maria is gracious enough to be here and talk very openly about what she sells and her struggles and that sort of thing. And so, I think this is a really good opportunity for anyone who’s curious. So, anyone who’s just kind of starting out and a little bit hesitant about the entire process.

Maria: Another thing I did want to mention is that I think that I mean I have to do this all the time, it’s some backing yourself up. It’s like making yourself feel good about what you’re doing. And one of the things that I use is mantras. I don’t know if anyone has ever done that. But you can get up in the morning and you can tell it, kind of give yourself what’s your focus for the day. So you might say, I am powerful and then you write that down a whole bunch of times. And as you’re writing it, and you’re reading it, it just helps you get a mindset. And then I find that that carries into my day.

Steve: Okay, a couple of other questions that have just come in. You mentioned trading reviews, where did you find people who are willing to do that?

Maria: So, this was in the old days when we had the forum and I asked on the forum.

Steve: Actually, we still have that that forum. I know I said I was taking it away, but I just kind of left it around because a few students asked me to just keep it around. So I haven’t removed it just yet.

Maria: Well, and I should say to give credit there was another student who came up with the idea and then we have pursued it.

Steve: Okay all right. So you got a whole bunch of thank yous, I don’t know if you’re on the classroom page right now Maria but everyone has found this extremely valuable and very informative. I was going to ask you, how do you plan — so first of all, how many hours do you work on this business a week?

Maria: So, one of one of the reasons why I did this is I wanted to have a lifestyle business where I don’t have specific work hours and relax hours. I mean, I would say probably 40 to 60.

Steve: Really okay.

Steve: If you were to break down the time that you spend, do where the breakdown is? Is it on product research, Amazon issues, how does it break out?

Maria: I spend a lot of time on research, and it’s not just product, it’s researching — so for me what’s going on [inaudible 00:44:52] what’s going on with the disease, where there are outbreaks, because I have a Facebook page that I post on every single day. So, I’m trying to keep people informed. I see my business as educational in addition to providing a product.

Steve: Do you have a blog as well or is it just a Facebook page?

Maria: I do, I have a blog on my website. So I have a website that just links all my products to Amazon because I’m not yet selling from my website because I want that to only be business to business. But I do have a blog on my website. I am not blogging all the time. And Stephen, I had talked about this a while ago. I don’t know if you remember, but it’s like in some ways with [inaudible 00:45:37], there’s a limited number of things you’re going to discuss. So, I’ve kind of done those posts and then I revisit them. I do try and come up with new ideas. But Facebook is one of my primary things that I’m using to just kind of communicate with a broader field of people and to demonstrate like this is not only about a product, this is about keeping you informed.

Steve: Do you have anyone on your staff to help you?

Maria: My dog.

Steve: Your dog. Okay that’s great. So there you have it Maria. Maria is doing this solo essentially right now.

Maria: But I really, I consider my team to be Steve, a couple students that I am in regular touch with, my faithful order, my manufacturers of, my warehouse people. I consider that to be my whole team, and so even though technically like I’m the one doing it, there’s a lot of people that are involved.

Steve: Of course, of course, so no full time employees I guess?

Maria: No, I’m in.

Steve: Okay. Well Maria, this has been great. I really appreciate it, and the class does too. You might want to hop on the live chat, maybe later open it up and just everyone is like yeah, thank you so much. Dan was just saying, thank you everyone for making this a safe space where we can openly discuss our products and not feel too vulnerable.

Maria: I did begin by telling you [inaudible 00:46:59] don’t be bad, so don’t do that.

Steve: I will ban anyone’s account if you sell [inaudible 00:47:05].

Maria: Yeah, the other — I mean, my main message though, to fellow classmates is, it’s possible. I mean, I went from zero to six figures in…

Steve: A year and a half.

Maria: Yeah, a year and a half. So it’s very, very doable and you have to really just keep motivating yourself and keep saying I can do it, I believe in myself, and you got to be right about that. Like you can’t have a pipe dream and pursue a pipe dream. You got to make sure your dream is grounded in reality.

Steve: Well, Maria, I’m going to stop the broadcast. Hang out a little bit, I want to talk to you a little bit, but thanks a lot.

Maria: You’re welcome. Good luck.

Steve: I hope you enjoyed that episode. Now, you probably noticed that I had to bleep out Maria’s product from the podcast and unfortunately, all the extra resources mentioned in the podcast are for students only. But I hope you got a lot out of this episode. It’s not always smooth sailing, but as long as you are persistent and detail oriented, you will eventually succeed. For more information about this episode, go to Mywifequitherjob.com/episode245.

And once again, I want to thank Klaviyo for sponsoring this episode. Klaviyo is my email marketing platform of choice for developing real quality customer relationships. Right now they just released a cool docuseries called Beyond Black Friday where you can learn successful e-commerce marketing strategies from real companies using their platform. This docuseries is free and you could check it out at Klaviyo.com/beyondbf, once again that’s K-L-A-V-I-Y-O.com/beyondbf.

I also want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any primer that is closely tied to your ecommerce store. If you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

Now I talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast where we’re giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.Mywifequitherjob.com.

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Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

244: Tim Schmoyer On How To Create A Successful YouTube Channel

244:  Tim Schmoyer On How To Create A Successful You Tube Channel

Today, I’m really happy to have Tim Schmoyer on the show. Tim is someone who came highly recommended to me by Colin Jones who will be a future guest on this podcast.

He is a veteran when it comes to audience growth on YouTube. And he specializes in helping YouTube creators spread their message to reach people online.

His channel has over 400K subscribers and this interview comes at an opportune time because I’m actively trying to grow my new show, The 5 Minute Pitch.

What You’ll Learn

  • Tim’s motivation for starting VideoCreators.com.
  • The types of videos that work well on Youtube?
  • How to build traffic to your videos and establish an audience
  • How to get a video to rank in search
  • What you can do in your video to grab a watcher’s attention

Other Resources And Books

Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
Klaviyo

Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
Privy

Ahrefs.com – The best all in one SEO tool out there that I personally use to improve my search rankings for my blog and my online store. Click here to win a FREE 3 month membership.
ahrefs

GoBrandWin.com – The fastest and most effective way to grow your email list for free using group giveaways. Click here to signup for free.

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into the strategies they use to grow their businesses. Now today I have Tim Schomoyer on the podcast. And Tim is my go to expert when it comes to building successful YouTube channels. And it just so happens that interviewing Tim comes at a very fortuitous time because I just released my brand new show where 32 entrepreneurs pitch their products for the chance to win $50,000 in cold hard cash.

Now my new show is called the 5 Minute Pitch. And you can think of it as a more relatable down to earth version of Shark Tank where the judges actually provide actionable feedback to the contestants. Now my fellow judges are Greg Mercer, Scott Voelker and Mike Jackness, and you can check out the show at 5MinutePitch.com/launch, once again that’s 5MinutePitch.com/launch.

Now before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Klaviyo is the tool that I use to build real quality customer relationships with my e-commerce store. And because all my transactions and email correspondence is tracked in Klaviyo, I can easily build meaningful customer relationships by listening, understanding, and taking cues from my customers and deliver personalized marketing messages. For example, with the click of a button, I can easily send a specific and targeted email to all customers with a lifetime value of over $100 who purchased a red handkerchief in the past year.

And it is for this reason why over 10,000 brands have switched over to Klaviyo. Right now they have this cool docuseries called Beyond Black Friday where they discuss successful marketing strategies that their customers are using that you can emulate with your business. So, head on over to Klaviyo.com/beyondbf, once again that’s K-L-A-V-I-Y-O.com/beyondbf

I also want to give a shout out to Privy who is also a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now what does Privy do? Well, Privy is an email list growth platform and they manage all of my email capture forms. And I use Privy hand-in-hand with my email marketing provider. They’re a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in e-commerce. Right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this. And when I implemented this form, email signups increased by 131%.

I’m also using their new cart saver pop up feature to recover abandoned carts as well. So bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve. Now onto the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m happy to have Tim Schomoyer on the show. Now, Tim is actually someone who I have not met in real life but he’s someone who came highly recommended to me from a friend of mine by the name of Colin Jones who will be a future guest on this podcast. Now who is Tim? Well, he is a veteran when it comes to audience growth on YouTube. And he specializes in helping YouTube creators spread their message to reach people online.

His channel has over 400k, subscribers and meeting Tim actually comes at a very opportune time for me, because I’m thinking about starting my own YouTube channel for real this time. I’m actually sitting on about 11k sales right now by accident and not doing anything with these people at all. And hopefully Tim can help both me and the audience out. And with that, welcome to show Tim, how are you doing today?

Tim: Hey, thanks for having me. I’m doing great.

Steve: So Tim, give us a quick background story in your motivation for starting VideoCreators.com.

Tim: Yeah, so I actually started back – I started on YouTube without any sort of motivation to do something like Video Creators, which is my business today where we work with creators and help them grow their audiences on YouTube. It actually started back in 2006. I was in graduate school halfway across the country from my family. And I was dating this girl and was trying to figure out a way of introducing her to my family back home. And I was doing a blog at that time, which I was using the way most people use Facebook today. Back then Facebook wasn’t a thing yet.

And so, I was just posting on there what I ate for dinner the night before. And then this YouTube thing came along. I’m like, oh, instead of emailing them video files, I could just post them here and they can just click play, it’ll be a lot easier. So, I started making videos with her going out to eat, going out the restaurants, going out to the park, on movies. Today we would know them as vlogs but back then that wasn’t a word. It was just being awkward in public with a camera. So, I would go out make these videos, I post them on YouTube, better than my blog and my family could watch them.

Well then, this weird thing started happening where other people started watching them too. And I was a little bit nervous because this was during Myspace days now where if someone knew who you were on the internet for some reason, they will come down and kill you. Right? I was like, who is Catholic, you’re 69? And should I be concerned that they’re watching my videos and commenting? So, I was trying to figure out like, who are these people? Why are they watching my videos? Where are they coming from?

And I started asking around other people who are posting on YouTube and everyone was like, we don’t know, Tim, but we’re trying to figure it out and if you if you figure it out, let us know. I’m like, okay, like a good challenge. And so from the very beginning days of YouTube, I was the guy trying to figure out how does this platform work? How do people discover content here? What keeps them coming back? What gets people engaged, what builds community all around on my video?

And in 2013, I started doing this audience development YouTube professionally full time for a lot of different companies and people, but in 2013 I launched VideoCreators.com which is business I run today. It is a small team of nine people who work for me, and together we’re just all working with clients and helping train people, doing their YouTube strategy for them and so far we have helped our clients gain 14 billion views and 61 million subscribers.

Steve: Wow, that’s a huge number.

Tim: We have a lot of fun with it. And for me it’s all about reaching people and changing their lives which is ultimately I think is about my girlfriend at the time now wife, we got married, and now we have seven kids in eight years somehow.

Steve: Oh my goodness.

Tim: We didn’t know that was possible, but we’re just seeing tons of people watching our family videos just like having their lives change, people who didn’t like to commit suicide because videos we’ve made. And people saying, I was about to to get divorced, but I watched your video or you and your wife are learning how to love each other better and I shared that with my husband, we talked about it and now we have hope again for our marriage, just want to say thank you. And just tons of stories I could tell you, but I know you want to talk about more than that. But that’s what gets me most excited. And I just love it when other people can spread that message that reaches people and changes lives.

Steve: That’s really awesome Tim, and when it comes to YouTube and today’s podcast, I actually want you to start from the beginning, but I don’t really want to talk about the mechanics of shooting a video or the equipment that you need, because all that somebody can find online. Let’s just assume that everyone knows how to shoot audio and video and let’s start actually by talking about what types of videos work well, and if there’s a different mindset involved in getting traffic on YouTube. So for example, does it involve keyword research, is it very deliberate and how you put out these videos and tag them.

Tim: Yeah, so that’s a really big topic to discuss. And the short answer is that there’s many ways to get discovered on YouTube. A lot of people come to YouTube, especially bloggers come to YouTube thinking primarily the way they think with Google, which is primarily search. And so, they are thinking in terms of keywords and outranking each other and it’s very competitive. But on YouTube, I mean, it’s the second largest search engine in the country, second only to Google.com itself — or not in the country, in the world. But YouTube is much more than just search. I mean, there’s that search feature, but a lot of people also can discover you through suggested videos, through the homepage and through playlist and through recommendations.

And so, what’s different about YouTube versus what people are familiar with on Google is if Google does their job well, you’re on their site for maybe a few seconds, and then you’re gone. But YouTube has the opposite goal, their goal is to get you on their platform and stay there as long as possible. And so, discovery is there’s a lot more discovery happening than just search. So, that totally answers your question but just think bigger than that.

Steve: So obviously search is a component of discovery, right? So, let’s talk about that first and then focus on how to get people to stick on your channel and continue to watch you.

Tim: Yeah, I don’t usually target search any more personally, it’s been about a few years. And the reason for that is one is really competitive, and two the principle is like where is your most valuable customer, and go after them. And in terms of YouTube, your most valuable customer/viewer is typically not a search driven customer/viewer, because those people are just looking for information real quick and then once they get the information, they’re gone. They’re scrubbing ahead, they’re like, okay, it’s taking too long, but just looking for information. And according to almost everyone’s analytics I’ve ever seen, the search traffic is worth the least from an average view duration perspective, which is which viewer gives me the most amount of watch time which is just the amount of time someone spends watching your video.

And so, if the goal, YouTube’s goal is to get people to come back to YouTube as often as possible, engage with as much content as possible, then you want people who are going to be watching longer. And often those people come from end screens, playlists, suggested videos and things like that. So in order to hit search, what I’ve been doing for the past few years, it’s actually targeting suggested videos where I get more watch time.

And then what happens is, as I successfully do that, Google starts figuring out who my videos are for, who’s responding well to them. And then they just, literally, they just put my videos in front of the right people, whether they’re searching or they’re on their homepage, whether they’re watching a competitor of mine or whatever, YouTube just learns who this is for and puts it in front of them. So like I said, search is how most people think with Google but on YouTube it works a little differently.

Steve: Okay, so does that imply then that the titles don’t really matter from a keyword perspective, and then you just want to create titles that encourage someone to actually watch the video?

Tim: Yeah, you’re on the right track. Yes and no. So yes, they still matter, but in my opinion, they matter primarily for people like when we’re thinking about optimizing here we have to remember we’re optimizing for people, not for robots. So, everything that ranks in positions of videos and search and discovery mechanisms across YouTube, all of them are based on viewer signals, which is like I mentioned, how long this someone has been watching your video, do they click on it, watch for 10 seconds, and then leave versus this other video, the exact same title, keywords and everything. Do they click on that video watch for three and a half minutes? Well, Google is going to say that the one with three and a half minutes of watch time per person must be more valuable than the one with 10 seconds.

And so, the one that’s only hooking people for 10 seconds is going to drop pretty quickly in results and suggested. And so, the title matters, but not because you’ve repeated the keyword 16 times and really convinced Google that this must be about that keyword. But it’s more because the keyword is what the person who’s looking for that information expected to see. And so they clicked on it, this must be about what I’m looking for. And then the content has to deliver because at the end of the day titles and tags and descriptions, nothing matters if the content itself isn’t actually crafted to hold someone’s attention.

Steve: Okay, and so does the keyword tag when you’re creating a video, does that really matter?

Tim: No, I mean, so we add tags tags, tags which is a form of metadata, you’re telling Google here’s the tag that this video is about. Google primarily uses those now just to check misspellings in your your title and description. So, if you like accidentally misspelled someone or something over there, they’ll be like, oh, here’s the where they actually meant but that’s about it.

Steve: And so in terms of getting on the suggested videos, what are some ways to do that?

Tim: Uh love it yeah, so there’s again this is a big conversation but there’s a couple of basic things that need to happen. Number one is your content needs to regularly attract a similar or the same audience. So, you can’t have like a video about here’s how I don’t know — tie a tie, then here is how I make playdoh, and then here’s what to do if your child’s diaper is dirty. I’m a dad so…

Steve: Yeah I know

Tim: Thinking about this morning trying to get kids ready, but yeah so it’s like those are all the three different potential audiences interested in those videos. And so, Google is like, well, this video is for that audience, this video is for that audience but if you want your newer videos to keep being recommended to people, it’s got to be like yeah, you need to have a specific audience. Google starts to feel pretty confident like oh, we get it, this channel is about people who are trying to climb out of debt and need financial help, right? Or this channel is about people who are trying to grow their audience on YouTube, and they start feeling confident, like who your videos are for.

And then once your videos are regularly targeting those people, then those people need to be consistently number two, be getting the value from your content that they want. So you need to train them that every time I listen to My Wife Quit Her Job Podcast, I’m getting exactly what I need. And the same thing is true on YouTube. Like what’s that value proposition or that thread that ties all of your content together so that Google starts feeling confident this is who this video is for and this is what this is about.

And then what happens is when a new person who’s coming to YouTube who has not yet connected with your content search like looking for something or or Google just starts noticing that they tend to start clicking on these types of videos, then they like, oh, they’re probably also interested in My Wife Quit Her Job here. Let’s just put that in front of you on the homepage or as I suggested video and get you into their content as well.

Steve: So that implies that only focus like a focus channel does better than a channel that just talks about random things.

Tim: Better depends on what your goals are obviously, but if your goal is to grow a subscriber ship and grow a community of people who keep coming back to you looking for this, then yes that’s true. You can do have like a random channel but you’re going to have individual videos that grow and you’re just kind of going after maybe adsense revenue at that point.

Steve: Interesting. So I was just thinking about all the blogs out there. Are those guys making a lot of money or?

Tim: Potentially. I mean not all of them are. I mean the thing that you probably know more than probably YouTube creators is that the the size of your audience is not tied almost — well I shouldn’t say in any way, there are some ways it is tied, but but there are channels with like around half million subscribers. That’s like half of the entire YouTube English speaking creative community is around a million, so I’ve got like half my market already subscribed to my channel. I make more — our business makes more I should say than other people. I got a client of mine who now has 10 million subscribers but at the time they had 6 million they came to me saying, Tim, I’m going to quit if you can’t help me figure this out. And I was making more than that person was. So, the size of your audience doesn’t make it — isn’t correlated to how much revenue you earn, necessarily.

Steve: Okay. And then, when someone types in something in YouTube, what kind of determines the rankings and how can you get your stuff to rank higher?

Tim: In search or suggested or both?

Steve: Well, let’s start with search and then move on to suggested.

Tim: So, getting yourself to rank in search really comes down to some of these same principles, which is the title and the thumbnail, do they work together to tease a value that someone in my target audience wants? Not necessarily needs, people don’t really click on what they need; they click on what they want. All right, so my audience wants more views, more subscribers and more money, so if I make a topic around one of those, it tends to perform better. And so, I want to create a video around a topic that I know my target audience is really interested in.

Then the next thing I would recommend is go and do that search a few times on YouTube and incognito window so that your previous viewing history and search history and things aren’t taken into consideration and just see what pops up there and look for what’s in common among all those videos that are ranking top four. Is it new like it was just published a few days ago? In that case then, YouTube just experimenting with it and it probably it may or may not be there in a few days from now.

Maybe you notice that all the thumbnails have like a bright smiling face on them or they all have a question mark on them. Or you go, oh this isn’t doing this title is actually crafted differently than the way I was going for it, and then you realize that definitely has a stronger human element to it. And I can see why it’s not “perfectly” optimized, but the human element there is a lot stronger so it gets more people to click. And so, maybe you notice that.

And then next thing I would look for is how do these videos start because a lot of people, they craft YouTube videos; they kind of model it after what they’re used to, which is television. But on television, when you turn the TV on, the video is already playing; you don’t have to click on a title and thumbnail. But on YouTube, the customer journey so to speak, the viewer journey actually starts with the title and thumbnail. So, you look at the title and thumbnail, and then you pay attention to the first 15 seconds of how those videos open because the title and thumbnail sets an expectation for the viewer of, here’s the value that you want to consume. And then the first 15 seconds either quickly affirm for that viewer that yes, what you clicked expecting to get is coming in this video, otherwise they leave.

And so, maybe you start evaluating how these top videos for the search query are doing that or not doing that. And often there’s a lot of opportunity there because sometimes they’re doing it terribly. So, that’s like the main thing you’re going to maybe for that particular in our example that we’re talking about right now, that’s the main thing that you go like, okay, all these videos are ranking number one for this but none of them are connecting the first 15 seconds of the title and thumbnail. So when I do my video, I need to make sure that I do that.

Steve: So it sounds, like just to kind of summarize is the click through rate matters and then the stickiness of the person matters in the rankings.

Tim: That’s right. That matters more than the actual text in the title and thumbnail yeah, except for the title and thumbnails which gets them into the video in the first place. So that’s important for that reason.

Steve: So when it comes to the thumbnail, I’ve actually heard that there’s a lot that goes into this. So, I was wondering if you could just kind of talk about some thumbnail tips.

Tim: Yeah, really important because a lot of people don’t realize that it doesn’t matter how amazing your video content is if someone is not enticed to click on it in the first place. So, the title and thumbnail is like the billboard, that’s like the marketing piece that really gets people into your video. So, for the thumbnail, a couple principles to consider, one is that most of YouTube’s viewership now is mobile and that we really need to craft these that are really small, tiny size like 72 by 100 pixels or something like that, right? So when it’s really small, can all the information that the viewer needs to see and consider, does it stand out?

So, if you’re using text and your thumbnails, is it still readable? Or if there’s like you’re trying to show like a human emotion or there is something that the viewer really, really needs to see, is it still viewable when it’s super small? So, your thumbnail should be at 10 ATP or 4k, like you should match the resolution of your video but we need to make sure that you can consider that we can see it in a small size, but also then some of the other principles all follow that which is it needs to be clear. It needs to have math like high contrast between the foreground and the background, the thing you want the eye to be attracted to needs to pop off the screen.

Smiling faces typically do better than non close ups of faces. Some sort of human emotion does a good job, whether it’s a surprise or shock or what or just a question or thinking like human emotion does well. Yeah, so all those need to be taken into consideration.

Steve: So, it seems like a human — the thumbnails at least that I see most commonly now always have a face. So, does that kind of imply that you should put your face on the thumbnail?

Tim: If that’s what the person sees when they click play, then yes, because remember the title and the thumbnail set an expectation. But there’s a lot of channels out there for example, like just tutorial channels where all you see is the hands, no face on there. And so, in that case your face isn’t as important because people aren’t clicking to connect with the person, they just want to know how do I build this table or whatever? Others like a kid channel, they just care about ABC series so they don’t they have to have faces either.

Steve: I’m just looking at some of these thumbnails right now actually on my computer and it seems like a lot of these people are outlined in white. They’re these big funky letters for the fonts, neon colors, are these all things that you do with your channel?

Tim: What types of channels are they?

Steve: They are tutorials actually.

Tim: Yeah, so the other thing to consider is the age of the video because thumbnails, like the style thumbnails tend to change like the style and fashion tends to change over time, so what works on YouTube two years ago doesn’t necessarily still work amazingly today. It’s not that they’re bad but but the style a few years ago was definitely to stroke everything in white and put it for us and color in the background. And now it’s kind of moved more towards like Instagram type of feel where it’s just like an amazing picture with that being color graded but not necessarily doctored in terms of texts and things. You’re like, oh, there’s a story there, I really need to see how they did that, or yes, that’s the cake I want to learn how to make or something. So, they tend to be a little bit more straightforward today.

Steve: And in terms of video content then, if you have any sort of pointers on how to create videos that encourage someone to watch all the way to the end, it sounds like it’s a ranking factor, so what are some things that you do to do that?

Tim: So, the other quick outline that I would recommend everyone starts with and not that this makes sense for everyone all the time, but it’s like learning how to write. You need to learn the rules of grammar and how to write so that you can break them and do that intentionally rather than just haphazardly later, right.

Steve: Sure.

Tim: So, the outline I would recommend at least considering when you first get started is starting with your title and thumbnail not your actual video. And so, that means sitting down and you know like the beginning of this customer journey/ viewer journey is they got to see the title and thumbnail. So, draft 20, 30, 50 whatever different titles for this piece of content and keep keep tweaking it. And then what’s the image I am going to use to represent this content that’s going to entice someone to want to click and watch, and start there. That way you can open the video already knowing what the person saw in order to click, and you can open the content pitching the content based on what they click because you already know the title.

Otherwise, what too many people do is they make the content first, they upload it and now that it’s uploaded, they’re trying to figure out the title and then like sometimes it matches but then often like the value actually comes at eight minutes into it. But you can’t title it that way because no one is going to click. At the end of the video, the title might make sense, but you need to make sense in the first 15 seconds. So you need to start there. And that’s the only way you can match the first 15 seconds to connect with the title and thumbnail. And then you need to open — the first thing you need to do then open that video with a hook which is like I said earlier just reaffirms for the viewer that what they click expecting to get is coming in that video.

So, it’s like an educational type video series tutorial for example, it opens like you guys really want to learn how to make this cake. It’s amazing. I love it, it is like the most beautiful fancy cake I’ve ever made. And everyone who comes to your party is going to think that you are some professional chef, but it’s actually really simple. Let me show you how to do it in this video. Right. So just something like that for that, or if it’s a narrative based content, it could be just opening up with a conflict or a motivating story, right? Yeah. Or some people do like coming up on, you can do that but that’s basically the same thing as you just teased the climax of the blog.

If you do a blog, well, you tease the climax of the story and then you go back until the backstory. So you open with a hook. Then number two, I recommend you have some sort of branded intro. And that could be anywhere from three to five seconds but absolutely no longer than five seconds. Anything longer than five, you’ll start seeing audience abandonment on your videos. So three is ideal. And what that needs to…

Steve: Why is number two important in your opinion and how did you test that?

Tim: Yeah, so what happens is a lot of people when they do this is they’re just putting up their logo and making their logo do some like fancy flip or something. That doesn’t add any additional value, it reinforces your brand, but what we’re doing with it is it actually needs to pitch the value proposition of your brand or your channel, in this case to someone in your target audience. And that sets the context now through which people should evaluate and consider subscribing. Like oh, this is a whole channel about growing my audience on YouTube and learning to reach people and change their lives, like heck yes, I’m here, I subscribe.

Versus like My Wife Quit Her Job and maybe the quit sign does a nice little flip in the middle and people are like, I don’t really know if it’s for me, is this not for me, right? And so, that three seconds in my case, it says, Master YouTube, that’s the what, spread your message, that’s the why, Video Creators TV. So, it’s not like a full thing but I’m telling people this is what I do and this is why we do it and then branding.

Steve: Okay, that makes sense.

Tim: And that gets people like a quick intro to who you are what you’re all about, which is one of those questions they’re asking about before they subscribe. Is this for me? And is this content that’s valuable for me or not?

Steve: Okay, great. Yeah, this is just like the principles of e-commerce. As soon as someone lands on your site, they need to know what you sell and why they should buy from you. Same…

Tim: Exactly, yes. Yep. Yep. Yeah, a lot of these principles are straight from business marketing world. It turns out people are people whether they’re on Google, YouTube, a blog, Facebook, whatever, like we’re all people, so the principle is transferred. And then the video should — if you’re doing like a talking head number three is it should like just welcome people very briefly, hey guys, my name is Tim Schomoyer, welcome to Video Creators, we are all about helping you grow your audience so you can spread a message that reach people and changes their lives. And then you get into content.

But in order to do that, you get into content. So the number three, the welcome should be very quick. And I actually do most of my welcome with a lower third that pops out so I don’t have to take as much time verbally to talk about it. And so people can kind of just visually see that while I’m talking. And then again, to the content itself and…

Steve: What’s a good length for the video now that we’re talking about content?

Tim: The way to evaluate length is based on how well you can hold someone’s attention. So, sometimes people say three minutes, but that’s only true if you’re only good at holding someone’s attention for three minutes. Some people are great at holding someone’s attention for 10 minutes, half hour, or some people can’t do it for three. so it really depends. My principle is if you have a two minute idea, take two minutes to share that story of that message. Don’t try to artificially inflate it into 10 and don’t try to take a 10 minute idea and squish it into two because someone told you a two minute idea was better. Serve the viewer the best you can and if that takes two minutes or 10 minutes, serving the viewer is the most important thing.

Steve: Okay.

Tim: So, deliver the content and then you wrap it up with some call to actions. I have a couple of different call to actions to make depending on what the goal of the video is. Another mistake a lot of people make is they try to do too many goals with each video. Each video they want to get tons of views, they want to rank number one in search, they want to generate a ton of leads and sales for their thing, they want to go big on Reddit, they want Huffington Post to pick it up, they want it to engage a new community. I’m, well, well, well, slow down.

A video will perform much better if you have one primary goal for it not 15. Just like your website, the front page of your website is designed with a specific goal in mind which is different than the about page which is different than the contact page which is different than this sales page, right? And so, what’s the primary goal of this video? And that determines what your call to action is. I think you should have — there’s probably — well there’s four different goals you could have for content.

One is discoverable, and if this is meant to be discoverable video, then the primary call to action should be to get them to watch another video which is you on the screen saying, guys, now this cake was amazing but if you have a birthday, you probably want to consider this cake right here and you’re like pointing to it on your screen. Say like, click this video right here and we’ll really dive into like how to turn this same recipe into an amazing birthday cake or something, and I’ll see you guys in the next video.

So, there’s nothing like hey, hope you enjoyed the video or see you next time or bye, just like another sales technique, which you’re probably familiar with, which is you just talk about the product as if they’ve already made the transaction. You start talking about the vacuum cleaner like, oh, wouldn’t be nice like this would suck up everything in your home and can you just imagine coming home and rather than having to pick up everything, you can just vacuum? And people are like, oh yeah. So, you’re doing that same thing with video, don’t sign off, just talk with the assumption as like they’re going to keep watching and they’re going to keep hanging out with you. And they are far more likely to actually then give that next video more watch time and increase the session time that your videos are having from getting people from video to video and all that is just really good signals that give your your videos a lift.

Steve: I just want to take a moment to thank Ahrefs for being a sponsor of the show. Now, I’m a huge fan of their tool and in my opinion Ahrefs is the best all in one SEO tool out there to rank in Google search. And recently, I completed a search engine site audit for mywifequitherjob.com and Bumblebeelinens.com and Ahrefs was indispensable. For example, I used Ahrefs to do a deep dive into all my posts to find the highest volume, lowest competition keywords to target in search. And in fact, recently, I used Ahrefs to rank a blog post in Google from position 20 to position five for a big time keyword in the span of just one month by switching around my title and H1 tags.

I also use Ahrefs to spy my competitors’ sites to see what keywords they are ranking for, and then I write a more comprehensive post and eventually outrank them in search. Now those of you who know me know that I hate spending money on tools, but I actually pay for Ahrefs and that should say something in itself. Right now, I’m giving away nine three month Ahrefs memberships for free. To sign up, head on over to mywifequitherjob.com/giveaway, once again, that’s mywifequitherjob.com/giveaway to win a three month Ahrefs membership. Now back to the show.

Let me ask you this, how do you prioritize all that? So you can guide them to another video, you can ask them to subscribe, you can actually take them off your website and try to get an email, how do you decide what you want to do?

Tim: Yeah, let’s come back to that because that’s the fourth video. So, the first one is discoverability and the call to action, get them to watch another video not necessarily to subscribe actually because if you get them to watch multiple videos, YouTube will follow them around with more videos from you on their on their homepage, on suggested videos, and things and that’s more valuable than just getting a subscriber who never watches you again. Two, the next goal would be community, and for me the main call to action there is engagement, so comment like guys, how would you make this cake? This is how I made it, but man, I’m open to other ideas.

And this is typically content that’s a little less produced and just the goal there is to grow then know, like, and trust factors after you’ve already brought people in with your discoverable content. The third video is…

Steve: Are you getting them to content to write comments on your video, is the thumbs up a factor also?

Tim: No, thumbs up and comments don’t actually mean anything. People often get correlation and causation confused on YouTube. I see a lot of YouTube experts making this mistake all the time. On the surface it looks like if you get more likes, your videos perform better. But it’s only because the people who are engaged enough to give you likes are people who watch your videos longer. So it’s just correlation not causation. So what you really need is people just to watch your videos and to give you a like, it’s fine but it doesn’t actually change how your videos perform because Google said this is too easy for people to gain that. So they don’t count it.

Steve: Okay, yeah, go on, I keep interrupting you.

Tim: Yeah, no, this is good, this is great. So whenever you need, just keep interrupting me, otherwise, I’ll just keep talking. So number three, these are your sales videos. And this is now where you’re going to try to get people off. So in terms of like an email sequence or something, we’re doing the exact same thing, we have a lead magnet which is our discoverable videos. And then we have our community videos which is like the first several emails of that email sequence which grows into like and trust factors, because people value the information, they otherwise wouldn’t have gone out and sought for that type of thing, they know, like, and trust us.

And now we get to the last email, the sequence which is to ask for the sale or in our case post the sales video. And the goal, the call to action here is to get people off of YouTube. Now the reason you don’t want to mix this with your discoverable content is because one of YouTube’s goals is to keep people on YouTube as long as possible. And so, if your video successfully keeps ending the viewing session and getting people off of YouTube, that video will not be discoverable for that much longer, right. So instead, we’re doing it just like a normal funnel like with email so we’re doing that with videos.

So the sales video, that is just intended to go to your subscriber base. It’s not intended to get a ton of views. It’s just going to pass through that feed of people and then like a week or two after you publish it, it should no longer be getting any videos. And that’s where you’re getting people off to go sign up for something or buy something, or there’s a sale going on, or a brand deal opportunity, or whatever the case may be, just get the heck off of YouTube. And that’s that one.

Steve: So when you’re talking about getting people off of YouTube, you’re talking about embedding a link in the video that they can actually click on, right?

Tim: Yeah, or a link in the description. It’s going be like that first link they can click under the video orifice to your website. You can put that right on the video for the people to click on.

Steve: So, when people click on those links, that actually negatively affects the discoverability of that video is what you’re saying?

Tim: Potentially. It’s a little bit more complicated than that but for our conversation, yes, if it does it effectively and consistently, which is what you want. If you do that well, then that video will not be positioned as favorably.

Steve: Interesting. Okay, so let’s say I have the video now. How do you actually promote a video to just kind of get it off its feet, so to speak?

Tim: So, if you have a built in audience like you already have, then I would be emailing those videos to my list, be promoting him on Facebook, Twitter, just kind of wherever I already have an existing audience, just promote it there. And the goal isn’t necessarily like a lot of people try to get all their Facebook people to subscribe to them; they try to get everyone in the audience to subscribe to them everywhere. And I’m more of a fan of getting someone from Facebook to subscribe to you on YouTube doesn’t necessarily help you because they’re engaged on Facebook not youtube. So, I at first will just promoted to everyone I can just to get that initial watch time and traction on it.

After that, it comes back to what we kind of talked about earlier which is consistently posting content for a specific audience that delivers a specific value every single time that people just grow to know and expect is coming from you. And it’s about doing collaborations, it’s about looking for videos that are performing really well in your niche and making similar content that could be suggested to it, not making the same video, but like, for example, my wife and I, with one of our kids, we homeschool our kids. And we saw this one video about how to do golf ball paint, and it’s getting tons of traction.

And basically it’s you hold a pen, you put a piece of paper in the bottom, squirt some liquid paint in there, and then you just roll a golf ball around in there and it makes like a cool design on the paper. You’re like, oh, that’s cool. Like, we don’t have any golf balls. And my wife is like, oh, we got an oak tree though. And and so we made a similar video called, how to do golf ball paint with acorns, right? And so that video, you can see how it was not the same video but it could clearly be a related video or a suggested one next to that video. And so our goal was just to get the spin off views then of people who were watching that big video to then start watching our video and then gain traction that way as well.

Steve: So, you’ve mentioned repeatedly that getting a subscriber is not as important as just getting people engaged in your video. So first of all, is that correct? And two then, what is the point actually trying to get a subscriber?

Tim: Yeah, it’s a good question. S,o subscribers are valuable because they will typically give you more watch time than a non subscriber will and that makes sense. They are familiar with your brand. They’ve already learned to love your content. And so, as your subscriber base grows, each new video you publish, you potentially get to launch that new video with more viewership and more watch time, which as we’ve kind of referred to already helps with how that video gets positioned all across YouTube.

So there’s value from that perspective, but the reason I don’t push it as much now, I mean, I still do, it’s still visually there on screen, the subscribe, and I’ll often say even on discoverable video, I’ll say something just very briefly like, so subscribe to this video and I’ll see you guys over in the next one or just something like that. I’m not making this full blown pitch for it. And the other reason for that is today’s social media is also mature enough that we know what it means to follow someone on Instagram or Twitter, we know how to like a page, people know how to subscribe to a channel. And often I just do that visually instead of like taking the time to call it out instead. So, they’re so valuable but on a discoverable video, the goal for me is actually to get people to watch more content.

Steve: So, one question I had for you and I’m not sure if you up do this, but I have all these podcast episodes, should I not be putting those on YouTube because those tend to get horrible engagement?

Tim: Again, it depends on your goal. If it’s on the same channel that you’re trying to grow with different type of content that is more optimized for YouTube, you could and just community and just count it as community content. But typically yes. So those podcasts on YouTube don’t perform as well as native content that’s designed for YouTube. If you wanted to kind of mix it up a little bit, kind of the way I’ve found, this is how I do it on my podcast actually, is I record my podcast as a live stream on my channel. And so, it’s a piece of content that people are watching and listening to.

So, I present the material like I normally would just as a recording live and then my producer then gets a lot of the good questions that were in chat while I was talking, but submit a shared Google Doc for me while I’m talking. And then I just answer some of those questions at the end of my podcasts less live stream and I include those in the podcast recording, but then it lives a little bit better on YouTube than before.

Steve: I guess the question is, can putting a bunch of non engaged content hurt your channel overall?

Tim: Potentially because what happens is you’re unintentionally teaching your audience, your subscriber audience to subscribe for the native content that’s designed for YouTube. They’re thinking, oh, I don’t have to watch every video that this channel puts out. Steve puts out great content, but only like that one I don’t have the watch. And you never want to start training your content that or your audience that they don’t have the watch everything you put out. I mean, they just want naturally but you certainly don’t want them to start filtering if you don’t have to. So I would either put that type of stuff on a second channel or just stop completely.

Steve: Okay, that makes sense. So, I just kind of want to end this interview by having you outline some of the most common mistakes that new youtubers make. And if you can just sum up the ones that you see, I imagine you see these all the time.

Tim: Yeah, we talked about a lot of them already so far, but the main one is that people just focus on optimizing for robots and not for people, and they don’t understand that the robots are designed to surface what people respond well to. So, instead of getting caught up in all the algorithms stuff, which we can talk about it if you’d like, but it’s just far more advantageous to focus on the viewer rather than on the system. that works better in the long run.

Steve: Yeah, so if I were to just sum up everything, it seems like just engagement is key. And as long as you have people watching all of your videos, YouTube will figure it out eventually.

Tim: If by engagement you mean people watching, yes.

Steve: Watching the entire video.

Tim: Yeah, because sometimes engagement people think like interaction, which is helpful and yeah, so those people do equal more, they’re worth more from an average view duration perspective. But at the end of the day, if you have a channel that’s going after toddlers, you’re not going to get comments and thumbs up. They don’t even know how to do those things, but they’re going to give you a massive amounts of watch time, right? So, engagement in terms of how they watch the video.

The second thing I guess a mistake is that people give up too quickly. And maybe your audience is a little bit different. But on YouTube, it looks so easy when you’re watching the top creators. You’re like, oh, all they’re doing is hanging out, making videos with their family. Like, I can do that. Oh, all they’re doing is playing video games, I can do that. But we forget, sometimes, I think your audience is probably more mature than maybe the average YouTube viewer is – I’m not insulting anybody, but I’ll just maybe go with that assumption for now which is that we understand when we watch an athlete on TV, there’s a whole backstory that are missing. There’s like, they’ve been practicing this since they were six and now they make it look effortless.

Or that musician who you’re like, oh yeah, I could play the piano like that, that doesn’t look too hard. Or that actor or actress who plays her role so amazingly well. Like when someone is good at what they do, they make it look easy. And a lot of creators, I think, watch a lot — yeah, they watch other YouTube creators, but they’re only looking at the ones who are at the top of their game. No one is comparing themselves to someone who’s at the bottom of their game. And what we don’t see which is what my team and I see is we see all the people who are struggling at the 100, couple of thousand, even 10,000 subscriber level, those are all the channels you don’t see because they’re small.

And so it gets frustrating because it’s easy for us to see just the people at the top of the game and get frustrated like why, it feels like I’m doing everything that they’re doing, and yet I’m not winning. And then I guess a third thing, a third mistake is that people — like we tend to think that the only thing people want is the content itself. But what makes channels actually win on YouTube is actually the human connection that people feel with the creator. So, you can give a perfect tutorial, let’s just use the same example, a perfect tutorial on how to bake a cake. And you give step one through eight for example, and you deliver it and execute and maybe the cinematography is just beautiful, and then a true story actually.

I worked with a creator who had seven full time people on their production crew, all television background, shooting on like $10,000 cameras and couldn’t break 24 views on a video. And the content looked amazing, and they come to me like, Tim, this content looks great but why is it not performing? And there were frustrated because there was a guy in his basement with a frickin webcam getting millions of views. And they were like, our content is so much better than that guy’s content, why is he getting millions and we’ve been doing this for 10 months now and can’t break 24 views?

And it makes sense when you think about it in terms of this guy I was working with. I was like I’ve watched 20 some of your videos now and I still don’t even know the host’s name. I don’t know — it was a vegan channel — I’m like, I don’t know why veganism matters to you, or what like, should I consider it? You just gave me the hard, cold, straight up, dirty facts and that was it. This other guy, he has a story people connect to. They understand why he’s doing this. They understand what his motivation is and they feel like they’re connected to him. And so, his videos are performing far better all day long with a webcam in a basement because he’s connected with people.

And so, the end of the day, remember that each of these views that we have in our videos, they’re not just like little tickers that just count up. Every view represents a real person and so we’re actually connecting with people. And I don’t know how much time we have here. We could talk into what gets people to connect but just…

Steve:We have a couple of minutes if you want to just summarize that because I mean, I think it is important right, people in course, like I sell digital course, people tend to buy the course because of the teacher as opposed to necessarily the content. So, I imagine this principle applies to videos as well.

Tim: Oh, yeah, and pitching, not the what you do but like the reward that they’ll get if they buy the course/ watch the video or something not just like, yeah, like solving the problem. So, there’s a few things that I recommend people do to kind of make it easier for people to connect with you and your content. And a lot of this for me goes back to a book called Primal Branding by a guy named Patrick Hanlon. And he looks at all the top brands that develop cult like followings and he asks, what made it possible for this brand to get people to love them so much, so deeply? And he breaks it down to seven aspects of the primal code.

And all the channels on YouTube that are just growing or killing it, they have pretty much all seven of these aspects just firing on all cylinders so well again, that you don’t even notice it unless what to look for. And we’ll just go through a couple of the big biggest ones right now, which is one of them is your backstory. Number one, like your key cult is your creation story. And that is people just need to know like who are you? Where do you come from? We know Google started in someone’s garage, right? We know like Steve Job’s story, we know who these pioneers are, the people who started these brands, these companies, we’re not connecting to logos, we’re connecting to the people who started these these logos and these brands.

And so, when I opened up to you in this podcast, you asked me how did you get started? I told you my backstory, my creation story. And so, for people to start caring about you, they need to know kind of where you came from. Number two, they also need to know what do you believe, which Patrick calls it the creed, but we’ve been referring to it a little bit here called the why as well. But I believe YouTube is a great place to reach people and change their lives.

I told you one little story that impacted me in terms of in that regard, but the strongest communities online and offline, they always revolve around shared beliefs. A lot of people think they would revolve around common interest but they’re actually like — common interest will give you something to talk about but when you believe the same thing, it like sucks you in. And so, stating that might sound scary and intimidating, but YouTube channel is so much competition that you really do need to state not just what you do but you need to say why you do it. What do you believe about why this is important? And the people who share that belief with you will jump on board so fast, as opposed to if they don’t have that information.

And you also need that, maybe number four is because the creed will separate the non believers and you actually need the haters. The Democrats wouldn’t be anything without the Republicans, Folgers would be nothing without Starbucks, Apple would be nothing without PC. You need these opposing people because of the strongest communities when they link arms together; they’re standing against something and which means that you need to stand for something in order for anyone to stand with you.

So, this guy with the vegan thing in this basement was like people knew, they knew his story, they knew what he was for, they knew what he was against, they knew what he believed, they knew who the non believers were, and then they also another one is the rituals. And the rituals are just the repeated interactions for people to grow to love and expect with with your brand. And so the best creators — do you watch a lot of YouTube by any chance?

Steve: I do actually yeah.

Tim: So, if I say like Pound It, Noggin, See Ya, do you know who that is?

Steve: No I don’t, I only watch a certain type of video, but yeah.

Tim: Okay, what type of videos do you watch?

Steve: Personal development, e-commerce, tutorial related ones, but I did notice that a lot of them sign off the same way.

Tim: Yeah like like Dude Perfect is the one I just mentioned, they have about 30 million subscribers. They have so many rituals if you start looking for them throughout their entire — the content, the celebrations they do, and the way they sign off. PewDiePie currently the largest but soon not to be the largest channel on YouTube used to do like Blueface and would do [inaudible 00:51:56] fingers and do this PewDiePie type of thing. And it’s like as you say like another creator I know will start every vlog with this camera in a different location. And he would pick up the camera then be like audience, that’s another ritual audience, why are you in my plants? And so every video opened like a question, why are you under my desk? Why are you in this shoe box? Why are you?

And so, it’s just like a ritual the audience just grew to love and expect. So we could go on with that. Rhett and Link have those too, they open with a hook and they say, let’s talk about that. And then they have icons and the icons are the things that just represent your brand, like in terms of Rhett and Link, it’s their hair. You know who Rhett and Link are by the way?

Steve: Yeah I do, I do actually.

Tim: Okay, so you know what I’m saying when I talk about their hair?

Steve: Yeah.

Tim: Their background, their sets is iconic on crutches of creation story, everyone who watches them knows their creation story, that they’ve been best friends for first grade, started making videos, started a commercial company and grew to this YouTube thing. They talk about their relationship, the Baxter, the relationship in almost like every other episode. So, we can keep going but some of those things make it easier for people just like, oh, I know who they are and what they’re about and it’s easier for me to make a connection with them now. And if you can…

Steve: [Crosstalk 00:53:13] is just about exposing your personality to the viewers, right?

Tim: Yeah, and your story, what you believe, what you’re all about, and then giving them some things to latch on, like, the icons and the rituals and stuff too.

Steve: Okay, Tim, this has been an amazing episode.

Tim: Yes, sorry, I just keep talking.

Steve: No, no, no, you know how I am. I tend to interrupt people and I haven’t interrupted you that much because everything that’s been coming out of your mouth has been really good stuff. Well, Tim, I want to give you a chance to talk about what you do and where people can find you online.

Tim: Yeah, so my team and I, we love working with creators and just helping them with their strategy and doing their analytics and everything for them to really help them grow a channel that reaches people and changes their lives. We do that through – well, right now we’re doing every weekday we have a new video video at YouTube.com/VideoCreators which is content designed just help people grow their audiences. We do a series, right now we’re in the middle of — called how they got 1 million subscribers. And we just sit down with million subscriber plus channels and ask them to reveal all the tips, tricks, and secrets, and tactics that they implemented to grow their audience to 1 million subscribers so that we can do the same.

I also have a podcast on iTunes, SoundCloud, Stitcher, Google Play, Spotify, just search for Video Creators weekly episode every Tuesday where we talk about a lot of the same principles as well, and dive into them in-depth. So, check us out there.

Steve: Cool. Well, Tim, I really appreciate your time. Thanks a lot for coming on the show.

Tim: Yeah. Thanks for having me.

Steve: Hope you enjoyed that episode. I’m actually really excited to implement the action items from this episode and looking forward to grow the 5 Minute Pitch audience. Now once again, if you all want to check out my brand new show, head on over to 5MinutePitch.com/launch. For more information about this episode, go to Mywifequitherjob.com/episode244.

And once again, I want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any primer that is closely tied to your ecommerce store. So if you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. So head on over to Mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s Mywifequitherjob.com/K-L-A-V-I-Y-O.

Now I talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast where we’re giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.Mywifequitherjob.com.

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