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204: The Best Way To Launch A Successful Product On Amazon Today With Casey Gauss

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The Best Way To Launch A Successful Product On Amazon Today With Casey Gauss

Today I’m thrilled to have Casey Gauss on the show. Casey is the founder of Viral Launch which is both a software company and an Amazon product launch service.

They have two main software tools called market intelligence and product discovery which help you find profitable products to sell on Amazon and their launch service has catapulted many clients onto the front page of Amazon search.

Casey is also going to be one of the speakers at my conference the Sellers Summit in May. Anyway, Casey is an expert when it comes to finding and launching successful products on Amazon and today we are going to find out how he does it.

What You’ll Learn

  • What it takes to launch a successful product on Amazon today.
  • Which factors he looks for in products to sell.
  • The most critical aspects of a product listing
  • Does enhanced brand content really matter?
  • Do giveaways still work?

Other Resources And Books

Sponsors

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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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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 what strategies are working and what strategies are not in business. Now today I’m happy to have Casey Gauss on the show. And Casey is the brain behind Viral Launch a tool that helps you research products to sell as well as launch them on Amazon. And as Amazon becomes more competitive Casey and I discuss what’s working today.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. 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 30% of my revenues as of last month. 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, 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 single email.

Klaviyo is the most powerful email platform that I’ve ever used 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.

I also want to give a shout out to Privy who is a sponsor of the show. Privy is a tool that I use to build my email list for both my blog and my online store. And what does it do? Well Privy is an email list growth platform and they manage all my email capture forms. And in fact I use privy hand in hand with my email marketing provider. There are a bunch of companies out there that will manage your email capture forms, but I like privy because they specialize in ecommerce.

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. Customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%. 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 Casey Gauss on the show. Now Casey is the founder of Viral Launch which is both a software company and an Amazon product launch service. They have two main software tools called Market Intelligence and Product Discovery which help you find profitable products to sell on Amazon. And their launch service has actually catapulted many clients onto the front page of Amazon search.

Now Casey is also going to be one of the speakers at my conference, the Sellers Summit in May. And Casey is an expert when it comes to finding and launching successful products on Amazon. And today we’re going to find out how he does it. And with that, welcome to the show Casey, how are you doing today man?

Casey: Steve thanks so much for having me. I’m doing amazing how about yourself?

Steve: I’m doing well myself. I’m a little bit sick, so if I start coughing or whatever, it’s all good. I will stop eventually.

Casey: Exactly.

Steve: So Casey, you got a pretty cool story about how you started Viral Launch. Can you give the audience just kind of like a quick overview of how you got started selling on Amazon, and why you decided to start Viral Launch in the first place.

Casey: Yeah of course. So essentially I went to college for a couple years. I was running track and studying business. Always had all these ideas I wanted to give a shot at. And yes I taught myself how to code, dropped out of [inaudible 00:03:58] and a friend of mine was the guy with the idea for Viral Launch. So he was the Amazon seller and he always wanted to start a business with me.

So I built the original platform for Viral Launch just as kind of like a side gig. But pretty quickly we were making money and it was so cool to see the amazing success that some of our clients were having. And so that’s really how I started to get my understanding of Amazon, what’s working, what’s not. I love data, I love metrics, and so yeah I’ve never sold anything on Amazon but we’ve helped people sell literally billions of dollars on Amazon.

Steve: But you developed Viral Launch along with your partner who did sell physical products on Amazon, right?

Casey: Yeah correct, and I ended up, I officially bottomed out like a year after we had gotten started. He wasn’t really into what was going on, and I just saw the incredible opportunity and wanted to run with it.

Steve: Okay. So what I like about you Casey is that you run the service where you’re helping like thousands of Amazon sellers launch. And so you kind of have intimate knowledge over it like a wide range of different products on what works and what doesn’t. And so what I was hoping to do today was kind of discuss what it takes to launch a successful product on Amazon today. A lot of things have changed in the last couple of years. And I guess let’s start with what factors you look for in deciding what product to sell in the first place.

Casey: Yeah, so I would definitely say probably our biggest advantage right now is just our perspective of the space. So we work with guys just getting started on Amazon that maybe have a budget of $2,000 a month all the way to our largest private label client does just over one 100 million dollars a year on Amazon. So really, really wide range. And from I am a huge advocate of the go wide strategy.

And essentially what this is is looking for those products where you’ll only do 10,000, 20,000 maybe somewhere around $30,000 a month in top line revenue but competition is extremely low. And what this allows you to do is quickly get into a market; you don’t need to have a crazy marketing budget. You don’t really have to spend too much time maintaining the products, making sure that competitors are not coming in and pushing you out of the market.

I would much rather — the saying is, I would much rather sell ten products that do $10,000 a month in top line revenue than one product that does 100,000. There’s a few reasons why. In those markets where you’re doing six figures a month, you are going to have a lot of competition generally. You’re going to have to spend a lot of time, continued time making sure that you maintain your rank, that competitors aren’t using shady tactics to leave bad reviews.

It just becomes a big mess or it is just a lot harder to manage than getting into these markets where it’s no headache to get up, to get ranking, to start getting those initial sales, to reach maximum sales potential, and to move on. And once you build that process around the product launch, your product launch strategy once you build that process, you just continue to push new products through that process, and in low competition markets it’s really easy.

So there’s definitely a lot of guys that have success in the products that are doing six figures and make sometimes high six figures per product, but they’re spending six figures to get that product to become successful. So for the – yeah go ahead.

Steve: I was going to ask as part of your go wide strategy, do the products have to be related, or they’re just completely desparied products, truly individual?

Casey: Yeah, I mean that completely depends on what your goals are as a business, right? So if you’re looking to build the brand that you can then sell, if you’re looking to build the brand that you can try to take off of the Amazon, I mean cohesion is important among your product line. But if you’re looking purely for cash flow, then yeah you can just go really wide on just a bunch of random products.

So the biggest account that I know that does that, they did just over 30 million last year, and they just sell literally everything from pet products to health products to car accessories, I mean they’re selling everything. But they just really — they’re like that, that [inaudible 00:08:15] for picking off just amazing markets where the competition is low. They get in and they can just kill it really quickly.

Steve: So branding isn’t as much of a factor when you take the strategy, right? Are you going into this with the philosophy like if this product dies it dies, and there’s always going to be another product to replace it type of philosophy?

Casey: Yeah, I mean obviously the goal is not to allow products to die, and in these markets products die a lot less frequently than in these high volume markets where people just get burned out from competition or they lose their pulse on the market. In these high volume markets, you always have to stay on the cutting edge or else people will push you out, and that’s a big revenue source for you. If you’re making a quarter of a million dollars a month in sales and your $100,000 a month product goes away, that’s really going to hurt if you are doing, you have 100 products that are all doing $10,000 a month, and you lose three of those, I mean that’s not that big of an impact on revenue.

Steve: Okay. And so what are some of your metrics then to find some of these lower competition products?

Casey: Yeah so the quickest metric to identify is this market worth looking into or not is what we call the sales review ratio. So from a conceptual level, essentially we look at reviews as the general barrier to entry in a market. So let’s say I’m selling a fish oil, and everybody on page one has 10,000 reviews. Let’s just say for the sake of an example, 10,000 reviews. That means that I need relatively close to 10,000 reviews to sell at the same volume as those other fish oils.

Even if you had let’s say 1,000 reviews, independently if you looked at this product 1,000 reviews seems like a lot. But if you compared to the other products, basically I think from the data that we have for essentially that customers are saying, wow, I wonder why this product only has 1,000 reviews while all these other ones have 10,000. It must not be as good. That must be — people must not be buying it for a reason, because from the consumer’s perspective the only indicator of popularity on Amazon is review quantity. They’re not looking at bestseller rank or anything like that.

So what this means is basically we look at the average sales review ratio. So we estimate monthly sales, let’s say this product is selling 1,000 units a month, and they have 100 reviews. So 1,000 divided by 100 is 10. If they have 1,000 sales — if they’re selling 1,000 units a month, and they have 1,000 reviews, then the sales review ratio is one. And so the higher that sales review ratio, the essentially the higher the ROI is for the amount of work that you have to put in to get there, and the easier it is to get there.

So anyways we look for these markets where the average sales review ratio is like two to three. So if the top ten guys are all selling 1,000 units a month and they have 100 reviews, that’s sales review ratio of ten, it’s relatively easy to get in there, get 50 reviews, 75, somewhere close to that 100 review mark, you will be able to sell a decent amount of volume pretty quickly. So that’s like the number one thing that we analyze for a product’s market.

Steve: Okay. And in general, I’m just curious what do you see the correlation to be right now in terms of reviews versus sales?

Casey: Yeah so we don’t have — it’s not necessarily one to one in so much as like if you have ten reviews and you get x percent of sales then you get 30, it’s all relative. So in some markets you only need 10 reviews to sell 1,000 units a month, but in some markets you need 2,000 reviews to sell 1,000 units a month because it’s so competitive.

Steve: So you’re looking at a review ratio of at least three you said three to five?

Casey: Yeah so if you can get 10 or higher, then that’s amazing, and again on average. One mistake that we see people make when like making their product selection is again you search fish oil and they see one ASIN has low review quantity but they’re selling a ton of volume. So they’ll think, oh I just need to sell this one particular ASIN and I can replicate those results. But the problem is you can’t attribute where those sales are coming from.

Maybe they’re amazing at driving Facebook ads and that’s where their sales volume is coming from. You need to make decisions based on the performance of the market as a whole.

Steve: So how do you determine whether someone is driving a lot of external traffic to a listing? Like if you’re looking at all the listings on the front page for example.

Casey: Yeah so basically one, there is no sure fire way. Two, essentially the way that we do it or estimate is we say, okay, well the majority of sellers are not driving significant volume from external sources to Amazon. In which case if I look at the average of the market and say the top 10, top 15 are selling 1,000 units a month, then I can assume that the majority of those sales are coming from Amazon.

If there’s one person that’s selling 10,000 units a month, then I have no idea what kind of volume that this — or how this guy is driving that volume. So I’m not going to guess it’s coming from that search term. I’m going to guess; maybe it’s coming from somewhere else, in which case I may not be able to replicate it, so I don’t even want to try.

Steve: Okay. So you’re basically looking for outliers and ignoring them?

Casey: Right exactly.

Steve: Okay. And in terms of sales revenue, you’re looking for that 10,000 range, does that sound accurate?

Casey: Yeah. I mean so it’s relative to every – basically one of the sayings that we have is every product is a good product to sell so long as it makes sense to you in your business. And what that means is I have friends where if they’re not doing 50 to $150,000 a month in top line revenue for a product, they’re not happy with the product. But then other people, they come in; they only have two, $3,000 budget. If they’re doing three to $5,000 a month on Amazon, they’re very happy.

So it’s all relative, but in the go wide strategy, I would be cautious around products that get up into the 30, $50,000 a month range, because I’m adverse to competition in this case.

Steve: Okay yeah, so you’re basically just hovering just under the radar of the most popular products so that you get less hijackers and trouble in general, right?

Casey: Yeah exactly.

Steve: Okay. So in terms of creating the listing, what are some of the more crucial points of a listing that you need to pay attention to based on what you’ve seen in terms of helping other people launch products?

Casey: Yeah I think that the whole listing optimization process is one of the most underrated things when it comes to having success on Amazon. If you don’t have a well optimized listing, it can literally mean thousands of dollars and if you’re in those competitive markets tens of thousands of dollars lost in sales every month, because not only does it have an impact on conversion but the biggest impact is in how it performs in the search results.

And so basically the three main tips that people really don’t get, one of them people have a little bit different opinion on. But the first one is you have to have plurals in your title. So you need to have a singular and plural form in your title. So let’s say I’m selling a singular grill brush, right, I need to have brush and brushes even though it may not make that much sense. I need to have both of those in my title because inevitably people are searching grill brushes or brushes for your grill because yeah.

And so you need to treat these words different. You can see this by going and searching fish oil, you’ll see different order of the results. And so one example that we’ve had is we’re launching let’s say it was this guy’s grill gloves. And so we ran a promotion targeting the singular form grill glove but he only had the plural form in title. So we got him mid page two for the singular form grill gloves, we add grill gloves which is what he was targeting. But for the plural form he was like top ten on page one for the plural form because it was in his title.

So these are general, it depends on the market but generally the singular and plural forms of words of high volume, and if you’re excluding one then you’re missing out. Number two is kind of keyword stuffing your title. So I know people want to add these beautiful titles that really impact click through rate, and I mean you definitely need to use the data to your advantage. But I would much rather rank for two times as many keywords, three times as many keywords but have a lower click through rate, because in total in aggregate you’re going to be driving more sessions.

So I think that’s really important. And then number three is, don’t include your brand in the title. This is a waste of space and Amazon shows your brands in most search results right there. So I think it’s a big waste of space. People aren’t searching your brand unless you are a name brand like Nike or Toshiba or something like that. Your brand is there already and it just is wasting character count.

Steve: Interesting okay.

Casey: Another quick little tidbit is you should be putting a colon or a hyphen after the fifth word in your title. The reason being is by putting that colon in your title, the five words that come before that assuming there’s no stop words like and, the, that is what dictates your canonical URL. And so, your canonical URL — we’re not exactly sure if it helps SEO in Amazon, but we do know that it helps SEO in Google, so yeah.

Steve: That’s an interesting tip. I remember when I’m trying to get the canonical URL correct; it’s just trial and error for me. I didn’t realize that you could put a colon or a dash in there to force it.

Casey: Yeah.

Steve: Okay. So I know you guys do a lot of launches as part of Viral Launch. And I was hoping we could just talk a little bit about some of your most recent successful launches with your service. What exactly do you guys do these days step by step to launch a product on Amazon? Can we talk about like giveaways and sales velocity, and that sort of thing?

Casey: Yeah, yeah. So first off you have to have an amazing listing. Again in the example with the grill gloves, here this guy was missing out on sales because he didn’t have the singular form in his title. And so make sure you have a well optimized listing.

Steve: Does enhanced brand content a big deal?

Casey: So enhanced brand content is supposed to help conversion rate, and we’ve seen it everywhere from it has no impact; it has a small amount of impact. I don’t think or if it does have any impact on SEO it’s so small and it’s hard to tell with all the noise. But what you should be doing, this is a good question — one little trick is if you have enhanced brand content, make sure that your description in Seller Central is still filled out, because those words will still index and help you rank.

Steve: Interesting okay. So can you tell me what type of products where enhanced brand content made a bigger deal than the other ones?

Casey: So honestly we didn’t see any correlation around beauty products or anything like that. So we also have this little test tool, and we’ve done a decent amount of split testing around content and how this impacts conversion. Split testing content is hard though because sometimes when you update the title, it hurts your search ranking, then it also you see declines so it’s hard to normalize after you change.

Anyway basically again it depends on the market or the type of products specifically, but conversion rate is largely driven from like your product photography and making sure that you have the features like in your listing. From there it’s all about having the keywords in your listing to make sure that you’re ranking and getting as many sessions as possible.

If you have beautiful photos that highlight the products, that are helping them to understand how many pieces are in this, what do I get, what don’t I get, how big is it? Answering all these questions so they don’t even have to read because less and less do people want to take the time to read, they just want to know is this right and then buy it. So you do a lot of that with your photos.

Steve: I was just trying to get an idea of like where in the hierarchy enhanced brand content falls in your priority list. It sounds like it’s pretty low.

Casey: Insanely low yeah.

Steve: Okay, all right cool. Sorry let’s move on with the launch process.

Casey: Yeah so anyway make sure you have a well optimized listing. And then from there basically you want to go and understand two things. What is the main keyword? Again if it’s a fish oil, generally we want to go after the highest volume keyword, reason being is let’s say we went out after like omega three supplements, the problem is the people ranking for fish oil are seeing really high volume and because they have omega three supplements in their title, in their listing, they’re still getting keyword push or boost for these long tail keywords as well.

So it’s very difficult to compete for a long time or a sustained period of time on these long tail keywords because these high volume sellers for the big keywords are also getting power for the long tail. So that’s one little tidbit. So we want to try to understand your main keyword. Let’s say it’s fish oil, and then from there we want to go look on page one to try to find these pockets of lower review quantities.

So again let’s say everyone on page one has 1,000 reviews and there’s like a pocket where someone has 250, 175 and 100 reviews, and you only have you know 50 reviews or 100 reviews. We want to ideally try to rank you within that little pocket of lower review quantities so that relatively you are competitive when people are scanning through the results and they see your review quantity next to the guy above you, the guy below you, it looks relatively competitive.

Steve: So are you implying that you’re trying to get a specific rank so that you waged in between two lesser ranked items on the front page?

Casey: Yeah in terms of review quantity.

Steve: Interesting, okay sure.

Casey: So it’s not like we have things to an exact science where all the time we can get you exactly position seven for fish oil, but sometimes depending on how sales trend throughout the — are distributed throughout the products that are ranking for the keyword, we can get relatively close. And so that’s always our goal. Anyway so we want to find this pocket, and then we look at, we try to estimate the number of sales that are happening for that particular product aside for that particular keyword.

So you’re looking for sales, for keyword. There is no tool that does this, there’s tools that have search volume, but the problem with search volume is you don’t know what conversion rate is. So we have some Amazon data that shows us conversion rate for this word is 20%. So people that search that then check out. And then for another word, it’s 0.2%, so it can vary so much. You also don’t know what sales distribution around for the results are.

Steve: Sorry those numbers that you just spit out on conversion rates, are those the person’s listing in question because how else would you get those numbers in general?

Casey: We have some special data.

Steve: Okay, it’s just from real accounts.

Casey: It’s not from accounts, it’s from up from Amazon like actual Amazon search volume, clicks in the listings, check out, and add a cart and then complete the check out.

Steve: Okay because you’re basically scraping a whole bunch of listings, you’re looking at correlations, is that hoe you gain the data?

Casey: No, no, no. It’s literally Amazon and Amazon report that we have access to.

Steve: Oh interesting. Okay, I won’t ask any more.

Casey: This is a lot of caveats if you want me to talk at a higher level, I totally can. So anyway so we estimate what the sales volume is for that particular keyword. Let’s say we want to land in this pocket between positions seven and 11, we’ll try to estimate what kind of volume these guys are doing for this keyword. Let’s say it’s 900 to 1,000 sales a month, which equates to 30 to 33 units per day. And then we will run a launch targeting fish oil, giving away 30 let’s say 35 units per day for seven days is generally the rule.

And so the way that Amazon tracks – let’s just say the contributor to keyword ranking on Amazon is sales. And so they track sales history in these buckets in these 24 hours, 48 hours, three days, five days, seven days and then seven day interments trying to understand how sales performed recently, but then also historically. And so our goal is we find that we have a much better time ranking maintaining rank if we fulfill that seven day bucket.

In really competitive markets sometimes we’ll go 10 days. In super competitive markets where you’re maybe selling 20, to 30,000 units a month, we’ll try to hit like the 30 day mark and sometimes even a little bit more. But anyways let’s say it’s relatively competitive, we’re going to give away for seven days. You go put that into the Viral Launch platform or whatever platform you use to drive sales and you press go.

And so in Viral Launch, again I’m biased, it’s easy because the program magically distribute the coupons for you every day. We’re giving away those 35 units, but…

Steve: Are these pure giveaways or drastically discounted items?

Casey: Yeah drastically discounted at like 80, 90% off.

Steve: Okay so I have heard that Amazon uses the amount of money that it actually makes as opposed to pure units. Is that — yeah go on.

Casey: So that’s a huge myth, and so basically I feel like this myth pops up like every two, three months and like gets legs again and really comes back. And so right now there’s a big wave of this myth, right? And so there’s a couple of things here. Well one, just yesterday actually we did a study on here, we haven’t published it because we’re trying to decide what information we want to show whatever. Anyways the first two products in the report are like they’re number one on page one for their targeted keyword. I mean results are just as good as they have always been.

So I try to understand where these rumors come from or like where they’re based in, and I think it’s a couple. So one, it’s right after the holiday season and Amazon is taking into account the historical sales of the products that were ranking well and performing well in December. So when your product comes from page three or page 30 and it has poor sales history, it’s really hard to compete because when Amazon looks at the 90 day, 60 day sales history of these products that have been ranking on page one, they significantly outperform your particular product that you’re now trying to rank.

So that’s why it was harder like two weeks ago — from end of December to mid January, but things are becoming easier just as easy again. And then I think people don’t give away enough units, or people don’t have the keyword like in their title. You would not believe the number of people that try to run a promotion for fish oil; they don’t have fish oil in their title as an example which is again really critical like we’ve been talking about.

So I think that’s where the rumors or people are impatient. So usually keyword ranking is delayed two to three days, but sometimes it can be delayed five, seven or I think like the longest that we would feel comfortable saying is like 10 days. So if you don’t see something after like four days, some people freak out, they’re like, oh shoot, like I’m not ranking, I’m cutting this off. And it’s like well you just need to be patient because sometimes it takes like five days or whatever.

Steve: Let me ask you this, so why the rationale for a severely discounted product as opposed to just a full giveaway if it’s just strictly units?

Casey: Well a couple. One you save just a little bit of money, and then two Amazon doesn’t allow you to do 100% off giveaways anymore. So I believe it would have to be 99% off.

Steve: Yeah that’s what I was getting at.

Casey: Okay yeah. So I mean you save just a little bit.

Steve: Okay, all right so when you say targeting a specific keyword, are you implying like super URLs or what techniques are you using actually to target these specific keywords?

Casey: Yeah so the traditional super URL are 2014, 2015. That stopped working early 2015. So we’ve been using what we call a two step URL which takes them to a page before the listing, the landing page. We’ve been using that for a while, but yes it does target a keyword. We can drive rankings without, but then that’s a more involved process and it’s a lot less efficient and it takes a lot longer. But yeah so pretty much everybody is using these two step URLs.

In Viral Launch you are able to use whatever URL you want so long as it goes directly to Amazon. And so yeah, so I know a lot of people using these two step URLs and…

Steve: Can you be more specific. I’m sure a lot of people in the audience don’t know what you’re talking.

Casey: Yeah, so like we don’t share exactly that’s part of the secret sauce, but it’s relatively easy to find how to put together a two step URL. So if it goes to like — so yeah I’ll just say like one type of two step URL. This is not what we use, but it will take you to the seller store front, and will only show the fish oils. Let’s say you’re selling fish oil, it will take you to brand X, Y, Z store front showing only fish oils. And whoever is buying the product goes to that page through the URL and then they see the product, they click the product, they added to cart and they checkout.

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I guess my main question was you’re not having your people on your list type in a physical search on Amazon for your product and then buying it that way, are they?

Casey: No, never no. So one, that’s just not a good experience for them. I would imagine coupon redemption rate would be lower.

Steve: Sure:

Casey: And then I just don’t like telling people what to do. That seems manipulative like if we’re taking you to the store front, like hey, here’s this brand’s products, and you are looking for their fish oil, so here’s this brand’s fish oils. I feel more comfortable doing that than saying, hey, like go search this, do this, and yeah.

Steve: Okay, and so these two step URLs, they do work like based on your experience with all these launches?

Casey: Yeah. I mean we’ve run probably like 25,000 launches since March of 2015 when we started using two set URLs, and they do work really well. I mean every month we’re testing out all the URLs that we are able to see, like this is how well each one works to understand what we should be using and kind of what’s available on the market, how things are trending.

Steve: Okay. And so you mentioned that you were doing these launches kind of staggered, evenly distributed across different days, do ads come into play at any point like sponsored product ads?

Casey: Yeah so I mean the goal is to drive as much volume as possible because the more — it’s never — there’s no such thing I think as overkill when it comes to like you’re driving these things. So if you give away too many units, you’re benefiting yourself in total because Amazon is taking into account the sales history. So if you sold a lot throughout this launch period, it helps you to sustain that ranking, it helps you to continue to drive ranking.

So if you’re supplementing back with something like sponsored ads or I’m a big advocate of lowering your price, I think you like the more willing you are to lose money upfront, the more successful, the higher the probability of having long term successes. So you should definitely run a promotion and have your sponsored ads going like crazy, lower your price like crazy, be willing to come close to breaking even so that you can continue to sustaining high sales volume so that you can continue to maintain that rank, you can continue to build up reviews. That allows you to perpetuate that increase in organic sales volume.

Steve: And so you’re generating all this sales velocity. Are you doing anything to kind of increase the review quantity at all, or are you just letting it go?

Casey: Yeah, so right now that is something that I try to stay far away from. That is like the one hot trigger for Amazon, and we’ve always kind of been lumped in with the review groups. People in the past always thought we were a review group. We were never a review group and I always wanted to stay away from that because it’s such a hot trigger for Amazon and I never want to even come close to getting on their radar around, are these guys doing shady stuff or not.

Also we would be putting our clients in jeopardy. I mean I guess that we have a 40 person company, like we can’t make these dumb decisions I guess if you want to call it. So yeah so you can definitely use email follow up sequences throughout the promotion although Amazon is on some products not allowing people to leave reviews if the product was heavily discounted. But I think that — and this is why I’m an advocate of lowering your price and running sponsored ads, because these are sales that you can get reviews from.

And I think that you should be trying, you should be throwing the kitchen sink at trying to get reviews because from the way that I see it, what the data is showing us, reviews are really the currency to success on the Amazon.

Steve: Okay and so are you doing anything different from everybody else outside of using like an e-mail service?

Casey: I mean yeah. I definitely use an email service. We do a lot of different things when it comes to using the e-mail service. We definitely advise people not to do any black hat stuff; I know there are so many people that are. So, one thing that we’re becoming more and more interested in is insert cards. I think that is a great area, I’ve never heard of anybody getting in trouble for that. So anyways, yeah that’s something that we’re starting to explore more, but yeah we haven’t really dived in and don’t have any secret tactics or data behind those tactics right now.

Steve: Okay. And in terms of determining how many products that you actually need to give away to rank on certain parts of the front page, can you kind of walk through how that calculation is done?

Casey: Yeah so essentially it’s you want to match per day sale for the people that you are trying to rank along with, or out rank. So if they’re selling 900 for the sake of numbers, if they’re selling 900 units per month estimated, then that 900 divided by 30 is 30. And so you need to sell 30 units per day.

Steve: Okay and how do you determine whether you need to do that for a week, ten days, for an entire month?

Casey: The general rule of thumb is seven I think after that. So if you — yeah it’s — I don’t have specific numbers around if your volume is X, then it will be ten, if it’s — so if — yeah I guess it’s just off the top of my head. If it’s over 4,000 units a month do ten, if it’s over 8,000 units a month, then do like 20 to 30. And honestly if it’s like 3,000 units a month and you’re willing to do ten days, or you’re willing to do longer, that’s just going to help you to sustain your ranking.

Another thing like the most aggressive sellers, the people that are the most successful with launches are the people, again they’re willing to lose money. And so it is a little bit hard for me to say that because obviously I’m biased. I’m not like saying use Viral Launch for longer. Essentially what these people do, actually you are building a set up so that you don’t pay us if you run multiple promotions in a month for the same products.

So I guess I’m not as biased. So anyways what these people do is let’s say I’m selling fish oil, the first ten days you target fish oil. And then the next five days you target omega 3, and then the next five days you target fish oil supplement. And basically you try to just go after the highest volume keywords as possible just to knock them out and try to rank for — blanket the search terms essentially with your product.

Steve: So given that the review rate is much more reduced now since you can’t manipulate the system, is ten days enough? Like given those ten days, you’re probably not going to get a huge number of reviews to kind of match your competitors in just ten days, and so does that imply that you have to constantly have giveaways for a sustained period of time?

Casey: So it depends. This is why I’m an advocate of lowering your price because that helps to sustain sales. Sometimes in some markets it can work wonders. So you’re running a promotion giving away 30 units a day, and you turn that off, you’re selling — let’s say you have a really low review quantity and you’re selling five units a day organically now. You lower your price and I’ve seen it where people go right up to 35 and it also helps to improve their ranking, just some really great things can happen from that.

And the way I try to help people under like justify that is essentially it’s like a higher priced giveaway versus giving your product away at 90%. To continue to sustain that rank, you can give it away at 40% off aka the lower price to continue to drive rankings. So the people that are most successful in these markets where you need a decent review quantity to be successful are the people that are just spending like you have to drive sales, that’s the only way you can drive reviews, sales volume.

So do whatever you can, lower your price, drive sponsored ads. But this is a huge reason why I’m an advocate of this go wide strategy right now because we’re specifically looking for markets where the review quantity is really low. That barrier to entry is really low and I can achieve maximum sales potential for this market in 30, 60 days because there’s not that many reviews that I need to be successful.

Steve: I see okay, and then at the same time you’re getting less people who want to hop on the listing because the revenue isn’t as attractive as one of the six figure product lines, right?

Casey: Exactly, some of these products I mean you’re giving away 30 units total, 50 units total over the course of the product’s life time and now you never have to worry about it.

Steve: One thing I’ve noticed on Amazon, there’s always these outliers where they have like a crazy number of reviews in such a short period of time. Do you have any idea how that’s happening right now, or do you think they’re buying the reviews? Are review groups getting busted, like what’s your overall take on the entire landscape of black hat?

Casey: I mean, my stance on black hat is never do it, especially when it comes to reviews. I mean this is the one area where I’ve seen people really get taken down because they’re towing the line or just doing things that they shouldn’t have been doing. But I mean I don’t know how much you want to talk about black hat because I don’t want to incentivize people to do it.

Steve: Yeah don’t incentivize people to do it, I just want what your take is and like any stories that you’ve heard, and whatnot and what’s going on in general landscape yeah.

Casey: So my take is that it really sucks because us guys that are not willing to cheat are paying the price for it, right? So everyone is incentivized to cheat because everybody is cheating and getting away with it and that’s the way to get ahead in these highly competitive markets and new markets. So overall this sucks. I really dislike it, I know a lot of people that are doing it and there’s a lot of different ways to do it right. So paying people through like friends network or yeah there’s definitely still those review groups.

The problem is, I think it’s hard for Amazon to detect these kinds of systems if they’re done well. And so I don’t know what the answer is like long term how Amazon is going…

Steve: There’s no answer. I was just kind of curious what … yeah. What is your take on like the people from China selling directly on Amazon? Are you seeing a lot more of those that you’re competing against?

Casey: Yes we are, for right now the advantage is that they don’t understand how to market it. They don’t know how to pull the levers to drive success, right, like they cannot conceptualize running giveaways because like they don’t understand how to lose money to make money. They don’t understand paying for great photos and great listing. They’re just trying to sell these products really cheap.

The day that these guys assuming that it happens really start to understand, oh this is what it takes to be successful on Amazon not just a low priced product that matches other people’s, that is the day that it becomes very scary for us third party seller, the third party seller market because at that point then we’re just a middleman. These Chinese manufacturers know how to sell; they do know how to do getting into the lower priced products.

And if you want to talk on the large brand side, I’m on like a bi weekly or monthly cost strategy call with a bunch of these like really large brands like L’oreal, Tome [ph] and all these big brands and these guys don’t get it either. And so basically they think that the trip to having success on Amazon, the only lever you can pull that success on Amazon is paid media. So they’re spending just tons and tons and tons of money on AMS, AMG, all these marketing programs that Amazon is having them just spend their money on.

They’re spending more – their spend on these ad programs is far outpacing their increase in revenue. And so some of them are just like we have to stop running ads, or we have to stop participating in these programs because we’re just losing so much money and it doesn’t make sense. So I think that’s definitely to our advantage, this third party seller market we’re on the fringes, we always know what’s working. And that’s why we’re able to drive success among these big name brands and these super cheap Chinese sellers at least for now.

Steve: Okay, hey Casey I want to give you some time to talk about your latest software releases, Market Intelligence and Product Discovery. Can you tell the audience a little bit about these tools?

Casey: Yeah so basically I think the most critical decision you’ll make in your selling on Amazon journey is product selection. And after running 30,000 launches, we’ve been able to see what works, what doesn’t, how can we help sellers set up for success. And we see so many people making bad product decisions, so we came out with Product Discovery and Market Intelligence.

So Product Discovery is an idea generation tool that basically allows you to search by product which we’ve all seen tools that do what we really kind of dive deep and really help people find these amazing markets is you are able to search by keyword, high quality keywords that you can filter by product score. So literally it takes like minutes to find five star products that you’re interested in your market.

Then we have brand search which allows you — we have millions and millions of brands that we’re tracking and it allows you to identify brands in your category that are growing, doubling their revenue every six months, or maybe they have a really high review rate and you want to go buy one of their products to see how they’re listing reviews so that you can maybe steal one of their tactics.

There are so many different ways to leverage brand search to identify good product opportunities, what products are driving the most successful brands. And then we allow you to sift through all 36,000 of Amazon subcategories to find these niches of opportunity. We just have a ton of data, ton of filters around helping you to identify your next great product essentially.

Steve: I remember looking through the brand search and I found this one company who was just killing it selling knockoff nerf darts and just making a killing. I never would have thought of that. Now Casey I know you also have a podcast. Do you want to talk about that a little bit as well?

Casey: Yeah thanks. So we have this contest called Follow the Data, and basically again running 30,000 launches, working with over 7,000 brands, we just have a ton of data around what’s working and what’s not, what are the common myths. And essentially we try to come from a place of data to help you understand how to get the most out of your Amazon business.

Steve: Cool man. Well I’ll be linking up all these resources in the show notes. Casey thanks a lot for coming on the show, really appreciate it and I’m looking forward to hanging out with you in May.

Casey: Same man, I’m pumped.

Steve: All right dude, take care.

Casey: Thanks, you too.

Steve: Hope you enjoyed that episode. With the millions of data points that Casey has at his disposal, he can definitely back up everything he says with data. And if you want to see him in person, check out my conference at Sellerssummit.com. For more information about this episode, go to my wifequiteherjob.com/episode204.

And once again, I want to thank Privy.com 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. 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.

And 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.

And finally I want to thank Payability for sponsoring this episode. If you’re looking to take back control of your cash flow, and scale your Amazon business fast, then sign up for Payability and say goodbye to cash flow issues and stock outs. With daily payments, you can speed up your supply chain, buy inventory at optimal times and stay in the buy box. The more control you have over your cash flow, the more buying power you will have. Visit Go.payability.com/steve to get started, and cash in on a $200 credit just for being a My Wife Quit Her Job listener. Once again that’s G-O.payability.com/Steve.

Now I talk about how I use all these tools in 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 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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203: How To Get Millions Of People To Read Your Content Through Syndication With James Clear

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How To Get Millions Of People To Read Your Content Through Syndication With James Clear

Today I’m thrilled to have my buddy James Clear on the show. James is someone who I met at a mancation held by Billy Murphy:) Now I’ve known about James for a very long time and he’s one of the most successful writers that I know. 

James focuses on uncovering the habits and routines of entrepreneurs, artists, athletes and high powered individuals and shares them in easily digestible and actionable articles.

He’s been featured practically everywhere including CBS, Entrepreneur, Forbes, Time, you name it. His site gets millions of visitors every month and he has an email list of over 400K email subscribers. Enjoy the show!

What You’ll Learn

  • How James gained traffic to his site early on when he was a nobody
  • The primary factors he attributes to his success
  • His secret for getting traffic and ranking in search.
  • His philosophy on content
  • How his website makes money.
  • Why he chose his name to be his domain

Other Resources And Books

Sponsors

Payability.com – A financing company that provides high growth Amazon sellers with daily payments. With Payability, you can say goodbye to cash flow issues and stockouts and hello to scalability and profits. Click here and receive a $200 credit upon signup.
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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

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. And today I’m happy to have my buddy James Clear on the show. And James is actually one of the most successful writers that I know personally and his site gets millions of visits per month. And today what we’re going to do is we’re going to talk about his strategies for building traffic.

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. Now Privy is an email list growth platform, and they actually manage all 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, bit 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 prizes in our store. Customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%.

So bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. 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. And I’m blessed to have Klaviyo as a sponsor because they are the email marketing provider that I personally use for my ecommerce store, and I depend on them for over 30% of my revenues as of last month. You’re probably wondering why Klaviyo and not another provider. Well, Klaviyo is the only email platform out there that is specifically built for ecommerce.

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 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 bought, piece of cake, and there is full revenue tracking on every single 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, 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 thrilled to have my buddy James Clear on the show. Now James is someone who I met at a mancation which was started by Billy Murphy. And I’ve actually known about James for a very long time now, and he’s one of the most successful writers that I know. James focuses on uncovering the habits and routines of entrepreneurs, artists, athletes, and high powered individuals and then shares them in an easily digestible and actionable article.

He’s been featured practically everywhere including CBS, Entrepreneur, Forbes, Time, you name it. His site gets millions of visitors every month and he has an email list of over 400,000 email subscribers. And with that welcome to the show James, how are you doing today man?

James: Hey Steve, doing great man, thanks so much for having me.

Steve: James, we got a chance to hang out for an entire weekend. But I actually don’t really know like how you got started. So I know you are a photographer, a weightlifter, as well as a writer, but how did Jamesclear.com get started, and how do you juggle like all three things?

James: Yeah sure. So I wondered about habits long before I started writing about them. So we all have habits, but I kind of cut my teeth with the idea as an athlete. So I played baseball way through college. My dad played professional baseball for St. Louis Cardinals in the minor league. So I kind of grew up wanting to follow on his footsteps as well, so athletics was a really big part of my life growing up. But I was also a huge science nerd, so I loved — I was a biomechanics major undergrad, so basically in chemistry and physics classes.

And so I kind of had like two halves of my life where I was just like did well in school and I was this nerdy kid on one side, and then I also was an athlete who really loved sports and athletics on the other side, and so like kind of like merger of a body and mind. I had all these mental habits, these study habits from school, and then I also had weightlifting habits, and strength training habits and practice habits on the field.

And I had a really serious injury when I was in high school. I got hit in the face with a baseball bat, and I ended up getting air carried to the hospital and put into a coma for overnights and had a bunch of seizures. I couldn’t drive for like nine months, and it was this really long road to get back, but then slowly over the course of the next few years, started to work my way back.

And the way that I did it, I didn’t notice at the time, but the way that I did it was by doing one small habit at a time. I started to make one little change here and then I’d like leverage that to build a little bit of momentum, and then I get my feet underneath me. And so they were — when I started this process, I just focused on little things like going to bed at the same time each night, or making sure I carved out an hour to study every day, going to physical therapy sessions consistently.

And so it was rude basic stuff, but I was able to leverage that idea of like one tiny habit leading to the next. And eventually five years later, I ended up becoming an academic All-American as a baseball player, and then shortly thereafter launched my business after I finished undergrad graduate school. And so that idea…

Steve: Your business being Jamesclear.com?

James: So that was not the first one I started. So the very first website that I started — well the very first thing I did that was not fair was starting an iPhone app which promptly went buzz. I thought like, oh if I just build it then people will come and check it out. And I think I spent $1,500 on the development of that and it made like $17 or something like that. I think it was like $19.17 So it did not do well, and I lost 1,500 bucks out of that which was a ton of money because like for me at the time I didn’t have much, and I wasn’t making any money for business.

So I learned that lesson pretty quickly that like, oh the reason this didn’t sell is because I had nobody to market it to. And so I had to start focusing on that, and that led me to reading back consumer psychology and like why would someone buy something, why would someone sign up for email list. And that little dive into consumer psychology led me to behavioral psychology, and then down the rabbit hole of like habits and behavior change. And that’s all the stuff that I write about now.

So the answer to your question is that it came out of this. My interest and habits and the launch of Jamesclear.com, which happened November 12th, 2012, came out of these two areas, the first area being my like personal experience with habits as an athlete and as a student. And then the second area being my failure as an entrepreneur at the start and having to learn about consumer psychology which sort of led me to the literature and the research on the topics of habits and behavior change.

Steve: Okay and in terms of photography, is that just something you do on the side, or are you a professional photographer as well?

James: Yeah, so I don’t do professional photography in the sense of like shooting for clients. I [inaudible 00:07:41] friends, but I’ve done travel photography in over 25 countries now, in 26. So I mostly focus on landscapes and street photography. And it started because I lived in Scotland briefly, and I thought, oh I should get a nice camera over there. And so I got it, and it was the first camera I’d ever had, and I took over 100,000 photos in the next year. So I just got like totally obsessed. And I don’t even know that I would like it, but I really love the visual and creative outlet that it provides.

So now I try to focus on going to three or four new places a year just with the express purpose of creating photos and stuff.

Steve: So in terms of just like your income, it comes primarily from JamesClear.com, right?

James: Yeah, like 98% of it is from there. I’ve tried; I don’t try very much to monetize the photography side of things.

Steve: Okay. Now I was just looking at your site, I looked at it last night and it gets an insane amount of traffic. And I was just curious like when you got started back you said in 2012, right, how did you gain traffic to the site early on basically when you were a nobody?

James: Yeah, it’s a good question and I think there are two kind of main points I want to make as far as share the specifics about where traffic comes from now. So the first point is when I started, like many of us, I read all these articles and tried to figure out like where people get traffic, and I was at work. And I remember reading this list of like 50 ways to drive traffic to your website. And I would in the next like three months; I did all 50 and like none of them really moved the needle.

And I was so frustrated because I was like what, all these people were writing about this, just like not doing it right, what’s going on? And I think that there is a very large contextual component to any business or website on where traffic comes from. So for example Instagram drives very little traffic for me, but I have a friend who is a hand lettering artist and creates illustrations and Instagram is where like basically all of her sales come from.

And so the question that you should ask is not necessarily where do I get traffic from or where do like top people get traffic from, but like where is the right place to get it for me in my business. So that’s one caveat. And then the second thing is there are very few traffic sources online that last for the long run. So a lot of — the internet moves fast, it’s moving much faster now, and so a lot of traffic sources are kind of transience. And so like Quora is a good example.

There was a like a year and a half, maybe a year to two year period where I got a ton of traffic from Quora and that’s basically gone now. And so that mostly has to do with how they changed their platform, we can talk more about that if you want. But my point being that Facebook and Google are — really Google was like the kingpin that has lasted for like a decade now.

Facebook seems to be or have a little bit more staying power than a lot of the options, but yeah things change fast. I mean social media wasn’t around ten years ago. Now there are entire websites that get 90% of their traffic from social. So it can kind of add the flow. To answer your question where traffic comes from for me right now, like 80 to 90% of it is from three sources, Google, Facebook, and Pocket.

And then in the beginning you’re not going to get much traffic from Google because your site hasn’t been around, it doesn’t have much content, and usually SEO takes a few months at least for you to start ranking for term. So what I focused on was writing two articles a week, and then I started pitching those articles to other outlets to republish and syndicate it to their audience, and then offer a by line to these. A lot of my traffic in the beginning was through partnerships that I built.

Steve: Let’s talk about that. So how do you get these partnerships when you have not that much content, or did you wait until you had critical mass before you started reaching out?

James: No I think the first article that I pitched was the second one that I wrote on the site. So I didn’t really have much on the site at all when I started. So just as a brief precursor to this, when I started Jamesclear.com, I had started websites before that. So like although I started it from scratch, I always knew what to focus on, like I knew to make the email list the most important thing.

And I knew at least I had like a little bit of a sense of what my voice was, and how to write an article. And I feel like that’s important to mention because if you started out — like there’s a period probably six months at least where you’re just trying to figure the basics out. And I had already gone through that so I was able to kind of like hit the ground running when I launched Jamesclear.com.

Steve: Can you walk me through like that first pitch on your second article. How did you find the person to pitch, how did shoot into the outreach and how did everything kind of come into play?

James: Yeah so I wrote the full article, published it on my site…

Steve: What was it about first of all?

James: That one was about diet habits. It was specifically about how to change your environment to make it easier to lose weight and [inaudible 00:12:51]. So like optimizing the things in your kitchen and the size of your plates or things like that. And so I still do that today, I still write everything on my site first. And then after it ran on my site for about a week, I reached out to — the outlet that ended up running that one was Lifehacker.

And so it doesn’t work this way all the time, but Lifehacker has an actual tips line. So I think it’s like tips@Lifehacker.com or something, but you can – they are actually actively looking for articles to run. Other places like CNN or Time or Men’s Health, or — and I’m just naming ones, but not everybody is looking for it. So in most cases you may have to find an editor who’s the editor of the relevant vertical for you.

So if it’s an article about finance, you’d want the finance editor, or if it’s about lifting weights then you want the health editor. And then you either need to contact them cold which I’ve done before, or it can also be a good strategy if you’re willing to play the long game, find another author who writes for that section already, and then get to know them, talk to them a few times on Skype or whatever and then like three months later have them intro you to the editor of the vertical so that you kind of a warm intro.

But for this first one, I wrote the article, I sent to Lifehacker and I almost always keep it very short in the first email. The only goal of the first email is just to get a reply. You don’t have to like you don’t have to include everything like don’t tell them your byline; you want it to be — don’t ask for specific links to be added but all that stuff can come later.

Instead I usually just say something like, hi, I’ve seen that you’ve written these articles on A, B and C like a link to other previous articles that they’ve written that are about the same topic. So in Lifehacker’s case, like I have seen you’ve written about weight loss habits here, here and here. I recently published an article on whatever the topic is, and it performed really well on my site. If you – I’d love to see it run on Lifehacker, if you’d like, you can check it out here. And then I always link to the version on my site so they know it’s already published, they’re reading my copy.

And then and I just say like go check it out and if you enjoy it let me know, I’d love to have it run. Yeah so they got back to me and said they wanted to run it. And then I said, okay, what’s included, keep all links in and give me a byline and this is what I want to say and blah, blah, blah. And so that was just like the…

Steve: Was that a cold outreach to Lifehacker that first time?

James: Yeah it was the first time. I mean now you know I now…

Steve: Right, now you’re in context probably.

James: But yeah the first time it was, and it was cold for almost all the places that I’ve run. You have to remember that the people who are running these verticals, these editors all have bosses. And the bosses are like, we need 125 articles this week and they all need to be good. And so if you can kind of tap them on the shoulder and give them something that’s great, then you make their life easier.

So I think the big threshold is not — everybody focuses on the email like what does the email say, but that’s not the threshold across. The threshold across is writing something great, because if you write something great then they’ll want it. So the email could be really simple, but the hard part is writing a great article not writing a great email.

Steve: Can we talk about that post real quick. Was it like a super comprehensive post that was like 10,000 words or?

James: No, that one was fairly short. Most of my articles, I do have some that are pretty long. I have some that are like 6,000 words or so. And those do well although I don’t try to pitch those as often to outlets. Most of my articles that I pitch to outlets are like 1,500 to 2,000 words. So still and people can see this if they want to check out some articles and see what the examples look like. But my writing style, I usually write about 4,000 words, and then I revise things like 20 times and it turns out to be like 1,700 or 2,000.

So my point is like I try to have very high signal and low noise. So even though it’s only 1,700 words, there’s like a lot of depth in there. And so I think that it doesn’t necessarily have to be super long for it to be comprehensive or compelling or thought provoking, but it might take you more time to stay classic. If I had more time I would have written a shorter letter, it’s that kind of flow.

Steve: So when you come up with topics, do you always have some sort of publication in mind meaning that do you ever just write for just the heck of it?

James: Yeah, actually I pretty much always just write for the heck of it. I almost never have an outlet mind. I don’t think I’ve — sometimes I’ve written an article with SEO in mind, but I’ve never written an article with like, oh I’d like the story on like Lifehacker, or I’d like the story on something.

And the reason I say that is because these places that run articles, I mean they have a huge breadth of things that they’re interested in running, like it’s not that necessary to try to tailor it as long as you’re writing about — for me at least as long as I’m writing about productivity or creativity or improvement or any of the topics the health habits, any of the things that I’m generally interested in, they all have big verticals that cover that stuff so it’s probably a good fit.

Steve: Okay and how do you find a list of sites that are actually willing to syndicate your stuff, because I know for a fact like if someone came up to me and said, hey I already wrote this article, do you want to syndicate it on your site, I would say no, right?

James: Yeah it’s funny. I get – you probably get tons of emails like that. so it’s hilarious I’ve never run a guest post on my site, but every week I get someone saying, I’d like to offer this guest post. I’m like I don’t — literally if you just look at the site, there are no guest posts on it, so I don’t know. So to answer your question, I’ve actually never seen a list of those sites somewhere. I just did it by searching myself. One of the things that really helped me grow early on and I think was fairly unique in my approach, as far as I know I was one of the first individuals to do this.

A lot of these big sites like let’s take Time for example, so Time was already syndicating articles from Shape Magazine or Men’s Health or something like that, I’m just giving these as examples. And so I went to them and said, look, you already have a partnership with this other media company and you’re running their articles on your site, like just treat me like you would treat Men’s Health.

And no other individual blogger was doing that at the time, and so I got distribution in these like really large outlets and that helped, that really helped push things because suddenly instead of trying to do a guest post on a site that had like 200,000 visitors a month, I was on Time and they’ve got five million or ten million visitors a month or whatever. And so the web of exposure was much, much higher by working with a major media company rather than like an individual blogger who would syndicate or something like that.

Steve: So to find the contacts, it’s just a matter of going through and finding out who the editor is and then reaching out to them directly?

James: Yeah, I think that process that I laid out before, I mean there’s probably other ways to do it, but at least that was the way I did it. I just would — a lot of these sites they’ll have what’s called a masthead or banner, and it lists all the editors for the different verticals. And so I would just try to find the relevant person and reach out to them via email. I never did it preemptively or just like, oh let me just build the relationship. I always waited until I felt like I had a really great article to send.

Maybe that’s another insight. So rather than moving fast and sending them the first thing you have, I would make sure you have something that’s really good, like especially for that first article you send over, I would always make sure that it performed well with my audience. And I knew that if it did well, then — like at the time I was writing two articles a week. So that was eight or nine a month, but I would only pitch like the two or three that were the best ones.

So I knew that if it was in my top 25% in a month, then it must be at least okay, and then I’d start with that rather than just pitching like everyone that I wrote.

Steve: I mean the way you are putting all this makes it sound very easy. So I’m just curious what your hit rate is.

James: Yeah, people have asked that before and I’ve never sat down and actually calculated it. But I would say that it’s at least 25%.

Steve: Wow okay.

James: So you need to be willing to spend some emails and getting a response. Maybe three out of four you end up not hitting, and I don’t know maybe I’m just lucky or maybe the topic that I write about lends itself well to that. Maybe if you wrote about I don’t know like something I don’t write about entrepreneurship for example, then maybe it would work as well, I’m not sure. But at least for my experience that’s kind of how it’s worked out.

Steve: Okay and then just from the publication standpoint, what is their rationale for syndicating an item? Like wouldn’t most publications want to be like the only source for that particular topic or article I should say?

James: Yeah it’s a pretty much all publications want that, and some of them still demand it, like I don’t think the New York Times for example is going to be syndicating anything or the Atlantic, places like that. But the rationale was just kind of what I laid out earlier where like they have certain number of articles they got to publish every week and if you can tap them on the shoulder and give them one that’s great then you make their life easier.

So I think the rationale is creating good content is hard enough, finding good content is also difficult. And if you can make that process easy on them where you can just — now for example I might get paid for some of the ones that get indicated, but for many years and still today in plenty of cases all syndicate for free, like I’m not asking for anything.

It’s just free content on their end and it’s a great deal for them advertising wise because most of these big sites have advertisers so that they get another page that they can rank and earn advertising revenue on without having to pay anybody to create content. But on my end I get a lot of email subscribers from it, so it’s worth it for me too.

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So James I actually ran an SEO report on your site before this interview, you rank number two for intermittent fasting, number one for values, one for good books, three for motivation, one for articles, most of these keywords have search volumes in like the tens of thousands. So did you have any particular strategy for ranking for these terms, do you do anything special about SEO?

James: Well I don’t know if I do anything special. The first thing is most of the time; I mentioned this earlier, most the time I just write stuff to try to write good stuff. I don’t necessarily think about SEO until after the fact. So like for example take motivation, you mentioned that one, so I think if you search motivation will be right near the top. And I had an article I wrote about motivation called the Goldilocks Rules just about kind achieving like a perfect dose of motivation or peak motivation.

And I didn’t think about what that — I didn’t even think about what that article was about before I wrote it. I just wrote the — I just had the idea and I didn’t think about the keyword term or phrase or anything. But after I finished, I asked myself, okay what is this article about, right? Of course it was something similar to search. And then I realized, oh it’s about how to stay motivated, so that is a good keyword for it. So we optimized the post for how to stay motivated after it was published.

And so there are a bunch of little on site things. I mean this is all basic stuff so it may be reviewed to some of your listeners, but like optimizing the title, so how to stay motivated in the title of the post. Have it in throughout the post itself, so in the body, copy and having some stuff like that. You can if you want to put it in the URL things like that. So all this is just basic on page optimization.

And then because I also have a fair like a fairly sizeable list and social following, again this is not to do with SEO, I would do this anyway, but I want to share it to my email list, I share it on Facebook and Twitter. That drives additional juice so to speak back to the page, more people share it and like it. I think the social signals probably help us a little bit. That ends up leading to people linking to it, but I don’t actually do any link building or anything like that.

Steve: Okay that was my next question yeah okay.

James: Yeah I do — the Only SEO optimization I do is internal. I don’t do any external stuff on like other sites or link building or stuff like that. It’s just, do whatever I can optimize on the page and then I move on to writing the next article.

Steve: So I guess the syndication mainly is your link building, right?

James: Yeah, it’s funny. I guess that does help. I had never thought of it that way. I thought about it just to get traffic and drive email subscribers because so what we’re talking about traffic sources, it’s great to get a lot of traffic from SEO, but SEO doesn’t convert as well as partnership although traffic does for email list scrubbers. So I was doing the partnership stuff because it was a higher conversion rate for emails, but it probably does help for SEO as well.

Steve: Can we talk about these partnerships, what do you mean exactly?

James: Yeah, so I just meant the syndication stuff.

Steve: Oh okay got it, got it.

James: Yeah, all the stuff that we just talked about.

Steve: Because they do link to you right, once you syndicate they link back to your original article, right?

James: Yes, so I always ask them to link back to the original, and I also ask for a link to my newsletter page which is just like my basic thought there is someone just spent five minutes reading your article on Time or Forbes or wherever, and they get to the bottom and then you don’t need like I don’t need to just send them to Jamesclear.com. They could go and browse, but like they already know that they like the content, otherwise they would have stopped reading the article half way through.

So at that point I just ask them to go straight to the email newsletter and sign up. So I have them link to — if you will feel like locking me out of it it’s changed to a .com/newsletter. And so, that landing page has kind of lured some people to have them sign up.

Steve: Okay, I mean you have this email list of several hundred thousand subscribers. Are there any specific strategies that you can share on how to kind of optimize these sign ups? I mean you just mentioned one, but are there any others?

James: Yeah so I thought a lot about — for the first couple of years I thought a lot about email conversion. I’ve thought much less about it over the last year or two as I’ve been writing my book and kind of focusing on that. But I think some of the basic principles still apply. I’m sure some things have changed over the last year or two. I don’t feel like I’m super fresh on whatever the hottest latest thing is, but I think the core ideas are still really valuable.

So the first is make it easy. To many people it’s so hard to find where to sign up. So like if you go to my site, you’ll see that there’s a newsletter link right in the navigation bar, so just it’s free newsletter, it’s right there. For a long time, underneath the title of every article I would have the title, then I’d say by James Clear, and then I would have like a little dash or separator and then I would say like click here to get free updates of new posts. And if you clicked that, then a little mobile came up and you could sign up to the email list right at the top of every article.

So both of those are above the fold. And this is why and I guess also for listeners who don’t know that term, above the fold just means that you don’t have to scroll to see it, it’s like on the window when the screen first loads. And so those are two links that were above the fold there. This is one of the reasons why pop ups tend to convert really well because it’s like right there in front of people. It just makes it easy and obvious.

But the second my little heuristic that I use when thinking about web design and conversion is I try to ask myself what is the person looking to do when they get to the page, and then at what points on the page are they looking for the next thing to do? So let’s walk through both of those. So the first one, let’s say that someone comes across the link to an article on Twitter or Facebook and they click on that link, and then they arrive at my site.

Well, what is that person looking to do based on their previous action? They’re looking to read the article; they’re not looking to see the side bar add an ad pop up or pop up or anything like that. They just want to dive in. And so we have some of our sliding forms or pop up forms or exit intense stuff or whatever set to only show on the second page not on the first so that we can make it as easy as possible for people to fall in love with the content and do what they intended to do which leads to a better user experience in my opinion when they first show up.

And then after that, they click on another link or want to dive deeper into the page, then we’ll show them something once they’ve expressed a little bit more interest. The second thing, the second part of the question I mentioned is at what point on the page are they looking to do something new? And so a lot of people will have, in my opinion they’ll have calls to action in somewhat strange places where people aren’t necessarily looking to do something next. But there are a few points in the page where people are naturally like one action has ended and the next one is now ready to happen.

So for a long time the end of an article is like a great place or the footer of a website. We don’t have it there right now because we’re testing some other things, but for a while when I inserted a form in the footer, it was like an extra 500 subscribers a month. And I was like where did those people come from, like what were they doing beforehand? They were just getting to the bottom of the page and there was leaving or is closing it. But just by giving them the option to do something next, making it clear what to do next, you increase the number of people signing up.

So I think I try to think about it through the lens of user experience and then putting calls to action at appropriate points or locations on the page based on what the user wants to do, or when they’re looking for something to do next.

Steve: What is your most successful sign up form on your site?

James: I don’t know what form it is right now, but I can tell you what the copy is. So we tested a bunch of different titles and subtitles, offers, all type of stuff. My assumption going in was that it was going to be some kind of freebie like download this guide to double your productivity or something like that, right? But in fact that was not what won. We tested a bunch of like free download options and stuff. The one that did best was like some something like join a newsletter here or whatever and then the title was get self-improvement tips based on proven scientific research.

And it wasn’t an offer at all, but it was just – it wasn’t a free download but it was a description of the content that was compelling enough that people wanted to sign up. And I was super happy that that ended up being the one that won on the split test because that’s actually what I would prefer. I would prefer people to sign up for the content they’re going to get long term, not sign up for like some free download then check out. So yeah, that’s what we ended up…

Steve; It’s interesting because I was just like looking at your site and free newsletter, like if I didn’t know you it just doesn’t sound that appealing, right? I’m just curious how many people actually click on that button, and then you offer two free books it seems on that particular sign up form?

James: Yeah, so this gets kind of to my larger strategy for site design which is if you go across the different tabs on the navigation, you’ll find that like the first two or three, they are different paths that all end up leading to the same destination. So for example if you go to the home page, they will have some kind of opt-in form on there, but then there’s also a link to the about page there.

And if you go to the about page, there’s like a form, a map page. If you click on the second tab and that’s the articles tab, and for a long time — I think we’re testing something different right now, but for a long time I would have a free opt-in form, like an opt-in form at the top of the article’s tab so that’s the second one in navigation. So you think that you’re choosing something different, you think that you’re choosing to go to the articles and might browse what’s there, and the archive is there so you can find accounts that you like.

But you’re also still giving them options to sign up. And then the third one is the books tab which has like two free downloads on the eBooks on there. So again, if you click on either of those eBooks, then that will take you to the landing page. So it’s kind of like you get to choose your own path, but there are options to get on email list regardless of where you go.

Steve: Do you run your email list where you send the same article out to everybody, or do you have it really segmented?

James: We do both. So on Mondays we send out new articles and the new article goes to everyone, and then on Thursdays we have kind of this like perpetual evergreen newsletter that we’ll only send you articles that you haven’t read yet from the archive.

Steve: Okay, how do you determine what they haven’t read yet?

James: Either, you were sent an article via email but you didn’t open or click on it, you have never visited that page, or you haven’t clicked on a link to that page. And so if all three of those are negative, then you get sent the article because you probably haven’t seen it before.

Steve: Okay interesting. What email provider do you use?

James: We use Drip.

Steve: Okay, yeah I recently switched over to Drip as well.

James: Yeah I really enjoy it. It took a while to get. I didn’t have to do this, but it took a while to get all the things set up like all the work flows and tagging and all type of stuff. But now that it is set up, it’s great to know what people see and what they open and so on.

Steve: So how does JamesClear.com generate revenue, like what are your primary products that you sell?

James: So we have a couple of different avenues. So the first one is courses and that’s also the bulk of the revenue. So we have one course called habits academy, so it’s kind of like I sat down and thought, what would it look like if a top tier university created a course on how to build better habits. They always create courses on biology and history and economics. But what if we did a college course on what habit formation looks like, and how to apply in a practical way.

So that was the goal was to create something that I felt like I could teach at an institution if necessary. And I think we’ve done a good job of it. We’re actually going to be shooting a second version of it soon, but we’ve had thousands of students go through. And that has about 50 lessons in it, so that course is our online course. And then we also have — so I have a book deal and so I’ve talked to you previously about that. It’s still with the publisher, we’re going through edits right now, and so hopefully that will come out in 2018.

And then we have speaking. So I usually do now about six to ten key speaking gigs a year. I don’t really want to do much more than that.

Steve: That’s pretty often actually if you think about it, yeah.

Steve: Yeah like once every two months is probably my ideal pace. So I think this year will probably end up right around that amount and then we’ll see. So we’re going through courses plus speaking. Right now actually this is a brand new one, we’re testing ads on the site for this quarter. So I don’t have…

Steve: That’s interesting.

James: I don’t have data or insight on what that will be like, but it’s kind of an interesting test on something new. I have been and I’ve been on the record as being very anti ads for years now. So I will just say for a long time, but I finally said like, I’m really big on testing my assumptions and trying to be open minded. And so I was like, well, you should probably like take some of your own medicine and actually try it, and see what the data is like.

Steve: I was actually shocked because I was on your site last night and I saw an ad at the bottom of the browser. I was shocked to see it actually.

Steve: Yeah, you were like the fifth person that saw the ad. So I guess that’s good because people feel like I wouldn’t do that kind of thing, I don’t know. It’s interesting, I feel very conflicted about it because I don’t really want them on there, but I did want to like at least make a decision based on data.

Steve: Yeah the reason why I ask is like you do a really good job of keeping people on your site, and it just seems odd that you’d want to drive them away for a click, I don’t know.

James: Yeah so it’s not based on clicks, we get paid based on impressions although of course some people click it. But yeah that is a good point. Early data has shown that our bounce rate has actually gone down which is so weird to me, and also there was no impact on conversions for the course which is the other thing I was worried about. We don’t run ads on any landing pages or sales pages, so like it shouldn’t influence that, but I just didn’t know if like there will be some long term impact of impacting the flow or whatever.

Yeah so we’re testing that. And then we also do affiliate stuff. So I don’t do — I made a decision when I started the site that I wasn’t going to do any affiliate deals for like online courses or anything like that. So the only thing that I do from an affiliate stand point is if I write an article and I cite a book, then I’ll link to like the affiliate link on Amazon. Which is not a ton, but the site gets a couple of million views a month, so they can add up based on the volume. So those are the main revenue sources.

Steve: One thing I did want to ask you and I noticed I don’t see very many photos on your site. So Pinterest probably isn’t a traffic source for you. I’m just curious what your rationale is for just pure text and not more graphics.

James: I don’t know that I have like great rationale for it. I think as a photographer I really dislike stock photos and like anything that doesn’t look really good. And then I also, for a while I was running like photo essays and some of my own work on the site, and so I like didn’t really want to include outside images, because I didn’t want people to be confused thinking like I had taken a photo, maybe I was just using it as like the header photo for that post or something.

Steve: Interesting, okay.

James: So there’s a little bit of that. And then about a year and a half ago or two years ago I started doing these hand drawn images and illustrations for some articles. And those have gone over really well and people seem to like them. They also sort of you know sometimes I’ll draw a graph, sort of sometimes I’ll draw like a Venn diagram or some kind of other like shape that represents like a certain idea.

And I really like those when I have the time to draw them because a lot of the time the visual ends up clarifying the main idea of the post. So I’ll have some readers who will email me and say like once I saw the graphic, then I really like got the idea. And so I try to think long term. I think I’ll do more of those for articles. So it’ll be like my own images in the gallery and available for as prints and then on articles it will probably either not have an image or be a hand drawn like illustration for me but will help clarify the idea.

Steve: Okay, yeah I was just really curious because you’re a photographer and at the same time there’s no images really in a lot of your posts. Okay so last question here, I kind of wanted to — so there’s a lot of people out there who want to blog or they want to start writing and basically get their ideas out there. And I was just curious and I want you to set the right expectations for them. How long did it actually take for your blog to gain traction, and what are some of the proper expectations in regards to traffic and monetization?

James: Yeah. So I think I mentioned earlier that I when I started JamesClear.com I had already built a website before that, and on that website I went from zero to I think about 20,000 subscribers and that took me about a year and a half. And I mention that period because I look back to that period now as like the period where I incubated my skill set. So I needed but it took me a year and a half to learn all the like basic stuff like how does a website work? How do you set up WordPress?

I taught myself how to code. I taught myself how to build an e-mail list and launch a product, and like find my voice as a writer. So it took me a year and a half just to get the basics down. Then once I had that, then I launched JamesClear.com. Now I’ve been very fortunate and honestly some of this I don’t even know if it’s really in my control or like even if I could replicate it if I tried to do it again. But JamesClear.com has grown very fast.

So the first month I think I had about 100 subscribers, three months in, I had 1,000, six months in, I was at 6,000. And then the seventh month, I went from six to twelve, so I added six in that seventh month. And it really never slowed down from there. So after the first year, they were 34,000 subscribers. After year two, I had over one hundred. After year three, I had like 250 and now it’s over like 400.

Steve: Just for the listeners, this is not normal.

James: Right, that’s what I mean. I am very lucky, I’m not sure like what the — I don’t know if I could even replicate it if I did it again. But it’s just like it struck at the right time and I just kept writing. And so I would say as far as trying to set expectations, the first thing is rather than trying to predict your success I think you should just try to control what you can control. I’m thinking about this a lot for the next stage for me. So I know I have this book coming out next year, and I would love the book to do well, but the truth is I don’t have control over how well the book does or how many people buy the book.

The only things that I can control are one, writing a great book and two, trying to put as much effort as I can into getting out there. So that means like the number of podcasts that I get on, the number of articles that I write, the number of interviews that I do. I can control that stuff. So I’ll focus on that and then however the book does is how it does. And I think you can apply that same logic to building a blog or a website.

So for me for the first two and a half to three years, I wrote a new article every Monday and Thursday, that was what I can control. And I knew that if I wrote eight or nine a month, then two or three of them will be decent, and if two or three were decent, then every marketing strategy was easier. And so I just focused on that. This is another thing for setting expectations.

So for the first year and a half, I didn’t make any revenue from the site, I just focused on growth. And then I launched the course and started doing affiliate stuff, and started speaking and all that type of stuff after I had the audience. There’s no reason you have to do it that way.

There are other people like Nathan Berry for example did the complete opposite way where he wrote an e-book first, started a product and then launched the site. So there are many ways to get to a successful business, but as far as expectations go and how my growth went, that’s kind of how it went out for me.

Steve: You did mention luck in your last statement. What percentage would you say was luck versus just you writing?

James: Well, this is an interesting topic that we all like we probably really want to dive into and probably spend a whole hour on that because if you think about it, it depends on how you want to define luck. So I’ll define it two ways. So the first way is how much of your life, success, business and so on was luck? Well if we’re looking at the whole view, honestly it might be like 98%.

I mean it’s an insane amount, like I was lucky to be born at this time in history. I was lucky to be born in America. I was lucky to be born into a family that could afford to send me into school and get an education. I was lucky to be born with a particular set of genes that make me intelligent enough to figure out problems and be interested and curious about this type of stuff. You go down the list, you can see how once you start to stack all that stuff up, it becomes a very, very large portion of things or luck.

They are probably a thousand, maybe a million, I don’t know. There are tons of people who are way smarter than me that are living in a slum in India or Bangladesh or somewhere else that just don’t have the opportunity. So there was a massive factor of luck there, so that’s the first way to define it. The second way to find it is, okay, that’s true but there were also millions of people who were born in America and born into a family who got them educated and they are born at this time in history.

So what’s actually the amount of luck that separates you from your peers who are like you? How come I ended up doing this rather than all the other kids I went to high school with, all the other kids I went to college with? And so for that amount I think luck probably plays less of a whole. I had a couple — I always — I mentioned at the beginning of this that I had this kind of like duo background where I was an athlete but also a big nerd.

And so I had some friends who were even more nerdy than I was that like we started a robotics club when we were in fifth grade, or I had another buddy who duo computers when we were in eighth grade and so I learned a lot about technology from them. So I guess I was lucky to be exposed to a few things there. But the truth of the matter is I also just spent a lot of time working and writing.

And so I don’t really know that you can cheat that process, and that part of it is not luck. I would say that that’s also the part that is more worth focusing on. All the things that are luck, you can’t really change those so you might as well just pour your energy into what you can control. And you can control how much you research on an article, how long you work on each article. Every article I write probably has at least 20 hours put into it, maybe more depending on the length of it. You can control how often you publish.

So focus on that stuff and what you find is that even if you weren’t the luckiest, even if you weren’t born with like the perfect set of genes, or didn’t happen to grow up in the right culture, you still can make incredible headway if you just focus on practicing and consistency, and showing up. And so I think that’s like where it’s probably most worthwhile to focus your energy and effort.

Steve: Here’s my quick take, like all the luck that has been involved in my business have revolved around people. And so as a result of that, I try to meet as many people as possible to improve my luck these days. So that’s why I run my podcast actually.

James: Yeah, I think that’s a fantastic point. What’s interesting is that when I started, so I didn’t have any entrepreneurs in my family, and I didn’t really have, I just didn’t really have anybody to look to in that sense. I didn’t even know what growing a business looks, but I knew one guy who was a DJ, but he just did it on the side. That was the only entrepreneur that I was close with.

And so at the time I had no peers who were — when I was starting making six figures from my online service, it was like really a big deal. It’s still a big deal now so I’m not trying to belittle it, but my point is that today there are way more people who are making like seven figures from their online companies and stuff. And I didn’t know any of those people at the start.

So for the first three months, I just emailed — I think I emailed like 300 people, 100 to 300 who already had successful businesses similar to what I was hoping to do, who already had successful blog and website online. And most of them did not come back to me. So you talked about hit ratio earlier with the emails to publishers. My hit ratio for those emails was very low, but I did have like 20 or 30 people who got back and we talked on Skype, and I got to know them.

So by the time I was like three or four months in, I at least had a couple of dozen people that I could send an email to and they would reply that were doing what I wanted to do. And I think looking back now, having that social network was critical. And now as you know what you said, you just try to keep meeting new people and expand that because having those relationships and those connections is a huge, huge part of achieving some kind of success online, because entrepreneurship can be a lonely journey. And a lot of that not only helps you sustain it, but also provides some of the luck and opportunity that you reference.

Steve: Absolutely. Hey James, I want to be respectful of your time, we’ve been chatting for almost 50 minutes. We will definitely have you back when your book comes out, and we will go through a more in-depth discussion on habits and motivation. But until then where can people find you online?

James: Awesome yeah thanks so much for having me. If people would like to get more, you can check out JamesClear.com and if you just click on articles, we’ve got things divided up by category and so on, so you can dive into whatever interests you.

Steve: Yeah, it sounds good. James, thanks a lot to come on the show, really appreciate it.

Hope you enjoyed that episode. James is an incredibly talented writer, but it takes more than just good writing to get ahead. You have to get your work in front of enough people and syndication is a great way to do it. For more information about this episode, go to mywifequitherjob.com/episode203.

And once again I want to thank Klaviyo for sponsoring this episode. Klaviyo is my email marketing platform of choice for ecommerce 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 auto pilot. 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 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.

And finally, I want to thank Payability. If you’re looking to take back control of your cash flow and scale your Amazon business fast, sign up for Payability, and say goodbye to cash flow issues and stock outs. With daily payments, you can speed up your supply chain, buy inventory at optimal times, and stay in the buy box. The more control you have over your cash flow, the more buying power you will have. Visit Go.payability.com/Steve to get started, and cash in on a $200 credit just for being a listener of My Wife Quit Her Job. Once again that’s Go.payability.com/Steve.

Now, I talk about how I use all these tools on my blog, and if you’re interested in starting your own ecommerce 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 are 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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202: The State Of Online And Retail Arbitrage On Amazon With Nate McCallister

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The State Of Online And Retail Arbitrage On Amazon With Nate McCallister

Today I’m thrilled to have Nate McCallister on the show.  Nate is someone who I met at the Import Summit several years ago and he runs a bunch of sites and services related to Amazon.

First off, he’s an Amazon FBA seller himself, a service provider, a software company and also a consultant for other sellers. He also runs the popular site EntreResource.com.

But the main reason I wanted Nate on the show is to talk about the current state of retail and online arbitrage.

As an online arbitrager himself, he’s been involved with the software tool Tactical Arbitrage and he’s the founder of the popular tool Storefront Stalker as well. Enjoy the show!

What You’ll Learn

  • The difference between retail and online arbitrage
  • How arbitrage works on Amazon
  • What the margins are like for retail arbitrage
  • Is arbitrage a good long term business model on Amazon?
  • How to find profitable products to sell
  • The pros and cons of retail arbitrage vs private label

Other Resources And Books

Sponsors

Payability.com – A financing company that provides high growth Amazon sellers with daily payments. With Payability, you can say goodbye to cash flow issues and stockouts and hello to scalability and profits. Click here and receive a $200 credit upon signup.
Payability.

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

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 what strategies are working and what strategies are not in business. Now today I’m happy to have Nate McCallister on the show. And Nate is one of my go to guys when it comes to retail and online arbitrage. And as Amazon becomes more competitive, we’re going to talk about the current state of arbitrage, and what it takes to succeed.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Always excited to talk about Klaviyo because they are the email marketing platform that I use for my ecommerce store, and I depend on them for over 25% 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, 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 single email that goes out.

Klaviyo is the most powerful email platform that I’ve ever used 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 I also want to give a shout out to Privy who is also a sponsor of the show. And Privy is a tool that I use to build my email list for both my blog and my online store. 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 like Klaviyo. There are a bunch of companies that will manage your email capture forms, but I like privy because they specialize in ecommerce.

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 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 Nate McCallister on the show. Now Nate is someone who I met at the Import Summit several years ago, and he actually runs a bunch of sites and services related to Amazon. So first off he’s an Amazon FBA seller himself, a service provider, a software company, and he’s also a consultant for other sellers and he runs the popular site EntreResource.com.

But the main reason I wanted Nate on the show today is to talk about the current state of retail and online arbitrage. And as an online arbitrage himself, he’s been involved with the software tool Tactical Arbitrage, and he’s the founder of the popular tool Storefront Stalker as well. And with that, welcome to the show Nate, how are you doing today man?

Nate: Hey Steve, thanks for having me on. You can hear me all right?

Steve: Yeah you sound great now. Can you believe, it’s been like three or four years since we met at the Startup Bros conference?

Nate: I know man, time flies. It seems like it was just the other day.

Steve: But I’m pretty sure…

Nate: That was a great conference.

Steve: It was. I had the most fun at that conference I think mainly because the alcohol just kept flowing. I remember they went all round.

Nate: Yeah they made sure that that was [overlapping 00:03:53]. Yeah that was a great conference, great venue. I asked them if they’re going to do another one, they just kind of like uh…

Steve: Yeah.

Nate: A lot of work went into that one; I think it beat them up.

Steve: Yeah, it totally did. So Nate for the people who don’t know who you are, give us a quick background story, tell us how you got started selling on Amazon.

Nate: Yeah, again I’m Nate McCallister. I got started selling on Amazon several years ago. I guess it was a couple years before we met. So if you get a calendar out to check and see how long it’s really been. I stopped stuff that belongs to this kind of rosy era at this point. But I got started; I was interested in making money for myself. I had jobs I didn’t really love, and I was always — I just didn’t really have much direction. I always was listening to podcasts like Smart-Ass, and I didn’t know about your podcast. I don’t know if it was around back when I was digging for the stuff.

Steve: It’s okay dude.

Nate: But yeah, so I listened to these podcasts every day when I was at work, and you hear about all these people doing these different things. And they were all exciting. But for some reason that one of them really resonated with me was an interview. It was somebody was talking about how they were buying and selling stuff and selling it on Amazon, buying stuff from local stores like Target and Toys R Us, and they were going and selling them on Amazon. Now I thought that was crazy, and then I thought it was even crazier when they were like, yeah we made one $120,000 this year doing that.

I don’t remember the exact number, but it was over $100,000 just like that, one of those mental numbers that it kind of sticks to you when you’re first getting started is six figure. The guy was making six figures. I was like man, that’s awesome, you can do that. I was like if this person is doing it, nothing offensive against them, but if they can do, it doesn’t sound like there’s anything too crazy involved. I like shopping, I can do that.

So I started doing that and I started by actually just selling some stuff from my house. I stole — I had two copies of The Four Hour Work Week. I’m sorry that was Four Hour Body. I had two copies of that because I saw one at the thrift store, so many just like that. I remember I went up to you for some reason Steven. But I was just scanning everything in my house, scanning with the Amazon app and saying what if there was any profit to be had. So everything in my house was obviously I didn’t even own it and so I didn’t have any cost.

So I was like okay cool, so this book sells for like — I saw that it sold for around like seven bucks. And I sold it and I fulfilled it at the time. I fulfilled it myself and after all was said and done it was like a dollar an hour every hour. But I was so excited because I was like, man I did that and that was just stupid dollar or whatever. I could’ve made more money as a hobo asking for cash outside the road. I was like but I know that this can scale now, I know that it actually is a thing people — like I listed this book and it sold immediately and it was because that book is extremely popular.

But I was shocked. I was like, oh I forgot that other people in the world buy stuff like this so fast. You don’t really appreciate until you’re like, man every second somebody is buying something that you have. So that was really cool and for some reason that really was an eye opening thing for me. And it ended up; I started doing that a lot. I started right after I got from work, I would go out, and I would source. It’s called sourcing when you go out to these retail stores and you scan stuff, you see what makes a profit.

There’s different apps that are out there that show you the price on Amazon, and then you enter the price of the product in the store and then you can, you net the arbitrage on that right which is the price difference after the fees of the price bought for and then the price for Amazon minus your fees. And that was really cool because you know I’m sure a lot of your followers sell on Amazon as well, right? And you understand fulfillment costs and all that.

So once you start to see that, man, all of these stores have products that make money, it’s just a matter of going through there and sifting and finding out. So that was really cool to me, but then again after I start doing it I was like, this is awesome. But I’m running out of time, like I still have my job and I was also in school. So I was in college. I had a kid, a young child at the time too, and really, really wanted to do this entrepreneurship thing.

So me and a friend, he decided to start doing it with me, and we decided — I don’t know where we heard about the concept or we just started doing it what inspired us to do but we thought that there’s websites online just like there’s physical stores, physical retailers that are selling things that are going to inevitably be lower on some products than they are on Amazon. So we were buying and selling products now online. So like I was able to do this like when I was waiting for a class to start, or when I was supposed to be paying attention in my class or at work. I was able to be sourcing.

I was finding products to buy and sell, and we would buy something from like let’s say just a basic example you would find something at target.com. It’s not as easy now as it was back then but you’d find something like that for ten bucks, you would pay whatever your cost for it to get to you and then you would you pack it up, send to fulfillment center and let it and hopefully it would sell at the price you estimate it would at when you originally bought it. And we were making pretty good money with this, and still even at that point we were like man, we still don’t have enough time like my time was just so crunched.

So we hired virtual assistants and we started — we paid people in the Philippines, we taught them our process. I was like all right — and I’m a huge Tim Ferriss guy. So I was obsessed with The Four Hour Work Week. I just said my first book was Four Hour Body. So I was obsessed with Four Hour Work Week. I learned a lot about outsourcing in that. And so I decided to hire somebody from the Philippines to do this process for me.

So I spent about a week training this person on how to do what I was doing, and I wasn’t really great at it yet either, which wasn’t a bad thing because they were able to learn from scratch, and they weren’t sending me products now to buy, they were basically sending me the links to these profitable opportunities and then when I got home I would buy them, and then we get them shipped to my house and then we’d back them up and ship them.

And it got to some point where I started making enough money that I was able to finally actually I was making more than I was at my job. And at that point I decided to quit my job. And then actually it kind of escalated from there, ended up selling good but anybody that knows me knows that I like business in general. I’m not obsessed or in love with one facet of business. So I love selling on Amazon, but right now my big bank people probably know me for my software is in the work I do with the software.

Steve: Hey Nate, what – So I going to say I do want to talk about your software, but one of the reasons I wanted to have you on because you have expertise in the retail and online arbitrage world. And I was wondering like all these techniques that you did a long time ago, it sounds like maybe four, or five years ago, it’s gotten harder right?

Nate: Yeah it would, anyone who says it hasn’t gotten harder is just lying. There’s really no reason to lie about it either if you’re doing it because you don’t work out that there’s a share of the truth. The truth is that there are now more tools that make it — that level the playing field. If I were to do it the way I did before by myself, it’s very hard.

Steve: So what is the difference between retail and online arbitrage first of all for those people out there who don’t know the difference?

Nate: Yeah, so retail arbitrage is just basic brick and mortar stores. You’re going — literally you’re walking into the stores like you would if you like you’re going to Target to go and buy anything you’d normally buy at Target. You’re going there except this time you’re buying for business, and you’re scanning things with either the Amazon, Amazon has a free app that you can scan bar codes or a paid tool like Scan Power or Inventory Lab. They all have these softwares that you scan and check prices so you can see sales rank and stuff like that.

You take out your fees so you know how much is actually — you can see profits, right? And you can see the data that you need to know before you buy something. Just because something is on sale at Amazon for 54 bucks doesn’t mean it’s selling for 54 bucks. So these tools give you — most of the good ones let you see things like historical graphs from Keepa and CamelCamelCamel so you can actually see if things are actually selling. So that’s retail arbitrage you’re actually going to the store, buying stuff, taking physical stuff home with you.

Steve: I see, okay.

Nate: Online arbitrage is the same thing except for instead of walking into a store; you’re going into a website. So you can be in your underwear at your house doing online arbitrage. And back when I did it on a large scale, it was all coming to me, and the stuff was all being — I would get it and pack it, and ship it. But now there’s — I didn’t know about prep centers, but now there’s prep centers where you can actually you can buy the stuff, have it shipped to the prep center. It’s a third party company; you have it shipped to a prep center, then they ship it to Amazon for you.

Steve: I see.

Nate: There’s a lot of businesses now. So online arbitrage you could really do it without — if you wanted to, you could do it without actually ever seeing the product except for your return.

Steve: Can you do online arbitrage on Amazon in such a way where you do merchant fulfilled and then you use list something on Amazon and then as soon as you get a sale you just go to that site and order it and have it delivered directly to the person?

Nate: Yes. So that would be called drop shipping, and you can do that. But it’s a high risk model and I don’t ever recommend it. I recommend — I love the drop shipping model like it’s really cool, but I don’t recommend it for anyone on Amazon because the problem is that you’re counting on another company to be in stock. So like if somebody orders it and then they go out of stock and you can’t fulfill it for some reason, a lot of people make the mistake of instead of going in and taking a loss on it right like sometimes if the raw product wasn’t available anymore, instead of maybe buying a full price unit and taking a hit on it, they just cancel the order and that is…

Steve: That dings your account yeah.

Nate: Yeah very, very quickly. And if you doing it at scale, that’s a problem as it’s not scalable because at scale you’ll always have those instances and it will end up shutting down your account. So I tell people that drop shipping is cool but you should do it with like a third party website like ClickFunnels, a sales funnel or Shopify store where you’re drop shipping stuff from in your own brand’s name or in your own you know something that if you cancel an order you’re not going to put yourself out of business.

Steve: So Amazon has started brand gating a lot of these brands, right, and so does that — how do you get around that when you’re doing online arbitrage or retail arbitrage? So for example let’s say I want to sell like cheap Lego products, would that still be possible today?

Nate: So on Amazon the difference between private label and arbitrage is going to be — well it’s the same I guess. You’re going to have a lot of – well in private label you don’t have restricted brands. In retail arbitrage and online arbitrage you some brands you just can’t sell. And there’s also some categories you have to get approved to sell. So it is a game of — it’s not as easy as it makes money if I buy it and sell it I can sell it. It’s unfortunately it doesn’t make money on Amazon and then you have to check that you can actually sell it.

So that part can be a little bit frustrating at first for newer sellers because there’s a lot of gates and restrictions right now for newer sellers. But it’s still totally feasible, it’s just something it’s just the nature of the game, and it’s always changing. Ever since I’ve been a seller, every year it’s gotten a little bit – it’s not that it’s hard to make the same amount of money; it’s that it’s just different.

Steve: You have to move around brands.

Nate: Every year right.

Steve: Would you say that like most of the popular brands are gated at this point or no?

Nate: Say it again.

Steve: Would you say that most of the popular brands are gated at this point or no?

Nate: No, a lot of a lot of big brands are like Nike had a big thing with authenticity issues. There’s a bunch of big popular brands that you would want to be able to sell that once you’ve been selling for a while you just know that you can’t sell them and you don’t even bother scanning them. But it’s totally — and there’s also softwares now that make it so that you can actually kind of remove those restricted products from even and I’ll get into that a little bit.

Steve: Okay sure.

Nate: Yeah and all the scanning apps will tell you when you scan it if it’s restricted for your account. So that’s how you get it. It’s easy to fall prey to that where you buy stuff and you think it’s going to make money and then you realize when you get home that you aren’t able to actually sell it.

Steve: Yeah but the tools will tell you, right? The tools will tell you what’s restricted, right?

Nate: Right, the tools will tell you. When you use the app, you log in, yeah they’ll tell you what’s restricted.

Steve: So you mentioned certain categories you have to get ungated. What is the process for getting ungated these days?

Nate: It depends what the category is, it’s completely changed since back when I first got ungated. Sometimes it’s just you click and approved and sometimes there’s actual applications that you have to fill out. It depends what the category is, and then randomly the categories will come open where they’ll just take anybody that applies. It used to be you got to submit what’s called a flat file which is a big long complicated Excel file showing that you knew how to make variation listings and you have to send invoices and all types of stuff.

I haven’t had to get ungated in anything in a long time, so I’m not even sure for some of the categories how difficult or easy it’s become. I know it’s definitely different, and categories like shoes and clothing don’t require these complex excel files like they used to.

Steve: Okay. So would you say that most online arbitragers are sticking to certain categories then? Like what are the popular categories?

Nate: Yeah. So as far as category goes, I always tell people that they should just be open minded to whatever they can sell. Money is money in that sense; it doesn’t matter if the category is toys or if the category is home and garden or apparel. It’s different than when you’re a private label or a wholesale business where you’re trying to create a brand and you want to have some continuity. When you’re arbitraging, you don’t really have continuity with that, which is one of the pros and cons of this model, is that you don’t really have that same brand equity.

You have kind of a flea market so to speak. It doesn’t make it sound attractive, but you have — picture is more of like, I don’t know a garage sale rather than a boutique shop that sells the same stuff.

Steve: Okay sure.

Nate: My imagery is terrible.

Steve: That’s okay.

Nate: It’s a broad array of stuff. And toys are profitable, a lot of people do still favor certain categories, toys, shoes, and clothing are always big especially for retail arbitragers, shoes and clothing are huge. But online arbitrage toys and kitchen and home and garden and stuff like that, there’s really no category that if you’re approved to sell it, you should look at it and not totally get it off for any reason. But some do perform better than others overall like you know basic stuff toys and outdoor equipment, sports equipment, stuff like that does well.

Steve: When you find an online arbitrage opportunity like a website, does it tend to last or does it go away relatively quickly?

Nate: The leads don’t last long for a number of reasons. First you have a limited stock that the store might have. Then you have the fact that depending on how many other people are doing online arbitrage, if they find the store and then it’s also — so it’s not that the store itself stops being profitable, it’s not those items will stop being profitable. But everything is constantly in flux. So there’s always new products on Amazon, there’s always new products in the stores, there’s always going to be price discrepancies because these third party sites don’t always compare the price to Amazon.

And even if they did, the price changes on Amazon so much. It’s just not — so you do get these arbitrage opportunities all the time, and some of the softwares that I’ll talk about a minute can scan hundreds of sites at the same time and find products.

Steve: So can you buy like a bunch of stuff that you think is a good deal but then all of a sudden the price plummets on Amazon, that does that happen?

Nate: Yeah that definitely happens more once when you’re getting started. It’s just something that new sellers should absolutely take into — I call it kind of just like a learning tax. It’s like your tuition to sell on Amazon is you’re going to make some bad buys. The real key is to just always assume that you’re overestimating the price before you make a purchase, and be really cynical and critical I guess, cynical I guess is the word. And think that there’s some reason why this isn’t a good deal. And if you look at everybody that way, you’ll end up better off.

I used to look at it as, oh this is great, this makes — I had a really stupid model where I was like, oh if it makes a dollar let’s just get it, why wouldn’t I want to if it makes a dollar. And like after fees I’m like, this is so stupid, that gives me no wiggle room. And also it’s like what’s the point of tying up all my capital on stuff that makes no money really, really embarrassing. So you need to have like a minimum acceptable net profit per item and minimum acceptable ROI.

And that varies by the seller. It depends how much cash flow they have, but you have to give yourself wiggle room. And those tools like Keepa and CamelCamelCamel that will tell you, they’ll show you historically how many times things have been selling, the price, so you can see like if I buy — just like I said earlier just because it’s listed at 59 bucks on Amazon, it doesn’t mean it ever did sell at 59 bucks. It doesn’t mean it ever will sell at 59 bucks. The realistic price for it could be 24.99.

Steve: Okay. So what are the margins like? What are some guidelines that you typically have for profit? Do you do it by dollar amount, or do you do it by percentage?

Nate: You want to kind of weigh both. Anything you know having a minimum net for me of $4 profit would be what I’m looking for, and then a minimum ROI. I would not want to go below 25% on a short thing. But it depends. I don’t do it at scale anymore, so I don’t have the cash flow that other sellers are putting in their products. So some people will take bargains way, way smaller than I would, maybe as low as 10, 15%.

Steve: That’s crazy.

Nate: Then there’s some sellers that won’t on take anything below 40 or 50. Unfortunately there’s tools now that make it so that you can find products.

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Yeah, so walk me through the process, like walk me through what the tool does and like how you would go about finding an opportunity.

Nate: Yeah, so the tool that — I can’t really do on a podcast about online arbitrage without talking about this tool because it just is…

Steve: Yeah do it, go for it yeah.

Nate: So the tool is called Tactical Arbitrage. What it does, well it does a couple of different things, but at the heart of it the purpose of the tool is to help you find products to sell on Amazon at a profit. So at any given time, like I had said before there’s millions of different products on Amazon, but then there’s also millions of different products on tens of thousands of other sites right. So Amazon is the king but there’s also tens of thousands if not hundreds of thousands of other web stores out there online that are also selling things.

And there is ways for us to pare those up. So the software Tactical Arbitrage, what it does is it compares the prices of products on Amazon with and then it goes out and finds those same products on hundreds of other sites across the internet. And when it finds it, it can show you the price of a third party site compared to the price on Amazon, and then take out your fees and tell you what you would make on it all things being equal if you bought it on a third party site and then shifted in to sell it on Amazon.

Steve: That’s crazy okay.

Nate: Yeah it’s really gotten extremely — when I started promoting it with Alex, I guess it’s been a year and a half, two years ago now, it was just 30 sites that supported it, and it was I mean it was amazing back and people were going crazy about it because everybody who did online arbitrage knew how powerful this was because it was literally finding these leads that were taking us hours and hours of manual sourcing page by page by page to find. This thing was just blowing through them and then kicking out just some little beads at the end.

Steve: So let me ask you this, if there’s a whole bunch of people using the same tool, won’t they all find the same deals?

Nate: There are so many different parameters that can be set that it makes saturation less of an issue, and you’re also going to have kind of the first come first serve thing with — it’s not that every site. Like if I go to a third party site that’s a smaller third party site, one of the tertiary sources that TA supports and I find a product, and it has a – there will be a couple of things that could keep it from being extremely hard to get past.

First, if the sales rank is extremely — it depends on how whatever the sales velocity is supposed to be is obviously going to be a big factor. If this thing is going to sell 100 in a month, I’m not going to be really — that source is probably not going to be able to tank the price. You get this is all things being equal, there’s other variables.

Steve: Sure, sure.

Nate: But then you’ve got the fact that most people, most stores have a limit on how many you can actually buy, and then you have other variables like people aren’t all looking at the exact same categories. I mean there’s hundreds of different, there’s so many different products and for people to be looking at the same ones and then flooding each other on the same ones is not as big of an issue as it seems like it would be. It’s not like everybody is going into – you’ll see the movie of — what’s that movie with Arnold Schwarzenegger where you want to give the turbo man to jiggle all the way, but seeing where they are, they all rush into the theater and they want to get like ten of these turbo men.

Steve: Yeah, yeah, yeah, aha. So it’s not like that.

Nate: It’s not like that.

Steve: Okay, okay.

Nate: So it’s a huge, huge market. There’s hundreds of sites, and then you got facts like not everyone has the capital to buy the lead that they found. The leads once you get the products, you always want to anticipate that people are going to come in and undercut you as well. So that’s another thing that I recommend people do when they’re buying is they keep that in mind. So if you think it’s going to sell 30, and you’ve seen historically it’s selling at 30, you might want to plan on it selling a little bit lower and see if that is still worth it for you.

Then again it depends on your risk tolerance, and it comes with practice over time you start to get better and better at it.

Steve: What sales velocity do you like to see for a product?

Nate: It doesn’t matter honestly as long as — it’s depends how many — it’s all relative right. So like if I have something and I know it’s going to sell immediately, I should say it doesn’t matter. I don’t want to hold something that I think I’m going to hold for longer than 60 days. It you still will, but you don’t want to plan on that. And some people it’s different for them. But you definitely want — it’s not like I’m saying I’m only going to buy things that ten a week.

It depends how many of them I can actually get if I can get them out within a reasonable time frame without the price tanking, or if it’s a seasonal item, I’m not going to load up on Valentine’s grocery items and then have them tank or have them not be able to sell out during Valentine’s Day and then be stuck with lots of perishable inventory. So it’s relative to the situation. I don’t want to buy something — if something hasn’t sold and there’s some people have minimum acceptable ranks like if it’s only once a month that’s — and it depends what the category is, the sales rank varies

And sales rank actually I could have a whole webinar on that. The sales rank is very much not a great way to tell the sales velocity. It’s like an indicator and a point in time, right?

Steve: Sure.

Nate: So if I sold a book and this is the first time I had sold a book ever, if I sold it today, the sales rank is going to look pretty good because I just sold it. So the sales rank if I was saying that 100,000 sales rank means the sales move on per day. That is relative to the fact that it just sold, I might be getting ahead of myself. So sales rank is…

Steve: Yeah that makes sense. I mean it’s relative to a certain time period yeah.

Nate: And that’s the mistake that we made when I was getting started as I was thinking, I was like, oh man the sales rank is reflective of — I used to think like whatever you know in toys. I thought 100,000 in sales rank in toys meant that it was once a once a week or something. And the gist was that logic does not work. The only way to really tell is to look at the Keepa graphs and the CamelCamelCamel graphs and see when they’re actually selling, and again that’s stuff you kind of learn over time. And you learn really quickly once you lose your own money on it.

Steve: Sure. Let me ask you this Nate, okay let’s say you’ve used Tactical Arbitrage and you found some products and you bought them The next thing you need to do is you need to piggyback on a listing and make sure you have the buy box, right? So how does that work?

Nate: Yeah so you always want to see how many competitors are on a listing. Some people don’t like to do a listing if Amazon themselves are on it because they can kind of control the buy box, they can actually, they can drive the price down pretty low. You want to get it within reason. Usually pricing at the same price, it depends on the sales velocity, and again that’s another thing that’s kind of an art I guess that takes a little bit of time to master.

And I know a lot of people buy with the intention of undercutting the buy box by a buck or something and they calculate their margins on that. But it gets kind of vicious. I mean a lot of people have re-pricing set up. So usually just coming in and pricing it at the same price as the buy box, it’s there. And there’s also other tools out there now that will show you how many are actually in stock from the person that’s ahead of you on the buy box. And Tactical Arbitrage can actually show you that, tools like how many can show you that.

And so you can see like, okay, this person that has the box now only has two left in stock, this thing is selling five a day. I don’t need to get crazy on price, you know what I mean. If you’re like, oh I’m out of these, I’m never going to sell out of them, this was a mistake, I need to recoup my money and get my cash flow back up. Yeah that you might want to cut, but it’s — the economics of it is relative to the situation I suppose, usually you want to price at the buy box price that’s already there.

Steve: So let’s say both you and I have 100 units, and the only way we’re going to sell is if we have the buy box, right? So what is the tendency to just kind of inch down the pricing and kind of steal the buy box from each other, and doesn’t that always lead to kind of like a race to the bottom?

Nate: Yeah it does. It depends how fast the product is selling. If I only — with arbitrage you don’t usually — a lot of people that do arbitrage sell very like kind of one off things where they might only have two or three of an item or maybe even just one of an item. So for them to really stake land and really get into it, but on a macro level yes there’s all types of price cutting and this war of attrition that happens this race to the bottom.

And experienced better sellers kind of know when to expect that and they plan around that, and they also sometimes they just go, okay this person is going to keep undercutting me. I’m just going to let them sell out and then I’m going to sell once they are gone. And if they come back, then they have to change their strategy.

But a lot of the bigger sellers have really refined their process knowing what to do and what not to do to make sure that they’re selling their product but also selling it at a reasonable price, because some people have very thin margins and other people have really those really high margins. They do that because they don’t ever want to get to the point where they’re like, I’m selling this at a loss or at cost. So if you have a minimum of like 50 to 75% margins, I mean worst case scenario you probably, it’s more difficult for you to ever actually lose money off that.

Steve: So if a lot of people are selling like a few limited quantities of a bunch of different products, how do you even monitor all the buy box stuff? What software would you use?

Nate: For the buy box it depends. I usually use Amazon’s native tools. I don’t think there’s a lot of people that use re-prices. But when you are doing equal when it was popular, a lot of people in my community use that. When you do arbitrage, you don’t go as deep on things, so there’s not really — it depends. Some people really monitor it closely and some people aren’t as hands on with the pricing and all that. They kind of set it and then move on. Some people use automated services to do it. So it depends. Everybody has their own strategy for it I suppose.

Steve: Interesting, what did you do when you were — Do you monitor the price like a hawk or?

Nate: Yeah I monitor the price pretty closely on things I went deep on. If it was something that I knew that I had really planned on selling at a certain rate, I would come back and monitor that. But if it was just something like a one or two off product, there’s no point in bothering dropping that price or playing with it. If I’m sure that that’s going to sell, I’m not going to be tying capital down. Some things it’s like you always want to make sure that you don’t tie up too much capital in inventory obviously.

Steve: Sure.

Nate: So you do want to make sure that those bigger buts that you’re getting the buy box as much as you would expect it.

Steve: Ad what is like a good expected buy box percentage?

Nate: That’s relative too I suppose, it depends how many you have on that unit you’re trying to sell. And there might be some products where you just keep the buy box until you’re totally out of stock. It’s relative, it’s not like I can say if you price at the same you get 40% of the buy box. It’s based on factors like if you price at the same sometime there’s a lot of that goes in the algorithm. Sometimes even geographical things like if the person’s — if it’s in a fulfillment center that’s closer to the person on the East Coast, they might give them the buy box.

Steve: I see okay.

Nate: There’s a lot that goes into. So it’s not like, that’s not really a stat that I really think is worth too much. If you’re a private label seller it’s huge, but yeah.

Steve: Sure. For private label if you’re a private label seller you always have the buy box. Let me ask you this, so do you ever have to get feedback or does feedback even matter? Like do you use Feedback Genius or do you ever purchase ads? Does any of that stuff matter when you’re doing this?

Nate: So that’s the cool thing with arbitrage compared to private label. I know with private label feedback is everything, reviews are so important. In arbitrage, it doesn’t matter that much because you’re selling other people’s stuff, and usually you’re selling products that are already selling. So you don’t do anything in terms of getting reviews to products. That’s the brands thing and you’re actually, you’re buying it because the sales velocity, it’s already selling at a rate that is good enough for you to have bought it in the first place, that makes sense?

Steve: Yeah sure.

Nate: Instead of bringing a product in the market and hoping to raise the sales velocity by getting positive reviews and all that stuff, you’re actually buying something that says, okay, this is already doing that. I just need it to keep doing that.

Steve: All right so since we’re on the topic of pros and cons of like arbitrage versus private label, would you say that this whole arbitrage thing, it sounds like there’s a lot of maintenance involved, right? Do you always have to be on your toes in managing all your products and constantly getting new buys? Is there anything that’s very — is there anything consistent about like an arbitrage opportunity?

Nate: So the products are — some people find products that are kind of evergreen. They’re called re-plans where you find something that you can keep buying at your local store and keep feeding it there or buying online and keep selling it and making a profit almost like you would with a wholesale account. But even those you can never count on those lasting forever, they usually are short lived.

Steve: Why is that?

Nate: Prices change, people catch on to good opportunities. I mean there’s just so many — it’s hard to keep a good product a secret forever. Just like with private label, people can see what’s selling and then once they say, oh wow, there’s this product that’s selling for $12 or for $15 is on sale at Target every day for 4.99, and somebody is just pumping them and making money. Eventually those kind of get damaged or destroyed when people come in and race to the bottom. So that is one of the downsides to it. You don’t have that same level of continuity, the same consistency. It’s in your kind of constantly like hunting, it’s kind of like actual hunting, and gathering as opposed to like private label could be seen as more like farming.

Steve: Sure, yeah, yeah.

Nate: Than actually going out and killing different animals every day.

Steve: Okay but I guess a big plus of this is it doesn’t require that much capital right to get started.

Nate: Yeah that’s the best part. The best part arbitrage does not require a lot of capital and it is scalable to a pretty high point. You’re not going to become a millionaire probably doing it, but there’s a lot of people that do six figures a month in online and retail arbitrage with some help with giving and outsourcing stuff and having people help them with their prepping and shipping. But it’s definitely easier to get started. You can start by selling things in your house as long it can be listed and you have to list them properly, right? Don’t sell your old MP3 player as a brand new or anything.

Steve: Sure, sure, sure.

Nate: But you can sell books from your house as used, or whatever is appropriate for that product and get started that way. A lot of people — some people kind of take it too far and they’ll do stuff like they’ll go — a lot people go thrifting and I don’t really recommend it. If anybody does that usually is because you have to sell good products. You can’t just sell crappy products and Amazon really doesn’t have much gray area for what is new and what isn’t new. I mean you can sell things as used, but I know a lot of sellers who get in trouble for saying something is like new and it’s really not.

And so a lot of arbitrage sellers are getting suspended for walking that line, and you can do the business without walking that line of selling bad products. So you can start it and do it the right way without dumpster diving. And it can be scaled pretty hard pretty high, and then you can always still get into private label and wholesale as well and diversify once you build that capital, or maybe you’re happy with how much you make in online and retail arbitrage.

I know a lot of people are shocked at how much they have made. I’m shocked at what I’ve seen some people that I know who really, really focused 100% on it. It’s exciting and it’s definitely a cool opportunity. I love talking about it because I know that it is very systematic and people can learn it if they want to. And it’s kind of a nice equalizer for entrepreneurship for example a nice gateway for people to start selling products and actually making some money online and getting paid for what they put into it.

Steve: So we talked a little bit about Tactical Arbitrage already. Do you want to talk a little about your tool, the Storefront Stalker?

Nate: Yeah so my tool is called Storefront Stalker. The name doesn’t reflect on the tool as much anymore. It started out as a tool that the purpose of it was to export the ASINs of competing store fronts so you could see what they were selling. All that information is available on Amazon, but this was just putting it into a spreadsheet so you could review it. So somebody who keeps undercutting you on one of your products or on multiple different products, they probably are sourcing from the same places as me.

Since we’re getting the same products it’s just some logic you have to use I guess. But then you can see what they’re buying and then you can possibly go and buy it yourself, because you guys probably are already overlapping that sources, so they might have things that you didn’t know or opportunities. So with that software you can then take these spreadsheets, then you export and upload them into a tool like Tactical Arbitrage. And I can run that through the software and it can go and find for me different sources for any products.

So Storefront Stalker can go to any Amazon category. I can export that category if I want. Like let’s I do baby toys and then I filter it down to toys that are less than $40. I can export that into Tactical Arbitrage and it will scour the internet for product opportunities. So I guess I only want things that are a sales rank of below 100,000 and I want the profit margin basically to be like 40%. So it will find me products across the internet that match up that I can buy and then sell back on Amazon at a profit. So it’s pretty cool, it’s pretty powerful.

So my tool is kind of the medium between that. It’s not very sexy on its own, but when you take that feature and plug the data that it gives you into Tactical Arbitrage in the CSV files, it’s pretty cool the results you can get. So it’s basically like retail arbitrage on steroids. Instead of going into one store manually, you’re essentially going into 700 stores with a shopping list of things you want to buy, and these lists can be up to 400 Amazon pages which is going to be like 80 or 9200 ASINs. And you can find all these across the internet. You can let it run and then you can go to bed and you can wake up and see what it found.

Steve: Does the software actually buy the product for you if you want to, because I can imagine…

Nate: No.

Steve: No okay.

Nate: No, that would be cool if it could and if it were accurate, but the problem is…

Steve: Well I can just imagine waking up and like having to shop at like 80 stores. That would take forever, right?

Nate: Well it depends and some people would love that opportunity if the products were profitable. I mean so like if you have — a lot of them, a lot of times the items might be — you have to double check the item and make sure it’s a perfect match because it’s really incredible when you think about what it’s doing, and sometimes it does it by UPC which is going to be a much better match because UPCs are like Social Security because basically like DNA. They match for everybody, but Tactical Arbitrage also does image recognition and title searches.

So it goes through and it is actually trying to make sense of all this stuff and putting it together. And so you’re going to have some that might be a multipack. So it might look a little bit better than it is. So you have to go through and make sure that the product actually matches. But everyone who’s the most appealing is when you run the software. People that use the software find that the results that it gets are just awesome. I mean it’s crazy what it can do and how much data it can plow through in one sitting.

Steve: So I know you’re going to be biased with this next question Nate, but do you see retail arbitrage – like do you see Amazon like stamping this out in like the next three years or so? Like if you were to look out three to five years.

Nate: So I don’t think that — I think that Amazon is always going to be implementing policies that make it more to difficult to sell anything that’s not perfectly brand new. And Amazon technically doesn’t — it depends how much you look into buying something from a third party store and selling it as new is technically not new. The problem is that I have one of my things I did last year — you know Cynthia Stine?

Steve: Sure.

Nate: I worked with her on suspensions and we had client after client after client was getting reinstated after they were getting in trouble for selling — having issues, false claims about counterfeit products. And we provided Amazon with invoices from Target or from Toys R Us or from wherever they got it, and Amazon was accepting it and letting them back in. So there’s a bit of a gray area.

Do I think Amazon has — Amazon I don’t think has the ability to wipe it out. They definitely have always been — ever since I’ve been doing it, I’ve been doing things have made it change. It made it a little bit more difficult every year. So right now it’s a great opportunity, five years from now I’m sure it will still be an opportunity. It will be way harder. My guess would be it will be harder. But it’s just the nature of the beast and we just tend to take it one year at a time I guess in this.

Steve: Okay fair enough. Nate, where can people find you online man?

Nate: Yes so my blog is EntreResource.com. I also run the Facebook group FBAToday.com, and you can find me across some of the other groups, Tactical Arbitrage I’m in there a lot, and catch me at most of these Amazon conferences. You’ll be seeing me coming with things to sell and buying bears on them.

Steve: It sounds good Nate. Hey I really appreciate you coming on the show and giving us this update on retail and online arbitrage. It’s actually a topic that I actually did not know a whole lot about, and you cleared up a whole lot of things out for me today.

Nate: Cool man. Well I appreciate you inviting me on. It’s great to chat with you and we’re going to meet up in San Diego next month.

Steve: Yeah next month. I’ll definitely see you there.

Nate: All right buddy.

Steve: All right man, take care.

Nate: All right.

Steve: Hope you enjoyed that episode. Based on that interview, I think that retail arbitrage is a great way to dip your toes in the water and start selling online, and Nate has provided some tools and suggestions on how to get started. For more information about this episode, go to my wifequiteherjob.com/episode202.

And once again, I want to thank Privy.com 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. 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.

And finally I want to thank Payability for sponsoring this episode. If you’re looking to take back control of your cash flow, and scale your Amazon business fast, then sign up for Payability and say goodbye to cash flow issues and stock outs. With daily payments, you can speed up your supply chain, buy inventory at optimal times and stay in the buy box. The more control you have over your cash flow, the more buying power you will have. Visit Go.payability.com/steve to get started, and cash in on a $200 credit just for being a My Wife Quit Her Job listener. Once again that’s G-O.payability.com/Steve.

Now I talk about how I use all these tools in 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 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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201: Creative Ways To Run Facebook Ads To Sell Physical Products With Steve Weiss

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Creative Ways To Run Facebook Ads To Sell Physical Products With Steve Weiss

Today I’m happy to have Steve Weiss on the show.  Steve runs MuteSix.com which is a firm that specializes in customer acquisition. They consult with Facebook ads, Google ads, email marketing…you name it and they were ranked number 341 on the Inc 5000 for 2017. Anyway, Steve is a master of running Facebook ads in the context of ecommerce so today we’re going to pick his brain. Enjoy the episode!

What You’ll Learn

  • What your average order size needs to be to make Facebook ads work
  • Guidelines for setting up a high converting ad campaign
  • How to pick an audience
  • The most important part of a Facebook campaign
  • How long to let an ad run before you make a determination
  • The recommended audience size for a top of funnel campaign

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Payability.com – A financing company that provides high growth Amazon sellers with daily payments. With Payability, you can say goodbye to cash flow issues and stockouts and hello to scalability and profits. Click here and receive a $200 credit upon signup.
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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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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. And today I’m happy to have Steve Weiss of Mutesix.com with me on the show. And we’re going to talk about Steve’s strategies for running Facebook ads to promote 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. Now what does Privy do? 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 prizes in our store. Customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%.

There’s other things that you can do too. So for example, let’s say you offer free shipping for orders over $100, well you can tell Privy to flash a pop-up when the customer has $90 in their cart to urge them to insert one more item. Bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. 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. Always blessed to have Klaviyo as a sponsor because they are the email marketing provider that I use for my ecommerce store, and I depend on them for over 25% of my revenues. Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is so powerful.

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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 to have Steve Weiss on the show. Now Steve is actually someone who I randomly met via email I believe, and after chatting with him about Facebook ads and actually having him help me with some of my campaigns, I actually invited him to speak in my conference, the Sellers Summit.

Now Steve runs Mutesix.com, which is a firm that specializes in customer acquisition. They do Facebook ads, they do Google ads, they do email marketing, you name it, and they were actually ranked number 341 on the Inc 5,000 for 2017. Anyway, Steve is a master of running Facebook ads in the context of commerce. So today we are going to pick his brain. And with that, welcome to the show Steve, how are you doing today man?

Weiss: Hey man, thanks for having me Steve. Really appreciate it man. It’s the holiday season. Let’s get at it.

Steve: Yeah, let’s do it man. So, first of where should we start here? How did you get started with Mute Six? How did you get into this whole Facebook ads? Like what’s your background story?

Weiss: So my story is a little interesting. So I’ve been running internet companies I guess since I was 16. I got into — I started off as more of a SEO Ninja. I used to run a lot of ads to generate mortgage leads during the mortgage, when the mortgages were big back in the early 2000s. So I cut my teeth on Google display network and search network. And then I went to college and I found out about this thing called Facebook.

And the time when I was in school, everyone was on the Facebook. And I was also into entertainment, and the first ads that I ever ran on Facebook was what we call Facebook sponsored flyer. For everyone in the audience, I don’t know if you remember, but they used to have these little flyer ads at the bottom right of the Facebook.com. And I ran that ad to actually get people to come to my stand up comedy shows. And in a past life I was the joker who used to go on stage.

Steve: I didn’t know that actually. I actually, that must have been before my time, before I started running Facebook ads. I didn’t know about these flyer ads.

Weiss: Yeah, it was back when there were only a specific amount of college campuses if you remember…

Steve: Yeah I remember that.

Weiss: You only could get on Facebook back in the day if you had a college email address. So it’s strictly prohibited to colleges. And it was great as a college student at the time; it was great for me because I could market to other college students on all these different campuses using a sponsored flyer. Then obviously as you know the history of Facebook, they raised capital and Peter Thiel and all the big heavyweights come in and they’re like, you guys have to develop an ad product and here we are today.

Steve: And so how did you start Mute Six? Did you jus all of a sudden say, hey, I can do this for other people and just start doing it?

Weiss: Yeah, so before I started Mute Six I was an affiliate marketer. So companies would pay me money to figure out how to generate profitable user acquisition. So, all I really know about Weiss is this specific area of direct response marketing. And after I saw where the landscape was going, I saw there was a huge need for individuals as well as teams to really come in and drive growth to understand the impact of a Facebook ad across the whole platform, across all your marketing channels.

So Mute Six was born out of a kind of a way to solve a specific problem in the market. I feel like there wasn’t a lot of — at the time when I started Mute Six four and a half years ago, a lot of teams or agencies or even people who really knew how to drive specifically performance acquisition on Facebook mainly for e-commerce. This is before Shopify was big; this is before you got ads rolling down the newsfeed, before audience network Instagram. This was kind of early, early on. And I think timing was huge for us. We got in at a point three point where we could forge close relationship with Facebook.

We have a number of amazing people at Facebook who we work closely with, and it’s allowed us to really become really good at what we’re doing, which is helping a number of our partners grow at scale.

Steve: Cool man and the reason why I brought you on the show today is I want to tap into your expertise. First off, I did have a quick question for you. How different is running Facebook ads for physical products different than for digital products for example? Like there’s a lot of people out there that’ll run Facebook ads for digital products, but I know a lot of your clients sell actually physical goods online.

Weiss: Very different, very, very, very different psychology. Number one, landing pages. Obviously, in most cases if you’re selling a digital product, you can’t just put a picture of the product on Facebook and hope that they click and buy it. You need to build a total full photo experience, even a much deeper than just if you have a multi skew in e-commerce. So number one, obviously there’s a different sales process. So usually when you’re selling digital goods, you’re getting them in with what we call like a long form ad or a piece of content or a video. Then they’re going through a specific sales cycle there. You’re going to hit a landing page, you’re going to read up about some of your case studies, some of the value adds of the product, step one.

And then maybe the next step is they download another piece of video, there’s a process from start to finish when selling digital products. When you’re doing ecommerce, you’re totally different mindset psychology. This is people who are gifting people. This is the holiday season. People who want to find unique items, they want to discover Facebook and discover platform. So they’re rolling through multi skews and maybe you have 100 in your site. You’re running dynamic product ads. It’s very much around the image and the value, and the solution to a specific problem.

And I think that’s where the two different lines, the sales process. Remember, like you’re always saying, marketing is selling and selling is marketing. I always say that, and anytime you’re selling any of these products, you’re always building a sales process for both, even if the sales process is called Facebook acquisition. So, two totally different mindsets, two totally different strategies on a full funnel mentality. Also for products, you’re using scarcity; obviously you don’t have an infinite amount of these t-shirts. You don’t have an infinite amount of these shoes.

So being able on your landing page to use some form of scarcity, whether it’s a time or saying that you have x amount of time, whether it’s you don’t have as many products left, you’re always selling with scarcity. Whereas with digital products it’s really difficult to figure out how to sell on scarcity, oh, we only have six more spots available. If you’re a smart person, you know that that’s not always true. So I’d say those are the two main differences.

Steve: So in terms of digital products, the margins are pretty much 100%. And for physical products, that’s not the case. So would you say that the average order size for an e-commerce store needs to be a certain size to make Facebook ads work?

Weiss: Totally, yeah. You need to be over $30 average [inaudible 00:09:18]. You just can’t ever run a profitable – or say you can’t run, but it’s super, super difficult to make the economics of Facebook work if your average order value is under $30. Let me differentiate. You can make — you could sell cheaper products on your site. You could sell $15 products, $10 products, $20 products, but your average order value is different than the prices of your skew. So your average order value needs to be at 30 or above 30. And I think there’s a lot of tactics out there to really figure out how to get your order value close to that $30 range because that’s when the economics start making sense.

Steve: Okay. And in terms of physical products that generally work on Facebook, do they need to be really unique and cool kind of in order for it to work? Like can you get by selling kind of mundane products?

Weiss: Yeah, I mean it’s all about the audience. It’s all about the audience and the creative. So obviously all types of products — we market over 70 different ecommerce brands. And all of them have wide ranging products from notebooks to t-shirts to shoes to toothbrushes, to toothpaste. I mean there’s a number of different, there’s a number of different valuables which drive success in the platform.

So I always say number one, you have to solve a problem with your product. Number two, you have to figure out a way to harness audiences. Maybe you’re running influencer or maybe you’re running affiliate, maybe you’re running other channels that are driving audience into your website, allowing you to build intelligent lookalikes. Then number three, you got to figure out how do you drive an action, how do you drive urgency to make a purchase? And those three things I think are the pillars of being successful on the platform at scale.

Steve: So what I was hoping to do today, Steve, was to kind of run through a complete example of how someone might use Facebook ads to build up an audience and sell an imaginary physical product. And I know I run Facebook ads. You’ve helped me with some of my campaigns and I’m not doing everything right either. So I’m just kind of curious how a seasoned pro does things. So why don’t we go ahead and make up an imaginary product. I don’t know, maybe it could be something that you’ve worked with in the past. And I kind of want you to walk me through where you begin, let’s say I have some content and a small audience and a website.

Weiss: I could actually use an example of a product that we’re working with, and I could kind of just outline as a case study or work with a brand that just launched about a month ago from concept to actually generating traffic. It’s been an interesting roller coaster. So we work with a brand called Butter Cloth. They are one of the most amazing dress shirts that are stretchy dress shirts that you’d easily wash. I mean they are one of the most comfortable shirts that I’ve ever worn. They came into our office and I was like, well, we got to figure out a way to not only work with them, but be a part of the company in a way that we can bring meaningful value.

So we partnered up before they launched. They finally got their products in and I knew — when I look at a product, it’s so important for me to hold the product and really understand how someone’s going to buy this product. What is the interesting angles, what’s the sales process looking like, what problems does it solve? So number one, creative based on how it looks, and feels and really a creative element.

So, we ended up partnering with Metta World Peace who’s a friend of Mute Six, he’s a friend of ours, all right? And obviously not everyone could partner with a former NBA basketball player, but he ended up just coming into our office and we told him, Metta, just try on the shirt, tell us what you think buddy. And then he started trying on the shirt and we just took out our phone and started taking videos of him on the shirt. And then we ended up getting two or three videos, not videos that were used on Facebook, but videos we could use in our creative, showing how the shirt works with someone who has the same issue as everyone else is that you sweat, it’s uncomfortable, etc. So we ended up using that creative…

Steve: Before you go on Steve, like how much of a factor was Metta World Peace? Like do you have an example where you’re not using an NBA superstar that’s well known?

Weiss: Yeah, I don’t think — I guess to the point like I don’t think that he is like – he is like the barrier to entry. I don’t think that we’re successful because of him. I just used that as an example because he was just trying on the shirt. It could be anyone, it could be you could take your product and just give it to someone. Just get content. You need content, you need creative, you’ve got a hold the product. You can’t market a product that you can’t hold and understanding because you’re in the position of the consumer.
So number one, like holding the product, shooting videos with it, it opens up your mind of how this product is going to be sold on the newsfeed. So step one…

Steve: So what did these videos look like with Metta World Peace? So let’s say you’re in these videos, like what were some of the — because shirts is really competitive, right? I can think of a number of shirts like brands are at the top of my head that are comfortable and easy to wash and take care of.

Weiss: Totally. So stretching, like it’s a stretchy dress shirt. So you’re looking good and you’re feeling it, and you’re feeling like you have room to breathe in your dress shirt. So number one, we’re taking pictures of someone doing like a big star type of shoot taking videos of someone doing a push up, running with the shirt on, doing cool stuff to solve a problem that’s unique. You don’t usually see someone running with a dress shirt on. So it’s so important to like hold the dress shirt or playing basketball with the dress. These are all things that normally people don’t do.

And what happens is people see this on a newsfeed and they stop. And they’re like, well what is this? This is interesting. It’s a disruptor. You want to disrupt this person’s scrolling, your possible customer; you want to disrupt them from scrolling down the newsfeed. So that was the goal is that we wanted to create content or creative that was disruptive, that’s going to get someone pique their interest. So number one, creative.

Steve: How long was this video?

Weiss: So the videos we shot were probably three or four videos, 30 seconds each, and then we didn’t actually use those videos. What we do is we have a whole team here at Mute Six, so we do all the editing work. So the magic of Facebook ad when it comes to the video is not the first video we shoot, but it’s the ability to edit the video and layer in other types of stuff into that video. So this video that we’re doing is a combination of lifestyle, it’s a combination of showing the shirt, a combination of talking about the fabric. We cut up the video into six different segments of the way to feature the share, which I think was really interesting.

That’s why I said it’s not just about a celebrity because it’s not. The ad that we’re running isn’t looking around our testing the shirt, looking at where we’re going to use this shirt; it’s more or less, look at this amazing shirt. Here is the fabric; here is the reason why it’s so comfortable. And then you see someone running and you see a recognizable face, but it could be anyone’s face in there.

So number one, creative. Number two, editing that video, then number three looking at some of your competitors. Obviously you don’t have any customer data, you have nothing, you specifically have — so what we’re doing is we’re targeting, we have to target interest audiences, the people that we think are going to be most likely to purchase the item because we have no audience there. This is a brand new website. This is from scratch. This is like totally brand new.

Steve: So how did you decide who to target in the beginning?

Weiss: Number one, we did a combination of different targeting. We did interest audiences, so we looked at some of our competitors in this space. Obviously interest audiences are huge and we wanted to get over a million people in this space. So you layer interest targeting obviously men who like other similar brands, obviously Bonobos, and obviously et cetera, et cetera. Number two we test our open audiences. We tested that. We wanted to just see like maybe we can target people in specific areas of California, specific areas of Florida. I want to target places right now where there is comfortable dress shirts, where it’s not too cold, but I don’t think we targeted initially at least a lot of people in the northern areas.

But I wanted to figure out like right now, where can this dress shirt be worn? So number one, location, two location targeting. And then number three, what we did was we saw that there was — we didn’t have the expectation that Facebook is going to optimize toward a conversion initially. What we wanted was we produced these three or four different videos. We wanted to get engagement on these videos, we wanted to get some audience data, we wanted to feed data back to Facebook to optimize. So we did what we call, we seasoned our creative so that we have people liking, commenting, sharing when we launch these new assets.

So we wanted to figure out which posts or which post ID is going to get the most engagement. And then that’s exactly what we did. So we found one of our videos, got a ton of engagement, ton of comments, ton of likes. And then what we did from there was…

Steve: So let’s back up for a sec. So you had these videos, are you running ads just for video views in the beginning?

Weiss: Yeah, yeah, we’re doing a combination of video views and PE, paper engagement.

Steve: Okay. So, no optimizing for conversions or anything like that in the beginning?

Weiss: No, not at all, not at the beginning, we don’t engage with it, because what’s going to happen is they’re going to look at the brand and there are like, oh you only have 10 likes or 20 likes and no comments on this video. There’s no social proof. So like they’re not going to — they’re obviously not going to make a purchase immediately. So spend a couple of days, a couple of dollars just really running, getting engagement, finding which post ideas we’re going to drive engagement.

And then after that we found a couple — one of our videos got a lot of amazing engagement, shares, likes, comments, et cetera. And that was when we started reading the comments. So reading the questions that people ask about the shirt, does it shrink, what type of material? And then we started using that intel to create new ads with. And then what we also did was we took that post ID, the post didn’t even get all the engagement, and we start spreading that specific post ID across a multitude of different ad sets. Now we have a specific ad that’s already has what we call social proof.

So now we’re going to spread this post video across a multitude of ad sets. Now is kind of our trick of watching the product and we spread that across multiple ad sets, got super high engagement rate across new audiences. Then we started getting purchases, and then we started getting people coming to the website.

Steve: All right Steve let’s back up. Let’s start — so you have this video that has gotten a lot of engagement. There’s no landing page in the beginning, right? You’re just going for engagement and views, and people liking and commenting on the video.

Weiss: There is a landing page, there’s a full Shopify site, it’s all ready to go.

Steve: Okay? So it’s just for clicks in the beginning, right?

Weiss: Just for engagement. We want our ads to have social proof on them. That’s the most important thing on Facebook is to have social proof on your ads. The reality is people want to buy something that they see other people engaging with.

Steve: Okay. And then can you tell me like what like the captions that you put like the best one that was on top of the video for the ad?

Weiss: I don’t have that in front of me, but it was more along the lines of let me see.

Steve: I mean, is it short, does it long?

Weiss: Yeah, it’s very short.

Steve: Oh, it’s very short?

Weiss: Yup. I think I’m not a big believer in doing over captioning stuff. So I’m a big believer in, especially if it’s like a shirt, you want people to focus on the shirt; you don’t want them to focus specifically on words above the shirt. They could see that if they pull the shirt apart that the shirt is stretchy. You don’t need to say in the caption, look, it’s stretchy.

Steve: What’s a good measure of engagement? Like how much are you paying per view for example, like what’s a good measure of whether a video is really resonating with somebody?

Weiss: I don’t really look at per the view; we have to look at just based on the amount of comments and shares. That’s more than — I really want to know like what people think of the content that we’re creating. That’s what’s really important to me. Is it resonating with a large open audience of people who have never actually seen us before? That’s what I really want to know. Is this content going to resonate with a large group of people?

Steve: So do you look at the relevance score at all or no?

Weiss: No. I mean we’ve had [inaudible 00:21:55] that had the relevance score there and a discussion as well. I’m not a big believer in the relevant score just because I’ve met so many campaigns that have crushed it, like very most CPAs have done amazing and actually relevant scores of twos, ones. And I’m like, what does this mean? Like relevant score to what. I feel like it’s a barometer, but it shouldn’t be something that you’re really looking at. You should be looking at based on your conversion objective how your ad is resonating with the audience and what higher end is converting based on that specific objective.

Steve: Okay. So once you run this ad, like how much social proof do you need before you actually start running an ad to optimize for conversions?

Weiss: I’d like to have maybe 10 shares, 20 likes or maybe like five or 10 comments.

Steve: Okay, so not too much. And then at that point then do you use the same ad sets that were working except you pay by conversions at that point?

Weiss: Correct, so I rotate that ad to other ad sets and I try to take that post ID should I say, and rotate that into all the other ad sets I’m targeting because now I want to start marketing from the area of strength. I want them to see like all the engagement, we’re getting all the proof and then that’s what’s going to increase your CTR. I honestly even increase the relevancy scores, going to also increase our conversion rate of people coming to the website.

Steve: Can you give me some metrics here? So let’s say you start optimizing for conversions, what are some CTRs you are looking for? What are you optimizing for in this case as well?

Weiss: So when I move it over, I’m going to try but optimizing for conversions on my website. Obviously you want to be over 3% conversion rate. That’s my goal.

Steve: Conversion rate of click through rate?

Weiss: Our conversion rate on the website.

Steve: Conversion rate. Okay. So what about the click-through rate? Does that matter at all?

Weiss: I mean it does, but I know if Facebook is going to be showing my ads to specific x scale to a lot of people, then I know even if I’m not getting a big click through rate and I’m seeing conversions coming from it, it’s less important to me. I think sometimes, I feel like people care too much about click-through rates. And my whole thing is, Facebook is not actually charging me based on a click, Facebook using that cost per click platform. So I’m worried about it it’s not the first thing I’m looking at when I drive traffic and I’m spending money on Facebook, I’m looking at my onsite conversion rate. That’s what’s really important to me. And I’m looking at how people are engaging with my ads and if Facebook is spending my budget.

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Okay, and then you’re optimizing for purchases, not add to carts.

Weiss: Yes, starting with purchases…

Steve: Purchases okay.

Weiss: And then starting with — everyone has their recipe so we start with purchases and we’ll start off with some manual bidding to see if we can get some – assuming you get Facebook to start spending, we can’t get spending. Then I start going over to add to cart, then I start going over to view content, I spur over the funnel as possible, and then maybe I’ll start doing optimized bidding. I’ll do optimize for impressions, I’ll play around with that. I think the key is you always have to be playing around with all the different objectives and all the different bidding strategies, because what works today might not work tomorrow and I think you really have to always be open to pivoting what you’re doing and how you’re doing it.

Steve: So you’re looking for a 3% conversion rate, but that doesn’t necessarily mean that you’re profitable, right?

Weiss: No, I mean that’s the goal on the website, but what I do know is that if I do have a high conversion rate on my website, I know that I could spend more money to get people to the website. So that really helps in my campaign so that I can be a little bit more aggressive in say my bidding style. I could bid higher to get — if I’m doing manual bidding, I could bid higher to get conversions if I know that I have a really, really high conversion rate, then I could bid more money to get conversions from doing manual bidding.

Steve: Let me ask you this question. So for these top of funnel ads that we’ve been talking about, do you offer discounts or anything in a sense of urgency, like what does the landing page look like and what does the ad look like?

Weiss: Totally, totally offering great question. Being very thoughtful about how you discount is nine-tenths of the game because right now it’s a lot easier to drive conversion off a discount. But the real question is once you start you’re not going to be able to discount over your brand. So, obviously when we launched Butter Cloth, we did a lot of discounting, and that was great. They provide us a lot of audience data, a lot of the product is getting in a lot of people’s hands. We have reviews, all the stuff you need to really build a brand long term.

But for Q1, our strategy is going to go far away from discounting, and I think that’s very important to really plan for the future. Don’t overly discount your product. And when you do discounting, don’t piss people off because some people who missed out on a discount, let’s say you run a discount and it ends and now you have to run ads without the discount. People are like, well, I’ve been seeing you discounting. I don’t really want to buy from you now; I’m going to wait for another discount. So it’s really important to really be very thoughtful about how you go about your discounting.

Steve: Can you give us an idea of how much you discounted for these first ads? Are we talking like 30, 40, 50% or less?

Weiss: 30%.

Steve: Thirty percent. Okay. And what does the landing page look like? Is it for a single product? Is it for a variety of products?

Weiss: Multi skewed.

Steve: Multi skewed.

Weiss: It’s just about 12 different skews.

Steve: I guess the distinction I’m trying to make here, is it a specially designed landing page for your Facebook ad?

Weiss: No, not for direct linking right to Shopify. We’re using a lot of different Shopify plug-ins. Obviously, cart hook to just, you know, we’re playing around with a lot of different Shopify plug-ins which helped increase our conversion rate, but we are directly lead to a landing page at least to start. Again, I don’t recommend starting by directly through to your landing page. I think you start directly linking to your site and then if that doesn’t work then that’s when you start looking into like other types of sales processes.

Steve: Interesting. So you’re just going for the sale at first, so you’re not trying to collect any emails or anything like that for this first…

Weiss: We collect emails from people who bounced off our shopping cart, bounced off specific page. We have an email collection and then we also have a shop message. So we’re also hitting them with a Facebook message if they bounced off our shopping cart. So we have a number of different types of retention plug-ins being run so that we’re optimizing full funnel. So inbound from a shopping cart, we’re asking for their email, we’re asking if it’s okay to message them. So we’re collecting a lot of first party data whenever we drop someone from site.

Steve: Okay. So let’s say — and this has happened with my campaigns, let’s say you start running these top of funnel campaigns to all of your ad sets and they are just not converting as well as you would like, what is your criteria for stop stopping to run ads and what do you do at this point to kind of troubleshoot?

Weiss: So usually doing exactly that, so you’re not hitting a specific CPA goal with that.

Steve: Yeah. So let’s say the CPAs are just too high. Let’s say your conversion rate is like a percent.

Weiss: Okay so then what I’m going to do I’m going to look at the landing page. I’m going to start really playing around with how the landing page experience, the site experience. The first thing I’m doing is I see there is a big drop on Facebook is I’m looking at the site, I’m looking to see if there’s anything that we could do to improve the on-site experience. Maybe that’s collecting emails off the shopping cart. Maybe that’s looking at the speed test of the website. How fast is the website, what’s their mobile experience like?

Then I’m looking at the Facebook number one, website. Number two, I’m looking at the Facebook insights and trying to figure out consistencies across the people that are converting and trying to apply that knowledge to my campaign. Okay, so who is converting like who is coming to my website, who is clicking on my ad? You could see all that in Facebook insights. Number three, I’m changing conversion objectives. Maybe if I’m not driving the volume or you’re not driving the CPA as you want.

Steve: I’m just making all this stuff up as I go along. I mean, let’s just say your conversions aren’t really happening that much and the ads that you’re running are just really expensive. Let’s say they’re like two bucks a click or something like that across a bunch of your ad sets. So, two questions. Do you expect to actually make money off of your top of funnel?

Weiss: Not all the time. No, it depends how much; it really depends on how much prior audience data I have on the website.

Steve: Okay, so in this case, with this case study that we’re talking about here, they had no prior audience data, right?

Weiss: No, I think no one’s heard of them, no.

Steve: So with this first ad set that you were just running to this audience with this creative that you kind of pre-verified, so to speak, right, with engagement ads, what did it look like? I would imagine it didn’t start off selling or converting, right?

Weiss: No, no, we were doing a lot of discounting. So again, like we weren’t even. I mean the first month we sold a lot of products but we weren’t, I think we were almost break even, so we weren’t profitable the first one. So the goal is when you launch a new product, just to get the product in as many people’s hands as possible, then figure out the next steps here. You’re probably on [inaudible 00:33:24], you’re getting reviews; you’re optimizing your website. And step two after the first month is to really start becoming a lot more intelligent with your marketing.

Steve: So with 30% off, people were buying at a 3% conversion rate, like right off the bat?

Weiss: Yep. Yeah. They were buying and I think we drove 300, three to 400 orders.

Steve: Okay, and then were converting at 3% with this heavily discounted. I’m just wondering if you run into any hiccups where you were like, okay, maybe we got up to discount a little bit to get it up.

Weiss: Totally. We saw that when we’re discounting that we were number one, we started doing a very conservative discount, 10%, then we upped it to 30%. Then we saw that we were losing a little bit of money with this 30% discount. Then we went back to 10%, we saw a negative conversion rate, then now we’re at 20% and we’re starting to see that we’re seeing a really good conversion rate. So it’s a lot of testing on a lot of price testing which goes into this.

Steve: I’m just trying to get an idea of like the order in which you change things, like when it first stops is not converting that well up, do you just up the discount, is that your natural inclination?

Weiss: If you have a good click through rate, a good engagement rate on the ad, the click through rate, I think it was about two and a half percent. And then what we did was then we saw that our ads weren’t converting really — wasn’t that good. So that’s when we upped this discount code and that was kind of the next step in the optimization. I wish there was an A to B process in terms of okay, this doesn’t work, and this doesn’t work, but reality is, is that we’re trying to test as many things as possible.

We know that the holiday season is — that we only have a couple more days of the holiday season, so we want to really take advantage of this as much as possible. So that was kind of the reasoning of we’re just going to protest everything, throw the whole kitchen sink at it.

Steve: Okay. And then how does retargeting come into play here?

Weiss: Retargeting is very important. So again, we’re driving a lot of people to the website. We’re driving a lot of new users. We want to intelligently remarket to them. Number one, we do retargeting through Facebook messenger. It works really, really well. It comes…

Steve: Can you go into depth about that since it’s relatively new.

Weiss: Yeah. So they come to our website, they hit our shopping cart, they don’t purchase, but there’s a check box during the process and say, hey, are you okay with allowing us to send you a Facebook messenger update? We use a tool called Shop Message, S-H-O-P M-E-S-S-A-G-E, really good Shopify plug-in for messenger. And that allows us to create almost like how you create email drips. It allows you to create drips in Facebook messenger as well, allow you to create different sequences to hey, come back emoji, you left stuff in your shopping cart. And that’s working incredibly well. And it’s also you’re not paying for that, which is great. You’re not paying for that. So Messenger — so you’re not paying for that ad. So number one, that works.

Steve: Do you prefer that over email at this point?

Weiss: I prefer both. I mean, see you could do both email and Messenger. We like to do both. We sequenced out email maybe like a day later now, we also shoot the email right away. We’d like to handle the Messenger first, then we hit them with the email, but everyone has their kind of recipe. I mean, I think Facebook Messenger; my opinion is a lot more personal than email. Email is becoming less and less and less personal because so many people are emailing, not a lot of brands right now are taking advantage of Facebook Messenger, which I think is really cool.

Steve: When you’re trying to get one, it’s easily one or the other, right? You don’t try to get both, do you?

Weiss: What do you mean?

Steve: Like you mentioned if someone is exiting your store, you ask them, hey, is it okay if we send you Messenger updates, but you can’t ask for an email and a Messenger and ask for Messenger updates, right, because it’s too much to ask. But do you ask for both?

Weiss: Yeah. So Messenger is only on your shopping cart page. So we’re only asking for Messenger on the email bounce. You’re only asking for the email when someone bounces. So I just want to differentiate the two, like Messenger is on the shopping cart page, the checkbox, and then email is only if they tried and bounced.

Steve: Okay, so email is only if they try to leave the site altogether. Whereas on the shopping cart page is when you ask for the Messenger, is that?

Weiss: Correct.

Steve: Okay, I’m just curious why that is. Like if they’re leaving too, why the distinction between asking for an e-mail versus Messenger when they’re leaving?

Weiss: I don’t think — it’s just the way that people are used to people asking for their Messenger. I think that if someone was like out of an e-commerce store and a boss popped up and said, hey, is it cool if I reach out to you on Facebook? They’re going to be like, oh, what does that mean? That’s weird. Like if I put it in email, it’s like that’s a normal process that people are used to. That makes sense.

Steve: Okay. And in terms of these retargeting ads where you bring people back, are you offering discounts as well? Like even a greater discount or?

Weiss: We’ve been testing that out. I don’t have enough data to do anything significant. But first we’re like trying to do the same code of like come back for 30%. But I think now we’re starting — we try to offer a little bit more and that converted really well. But again, it wasn’t very economical. So what I like to do is I like — we started testing out buy one get half off or something, buy one at regular price, get the next one at half off instead of just saying 70, 30% off your whole order. And so we try and come out with kind of a unique discount on the Messenger or on the retention than we have when someone comes in and make a purchase.

Steve: I see. And then what is the distinction between — you guys are running dynamic product ads, I would imagine, right?

Weiss: Correct yeah.

Steve: So what’s the distinction between that versus just regular retargeting with these special promotions?

Weiss: So again, like we don’t have a lot of audience data to do remarketing at scale on Facebook. It doesn’t even make fiscal sense to run EPA ads. So we just don’t have a big enough audience. So it makes it a lot more sense for us to just do Messenger bots and email. So if you don’t have a big enough audience, that’s where it makes sense to do a lot more Messenger. If you do have a big audience, obviously yeah, you want to run all different types of remarketing ads. You want to run mobile collections, you want to run carousels, you want to run video, you want to throw the kitchen sink at it, really build a kind of unique sales process.

Steve: Okay. So in this beginning right now with this company, you’re just doing top of funnel ads right now, and then trying to get their Messenger and marketing that essentially?

Weiss: Correct.

Okay: Okay. What does your Facebook messenger autoresponder look like?

Weiss: I don’t have that in front of me.

Steve: I mean not exactly. So what’s the general strategy?

Weiss: I use a lot of emojis. I use a lot of like fun — remember I want to make the Messenger kind of look a lot like what someone would be messaging with someone instead of it coming from a brand or saying, come back and buy more. I always use emojis, like the arrow signs. I mean we encourage you to return it’s like you were shopping in your shopping cart, come back, come back, happy face and get 5% off on us, or something like that. That works really well.

Steve: Are you sending out content or is it mainly just promotions?

Weiss: Right now it’s promotions. I mean you can send out content. What’s to know about Facebook Messenger is that you can only send one message a day over a 24 hour period, and then if they respond then you get to send out another message the next day. So you’ve got to be very, very careful about how you use messenger.

Steve: So I’m curious then, so you’re driving all this top of funnel traffic. Are you using retargeting for that traffic right now? It might be a small audience, but are you still running it?

Weiss: Yeah, we are. We’re trying to, but it’s just — we’re not getting a ton of ad impressions. We were remarketing to a smaller list. We’re trying to switch off, convert the objective, conversions because we know that there’s just not enough ad impressions, so we’re running a CPM to that.

Steve: Okay. And so for this campaign right now, it seems like, is your top of funnel at least breakeven them at this point?

Weiss: It’s hard to tell because we’re discounting. I think we’ll close to break even, which in my opinion is a big win because these are all people who’ve never heard of us and we’re selling them $100 shirt, which I think is pretty cool. So it shows a lot of amazing potential, but I think we’re close to breakeven.

Steve: So is the play here in the beginning then just to get this customer list so you can get them to buy again and again, or I guess you mentioned that you’re kind of happy that it’s break even. So the goal here is just customer acquisition.

Weiss: Yeah reviews, audience data and intel. Those are the three things. Again, I think reviews are so important. Like you got to get, when you launch a new brand or something new, you got to get as many people to review your product as soon as possible because that goes into being able to get a good conversion rate on your product. So number one, reviews, number two audience data, obviously cookie data from people coming into our website, emails, et cetera. So audience data is so important to being able to target the best users to convert on your ads.

And then the real intel, conversion rate intel, how do we up the conversion rate on our landing page, what specific offers, what specific types of video content work, what are the big pain points of the customer? And then number four, last but not least, products. We want to know how we can continuously improve the product. Whether that’s — we’re getting all types of great feedback of why people return products. How do we keep improving the customer service and the product? That’s what is going to build a brand that’s a brand to last our company or built to last per se.

Steve: When does it come time to scale these top of funnel ads? So now that they’re kind of breakeven, let’s say you turn them to breaking even, is that the point where you start scaling them?

Weiss: Yeah, little by little. I think for break even top of funnel, that’s going to have a positive impact down the funnel. So what I’m trying, what I’m thinking is only scale is number one, the economics. I’m looking at the full site economics. So how profitable are we total commerce because remember like even if Facebook says we’re breaking even, a lot of cases Facebook isn’t taking credit for all the conversions that is creating. I mean some people say it overcompensates, I always say sometimes it under compensates. So if I see like the site is generating 5x to the return on the expense on Facebook, I know we’re only running traffic on Facebook, then it obviously makes a lot more sense for me to scale these ads.

So number one, looking at the full site economics. Number two, looking at like the growth of other ancillary audience data. So if I see that our email list is growing and I see that we’re breaking even on the product, I see that we’re gathering a lot of great data, then it might make sense to scale a little bit without crushing the CPA goal. Number three, I’m looking at the supply chain. How much product do I have left, or do I have new inventory coming in? I don’t want to blow through this inventory. So inventory is very, very important to me, and like do I scale or when not to scale because that’s going to have a big bearing on it.

Steve: That actually leads me to my next question, so how do you determine like how do you attribute sales to Facebook?

Weiss: A big multi-million dollar question.
Steve: Well, I want to know how you do with it actually.

Weiss: So number one, I always look at like how many channels do we have running? If Facebook is the only channel running, I’m obviously going to be a lot more open to giving Facebook a lot of attribution credit for that specific Facebook ad. Number two, I’m looking at the amount of traffic. If I have multiple channels running, say I’m spending on podcast, I’m spending on search, I’m spending on TV or radio, maybe I turned down Facebook and I see like a conversion lift across my other channels, does my search channel go down, does my overall e-commerce sales go down? What is the overall like, what is the width that Facebook provides?

So it’s very — if I see that all my channels go down when I turn off Facebook, then that means that Facebook has an amazing lift across all my other channels. So I should give Facebook a longer attribution credit. If I see that there’s no lift that means that there’s other things that are driving the specific conversion. So I’m always looking at the lift. Then number three, I’m always looking at post product surveys. I think a lot of people should, if they’re not already doing this, they should start considering doing this is just asking people where did they hear about your product after they’ve made a purchase. So I’m looking at that data as well.

Steve: Interesting, okay.

Weiss: To kind of just figure out like what had the biggest impact on driving this conversion. I think if you don’t give Facebook enough credit, then you shouldn’t even play on Facebook. Like if you’re going to say that I’m not going to get Facebook a one day click credit, or seven-day view or seven day click, then you shouldn’t be even on Facebook. You can’t expect Facebook to convert off of last click attribution. No one I know is making Facebook scale 100% off last click. It’s just impossible. So I think that finding the common quite in the middle end point of that is required a little bit of homework and a little bit of testing and playing around. But I think you become really intelligent about building a model for your business that will scale.

Steve: You don’t use first click attribution now, do you?

Weiss: It’s hard. I don’t really use first click either. I’ll use first or last click because like it’s hard to track that path. You really — we don’t know, like let’s say the first click came from Google and then Facebook says that that user converted. Well, did that user convert because they saw a Facebook ad? Like it’s a really — it’s a mismatch of like figuring out if you’re trying to do the first click where they came into the funnel.

Steve: Okay. I was hoping for a silver bullet, but it sounds like you have similar issues as everyone else when it comes to attribution and it’s just a matter of — there’s like an art to it essentially, right?

Weiss: Yeah. I mean I think this is the number one priority on Facebook’s roadmap. I mean, just from being very close to them and talking to friends who work there. I mean this is the problem that they’re going to be solving over the next year is measurement. I think that they know it’s a big issue, they know that it’s important, they know that if they’re going to big brands and the CFO has to sign off on this seven day or 28 day click, it’s hard to get that signed off. It’s really, really hard. So I think it’s on their roadmap. They’re definitely aware of it, and I think we’re going to see over the next couple quarters, we’re going to see a lot of solutions to the problem.

Steve: And finally to end this, I did want to talk a little bit about the fact that Facebook is going to allow you to see everyone else’s ads. They’re doing away with dark posts. What impact do you see that having on businesses?

Weiss: Transparency? I think number one is transparency. Like you can’t run specific stuff to one audience I think, and not give that same stuff to that same audience. I think that it’s going to change the way people think about strategies around remarketing, around prospecting, because if you run an ad for prospecting and you’re giving a heavy discount goal, well now the people who already saw you they’re going to see that same ad when they go on the page. So being very sensitive to the user because now it is a level playing field. I think politics is the one that forced this, but I think that you’re going to start seeing a lot of brands be very thoughtful about how they do discounting and the messaging they do for different audience segments.

Steve: Just curious. So this is going to change your strategy certainly, right?

Weiss: Yeah, totally. It’s totally going to change. I mean we’re having meetings about it actually at the end of this week. So I don’t know the full range of impact. I don’t know if users are going to go to fan pages just to look at ads. I know that my team is very much going to grab as much intel from.

Steve: Exactly yeah.

Weiss: We are going to see what some of our competitors are running. They’re going to troll and figure it out, but you just don’t know from a consumer behavior perspective like how this is going to impact the bottom line. I think as a psychologist and someone who is deeply into the psychology of what drives an action like I’m fascinated by this new iteration.

Steve: Yeah, I mean if you put out this 30% coupon, people are going to see it, right?

Weiss: Totally 100%, and I think that’s going to be — what’s really interesting is like how are they going to react? Like how if you go to a fan page, let’s say I buy a lot of Allbirds. I’m a big Allbirds fan. I’m sure Steve; do you have your one pair of Allbirds?

Steve: No, I have not.

Weiss: The most comfortable shoe ever. I probably bought 11 pairs of Allbirds shoes. If I go on Allbirds, I go on their fan page, I’m like, wow, they’re offering 30%. They never discount, but I’m like wow, they’re offering 30% off to some people and they didn’t even show it to me, oh that’s kind of weird. I’d be like — and then I’m going to click on that link and then just go buy with 30% off code.

Steve: Yeah and you can’t use these static codes as easily anymore either.

Weiss: Yeah, exactly. So there you go. That’s kind of what I’m thinking is like, well, I’m your loyal customer. You’re discounting for people who’ve never bought from you. So, I don’t know where it’s going to go, but it’s definitely interesting.

Steve: Okay. Well Steve, we’ve already been chatting for like 50 minutes. I really appreciate your time. Where can people find you if they need help with any sort of ads?

Weiss: Yeah. So I run a podcast as well. You could download it in the App Store. It’s called Spend 10K a Day Podcast. So a lot of the stuff that we kind of dug into is, I dig into on a weekly basis, we record new episodes a week. So number one, if you like this content, if you’re really into Facebook ads, you’re into e-commerce, you’re into full funnel, take a look at our Facebook ads podcast. If you’d love to email me and just get to know me and talk some strategy, feel free to email me directly at steve@mutesix.com.

We pop out a lot of content. Whenever we learn something new from our team, we’re writing about our blog, we’re talking about on our podcast. We’re doing webinars. So feel free to come to our website, join our email list and you’ll be a part of our community that we’re building around Facebook ads, Mutesix.com.

Steve: And I’ll link all these things up in the show notes. But Steve, hey man, thanks a lot for coming on the show. Really appreciate it.

Weiss: Steve, you’re doing an amazing job man. I’m always excited to contribute, man. Thank you so much.

Steve: Hey thanks man.

Weiss: All right, take care.

Steve: Hope you enjoyed that episode. Steve is someone who has helped me with my Facebook ads in the past. And if you’re a company in need of ads help, be sure to check out Mute Six. For more information about this episode, go to mywifequitherjob.com/episode201.

And once again I want to thank Klaviyo for sponsoring this episode. Klaviyo is my email marketing platform of choice for ecommerce 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 auto pilot. 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 use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. 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 P-R-I-V-Y.com/Steve, once again that’s P-R-I-V-Y.com/Steve.

And finally I want to thank Payability. If you’re looking to take back control of your cash flow and scale your Amazon business fast, then sign up for Payability, and say goodbye to cash flow issues and stock outs. With daily payments, you can speed up your supply chain, buy inventory at optimal times, and stay in the buy box. The more control you have over your cash flow, the more buying power you will have. Visit Go.payability.com/Steve to get started, and cash in on a $200 credit just for being a listener. Once again that’s Go.payability.com/Steve.

Now, I talk about how I use all these tools on my blog, and if you’re interested in starting your own ecommerce 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 are 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.

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200: My Wife Is Back – Frequently Asked Questions On Making Money, Productivity And Life

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My Wife Is Back - Frequently Asked Questions On Making Money, Productivity And Life

Every hundred episodes or so, I manage to convince my wife to put her introverted self aside and join me on the show. In this episode, she grills me about business, philosophies, productivity and life. Enjoy!

What You’ll Learn

  • Why we don’t just start more ecommerce businesses
  • Where we see ecommerce going in the next 5 years
  • How we are able to stay productive
  • How we stay organized
  • Whether you need to be an extrovert to be successful
  • How we manage stress
  • My favorite business book of all time
  • What we do if we had to start all over
  • Our goals for the next 10 years

Other Resources And Books

Sponsors

Payability.com – A financing company that provides high growth Amazon sellers with daily payments. With Payability, you can say goodbye to cash flow issues and stockouts and hello to scalability and profits. Click here and receive a $200 credit upon signup.
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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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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 what strategies are working and what strategies are not in business. Now today is episode 200, yay. And every hundred episodes or so, I manage to wrangle my wife to overcome her introverted self and actually join me on the show. And in this episode, she’s going to be grilling me about business, philosophy, productivity, and life.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. 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 20% of my revenues. Now, Klaviyo is the only email platform out there that is specifically built for ecommerce, 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 bought, piece of cake, and there is full revenue tracking on every single email.

Klaviyo is the most powerful email platform that I’ve ever used 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 I also want to give a shout out to Privy who is also a sponsor of the show. And Privy is a tool that I use to build my email list for both my blog and my online store. Privy is an email list growth platform and they manage all my email capture forms, and I actually 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 ecommerce.

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%. 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 is episode 200. Can you believe it? I’ve been podcasting for almost four years now, and it’s now part of my routine. And in fact I don’t even remember what my life was like without my podcast. And over the years I’ve met over 180 new entrepreneurs, many of which I now call my friends, and whenever I travel there’s a good chance now that I know at least one person wherever I’m headed.

And here’s what’s funny about the podcast. I’ve been blogging way longer, like since 2009, but whenever I get approached at a conference or an event, people inevitably recognize me through the podcast and not through my writing. In fact, I was having a conversation at Traffic and Conversions last month when someone randomly came up to me and said, hey, I thought I recognize that voice and proceeded to introduce himself.

Anyway, for episode 200, I thought that I do something completely different and answer some of the most commonly asked questions about my life, my philosophy, and how I run my businesses and basically had my wife interview me this time. So I’m going to turn it over now to my wife. And what’s funny about this is she knows me inside and out, and she knows when I’m BSing. So let’s see how this goes.

Jennifer: Okay, let’s take it away. I will try not to contradict you when I don’t believe anything you’re saying.

Steve: Yeah. That’s the problem with having my wife on. She knows when I’m lying.

Jennifer: Yeah. Well, I’m just watching you talk right now and I find it very funny because you’re way more animated talking into this microphone than you are talking to you normally.

Steve: Of course, of course. It’s the podcast. All right, let’s get on with it.

Jennifer: Okay. So now that you no longer work a day job, what has been curious for most people that have asked me is they were wondering what you do on an average day.

Steve: I Work 16 hour days while you are at the Bumblebee Linens office.

Jennifer: Whatever. I seem to recall that most of your day is spent watching Netflix.

Steve: No that was only when I was injured, not on a day to day basis. Okay so I, as you know, I wake up the kids at 7:00 AM while you’re still sleeping. And I get them up, I have breakfast with them, I make sure they eat and then I turned them over to you and I start working at around 8:00 AM I would say. And you drop off the kids at like 7:50. And then I go consistently, I lock myself in the room and I work consistently until about, I would say 12:30, sometimes 12:00. So that’s like a good four hour stint, and then I have lunch two or three times a week with you. And then afternoon I usually exercise and then I work again for maybe another couple of hours and then I pick up the kids at around 4:30. Sound accurate?

Jennifer: No, but that’s okay. I know everyone can — you can probably imagine my eye rolls at this moment about me sleeping in at 7:00. I’m up also, but I do let you wake them up though. That’s true. I’m curious, how do you achieve work-life balance?

Steve: Yeah, it’s actually really hard for me. You know, my wife knows me pretty well, I like to keep busy. And what I try to do now is I try not to over commit myself to anything. And so usually what I do is I leave certain blocks of my schedule for my kids, weekends are for the kids. Afternoons for the most part are for the kids. I try not to schedule anything in the afternoon. I try not to take any large project that will occupy an inordinate amount of time.

And so it’s like this really hard balance. I still haven’t figured it out yet, because right now I’m a little under-stimulated and a little bored sometimes from day to day. And so it’s just a matter of committing just enough to keep myself interested, but not too much that I sacrifice family time. It’s still a struggle right now. I haven’t figured it out yet.

Jennifer: But when you were working, how did you actually do it? So one of the nice things about you staying at home now, you have a better handle of what your work life balance is, but when you were actually working a full time job, how did you manage that?

Steve: I mean, you knew how it was when I was working, like I would work the entire day, we’d come home, we’d have dinner and we’d hang out for a little bit and then I’d work from after dinner until about 10:00, 10:30 and go to bed. And so, I mean, we didn’t have kids back then or we had one child who was young at the time and it wasn’t as bad. And yeah, I basically sacrificed the nights. These days I don’t work nights at all. I mainly either spend time with you, or read or watch TV.

Jennifer: Is there anything that you do to make yourself more productive? Is there a system that you use?

Steve: Okay, so you guys can’t see this, but I’m looking at my wife right now because this is what gets me into trouble. The way I’m able to stay productive is I prioritize everything very carefully. So whenever my wife asks me to do something, I always ask her to quantify like what this task is going to be and how it’s going to affect the bottom line. And she always gets mad at me for this because she’s like, hey, if I’m asking you to do something, you should do it. But here I am looking at my task list and all these things on my task list will actually generate revenue, whereas something that my wife might be asking for might be just something on her to do list, but might not necessarily impact revenue or business the same way.

And so usually some — oh I don’t want to say usually, but sometimes I’ll prioritize my wife’s task below all of mine, and that’s what gets me in trouble. But basically the way I remain productive is I have a list of tasks that I need to do. And the day before I usually just kind of prioritize what I’m going to do the next day, and I basically just try to accomplish one thing at most and anything more than one thing is just kind of like gravy. I don’t have lofty goals every day; I just want to make sure I make forward progress from day to day.

Jennifer: Sure.

Steve: And the other thing I do is I usually dedicate one full morning or one day of every week just to think about what I need to do next instead of actively doing something.

Jennifer: Okay. And then, you know me, I’m a total introvert. You’re a total extrovert. And what I would be interested in and other people have asked is, do you need to be an extrovert to be successful or to be like me and be very private?

Steve: So I’m surprised that you think I’m an extrovert. I’m actually what they call an ambivert I guess. Is that the right term? But basically I’m an extrovert when I need to be, but in certain cases I’d like to just be by myself just like you. I think it certainly helps to be extroverted when it comes to starting a business, especially in the marketing side. Like whenever I go to events, I actually enjoy meeting people and establishing rapport with people who listen to me or read my blog.

And I think it’s easier, but that’s not to say that you can’t do all these things as an introvert. An introvert I think is defined as you gain energy from being by yourself, but that doesn’t necessarily mean that you’re not good socially either. So I would say that introverts have just as good of a chance of creating a successful business, but you do have to put yourself out there and as long as you put yourself out there and are willing to meet your fans and be extroverted at times, I think you should be fine, which is what you are essentially, right? When we go to conferences together, you’re pretty extroverted, but then you need to recharge in the room and not talk to anyone for several hours.

Jennifer: I think one of the things that we always find a balance, we need to find more balance on sometimes is that I’m obviously a little more paranoid than say you are. I’m not as out there as you are. There are certain things that I want to keep private, such as like my kids names for example. But there’s other things I’m very, very open about, because I think for women in particular, they don’t want to say everything out loud.

Steve: Yeah. So for the listeners out there, it’s like this constant battle between my wife and I about what we share and what we do not. And so whenever I write a post, usually my wife will read it and she’ll say, nope, nope, I don’t think you can write that. I don’t think you can write that. And so it’s Kind of like this, it’s this battle that we have.

Jennifer: Yeah, there’s certain things that I’m — I’ve gotten better over the years I think, but there are certain things I still feel that we should keep private.

Steve: Sure. But this has nothing to do with any introversion.

Jennifer: I know, I know. I am sorry. I just got a little sidetracked a little bit. Okay what is one way that you manage stress?

Steve: Yeah, usually the way I manage stress is I go running, or I do some sort of exercise, like whenever I’m angry or stressed out, I’ll go lift weights. And incidentally, that’s why it was a struggle for me when I got injured and I couldn’t exercise, and that’s why I got a little bit more stressed out during that period if you guys listened to my episodes from last year. But outside of that, I’ll hang out with friends or exercise. That’s my main way of doing it. What about you? What do you do?

Jennifer: To manage stress?

Steve: Yeah.

Jennifer: I read. I know that you’re always trying to get me to do more exercise, but for me, I just need time, quiet time locked in my room, maybe some pro-milk tea. As for you, let’s see. Is there a possession that you cannot live without?

Steve: Like a material possession?

Jennifer: A material possession besides our kids obviously. They’re not material, they’re not material things.

Steve: Things about possession. Okay so if I’m looking through my list of gadgets, I assume you mean gadgets here. The number thing I can’t live without are my noise cancelling headphones. Whenever I have to write, whenever I have to do any thinking or anything creative, I put up my noise canceling headphones, which kind of drowns out all the background noise. I had the Bose QuietComfort 35 I think. And that allows me to be a lot more productive. Is that what you were looking for?

Jennifer: I think I was thinking more, not necessarily in terms of work, but just in general. Is there anything that you can’t do without?

Steve: In terms of computer programs? Adobe Photoshop, I don’t know.

Jennifer: Okay, okay sure. So next question, if you had to start over from scratch, how would you build a following?

Steve: Like if I were to start over My Wife Quit Her Job from scratch you mean?

Jennifer: Yes. Or actually let me rephrase. If you were had to restart our e-commerce business, not your blog, but the e-commerce business, how would you build a following?

Steve: How would I build a following with that? So, what’s funny about this is like our business, we kind of just accidentally stumbled upon it, right? I think if I were to start over again, I would probably choose something to sell that actually addresses a pain point. What we sell right now are just kind of nice to have items. They’re like vitamins. And so as a result, it makes it a little bit harder to market the products that we have to sell because they’re not like must have items. If I were to start over, I’d probably choose something different. Perhaps something that I’m interested in, and that I would be more interested in writing content about, or going on YouTube or producing videos or podcasts about. I probably wouldn’t be selling handkerchiefs again.

Jennifer: But do you think that you need to have a passion for that product?

Steve: I don’t think it’s necessary to have passion for a product, but I think it certainly helps. Right now we have this blog. I can’t write for it because I’m just not interested in doing crafts and whatever with our products. It’s not like I can go on YouTube because I feel like for wedding products…

Jennifer: Yeah a guy selling handkerchiefs.

Steve: A guy selling handkerchiefs isn’t going to do it, and there’s not much to podcast about it. And so there’s very limited things that I personally can do to promote our business outside of just running all the marketing, like the paid ads and that sort of thing.

Jennifer: Okay. So how would that differ I guess for your blog versus the e-commerce? So how would you go redo My Wife Quit Your Job?

Steve: Like if I had to start all over again?

Jennifer: You had to start over.

Steve: I think I would have probably started with a podcast. And the reason why I say this is because as I mentioned before, most people know me through the podcast and not through the blog. That being said, I think in order to be successful today with content marketing, I think you have to do more than one thing. You have to write and you have to podcast, or you have to write and be on YouTube.

These days what’s nice about writing is that if you can get it ranked in Google, that’s like an endless flow of traffic where you don’t have to do anything. A podcast is really good at making existing fans, stronger fans. And so the people who listen to your podcasts tend to be listeners for life, for example. And so you need some combination of the two these days to be successful. So one, to get leads, and then another medium to kind of strengthen the leads that you do have, and the fans that you do have.

Jennifer: That sounds relatively easy or you’re making it sound easier than it probably is. I know a lot of people have been asking if you already know how to do this, why don’t you start more businesses? Why don’t you start another, I guess another e-commerce business and why don’t you just make ours bigger?

Steve: So you’re asking why since I teach e-commerce, why not don’t just start a bunch of e-commerce businesses.

Jennifer: Sure.

Steve: Well one…

Jennifer: I already kind of know the answer to this, but…

Steve: You know the answer to this because whenever I try to grow Bumblebee Linens too quickly, you get stressed out and then you come home, kind of not in such a good mood. And so, I don’t know if the listeners know this, but my wife and I kind of agreed that we will grow Bumblebee at like this controlled rate, 10 to 20% growth every year. That’s very low stress when you’re achieving that sort of growth rate.

And so the question is why don’t we start another e-commerce store? And starting an e-commerce store is great when you need money quickly because you’re selling actual product and you’re getting money in return. Problem is, is that e-commerce requires a little bit more labor. So we have a warehouse, we have employees now. You don’t have to have that in this day and age with Amazon. But if I look at the businesses that I have, I have an ecommerce store or we have an e-commerce store, I have a blog, the podcast, and the conference. Those are completely different industries and I kind of like to diversify everything.

So I probably wouldn’t start another e-commerce store. I probably would not start another blog or a podcast, or another conference at this point. If I were to do another business, I would probably go into the tech space maybe a little bit more, either in software or SaaS or that sort of thing in order to just kind of diversify all my holdings.

Jennifer: Where do you see ecommerce going in the next five years?

Steve: Yeah, I think the way things are going right now with Amazon just taking over the world and providing this avenue for other people to sell products, I really think that going forward in the next five years, unless you have your own branded products, unless you’re doing private label, you’re going to slowly get pushed out because the problem is when you’re selling other people’s products, that means other people are selling those exact same products, and whenever you have two identical products or two identical sellers clashing on the same marketplace, that just leads to price erosion.

And so the only way that you’re going to be able to maintain your prices is by holding your own brand and establishing your own brand so people buy from you because of you and not necessarily because you have the best product. And of course if you have the best of both worlds, that’s the best way forward in the world of e-commerce. So yeah, going forward, I think you got to go private label.

I just want to take a moment to thank Payability for being a sponsor of the show. If you run a successful e-commerce business like I do, you probably know that the worst thing that can happen to you is to run out of stock. Now my wife and I regularly import container loads of merchandise from China, and having the cash flow to do so is very important.

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Jennifer: A lot of our friends that we know, they’re all interested in starting their own e-commerce business, but they have a hard time actually pulling the trigger. So I’m curious to find out what would you do, or what advice would you give to those over thinkers, and to get them to just do it?

Steve: Yeah. So here’s the thing. And for the listeners out there, most of my wife and I’s friends they’re mostly engineers, or they’re very analytical people. And I’ve discovered that in myself, over the years that the more analytical you are, and the more engineer like that you are, the less likely you’re actually willing to take a risk and start a business because you want all the numbers in front of you. You want like a definitive answer when you start something that it’s definitely going to make money. And that’s simply just not how business works.

And so I know for myself, like my wife, we probably wouldn’t have started our business if we weren’t kind of forced into that situation in a way. Like we knew that my wife wanted to quit her job to take care of the kids, and I knew that we needed two incomes in order to get a house in a good school district. And so that just kind of tipped our hands, and we took that risk.

And so my advice for people who are just too analytical and they need answers, you just got to fight that urge and just start small, invest a small amount of money that you don’t really care if you lose the money or not, and just dip your feet into the water and see how things goes. The thing is, once you get that first sale, that will give you enough confidence to keep going, but until you get that first sale, you’re always going to be squeamish about getting started.

Jennifer: Yeah. I think a lot of people are afraid to fail. I think that it’s okay to fail and it’s a learning experience, but I think I see a lot of people that will try something out. They’ll just put something out there and then they’ll just stop. It’s not hitting the right numbers that they want to say that it’s not hitting their targets that they analyzed. So…

Steve: Yeah, I mean that’s the other thing, if you’re going to go into business you have to think like — so whenever I start something new, I always think in the three to five year timeframe. Whereas most people think like six months to a year. If you look at the students in my class, most of those students in my class who have been with me for over a year are doing quite well. Whereas the ones who usually kind of fizzle out, they usually fizzle out like within six months, they give up.

You got to give yourself enough runway to be successful because most of the gains that you’re going to see from your business are going to be past one year. So for example, with our story, it took a year, but most of our big gains happened after that. We’ve been doing this for 10 years now. With the blog, I didn’t see any money for three years, and after three years though, the growth was exponential. So you just got to give things time to grow.

Jennifer: And what are your goals for the next 10 years?

Steve: That is a loaded question. I think my goals right now and my goals have changed over the years as our kids have grown. For example, our kids need a little bit more guidance now when it comes to their education. I wouldn’t call ourselves tiger parents per se, but academics are very important to us. And just to give you an example, like my daughter has required a little bit more help with her math homework lately. So I work with her on weekends in the mornings on her math homework. We have her sign up for some extracurricular math activities. Both of our kids are in sports. I had the pleasure of being an assistant coach for my daughter’s basketball team.

I want to make sure that I’m dedicating enough time so that we’re bringing up good citizens in our household. So that’s one of my main goals. The other goal for me of course is to make sure I’m still interested, whether that’d be starting another business or even going back to work. I thought of that at one time, just maintaining stimulus from my brain is very important. And of course maintaining a really good open relationship with my wife and make sure we are just a real happy family going on vacations and that sort of thing. So I don’t know if I have one singular goal, but it’s — I would say if I had to pick one goal is to make sure that my kids grow up to be good citizens.

Jennifer: What I heard from that was we need to go on vacation.

Steve: Yeah. But then here’s what’s funny about all this. My wife loves going on vacation, and for me at least vacations with the family, they tend to stress me out a little bit. Like we just went to Disney and I got really stressed out and like our kids occasionally they’ll misbehave and they’re not grateful for the vacations that we do have and we just get angry. Whereas this last thing where I went on this mencation [ph] with a bunch of other entrepreneurs, that was relaxing to me, just hanging out with a bunch of business guys where we’re just chatting about business or just relaxing. Those types of things tend to be more relaxing for me.

Jennifer: I’m looking at him and I’m just thinking to myself, oh gosh, he’s going to dig himself into a hole.

Steve: I mean I enjoy our vacations.

Jennifer: Yeah, I understand. Yeah. And so I guess we’re going to conclude this whole thing with every podcast or business podcast I listen to, the question I always hear is what is your favorite business book and why?

Steve: Yeah, so unlike my wife who only reads romance novels…

Jennifer: Oh I read other books stuff, but mainly romance yeah.

Steve: What else do you read besides romance novels?

Jennifer: Suspense.

Steve: Okay fine, suspense and romance novels, fiction.

Jennifer: Fiction, yeah definitely fiction.

Steve: I primarily read business books and programming books. And in fact, whenever I go on vacation, I usually take along a programming book or some sort of business book just to keep me occupied. The best book I think that I’ve read so far is Cialdini’s Psychology of Persuasion. I highly recommend that book. I’ve gotten so many takeaways, like all my sales funnels and everything kind of revolve around that book. So if you haven’t read that book yet, I highly recommend that you go pick it up.

Jennifer: What do you find most stressful about running a business?

Steve: The most stressful things that I find about running the business involve the people side of the equation.

Jennifer: All right, great. So, why don’t we start with on e-commerce side, and then also on your blog side, so we’ll do it separately.

Steve: So on the ecommerce side; it’s mainly managing people, right? Making sure employees are happy, making sure all the orders are going out the door and that sort of thing. And incidentally our experiences with employees with Bumblebee have made me realize that I don’t really want to run a business with a lot of employees. I know that’s the right way to scale, but the reason why I keep My Wife Quit Her Job really lean is because I don’t have any employees. I don’t have any desire to have a whole bunch of employees. I’d rather just have contractors here and there to help me with tasks that I might need to do on a regular basis, such as podcast editing and that sort of thing.

Jennifer: Yeah, I mean I just want to be clear. We’ve been very fortunate to have very great employees, but it is a little more stressful because if someone calls in sick and then we have to backfill or even hiring new employees has always been an issue. So one of the things that we’ve always talked about, why I don’t want to scale to ramp up, and I fully know that I’m holding the business back a little bit and why we agreed to not grow it so fast is because when you grow too fast, you do have to hire more. And we like having a small business. We like having the small family size business.

Steve: We don’t even spend that much money. So the money that we make is just more than enough. And I guess the only reason to just blow any business up at any point…

Jennifer: I think it’s ego, right?

Steve: Yeah, it’s ego, unless you want like a big sale which will set you for life. I don’t know. Yeah, I mean there’s trade offs for sure, but for the most part it would be ego.

Jennifer: Yeah. But I mean, do you think we would ever sell the business?

Steve: I mean, I never want to say never. I mean one day we might, but as long as there’s still interest in running it, there’s really no reason to do so unless we have something else we want to put that money into. Right now if you want to invest that money in something else, then yes, it might make sense. But for now we’re mostly in cash as is. We don’t even know where to invest our money right now. We’re waiting for like a downturn so we can invest that money. So totally it doesn’t make sense to add more cash to the mix.

Jennifer: Right, unless we want to spend more money on vacations. Well, vacations aren’t that expensive unless you want to buy a gigantic house. That’s the only thing that stresses me out.

Jennifer: I know, Steve has this huge thing against property tax. What do you find most rewarding about business, e-commerce, and also your My Wife?

Steve: I mean, I’ll be honest with you, I find My Wife Quit Her Job a lot more rewarding than our e-commerce business mainly because I get to interact with the people who consume my blog posts and my podcasts. I actually get to meet these people face to face at the Sellers Summit, which is my annual conference. With the e-commerce store, I don’t get a whole lot of gratitude I should say, or I mean we do have customers and they’re happy with our products but…

Jennifer: You have to admit it’s kind of cool when we see our products on our — Sorry, it’s kind of cool to see our products when it’s in a publication.

Steve: Sure.

Jennifer: And also we get some really nice testimonials.

Steve: Yeah. I’m just saying that I get more gratification out of running My Wife Quit than Bumblebee. I mean they’re both rewarding in that we’re able to have the freedom that we have. We’re recording this podcast at like 3:00 PM on a weekday, right? These are the luxuries that we have as a result of our businesses.

Jennifer: Speaking of Sellers Summit, one of the newest things that we’re doing at Sellers Summit is the mastermind group. What do you see the benefit of a mastermind? How many masterminds do you belong to?

Steve: Yeah. So at Sellers Summit we…

Jennifer: Maybe you should explain what a mastermind is.

Steve: Unfortunately all the tickets are sold out. I don’t know why…

Jennifer: I know but…

Steve: Yeah. The mastermind basically for the conference is where we bring a bunch of e-commerce entrepreneurs together. We actually screen for revenue so that everyone really knows what they’re doing and they’re high level entrepreneur. We put to them together in a room and then we go around and put each other in a hot seat, and we basically helped each other with our businesses.

And, I would say last year or the year before last, I was actually a member of five masterminds at one point. It got to be a lot. I was getting a whole lot out of them. And then once I got injured, I kind of just, I kind of quit most of those masterminds, and then now I’m just trying to get back into it. But the mastermind is a great way to advance your business because running any business is, it’s a really lonely process, and the best way to kind of improve any business is to just kind of share your experiences with other entrepreneurs.

Jennifer: Agreed. But don’t you think that — I would like to think or I feel like most of our changes in our businesses where we made a huge improvement happened after you attended a mastermind.

Steve: Yeah. Either a mastermind or a conference, right? I just came back from Traffic and Conversions, and Social Media Marketing World with a huge laundry list of items. I came back from the mencation with a list of items as well. And just the people I’ve met. The way I approach people is I ask them to be a guest on my podcast, and that’s what usually starts a conversation. That’s how we become friends because sometimes at a conference you only have a couple of minutes to chat with someone, but when you have someone in the podcast, you get their attention for a full hour and actually really establish a meaningful relationship that way. So yeah, that’s why I always advise that everyone go to conferences and for masterminds if they can.

Jennifer: Yeah. The conferences may be very intimidating for people such as myself. What would you recommend for a person that is an introvert like myself or who is afraid to put themselves out there?

Steve: Just go with a friend. Just make sure there’s one person there that you can hang out with the entire time and that should be good enough. I’m at the point now where I don’t really need to do that. Like I’ll just go by myself, like I was by myself for both of these conferences and it was fun.

Jennifer: And which conferences do you go to?

Steve: I usually go to Digital CoLab, which is a conference run by my business partner Toni, FinCon, which is run by my buddy PT, Traffic and Conversions, Social Media Marketing World, which is run by Mike Stelzner. This next year I might be going to speak at Stylecon, which everyone’s been laughing hysterically because I got no style, and I might also be speaking at the Agents of Change. I actually haven’t asked you for permission about that one yet, but I’ll bring it up after this recording stops.

Jennifer: Okay. I’m going to end this by asking if you have any questions for me.

Steve: I don’t have any questions for you, like off the top of my head, I think we’re good. Let’s end this before…

Jennifer: We end to fight.

Steve: Yeah. All right, take care.

Steve: Hope you enjoyed that episode. Please give a round of applause for my wife. It’s actually really difficult for her to put herself out there, and I’m always appreciative when she comes on the show. For more information about this episode, go to my wifequiteherjob.com/episode200.

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 parameter that is closely tied to your e-commerce store. If you want to give you to try 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 Payability for sponsoring this episode. If you’re looking to take back control of your cash flow, and scale your Amazon business fast, then sign up for Payability and say goodbye to cash flow issues and stock outs. With daily payments, you can speed up your supply chain, buy inventory at optimal times and stay in the buy box. The more control you have over your cash flow, the more buying power you will have. Visit Go.payability.com/steve to get started, and cash in on a $200 credit just for being a listener of My Wife Quit Her Job. Once again that’s G-O.payability.com/Steve.

And finally, 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, 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 talk about how I use these tools in 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 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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199: The Best Way To Source Private Label Products From China With Nathan Resnick Of Sourcify

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The Best Way To Source Private Label Products From China With Nathan Resnick Of Sourcify

Nathan Resnick is someone who I met at The Hustle conference in San Francisco. He is the founder of Sourcify which is a company that helps you find manufacturers to produce your products.

Prior to that, he owned 2 ecommerce companies, Yes Man Watches and Cork Supply Co. And recently, he was on the Hustle blog where he made 23k selling Conor McGregor F You Suits.

Nathan is my go to guy when it comes to sourcing from China so enjoy this episode!

What You’ll Learn

  • Common mistakes when sourcing from China
  • The best way to find good suppliers
  • The disadvantages of using directories like Alibaba and Global Sources
  • How Nathan ensures the quality of a factory
  • How to attract the attention of a potential supplier
  • How to tell the difference between a wholesaler, trading company and factory

Other Resources And Books

Sponsors

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Transcript

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’m happy to have Nathan Resnick of Sourcify with me on the show, and we’re going to talk about the ins and outs of products sourcing from China.

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. Now what does do? 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.

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 prizes in our store. And customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%.

There are other things that you can do too. For example, let’s say you offer free shipping for orders over $100, well you can tell Privy to flash a pop up when the customer has $90 in their shopping cart to urge them to insert one more item. 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.

I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. And I’m blessed to have them as a sponsor because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 20% of my revenues. Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is so powerful.

They can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send 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 single email.

Klaviyo is the most powerful email platform that I’ve ever used 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 is your host, Steve Chou.

Steve: Welcome to the My Wife Quit her Job Podcast. Today I’m really excited to have Nathan Resnick on the show. Now Nathan is someone who I met at the Hustle conference in San Francisco. And what’s funny is I actually went over to chat with Tucker Max, but before long Nathan and I started talking about e-commerce and left Tucker out of the conversation. Anyway Nathan is the founder of Sourcify which is a company that helps you find manufacturers to produce your products.

And prior to that, he owed two e-commerce companies, Yes Man Watches and Cork Supply Co. And recently he was actually on the Hustle blog where he made $23,000 selling Conor McGregor FU suits which is really random. And with that, welcome to the show Nathan, how are you doing today man?

Nathan: What’s up, I’m doing great, thank you so much for having me.

Steve: Yeah so Nathan, first off how did you get started with e-commerce? Tell me about your journey selling watches to quirks to Conor McGregor suits to starting Sourcify.

Nathan: Totally. Well, I think really my journey in e-commerce starts about seven years ago, when I was living in China. I was a foreign exchange student living with a host family that didn’t speak English, this was in high school. So I mean I’m young, but even then I was younger back then and it just got me so excited by the supply chain and manufacturing landscape because I saw the power of these factories to bring new products to life. And literally you would see thousands of different products being produced everything from shoes and socks to bunk beds and [inaudible 00:03:51] at these factories.

And we had the opportunity to go check out a few factories and obviously that’s the main industry over in China. And so in 2010, I got very excited by the ability to turn ideas into products. And so I guess the following year I was working a nine to five summer internship. I was a sales intern making a hundred plus cold calls a day, and I actually read The 4-Hour Work Week, I’m sure you guys are all familiar with that book.

Steve: Sure.

Nathan: And it motivated me to start my own company. And so that’s basically what I did. And the first company I started that was run through Shopify I started through a Kickstarter campaign. We invented the first leather watch strap without holes. It worked like a zip tie where you slide the strap through the buckle. It caught on notches in the strap. We launched on Kickstarter, grew it to just over six figures in sales on Shopify. And since then I’ve just been bringing so many different products to market, and that’s kind of how Sourcify came about.

Steve: Can we talk about that first watch company? Like presumably you knew nothing at the time, right?

Nathan: Yeah totally. I mean literally I goggled how to start a watch company and it’s a funny story. I was launching our campaign on Kickstarter and I was on scholarship. I was a freshman in college, I obviously didn’t have the money to fund production, and that’s why we turned to crowdfunding. I mean most crowdfunding campaigns are basically raising money to fund their production runs.

And so that’s what we did initially. And so, literally I was in the library of my university, the University of San Diego at the time and we were about to launch on Kickstarter the following week. And my buddy who was smarter than me, I mean honestly I don’t consider myself that smart of a guy, but all I work and hopefully work smarter than most people. And so he was like, Nathan you should file for a corporation. In my head I always thought a incorporation, that’s like huge, like how am I going to do that?

And so we literally just goggled how to file a corporation, ended up filing for a Delaware C Corp in our university library, and a few days later I had Yes Man incorporated or registered with the state of Delaware.

Steve: But presumably — so in terms of sourcing you didn’t know what you were doing back then. So I was hoping to if you can just kind of talk about those experiences when you didn’t know what you were doing. And then now that you do know what you are doing, what were some of the common mistakes that you did early on?

Nathan: Totally, I mean really for us, when I was first going through the process of bringing my idea to life like seven years ago, it took us five months to go from an idea to a finished product, and it was crazy. I mean, literally you have so many open databases out there like the Global Sources and Alibaba and Made in China, and all that stuff. And there’s going to be some solid factories on there, but the most of it is a lot of noise. I mean most of the companies on there are going to be trading companies or export agents and there are some reasons to work with them.

But really that whole process when we first turned — when I first turned my idea into actual product, it took us five months because they were so much back and forth. I had no clue even what a CAD was to actually create our custom mold that we needed for our watch buckle. And the whole process was crazy. I mean not only was the importation of the product almost got stuck in customs for some reason that I didn’t understand, but also just the back and forth with different factories, and there weren’t that many resources online at the time really diving into private label or leaning on creating custom products.

And so it was a complete learning curve. I mean at the end of the day if you want to dive into some details I was working in four different time zones. I was based over the summer in Washington DC area where I grew up and my buddy in San Diego called a buddy designing our first logo. I had an engineer based in Budapest who was doing our CADs, our computer data designs that we connected with through…

Steve: How did you find that first factory? Was it off of Alibaba or did you actually fly over to Asia?

Nathan: So the first factory was through a friend of a friend through my host dad in China’s friend who was in the factories and just connected me with one. And I had no clue whether to trust them or what exactly to make of it, but I didn’t have anyone else to trust. I said, all right well if my host dad introduced me to this guy and this guy introduced me to the factory, hopefully it’s all right.

And it was a whole process and even then when you go through and source products through Alibaba you’ll always going to have that back and forth and most people that go that route, they’re going to submit like 20, 30 plus requests to different potential manufacturing partners on a website like Alibaba. And that just takes so much time going back and forth and having to do your own due diligence on each factory. And it makes it so you can’t manufacture fast, and when speed especially with all these viral trends you see is so important, it doesn’t make sense to go through an open database like that.

Steve: Interesting, so it sounds like you kind of have a negative opinion of Alibaba or Global Sources and those type of resources?

Nathan: I think it’s a great starting point, but I think if you’re really trying to manufacture effectively and move fast, I think there’s some bottlenecks in that experience. And it just stems from them being an open database. It involves just a lot of back and forth, and I think there’s a better way to streamline that process. And so if you don’t necessary have to search, and validate and do the due diligence on the factories yourself, then you’re going to be more suited to bring your product to life faster. And so that’s kind of the whole dynamic that I realized.

And I can kind of dive into the different types of companies or manufacturers you might come across on Alibaba.

Steve: Sure, yeah.

Nathan: I mean the main ones are obviously going to be factories who are the actual producers of certain products and the main – so its factories, trading companies, wholesalers, export agents. The main way right off the bat to tell a trading company is sometimes they have it in their name. With that said, there are some factories that have a trading company arm to their company, but usually you can tell from product categories.

So if you go to their let’s say Alibaba home page and they’re producing everything from watches to backpacks and sunglasses, all those products stem from different raw materials, so it doesn’t make sense that a factory would produce in all those different product categories. But for like an apparel or a cut and sell manufacturer, they could produce in different apparel categories and still be considered a factory. And then diving deeper actually you can look at their business license. If you have a friend or if you speak Mandarin you can request for their business license, and they will hold back out on track through a province website in China and actually see how they’re registered as a company in China, or whether or even if they’re registered.

And then the sourcing agents, and export agents and even trading companies, those three categories of companies are basically just taking their margin on top of the actual unit cost that a factory gives them. And the value add that they provide is kind of being a liaison and having those English speaking sales reps.

Steve: So let’s say you wanted to make like your own mold or something and you went to a trading company, will then the trading company do all of the go between, between the design and the factory?

Nathan: They would act as a liaison. So I mean there are plenty of factories that don’t have English speaking sales reps. And so that’s where a trading company could come in to help and all that kind of that process to actually get that mold created and then go through that whole design phase.

Steve: What is your opinion on like going to like the trade shows then like the Canton Fair or Global Sources?

Nathan: Oh it’s valuable. I mean the value that you get from most trade shows is meeting these people face to face and like at these booths, I mean it’s much easier to tell if they are actual factory or trading company once you kind of dive into a conversation, or you just tell from the products that are in their booths. And in Asia business revolves around relationships, it’s very important to make that face to face relationship. And if you start doing business with a factory and you start reordering, if you actually make that trip over and go to their facility, they’ll even deepen that relationship.

I mean it’s crazy because when we’re doing factory tours, most tours are going to last two to three hours, and that’s just because it’s a whole process. It’s all about you know in China the term is [inaudible 00:12:17] and it’s just about bringing that synergy together from a business relationship standpoint in terms of look, like we don’t want the business to be transactional, how it is a lot of times in the Western world, we want to dive into the relationship of actually conducting a long term business and finding synergies across the board and hoping we can grow together.

And that’s even more important if you’re working with smaller middle tier factories. And even the big factories they understand like if it’s a small company that devotes time with them and puts in an effort to build a relationship, they could be more willing to work at lower not use lower minimum order quantities.

Steve: I know that most of my factories that I use for our store, they actually aren’t found on Alibaba, and is the reason for that that because there’s just too much riffraff on Alibaba and Global Sources?

Nathan: So here is the thing that a lot of people don’t actually understand and they don’t even think about is think about the lead flow from a factory standpoint. Right now for most factories and their clients there’s too many lead flows, and that’s open databases like Alibaba and Global Sources or trade shows. Both lead sources provide pretty low quality leads.

If you look at Alibaba and analyze the lead flow that they provide for factories, let’s say you get 50 inbound requests from Alibaba as a factory each month, less than 1% of those inbound requests will actually convert into a production run. And the reason being is people just go on there a lot of times and spam different factories and say, hey, I’m interested in purchasing this and just kind of message the same thing across the board to a lot of different factories, and that’s the process that those open databases just require you to have.

So from a factory’s standpoint, they spend so much time and money qualifying leads. And that’s a whole dynamic, and a lot of times people say, you know what, didn’t the factory respond. Well it’s probably because they got ten other messages that day that all sounded similar and they weren’t sure if you were legit or not. I mean that’s the whole dynamic behind a factory lead flow. On the trade show side to, it’s nice to meet someone face to face, but at the end the day everyone has this little notebooks where they staple your business card in and write down a few notes on you.

And a lot of times at trade shows they’re usually pretty good at following up, but the dynamic there is it still depends on the presentation that you have with the factory especially when you’re on their booth. I mean after a long day at a major trade show like the Canton Fair, if it’s towards the end of the day and you’re a bit sluggish, I mean if you aren’t excited about producing these products, how do you think a sales rep that’s not getting paid that well is going to feel.

Steve: So based on what you just said, how would you stand out if you were to send an email to someone on Alibaba, like how would you let them know that you’re serious?

Nathan: That’s a great question. I think first and foremost you have to show buyers intent, and to do that you want to ask a few main questions and tell them about yourself like if you have a online store, I mean what’s your real risk in let’s say it’s like IP protected product of them necessarily copying it. I mean if you can actually showcase like, look, this is what we’ve done. This is our store, this is the growth we’ve had, these are the products we need to produce, your response rate is going to be much higher because they can actually see your assets and that’s the whole dynamic.

Or even if you have like easily searchable online presence, like send them your LinkedIn, or I won’t say Facebook, you can’t use Facebook over there, but LinkedIn is definitely doable. And so showcase to them that you’re actually looking to buy. And then don’t necessarily bombard them with questions right off the bat. I mean obviously you want to ask them a few key questions like, who they potentially produce for, what are their main markets, maybe about their MOQs. But don’t just bombard them with questions right off the bat because for them to reply back a decent answer, it’s obvious it’s going to take them quite some time.

And even on their end a lot of times the English level of these sales reps varies quite a bit pretty dramatically. But I think the whole dynamic there is like make it straightforward, easy to comprehend and make it your miracle words 1, 2, 3, 4, 5 type of order of questions.

Steve: I know you run Sourcify and presumably you have this huge database of vetted suppliers, right? But you’ve only run an e-commerce store selling watches and quirks and so I’m just kind of curious how you actually vet a factory unless you actually use them, right?

Nathan: Right exactly. So our dynamic to the factories basically stems from through connections, through the industry, trade shows and then verifying business license and certificates. So we work directly with like some bureaus or provinces to actually see their business licenses and then we basically go through like ISO certificates and RAP certificates to see what they’re qualified to produce from what certificates they have.

And obviously the best way to validate and verify a factory is working with them a few times and then confirming that they have quality over time and the communication holds up over time. And that’s something that we’re growing with. As we grow the factory relationships that we have become stronger and stronger.

Steve: So what are some questions that you ask to vet a factory, or what are some things that you’re looking for?

Nathan: Totally, I mean number one would be past clients, main market, main product categories, business licenses, certificates like ISO is a pretty standard one. And then also just we usually ask for a few different touch points at the factory. So number one you never just want to have one mode of communication, you want to be able to communicate with them on everything from email, WeChat, Skype, WhatsApp. WhatsApp actually just got – was banned.

Steve: Yeah they just got banned yeah.

Nathan: Yeah exactly, so heads up on that. If you use WhatsApp, try to switch over to WeChat. And then in terms of the actual process like most people that you deal with through like a request on Alibaba is going to be a sales rep. So try to get more to a managerial person at the factory and sometimes even the boss, because when we tell factory bosses what we’re doing at Sourcify, they get excited as well because number one, it’s free high quality lead flow for them, and number two it helps to streamline that process of a lot of the back and forth that happens when you go through a platform like Alibaba or even a trade show.

If you’re managing your product, your production process over e-mail or over WeChat, there’s a lot of back and forth and to be honest we do have quite a few entrepreneurs that aren’t really that organized. And so having some sort of project management tool on both sides of the table to help actually track that process is beneficial on both sides of the table.

Steve: I guess let me ask this in a different way, what are some red flags when you’re dealing with a factory?

Nathan: Right I mean red flags would be obviously lacking communication, I mean language barriers is always going to be there, but if the language barrier is too deep, it’s not a factory we’re going to want to deal with just because the communication with our clients isn’t going to work out. And then just background checks like business licenses like sometimes if they’re really just registered as a trading company or if they’re producing across product categories.

It’s a balance. I mean to be honest most of the like I’d say around 85, 90% of the companies that you find on some of these online databases aren’t really actual factories, and sometimes going through a trading company if you’re producing at lower MOQs is worthwhile because then you can produce at these lower order quantities, and for a trading company you might not necessarily be the smallest fish in their pond. But it’s always a dynamic and I think that really at the end of the day it’s going to come down to the relationship that you’re able to establish between your company and the factory or your manufacturing partner.

Steve: So based on what you said, would you recommend like using a tool like Panjiva or Import Genius and find out who your competitors are getting their stuff from if it’s good quality?

Nathan: Yeah you could, I mean those are great tools. A lot of times those are produced for — a lot of people use them more at scale. If you really, really want to find out, it could be a good option, but at the same time you just have to be careful in terms of like who they’re actually importing through, or sometimes if they’re working through like an importation agent, the factory name might not necessarily be read on the label.

Steve: Okay and in terms of just like maybe Sourcify, are you finding suppliers outside of China, or are most of the suppliers still within China?

Nathan: I mean the trend really this is something that I think is really shifting more and more. Bigger companies are moving outside of China. It’s just a matter of fact that the labor costs in countries like India and Pakistan are cheaper. I mean the average factory worker in China is going to make about 400 to 600 a month whereas in Pakistan sometimes it’s like around 200, even as low as 180 a month. It sounds crazy, but that’s the going rate of labor over there and it’s just the dynamic of the world economy out here.

And so I think really in terms of addressing your question, we work with factories everywhere from Thailand, India, Pakistan, Mexico. We work with like the Economic Development Council down there to work with – we work with about 40 factories down there. And it’s a dynamic in each country. I mean the main differences that I see between countries like India and Pakistan compared to China is that China, most of the factories are a lot more systemized, whereas in India and Pakistan a lot of it is very labor driven in terms of like they don’t necessarily have much automation behind their products.

So if you need to produce 100,000 shirts with the same stitch, you’re probably going to have a higher likelihood of keeping that quality up going through a factory that has some automation in China compared to a factory in India that is using a lot of manual labor.

Steve: Okay, and then what is like an easy way to find those factories that are in other countries? Do they go to the fair or are they on Alibaba?

Nathan: So they do have some at the fair. They do have international sections at different trade shows like the Canton Fair or even sourcing direct at AFC market, we’d get a few international factories. But there are a few on Alibaba. There isn’t really — it’s surprising there really isn’t a main go to online database for these different countries like Alibaba set up. And so really the dynamic like at least for what would at Sourcify, that dynamic between us and a lot of those factories in those countries is we basically hire like a freelance factory manager to manage those relationships and build those relationships.

Right now we have a freelancer in India and a freelancer in Pakistan that’s helping us dive into those markets because the barriers are still really big to those countries. But from what we’ve seen actually, the MOQs and costs in some of these countries like Pakistan, we’ve been doing some athletic apparel there is actually cheaper than China.

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So let’s switch gears a little bit, and I want to talk about your Conor McGregor suit story because it’s really interesting and it really caught my eye as soon I saw it. And from what I read, you got your first sample of the suit among other things like a wallet and some other things within ten days, is that right?

Nathan: Yeah that’s correct.

Steve: Okay, so tell me how that’s possible, and then just kind of walk me through your process.

Nathan: Totally yeah, that was honestly probably the most fun project we’ve done this year. And basically the way it went down for anyone that hasn’t seen or heard about the Conor McGregor suits, you wore a pinstriped suit that had FU letters going down on all sides of it. And my team saw that the night he wore to the press conference, the next morning it was all over social media, all over the biggest media outlets. And we said wow, let’s manufacture this, let’s showcase our ability to manufacture this faster than anyone else because even the original clothing supplier was saying it’s going to take them 16 to 20 weeks to actually produce those suits.

And so what we did was we already had this suit factory set up and we’ve produced suits before. Hit up three or four of the suit factories we work with and said, hey, we’re going to start as fast as possible, here’s the first of the sew.

Steve: How did you find those original suit factories in the first place?

Nathan: That was just through our own network at Sourcify. So that’s kind of showcasing just the ability to move fast in terms of, look if we went through online database it would be a lot of back and forth to win potential factories we wanted to work with. So we already had the factory relationships lined up, and so it was just a matter of hitting them up and saying, look, we want to manufacture this, let’s get a sample as fast we can. And so we did wallets, ties and the suit. The wallet and ties actually came in six days, like printed ties these ties are incredible, and they’re actually pretty nice, and the FU knocking down the front and what not.

Steve: So can we talk about the process on the suit, like the suit I imagine, do you need a pattern, or did you just take one of their off the shelf suits?

Nathan: Totally, so it’s always — whenever you go to produce a product, you learn so much about the product. And so with suits there’s so many different variations. The fabric and all this was done remotely like literally in a day. Our factory sent over fabric options like just through WeChat and email. We picked a fabric that looks similar to the suit that Conor wore.

Steve: But you didn’t have Conor’s suit in your hand either, right?

Nathan: Right, of course, and it was all through just online looking at images and saying, look, does this fabric look the same. And it’s not something you can do with all products; obviously sometimes you want to have the fabric in hand. Like with athletic apparel for example there’s a lot of fabric weights that you can deal with or even just in apparel in general. But with suits and the lettering, the lettering was actually the hardest part, because we had to space out each and every letter.

And so what ended up happening was like we just printed different spacing on a piece of paper and said, hey, like does this look like pretty good spacing, what size are these letters? And it’s literally spaced out to the exact millimeter, and so the spacing has to be spot on. And with actually suit production especially when printing on fabric, the factories first send it to the printing factory that print on the fabric, they then go ahead and have to cut and sew the sample to our specifications.

I actually got the suit spec’d out to fit me, so I wore on a fight night which was pretty fun. But it was a whole dynamic and that’s the whole process you have to go through. But literally if you have trust in the factories you work with, like that first day or I guess it was night because here in San Diego our night time is day time in China. We paid for the samples and the samples — I think I wrote an article the samples were like I want to say around $100 or so including shipping. And we paid for all that before we even had all the specs ready because we knew that we could trust these factories, and we knew that we needed to do this fast.

And so ten days later, the suit and ties and wallets all showed up, did a little photo shoot, and we launched FUsuits.com, and that went pretty viral. I mean to get that going viral, we partnered up with a digital marketing agency, and I can dive in the story more if…

Steve: Actually, I’m curious about the back and forth to get the suits made. Can you just kind of describe what you did? Did you send them a photo of the suit in the beginning?

Nathan: Yeah literally. So photos of the suit and then they said, well, what’s the fabric, what’s the spacing of the letters, and then we were like what’s the trim, what’s the cut, all those certain details.

Steve: But did you know all those terms, did you know all the terminology?

Nathan: So what I literally did was I went to a custom tailor here in San Diego. I said, hey, I need every little measurement you can spec out and measure me. And I did that, that same day, the day after we saw the press conference. I went to a suit tailor here in San Diego, got measured, sent those measurements to the factories we were working with in China. They confirmed the measurements, and then next step was spacing out the letters and picking the fabric color.

Steve: Okay so they already have like a suit design in mind, right?

Nathan: Right.

Steve: Okay. And so it was just a standard suit it sounds like, and then you just had to pick the fabric and then the design that went on the suit, right?

Nathan: Yeah I mean so here’s the thing just briefly touching about the relationship that you can have with these factories. A lot of people especially if you’re dealing with a factory that handles this product a lot, they know the specific Asians that they need to produce your product. Like if you’re going to produce backpacks or whatever maybe, they know all the material options, they’ll know what design items you may want on your backpack, what kind of zippers you might want to have. They’ll ask you.

If they’re a good factory, they’ll ask you those questions. They’ll ask you like, hey, what about this type of zipper, or this pocket you forgot about. If they’re really thinking about the customers they’ll ask you that. And so we’re fortunate enough to work with factories that ask those questions, that want to develop great products as well.

Steve: Okay, can you describe some of the choices that you had to make, or the tradeoffs? Like was cost — cost was obviously a factor, right?

Nathan: Honestly the margins on these suits were great. Like literary I think our unit costs on these would have been about $30 or so or $40 per suit, and we were retailing the full suit for about 400 and that was — I mean the original tailor was selling them for like six or $7,000. And then the color he was doing at I mean it was wool fabric, we had a back with a double open, we had two pockets on the sleeve, two buttons. Literally whenever you produce a product, you learn so much about different options that you can incorporate into the product.

Steve: So you got your sample back. Was the sample fine when you got it or?

Nathan: So what we always recommend is usually if you need to move fast, you’re going to want to buy samples from two to three factories. So we bought two different samples. One of the suits, the lettering was a bit too — the letters were just too big was what, they didn’t space it correctly, and we wanted to test that. That was something we said, hey, let’s send one space into one factory, another space into another.

So one of the samples came in, the spacing was too big, the other one was right on point. I mean I’ll share a photo with you of the suit I wore out on the fight night and it was incredible.

Steve: Okay so you got one sample that was good like just right off the bat, right?

Nathan: Mm-hmm.

Steve: And presumably it fit you and all that. What were some of the logistics that — so you paid $100 per sample?

Nathan: Yeah.

Steve: Okay. So what are the logistics then in terms of getting orders? Did you have to preorder a bunch of suits or did you take orders first and then produce them?

Nathan: So that was the biggest dynamic. Once we got the suit in I was fortunate enough to be connected to a few different photographers here in San Diego. I said, hey, I really need these products shot like right now today like you’re going to do those shoots tonight or whatnot, made it happen, got products images up. And that was the biggest dynamic is we launched the site promising people to fulfill the orders before the fight. And so it was a race against time, if you wanted to fulfill these orders we had to do it fast.

The dynamic of what ended up happening is that first week at sales when launched fusuits.com, did $23,000 in sales. And that was primarily — I mean we had a digital marketing partner that was setting up the site and handling the assets and was going to run ads, but we landed on high [inaudible 00:33:09] to slay like a lot of big media outlets driving a lot of good traffic to our site. And that’s what primarily drove a lot of those sales. But as we grew, the marketing guys made a slip up and image of Connor McGregor and he’s got a great legal team to operate that way.

But we used the image of Conor McGregor and the name [inaudible 00:33:33] is and they claimed rights to that and basically sent us a cease and desist letter within a week of our e-commerce store being up.

Steve: How many suits is $23,000?

Nathan: 400 divided by 23,000.

Nathan: Okay, so it wasn’t a ton of suits, but I mean that’s the thing about selling a higher price ticket item is you don’t necessary have to sell a ton of units to make a lot of money.

Steve: So did you collect the money first and then produce them?

Nathan: So what happened is the cease and desist. We didn’t even go on to production, we just had the sample, and then we had the cease and desist. It was like look, if you ship we’re probably going to sue you guys, or you can just refund them and take down the site. So that’s what ended up happening, but even then we had the production lined up. We’re fortunate enough right now to have the cash flow to do kind of case studies like just to showcase our speed of manufacturing.

And we’ve done other case studies like we are – I don’t know if you’ve seen the [dad bought bags] [ph] that have been going viral. We were working with the original creator of that, but so many people knocked that off now that his market share has decreased dramatically because he didn’t pull the trigger fast enough. But it’s really a lot of times if you’re looking to capture viral trends, you have to move fast. And if you’re going through open database or you’re spending time trying to find a factory to work with or don’t have trust in your manufacturing partner, your ability to move fast just isn’t there.

Steve: So after you got your first sample, that factory was basically ready to go with production?

Nathan: Yeah, we would have had — I mean we could have had 500 suits done in two weeks basically which is it’s not a ton, but 500 times $400, I mean I don’t know how much money that is in sales, but it’s now decent money for two weeks.

Steve: So would you have gotten inspection then also or did you trust this factory enough, I’m just trying to get an idea?

Nathan: Yeah that’s the thing, when we work with factories because we’re sending them in the flow, we put pressure on them and say, look, if communication drops off, if the quality drops off, we’re going to cut off — we’re going to cut you off from our list of factories that we work with pretty much. And so that’s the whole dynamic there is we put a lot of pressure into our relationship.

And I don’t know if pressure is the right word, but we try to rule our relationship around this dynamic that we create by sending them lead flow, and that’s the whole dynamic. We’ve had — I’ll be honest we’ve had — we only had one factory that we really had to cut out and that’s because the communication was too iffy and the sample that they had produced for a client was tablecloth actually, some really cool tablecloth, but the communication was just wasn’t there and that’s huge. If you want to connect with your factory like obviously they have to respond back especially if you’re trying to go on a production run.

Steve: It’s actually a shame that you never shipped because I had a whole slew of other questions, like suits have sizing issues, right?

Nathan: Yeah.

Steve: And I was kind of curious how you were going to handle the custom sizing involved in selling suits of guys of different sizes.

Nathan: That was the hardest part of the biggest question is like how do we actually size this out. And what we were going to do is just group it into small, medium, large, extra large and kind of just shipped that. I mean it wasn’t necessarily like a long term e-commerce play.

Steve: Yeah of course.

Nathan: It was a short term catching a viral trend. And so we weren’t necessarily — we weren’t thinking too much about the long-term customer relationship that we have with the e-commerce store. It was a bit of like just kind of comparing it to a drop shipping model where you have so many like turn and burn entrepreneurs that will drop ship products that take three weeks for the products to arrive to a customer, and they don’t have any long-term relationship with those customers. It was more of that model, but I think really the scalability for any e-commerce store is in branding, in private labeling and creating custom products.

Steve: So your plan was to get the orders ahead of time, so you knew what sizes that you needed and then place the order and then have the factory make it?

Nathan: Exactly, exactly and we didn’t even — we kept all the money in Stripe, I think is what we’re using. Because that was another thing too, we decided not to use Shopify, we used Woo Commerce because Shopify sometimes if they see stores that are infringing on others IP wishes like a potential risk that obviously came to play in this case study, Shopify will take down a store if it’s infringing on IP, whereas Woo Commerce usually just lets it fly.

Steve: Okay. I had a question because I get this question a lot in terms of dealing with plastic products. In your experience when designing plastic products, how much does it cost, and what’s kind of like your process? Do you need like a CAD designer, or what are the resources you need?

Nathan: Yeah I mean classic products can mean a lot, like this pretty general kind of product category, but I would say usually first dynamic is trying to find a factory that’s produced something similar to what you are looking to make. And that’s the whole process. If you’re looking through like an open database, obviously you have to spend some time searching through those different manufacturing partners.

But if you’re trying to create a custom product and really go through that route of making your own mold, most of the time you’re going to want your own CADs done, and honesty can get CADs done through like the outsourcers and freelancers abroad for a pretty effective rate. And then molds like it obviously depends on the product, but I mean you can buy molds for the low like just a few thousand dollars or even less than that now. I mean especially if you can find a factory where you just need to modify a mold, then that’s really not that much work; it doesn’t have to be that expensive.

Steve: Where did you find your CAD people in general, like what service did you use?

Nathan: I used Upwork, it used to be Elance, and that was my first time. That was like seven years ago when I was trying to bring this product to life. And I mean when I started out I didn’t even know what a CAD was. Luckily my dad is an engineer so he kind of explained what it was to me, and I just went through the process. And literally what I did like this is what I think you can do especially if you don’t have like a designer or product background. I say, look, see what products you like on the market, and then take different aspects of those products and apply it to a certain product to make it better.

And that I think is really – everyone is always trying to improve on different products, and you don’t necessarily need to create completely custom products. You can apply something that’s working on a different product to a new dynamic. Like for example with our watch straps that we invented, there was already those belt buckles that had a zip tie function. And some people say well you just took that zip tie function on the belt and put it on a watch strap, and you see a lot of brands that are doing that nowadays where they take aesthetic or a function that works on a product and apply it somewhere else.

Steve: And I guess the same goes with like clothing and textiles as well, right? You don’t have to actually have a pattern design per se, you can probably just take something that already exists and then a manufacturer maybe modify in some way, like get a pocket or a seam or something like that?

Nathan: Yeah totally and especially even with the rise of like more organic or sustainable products like bamboo or coal, all those different materials or wood, you see so many different brands that are sprouting out in all sorts of product categories because they see this trend towards sustainable products that are potentially selling better. And so they say, hey, if someone is creating wooden watches, why don’t I create wooden speakers, wooden hats and like we’ll have brands and stuff like that.

So it’s a whole dynamic, and I think that it opens a door for some entrepreneurs. But at the end of the day with the brand, I think it’s really the aesthetic that you create and especially on the marketing side there’s so much going on and in the digital marketing world right now that I mean I think you really need to start by honing in on a channel, optimizing that one channel and then figuring out other ways you want to grow.

You see some entrepreneurs that start off saying, oh I want to sell across channels on Amazon, Shopify, eBay, all these different channels, and like they don’t even know how to scale at one channel and they already started trying to scale five. It’s like look, first crush one channel, grow on that channel and then start expanding, then start figuring out other ways to grow.

And I think that’s partially because you have so many resources available where you can now sell effectively across channels, but also at the end of the day it’s partially the kind of maybe short sighted nature of some e-commerce entrepreneurs who really think they can really dive deep instead of — or I guess take a wider approach instead of diving deep on one platform.

Steve: I’m just curious, how do you prevent your manufacturers from selling your design to other people, or kind of violating copyright?

Nathan: Totally, I mean the IP question is always in play and we get that a lot especially with more customer private label products. I’d say first and foremost it goes back to the relationship that we have with these factories. We put contracts in place, but to be honest contracts number one are you going to really have the money to go fight a contract in China and is it even going to be worth it? And number two it’s just a lot of time that can be worth your time to go through that legal battle.

Ad so it’s all about the relationship on that end. And at the same time too like with branding, if you’re creating a new line of a consumer product good like let’s say socks or hats or whatever product it may be, at the end the day what’s going to sell your product is the brand. I mean like obviously you want to create a high quality product, but at the end of the day until someone actually touches and feels your product, they’re going to be sold especially online through the brand that you create.

Steve: Okay, I mean even if you design something completely unique, there’s really in theory nothing stopping a manufacturer from modifying a slight bit and selling to someone else, right?

Nathan: Yeah I mean I’ll touch on — I was looking into the story of the TRX straps, the workouts straps that are just like ropes, that I mean that founder literally spent I think I was listening to a podcast where he said he spent like five plus, five million dollars basically fighting a legal battle, and he wasn’t even fighting it necessarily with the direct factories overseas, he was fighting it with a trading company that was selling his products as a knock off brand on Amazon.

And what the lawsuit ended up happening is he worn it, but all that meant was that there was people’s products got taken off Amazon, and so he could now take over that online channel which is obviously huge and a big win. But at the end of the day I mean it’s always going to be a balance trading, you need products and there’s some stuff you can do with the Customs and Border Protection in terms of having them help you protect the IP around products that are being imported that are infringing on your trademark. But at the end of the day I mean sometimes you can work through these e-commerce platforms and have those stores taken down which is a more effective route.

Steve: Are you seeing more and more like trading companies and manufacturers selling directly on Amazon these days?

Nathan: One hundred percent, I mean that’s one of the biggest dynamics that I see in Asia right now is factories, they’re anxious to see what a product that they’re producing is being sold for online now, that’s a pretty simple Google search or buy new search in their case. And so they’re realizing that they aren’t making most of the margin, obviously the brand or company that is selling is making most of margin. And so if they’re able to sell direct, they are obviously making a lot more money.

But the hard part with that is number one; to be honest most factories in Asia are just bad at producing brands and in making cool products. And number two they just don’t understand the logistics of importing, and sometimes just don’t want to invest in it, just not their bread and butter.

Steve: So it just makes basically the bread even more important, because these Chinese factories are just throwing up their generic products on there?

Nathan: Right without a doubt. I mean that’s the thing, like you see what happened with recently there was fidget spinners, I mean it got crazy competitive and was just because everyone was producing those and trying to sell those. And it’s just the whole dynamic behind I think the manufacturing landscape right now is if you really want to create long-term protection around your product, you’re going to be selling the brand. I mean you can have IP around your product, but if you don’t have the money to protect that IP it’s not that valuable.

Steve: Right. All Nathan, we’ve been chatting for quite a while, I did want to get an opportunity to talk about Sourcify a bit. So tell us about your service, and what’s your secret source?

Nathan: Totally, so what we do is basic connect a company to the right factory and walk them through production process. This makes it easy for anyone to bring a product to life and cut manufacturing costs. I’d say our secret sauce is the ability to produce faster than anyone else, and more effectively. And the way it works is someone just submits a product spec on a website, that product’s specs get sent out to factories that we’ve pre-vetted.

Steve: How complicated does the product spec need to be?

Nathan: It depends on the product. For I guess simpler products like jackets or shoes like a tech pack or something similar works, or you can literally just send images of similar products and say, hey, I just want to put my brand on a product that looks like that. I mean we’ll literally just send it out to factories that we pre-vetted that produce those pretty much same products. So it can be simple in that regard.

Obviously if it’s a product that involves a mold, you’re going to need a CAD or at least have some understanding of the technicalities of that mold. And from there, we send out the products specs to factors we’ve pre-vetted, those factories send back price quotes, you get shown those price quotes. You can communicate with — usually we send in like three to five price quotes that we showcase to you. You can see those price quotes, choose a factory to work with, get a sample made, go through a production run.

And what’s really cool about our platform actually, by the end of this month it will be able to handle the payments between a company and a factory, and we send wire transfers through block chain. So we beat the bank straight and send a wire transfer in six hours compared to two to three days. So it’s all encompassing in terms of the importation of the products, we help you understand the compliance standards of your product and then also work with 3PLs and freight forwarders to optimize that whole side of the logistics.

Steve: So it’s like a one stop shop essentially?

Nathan: Exactly, I mean our goal is to just make it easy to bring a product to life. I mean the struggle that I went through seven years to bring my first product to life was ridiculous. And after bringing so many products to life and realizing what was out there, I figured there must be a better way, and that’s really why I started Sourcify.

Steve: How do you guys get paid, is it a monthly fee or an upfront fee or do you take like a cut of what the cost is?

Nathan: Yeah so right now it costs — we’re switching revenue models actually like literally next week, but basically what it’s going to be is it’s going to charge 1.99 to submit a project, and then we take a commission, it’s a processing fee basically between you and the company when you pay the factory to go into production.

Steve: And then once there’s already business done with that factory, do you guys kind of step out of the way at that point?

Nathan: I mean it can be all between you and the factory. Our payment processing research will always be there and we plug into different messaging platforms like WeChat as well to kind of streamline and optimize communication.

Steve: And when you say vet the factory, it means you’ve checked all the certifications and that sort of thing, right?

Nathan: Exactly.

Steve: Okay, well Nathan it sounds like a really interesting service. I appreciate you coming on the show, and telling your story about the Conor McGregor suit which was really random and answering all these various product sourcing questions regarding factories in China.

Nathan: Totally my pleasure, thank you so much for having me.

Steve: Yeah man, thanks for coming on.

Hope you enjoyed that episode. Nathan is a hustler and he’s now my go to guy when it comes to product sourcing from Asia, and in fact he’s going to be speaking at my conference in May. For more information about this episode, go to mywifequitherjob.com/episode199.

And once again I want to thank Klaviyo for sponsoring this episode. Klaviyo is my email marketing platform of choice for ecommerce 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 auto pilot. 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. 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 P-R-I-V-Y.com/Steve, once again that’s P-R-I-V-Y.com/Steve.

And finally I want to thank Payability. If you’re looking to take back control of your cash flow and scale your Amazon business fast, then sign up for Payability, and say goodbye to cash flow issues and stock outs. With daily payments, you can speed up your supply chain, buy inventory at optimal times, and stay in the buy box. The more control you have over your cash flow, the more buying power you will have. Visit Go.payability.com/Steve to get started, and cash in on a $200 credit just signing up. Once again that’s Go.payability.com/Steve.

Now, I talk about how I use all these tools on my blog, and if you’re interested in starting your own ecommerce 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 are 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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198: The Software Tools I Use To Run My 7 Figure Blog With Steve Chou

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198: The Software Tools I Use To Run My 7 Figure Blog

Most people are amazed that I can run a 7 figure blog without having any employees and only working 20 hours per week. The truth is that I rely heavily on software and automation to accomplish most of my tasks.

So today, I’m going to go over every single piece of software I’m currently using to run MyWifeQuitHerjob.com.

In addition, I’ll talk about the pros and cons between the different options.

What You’ll Learn

  • Which tools I use for hosting
  • Which tools I use for marketing
  • Which tools I use for email
  • Which tools I use for social media marketing

Other Resources And Books

Sponsors

Payability.com – A financing company that provides high growth Amazon sellers with daily payments. With Payability, you can say goodbye to cash flow issues and stockouts and hello to scalability and profits. Click here and receive a $200 credit upon signup.
Payability Right now, Payability is giving away $1000 in gift cards to three lucky Amazon sellers. Click here to enter The Ultimate Amazon Reseller Giveaway today. Rules apply. Giveaway ends on February 28, 2018.

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

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

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 what strategies are working and what strategies are not. Now today I’m going to be doing another solo episode, but this time I’m going to talk about all the tools that I use to run my seven figure blog and my personal experiences with many different software tools.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. 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 20% 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 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 single email.

Now Klaviyo is the most powerful email platform that I’ve ever used 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 I also want to thank Payability for being a sponsor of the show. If you run a successful e-commerce business like I do, you probably know that the worst thing that can happen to you is to run out of stock. Now my wife and I regularly import container loads of merchandise from China, and having the cash flow to do so is very important.

Right now Amazon pays you every couple of weeks, but imagine what you could do if you got paid on a daily basis. My friends over at Payability make that possible for thousands of Amazon sellers. Right now high growth Amazon sellers are using the extra cash flow from Payability to buy more inventory, stay in the buy box, and keep up with demand.

Here is how it works. Every single business day, Payability gives sellers 80% of their Amazon earnings from the prior day for a 2% flat fee on gross sales. The remaining 20% is reserved to cover returns and charge backs, and is released to you on Amazon’s regular 14 day schedule. Your money isn’t doing anything for you if it’s sitting with Amazon, so why not get it faster.

Sign up now and put your earnings to work today. Go to Go.payability.com/Steve to get started, and receive a $200 credit on sign up. Once again that’s Go.payability.com/Steve and get a free $200 credit upon sign up. 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. In a previous episode, I discussed all the tools that I used to run my seven figure e-commerce store at bumblebeeLinens.com. So today I’m going to do another solo episode to talk about the tools that I use to run my other seven figure business, my blog at Mywifequitherjob.com.

And to be clear, when I talk about my blog, I’m lumping a bunch of things together which include my online training course at profitableonlinestore.com as well as my podcast, because they’re all under the same LLC. And what is cool about Mywifequitherjob.com is that it’s mostly a one man show. I basically have one person on my team that edits my podcasts, but that’s it, and I spend roughly 15 to 20 per week to run it.

And in fact that’s what I really love about blogging. Blogging scales incredibly well and there are practically no costs of goods. Now of course it did take me eight years to get to this point, but now I’m finally able to enjoy the fruits of my blogging labor. In any case without further ado, here are the tools that I use to run Mywifequitherjob.com.

So the first question I always get asked is what platform I’m on and where I host my blog. Now I’m on WordPress which is pretty much a no brainer today. WordPress is a CMS that pretty much powers over 30% of the web, very feature rich, it’s got a huge developer community making plug-ins, and all those things put together make it a no brainer as your CMS platform.

Now in terms of hosting, I’ve actually chosen to self-host my blog on a web host called Storm on Demand. Now it’s the same host that I use for my online store. I’m paying about $100 a month to host five websites which is super cheap. And the up times have been fantastic. I actually pay a little bit extra for a fully managed service over at Storm, which means that they handle all the server issues for me when there’s any sort of trouble.

So let’s say I need a new PHP package installed, I can just send them an email and they’ll go ahead and do it. If there’s problems with the server or something has gone down, all I have to do is send them an email and they’ll fix it. I’ve actually had to use their service usually like once per year or so like when something goes wrong, but for the most part it’s been really smooth.

Now most of the bloggers that I know who are doing seven figures are actually on a service call WP Engine which is a fully hosted WordPress platform. And the reason why I don’t use WP Engine is because it’s a lot more expensive. I think right now, I’m paying 100 bucks a month for Storm. If I run WP Engine I’d be paying over $250 per month. But what’s nice about WP Engine is that they handle everything for you. So overall, if you don’t want to deal with anything technical about your blog, go with WP Engine, otherwise host it yourself on a host like Storm on Demand.

Now the second most often question I get asked is about my email marketing, and so first off I use a service called Drip. And e-mail is actually responsible for over 90% of the revenue from mywifequitherjob.com. So I thought I’d spend a little extra time just talking about email in general, because almost every week someone emails me asking me what I think about MailChimp versus AWeber versus ConvertKit versus Drip versus Klaviyo.

Now I’ve actually used or I’m using these services and I’ve used them for the past nine years, so I just want to give you a quick rundown of the differences in the context of email marketing for blogging only. And so let’s talk about MailChimp first. MailChimp is actually the email marketing service that most people start with because it is free for up to 2,000 subscribers. Now I want to preface this by saying that I have had just horrible experiences with MailChimp in the past, and I will never ever, ever use them or recommend them for anyone for anything mission critical.

Usually I try not to be negative about services, but this particular service just burned me twice during a critical period of my business career, and I thought I’d just tell you what happened. I remember for mywifequitherjob.com, I remember I was about to do a launch of a product, and then out of the blue they just decided to ban me. And they banned me out of the blue. I sent them e-mail for support to see what was going on because they didn’t even give me a reason. And they emailed me back 48 hours later telling me that the decision was final.

And so all of a sudden, I had this launch to do, and I had to scramble to switch providers and get everything together in a hurry because it just happened without any warning all the sudden. Now I was actually using MailChimp for Bumblebee Linens as well. And I remember during the holiday season once again I got banned out of the blue. I wasn’t sending any spam; these are all content that I was basically sending out.

We got banned during the holiday season, and once again we had to scramble to find another email provider over the holidays and we probably missed out on over maybe a week of sales while I was doing this transition, so we lost lots of money. Both of these bans from MailChimp happened at a very bad time. And here’s what I don’t like about them. They don’t offer you any support except for e-mail, you can’t get anyone on the phone, and it can take up to 48 hours before you even get a response.

And we got banned both those times, the decision was final and I was forced to find a new provider ASAP without any warning whatsoever. And just recently, a couple of weeks ago, one of the students in my class using MailChimp just got banned as well just before the holiday season. So MailChimp is great if you want something that’s free for up to 2,000 subscribers. But if you want to use e-mail marketing for anything mission critical, I would advise that you stick with another solution. This is just based on my experiences; your mileage is going to vary.

Now when I got banned from MailChimp, both times I went over to AWeber. AWeber is actually a provider that I use for over six years. I was very happy with them and I still recommend them to this day. Back when I started blogging in 2009, AWeber was actually the de facto standard. The only reason I started out with MailChimp is because it was free. Unfortunately in the past seven years with AWeber, they’ve been really slow to adopt new features. And overall they’ve kind of fallen behind over the years.

Now that being said, whenever I rate any sort of email marketing provider, the first thing I look at is deliverability. And AWeber has fantastic email deliverability. I run all of my email provider prospects through a tool called Glock Apps. Now if you’ve never heard of Glock Apps, Glock Apps is a tool that tells you what frequency your emails make it to the inbox and not to spam or the promotions folder.

So here’s how it works. Glock Apps gives you a series of email addresses that will be under like Gmail, Yahoo, Hotmail, the whole bunch of email providers. And then what you do, you send a broadcast to this list and then Glock Apps tells you what frequency of your e-mails actually make it into the inbox, and then they provide you suggestions on what to do in order to get into the inbox. So I basically run this test on every single email provider that I’m looking at trying, and based on the deliverability I make a decision. So that’s just one thing I factor in when deciding what to do.

Once again AWeber has awesome deliverability, and I actually never would have switched if I didn’t start running webinars and I needed some additional features. Basically what I wanted from AWeber was the ability for someone to click on a link within an e-mail and instantly be tagged and segmented for a webinar. But unfortunately AWeber didn’t offer that.

When I told them that I was thinking about switching, they basically promised me this feature within three months, and so I waited, and waited, and waited. And there are of course delays in the implementation and that sort of thing, and I really couldn’t wait, so I decided to switch over to ConvertKit. Now at the time, ConvertKit was actually slightly cheaper than AWeber, and they had this click to tag functionality, so I just decided to make the switch.

Now making the switch is actually a major pain in the butt, and so I really needed this feature and that’s why I decided to switch. And when I did make the switch to ConvertKit, I actually fell in love with their service as soon as I started using them. They have a very intuitive user interface. They have really easy to use tagging features that allow you to easily segment your list, and overall I think I was with them for almost two years. I was extremely happy with them, and then I started getting mass spam attacks to my list.

Basically what was happening was like hundreds of these bots were just filling out the forms on my website, and basically these were just — they weren’t humans so they were of no monetary value for me. And they were filling up my subscriber list, and I was paying for these subscribers. And at that point I remember going to double opt-in, but these bots were so smart that they actually have another bot waiting to actually click on the double opt-in link that most email providers provide. And as a result I was getting hundreds of these per day signing up for my email list.

And the major downside of ConvertKit for me was that I could not easily pull my list and detect these fake subscribers. The main problem for ConvertKit for me was they don’t give you an easy way to remove crappy subscribers from your list. They basically offer one segment that’s built in. It’s called cold subscribers. They can use to see if no one has opened or clicked an email within a certain period, but that is it. It’s unclear what that time segment is, and you can’t really do anything special in terms of locating these spammy subscribers.

So basically what happened was I was getting lots of spam subscribers, on the order of hundreds per day. There was no easy way for me to detect these people in ConvertKit, and as a result I was just paying all sorts of money for crappy subscribers. Now over time as I became a more advanced blogger and I needed more features, I also found that there are certain things about ConvertKit that I couldn’t do that I wanted to do as well.

So for example, let’s say if you want to create a segment based on people who’ve opened a particular email or visited a particular web page on your blog, or clicked on a link that was not tagged within an e-mail, well you can’t create a segment with ConvertKit that way. And the downside, the one downside of ConvertKit that I found was that you can only segment subscribers if you have everything nicely tagged and set up ahead of time. Like you can’t get a bunch of describers and then decide to segment them after the fact.

So for example, let’s say I want to send an email to people who have opened all of my emails in the last month, you can’t really do that in ConvertKit. You can’t send an email to everyone who has looked at a certain web page, there is no real way to determine how engaged a particular subscriber is on your list even if they are explicitly tagged. And you might think that some of this functionality isn’t that big of a deal, but let’s say you’re doing a launch and you want to get an idea of how good your product is to your most active subscribers.

So what I would do in this case is I would compile all the list of my best people and try to solicit their opinion from my most loyal fans. You can’t really do this in ConvertKit. There’s also a lack of many email personalization features. So let’s say I want to include a short blurb at the end of all my emails to remind subscribers when and where they signed up to reduce kind of this marked as spam complaints, you can’t really do that easily with ConvertKit.

But overall I was actually pretty happy with ConvertKit until I got these spam attacks. I was willing to live with some of these lack of features. But just over time at the rate of getting 100 spam subscribers a day, I just couldn’t really justify paying for all that money to ConvertKit when most of my subscribers were bad ones.

I just want to let you know that tickets for the 2018 Sellers Summit are on sale at sellerssummit.com. Now what is the Sellers Summit? It is the conference that I hold every year that specifically targets e-commerce entrepreneurs selling physical products online. And unlike other events that focus on inspirational stories and high level BS, mine is a curriculum based conference where you will leave with practical and actionable strategies specifically for an e-commerce business.

And in fact every speaker that I invite is deep in the trenches of their ecommerce business, entrepreneurs who are importing large quantities of physical goods, and not some high level guys who are overseeing their companies at 50,000 feet. The other thing I can assure you is that the Sellers Summit will be small and intimate. Last year we cut off ticket sales at around 100 people, so tickets will sell out quickly.

If you are an e-commerce entrepreneur making more than $250,000 or one million dollars per year, we are also offering an exclusive mastermind experience with other top sellers. Now the Sellers Summit is going to be held in Fort Lauderdale Florida from May 3rd to May 5th. And as I mentioned earlier, we’re almost sold out already, and I actually will be raising the ticket price from here on out every two weeks. That’s right; the ticket cost is going to go up every two weeks until the event. For more information, go to sellerssummit.com. Once again that’s sellerssummit.com, or just Google it, now back to the show.

So I decided to look around, to look at other email providers that could solve my problem, and ultimately Drip is actually the platform that I settled on. Basically in a nutshell they have all the great features of AWeber and ConvertKit put together. Drip allows you to track the actions of every single subscriber, and what’s cool about Drip is they assign everyone a lead score. Basically this lead score is a numerical value given to a person based on their activity.

So basically points are added based on every time someone opens an email, every time someone clicks a link, every time someone visits your website, every time someone downloads a lead magnet, and points are subtracted at a steady rate based on how long a user is inactive. As a result this lead score can tell you how active a particular subscriber is. And that’s just extremely powerful because you can easily segment who your best customers are and who your worst ones are.

So let’s say I want to run a quick test to my active readers, really easy. Let’s say I want to offer a special discount to my most loyal fans, that’s really easy to do on Drip, and that’s something that you can’t do on ConvertKit or AWeber. This lead score feature is also especially useful at screening out spam email subscribers. Because Drip allows me to track all of their activity, I can pretty much easily detect a spam subscriber based on certain rules that I’ve set up in Drip.

Now I don’t want to go into too much detail about the exact rules that I’ve set up, but let’s just say it’s really easy to spot a real human from a robot when you’re using Drip because they give you access to all these primers that are not available in other providers. So I’m using Drip for the blog, and one of the number one questions I got was, hey Steve isn’t Klaviyo a sponsor of your show, how come you’re not using Klaviyo for your blog?

And I just thought I’d clarify this. I use Klaviyo for my e-commerce store, and I use Drip for my blog. Now why do I use a different service for email versus e-commerce. Well quite frankly I probably could use Klaviyo for the blog, but it’s significantly more expensive per subscriber than Drip, approximately three X. Now Klaviyo is actually great for tracking all of your sales and all of your customers. But outside of your sales and your customers, they actually have pretty lousy segmentation for anything else other than sales.

So for example, with Klaviyo I cannot segment my list based on what a customer has clicked or what content was browsed. Klaviyo was designed for sales. So I can easily segment based on what someone actually purchased, but I can’t really easily do it based on content or click within an email. So as a result Klaviyo would be pretty useless for me in terms of my webinars. It also would be pretty useless for me in determining who my best email customers and in terms of their open rate or their click rate.

And so that’s why I use you know two separate e-mail services for my two separate businesses. If there were a one size fit all solution, by all means I would probably go with it. But for now in the meantime I’m using Klaviyo for ecommerce and Drip for my blog. Now since I run a WordPress blog, there are a number of plug-ins I use to manage the blog. And in general, my philosophy is to use as few plug-ins as possible because for every single plug-in that you add to your blog, it actually slows down your site.

So I try to be minimalistic. So I’m just kind of go over the ones that I absolutely use for my blog. The first plug-in is called All in One SEO Pack. And basically it’s one of two of the best SEO plug-ins for WordPress. It basically allows you to change all the title and all your meta tags for all of your posts. It creates a site map for you; it does the OG markup for you for Facebook which is pretty important. It’ll also do the markup for you for Google as well.

So there’s basically two plug-ins. There’s Yoast and All in One SEO Pack. I think I just started out using All in One SEO nine years ago, and I just stuck with it. But as far as I know both plug-ins are really good and they both do the same thing. For the podcast I use a plug-in called Blubrry PowerPress to manage my podcast feed that goes to iTunes and a bunch of other services. I don’t actually have too much experience with trying out all the different podcast plug-ins, but Blubrry has worked really well for me over the years, and so I’ve just stuck with them.

To host the actual audio files, I use a service called Libsyn. Libsyn is probably the oldest hosting service for podcast, and once again once I stuck with them I didn’t look elsewhere really. But what’s really nice about Libsyn is you pay a flat rate to host a certain number of podcasts per month, and then you pretty much get unlimited downloads. If you were to host your podcast on a service like Amazon S3, if your podcast were ever to blow up and get really popular, then the cost would get really high. But with Libsyn you basically pay one flat monthly fee no matter how popular the podcast actually gets.

The next plug-in I use is a plug-in called Cookies for Comments. And once upon a time I was getting mass comment spam, and the built in plug-in for WordPress Akismet wasn’t doing it for me. And what Cookies for Comments does is it places a cookie on the person’s site, and it also requires the reader to have JavaScript enabled on their browser. Now most bots that do common spam, they can’t handle cookies and they can’t handle JavaScript. And so that’s why Cookies for Comments basically eliminated 90% of my comment spam on my blog.

To make my blog run extra fast, I use a plug-in called WP Super Cache. Basically what it does is it takes all of your blog posts and creates static HTML files for your posts. So as a result when someone comes onto your site, they are served the static file instead of having to run the database and run the PHP element of your web server. It makes your site zippy and it allows you to get a lot more traffic before your server goes down.

The next plug-in I use is called “Scroll Triggered Box.” It’s basically an email form that slides in from the side. If someone has scrolled all the way to the end of one of my posts, you’ll see this little email box kind of scrolling from the side and entice someone to sign up for my email list. Once someone has finished reading a particular post on my blog, I usually list a set of random and similar posts to encourage other people to click on different articles on the site. In case someone wants to comment on the blog, I have this feature called subscribe to comments, which basically sends them an email whenever someone has responded to their comment on the blog post.

Now I also run a membership site for my course which is over at Profitable Online Store Course. And the plug-in that I use to manage my membership site is called s2Member. Now at the time, I evaluated a bunch of different membership plug-ins like WishList, s2, I think I looked at Zippy Courses at the time. And overall, I chose s2Member because it was the most lightweight plug-in out there, and it was free. And basically — so the way s2Member works is it’s free for the base features, but if you want to add a payment processor, they’ll charge you extra to get all these extra little features.

But since I know how to code, I basically took the base s2Member and then coded up all the different payment platforms that I needed. And so ultimately I had this platform where it was completely free and I could host as many members as I wanted without any cost. Now if you’re going to start a course today, there’s a number of fully hosted platforms out there that will take a percentage of your sales and or charge you a monthly fee. But I’m really averse to paying anything on a monthly basis, so that’s why s2Member was good for me. It’s free, there’s no monthly fee, and it’s really feature rich and it’s lightweight and will not bog your site down.

To manage my payment plans for my payments, I use a payment processor called Stripe. It is free. It’s a little bit expensive in terms of the percentage that they take, but it is free and the API is fantastic which allows you to integrate it easily with any sort of payment or membership site that you want. Every single month I run webinars, and everyone always asks me which webinar platform that I use.

Right now I’m actually not using any webinar platform. The tools that I use for webinars are actually free. I basically use YouTube Live and Chatwing. It costs me zero dollars on a monthly basis. Remember when I mentioned I’m averse to paying anything on a monthly basis, well my webinar platform is free, and I manage to make between 30 and $70,000 per webinar on this free platform and it’s worked out great for me.

To edit my podcasts, I use a tool called Audacity. All the tools that I use to run my podcast can be found in a really comprehensive video tutorial that I put together over at mywifequitherjob.com. I’ll actually list this in the show notes, but the reason why this tutorial was actually so good was originally I was going to sell it for $99, but ultimately I decided that podcasting really had nothing to do with the things that I blog about on the site, so I decided to just give it away for free. Once again this podcast tutorial will be listed in the show notes. I highly advise if you want to start a podcast, go read this post. It’s got videos and everything. Once again I was originally going to sell it, but decided to give it away for free, check it out.

Anyways, those are all the tools that I used to run a seven figure blog. And as I’m looking over this list right now, the only thing that I actually pay for is my email marketing and my podcast hosting and my web hosting. Everything else that I use or do with the blog is actually free, and anything that I sell has a zero cost of goods which makes blogging infinitely scalable. Anyways, I hope you found this helpful. And leave a comment in the show notes if you have any other questions on tools that I use.

Hope you enjoyed that episode. Well I wish there was a single comprehensive piece of software that could do it all, unfortunately there is no such thing. And the software game is constantly changing and you basically have to adapt to keep up. For more information about this episode, go to mywifequitherjob.com/episode198.

And I want to thank Payability for sponsoring this episode. If you’re looking to take back control of your cash flow and scale your Amazon business fast, then sign up for Payability, and say goodbye to cash flow issues and stock outs. With daily payments, you can speed up your supply chain, buy inventory at optimal times, and stay in the buy box. The more control you have over your cash flow, the more buying power you will have. Visit Go.payability.com/Steve to get started, and cash in on a $200 credit just for being a My Wife Quit Her Job listener. Once again that’s Go.payability.com/Steve.

And finally, Klaviyo 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 auto pilot. 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 ecommerce 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 are 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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197: A Better Way To Launch Products On Amazon With Scott Voelker

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197: A Better Way To Launch Products On Amazon With Scott Voelker

Today I’m happy to have Scott Voelker of The Amazing Seller back on the show. Last time I had him on was back in episode 89. And since then, we’ve become good friends, hung out at multiple conferences together including Fincon where we were both on a panel together.

Anyway because it’s been so long, I invited Scott back to talk about some of his updated Amazon strategies and to see what he’s been up to. Enjoy the episode!

What You’ll Learn

  • Scott’s new criteria for selecting a product to sell
  • His new process for finding profitable niches
  • How to build a list of interested buyers
  • How to create a giveaway

Other Resources And Books

Sponsors

Payability.com – A financing company that provides high growth Amazon sellers with daily payments. With Payability, you can say goodbye to cash flow issues and stockouts and hello to scalability and profits. Click here and receive a $200 credit upon signup.
Payability Right now, Payability is giving away $1000 in gift cards to three lucky Amazon sellers. Click here to enter The Ultimate Amazon Reseller Giveaway today. Rules apply. Giveaway ends on February 28, 2018.

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

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

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 what strategies are working and what strategies are not with their businesses. Now after a multi-year hiatus, I am happy to have the great Scott Voelker back on the podcast to talk about what’s changed on Amazon and how his strategies have evolved in the past couple of years.

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 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.

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 prizes in our store. And customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%.

There are other cool things that you can do too. So for example, let’s say you offer free shipping for orders over $100, well you can tell Privy to flash a pop up when the customer has $90 in their shopping cart to urge them to insert one more item. 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 I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. I’m always blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 20% 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 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 single email sent.

Klaviyo is the most powerful email platform that I’ve ever used 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 is your host, Steve Chou.

Steve: Welcome to the My Wife Quit her Job Podcast. Today I’m happy to have Scott Volker of The Amazing Seller back on the show. Last time I had him on was way back in episode 89, and since then we’ve become good friends. We’ve hung out at multiple conferences together including my conference, the Sellers Summit. And recently we hung out at FinCon where we were both on a panel together.

Anyway because it’s been so long, I think it’s been like two years, I invited Scott back to talk about some of his updated Amazon strategies, and basically just to see what he’s been up to. And with that, welcome to the show Scott, how are you doing today man?

Scott: I am doing great. I can’t believe it’s been two years really.

Steve: I can’t believe I’ve been podcasting for like three years now to be honest with you.

Scott: That’s insane, truly insane.

Steve: Time flies.

Scott: Yeah it really, really does. I mean I’m excited to be back, excited to share what we’ve been up to, and yeah I mean just some things have changed, but some things are pretty much the same. But we’re growing and we’re having fun doing it, and yeah excited to be back on.

Steve: Yeah so it’s been a couple years, and I know some stuff has changed. I’m just kind of curious like so last time I think we talked about a completely different set of products. Are those original products that you sold on Amazon, like when you first got started are those still going strong?

Scott: Well they’re not going strong, but there’s a reason for that. I kind of let them go in a sense. They were kind of like my beginning products that kind of got me started. Now with that being said, there are some months that we’re still doing about 10,000 in revenue on those, and I’m literally Steve I’m not touching it. And I think I’m only spending like 20 bucks a day on pay per click. So they’re kind of like set and forget, and I take whatever I get and it’s a decent little chunk to not really be doing anything.

But one of the reasons I kind of backed off on that, number one was the starting point. It kind of got me into the game, it kind of got me like, oh my gosh, like I should probably pay attention to this thing. And I did but then I started to see like if I was going to build this thing out or build a brand, I would do it differently. I wouldn’t do exactly what I did in the beginning. I’d go after products that were different, I would build a brand, I wouldn’t just go out there in just find a product or a widget that was selling in a sense.

So with that being said, it’s kind of my fault. I think I could have grown that into something bigger, but now I’ve taken my energy and focused on different projects.

Steve: I see, so you didn’t feel like you could create a real brand around that product, so that’s why you put on the back burner?

Scott: Yeah exactly yeah. It was kind of like — and it’s one of those things that now it’s gotten saturated. And even though it’s gotten saturated because I got in early, I’m still ranking okay, I’m still getting sales organically, but again literally if I spend — oh gosh, if I log in and check my stuff once a week it would be a lot.

Steve: Okay. Well so given what you just said Scott, how has your criteria changed then for selecting a product to sell?

Scott: Well okay, here is the deal, it’s not even so much the criteria has changed as far as like the numbers go, but as far as where I look for products or what I think would make a good, not even product but a good brand. We talk a lot about like the open brand concept, and I’ve got a partner that I work with on that side of things where we’re able to test products relatively quick. If we find something, instead of trying to fit it into a brand, you can kind of just go, okay let’s just launch it under the open brand. It’s kind of like retail arbitrage for privately label.

Steve: Sure right.

Scott: And we’ve done that, and we’ve actually got one product right now, it’s really, really crazy on how that all happened. And we sourced it locally at first, and then we now are going to China after we validated it numerous times. My partner kind of was dragging their feet a little bit on that, but that’s one product that it may be a trend. So it’s one of those things too that if you see something trending you might be able to jump in, but there’s not really a brand behind an open brand with that.

So with product criteria, the stuff that I look at now more so than anything is really brand, and I string some products together. And I don’t know if you’ve seen this, this maybe breaking news I don’t know I’m going to let you know this right now. But yesterday we logged in, myself and Chris Schaefer, which are partners in this new brand that we’re working on, and we noticed that they rolled out a new feature in Amazon with their coupons. And basically now we can create coupons that target our past customers or ASINS, and we can let that coupon show up to that person almost like they were pixelled in a sense. Have you seen this yet?

Steve: No I have not; it is news to me, interesting.

Scott: Yeah and depending on your account, maybe how old it is or whatever, but if you go to the advertising tab and you’ll normally see campaign manager, enhanced brand content, early reviewer program, lighting deals, coupons, promotions, if you go to coupons, I think that’s where it would be, yeah creating new coupon. That’s where it would be there, and if you want to create a coupon, but then if you go under there and you see promotions, you can go under there and then you can go ahead and create your promotion. So the coupon thing is new. The promotions has always been there.

Steve: So basically you’re only giving coupons to your past customers essentially?

Scott: Well you can select that, you can select the criteria. It could be past customers, it could be an ASIN. So if you have one of your ASINs on your products and you want someone bought this but then you wanted to see something else, you can put that up alongside them. And I think they’re charging like 60 cents a transaction, then whatever else the percentage of this after use. You can either use percentage off, or a dollar amount off.

Steve: Okay.

Scott: Pretty cool man.

Steve: Yeah.

Scott: So yeah we’re actually playing around with that right now to just kind of see exactly what it’s doing. I think we already gotten some sales from it. We just started it like literally like less than eight hours ago. So yes so anyway…

Steve: Let me ask you this real quick. So you mentioned that now you’re focusing more on brand, do you still think the open brand concept is sustainable in the long run?

Scott: That’s a great question. Sustainable, it’s kind of like retail arbitrage, that’s the way I look at it. It’s kind of like it’s a little different because you can keep reordering. But I guess the question is, are the products, products that are trending, are they products that are I guess seasonal like those are the things that I would say? And again it’s like unless you’re just going to be like you’re just going to focus on like electronics, like you’re going to be the electronics dealer or something like that.

It’s hard to say sustainable if you’re looking at like just random products. So to me it would be probably harder to sell a business that’s random products versus like one that is specifically focused towards a market.

Steve: Okay right.

Scott: So I don’t know about sustainable. I would say for people that are like, they’re like, oh my gosh, I don’t know what product to pick. If you want to test products or market, it’s a great way to test markets. I think there’s like five different markets that are in the open brand that we’re working in, and they’re just different markets, right? So you can test sport and outdoors, you can test cooking, you can test fishing, you can test like all these different ones and then you can see which ones maybe has some legs, and then you can take it to the next level if you want to.

So it’s a way for you to test. I don’t know if it’s sustainable, maybe it could be. I wouldn’t want to make that my in thing.

Steve: So is your process now then to just kind of launch a private label product first, see if it has legs and then consider whether you can create a brand on it, or do you consider all the brand stuff right away?

Scott: Well I do consider the brand stuff, but I always start with that. It was funny, I was having this conversation with a friend of mine and I said years ago we would build the website, we would do our product research, we would say we think that this thing is going to work. Now what I like to do is go to Amazon, let them tell me if there’s products selling in that market. Can I create a better product; can I validate it before I actually put all the work into building all of the stuff that it takes to build the brand?

So for me it’s kind of like Shark Tank, right? The sharks on there, they always come down, they go okay like what are your sales? Until you have sales, you’re not proving the concept. You haven’t proven or validated that the market is going to buy your product. So I like to go the other route, do a small test order, put it in, and then from there we can kind of grow with that. So yeah that is kind of the mindset and kind of the process that we take.

Steve: Okay, so let’s talk about that. So we place a small order, then what is your product launch process now today?

Scott: Yeah that’s a great question. So what we basically do is generally we will do a test order of anywhere between 300 and 500 units. Now some people say, Scott how do you do that, like they all want me to do 1,000 units. And we ask, we just keep asking and will negotiate, or will move on to a different supplier. We’ve found that generally you can find at least 500 that you can test, 500 unit run.

You’re going to spend a little more, but that’s okay because we’re just testing and we’re kind of reducing the amount of risk if we were to buy 1,000 units so that’s fine. So what we’ll do is we do our product research. Normally how we do it, we want to look at the sales of current competitors and see what they’re doing. We’ll look at the reviews, see what we can do better, we’ll look at the listing optimization, see how we can do a better job there, better pictures, better title, better optimization, all the way around.

And then what we’ll do is we build our own email list. So we instead of like before you could go to a service that would do a launch for you. And I wasn’t big on those before, I never did massive ones, some people were doing like hundreds or thousands of units and just giving away their products. We’ve never been about that. I’ve generally been about 100 units is what my budget is for my promotion, because I’m going after products also Steve that are not selling hundreds of units a day. I’m going after like can I find a product that can sell ten units a day, $10 profit each, make $100 profit per day. Like can I find that product, low competition, less than 200 reviews, that’s what I’m looking at.

So if I can spike the algorithm, if I can get ten sales a day through an email list or some type of promotion that I can run, in my case I like building email lists because I have an asset now, and then I can spike sales, then I can start to rank organically, then I can start to get in to Amazon’s traffic.

Steve: Right so you’re basically trying to stay under the radar of like the big guys where most of the evil stuff happens essentially?

Scott: Pretty much yeah. I mean again it’s like when you get into gray hat and black hat, it’s always well how can I be the other guy that’s trying to get one 100 sales a day. Number one, if you’re going after products that are selling 100 units a day, in order to rank you’ve got to sell 100 units a day, like bottom line.

So then you get into how do I give away — and I’ve heard some stories where some people will — they’ll take 100 grand and go in because we’re going to dominate that market, they’re going to try to take over it. They’ll take 100 grand and just use that as money to give away their products, so this way here they will just get ranked. And then once they secure their spot, then the organic sales will take over. That’s just not my cup of tea.

Steve: Right okay.

Scott: I don’t want that. And I’m not looking to just building it on Amazon either like that’s where we start, and that’s kind of where we kind of — because we can we can kind of like get started quicker in a sense where we don’t have to build out the website, we don’t have to do the merchant account, we don’t have to do refunds, all that stuff, fulfillment, we can do that.

So to me it’s the way to get started, but I’m always thinking, okay and like I was talking to you just before we got on here, like okay our next move is like we’re going to build a little mini funnel, we’re going to do a free plus shipping offer, we’re going to go through ClickFunnels, we are going to do all the stuff, that’s like what we’re working on now. But it’s been seven months in this new brand that we haven’t done that yet. We’re moving in that direction.

Steve: Okay let’s talk about your email list then, your launch email list, how to do you build that up?

Scott: Yeah we’re building it with your good friend and my good friend Mike Jackness which does the same thing and he did it in his brand is giveaways. We’re doing a 30 day giveaway. A lot of people will do shorter ones; I don’t like the shorter ones. We’re doing a 30 day one, and generally will give away a prize that’s worth about $200 to $250 in value, and it’s a physical product. And now because we have about eight or nine skews, we’re able to include those skews in the bundle as the giveaway, so now they’re kind of aware of our brand. But then we’ll wrap it around something major.

I kind of use a fishing analogy where if I’m going after the bass fishing market, I’m going to go find the best bass fishing lures and the tackle box and the vest, and I want to make that my bundle, and then hopefully my tackle box will be in there too. And then I will do that for 30 days. I’ll drive Facebook ads to a landing page or Instagram influencers. And then I will drive them through a contest, and then I will follow up with them through email. I’ll announce the winner and then on the back end will say to all the people that didn’t win, hey sorry you didn’t win, but we’ve got a 25% off coupon on our tackle box until midnight.

Steve: Can you describe how you figure out the product for the giveaway? It’s not your own product in the beginning?

Scott: In the beginning it’s not. I get a lot people say; well should I not wait to have my own product? The answer is no, like just that’s going to be your launch list. So we did it before we even had our product. We had a product ordered but we didn’t have it yet. So we just found something that was going to be related. The one mistake I see people making is they’re just going to like I know everyone wants an iPad. So I’m going to do an iPad. Well that’s not your market unless you’re selling iPad accessories.

So to me it’s got to be really dialed in even in the fishing space. If you’re going to sell something that’s tailored towards bass fishing, you want something that’s tailored towards bass fisherman. It’s got to be that targeted, because we don’t just want people that are free seekers, we want people that are in that market because people will say, well why wouldn’t I just go to someone that has a list for people who want to get deals?

That’s the problem, they’re just raising their hand because they want to get deals or get deals just like I mean back in the day, we’re talking like eight, nine months ago with Amazon review groups or people that were building these were these groups. These were just email lists of people that were raising their hand that wanted to get basically free product from Amazon. Well those people aren’t necessarily my target market.

So what I want to do is get something that I know is going to get them to raise their hand, and then from there we can go ahead and then start following up with either content, or other offers and stuff like that. So a good offer is key though, and you’re right, you can’t just give away your $29 tackle box. That’s not enough. You need something’s going to get some buzz, you can have a bundle. And we’ve had really good results since we’ve been doing those, and we’ve done it in a couple of different markets.

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I’m just curious, so that list that you get, like what is the quality of that list like?

Scott: You’re going to love this. In the very beginning when it’s fresh, it’s generally between 50 and 60% open rates. Okay so not too bad. So then people would say, well, wait a minute here, you got 1,000 emails, and you get a 50% open rate, that’s only 500. Okay so now it cost me fifteen cents to acquire an email by the way, so — oh it cost me 30 cents to acquire an email. And those are people that are opening my emails so that means that they’re interested.

And so what we’ll do is we will — like right now, I think we sent out an email yesterday to about 16,000, and I think that one right now and it hasn’t even been a full 24 hours, you know how that goes over time and it’ll get a little bit better, I think we’re over 25% right now. That’s above standard.

Steve: And so in terms of – so that’s the open rate, but in terms of like the people that actually buy, what percentage would you say that list in your last campaign?

Scott: Yeah in the last campaign, and it’s kind of hard to say because I’ll be honest, here is the other cool thing that happens. You get one person or two people that take your promotion that you’re doing and they share it to a Facebook group, and then it blows up, we just had that happen. We sold over 190 units from one email. So did that come directly from the email list? Not necessarily, but it came from someone that was on the list that shared in a group.

But I would say it depends on the offer again too Steve. I think you know that.

Steve: Sure.

Scott: You could send out that to everyone and it might not be the right product. We have right now nine skews. So we’re going to actually be able to kind of tell you a little bit more of that probably in the future because we’re going to run kind of like Mike has done. We’re going to do like ten days to Christmas sale, and we’re going to do like a little email campaign where we’re going to kind of give people different offers. But I would probably say it’s — I’d be kind of lying to say I knew exactly. But I would say, for the most part I would say probably half a percent to a percent.

Steve: It’s hard to track that right because you are not allowed to use affiliate links in emails either, right?

Scott: Yeah you’re not really supposed to. The only thing that we can do is we can track the coupon codes that we’ve given out.

Steve: Right.

Scott: And look at that and actually the one that we just did, we’re starting to get data, but also Amazon is kind of delayed on the data. But the way I look at this, the way I look at it is like this too and I know you’re a numbers guy. You like the numbers. Here’s the way I look at it though. I look at it like this. I got an email list and I paid $1,000 for it, all right. And I launched this product and I sold 250 units in three days. I got ranked on Amazon, I’m starting to get organic sales, I’m not even using sponsored product ad yet.

So that 250 sales that came from that email that I sent out because it was a discount, is that worth 1,000 bucks? To me it is because I’m not even looking at that. I’m looking at now I’ve got potential to take that list and send them another offer, or send them a piece of content that gets shared into a group that I get 60,000 views on a video we just shared. All of those things come back to me.

So I don’t necessarily look at it like, okay I sent an email, I got a 1% conversion, I got a half percent conversion. I don’t look at that. I look at more of like the long term of that. And you know as well as I do, I can take that list now which we’ve done, and I’ll upload it to Facebook, and now I’ll create a retargeting or I’ll also create a look alike audience from that email list. So that’s a little bit more of a higher level I guess thinking, and that’s how we do it. So the email list is built not just to sell a product.

Steve: Can we talk about like the emails that you actually send for a little bit?

Scott: Yeah absolutely. I mean our first email obviously if you sign up for a contest, the first one is going to like thanks for entering. And then from there we’ll give them another — there’s a link that’s in — we actually — actually Chris Guthrie, a good friend of ours, him and I partnered up on a piece of software that we created called Giveaway Boost, which we created for doing this. And there’s been a few other ones out there. We just wanted to have ours more tailored towards e-commerce which is more features.

So we actually built that in. So what it will do is it will give them their own tracking code. So they can share that tracking code and will incentivize them by if you share this with people you know or think that you would like this, and you get three entries, you’ll get an extra entry. So we incentivize in that way. So in that first email, that’s what it’s thanking them. It’s letting them know what they just did, and that they’re confirmed. And oh by the way, here’s your special link that will get you additional entries.

And then we’ll follow up probably in about three days with some just regular content. So it’s basically like, hey, we just wanted to drop in here; I know that you probably want to catch more bass this weekend. So here’s a couple of tips that we’ve been using and they work really well. And oh by the way, here’s your special link again to share the contest, whatever. So it’s kind of like that hybrid approach.

So stuff like that, and then once the contest is over, we’ll announce the winner. So the headline is usually like the winner is, and then from there, and that will be a huge open rate. And then from there we will announce the winner publicly because we want to let them know that we’re actually fulfilling the prize, and we’ll also if we can get a picture with that winner. And then from there it will say, but you’re still a winner because we are going to give you a 25% off discount through this weekend just for entering the contest, we want to thank you. And oh by the way here’s another cool YouTube video that we shot about this other thing.

So it’s really a way for us to connect with them without just pushing a sale, but then we also — and one thing I would say and you know this, and hopefully your audience knows it or they’ll not know it now is the one thing we’ve done is we’ve always added some form of deadline to our offer. So if there is a 25% off coupon, and it goes live on Friday afternoon, it will end on Sunday night. And that will give us the opportunity to email three times, once to let them know about it. The second time to let them know that there’s still a bit more time, and then the third one is its end. It always spikes the sales. The last day is usually the most sales that we’ll get from that email.

Steve: Right. So I’m just curious then, so how does this giveaway strategy fall into some of your other email gathering strategies? You mentioned a free plus shipping offer in the beginning, how do you arrange all these different offers together?

Scott: Yeah well, the free plus shipping is something that’s just getting underway right now. So I can’t really give you that, but it’s like our next move. Right now the whole building of the email list has really been, two ways really. One has been from the contest, and that’s been the number one way. The second way is kind of like giving away like a free PDF the seven lures you must have in your tackle box kind of thing. And that gets a trickle of emails in. And then the third way will be free plus shipping, and those will be like warmer leads in a sense.

So I can’t really tell you on that one, but we’ll be setting these up just like you would. We’re going to segment, we’ll have a contest list, more or less a customer list, and then you’ll have a warm list that came from a free plus shipping offer. And the free plus shipping offer will be interesting because we’re going to be doing it where you get the free plus shipping, and then really on the back end it’s not even to be like the next product maybe, it might just be more of what they just got for free.

Steve: Sure of course.

Scott: But then maybe test it down sell up sell, all that fun happy stuff.

Steve: So just curious, what are some tips on giveaways? So your price you recommend 250 to 300 bucks?

Scott: I’d say yeah, I’d say the more the better just because it gets more hype, right? It’s like a bigger deal. So I would say the offer is key, your targeting is key too. You can’t just throw that up and think everyone is going to see it and like it and share it with someone that they know is into fishing. You have to really do that targeting, and it’s going to take a little bit of work. We have done Instagram, we found influencers. We didn’t even run ads; we just basically reached out to influencers.

In this new brand though, we have not really had success with influencers on Instagram, and I think more so because we haven’t really spent too much time. We tried like three or four, and then we just kind of said, you know what Facebook ads are kind of easier right now, so we’re going to stick there. But we did one. We actually did an open case study. I did it for — my son’s into sneakers. I did the whole Jordan and all that stuff. So we did a public case study for one of our live events showing how we built the email list and stuff in the sneaker head market.

And that offer was all driven through or actually shared through Instagram. I found on Instagram a couple. I found like three different Instagram pages that had — one had 300,000, one had like 500,000, one had a million, and I think the most I spent was like $125 for a post. And those converted really well in that space as far as email capture, which is kind of crazy because in Instagram you have to go to the bio link and you have to — then you’re warned that you’re leaving Instagram.

We spent like I think 125 bucks on that one run for that one page, and we got like over 500, 600 emails in than four hours.

Steve: In terms of writing your Facebook ads for these promotions, so let’s use your fishing example, what are some targeting aspects of Facebook that you would use?

Scott: Well, I think first off you’ve got to find out where your audience is hanging out. And I mean an easy way to do that obviously is to just kind of go to Facebook, it’s a search engine, and just start to search for groups, and search for pages. And then from there sometimes you can target some of the — not the groups but the pages, or it can at least get you started. So if you’re starting from scratch, that’s where you’re going to kind of have to start doing some of your own testing.

So you’re going to go in, you’re going to look at the target, the different interests that you’re going into like fishing or it might be bass fishing or whatever, right, like those interests. And then in the beginning, I mean you’re kind of like you’re guessing as far as like demographics until you start getting some of that data and then you can start to really hone that in. The advantage of having even a small tiny 250 email list of people that you know raised their hand already, and then taking them and uploading them into Facebook and using them as your lookalike, that really can speed up the process because then it almost goes out and finds those people for you.

But beginning I would say it’s going to be testing. And for us it was kind of like you’re kind of shooting kind of blindly, but you’re just guessing. And then you start to look at the data and you’re like, okay wait a minute here, guys that are 18 to 24 are clicking, but they’re not converting. So let’s just pause those guys, let’s only target the guys that are older than that. And you just start refining that through your different tests. But I would say just go there and find groups, and there’s going to be tons of them that you can look at groups and Facebook pages, and then just start seeing from there what kind of people are hanging out in that market, and then start to use that as some of your insights.

Steve: I guess what I’m trying to get at is like what is your exact process, like how many ads do you run, how many different ad sets, how much money do you put on each ad set at the beginning, what is like a target click through rate or a conversion rate, how many people do you — how much do you expect to pay per lead, that sort of thing?

Scott: Well I’m going to kind of go over to being that’s not my expertise Steve, so I’m not going to give you that.

Steve: All right.

Scott: Chris Schaefer, my partner is that. He’s the guy that loves those numbers like you; you guys would have a great conversation over those Facebook ads. But I could give you the basic stuff. So when we were starting that stuff, we allocate 20 bucks a day, and that’s like our testing money. Generally, I mean in the beginning we were shooting for a dollar per email, like that’s what we were shooting for. We’ve since got that from where it was, it was I think we got it to 50 cents, and then we got it to 30 cents, and then recently, our most recent one was 15 cents.

But again that is from him looking at the numbers after day one, and then tweaking, turning off this and putting this. Now the one thing I would say, a little tip here and I know this is the case because we kind of go over this stuff, if you have a — again testing, it all comes out on testing. If you take a static image, just an image that’s just not going to be any movement, no gift, no nothing, that may not convert as well as a video or just a gift.

And what I mean by gift is like what we did is we took, I think it was five pictures in our contest, and all we did was create an animation of it. And we put it up and acted as a video, and our conversions were better and our click through rate was better, and our cost per email was better just from that one thing. And that was just Chris saying, I’m going to give this thing a test and see what happens. And he did it, and it was like that’s what we use now in every single ad set.

So yeah I mean to give you like all of that, all of those numbers. I can’t give you that. All I can tell you is we’re spending between $20 and $30 a day; our email cost is about 15 cents give or take per email. That’s per email, that’s not click that’s per email. And then from there as far as different ad sets, I think we’re using right now four, you know what I mean to test. And that’s basically the bare bones. And I know even Chris has said like we could get even more granular, but why? At this point we want to spend more time doing other things, and just kind of run this behind the scenes.

Steve: Yeah I mean 15 cents is really good, and that’s probably because people are sharing this, right?

Scott: Yes. Yeah they’re sharing it, and again another byproduct of this is every time we do a contest, we add about 2,000 Facebook likes to our page, which just happens automatically because we have to have the ad running through our Facebook fan page. So of course that we’re naturally getting likes on our page, now people would say, well aren’t likes kind of useless, aren’t they? No, they’re actually not, because we can retarget that page now and run ads cheaper to our Facebook fan page, and we can also now do our Facebook lives where we get exposure to our audience, but then they can share it inside of our fan page versus a group. So that’s the other things that we look at.

Steve: And in terms of this email list, do you end up cleaning it after?

Scott: Yes.

Steve: Okay. What is your process?

Scott: Well at this point it’s really like we give them opportunities to open or click. So it’s like one of those things, like after — I think we’ve been doing it about every 30 days that if they haven’t opened a email, we will then send them kind of like in that last set of emails, and if they don’t click or open after that, then we’ll just get them off the list or manually remove them. And of course we’ll get unsubscribes which we’re happy to get those. I mean it’s just them doing it for us.

But for the most part it’s pretty standard right now, and we’re kind of still new and kind of growing in this because for us it’s less than a year. And I know Mike has got some pretty — Mike Jackness that is, he’s got some pretty intricate systems and stuff going on behind the scenes to do all this stuff, and I’m definitely looking forward to chat with him on this stuff. But we’re definitely going through the process on a basic level to just clean it on kind of top level. And then from there we’ll probably do some type of like wake up campaign where we kind of get them reactivated, and if they don’t after that then we can just keep off.

Steve: I guess are you putting these people like in an autoresponder sequence after the contest is over for a long time.

Scott: Yes. Actually right now I think we’ve got it built out to about 20 emails.

Steve: Twenty miles okay, yeah that’s a lot actually.

Scott: Yeah and I think we’re doing about — at least we’re doing one drip every single week, but we’re also doing a live every single Friday. So like every Friday there’ll be like an update of what we published, or new content or a new deal, or whatever. And then the drip will be basically content sprinkled in with a little bit of an offer.

Steve: So let’s talk about that. So who’s creating this content, and I imagine this is all going into establishing a brand, right? You’re putting something out there with the content, so what does your strategy look like there?

Scott: You mean as far as like who is going to be writing the content or who is going to be the face and all that stuff?

Steve: And how you formulate the content. So you have this email list now that you have to kind of nurture along, and hopefully at some point they’ll buy from you, just because you have given them mind share of your product. So how often are you creating content, how do you know what content works well, like what’s the strategy there/

Scott: Yeah well okay and we’re again testing a lot of different forms, because I think every market reacts a little bit differently. We’re finding that Facebook lives work really well, but also you have to be there live. So it can be a little taxing on the person doing it and you know that. So we are trying to do at least, we were doing one of those a week, sometimes two, now we’re doing about one every two weeks. But we’ve since started to add short videos that are tutorial based that are giving value that are kind of showing how to do something. And that is being done generally about twice a week on a regular basis.

And then once we get past — we just started talking about this, once we get past a certain amount of content, we can then start to kind of repurpose it and kind of bring it back to life again. But the way it works really is my partner in this, my partner that I started this brand with, they’re the face. So they’re the ones that’s coming up with the content. And the way that they’re coming up with content is a few different ways. Number one they’re part of other groups and other pages. So they’re very aware of what people are talking about, what people are excited about, what people like, what they don’t like. So then they just put their spin on whatever that is, whatever is interesting at that time, that’s one way.

The other way is we now are starting to get emails from people asking can you show us this, can you do this, how does this work? So then we can start to create content around that. It’s great also because you can start to add social proof that, hey Sally from Mississippi asked this, and I wanted to answer her question, here is the answer, a piece of content. So, all of that stuff is kind of being produced.

Once that’s being produced, it’s also now being published on our blog. Our blog is our home base, and by the way it’s kind of crazy, we did the blog without thinking about like driving traffic to it, or even getting search engine optimization, really dialed in, and we’re already probably getting about 25,000 to 30,000 uniques a month.

Steve: That’s crazy man.

Scott: To that blog, which is basically us just taking what we’re creating on Facebook and then republishing it on our blog our home base, and then from there people can — and then we drive people, generally we’ll drive people from the email either to the blog or to Facebook whichever we want to get attention. If it’s Facebook we’re doing it because we want to get shares and we want to get comments and all that stuff, or we’re driving it to the blog because we want people to be able to download something or consume something there. So we just kind of direct the traffic wherever we want to.

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So let me ask you this, regarding the content is it product focused content or is it is it informational content related to the niche primarily?

Scott: Yeah it’s that. I would say out of ten posts, it would be one or two may be product based, but it’s not going to be us coming on being like, hey, I just wanted to show you my new fly fishing rod today, and I want to show you why I like it so much, it’s got this, it’s got that. It’s not that, it’s generally like, hey, I want to show you how with my new rod I just was able to go out there and catch three fish or whatever.

Steve: Right, it will be like fishing techniques as opposed to like, hey, check out my rod?

Scott: Exactly, and then in the conversation you’re able to say, oh by the way I custom made this fishing rod because I was frustrated because this, that and the other thing, if you want to go check it out you can, but here let me go ahead and show you what I have been doing. So you’re just sprinkling that in your, and then from there people are just naturally wanting to see. It’s one of those things, it’s like we don’t want to be sold, but we’re sold if we see something that’s working or something that could benefit us in some way.

So it’s a way to do it and give value, and then from there you can also sprinkle in that offer. And so we’ve done — like I said, if we do ten posts, it might be eight of them that are pure content with mentioning all of the products, but it’s not necessarily product driven. The other might be 100% like, hey, I wanted to show you this new thing that we just created because I was frustrated, and we created something that’s awesome that I want to share with you guys because I’m so excited, like that type of thing. I’m so excited and we just launched this thing, I want to give you guys a 30% off discount all through the weekend.

Steve: So let me ask you this, so the way you’re doing it, there’s definitely a person who is the face of the company.

Scott: Yeah.

Steve: So let’s say there’s people out there who don’t want to be the face of any company, they don’t even want to show their face, how would your strategy change?

Scott: Yeah, that’s a good one. And here would be my advice. I would try to find someone that is so into your space or into your niche, and maybe they have a YouTube channel that they’re just publishing on the weekend, maybe they’re fixing their car on the weekend because they’re into fixing muscle cars, and they have no idea about like that they could actually make some money at this, I would look for someone like that and then tap into those people. I think if you want to build a brand, and really differentiate yourself not just with the product but with the personality, because I think that is a huge advantage, I think you just need to find someone. And it could take some time.

It’s funny though, I mean I don’t know about you, but I mean I come across people all the time that I see opportunities that if I was in that space I could probably make it happen. I could probably say to them, hey, I know a thing or two about e-commerce. I know a thing or two about information products like what do you say, you want to do something here? And they’d be like, what do you mean, like what’s FBA, is that like the government, is that like the IRS? No, no it’s not. Like literally there’s people out there that have no idea and they love talking about this stuff.

So, I would try — I just actually met with – actually it was at FinCon. I had my little TAS meet up there, and I met with a couple there that they make their own honey and they make their own honey cider vinegar and all this stuff, and we were actually giving them a consultation, we were actually doing a hot seat with them. And they are the face of the brand. But in the beginning they weren’t that person, but they just were doing it because they love it and they just love growing their own plants, and they just love all this organic stuff.

And they were like my neighbor, I’m sure I could connect with them and say, hey, I’ll tell you what, you do this, just jump on video, do this, that, and the other thing and I will take care of the rest like that’s how a partnership could form, and that’s your face. That’s the only thing they got to do is just be the face and just get on and do videos and stuff. So to me it’s like it’s a process to find that, and people say well where do I find that? You just be aware. I don’t know about you, but I mean I find people all the time that I could do that with.

Steve: Yeah I mean I think for us, it’s a little different. I mean we have access to a lot of people. I’m just I get this question a lot which is why I was just curious what your take is, because a lot of people are shy and then they don’t really go and talk to people, they don’t go to conferences, they don’t really network, and so it’s a little bit harder when your life is a little bit more insular, you know what I’m saying?

Scott: Well okay but I’ll give you an example. Okay I’m at my daughter’s volleyball, she is nine years old. I’m sitting there in the bullion chairs. And no one knows who I am, no one knows what I do nothing, and I got a lady that her sister was there with her, and she’s a huge volleyball player, was in the day, a D1 college, she coached, she’s done all this stuff, and she wants to make a little bit of extra money on the side and doesn’t know what to do.

I could have very easily said, you should go into the volleyball space, you should be an instructor, you should be an on line coach, you should — or I’ll tell what, I sell volleyball stuff or I sell sporting stuff for this market, how about you come on as a face, I will pay you and you can be part of the brain, I’ll give you a cut. That’s what I mean, like it doesn’t matter who I am, it’s just it’s there it’s right in front of you and it doesn’t mean that I have a podcast, you have a podcast, we have more connections. It means that I’m there locally inside of this place where there’s this raving fan base.

I don’t know about if you’ve ever seen this, but like volleyball or even soccer, you know soccer, kid soccer it’s crazy, right? So it’s like there’s a huge niche for girls’ volleyball at certain ages like this person could be like the local and the online trainer, but they had no idea that they could do that. So like for me I could bridge that gap for them and be like I know all this other stuff over here, all you got to do is just do what you love and just teach.

Steve: Yeah I mean it’s basically just keeping an open mind.

Scott: Totally.

Steve: Right yeah.

Scott: And if you’re aware, if you’re looking for it in a sense, it almost happens. But if you’re just close minded, you don’t think about it. You just think it’s got to be someone that’s on YouTube already, and they’re doing this thing. It doesn’t mean that, it just means you have to be open and you have to ask questions and get to know people a little bit.

I did it just by listening to the conversation. I wasn’t even on the conversation. I just heard it and my wife was talking to her sister, and I was like, okay well, if I wanted to get into that space, I could probably grab her, and she would probably be a great face. Totally looks like a volleyball person, like great personality, I’m like but she doesn’t know that you can do that right now, and she’s just not into that space.

Steve: So Scott, to kind of end this interview, I just kind of want to get your take on where Amazon is going. So how do you feel about RA, OA, private label, and then branding?

Scott: Yeah okay I think Amazon isn’t going anywhere, that’s first.

Steve: Obviously yeah.

Scott: So, you can either take advantage of what they’re doing right now, and get in on some of that, and to me it’s like getting a foot in the door. It doesn’t mean you’re going to build your business primarily on Amazon. I’m not a fan of that; I’m a fan of getting started there. But I think that, yes change is going to be happening, are we going to have to adjust? Yeah. Has SEO changed over the years? Sure.

So I think retail arbitrage, online arbitrage, I think that’s going to become a little bit more difficult, because brands are going to be able to lock down who can sell. They already can, but I think it’s going to become even harder. So that will probably become a little bit harder, but there is this place out there called eBay, and there’s still people doing pretty well over there, so you can always look into that.

But I think for RA or OA or even wholesaling, I think that’s not really going anywhere in 2018, I think it’ll still be there. I think people can still take advantage of it. I think it’s a great stepping stone. I don’t think — me personally if you’re going into this thing to create a business, I would start a business building your own brand, that’s what I would do. If I could choose one thing, it would be do exactly what we’re talking about, doing exactly what you’ve done, do exactly what Mike Jackness has done. This stuff will be here for the long term.

And I think Amazon is just that channel that we can tap into and take advantage of their platform and of their resources and stuff like that right now. Now in the future if they decide to change things and or maybe they take your legs out and you can’t sell there anymore for whatever reason, you definitely want to have your own platform, you definitely want to have your own email list, you definitely want to have your own sales channel so you can start directing traffic there. That is important.

But I think Amazon is only going to get I guess bigger, and it’s going to create more opportunities for us to be able to take advantage of these different resources. But for the ones that are doing these little hacks or gray hat, black hat stuff, just know that it’s a short cut, and that it probably will go away, and it could get you banned and then you could be sitting on inventory that you’re not going to get rid of. That would be my take.

I think private labeling, no matter if you’re selling on Amazon or not is still going to be here, and I think that building your own brand will just give you more security, and it will allow you to sell your brand if you want to and get more money for it if you end up by kind of getting out of that space.

Steve: Well Scott, thanks a lot for coming on the show man. Where can people find you and find out what you’re up to now?

Scott: Yeah, TheAmazingSeller.com is where you would find me, and the podcast is on iTunes, Stitcher, I believe it’s on Google Play as well. Yeah that’s pretty much where you’d find me. You’ll find me at Sellers Summit, I think one more year, right, Am I going to be back?

Steve: Yeah, what are you talking about, I told you to put on your calendar, good Lord?

Scott: I did, I did. Always a pleasure hanging out at Sellers Summit, and everyone that comes, it’s just been a really great community. I’m really impressed to you and Toni, and everything that you guys have done and you’ve built like a nice community there for Sellers summit. It’s just — it always gets really, really good reviews. So I want to thank you again for letting me be a part of that.

Steve: Dude, always happy to have you man.

Scott: I appreciate man. All right, go get some sleep; you’re still recovering from that jetlag are you?

Steve: Yes we are, yeah coming back from China is pretty brutal.

Scott: All right man.

Steve: All right dude, take care.

Scott: I appreciate Steve.

Hope you enjoyed that episode. What I like about Scott is that he’s always trying new things, and always at the cutting edge of Amazon trends. For more information about this episode, go to mywifequitherjob.com/episode197.

And once again I want to thank Klaviyo.com for sponsoring this episode. Klaviyo is my email marketing platform of choice for ecommerce 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 auto pilot. 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. 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.

And finally I want to thank Payability. If you’re looking to take back control of your cash flow and scale your Amazon business fast, then sign up for Payability, and say goodbye to cash flow issues and stock outs. With daily payments, you can speed up your supply chain, buy inventory at optimal times, and stay in the buy box. The more control you have over your cash flow, the more buying power you will have. Visit Go.payability.com/Steve to get started, and cash in on a $200 credit just for being a My Wife Quit Her Job listener. Once again that’s Go.payability.com/Steve.

Now, I talk about how I use these tools on my blog, and if you’re interested in starting your own ecommerce 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 are 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.

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196: How Ian Schoen Built And Sold His Design Firm And Started The Tropical MBA

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How Ian Schoen Built And Sold His Design Firm And Started The Tropical MBA

Today I’m thrilled to have Ian Schoen on the show. Ian runs the popular blog and podcast, the Tropical MBA, and he’s one of the guys behind Dynamite Circle, a private community for location-independent entrepreneurs.

A while back, he also built Two Tree International, a global design and manufacturing firm to 4 million in revenue before he sold it for 7 figures in 2015. Ian has a wealth of experience when it comes to ecommerce and entrepreneurship and there’s a lot to talk about today.

What You’ll Learn

  • How Ian came up with the idea to sell valet boxes
  • How he grew that business to 4 million in revenue
  • How he validated his products before manufacturing them
  • Ian’s main traffic and sales channels
  • Why he decided to sell his company
  • How his experiences led him to start the Tropical MBA podcast

Other Resources And Books

Sponsors

Payability.com – A financing company that provides high growth Amazon sellers with daily payments. With Payability, you can say goodbye to cash flow issues and stockouts and hello to scalability and profits. Click here and receive a $200 credit upon signup.
Payability Right now, Payability is giving away $1000 in gift cards to three lucky Amazon sellers. Click here to enter The Ultimate Amazon Reseller Giveaway today. Rules apply. Giveaway ends on February 28, 2018.

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 delve deeply into what strategies are working and what strategies are not in business. Now today I’m excited to have Ian Schoen on the show. Not only is he a successful ecommerce entrepreneur, but he is also the founder of the popular TropicalMBA Podcast, which you should all check out.

Before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Always excited to talk about Klaviyo because they are the email marketing platform that I use for my ecommerce store, and I depend on them for over 20% 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, 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 single email.

Klaviyo is the most powerful email platform that I’ve ever used 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.

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. Privy is an email list growth platform, and they manage all of my email capture forms. In fact I use Privy hand in hand with my email marketing provider.

There is 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 prizes in our store, and customers love the gamification aspect of this. And when I implemented this form email sign ups increased by 131%.

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 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 thrilled to have Ian Schoen on the show. Now Ian runs the popular blog and podcast the TropicalMBA, and he’s is actually one of the guys behind Dynamite Circle, which is a private community for location independent entrepreneurs. And also a little while back, he built Two Tree International, a global design and manufacturing firm up to four million in revenue before he sold it for seven years in 2015.

Anyway, Ian has a wealth of experience when it comes to ecommerce and entrepreneurship, and there’s a lot to talk about today. And with that, welcome to the show Ian, how are you doing today man?

Ian: Hey Steve, thanks for having me man.

Steve: Yeah, so for all the listeners out there who aren’t familiar with your story, I’d like for you to start by telling us about the ecommerce company that you started and sold in 2015. So what did you sell, how did you come up with the idea?

Ian: So we had two major — excuse me we had to main brands. One was a valet parking equipment, and then the other one was portable bars. So like if you go to a conference center, if you go to a wedding, a lot of those bars are movable, and so we started a line of those. And how I came up with the idea was just through experience. In college I was a valet parking, and just kind of took note of the equipment.

So I went to school to be a product designer, so I was always kind of interested in physical products. So I went to school, became a product designer. I got out, got a design job, and realized I wasn’t going to live that corporate life. It just wasn’t for me. I thought back to my time as a valet, started to kind of look at that landscape. I started to look at the products that those guys were making, figured out that I could make a better product, and then I started selling them online.

Steve: That sounds really random. So sorry what was that first product for the valet, was it a box?

Ian: It was a box, so those big black boxes that you see outside of hotels and restaurants that store keys. That is like the main product that valet companies use to organize their company essentially, that’s where they keep all the keys.

Steve: Okay so that’s pretty random, like that’s not…

Ian: Totally random.

Steve: Yeah so how did you know — there aren’t that many valets out there, so how did you get a gauge of how much money you could make with that idea?

Ian: I didn’t really — it wasn’t really like that. So at the time I was like 26 years old, and just so like pinch a picture. I’d gone through college, I’d gotten a degree, I’d spent a bunch of money. And then I landed in San Diego California, and I was living at the beach and life was great. But then I was commuting up to this little town called Oceanside, and I was in some office park, and I was working for people that I didn’t particularly like to work for.

And I just kind of saw my future as a — it was just kind of dismal. The outlook didn’t look great to me. I didn’t want to end up working for the guy that I was working for. I did want to continue to make products. I thought that that was a lot of fun, but a year and a half in I was like this is not going to work for me, I’m going to figure out something for myself.

And I’d always kind of been like a little bit entrepreneurial in some things that I’d done when I was younger. But I just knew that I couldn’t sustain this kind of corporate lifestyle. So I just started to look around. I said what skills do I have, what connections do I have, how can I do something on my own? And my first business partner was actually the owner of that company.

Steve: Interesting okay.

Ian: Yeah, he had a direct line to China, so we were manufacturing in China. And so through that job I got to go to China I think once or twice and kind of understood the manufacturing process there, I had all the contacts there. And so at that point, like I said I kind of started to look back at my previous experiences. Okay I was a valet; they make these big metal boxes. At the job that I was at the time, we were doing some sheet metal work, so it wasn’t too hard to put together on the sourcing side.

Steve: So that implies that you designed the boxes yourself with card software?

Ian: Yeah, so I used SolidWorks at the time. And the first product that I designed was a complete disaster.

Steve: Well let’s talk about that, let’s back up. So the whole manufacturing process, so you design something using the software at your work, or did you SolidWorks?

Ian: So just to get into the nitty-gritty details I guess, I formed a partnership with the guy that I used to work for, the owner of the company. And so at that point we had formed a new company.

Steve: Got it okay.

Ian: So I had a license of SolidWorks and all that stuff.

Steve: Okay, and in terms of just like funding this, it sounds a little expensive, right?

Ian: It wasn’t too bad no. So we took a loan out from that guy, from the CEO of the company for about $50,000 and funded some of my time, and then our first container.

Steve: Okay and did you just order a container right off the bat?

Ian: Yeah, so we went through the sampling process of course, got the samples in, evaluated them, thought they were going to be great. And then we ordered a container. And what happened after that was more of a disaster.

Steve: I want to hear about the disaster actually, it sounds interesting yeah.

Ian: Sure, one of the things about design is it can look really good on SolidWorks. It can really look good on paper, but once you get out into the field you find out different things. And these metal boxes were rolling over a lot of different kinds of surfaces, and valets aren’t the most careful. They’re like I was when I was 20 years old parking cars, they don’t care, right? You just want to get off work so you can go have a beer, so you rolling this thing over cobblestone, you’re rolling it over gravel, you’re rolling it over whatever.

And our first production run, the way that I designed the casters in these podiums wasn’t structurally sound enough. So what was happening was we were setting up these podiums, guys were using them for a month or two, and then they’re being completely destroyed. That was a problem for us because this was a high ticket item, it was like $550 and shipping wasn’t cheap either. I think either way, I don’t know it was $150 to ship these things.

So we had a real problem on our hands, and we had to figure out how to solve that. So instead of crying because that’s what I wanted to do, we quickly developed a new base for these units. And luckily part of our value proposition was to make knockdown podiums. So basically what that means is they assemble. Because what had happened before in the industry was they were just shipping these huge boxes on pallets, and actually that’s what we eventually came to as well.

But our initial value proposition was, hey let’s sell these things to these guys and let’s do it knock down so they’ll save 50% on the shipping. So in doing it knockdown we actually had replaceable parts. And so we were able to actually replace and service those bases in the long run.

So the knock down part didn’t work out for us, it turns out that valet companies, they don’t want to assemble products, they’d just rather spend $150 to ship it. But the replaceable parts, that actually worked out for us in the long term, and that’s something that we continued with that product line for seven years, and it became a real good value proposition for that industry.

Steve: It seems like the stuff that you guys had sold in the past are all pretty big, the portable bar is pretty big also, right?

Ian: Yup. So and that something — like most of this wasn’t intentional, so keep that in mind. I was 26 years old. I was just trying to figure out a way to get out from underneath my boss, I just wanted to go to the beach and hang out and travel and make some money and not have to go to an office all day. It came from my experiences, but a lot of what we did in the beginning wasn’t intentional.

Now, we became more intentional as we went along, and as we learned. But yes, a lot of the products that we sold were big products. A lot of the products that we sold could be manufactured at many of the same factories, so there was a lot deficiency there. A lot of the products that we sold were expensive too. So one of things I figured out early on in this business was one thing was I wanted customers, I didn’t want clients. And I wanted to sell expensive items, and I wanted to sell B2B.

Steve: Interesting, can you elaborate on that, so why B2B, why customers not clients, what was your rationale?

Ian: Sure, so customers not clients. Customers, they pay you money, you give them the product, the experience is over, or hopefully they buy from you again. Clients it’s like an ongoing. It’s an ongoing situation; you’re constantly trying to please them. There is a thing about client work is that I had seen in the job that I had. They were doing client work, and I had seen all the hoops that they had to jump through for these people and how little money they made.

I just thought I just want to make a product, and I just want like push it out to people. I want a customer to just pay me money. I don’t want to have this ongoing conversation. What was the other thing that you asked?

Steve: B2B.

Ian: B2B, so we actually experimented with some B2C so business to customer and products. And actually not B2B, it was a lot more my style. The thing about B2B is like these people especially in the valet industry and the bar industry, they really wanted the best equipment, and they really wanted to talk to somebody about how to develop the best equipment, and we were really good at that. So in terms of like product development, it was very easy for us to develop the best products in both of those industries because we’re engaging with our customers.

And these customers aren’t like not picky consumer customers. They are like leave your review and they don’t say anything. They’ll actually call you and say, hey man, like this is it working out, you guys should design this or develop this. And for like a middle manager at a valet company to be able to have that kind of power to say like, hey man, you got to change this so it really be nice we would order more of these products from you, that’s like super empowering for that guy. And for us there was a winner because we got to make the best products.

Steve: I would imagine B2B, once they buy from you, they’ll buy from you over and over, and over again, whereas a consumer customer like their memory is a little less, it’s shorter memory.

Ian: Right, you’re absolutely right. So once you can get in with these companies, and it wasn’t always easy, we had to fight for it. But once you’re in, a lot of times you’re in until that purchasing manager is gone, or until a better product comes around which never happens. So yeah a lot of times we need to sell the first time and then seven years later we’re still doing business with them without any additional marketing costs.

Steve: Okay let’s — I want to talk about the manufacturing process because very few of the people that I deal with actually go through and manufacture a large product from scratch, which is what you guys did, right?

Ian: Yeah.

Steve: So you put together your SolidWork’s design and then you get a prototype, the prototype looks good, and then you ordered a container. And it sounds like only after selling it did you discover these problems. I’m just kind of curious what the process was like to iterate over your product.

Ian: Yeah so in terms of the design process, it was just sad, it was SolidWorks. It was send it over to the factory, the factory says hey we can do this, we can’t do that.

Steve: Did you have to fly over there to deal with this stuff, it seems like doing this remotely would be quite difficult?

Ian: Yeah I was over there all the time.

Steve: Okay, all right.

Ian: Sometimes I lived there for weeks at a time just like sourcing new factories, visiting factories and things like that.

Steve: How did you find the factory?

Ian: I had a sourcing agent there, and he found the factories. And a lot of times like once you find — like in China, once you find where the manufacturer is for the zipper, then there’s like a whole bunch of other zipper factories right around there. So it’s just the way that China is organized. So for me we’ve kind of found some metal manufacturing, and then in that area we found other suppliers.

So finding factories wasn’t too tough because I had an agent. Now there’s a lot that goes on with those factories. So was my agent like taking a kickback from this factory, it’s like absolutely. So whenever I wanted to like switch factories or find a new product or something like that, it was always a struggle because he’s got these relationships.

So this is a small insight into China, but in terms of the manufacturing process, we would design on SolidWorks, we would find a factory or we’d have an existing factory that would make a prototype. They would send it over to us, we would send back changes, and then eventually we would go to production.

Steve: Did you have redundancy in terms of your factories, because I have a buddy who used to make baby strollers, and he said, make sure you have redundancy with all your parts otherwise you’ll get screwed at some point.

Ian: Yeah we had redundancy. We had multiple factories like sometimes if you’d be ordering a couple of hundred products, we do a test run with another factory and say okay you guys do 50 or sometimes we’d split up 50/50. But to have redundancy in products like that like metal products you have to have very tight tolerances. So basically meaning these guys have to be making these products on jigs, and they have to make them so the parts fit together.

So I said, one of our value propositions for all of our product lines is that we had replaceable components. And so that meant if you had A factory build the valet podium, then B factory’s part had to fit that. And that is actually a lot harder than it seems. So we did have redundancy in our factories, but most of what we did was we had this factory make this product line and this factory make this other product line.

Steve: I see and with the parts kind of similar with both product lines or?

Ian: They were similar. I mean it was just metal manufacturing. So a lot of the same processes yeah.

Steve: And in terms of pricing, did you determine the final retail price based on your cost, or did you go in with a cost in mind?

Ian: So we can talk about the valet industry for a minute.

Steve: Okay.

Ian: So when we came into that industry, I think there was like one or two players. There ended up being maybe five or six now. We were always a leader, probably starting year two in the business. And when we came in, I think a standard valet podium was like $549. They were manufacturing in Los Angeles, California which is where probably arguably the most valet parking goes on in the whole world.

Steve: Sure.

Ian: And we came at I think like for 499 something like that, so a little bit cheaper. It was easy for us to be cheaper because we’re manufacturing in China, they are manufacturing in the United States. We found the industry to be somewhat price sensitive, but what they were more interested in was new products and durability. So in terms of our pricing, we kind of anchored around what was already existing and happening.

What ended up happening though is we figured out a way to create the lowest cost product in the industry, no one was able to actually even touch it I think even to this day just because we had so much volume. So as the years went on we drove the price down of that standard valet podium to $399, and then we drove the price up on premium products.

So then we started to develop products that were twice as big, we started to develop products that were made out of wood, we started to develop products that were weather resistant stainless steel, all the things that this company that was currently manufacturing in Los Angeles could not do.

Steve: I see.

Ian: So we drove the price down on their core product, and then we started to offer more expensive products. So we weren’t making a ton of money on that entry level product, but we’re making lots of margin on those more expensive products.

Steve: Interesting. So what were the margins on that low end product?

Ian: They always stayed above two.

Steve: Okay.

Ian: Yeah I tried and everything that I sold I try not to sell for less than two, because we had a decent size operation. And of course we did some marketing and things like that. So it never made sense to sell products for less than 2X.

Steve: It seems like 2X is a little low actually.

Ian: Yeah I guess it depends on the volume. Like I said, we’re doing a fair amount of volume there, but then on some of our more expensive products the margins could be three to five X.

Steve: Okay and that’s where you made most of your cash?

Ian: Yeah it was easier to make it up there for sure.

Steve: Okay and let’s talk about marketing a little bit. So you’re doing B2B stuff, does that mean a lot of it is just non advertising based, it’s like calling these companies and doing a lot of legwork?

Ian: Yeah totally in the beginning, that’s what it was all about. So kind of back to the beginning of the story, when I graduated from college I didn’t know much about the internet. I was focused on product design. And then we got this container and we were just like, okay we had a spreadsheet, we started calling valet companies and they were interested in the product. And so that’s how we initially started selling.

But we started to figure out pretty quickly that that wasn’t going to be enough. Like we could call everybody that we found on the internet, but it wasn’t going to be enough and it was going to be fast enough. So what a lot of these companies were doing at the time was going to these trade shows, and there was like two or three industry trade shows. We decided to just skip those trade shows and bust in internet marketing.

So me and my business partner Dan sat down and we said we’re going to figure out how to use this internet. I think one of the first things that we did was like a Yahoo directory or something like that. And then from there we just started to learn how to do SEO. So we went on the front page, and then all of a sudden, two years later we’re dominating the front page of Google with like three or four listings.

And so while all of our competitors were spending their time going to these local or going to these trade shows, no one was investing in internet marketing.

Steve: Interesting, so what are some of the things that you did to get on that front page of search?

Ian: Oh gosh like back in the day it was much different than it is now. We had like little networks that we did, we were doing link building, we did some content marketing. I did some little clever things, like I went to an exotic car dealership, and I learned how to valet all of their expensive cars, and we put out that concept marketing. But mostly it was link building back in the day.

Steve: Okay, I mean has it changed, you ran this up until 2015, right?

Ian: Yeah.

Steve: After all the Google updates and you weren’t doing anything grey hat or black hat, right?

Steve: Yeah correct. So at that time, by the time 2015 rolls around, we had been established on the front page of Google for like a lot of key terms. And we continued to stay there, because yeah we did mostly white hat to get there. So that’s the thing is like once you’re there, we had an established I mean from 2006 or seven, and we had become the industry leader in these different niches.

So yeah Google wasn’t really a problem. Of course there was an update here or there that knocked us down for a few key terms or whatever, but we never had a problem with that.

Steve: Were you guys running pay per clip also?

Ian: Yeah we were running pay per click, and this was around the same time we started to experiment with like Amazon and things like that. But being B2B, there was definitely some need for that, but a lot of it was just honestly like word of mouth, so it was kind of nice, because also we had physical products. Our products were actually like out in the field. And our logos won that, our phone numbers won that.

So even to this day, you walk down the street, I see in Los Angeles or in Chicago or in Dallas, I see our podiums everywhere. And it’s a very visible product like that, and if you’re in the industry you kind of know, because it’s only four or five players. So in terms of like needing to actively market, yeah we did some of that and a lot of our PPC came from people that were maybe new in that industry getting into it and hadn’t heard of anybody before, and searching online.

Steve: Okay and so it sounds like you made the most of your sales through Google as opposed to cold calling and industry trade shows?

Ian: We did a lot of cold calling.

Steve: Oh yeah okay.

Ian: Yeah absolutely. So I mean we learned how to use the internet, but that was in conjunction with cold calling. So like I remember gosh, I remember paying people on Upwork or whatever it was called at the time $50 and they would go out there and scrape the internet, and next day I’d have like a list of 200 valet companies. I’d sit down in the conference room, and I call every single one of them.

Steve: How did you get their attention, like what was your pitch?

Ian: At the time, like I said our pitch was we have replaceable components. So you’re able to service these products, and we have cheaper products, and so he gives us a try.

Steve: And the other companies they never adapted?

Ian: Eventually some of them started to move a little bit faster, but not as fast as we could move for sure. And keep in mind too these like the valet industry is not a very big market, and it’s not a very competitive market. So you better succeed in thinking about that market. Now the bar industry was much bigger and there was more opportunity there. So it was actually a lot more competitive. So some of the products that people were designing were pretty innovative, they had good bar structures etc.

Steve: Interesting, so I’m just curious myself then why did you decide to exit these physical product companies? It sounds like you were the leader and it was a cash cow, and you could kind of sit back and just relax a little bit, right?

Ian: It’s a good question yeah. I didn’t want to solve those kinds of problems anymore. And this is me and my business partner we have like talked about this a lot, and I think that there’s a lot of ways which we could have continued to own this I’d say and been happy at the time. I got myself to a point where I was probably working about five hours a week. We had a team of about 15 people and that was just too much for me.

I didn’t want the liability anymore, I don’t want the risk. And keep in mind there wasn’t a lot of risk or liability, but I just didn’t want the mind share of it anymore. And so we decided to sell it. Now I don’t know if that was the best decision. It was certainly not the best financial decision, but in terms of being able to start a business and exit a business, to me at the time, that was important. I thought that that’s what made a successful entrepreneur. I’m not necessarily sure I agree with that anymore now that we’ve exited.

Steve: It’s interesting, so if it was only five hours a week, that doesn’t sound like a whole lot of mind share, right? Were you just worried that the whole thing would come crumbling down at some point?

Ian: I mean I had at the time when we sold it. So we started the business in San Diego, California. We had offices there, and a warehouse there. I had moved to Austin Texas, and so I was like removed from the team, and I had team calls and whatnot. Did I think it was going to come crumbling down? No, did I think it was going to grow at the same rate that I had in the past? Not really.

I knew that to get it to be a ten million dollar company, I was going to have to actually sit back down in my chair and work for 40 hours a week, and that wasn’t something that I was willing to do. So in retrospect like should I have just kept this little asset that was churning out a decent amount of profit every year for five hours a week? Yeah, the smart financial decision was yes, but what I was thinking at the time was, look I’ve got a boatload of money wrapped up in inventory that I’d like to have in my bank account. I’d just like to take some money off the table.

Steve: Got it, okay.

Ian: I knew that I could start another one of these businesses again if I wanted to, and have some other things going on. And so it was just time for me to take money off the table.

Steve: So after it sold — I did want to talk a little about the sale, but you had some intentions with that money. So how did you invest that money after you sold it?

Ian: I haven’t done a great job of that honestly. It’s a lot harder for me to be an investor than as an entrepreneur. It’s much easier for me to sit down and start a business with very little money than it is to invest. I’ve invested in some things like property and some other businesses and things like that, but I wouldn’t say I’ve put that capital to as good a work as it was doing in that company.

Steve: I mean the reason why I ask is I have buddies who’ve sold their businesses and then they get this money and they’re like okay now what do I do? I’ve been spending all my time on this company, and now I’ve got nothing to do.

Ian: I have plenty to do, I have a lot of hobbies that I enjoy, and I have another business. But in terms of like making that money work for me as good as it did, and perform as well as it did in that company, I haven’t found another vehicle for that yeah.

Steve: Okay and how do you sell a company, how did you find someone who wanted to buy like a portable bar company and a valet company?

Ian: So the first thing you don’t do is you don’t call your competitors. That’s one of the things that I did. I ended up calling one of like our competitors, he wasn’t a direct competitor, they were making similar products to us, and I started to show them what we were doing. It got to the point where I started to sign the NDA, just didn’t really feel comfortable about this guy, and of course what happens six months later is he ripped off a bunch of the products.

Steve: Uh man okay.

Ian: So number one unless you’re already engaged with your competition, I wouldn’t recommend calling them, because things like that happen all the time. The second thing I did was I figured out what I wanted to sell the company for, I figured out what a number for me would be where I would feel happy, and it would be a meaningful number. And I think that’s important because you go to these brokers which we eventually did, and they’re going to tell you whatever makes sense for them.

So, oh I think I have a buyer for this company, some million dollars. Well I’m valuing it at five million dollars. Well we’re not going to represent you well; we don’t think the market can bear that whatever. So figure out what number is right for you. And then we went to the brokers and try to see if they thought this might be something that would sell.

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What are the multiples like on an e-commerce physical products company, are they on the order of like 3X or?

Ian: Yeah I think it’s anywhere between one and five.

Steve: One and five.

Ian: Or something like that yeah. For us we had a couple of advantages and a couple of disadvantages. One was that we were growing year over year like crazy. So that made it a little bit hard to value the company, but it was good. Now it was bad because a lot of buyers came to us and they said, you guys are doing great, I’m not sure I can really offer anything to this situation.

So in retrospect like looking back, I’ve talked to a lot of buyers, people that have sold their company, and a lot of times companies get sold when they’re either flat or on the downturn because people feel like they can come in and actually do something. People were looking at our business thinking like, oh I don’t know what I can do. The other thing about our sale was it took 18 months. So it was a very long process. That wasn’t something that I was prepared for.

So at the time when we started getting ready to sell, just coincidentally our GM who had helped me grow the business through the years, he had enough, and he was like I’m ready to go. And I said, just stay on for like three months, I’ll pay like 50 grand, that will be great, we’ll sell this thing. And he was like no; I’m ready to do my next thing or whatever. But that’s what I really thought, I was like, oh three months we’ll sell this thing. It ended up taking 18.

Steve: Why did it take so long?

Ian: I think it just takes that long a lot of times. This was a financial sell; this wasn’t like a strategic acquisition or anything like that. So we went through probably five or six suitors, five or six people that dug into the business, that took a look at everything that we’re doing. And it turns out a lot of those people weren’t actually even qualified to buy the business. So that was a mistake on our part, on our business progress part is that we didn’t qualify them properly.

Steve: I see.

Ian: So at the end what I started doing — this is now talking to brokers, they say yeah this is what you do on day one. I asked for a personal financial statement from people that were interested in buying my business, and that helped me to qualify them to see if they’re actually able to buy that business.

Steve: Interesting. I imagine you get a lot of tire kickers that just want to see your numbers, and then don’t do anything about it.

Ian: For sure yeah. And this was not — this was a seven figure sale, so like you have to imagine who’s actually going to buy that business, right? And for us like we weren’t at the point where it’s like a strategic purchase for like a PE firm or someone like that. This was going to be somebody and ended up being someone with like that kind of money in their bank account and able to buy it.

So when you start to think about like how many people do you know with that kind of money, I don’t know. I guess it depends on the circles that you run in, but in and that will also be interested in buying a valet parking equipment company that does design work. So I wouldn’t say that we got lucky. For sure I think there’s a lot of people that are kind of looking for a “retirement plans,” and the person not bought our business, that’s exactly what they were up to.

Steve: I see, so it wasn’t a competitor or anything like that in the end?

Ian: No, and I just want to mention this about like the buyer profile. The person that bought our company was looking for a retirement plan. In retrospect like one of the things that I think about after selling this business was this could have been my retirement plan.

Steve: Yeah.

Ian: I spent seven years of my life plus building this business and then I sold the asset right when it got sweet.

Steve: Well I mean you moved on to better things. Let’s talk about TropicalMBA a little bit, when did you guys start, was that actually before the sale?

Ian: No, TropicalMBA I started, gosh TropicalMBA started 2009 I think.

Steve: Okay.

Ian Yeah basically what was going on was me and my business partner — it was like two years into this business, we were super lonely. We didn’t know anybody that was up to the same things that we were doing. Two young dudes trying to grow an ecommerce physical products business while traveling. It was kind of like we were on an island.

So what we did was we were having basically daily calls with each other for two hours because he was living out of the country and I was living in San Diego. And we said like why don’t we try to record some of these calls, why don’t we try to record some of the problems that we’re going through and see if anybody else is having these issues? And so that’s what we did is we flipped on the mics, we were both super in the radio markets. So we thought it’d be cool to make a radio program.

And yeah seven years later now it’s turned into the TropicalMBA Podcast. It wasn’t that initially, but that’s what it is today.

Steve: What’s funny about that story is that I started in 2000, and also same issue as you. I had no one to talk to; it was just my wife and I, very lonely. And instead of doing a radio show, I started just writing about running our business. And I guess we’re in similar positions today. I had this like whole troll of posts about all the struggles that I had bringing up my e-commerce store.

Ian: Yeah it’s like we’re on opposite sides of the globe trying to find each other and I hop into the internet. Yeah I was like desperately searching for people like you too that were like writing about what was going on, because it just felt like nobody was doing it at the time.

Ian: And then how did that evolve into Dynamite Circle? Did that start shortly after?

Ian: Yes, Dynamite Circle is our community of entrepreneurs that are doing business online. So the way that the DC started was we had the podcast, we were talking, and then we decided to do an in person meet up. And so I think 20 or 30 of us met up in the Philippines, and it was like on the back porch of our buddy’s resort. And we thought like, hey this is like really cool, how do we stay in touch? And so we started a forum.

And so eventually that forum turned into about 1,500 people what it is today, and we have events all over the world. So this year our big event was in Bangkok. About 300 people showed up, and then we have another event in Austin in the summer, and then we have member hosted meet ups throughout the year. So it’s basically for us it’s trying to solve this problem of entrepreneurial loneliness.

And a lot of the problems that we were solving in the beginning might be loneliness and things like that, but the problems that we’re solving now are bigger as we’ve grown too. So now it’s how do I — like you said, how do I reinvest his money that I made from selling this company, how do I acquire other companies, how do I manage my 15 employees? So it’s kind of cool because as we’ve grown, the community has also grown.

Steve: So I’m just curious, are you monetizing like TropicalMBA and Dynamite Circle? Where is your revenue coming today?

Ian: Yeah. So TropicalMBA that has always been like a passion project, we have always just focused on telling our story initially, and then now telling the story of other entrepreneurs. We have just recently started to monetize that through ads. When I say monetize, I mean not even cover the cost. So we’re almost covering the cost. And like I said, the idea behind that project is to share stories. And so I never really imagined that turning into a business, it is just something that we love to do every week.

The Dynamite Circle is a profitable business. It’s a community, there are properties to use and then we charge for people to come to the conferences. But I don’t want to paint a picture that we’re making millions of dollars or something like that. Again the idea of the of the Dynamite Circle like for me I have a network of 1,500 people in that community, and like these are people that I do business with. These are people that I trust; these are people that I learn from. So I’m not sure if we’re ever going to really monetize that business.

Steve: Okay and I’m just curious, any thoughts about starting another ecommerce business, or are you done with physical products altogether?

Ian: I take your question. I’d never say never, and like it’s funny like I walk around all the time and have the same on the internet all the time and I see opportunities everywhere for physical products. So I think people can get kind of down, it’s like with Amazon these days. So it’s like oh I’d like to get into physical products, but everybody is already selling them on Amazon, and there’s a million other products out there.

I see opportunities every day from million dollar businesses. I don’t know if I’m just too lazy, or I just know too much. But the next physical product business that I do if I do one is going to be much bigger than the one that I did. And most of the ideas that I have are still in that one to five million dollar range. So for me it’s like it’s a lot of effort over and not a lot of money.

So the next time I do it it’s going to be big. But I want to say this about people selling on Amazon and getting disgruntled about something on Amazon and things like that. I still think today in 2017, the best way forward is to build a brand. I know guys that are selling seven figures a month on Amazon with arbitrage and things like that, and then I’ve seen guys that are selling seven figures a month arbitrage on Amazon and their business just goes away like that. That’s not a risk if you build a brand, that’s not a risk if you have real customers that you own. That’s not a risk if you’re actually developing good products for people.

Steve: Do you think that you can actually build a brand on Amazon without having your own property?

Ian: Probably, yeah I think you probably can. I’ve seen it a couple of times. Actually there’s some — I’m into cars and racing and stuff like that, and there’s some shop products that I bought on Amazon and they have a brand on Amazon, but they don’t have a brand anywhere else. So yeah I’ve seen it a couple of times being successful sure.

Steve: So for the people — I mean you obviously talk with a bunch of entrepreneurs, do you recommend that people start on Amazon? What flow would you recommend for someone wanting to sell physical products today?

Ian: I guess it’s where you see the opportunity. Like for me the opportunity was to design and develop physical products because that’s what I had a degree in. So if you’re a person that has a degree in creative writing and you want to make physical products, like what’s your competitive advantage? Do you know more about Amazon than most people, do you know more about design than most people, what’s your competitive advantage?

I don’t think it’s a good idea to just get into anything whether that be physical products or information products or what not unless you have some kind of competitive advantage.

Steve: You know so I asked you that earlier question for selfish reasons, you’re a product design major. I was an electrical engineer. Recently I quit my job, and all those years of doing electrical engineering, I feel like went kind of down the drain. Are you using your product design experience right?

Ian: Yes.

Steve: Oh you are okay.

Ian: Yeah so like I said I like to race cars, and so a lot of that is like problem solving. And actually a lot of that is sheet metal work which is what I was doing with valet parking equipment and with the portable bar. So yeah I’m still actively designing and developing products, but mostly for myself and for the cars that I work on. So, in that way I kind of get to scratch that itch in my own head.

But in terms of like waste, I’ve thought about that a lot too, because I went to college and it was really expensive, but I got that money back through that company and through those experiences, I got that money back. And you and I wouldn’t be able to have this podcast right now and be talking about this if I didn’t go through those steps.

So for me it just feels like a progression. Can I go back and do product design, can you go back and do electrical engineering anytime you want? Yes of course but I feel like for me like that stage of my life is kind of over. I might revisit it, I’m happy to advise people on it, that’s really fun for me now. But I actively I’m not pursuing that to make money anymore.

Steve: Okay yeah fair enough. I know I looked on your Twitter feed just for kicks here today. It looks like just recently you decided to try to drive a car on two wheels.

Ian: Yeah, this is what you do when you’re part time retired is you find fun things to do with your friends yeah. So it’s called car skiing, so we built a ramp and we tried to see if we could learn how to drive on two wheels, and it’s actually like a lot harder than it looks. And is actually like a lot more modifications to the car that need to be done for that to be easier and effective job.

Steve: And is really random, like you had a Jeep Grand Cherokee I think, right?

Ian: Yeah.

Steve: And of all cars you chose a jeep to run on these two little wheels, right?

Ian: Yeah. It was fun so yeah that’s what I do my off time, it’s for my Twitter and Instagram and hopefully you don’t watch me.

Steve: So it sounds like right now you’re just enjoying life and doing what you want to do?

Ian: Yeah enjoying life, working pretty hard over at the podcast over at TropicalMBA to tell better stories. So two years ago we brought on a producer, producer Jane. She is a professional producer, she has worked for the BBC, and I credit her with like most of our success lately. But she has really helped us to build better stories.

So we actively work on that every day and we actively work for the DC every day and trying to figure out what do these people want, where do these people want to meet, how are these people going to grow their businesses, what kind of resources can we provide these people? So that’s a big focus for us is the DC and also the TropicalMBA.

Steve: Okay, and Ian if people want to find you and learn more about DC and the TropicalMBA, where can they find you?

Ian: Yeah I’d say just go over TropicalMBA.com first and check out a couple of podcasts, and see if that makes sense for you. And I’m on Twitter @anythingian.

Steve: Cool. Well Ian thanks a lot for coming on the show. I really appreciate your time, and hearing about your experiences.

Ian: Cool Steve, thank you and take care.

Steve: All right man and take care.

Hope you enjoyed that episode. What I love about my guests is that they all have their own unique stories. And I love how you can make money by selling very random items like Ian did. For more information about this episode, go to mywifequitherjob.com/episode196.

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. 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.

I also want to thank Payability for sponsoring this episode. If you are looking to take back control of your cash flow, and scale your Amazon business fast, then sign up for Payability and say goodbye to cash flow issues and stock outs.

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And finally Klaviyo 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 auto pilot. 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 all these tools on my blog, and if you’re interested in starting your own ecommerce 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 are 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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195: The Software Tools I Use To Run My 7 Figure Online Store With Steve Chou

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195: The Tools I Use To Run My 7 Figure Online Store With Steve Chou

Everyday, I get between 100-400 emails and a bunch of the questions I receive are about which tools I use to run my 7 figure ecommerce store. So today, I’m going to go over every single piece of software I’m currently using to run Bumblebee Linens.

In addition, I’ll talk about the pros and cons between the different options.

What You’ll Learn

  • Which tools I use for hosting
  • Which tools I use for marketing
  • Which tools I use for shipping
  • Which tools I use for product research
  • Which tools I use for Amazon

Other Resources And Books

Sponsors

Payability.com – A financing company that provides high growth Amazon sellers with daily payments. With Payability, you can say goodbye to cash flow issues and stockouts and hello to scalability and profits. Click here and receive a $200 credit upon signup.
Payability Right now, Payability is giving away $1000 in gift cards to three lucky Amazon sellers. Click here to enter The Ultimate Amazon Reseller Giveaway today. Rules apply. Giveaway ends on February 28, 2018.

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

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

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 what strategies are working and what strategies are not with their businesses. Now as part of running my blog and my podcast, I have the opportunity to try out a lot of different e-commerce tools. So in this episode I’m going to go over every single tool that I use to run my e-commerce store.

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. Now what does Privy do? 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.

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 prizes in our store. And customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%.

So bottom line, Privy allows me to turn visitors into email subscribers, which I then feed into 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 I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. I’m blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 20% 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, 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 single email.

Now Klaviyo is the most powerful email platform that I’ve ever used 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 is your host, Steve Chou.

Steve: Welcome to the My Wife Quit her Job Podcast. Today I’m thrilled to actually have myself on the show. That’s right, today is going to be a solo episode as part of an experiment that I’m going to be doing for the next several months. Now what’s funny about this is a number of listeners have been e-mailing me asking me why I don’t talk more during my interviews, which is hilarious because I never get that at home. My wife never wants me to talk more, the same goes with my mom.

Anyways the reason I focus on asking questions is because when I bring someone on the show, I want them to be the main focus of the conversation. And as my guest is talking, I’m usually concentrating on asking more probing questions to extract every last detail. In any case, today I’m going to be doing all the talking, and I thought that it would be interesting to simply answer the most common questions that I get asked.

And every day I get between one 100 to 400 e-mails, and a bunch of the questions that I get are regarding tools that I actually use to run my seven figure e-commerce store. So here it goes, question number one, Steve what shopping cart do you recommend, and what do you use? And the answer to this question is always a little bit complicated for me. So first off, I started my store back in 2007.

There weren’t a whole lot of choice out there, and so I think at the time there was Yahoo and there was OsCommerce, and there was Zen Cart, and at the time I chose OsCommerce. And today I’m still on OsCommerce. So I’m basically on a heavily modified version of OsCommerce, and over the years I’ve pretty much learned almost every line of code in this cart. And so I manage all the source code myself.

Now I do not recommend that any of you out there follow this path because today there are so many better carts out there. But I do want to add that there is something to be said about owning the source code for your own shop. So for example if there’s any feature that I ever want or need, I can simply just code it up myself. And I’ve done this a number of times with my cart over the years.

So for example recently I wanted some custom sales reports created from my cart so my wife could do some of the accounting a lot easier. And so one afternoon I just quickly whipped something up that matched her exact specifications. Another recent example of something I just coded up is I wanted a way to automatically apply a coupon code to a customer so they don’t actually have to enter in anything during checkout, and this is all based on a cookie, a couple of lines of code and boom.

And the reason why I actually did this is because over the holidays we ran this promotion for our aprons and a bunch of people were abandoning their carts, and I just could not figure out why. And so I actually went and I called each one of these people who abandoned their cart, and one of the main complaints is they went through checkout with this coupon code that I gave them, they got to check out, they forgot the actual coupon code, and when they hit back they couldn’t find it again, they got frustrated and they left.

And so that’s why I went ahead and implemented this automatic coupon code, and I’ve actually since extended this functionality where when people get a coupon code from our site in return for their email address for example, the coupon code is automatically included into the cart so that when they check out — so I limit the coupon code for 24 hours. So when they check out, they don’t actually have to enter anything, and there’s also this sense of urgency in this countdown timer that they actually have to use this coupon within a day.

Anyways when you own your own source code, it’s actually really easy to make custom modifications. But for most of you guys out there, you probably aren’t tech savvy, you probably don’t want to deal with any source code. So when it comes to recommending shopping carts, here is actually my take. If you are totally tech averse and you don’t want to deal with anything, go with a fully hosted shopping cart like Shopify or BigCommerce.

Now one of the main questions that I get asked is, Steve can I use one of the cheaper shopping cart solutions out there like a Wix or Squarespace? And here’s how I always answer, if you want the most e-commerce related features at your fingertips, you need to be on a real e-commerce platform that specializes in e-commerce. Most of the cheap site builders out there, they’ll offer you some e-commerce functionality that will get you by for a small shop, but it’ll have very limited features and it won’t be good enough in the long run when you actually become really successful. And as a result you’ll probably eventually have to switch platforms, which is a major pain in the butt.

It’s actually one of the main reasons why I haven’t switched over from OsCommerce to a cart like Shopify for example. So moral of the story is, don’t be cheap with your platform. I know it’s going to be a little bit hard to tell what the right platform is in the very beginning before you’ve actually even started selling. But as soon as you start using some of these simpler basic cheap platforms, very soon you’re going to realize how limited they are, and you’re going to have to switch eventually, and it’s just not going to be easy once that happens.

Okay so if you want to own your own source code, go the open source route, I recommend a cart called OpenCart. It’s fast, the code is easy to understand, it’s feature rich, and there’s actually a decent size plug-in library. There’s actually developers out there who are writing plug-ins for this cart that add a bunch of functionality in case you don’t want to code up yourself. If I were to do it all over again, I would probably choose OpenCart as my open source cart instead of OsCommerce.

And finally if you are on WordPress, so first of all a lot of people ask me whether they should start their own store on WordPress. I tend not to be a fan of WordPress mainly because usually when you run something on WordPress you have a bunch of plug-ins, and then WordPress upgrades itself like maybe every three to six months. Every time I hit the upgrade button, it’s like playing Russian roulette, something inevitably breaks.

And so if your cart is on WordPress and there’s like real money on the line in real time, I’m a little hesitant to rely on a platform with a bunch of different plug-ins when there’s actual money on the line. And so I tend not to like WordPress as a platform. I also don’t like the fact that WordPress, its main functionality is as a CMS. It’s not meant to be an e-commerce platform out of the box. As a result, there is all this extra code in WordPress that can slow your site down.

And so a lot of the WordPress e-commerce sites that I see tend to be slow. And so in order to host an e-commerce WordPress site, you kind of need more powerful hosting. And so that’s why I tend to discourage people from starting an e-commerce from a WordPress. That being said, there’s a lot of people that do it, and they do it successfully. But if you’re going to start an e-commerce store in WordPress, I like a plug in called Ecwid. And the reason why I like Ecwid is because it integrates seamlessly with WordPress, but the e-commerce part of it is actually hosted on Ecwid servers.

So think of it like a Shopify except it’s like a widget that you can incorporate easily into your WordPress blog, which actually does not bog the site down at all, and it makes your store seamlessly integrated within WordPress. And I’m talking about this all based on experience. I’ve had students in my class basically go nuts after things have started breaking every six months, or I’ll critique a site on WordPress and it’s really, really slow mainly because they have all these plug-ins, and they’re not using caching properly with their e-commerce store.

Anyways as I mentioned before, I’m currently on OsCommerce, and I’m hosting my shop on Storm on Demand as my web host. It is basically a virtual private server, and I have it all to myself. I’m paying about $100 a month, and I actually have I think four or five sites on the server, and it’s not even close to being maxed out. If you think about it this way, if I were on a fully hosted platform like Shopify or Big Commerce, I would probably be paying on the order of $500 to $600 a month for the equipment functionality.

Meanwhile I have like four to six sites on a server and I’m only paying $100 a month. It is a lot cheaper, and I have full control over everything which is why I do it this way. Once again, if you guys are tech averse go with a Shopify, go with a BigCommerce, and you should be fine.

Next question I get asked is about email marketing. Now if you guys follow my blog or my podcast, you probably already know that I use Klaviyo for my e-commerce store, and they are also a sponsor of the show. And the holiday season just passed, and over the holidays, email represented over 35% of my revenues this holiday season. And what that means is that 35% of my sales were actually from either repeat customers or people familiar with my brand.

And incidentally the reason I mention this is because the one main advantage of selling on your own site versus relying solely on a platform like Amazon is that you can get repeat sales, and you get real customer relationships. And a lot of these people that were buying at our store via e-mail, these are people who have bought from us for the last ten years. And one of the reasons why I like Klaviyo as my email platform is because they track every single customer and every single sale on your site.

And so I can easily create segments on the fly, send emails based on what people have purchased and at what frequency. So I’ll give you guys a quick example. For people on my newsletter who have been on my newsletter for quite a while but they haven’t purchased, I’ll send them out a coupon to encourage them to buy. However, these same people on this list, if they have made a purchase within a certain period of time, they do not get the coupon. And all this stuff happens dynamically.

And so I end up only sending out coupons to people who haven’t bought, and I don’t send coupons to people who have purchased from us, which basically maximizes our revenues. Over the holidays I sent out a 12 Days of Christmas sale. Basically what that was, was every single day I sent out a flash sale email. So for example one day I might offer like 50% off a certain style of handkerchief. And every time I sent out this promotion, I weeded out the people who actually bought that product that I was going to flash sale within the last two weeks so they wouldn’t get upset when they saw the flash sale and they bought that product recently.

These are really powerful things that you can do with Klaviyo that you can’t do with other email platforms because they don’t have knowledge of your entire track record of sales and what they’ve bought. Not only that, Klaviyo allows you to export these audiences over to Facebook automatically, these custom audiences where you can then run simultaneous ads on Facebook as well. Anyways, Klaviyo is a little bit pricey, but if you’re going to be running a serious e-commerce store and you want to get repeat business, it is worth every penny.

Now another service I use is called Privy, and you guys have probably heard me talk about privy because they are also a sponsor of the show. And what Privy does is they help you create email sign up forms. Normally I’m a DIY type of guy; I create all my own forms. But for all of my pop ups, I actually now use Privy, and here’s what kind of instigated the change. Last year I wanted to implement a Wheel of Fortune pop up.

Basically what this is, is you try to get people to sign a free email list in return for a spin of the wheel where they can win valuable prizes. And at the time last year there were no real out of the box solutions for my particular shopping cart. There were Shopify plug-ins, but there was nothing custom that you could create. I wanted to create my own solution and Privy was powerful enough to basically allow me to create my own Wheel of Fortune pop up. And as I mentioned before on one of my posts, I managed to over double the amount of email sign ups that I got from using this wheel of fortune pop up.

Anyways, today this wheel of fortune pop up that I’ve been talking about is now out of the box in Privy, and they actually offer a nice drag and drop interface so you can create custom pop ups super easy. It’s super easy if you aren’t tech savvy, it’s free. I actually started using it now for pretty much everything because I can design something in Privy a lot faster than I can code it up in HTML. So I’ve actually found myself using the tool for everything now as well.

Okay the next tool that I want to talk about is also a tool for the first time that I got a chance to use over the holiday season and it is actually pretty good. I actually haven’t written much about this tool, but it’s basically a push notification tool on steroids. Now if you guys aren’t familiar with what a push notification is, basically when people land on your site they are prompted to receive notifications. You’ve probably seen this from a number of sites.

If you opt in or if a customer opts in, you can then send messages that appear as notifications on both their phone and their desktop, really powerful. So for example if you have an Android phone and you come on Bumblebee Linens and you opt in notifications, I can send you things that actually pop up in your notification bar on your phone. Now there’s actually a bunch of tools out there that do this, but the tool I use is called Vizury.

And the reason why I use Vizury is because it specializes in e-commerce. In fact I would tend to compare Vizury to Klaviyo. So Vizury is like the Klaviyo of push notifications. You basically upload your entire product catalog, and Vizury can instantly send push notifications of your products taken from this catalog based on what people have either browsed or purchased. So let me give you an example here.

Let’s say a customer was looking at pink holiday themed handkerchiefs in our store but they did not buy, four hours later they would get a reminder on their phone in their notification bar to come back and continue shopping. All the notifications I run for Vizury are automated, and they’re extremely powerful. So here is just a couple of examples. If someone has purchased on our store but have not purchased again in a month, Vizury will send out an automated notification giving them a coupon code to remind them to come back and buy more.

Likewise if they browse any item on our site and they haven’t purchased, they’ll get a reminder two times, once four hours later and once two days later for them to come back and complete the sale. We use this tool also extensively to run flash sales during that 12 Days of Christmas sale that I was just talking about. Basically these flash sales appear on their browser and on their phone for like 50% off, and all they have to do is tap on it, they’re taken to the product, they can add to cart and then instantly check out. It’s extremely powerful, and it really caters to those kind of impulse decisions that people make when buying online.

I just want to take a moment to thank Payability for being a sponsor of the show. Now if you run a successful e-commerce business like I do, you probably know that the worst thing that can happen to you is to run out of stock. Now my wife and I regularly import container loads of merchandise from China, and having the cash flow to do so is very important.

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In terms of some of the tools that I use to just keep the store up and running, I use ShippingEasy to manage all the shipping for our site. Now there’s a lot of different options out there like ShipStation, ShipWorks whatever. The reason why I actually chose ShippingEasy is because they offer this free tier. And they got me in the door with this free tier, because at the time I think I was using Stamped.com, and they let me use it for free. And it’s actually free forever as long as you don’t exceed a certain volume.

And basically because it was free, I decided to give it a try, and I actually got addicted to the service. And of course our shipping thresholds went beyond the free tier, and then we started paying, and that was that. And so the reason why I like it over the all the other solutions is if you guys are just starting out, and you actually don’t ship that much right now out of your own store, well you can get all the functionality of ShippingEasy shipping software, and not have to pay anything, and then once you exceed the threshold then you start paying.

It has all the features of all the best services out there, and it’s really easy to integrate. It integrates with all the actual popular carts out there, and it’s great and it’s free. In terms of credit card processing, we actually use three different services, and you’re probably thinking to yourself, why the heck would you need three credit card processing services for your store? And here’s why, and mainly it stems from my paranoia.

So by default we use PayPal, Website Payments Pro, and these days I would say that you pretty much need PayPal especially for mobile. And the reason for that is PayPal allows you to quickly import a customer’s information. They don’t have to enter in anything, they don’t have to put their credit card, they don’t have to enter in their address, and it makes the whole mobile transaction space a lot more seamless. And unfortunately PayPal is also one of the most expensive solutions out there. But if you want to make your mobile transaction a lot more smooth, then you pretty much have to go with PayPal.

So outside of PayPal, we actually have a service called eMerchant as our backup credit card processor. Now here’s the thing, for the past year and a half pay, PayPal has actually gone down for us multiple times during periods of very heavy traffic as well. I don’t know what’s going on, maybe it’s the fact that they spun them out again, but routinely I want to say there’s a period where I was getting messages every day that PayPal was down for certain services. And another time, we actually had our PayPal account suspended for a day for no good reason.

And so that’s why, and I don’t know how paranoid you guys are out there, but if credit card processing doesn’t work for a day, that’s actually a huge deal for us. And so that’s why we have backups. So we use eMerchant and eMerchant is actually way cheaper than PayPal for just basic credit card processing. I think we’re getting about 2.2% as opposed to PayPal which of course charges 2.9. And I think they charge even more for especially cars like Amex and that sort of thing.

So finally we actually have Stripe as a third backup in case eMerchant and PayPal go down just because I’m paranoid. Stripe is free, there’s no monthly fee. So it’s just nice to have something else there in case the other solutions go down. Again most of you guys out there probably aren’t going to be as paranoid as I am, but I would say that you should at least have one backup credit card processor.

Okay in terms of ads and marketing. For Facebook ads I use a tool called AdEspresso. Now prior to AdEspresso, I was actually using the Facebook power editor to run all my ads, and you know the power is pretty good. But once I started testing a lot of ads, I found it extremely clunky. So here’s an example, every time I run an ad today, I use multiple images, multiple creatives, multiple headlines and multiple audiences. And in order to split test everything properly, you need all the permutations in separate ad sets.

Now you can imagine if you want to create all this stuff by hand in parallel, it’s extremely tedious. But AdEspresso what it allows you to do, it allows you to create all these different permutations at the push of a button. And so instead of spending like an hour creating all these permutations in power editor, I can just click one button and AdEspresso separates everything out, and tells me how each permutation is performing. And I can easily turn off the ones that are not performing and let the winners run really easily using their interface. AdEspresso is highly recommended if you want to be serious with Facebook ads, and so go check it out. It’s actually not even that expensive.

Okay so we sell on Amazon in addition to our own site, and when it comes to selling on Amazon we use a bunch of different tools. So for product research on Amazon, I use Jungle Scout, and if you guys aren’t familiar with Jungle Scout by now, it’s basically a tool that gives you estimates on how well certain products are selling on Amazon so you can make an educated decision whether you actually want to carry that product. Once again you know most you guys are familiar with the tool already.

Recently however, I’ve been testing a tool called Market Intelligence by Viral Launch. And Viral Launch is what I consider Market Intelligence by viral launch on steroids. So just a couple of examples, Viral Launch highlights products that have recent surges in sales for example if someone has been doing a giveaway. So you can basically disregard those products in the reports. It also has integrated sales history in there, so you can determine whether there is some funny business going on, or whether these sales numbers are actually inflated.

They also give you estimates on the sales velocity that you need to get on the front page of Amazon for a given product or a given keyword. Now I’m still in the early phases of testing this tool, but it seems to be super promising. So product research on Amazon I’m using Jungle Scout and Market Intelligence.

For search demand on Google, I use a keyword research tool called Long Tail Pro. Now what I like about Long Tail Pro is it tells me how often a keyword is being searched for on Google, and it gives me an idea of how easy it is to rank that particular keyword. And so I basically use Long Tail Pro before publishing any blog post or any product on my site, because I want to choose the keywords that I’m most likely to rank for, and the keywords that have the highest volume.

So if you’re publishing any sort of blog or whatever, you definitely need a keyword tool to make sure that you’re writing something based on what people are searching for. For product research on eBay, I use a tool called Terapeak. Now what Terapeak does is it scrapes all the completed listings on eBay, and it gives me real sales numbers on listings. Now in terms of product research tools, it’s actually one of the few tools out there that will give me real sales numbers based on products that I’m considering selling.

So in that respect I think Terapeak just recently got acquired by eBay, which should allow the numbers to be even more accurate than they already are. And so if you’re thinking about selling on eBay or if you just want some real sales numbers that will tell you whether you want to sell something or not, go check out Terapeak.

Now there’s also a number of tools that I’m using to just kind of maintain my Amazon account. So Ignite is a tool that I’m currently using to manage my sponsored product ads. And when I first started running ads on Amazon, I was just shocked by how bad the Amazon ads interface is. I’ve been running Google AdWords for ten years, and I was just shocked because Amazon’s interface is just so bad. Basically Ignite makes Amazon sponsored product ads actually usable, and they provide suggestions on how to adjust your bids on the fly.

In terms of keyword research on Amazon, I use Scope. And what’s cool about Scope is the tool that allows you to look into your competitors’ listings to see the exact keywords that they are ranking for, the exact keywords that they’re using to generate sales, and basically the exact keywords that you need to be targeting with your own products. I use Scope to select keywords for all my listings, and I also use Scope to kind of discover seed keywords to use in my sponsored ad campaigns.

For Amazon accounting I use Fetcher. And I don’t know if this is on purpose or not, but Amazon has made it really difficult to calculate your true profit. Once again I’m not sure if this on purpose, but you pretty much need a tool to tell you how much money you’re making on Amazon today. If you’re not, there’s probably all these hidden fees that you’re not taking into account and you know perhaps you’re not even profitable day to day.

Another tool that I use is a tool called Efficient Era, and I basically use this tool to monitor all my Amazon listings. We have a bunch of skews on Amazon now, and I actually don’t have time to look at them all on a daily basis. And what I like about Efficient Era is they’re the only tool as far as I know that provides 100% accurate buyer review matching. So if someone leaves you a bad review, I can find out who that person is, and basically respond directly.

So I can basically offer them a refund, apologize; maybe offer an additional free item to make the situation better. Efficient Era also lets me know if I got a bad review in the first place, if I’m running low on stock of something, if I’m seeing unusually high or low sales volume, basically anything that I might need to take action on, Efficient Era sends me an email alert to basically alert me that I need to do something about it. And it allows me to manage my listings without having to watch them like a hawk with my own time.

Some of the miscellaneous services that we use for payroll because someone asked, we use Intuit Online Payroll. For shipping we use UPS and USPS. And the only reason we decided to use UPS over FedEx was because UPS was more willing to negotiate. So we actually negotiate some pretty good discounts with the UPS that FedEx was actually not willing to match.

Okay so this next tool is something that I use to get instant feedback from real humans about anything that I want to sell online. So for example whenever I put up an Amazon listing, I’m never sure which photo to use as my main image. And so to figure these things out I use a service called Picfull. Now here’s how it works, I upload a couple of variations of different product images, I click go and within 15 minutes I’ll have at least 50 real people respond telling me which image is more appealing.

And based on this feedback, I can make a decision of which image to use for my Amazon listing that will generate the most clicks. Now what’s cool is that Picfull allows you to choose the demographics of the people that you want to respond to your poll. So for example, I can choose to have only women who buy on Amazon take part in my survey. You can also use Picfull to get a real opinion on product copy, landing pages, product descriptions, you name it. And what’s nice is that you get instant feedback on everything.

Now this isn’t a replacement for split testing. But personally I’ve done a lot of split testing in the past, and I actually hate doing split testing because it takes forever to gather data. And oftentimes you need a lot of traffic to get an answer within a reasonable amount of time, usually on the order of like two to three weeks. And what I also don’t like about split testing is I’ll run all these split tests, and I would say 80 to 90% of them are inconclusive. So what’s nice about Picfull is that you can get an answer within 15 minutes, and as a result you can run a whole bunch of these polls, get instant feedback from live humans, and make a decision that way.

And finally, I save the best tool for last because I want to talk about a tool that has replaced half an employee at my company and it’s basically a tool called WinTask. And what WinTask does, it allows you to automate tasks on Windows PCs. So to understand the power of this tool, I had to give you an actual use case. So in our shop, we actually offer personalized items. And so what that means is on a handkerchief, people can specify what they want to write on the handkerchief and we actually have embroidery machines, and we actually personalize these handkerchiefs on the fly in-house in our warehouse.

Now the tools that allow you to personalize, they’re kind of a pain, because you have to manually type in what you want personalized to the tool, and it’s a Windows PC only app, there’s no API, nothing, right? And so basically every single morning we had to have an employee come in and cut and paste all the personalization that someone ordered to this PC tool before it could be sent to the machine to be embroidered.

Now as I mentioned before, WinTask allows you to automate tasks on Windows PC. And so I wrote a script that basically you export from our site, so it’s automatically generated, you click a button and it automatically types in all the personalization to these old Windows PC apps that do the embroidery. So an employee would spend between two to four hours a day doing this, and now a computer program just kind of runs in the background and does this automatically. This tool it wasn’t even that expensive, it was a couple of a hundred bucks, and it literally allowed us to replace half an employee at our company.

All right, so there you have it. Those are all the tools that I use to run my e-commerce store. There’s probably a couple others that I didn’t mention, but if you guys have any questions about what I use, feel free to leave a comment on the show notes, or feel free to email me directly on what I use and I’ll be happy to respond to you.

Hope you enjoyed that episode. I know that I threw a lot of tools at you all at once, so if you want the full list, you can actually head over to my blog and check out the show notes at mywifequitherjob.com/episode195. Now once again I want to thank Payability for sponsoring this episode. If you’re looking to take back control of your cash flow and scale your Amazon business fast, then sign up for Payability, and say goodbye to cash flow issues and stock outs.

With daily payments, you can speed up your supply chain, buy inventory at optimal times, and stay in the buy box. The more control you have over your cash flow, the more buying power you will have. So visit Go.payability.com/Steve to get started, and cash in on a $200 credit just for being a My Wife Quit Her Job listener. Once again that’s Go.payability.com/Steve.

I also want to thank Klaviyo.com for sponsoring this episode. Klaviyo is my email marketing platform of choice for ecommerce 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 auto pilot. 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.

And finally 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. 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 ecommerce 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 are 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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194: Copywriting Strategies To Increase Ecommerce Sales With Karon Thackston

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194: Copywriting Strategies To Increase Ecommerce Sales With Karon Thackston

Today I’m happy to have Karon Thackston back on the show. If you don’t remember Karon, I had her on episode 74 where we talked about how to optimize an Amazon listing for maximum sales.

She’s been helping ecommerce clients get both higher rankings in search and higher conversion rates with the power of copy for the last 25 years. She’s the author of 10 books and she runs the popular site MarketingWords.com which I recommend that you check out.  

Anyway, last time we focused on tactics for optimizing Amazon listings. Today, we’re going to talk about copywriting strategies to increase sales.

What You’ll Learn

  • Karon’s recommended way of getting reviews.
  • Recent changes to Amazon search.
  • Does enhanced brand content make a difference?
  • The most common mistake with copywriting
  • Karon’s recommended launch process
  • How Amazon search differs from Google 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.
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

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

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 what strategies are working and what strategies are not in business. Now today I brought Karon Thackston back on the show, and today we’re going to talk about copywriting strategies to increase sales for physical products online.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Now I’m super excited to talk about Klaviyo because they are the email marketing platform that I use for my ecommerce store, and I depend on them for over 20% of my revenues. Now, Klaviyo is the only email platform out there that is specifically built for ecommerce, 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 bought, piece of cake, and there is full revenue tracking on every single email.

Klaviyo is the most powerful email platform that I’ve ever used 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 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? 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.

There is a bunch of companies out there that will manage your email capture forms, but I use Privy because once 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 prizes in our store. Customers love the gamification aspect of this. And when I implemented this form email sign ups increased by 131%.

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 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 Chu.

Steve: Welcome to the My Wife Quit Her Job podcast. Today I have Karon Thackston back on the show. Now if you don’t remember Karon, I actually had her back on Episode 74 where we talked about how to optimize an Amazon listing for maximum sales. And she’s been helping e-commerce clients get higher rankings in search and higher conversion rates with the power of copy for the last 25 years. And she’s the author of ten books; she runs the popular site MarketingWords.com, which I recommend that you check out.

But anyways, last time we focused on tactics for optimizing Amazon listings. Today we’re going to talk about more copywriting strategies to increase sales, and just get a pulse on the overall landscape on Amazon today. And with that, welcome to the show Karon, how are you doing today?

Karon: Hey great, how are you?

Steve: Yeah I’m doing great, and I’m really glad to have you back. It’s funny that one of my students actually posted about you on the Facebook group, and that’s when I realized, hey I haven’t had Karon back on the show for a very long time. I definitely had to have you back.

Karon: Well I appreciate it, and I like hanging out in your group. You guys have some great ideas and conversations going on in there. So, always interesting when I spend some time over in your space of the Facebook landscape.

Steve: So I know you actually deal with a lot of Amazon clients. And so what I want to talk to you about first is since you have a previous post on the matter, how is the Amazon landscape changed, what are some of the issues that have been popping up within your community?

Karon: I am still finding a lot of people that come in from other communities, or folks that are in our Facebook group that are newbies that aren’t quite getting a handle on what changes have taken place as far as keywords go and the whole new Amazon 250 thing.

Steve: Why don’t you give an introduction just in case people listening don’t know what you’re talking about?

Karon: Yeah, let’s start from the beginning. Amazon way back five, six, seven years ago probably started out with a 250 character maximum in the search term fields. Some categories now show that as generic keyword fields. And they changed that a couple of years ago to 5,000 characters, which a lot of people still think that the 5,000 character limit is in place, which is Amazon’s fault.

I think they should put hard stops there. However, earlier this year Amazon made an official announcement after a lot of speculation that they were in fact going back to the 250 character limit. Amazon listed as 250 bytes, and bytes differ. A byte equals one character if it’s a letter or number. A byte can equal two characters if it’s some special question mark or special character on the keyboard, which you typically would never have in your search terms anyway.

Steve: What about spaces?

Karon: Spaces don’t count, they used to. Amazon is saying spaces don’t count in the 250 now. So you get a couple of we still stick to 250 or below instead of trying to guess how many spaces we had in there. That gives us six more characters. It’s not worth all the trouble to do that in my opinion. So now we’re back to 250. You do not have to fill out all of the search term fields or the generic keyword fields whichever one your particular category says. You can put them all in one field if you want to.

However if you go past 250 characters, Amazon will ignore everything that you’ve put into the search term fields. And people are still of the impression that because the field will actually hold the 5,000 characters, the total of five fields will hold 5,000 characters that they’re still allowed to do that. So they’ve either left 5,000 characters worth of keywords and phrases in the backend, which are probably now not being indexed or used for ranking at all because 5,000 is way more than 250, or they’re not understanding what needs to go in the back end keywords and what doesn’t.

If you have the keyword in your title, in your bullets or Amazon says in your description, then you don’t need to repeat it in your backend search term fields.

Steve: That’s interesting, so that implies that the bullet points are now indexed?

Karon: It does, and we have seen that for a very, very long time. In many style guides, not all of them, some of them are still anciently old and have never been updated. But in the updated style guides, probably about half of them tell you, you would be better off to put keywords in your title, your bullets, and your description than to put them in the search terms. Amazon makes a point of stating that the search terms are optional. They’ve said that for a very long time.

They make a point of saying that when you put anything in the backend search terms or generic keywords, whichever one you assess, that it is, to paraphrase, you’re making a suggestion. And Amazon is not in any way, shape, or form obligated to use the information you put in the search terms.

They would much prefer that it be in the copy somewhere. And this goes — my suspicion, underline the word suspicion is that eventually just like Google, Amazon will say bye-bye to the search term fields, or either they just won’t give them any credit at all whether they make it public or not like Google did with the meta keyword tag years ago.

I haven’t heard that from anybody at Amazon, but Amazon is following down the Google path from years ago with a lot of their changes. So it makes sense that they would eventually say if the keyword or phrase is that important, it needs to be in your copy not in the backend.

Steve: Here is something funny that did happen to me. So I had more than 250 characters on one of my listings at one point. And then one day for that particular listing all the sales tanked, and I wondered what happened. I looked and all of my keywords had disappeared.

Karon: Really?

Steve: Yeah, it was the weirdest thing. And then there was another listing ahead where I exceeded 250 also, and then the sales just kind of tanked one day. And then I removed almost all the keywords and just used like maybe three or five on each line, and then the sales just came back.

Karon: I see, here is something that has people confused too, because you’re hearing all these different stories like yours. Now I had never heard anything about somebody’s keywords just disappearing before, that’s a new one for me. But because there’s so many variations of what’s going on, and because Amazon historically never rolls anything out to everybody across the board at the same time, you get people that say, well I took all my keywords out and it ruined my listing. Or I went down to 250 and all my traffic going away, or the reverse, all of my traffic went away until I went to below 250 characters and then it came back.

So people get really frustrated not knowing what to do. And because every listing is unique, there are points where you’re just going to have to test and tweak and like you, you paid attention. You had things happening, you went in there, and saw, okay well I still have too many key phrases or keywords, let’s just dial it back so I might see what happens and fix the problem. So patience is key, testing is key.

Steve: So what is your best practice, what is your recommendation in general now with these keywords?

Karon: Yeah right now we are going with high le [ph] relevant search terms in the backend. We aren’t doing anything that’s extremely broad. If it’s not a synonym, a substitute for what you’re calling the product, you know if you have a stainless steel water bottle or something to that effect, some people would put water jug in the backend or something around that. If you would not substitute a water jug for this water bottle, then don’t use that is one of my rules of thumb.

It needs to be people have the mindset of, well if you’re looking for a water jug then you need something that’s going to deliver water. So maybe they would be interested in a water bottle too. To me that’s too broad.

Steve: So do you have your clients now fill out all of the 250 characters?

Karon: If they are not highly relevant and have a really good search volume, we don’t. I am not somebody that will tell you use every character available to you regardless of what you put in there, because we have seen too many times where using irrelevant keywords has actually turned around and bitten people in the rear end. You get folks with the water jug example.

They’re looking for water jug, yours pops up, and the picture maybe the water bottle kind of looks like a jug or something. So they click on it, they go over and go, this thing only holds 20 ounces, that’s not a jug, that’s a bottle, they click away. That bounce if it’s repeated over time, Amazon pays attention. And they’re going to start demoting you in the search rankings because they only want to list the products that are selling.

So when you lose your rankings you’re also going to lose your sales, or either your PPC costs are going to go way up, and you’re going to have to drive them with an additional fee through their monetary system. But there’s too many times where going broad has turned around and ruined everything. So we stick with the relevant words.

Steve: Okay and presumably though that the rankings would only go down for that specific keyword, but you’re saying that putting less relevant keywords will ruin your rankings in general. Is that correct?

Karon: Not necessarily for everything, no. I don’t have any proof that it would ruin the listing for everything. For the terms that you’ve put in there that are broad, that’s going to drag it down. However, Amazon would be looking at the listing overall is my guess. So if you’re dropping for a handful of keywords that are too broad, it’s still going to drag your data down.

Steve: Okay and so just your overall product conversion metrics is what you’re saying essentially?

Karon: Right.

Steve: Okay and then you’ve had clients where you’ve removed some of these faulty keywords and their sales have increased?

Karon: We have. We have also had clients where we have put all of the relevant keywords in the copy and had nothing in the backend, and they did wonderful. Now let me stop here and say pay attention to what I’m getting ready to tell you. I am not advocating that you do that. We ran three tests, one two, three, that’s it. So it’s in its very early stages. But to me that is a mild indicator that Amazon is actually for once in its life doing what it says, and it really does prefer to have the keywords in the copy.

So our rule of thumb at Marketing Words is put as many keywords and phrases in the title, bullet, and description as you can without it sounding stupid.

Steve: Okay, that’s good advice actually.

Karon: You don’t want to confuse or irritate customers. They’re the ones sitting there holding the credit card. Getting great rankings is awesome, but if you can’t get anybody to buy what’s the point?

Steve: So I’ve actually heard rumors also that like the first line of the keywords has more weighting than the others. Do you have any evidence of that?

Karon: I don’t, we typically at this point in time are just telling people to put everything you’ve got in the first field. But I haven’t heard anything about it being more powerful than the others.

Steve: What about the first ten characters let’s say of the title?

Karon: Not the first ten, I mean I haven’t heard anything about the first ten. What I have been told by a couple of different leadership team members at Amazon were that the first 80 were indexed and used for ranking. The others might be indexed, but at least according to these people, not necessarily used in Amazon’s ranking algorithm.

Steve: Okay, I mean I know that sometimes the total gets truncated depending on what device you are on. So it pays to put your messaging I guess towards the front of the title so it never gets truncated depending on the device and the screen size.

Karon: Right, and sometimes you’re not going to get a whole message through there. I mean the [inaudible 00:16:00], a little tiny. You get something like 35, 37 characters, that’s not a lot of space.

Steve: Yeah, so however we talked about manipulating all these keywords and titles and that sort of thing. And you know Amazon doesn’t really allow you to easily split test these things. So I was hoping we would talk about your process for doing the testing to make sure in fact that one of your changes is actually making a difference.

Karon: Yeah absolutely. There are some common mistakes that most people make when they’ve never done any testing, and they’re doing it manually. Obviously there are service tools out there that you can use to conduct split tests and what have you, but you still have to know what to test. So what we do through group, a monthly group that we have called a listing lab. It’s not a copywriting service; it won’t teach you how to write listings.

It’s specifically for testing listings you already have, is create two lists a month, two tests a month that you would do either through a tool that you have a subscription to or manually either one, and also teach people how to do the testing. So the first thing would be actually using a tool that allows you to do what’s called multivariate testing. If you’re doing things manually, you would want to make one change to your title, or one change to one bullet, or one change to your search term section or something to that effect, which is slow.

But if you go in and you take out a keyword that was in your title and put a different one in, and you tweak a bullet and you found three other search terms you think would be great in your backend, and you get wonderful results, you have no idea which of those three brought about the change. So you don’t know whether to keep tweaking your title or change some more bullets or put more keywords, or take those keywords out. So, do one test at a time, and only change one element at a time so that you are fully aware of what did or did not make a difference.

Steve: What tool did you recommend? You mentioned some tools, what have you use in the past?

Karon: Well the only thing — we don’t actually do testing as a service at Marketing Words. So what a lot of the people in Listing Lab, and a lot of our other clients use is one called Splitly.

Steve: Okay yeah.

Karon: I have not used that tool, so I can’t tell you anything about it. But I have not heard anybody that’s come back and said anything negative about it so far. There may be people, but the reports so far are good with Splitly. So if you don’t want to do all of these things manually, you can use a tool like that or something else that’s available, and set them up to run automatically.

Steve: So you recommended testing exactly one thing, letting it run for two weeks and then changing it back, right?

Karon: If it’s possible we like to do the same amount of sessions looking at traffic instead of [overlapping 00:19:21]. But with smaller listings sometimes you don’t have that luxury. If you’re only getting a few hits a day, you may just have to do the time frame and wait two weeks and take a look at it.

Steve: How many sessions are required to come to a conclusion or not a conclusion but to get a good idea?

Karon: In a perfect world you’d want to do a thousand or more.

Steve: A thousand or more sessions, okay. And how do you determine whether it’s actually statistically significant or not?

Karon: This is where you get to go looking your data, and I’m a data geek so that thrills me. But a lot of people go; oh you got to be kidding me. It’s really simple an Amazon. If you go into reports and then business report, say you looked down the left hand side, you want to look at details by child item. Even if you don’t have variations in the listing, the details by child items seems to be more specific and more accurate.

You can look at the number of sessions which tells you how many shoppers have been to your page. You can look at of course the number of sales. And in there is something called unit session percentage that is Amazon’s version of a conversion rate. So taking a look at all of these will give you a general idea about whether you’ve had success with your listing or not. If you’ve put in new search terms, look at your sessions. Has that driven more traffic, did you have the same amount of sessions when you look at the dates or the amount of traffic previously as you had in this test, or did it go up down what have you?

If you got more traffic, did that traffic result in more sales? If you got more traffic but nobody bought, then maybe you need to take those search terms out and try some other ones that would drive traffic that would convert to sales. So digging around in there, I could get lost digging around in the data all day long.

Steve: Yeah, I just have a couple of questions. I mean this isn’t really a true split test because it’s two weeks for example and then you’re changing it up in two weeks. So there just seems like there’s so many variables in play, right? There could be seasonality, there could be like a social media mention that happened that drove a lot of sales like how do you kind of factor all those things in?

Karon: That’s why you want to look at a large number of sessions when possible, because that’s usually going to happen over a longer period of time. You can also go back and look for trends. If you’ve been doing testing for a while and you’re used to looking in the data, you can go back and look at what happened over a 30 day period previously, or over a three month period previously. But you do have to be aware of your own products.

So if you have a product that’s seasonal for summer only, and you’re doing testing in January, you’re probably going to get inaccurate results. So you’ve got to incorporate some common sense into this as well. But you are correct, usually with ABs, you’ve got two tests running simultaneously, so it sort of accounts for some of these anomalies. And you can’t necessarily do that in Amazon. They will not allow you to create two identical listings and then tweak each one to run them side by side.

Steve: Right, so I guess — so this is like a very long term thing this split testing, right?

Karon: It’s not a quick fix and it’s for people who understand the value of testing and want to get in the habit of doing that every month and seeing how they’re able to improve those listings.

Steve: I was going to say like it implies that you should only do larger changes to your listing so that the changes are more obvious. So what are some of the things that you recommend people split test immediately?

Karon: Definitely the search terms. Especially with a limited number of characters that are being used by Amazon now, you want to be sure that the ones that you put back there (a) are actually helping and (b) are driving visitors to your pages that are converting. A lot of the information can be found in PPC campaigns. If sellers are running those sponsored ads, you can dig in there and find more detailed information down to the keyword level that will also help you make those determinations.

But that would be one of the first things that I would do especially with all the changes going on. I would also recommend testing the variations of keywords that you put in the title. So if you’re selling dog treats, crunchy dog treats, chewy dog treats, jerky dog treats, dog treats for allergy dogs, you’ve got all these different variations, they all still have dog treat in them. So I would suggest testing the variations of dog treat, or whatever key phrase applies to your product of course, and seeing which one of those polls better.

A lot of times people immediately go for the ones with the highest search volume, but often ones with lower search volume that are referred to as long tail key phrases that are more specific have a higher conversion rate.

Steve: Okay and so that’s just a matter of testing. I’m surprised actually that you didn’t talk about the image, like for some reason the first thing I think about in terms of conversion is the main header image.

Karon: Well Marketing Words does words. So it’s not marketing images, it’s marketing words. So we don’t have anything at all to do with images or any other part of the listing, only the ones that deal with words.

Steve: Okay, let’s talk about enhanced brand content for a little bit. Have you noticed with your clients where using this has dramatically increased conversions?

Karon: No.

Steve: No, okay interesting.

Karon: We have not. It has made some improvements, but not to the point where I’m ready to tell every seller you need to develop a branding, get into the brand registry and what have you. I have seen a lot of talk in various Facebook groups where people have said after going through everything to get the EBC listing up and the additional cost and yada, yada, yada, it was okay.

Steve: Interesting okay, because it’s a lot of work to actually put up the EBC on all of your listings?

Karon: It is, and it gets expensive. If you’re not doing the listings yourself I mean obviously it takes a lot more work for whoever is developing the listing. So if you’re not doing yourself, you’re paying that to somebody to do it, there’s an additional cost there, there’s an additional cost with Amazon. But it has not — we haven’t seen the comments from people, our clients or in other Facebook groups that have backed up what Amazon said with 25% improvements in sales and all the statistics that they originally quoted.

Some people are getting, but I would say at least half of the comments we’ve seen have been, uh it’s okay.

Steve: Okay, so in terms of priority, where should you be focusing your optimization efforts?

Karon: In the title and the bullets. The description is sometimes being indexed, sometimes the whole thing is not being indexed, sometimes you get the first however many characters that are being indexed. And honestly at this point I have not found any rhyme or reason to it. I can’t identify any common denominators at this particular point in time. The bullets however do seem to be indexed reliably. So I would focus on including the search terms in the title and in the bullet points at this point.

Steve: So a couple of minutes ago you mentioned testing the backend keywords, and then you maybe earlier in the interview you mentioned that one of your clients had nothing in their keyword fields. I was just curious what the rationale was for not having any keywords in the backend?

Karon: We wanted to see what would happen.

Steve: Okay, so it’s just a test, you don’t actually recommend this, right?

Karon: No. What I was saying do not. We did it with three listings only. I do not recommend that you run out and remove the search terms from the backend.

Steve: Okay. Let’s switch gears a little bit and let’s talk about reviews, review copy, right? Ever since Amazon has allowed people to opt out of getting e-mails, it’s been harder to get them. So it makes it even more important to kind of improve the copy on your solicitation emails so you actually get a good percentage of reviews. So what is your recommendations there?

Karon: There are a couple of things that happen that I think contribute greatly to e-mails not being opened, or customers not responding to review request emails. And one of them is that virtually every seller out there is using the exact same template that every other seller is using. The other thing is that the subject lines, people are defaulting to putting the product name and the order number in the subject line, which for a lot of people is an indicator that the message is a spam message.

They’re trying to trick you into, oh your charge of $427 for your order has been fulfilled, those kind of spammy messages, and they put the order number in there and what have you. So one thing that I recommend is doing unique review request e-mails, which is a lot more work than using the exact same template for every single product that you have.

However, we have actually had folks that have used the suggestions in the review advantage eBook that we have that emailed us back and said, you know what, I just got two thank you comments for the review request emails that we’re sending out. And that just never happened before that I’ve seen. So people are looking for helpful useful information. It all boils down to the, what’s in it for me mindset of clients.

When they get emails that all look the same and all pretty much say the same thing, and they are give me, give me give me, you know we want you to leave a review, and could you please do this, and could you click over here and give feedback, and all the information that’s in there. And then they get different emails that say, hey you just purchased this brand new skillet from us, and here’s a couple of recipes you can try, or here are some tips for keeping that brand new nonstick skillet in perfect use, some things that you may not be aware of, or here are some ways that you can do other things with the skillet besides frying. Maybe you remind them that the handle is not rubberized. It’s a metal handle, so it can go straight in the oven too.

And when you start giving information that customers find useful and helpful and are grateful for, then you increase the chances that you’re going to get reviews. You certainly do ask for a review in the email as well. Not only that but you create a lot of goodwill too.

Steve: For those resources that you mentioned, are you implying that you are linking people and taking them off to a different site or just within the email?

Karon: Within the email, absolutely not linking to another website.

Steve: Okay, and then no attachment – actually I don’t even know if you can do attachments, and nothing along those lines, right? These are simple content messages?

Karon: Right, within the email themselves. And yes certain attachments are allowed by Amazon, but what we recommend is including it in the body content of the email.

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 e-mail, and I’ll send you the course right away. Once again that’s mywifequitherjob.com/free, now back to the show.

And what about the subject line. You said don’t use the product and the order number, what are some examples of emails that have been working really well for your clients?

Karon: A number of tips. Email works well for example three unique ways to use your new nonstick skillet, or five tips for getting the most from your new nonstick skillet, or something to that effect. You could also do, if there are things — I wouldn’t use this if there isn’t something urgent that needs to be said, but if there are use tips that people need to be aware of the immediately, you could say stop, or warning, or wait, don’t use your new skillet until you read this.

Steve: Interesting.

Karon: It needs to be true however. So if its — we’ve used to that for example with baby products that there was something that needed to be done with the product before the first use or what have you. So it was justified then, but don’t use that type of subject line just to get attention and then not deliver with an urgent message.

Steve: So it’s almost like running a blog and an e-mail newsletter at that point. You’re sending out content?

Karon: Mostly content with the request for the review.

Steve: Okay, and can you just talk about like the phrasing, say you provide a good piece of content and then you say something like, well if you enjoyed this content, would you mind helping us spread the word. What are some of the exact words that people have been using when you get to the review part of the e-mail?

Karon: You cannot legally say if you have done anything, then come and do this, that’s now against Amazon’s terms of service. They want these to be completely unbiased. So the review actually comes in as pretty straightforward. You say thanks for buying, here’s the information that we want to share with you, and then when you get to the request for review, you simply state, we would love to have your opinion about your new skillet, please take however many minutes and leave a product review on Amazon.

Say we understand you’re busy, if you’re willing and have a few minutes, would you please leave a review. But nothing about if you’ve loved your skillet, we’d love to have your opinion, if you appreciated the tips we’ve given, all of that. Amazon is now considered as a way to incentivize the review essentially. It’s some sort of manipulation because you’re not saying regardless of what you think, if you liked it or not come and leave a review.

Steve: Okay and your examples have implied that you should be sending out product specific e-mails. But let’s say you have too many skews to do that, what is a good I guess generic way to write the e-mail?

Karon: That would be a difficult thing to do for the approach that we take. If you have lots of different skews that are the same but different, lots of different types of shampoo for hair growth for example, but maybe one has added jojoba oil or something else, slight differences in there, you could probably write in groups and use tips that were applicable to all the different types of shampoo. But in order to use the approach that we talk about in the review advantage eBook, I don’t think you’d be able to do a generic one.

Steve: Okay, so it seems like the general like at a very high level at least, the advice is to provide some sort of value through your content, and then ask for the review?

Karon: Exactly.

Steve: Okay and then phrase the e-mail not like a receipt type of e-mail, but like a piece of content that someone would actually want to read?

Karon: Exactly.

Steve: Okay and can you just kind of comment on some of the results that you’ve had with some of the students in your class when switching over to this method?

Karon: Right, well it’s not a class, it’s just an eBook that somebody…

Steve: Oh it’s an eBook okay.

Karon: It’s an eBook, but like I mentioned before, when people have applied this we’ve gotten comments back either in the Facebook group or that have emailed to us saying that they’re actually getting thank you notices from the customers. Sometimes the customers are leaving it in Amazon feedback or in the review itself saying the information that this seller provided, one of them was child probiotic drops. And the information that the seller provided in the email he sent was extremely useful to me in knowing how to best use the probiotic drops with my eight month old or nice touch or something to that effect. And that’s not an entirely uncommon thing to have happen if you provide quality content.

Steve: Okay and it’s kind of want to conclude this interview by asking you what are some of the common mistakes that you’re still seeing people make on their Amazon listings?

Karon: Five hundred character bullets.

Steve: Five hundred character bullets okay.

Karon: They drive me crazy for a couple of different reasons. On mobile for one thing, I don’t think people pay enough attention to Amazon mobile. They work on a desktop or a laptop computer and they’re looking at their listings on Amazon. But when you 500 characters per bullet with five bullets that all show on the page depending on the layout that your listing ends up having on Amazon is a big chunk of words, and it’s really reader unfriendly. It’s even more so if you look at it on a mobile phone, and you literally have to keep scrolling three or four times to get all the information, and all the person is seeing is a big chunk of words.

We much prefer, and we have gotten much better results with bullets that are at least half that length or shorter, because you get more that show up especially in the format with the pictures at the top and the three bullets are showing at the bottom and you have to click them all, and on mobile devices where you only get the three that are going to show before you click the arrow. So shorter bullets is a biggie.

Steve: Interesting, that’s like counter-intuitive because since the bullets are indexed it seems like you’d want to put more information there. I actually personally have not noticed on my phone because there’s always a show more when I shop on Amazon on my phone which collapses everything. I actually only see like the first bullet point in fact, or the first two maybe.

Karon: But when the bullets are shorter, more show.

Karon: Okay, any other mistakes that you’ve seen? I’m sure you see a lot of plain mistakes, any other ones that come to your attention?

Karon: Yes, with the keyword research, I still think that people are going too broad; they’re not being relevant enough with Amazon.

Steve: Give me an example of that actually, a quick example.

Karon: Something that a lot of people do is they’ll go broad and use accessories. So we will go back to the water bottle example. And maybe it’s a water bottle that you can use when hiking because it has little carabiner hook to put on your backpack or what have you. They’ll put things in the search terms like camping accessories, way too broad. Yes you might be able to use water bottle while you are camping, but most people are not going to consider that a camping accessory.

Steve: Okay, got you. So it seems like the general trend that you’re advising is to just focus on less, less is more essentially?

Karon: Less is more.

Steve: Okay, well Karon I did want to give you an opportunity to talk about — like the last time we talked I think you only had maybe five or six eBooks or products available. Now I looked and I think you have over ten I want to say. So can you talk about what you have to offer, and what you’ve added lately since the last time we spoke?

Karon: Sure absolutely. The Amazon product description boot camp is something that we added a little while back, and it is a live event that is recorded. We just closed that out a couple of months ago, so it is fully updated. The replays of that webinar, which were four sessions, we went for four weeks, and all of those are now available up on our site. And I will send you Steve a coupon so that people can save 20% off of the Amazon product description boot camp.

This is very detailed. We where you through keyword research, you watch several sessions of keyword research, doing the titles, doing the bullet points, doing description, but we also get into Amazon mobile, and we also get into the basics of testing as well in all these video sessions. Something else that we added is called Listing Lab, which we talked about briefly just a minute ago.

That is a testing group, it is not of course. It’s for people who want to start testing their listings and need help figuring out what to test and how to test. That gives you two tests that I have created each month that you can either manually implement on however many listings you want, or you can use it along with a tool like Splitly or some other Amazon split testing tool if you use those types of things. So that is something that can help you gradually over time see improvements with your listings as well.

And then there’s the review advantage eBook, which is the one we just talked about that has all of the suggestions and the formatting and the how tos of how to create those review request e-mails that do include helpful content for your shoppers as well as a request for their review. And I’ll send you coupon codes for all of these.

Steve: I’ll link all this stuff up in the show notes. I do you want to just give a quick endorsement; the eBook that you offer on just Amazon listing optimization is excellent. I highly recommend everyone go pick it up. It’s really inexpensive, and it’s a no brainer.

Karon: Thank you, that’s Amazon Advantage, the Amazon Advantage eBook. I appreciate that very much.

Steve: Well Karon I appreciate your time, and thanks a lot for coming on the show.

Karon: Thank you, see you next time.

Steve: All right, take care.

Hope you enjoyed that episode. Copywriting plays a huge role in sales, and it’s nice to get it straight from someone who has helped hundreds of ecommerce store owners improve their sales. For more from information about this episode, go to mywifequitherjob.com/episode194.

And once again I want to thank Privy.com 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 that 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. 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 auto pilot. 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 all these tools on my blog, and if you’re interested in starting your own ecommerce 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 are 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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193: How To Hire Skilled Filipino Employees At A Fraction Of The Cost With John Jonas

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How To Hire Skilled Filipino Employees At A Fraction Of The Cost With John Jonas

Today I’m happy to have John Jonas on the show. John is an entrepreneur who has been making a full time income online since 2004. He runs the popular site OnlineJobs.ph and he’s helped thousands of entrepreneurs succeed by teaching them how to replace themselves through outsourcing.

Over the years, I’ve come to realize that there are many tasks that can be outsourced to someone virtually and John’s methods makes it so easy. Enjoy the episode!

What You’ll Learn

  • How to start a Filipino outsourcing company from the United States.
  • How to get traction for a job board
  • How he got his first few customers.
  • John’s process for hiring a great Filipino employee

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 what strategies are working and what strategies are not with their businesses. Now today I’m thrilled to have John Jonas on the show.

Many successful entrepreneurs I know outsource a lot of their work to the Philippines because you can find great workers at a fraction of the cost. Well John Jonas is the founder of onlinejobs.ph, which is a job board for Filipino workers. And today he’s going to teach us how to hire from there.

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. 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 prizes in our store. Customers love the gamification aspect of this, and when I implemented this form, email sign ups increased by 131%.

There are other cool things that you can do too also. So let’s say you offer free shipping for orders over $100, well you can actually have Privy flush a pop up when the customer has $90 in their cart to urge them to insert one more item. 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 that 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. I’m blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my store. And over the holidays right now, I actually depended on Klaviyo for over 31% 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, which makes it extremely powerful. 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 single email.

Klaviyo is the most powerful email platform that I’ve ever used, and you can actually 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 is your host, Steve Chou.

Steve: Welcome to the My Wife Quit her Job Podcast. Today I’m happy to have John join us on the show. Now, John is an entrepreneur who has been making a full time income since 2004. He runs the popular site onlinejobs.ph, and he’s helped thousands of entrepreneurs succeed by teaching them how to replace themselves through outsourcing.

Anyway, many of you probably know from my blog, but we have three full time employees at BumblebeeLinens.com which is our ecommerce store right now. We used to have four; we had to let someone go. Anyways, the minimum wage in California is actually going to creep up to seventeen dollars in the next couple years, and we’ve kind of come to realize that there’s many tasks that can be outsourced to someone virtually.

Now John’s company does this in his sleep, and so I want to kind of pick his brain today. And with that, welcome to the show John, how are you doing today man?

John: I’m good, thanks for having me.

Steve: John, for everyone out there who doesn’t know you, can you just give a brief intro of how you founded onlinejobs.ph in the first place, and what you’re up to today?

John: So I’m a terrible employee. I graduated from college in 2004 and had a job for ten months, and my only goal there in that job was to quit, because I don’t know it just doesn’t, it doesn’t work for me.

Steve: What was your job?

John: I was a programmer. I graduated from college in Computer Science. I was in programming. And I really like programming, it’s really great, but just working to make someone else rich just doesn’t work for me. And I found myself like stealing their time and…

Steve: Did you outsource your programming job to the Philippines or?

John: I didn’t know how to at the time otherwise I totally would have.

Steve: Okay, all right.

John: So since I learnt to make a little bit of money, I quit my job and started working from home. And I had these people working for me in the Philippines within a couple of years, and they were working on my business at the time, I was doing affiliate marketing stuff. And I just found myself; I have a mastermind group that we have a phone call every week. And I found myself teaching what I was doing every single week because there were 15 of us on the call, and every week people wanted to know more because it was so successful what I had kind of stumbled into.

So the way that we found people was crappy at the time, and so after a couple years I was like, there’s got to be a better way to find these people because this is so good. That’s when I started onlinejobs.ph, which is the marketplace to find the workers. So that’s kind of how I got into it.

Steve: So I’m just curious why Filipino workers and not a different country, like what’s special about them?

John: So I didn’t know this at the time. So one day I was talking with the owner of BatCountry.com [ph] and this is 12 years ago. And they were huge, and I was nothing. But he and I had some similar things that we were doing. It was like a side pet project of his and my main business. He says when you are registered outside with some of the stuff; make sure you go to the Philippines with it. I was like what? He said yeah because in India when you tell them something and they say yes, that means yes I heard something come out of your mouth, it doesn’t mean yes I understood what you said.

And that was a big shock to me, like I had never thought anything of the sort. I just thought [inaudible 00:06:37]. And he gave me a reference where I could hire someone, and I think what it really was, was it was hope that like there could be something different than what I had previous experience. Because I think most people I knew at the time had experienced what I experienced in outsourcing and it was just painful, it was a problem.

And it kind of gave me hope that maybe there’s something different. So I ended up hiring someone and it was completely different like it changed my life. Where he gave me a reference where I can hire an individual full time person. They speak good English, we’ve never had a communication issue, they’re honest, they’re loyal. The person still works for me today 12 years later. They’re hardworking, they’re pleasing, they want to make you happy. I have taught him everything I can teach him I think. And he has started to run businesses for me that have made hundreds of thousands of dollars.

And along with their honesty and their loyalty, they’re not entrepreneurial, so they don’t want to steal your business. So there’s all kinds of cultural things that when you combine it together, make the Philippines a very different experience than the beastly world that we are at. At least I have never heard, I only try to cover different countries, but I’ve never heard someone say to me like, hey, I’m finding the same experience somewhere else.

Steve: Okay, so it’s a cultural thing. Did you ever try to hire someone in the states or?

John: Yeah. So way back then, I actually tried four different people. And with what I was doing then, I taught them stuff, and the very first thing they did was quit, because it looked like, oh I can do this on my own.

Steve: Interesting okay.

John: And I have two people in the states that work for me today, actually three people in the states that work for me today, just growing the business, doing different things.

Steve: And why couldn’t those employees be outsourced?

John: You know sometimes I think they could. I have an amazingly good writer here in the US who I love, like she’s a really great storyteller, and I love her style and it just fits me, and so I keep her. I have a girl who is really, really creative with Facebook or with just advertising in general, and so she runs our ad team with someone in the Philippines running ads, and a designer in the Philippines. And I have another writer here in the US who does other odd stuff.

Steve: Interesting okay. So yeah I was just about to ask that question, so would you say like the writing talent is better in the US than it would be over there?

John: Yes. I mean you could — so like if you read my blog, if you read the blog, working with the blog at jonasblog.com, there are blog posts there written by me, by people in the US and by people the Philippines, and I would eventually guess you couldn’t tell which are which [overlapping 00:09:44] the byline of the author.

Steve: So let’s switch gears a little bit then we’ll get back into the outsourcing thing a little bit, but how does one start a Filipino outsourcing company from the United States, like did you travel back and forth or did you do everything entirely in the US?

John: I did everything entirely in the US, all in the US.

Steve: Okay that’s interesting. So how did you get started with something like that when you started?

John: So like I said, the dude that I was talking to from back [inaudible 00:10:13], he gave me a reference to where I could hire someone. At the time it was a company that has offices in the Philippines and it was agentsofvalue.com, it’s still around. They have offices in the Philippines, they recruit Filipinos, bring them into the office, and they like offer you a menu like here’s this person that we have, here’s this person that we have, and they have like 12 people that you can pick from.

And then they mark up their salaries and listen to you basically. The good thing was it was a full time thing where like that person only worked for me full time. The problem was when I had the first person quit and leave because of office politics, it was like this is work, you can’t quit, you’re an amazingly talented programmer, just because you’re not able to work in this office, you’re going to work for me still. So that was kind of how I got started, and then it kind of spiraled from there with hiring more and more people, and more and more people asking me why and how are you aren’t these people, how is this working out for you?

Steve: I mean the company itself onlinejobs.ph like how do you — it’s like a chicken egg problem, right? I mean you got to get people and you got to get demand?

John: Yeah. So how I did it, we built the site and actually I just had my guys in the Philippines build the site, and I just I really just told them, hey, look here’s the concept, like look at Monster.com. This is what it is, we want a dumb down version of this, right? And I had Bill [ph] and I had this guy who was a programmer and a reasonable designer, and so he just did the work. And I was very much uninvolved and it was very crappy. But that was in 2008 when he was building it, but it worked.

So I wrote some copy for it. And then I was teaching employers at the time how to find people, and it was the possibly at the time it was really painful. And so in the Philippines I just sent an email to all my guys in the Philippines saying, hey, we have this site, how do you think we could market this in the Philippines?

And they were like, oh I can tell my friends about, oh I can post on Friendster, which was the Facebook in the Philippines at the time. I can post classified ads, I can do whatever. And that was all we did, and within a couple of months we had like a thousand visitors.

Steve: Interesting, is that why you registered the .ph domain?

John: It is, so it was yeah to attract the Filipino workers, because I knew that was part of — I knew I could bring employers to it because I was teaching them how, and they were really flocking at the time to us. And so it was a matter of kind of get the Filipinos just to recognize this and sign up. And that turned out to be even easier because the job situation in Philippines is so different that yeah.

Steve: It must be pretty bad over there right for them to…

John: Philippines, it’s a very third world country, and it’s a weird employment situation where there’s tons of temporary and part time work. So like I’ll tell you, the only time I’ve been there was in 2010. We spent a month in the Philippines on vacation with me, my wife, and my three kids at the time. And so we were on this remote island, and I’m in the grocery store and I see this kid stocking shelve. And I start talking to him like, hey, are you from here, what do you — no I’m not from here. I’m from Manila, which is a 14 hour boat ride away. I’m here for six months to do this part time temporary work. In six months my contract is up and I go back home.

Steve: Interesting.

John: Yeah and then it was like we had an assist come to our apartment every day, and she was two dollars an hour, and she was the exact same story. No I’m from near Manila, I’m here for six months and then my contract is over, I go back home. And then what? Then I find another job. Like this I don’t understand it, it seems super inefficient, but this is how this tons of work is, they’re so — when you offer them a full time stable job, it’s really good for them.

Steve: Okay, so the way you marketed it early on in the Philippines was just kind of like word of mouth it sounds like?

John: Yeah like we just — in fact I think I had six people working for me at the time, and I just said, what can you do, and they all went and did something. We never run any ads, we never put up like billboards or anything like that, we just talked about it online, and then people started talking about it online, and it kind of snowballed.

Steve: What about in the US, how are you getting your customers? So did you have to have critical mass obviously first in onlinejobs.ph in terms of Filipinos before you started getting business in the US for it?

John: So because I was teaching employers at the time, I was teaching how do you do this, how and why, like why do you go to the Philippines instead of somewhere else? Why do you use the Philippines instead of Odesk, which is what it was before Odesk and Elance? Like what’s different about this? I was teaching that and I would say like, look here’s a good way to find people, onlinejobs.ph is one way, and here’s another way is value. So some people started using Online Jobs, the poorest did.

The Filipinos were coming, and then there were jobs, and so people were like, oh my gosh, I got a job, they’re telling their friends. And they’re part of every good experience and they’re telling people.

Steve: And so you never had to run ads to begin this either, it was just word of mouth as well in the beginning?

John: Yes, which is not a great story for me to tell you for other entrepreneurs, right?

Steve: No, I’m just curious.

John: You got to run ads, and we run ads today, we didn’t when we started.

Steve: Okay, how does the business model work, is it just like a straight finder’s fee from the employer side?

John: No, well it’s a recruiting fee. So you pay to recruit people, you pay a monthly fee, $50 to recruit people for a month, it’s the cheapest recruiting fee that exists. You pay 50 bucks; you recruit whatever you want for that month. So you need to hire three people, hire three people. And then when you’re done recruiting, you cancel that monthly fee and those people are still yours, we don’t take a cut from their salary, we’re uninvolved in the process after that, we just provide the marketplace.

Steve: Interesting. Is it sticky though, like do people just tend to come back over and over again?

John: Yes and that’s what we’ve found is that someone who hires someone one time, or even someone who maybe doesn’t even pay, they just look at profiles and see what there is, we find that person is going to come back. And whether it’s in three months or whether it’s in two years, they’re going to come back. So it took me a long time to figure this out, because often there is a long delay like someone sees it and realized it, and they’re not ready to hire someone right now. But we use BluPro for analytics, it’s a Google Analytics.

Steve: Sure.

John: By looking at people’s behavior over a long period of time like individual behavior, I finally realized what was going on and why it was growing when we couldn’t track, because people were waiting six months, and then coming back and hiring someone.

Steve: Let me ask you this and let’s get more into like the actual outsourcing process. So when people come to me or when they’re looking like the first thing that most people think of is Upwork, right? So can you kind of describe the difference, like what’s the main difference in going Upwork versus someone from the Philippines?

John: So the main easy difference is turnover. So in Upwork, the whole purpose of what they’ve set up is for someone to get a job, get that work done, get paid and get feedback so they can improve and get another job and get feedback and prove to get another job, right? Because in Upwork you have to have feedback in order to get a job. At Online Jobs there’s a feedback system, there’s a rating system that you will find very few ratings on people, because what most people do at Online Jobs is they hire someone permanently.

And if they find someone who’s good, they don’t leave feedback, like saying, hey everybody, this guy is really good, right? Because you hire someone full time permanent, and they work for you for as long as you manage to be successful. So that’s why like the first I hired 12 years ago, still works for me today.

Steve: Interesting, so you’re not looking for odd jobs on Online Jobs, you’re looking for full time employees?

John: Yes.

Steve: Okay, interesting.

John: And you can get odd job stuff done, but like at Upwork you go and post here’s what I want done, and people will say, oh I can do it and here is how much I charge, here’s my hourly rate. At Online Jobs, people say, here’s my monthly, here’s what I want per month.

Steve: I see interesting.

John: And so it’s a different concept. We’re like at Upwork you’re guaranteeing yourself one 100% turnover with the workers in your business which is fine for if you just need a small thing done. But most businesses need long term stuff done over and over and over again, and that’s what people find at Online Jobs.

Steve: Okay and then can we just kind of talk about like the going rate for someone in the US versus someone equivalent in the Philippines?

John: Yeah so like who?

Steve: Let’s talk about developers.

John: So I don’t know the developer costs in California.

Steve: It’s really expensive.

John: [inaudible 00:20:11] I would bet that a PHP programmer like a good PHP programmer is like 70,000 a year here. I have four full time PHP programmers who I would put them up against just about anybody, and they cost me between $800 and $1200 a month full time.

Steve: Okay, so it’s a factor of two cheaper than.

John: It’s a factor of ten cheaper.

Steve: Factor of ten, 1200 a month, that’s – okay.

John: So 1200 a month versus like well so like 800 a month, my guess is 800 a month, right? And that’s $9,000 a year.

Steve: Interesting, yeah that’s crazy. Yeah, yeah, yeah, I was off by order of magnitude there. Yeah that’s crazy.

John: I mean it’s hard to say you’re going to get twice the output from someone in the US. You’re going to get more probably depending if you hire the right person you’re going to get more. Twice maybe, ten times, not a chance.

Steve: Interesting, so this is something I did want to ask you, like what are the kind of like the best jobs that you can outsource, because I’m an electrical engineer. That’s kind of why I started with developer, because there’s a lot of nuances to being a developer, right? There’s quality of code, there’s just ways of thinking, efficiency and that sort of thing. If you’re getting like a better quality person in the US, could there be like some negative long term repercussions going forward? Maybe PHP isn’t a good example because most PHP scripts are pretty straightforward.

John: Yeah.

Steve: But for anything really complicated like an application, would you outsource that?

John: I personally would, like I had to develop a lot like we have a windows application that we had someone developing to do, and he’s been great. He’s a full time worker, he works for us, so when there’s a problem he just fixes it. We have an IOS staff that has done Philippines, actually there’s a fifth developer, our IOS developer and he cost me $1200 a month and he’s pretty good at that. I think I mean whatever we ask him to do is not normal, and he figured out and made it work how we wanted it to work. So I don’t know the long term repercussions…

Steve: Or technical debt is more like what I was getting at but…

John: Technical debt?

Steve: Yeah like where you just slap something together and you get it working, but then it’s like spaghetti code or…

John: So here is what — I find the opposite problem. In the entrepreneurs I have talked to typically, I find the opposite problem usually where like people get so into getting something perfect and exact and beautiful in the beginning, they never make sales. And that’s where most entrepreneurs suck is in not making sales. And so they are so concerned with it being precise and beautiful looking code that it doesn’t matter.

Like I have a good friend doing this right now, and I can tell him stop it, like what you’re doing is not going to work. This doesn’t have to be perfect, you don’t have to have this extra feature, your code doesn’t have to be beautiful, it doesn’t matter. You’re not making any money from it and you’re not going to until you stop doing this it make sales.

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 what are some of the best things to outsource? Like social media, I’ve had friends do writing to a certain extent, you mentioned earlier that the writers that you have in the US are better, but you do have writers and in the Philippines, right?

John: Yes, so like I have – I’ll tell you the things that I have. So we have good design work done.

Steve: Like graphic design you mean?

John: Graphic design.

Steve: Okay.

John: Programming, any admin, or customer service stuff is done in Philippines.

Steve: How does that work, so they’re in a different time zone, right? So is it just email support then?

John: So we do email and chat support, and we hired three young people to cover the three eight hour shifts, and we have an extra person that fills in time for other people. So like we’ll have a couple of hours of downtime and that’s why we can hire a couple more to fill those in, but we’re pretty good with our support. You can hire phone people, and it’s a question I get asked often. We don’t have it, but it’s not that hard to do with all the different internet voice systems that exist today.

Steve: Sure of course.

John: So social media only is done in the Philippines, our Facebook gets done partly in the US and our advertising, I mean our Facebook Google at role [ph] being — all gets partly done in the US and partly in the Philippines.

Steve: Are the prices like still around a factor of eight to ten then cheaper?

John: Yeah.

Steve: They are, okay interesting okay.

John: I mean like it’s — let’s see, we pay the person, our Facebook person in the Philippines, our most expensive, our most highly paid person, our ads person are like $8 an hour, $8 or $12 an hour. Per person in the US is $50.

Steve: Okay, wow. But the expectation is always to hire them full time, right?

John: That’s mine, you can hire part time.

Steve: Or what I mean is like a long term relationship is always the expectation.

John: Yeah, so let me tell you kind of what that does for most entrepreneurs, what I’ve seen. You had a contract worker; you have to put a similar effort in to hire that person as you do to hire a long term person. Then once you hired them, there is a difference in what your brain will allow you to do. So for example, I work like 12 hours a week because I have given everything that I do to someone else in the Philippines. And I’ll take that step further.

So every day when my guys in the Philippines logs into my email accounts and archives all the emails he knows I don’t want to see, so I have a clean inbox and more. It makes my day more efficient. That’s something you would never consider doing with a contract worker, it’s too painful because you’re going to teach them and they’re going to leave, whereas the person that does this has been with me for 12 years, and I know he’s not going to leave. And so I can make my life better because…

Steve: You he’s not going to leave, is that because it’s just turnover in general is really low because it’s a cultural thing or?

John: It’s a culture; yeah it’s a cultural thing. So I’ll give you another example. I had a girl once who was doing a bunch of work for me, I love her, and I put her in a client facing position. This was the first time we’d ever done this because of who I am, like people look at me as my employees are amazing because I tell amazing stories about my employees. So I know that someone — when people find out who my employee are, they are going to try and hire from me, right?

So I put her in a client facing position and said, hey, you’ll get second job offers from other people now, and I just want you to be careful. You know I’m a stable employee. She interrupted me and said, oh don’t worry sir, I get jobs offers from people every single day, I’m not leaving. And that’s kind of if you treat them well in the Philippines, that’s how it is. Like just because they get a job offer that pays them more doesn’t mean they’re going to jump ship. They’re probably not going to.

Steve: Interesting.

John: And that makes a really big difference in a long term business situation.

Steve: So that sounds like that’s one of the key advantages, right? You get loyalty, they’re not all mercenary as long as you just keep them happy, they’ll stick with you?

John: Yes. It’s critical, it’s critical, right? Like a programmer, they write code, they know the code. It’s so hard for someone else to come in and learn and understand stuff.

Steve: Right that was the other question I was getting at with the developer stuff, but yeah it sounds like your developers have been with you for a very long time.

John: Yeah, like we have a good developer, they don’t leave. We don’t let them leave, that’s not true. The very first guy I hired was a programmer, he left years ago because I was paying him $500 a month, and the guy was amazing. And this was ten years ago. And he got a job making $2500 a month in Singapore.

And I was like, okay, this is your dream, I know this is your dream, this is what you want, and I also know that I can find someone else who is just as good at $500 a month. And you can’t – it’s not 500 today, it’s a 1,000 or $1200. But he said, in leaving he said, but don’t worry sir, I’ll keep working for you part time at the rate you’re currently paying me. So like that loyalty is…

Steve: So John, are you just a really good employer, like what are some of these things that you do that keeps them happy, or is this like a consistent experience across a lot of the people that you’ve interacted with? So it is a consistent experience under certain circumstances. So I think I am a good employer, but I can tell you the things that make me a good employer.

Steve: Okay.

John: So often and I get the sense that your concept of this is that I don’t know if I can trust this person. I don’t know if I can trust him to do good work, I don’t know if I can trust them to be honest or whatever.

Steve: Yeah, that’s the angle I’m taking yeah.

John: Right, their idea is I don’t know if I can trust this person. So you’re looking at it like skeptical of them, they’re skeptical of you. And unless you shift your mindset to, I have to trust this person and I’m going to treat this person as they’re sitting next to me, and I love them and they’re amazing, they’re going to continue to be skeptical of you. As long as a Filipina is skeptical of you, until they trust you, they’re not going to do great work, because in the Philippines they don’t want to lose face.

And so they really want to make you happy, that’s how they are as a culture. They’re a pleasing culture. So if they don’t think they’re going to please you, that you’re not going to be happy with their work, they’re not going to try and do their best, because they’re going to hold back and just be conservative with stuff. And that makes their life not great.

And if you do things to push them to where they trust you less, they start to get more and more hesitant rather than more bold. Rather than trying to impress you, they get more hesitant to the point where they’ll disappear. And that’s really the situation where most people lose a worker is not working, is working less, most of the time because they don’t know if they can trust you.

Steve: I guess the same is true of any employee, right?

John: Yes, but it’s more so in the Philippines because of their culture. Yeah, these are like general good management practices, but I found a lot of people don’t do. So here’s an example. I recently had a guy who worked for a friend of mine who I know is really, really, really good, this employer. He worked for him for four years. It’s Brad Callahan. A lot of people know him; he runs a very well done software system. This guy worked for him for four years. His business was changing, the thing he was working on, he didn’t need him anymore. He said, hey, can you find this guy a job?

So I had at the same time a CEO of another company who said, hey, I’m interested, do you have anybody that you trust. So I sent him this guy, it was a perfect match, right? One day later he said, oh this doesn’t work, he’s not good enough. I was like, what do you mean? Well he showed up an hour late, and he didn’t do this thing exactly right how I asked him to. I was like well dude; he’s been working you for two hours, like you’ve got to have a little bit of patience here. This guy is 14 hours different time zone from you.

And so that’s usually a situation where I’m like this doesn’t work for you. You should not hire someone in the Philippines. You have zero patience; you have zero tolerance, this is not going to work for you. But, so for the people that I see succeeding, they’re willing to put up with, oh you made a mistake, let’s fix it, and move on. Here’s the mistake you made, let’s fix it and thank you for trying really hard, that’s their attitude.

Steve: Okay and then I guess these are just all true as if you were just hiring someone in the US, right? I guess that’s the mindset that you really need to take. You shouldn’t think of these people as like temporary workers that are just doing the jerk that you don’t want to be doing, so to speak?

John: Yeah I mean like the thing that I see often is like, oh just fire her, just get rid of her, oh they suck, just get rid of her. You know like it’s a robot on the other side of the world without you know it’s a robot. And when you realize after you have someone working for you for a while and you start to get to know them and their family, you realize, oh my gosh, like life is a struggle over there.

This person is putting for some serious effort to do some amazing stuff for me, and right now they’re having a problem in their life like their mom died and they live far away, and that’s why they’re not showing up to work, and they don’t want to tell me why they’re not showing up to work because they’re scared that I’m going to be disappointed in them. And it’s not working right now. Where a lot of people are like, fired, you’re done.

Steve: So John let’s switch gears a little bit, and I’m assuming that like maybe the majority of the people over there are like this, but I imagine there’s always going to be some bad players, right? And so what are some of the processes that you have in place to kind of weed out the bad people from the good?

John: So one of the things that we have done at Online Jobs is created the ID proof system which is a reading on zero to 100 of, is this person who they say they are, because it’s a virtual system where like it’s easy to create a fake profile or create 20 fake profiles, and trying to get 16 different jobs and doing very little of each to just get paid whatever you can. So ID proof is a good move. I have looked at thousands of profiles and started recognizing patterns of here are things that cheaters do. And so we put that — I put together into an algorithm that’s pretty good.

So if someone’s ID proof is low, you’ve got to be really, really careful when you’re hiring them, and I’m not saying that you can’t find someone who is good. There are people who come in and they’re like I’m not willing to put in the effort to make my ID proof high, the score high because I don’t think this is going to work. Because they’re skeptical of getting a job online, often in the Philippines they don’t feel like this is going to work. So you can find it but someone whose ID proof is high you’re much more likely to find…

Steve: What about during the interview process, like once you actually have them on Skype?

John: All right, so here is the next thing, don’t do Skype interviews.

Steve: Really, interesting.

John: Yeah so Filipinos are again they’re a very pleasing culture, and they are also skeptical of their own talents. So like you get someone who has not worked for an American before, and they haven’t talked on the phone before, and they’re very scared of their English, like of you judging them in their English. So they will feel like they’ll know, they’ll understand you on the phone, they watch American TV and American movies. But they’re very worried that you’re not going to understand them, and you’ll be disappointed in them. So I skip the Skype interview.

Steve: Interesting, okay.

John: Because what I find is you schedule a Skype interview, your schedule of five people, three and a half will not show up. You have lost a really good person who was a programmer that didn’t need to be on Skype and they didn’t want to go on Skype with you and so you lost them in the interview process. So the way that I do my interviewing is I ask lots of questions over a long period of time. So what I find with this is — so it’s a remote worker, it’s not someone that’s in the office every single day, you get to watch them.

Their attention to detail is important to me, their responsiveness is important to me. And I can gauge that pretty well in an interview process where I send them an e-mail a day or two emails a day asking them one, two, three, four questions each time. They have a hard time faking it. If they faked their profile or their friend helped them write the profiles and their English is flawless in their profile, they’ll have a hard time doing over a two week process where they’re entering three questions in emails a couple of times a day.

So you get to see their English; you get to see their attention to detail. I ask them four questions, they only answer three of them, why? I get to see how responsive they are. Do they take two days to respond to an email or do they take two hours, because if they take two days during an interview process, the chances of them taking two days after the hire then is really high and that has worked for me.

Steve: What about live chat?

John: You can do live chat yes and then you get to see kind of how quick they are right? There are things to be concerned about. So like live chat is good, you can fake live chat. So okay, most people in the Philippines have their own computer. Live chat will tell you maybe how fast of a typer they are, or how slow their internet connection is, or how poor their computer is maybe. But going into the internet cafe you can change that. You can get a fast computer, you get fast connection.

If you’re writing emails back and forth a whole bunch of times, and they’re taking more than a day to respond, that to me something is wrong, and I get that through email. Like you’re going to work through internet café, you weren’t able to get to the Internet cafe today, or not every single day for two weeks, and that just tells me this is going to be a problem, right?

Steve: It’s interesting. The reason why I was like wondering about your email method, it makes the whole interview process really, really long and drawn out, right?

John: It does.

Steve: Like weeks?

John: It can be, it depends on the person. You’ll get a gut feeling pretty quickly often. And often times I’ll do it, like if I get someone who is responsive, I will send them an email every time I get one back. And often, our times will overlap; they’re in the same — later they’re getting up early, because like in the Philippines it’s very common to be up at 5 am, just because of the way the sun is different there than it is here.

So you’ll get four hours in the morning when they’re up, or four hours in the afternoon like they’ll come online at two o’clock, and I’m still working at two o’clock. So you’ll get sometime where I can send them an email and they respond, and I can send them an email and they’ll respond, then I’ll get a whole bunch of questions in over a three day period and hire someone.

Steve: During the interview process, do you actually have them do some work for you?

John: Not often. So that’s something that you can do it, and I have done it over — I have done at times, and I’ll do it with multiple people sometimes, where the only issue is you have to tell them you’re going to pay them, because Filipinos are scared of doing work and not getting paid. So you tell them, hey, look, I want you to do this test task, I’m going to pay you regardless if I hire you or not. Here’s the [inaudible 00:41:42] no, I’ll pay you, can you do this?

Steve: That’s really interesting that you don’t recommend Skype. It sounds like you don’t use — you personally don’t use live chat, you just do this email type of interview drawn out over a couple weeks.

John: Yeah. You can try Skype, but like if someone in the Philippines doesn’t have a microphone on the computer because they don’t, then you just lost a good — because now they know that Skype interview is required, and I can’t get a job with this person for now, another missed opportunity. And if they were really talented for a programmer position, you just lost a really good time to review.

Steve: But how do project reviews for like a developer position for example? Oftentimes it helps to talk via voice, right?

John: Yeah, I don’t do it.

Steve: You don’t do it, okay. So I’m just curious about your process then, so do you have them create the specification then you review it or?

John: Do you mean for a feature?

Steve: Yeah for example.

John: I will create the spec.

Steve: Okay and then…

John: With the developers I am very involved.

Steve: Okay but not by voice.

John: No.

Steve: Interesting okay. That could take a little bit of getting used to actually.

John: So actually okay so it’s not by email either. So first of all email — we use Basecamp, whatever.

Steve: Okay sure year.

John: Transfer and save things like that. But what I do is a lot of video. I do a lot of screen capture video explaining things and showing my screen exactly what we’re doing, exactly what I want. And I have found that to be super, super effective. So they’re hearing my voice, and this is a big deal with what we talked about earlier of getting their trust, is them hearing your voice in these videos. They learn to know you, come to know you and they trust you. So I found that videos are a big deal [overlapping 00:43:54].

Steve: Yeah these short like one or two minute clips essentially?

John: Yeah or five or 15 pop ups.

Steve: Okay and then they don’t produce videos back for you, do they?

John: Sometimes they do yeah.

Steve: Okay interesting.

John: Yeah, they’ll take screenshots and say like this is what I’m seeing, we’re working through an issue, also looking – this is what I’m seeing, and we’ve got to find that, can you reproduce this for me? Like they’ll say, how do you reproduce this?

Steve: So John, let’s kind of end this interview with like some gotchas, like what are some best practices, and what are some things to watch out for?

John: Don’t pay someone ahead of time. When you’ve hired someone in the beginning, don’t pay him up front, and always pay after work is done.

Steve: Are they at a salary in the beginning or you’re just talking about the very first task?

John: No, sure the very first task. No I always start people on a salary. Different people do this differently.

Steve: Sure, I was just asking your process yeah.

John: My process is I start on salary, and I have started lower than what they want, and then I raise it within a couple of months to what they want to. Gotchas, so what most people will find the biggest problem is the disappearing Filipino, where they do good work and then they disappear, and it’s unbelievably frustrating because you spend a lot of time recruiting someone and then to have them disappear.

What I have seen is 97% of the time that issue is with the employer not the worker. Now it’s a cultural thing that the employer need to understand, but usually when a Filipino disappears, it’s not because they don’t want the job, because they do, it’s because they don’t understand something you’ve asked them to do, or they don’t know how to do something, or they’re uncomfortable doing something, or they don’t understand your instructions. And even though you think your instructions were super, super clear, you’ve got to find another way to explain it.

If they’re disappearing, if they’re not showing up to work, that’s usually the problem. And so when I hire someone, I tell them, I know that you’re going to get stuck on something at some point and you’re going to want to disappear and not say something to me, don’t. You can’t disappear, that’s the worst thing you can do. And it’s been interesting, like I got an email once from someone that said, Sir, I don’t want to send you this email, but you told me I can’t disappear, so I’m not. I have to tell you what’s going on, here I go. That was what she said in her email to me.

So if someone disappears, you seek them out and say, hey, I know you’re stuck on something, what are you stuck on? What can I help you with? Will solve 90% of the issues in hiring Filipino workers. That’s a really big one.

Steve: Okay interesting.

John: Another one is internet and power outages, where like there are times in the year in different places of the country where they have scheduled power outages, because of not enough power to go around. So and usually it’s in our winter and their rainy season, now their dry season, their warm season, where they’ll have four hours every single day or six hours every single day with no power. And it’ll be in the middle of the day and they’ll just start sending you emails, I’m sorry, I couldn’t work today for three hours because our power was out, I’ll make it up for you tonight or on Saturday.

Steve: So it’s just basically have the expectation that these things will happen so you don’t get mad at them?

John: Yeah and that is a big one right there is don’t get mad at them. Well like it’s okay to mad, I get it, but especially in the Philippines if you yell at someone, like in the US you yell at someone, they get over it. In the Philippines that’s not the case where you yell at someone and then they don’t trust you anymore. And yeah these are good general management practices, but anytime you’re going to give some negative feedback to someone, start with positive, lead with positive, it will make such a difference.

Steve: Okay, all right John that’s some good advice. Yes some of it seems very specific to Filipinos which is really useful. I never thought that giving a Skype interview for example would be a negative thing, and you could be missing out someone really good by doing that.

John: I know and it took me a while to figure it out, where like I’m scheduling these interviews and they’re not showing up. And now today I see it every day, because I have a girl in the Philippines — actually I stopped her from doing it, but she does recruiting. And she schedules these interviews, and she’s like, oh three of the four didn’t show up. Like stop doing this, they don’t want to do it.

Steve: Yeah I know it’s really counter-intuitive actually to someone in the states. John it’s been a pleasure chatting with you today. I want to give you the opportunity to tell us where people can find you if they need to get ahold of you or your services, where can people find you?

John: So I am infinitely available through email, and if you submit any contact us form on Online Jobs, you would — if you want me, you’ll get me, it will come to me first. But if you say, hey, send us to John; it will definitely get to me. You can get me on Facebook even though I really dislike social media. If you send something to me on Twitter @JohnJonas, it will get to me also. Yeah, so I’m available through business and any communication except for phone.

Steve: Okay awesome. Well thanks for coming on the show John; I really appreciate your wisdom in teaching us what the nuances are interacting with a different culture.

John: Yeah, thanks for having me, this was really good.

Steve: All right, thanks a lot John.

John: Talk to you later.

Hope you enjoyed that episode. I’m actually in the process of trying to hire an employee in the Philippines right now and John’s advice has actually been invaluable. For more information about this episode, go to mywifequitherjob.com/episode190.

And once again I want to thank Klaviyo.com for sponsoring this episode. Klaviyo is my email marketing platform of choice for ecommerce 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 auto pilot. 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.com 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. 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’s 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 all these tools on my blog, and if you’re interested in starting your own ecommerce 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 are 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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192: How My Blog Performed As A Business In 2017 With Steve Chou

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How My Blog Performed As A Business In 2017 With Steve Chou

In last week’s episode, I broke down the numbers for my ecommerce store at BumblebeeLinens.com. So in this episode I’m going to talk about my other 7 figure online business, MyWifeQuitHerJob.com.

What I like about running MyWifeQuitHerJob.com is that it’s a very hands off type of business if I need it to be, which comes in really handy when you get injured and don’t want to do anything for months in the latter half of the year.
All told, I spend between 15-20 hours per week on this business and it generates over 7 figures in profit. Listen to this episode to see how 2017 went!

What You’ll Learn

  • How a swarm of bots nearly took down my email marketing
  • How I recovered from getting banned from a popular advertising platform
  • How much I made in 2017
  • The changes I made to improve my blog

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

MyWifeQuitHerJob’s transcripts are done by Outsource2Africa.com, an awesome transcription service that is half the price of other competing companies. Highly recommended!

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 what strategies are working and what strategies are not with their businesses.

Now today is part three of a three part series where I break down how all of my online businesses performed in 2017. So last week I covered my e-commerce store BumblebeeLenin.com. So this week I’m going to talk about mywifequitherjob.com.

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 basically they are 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.

There’s 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 prizes in our store. And customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%.

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 that 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. Always blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 20% 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.

They can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send 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 single email.

Now Klaviyo is the most powerful email platform that I’ve ever used 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 is your host, Steve Chou.

Steve: Welcome to the My Wife Quit her Job Podcast. In last week’s episode, I broke down the numbers for my e-commerce store at BumblebeeLinens.com. So in this episode I’m going to talk about my other seven figure online business, mywifequitherjob.com. Now truth be told, I didn’t actually change that much in 2017 from 2016 except for one major thing, which I’ll talk about in a little bit.

But for the most part what I like about running mywifequitherjob.com is that it’s a very hands off type of business if I needed to be, which comes in really handy when you get injured and you don’t want to do anything for months in the latter half of the year. But all told, I spend between 15 to 20 hours per week on this business, and it actually generates over seven figures in profit. I have one assistant who helps me out with the podcast, but outside of that my mywifequitherjob.com is mostly a solo affair.

Now, what’s nice about running the blog and the podcast is it allows me to meet other entrepreneurs and give back to the community by helping others start their own businesses. Now I’m often asked what type of business to start if you have no money and no ideas. And my answer to that question is always to just start documenting something that you’re good at. Put everything down on a blog or a podcast, or a video, and you’ll eventually build a following and then good things will happen. And then once you do have a following, you can easily make money.

Now might be hard to understand how it works until it happens, but just trust me. What’s funny is that my mom still has no idea how I make money on the blog, but she has slowly started to accept the fact that I’ve ended my engineering career of 20 years to pursue this full time. Now another common question I get asked is what I would start today if I had to start all over again, a blog or an e-commerce store.

And the answer depends. If you want to earn revenue quickly then go ahead and start an e-commerce store. But if you have a three to five year time horizon and you don’t need to be making money right away, then start a blog. Whereas an e-commerce store will make you money sooner rather than later, it actually doesn’t scale nearly as well as a blog does because you have to deal with physical products.

But a blog will take a long time to develop and quite frankly blogging is a slog. And in fact mywifequitherjob.com didn’t make any money for three years. And if you don’t make money for that long of a time, it’s actually a major test of your persistence and your determination. And to put things in perspective, I’ve been doing this for nine years now, nine years. I mean that’s a long time. None of this stuff happened overnight, and the only reason that I’ve been successful is because I made it a part of my lifestyle and routine.

All right, in any case let’s jump to the numbers. In 2016, I had a major milestone in breaking seven figures in revenue. But in 2017, I actually managed to make seven figures in profit on revenues of about 1.35 million. Now just going forward, I just want to give you guys a heads up. I’m going to stop giving absolute revenue numbers for mywifequitherjob.com because the numbers don’t really add any value to the conversation.

Instead I’m going to speak in relative terms from here on out and instead teach you exactly what I did to achieve those numbers. But I will let you know if I ever reach eight figures which would be an amazing feat. All right first off, traffic increased by 19%. Now email subscribers which is the way I kind of measure my business actually remained relatively flat, and I’ll explain to you why that happened in a little bit.

In terms of my podcast listenership, it actually nearly doubled in 2017 after remaining mostly flat in previous years. Now you should take this number with a grain of salt because Lipson my podcast provider recently changed the way they measure stats, and I’m kind of still waiting for the dust to settle. But those are the main metrics that actually matter when it comes to blogging for my mywifequitherjob.com.

All right, so let’s talk a little bit about the lowlights and the highlights for the year. The number one lowlight for the year was I ran into major e-mail spam problems early in 2017. There is this group of malicious bots who are randomly spamming my email forms with hundreds of fake subs per day. And even though I switched over to double opt in at the time, these bots are actually really clever, and they actually ended up clicking on the double opt in links in the email.

And in fact these bots not only did they click on the double opt in link, but they actually click on every single link in every email that I send to make it seem like a real human. Now the way most people deal with this is that they prune their list by removing inactive subscribers, but because these bots actually click on the links in the e-mails that I’m sending, they’re technically fake active users and it’s really hard to see whether they’re fake or real people.

And of course this put me in a major dilemma because a good percentage of these users are worthless, and I couldn’t really distinguish them from real humans. And meanwhile having all these fake subs, my deliverability was going down, and I was paying for subs that would never ever end up generating me money.

Now unfortunately my previous email provider ConvertKit did not have a good way to detect these fake subs. So this actually tipped my hand and I was forced to look for another provider. Just a quick note here, I was actually very happy with ConvertKit, and if this spam bot issue didn’t require an immediate solution, I probably would have stayed with them. But I did end up moving to Drip mainly because of one feature that they have that the rest don’t called the lead score.

Basically the way it works, you can track how engaged a subscriber is by assigning a point value to them. If they click on a link or open an email, their score goes up, but if they never open the score goes down. As a result, based on this one number you can get an idea of how engaged a subscriber is. But what’s key here and how I use this to solve my spam problem is that you can actually perform these crazy automations to quickly eliminate subscribers that follow certain patterns.

Now I don’t want to get into too many details. I actually wrote extensively about this in a blog post which I’ll link up in the show notes, but essentially I put together this algorithm that detects whether a fake sub has a certain point score in a short period of time. I marked them as spam for removal. Okay and so one thing I also discovered as part of this whole spam elimination experiment is that you should never implement your forms in raw HTML. If possible, use JavaScript to implement your forms because a lot of these bots that are out there, they can’t read JavaScript.

So the combination of those two things managed to eliminate my email spam I would say by at least 90%. Anyway once I moved over to Drip, I did a mass pruning of fake and inactive subs which actually caused my email subscriber count to remain mostly flat from the previous year.

Now the second lowlight which happened towards the middle of 2017 was that my Facebook account, my ads account got banned for about three weeks. I didn’t get any warning whatsoever. I just woke up one morning and all of a sudden I noticed that none of my ads were running, and then I got this email saying that I had violated some Facebook ad policy and I was banned.

Now thankfully, Facebook actually isn’t a huge part of my business, but it does drive new subscribers and it actually allows me to reach millions of new potential customers. I run ads to my blog post, to my courses, to my conference and actually rely heavily on retargeting as well. Now thankfully, I got reinstated relatively quickly, but it did remind me once again of the importance of diversifying my traffic sources.

And by the way you’ve probably heard this from me time and time again, if you are depending on a single source for your revenues like Amazon, eBay, whatever it is, you really need to diversify or try to own more of your customers. If Facebook ads for example was my entire lead gen strategy, I would have been tossed.

Anyways that’s pretty much it for the lowlights; let’s talk about the good things now. All right first thing in 2017 I spoke at four conferences, Social Media Marketing World, Digital CoLab, FinCon and of course my own conference Sellers Summit of which I keynoted for the second straight year which is pretty sweet. No one there to dispute me there except for my partner. But I will be speaking at these four conferences again, so if you ever want to meet up, you know where to find me.

And as I look back on last year, I think four conferences per year to speak at is pretty much my limit. It takes a lot of time to prep a speech, and I don’t really like the travelling aspect because I have to be away from my family. But once again I’m going to be at these conferences. Social Media Marketing World actually incidentally is next month, and it’s going to be in San Diego which is a great place to have a conference. And so if you’re going to be there, send me an e-mail, look me up and maybe I’ll do some sort of meet up there.

In other news, I also raised the price of my e-commerce course up to 1497, and I’m happy to say that it’s still selling well. I remember back in the day when I was terrified when I launched at just $299 for a lifetime membership. But I will say this, the great thing about raising the price of my class is that it weeds out the tire kickers, and I can actually focus my efforts on the students that I have.

And if you haven’t determined this from my personality, I never like to play the volume game. I prefer to work in small, intimate, and motivated groups, which is incidentally one of the main reasons why I purposely kept my e-commerce conference the Sellers Summit very small. I’d much rather build deeper relationships with fewer people than have a whole bunch of friends on a surface level.

Anyway in case you’re curious, here’s how mywifequitherjob.com makes money. The first way I make money is through podcast sponsorships. Podcast sponsors only generate a very token amount of money, but it does manage to pay all the bills for the podcast and my editor, and that’s mainly the reason why I run these ads. The primary reason I run my podcast is actually to meet new people.

As I mentioned before, I work from home, it’s kind of lonely here at times, and by talking to someone on Skype for an hour or more, you actually instantly build a connection. And over the years, the guests that I’ve had on my podcasts have become my friends and even speakers at my conference.

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.

The second way I make money is through affiliate revenue. Now since I run my own online store, I use a lot of different tools and in fact I like to think of my shop like my own personal laboratory that kind of works hand in hand with the blog. Mywifequitherjob.com allows me to easily get into contact with software companies. I can try out their tools and get real sales numbers, and then report the results on my blog.

I will never promote a tool or a company that either I, or one of my close colleagues haven’t used in real life. And as a result of this, people tend to listen to my recommendations. The next way I monetize my blog is through my online course. Now as of right now, I have almost 3,000 students in my class. And I’m actually proud to say that 59% of my students who have been with me for a year are making at least four figures for month, and 9% are doing at least $50,000 per month.

And in fact one of my students Abby, she actually now runs a multimillion dollar business, and she just published a book on her journey. Now it’s stories like this that make me really happy to teach my class, and it’s actually extremely rewarding for me to see others succeed.

Now my final revenue source is my annual conference, the Sellers Summit. Now incidentally tickets are on sale right now, but they are almost sold out. All the mastermind passes are gone right now, but we do have some regular passes left. And as I mentioned earlier, I like to keep things small and intimate with a focus on learning and networking.

So if you want to meet up, and you want to learn how to sell physical products online and you want to meet the community, then head over to sellerssummit.com. Now while we’re on the topic of conferences, I just want to note that the Sellers Summit is actually not really a big moneymaker for me. Now if you’ve ever run a conference before, there are a ton of fixed costs involved like food, rental space, beverages, that are super expensive because the hotel jacks up the prices on everything. Not only that, but just organizing the event like this ends up being a logistical nightmare.

Now the reason I run my event is so I can meet all of you in person, because if you look at it in terms of dollars per hour of time it’s simply not worth it, but the human connection is priceless. All right the final thing I want to talk about is what I’ve been doing to improve my blog. Now towards the end of 2017, I did a major content audit. And the reason why I did this is because the SEO game has changed a lot over the years.

Back in the day it was all about writing separate blog posts to target long tail keywords. Well guess what, Google now is smart enough to know about the long tail, and there’s now an increased focus on improving your on site metrics, how long is a person staying on the page, are they engaged with your content, do they click on your links in the search results or do they bounce right away?

As a result short articles just don’t cut it anymore, which is probably why you’ve noticed longer and more comprehensive posts on mywifequitherjob.com. Now before the content audit, I had close to 900 posts, and some of these were like 300 word posts of no value. I was doing roundups, I was doing these like status updates. I member one article I published where I got up and said, uh it’s such a busy day today, but I’m going to go in on the weekend to start shipping some products, stupid things like that which have no value I just simply eliminated all together.

Back in the day, and if you guys have been following me for a long time, I had guest bloggers, I even had a paid writer that wrote these short posts that never went anywhere. And as a result, I removed all of them. Back in the day it was about quantity over quality, but now in general for SEO, it’s now better to have a nice tight site full of great articles instead of a ton of mediocre content.

And in fact I like to use my buddy Noah Kagan’s analogy, your site is like a restaurant. On your menu do you want to include everything that you know how to cook, or would you rather only list your best dishes for sale, because when people come to your site they tend to judge you by the first piece of content that they see.

And when you have large quantities of crappy content let’s say that one person ends up finding you through this piece of crappy content. Well guess what, they’re probably not going to come back again. Whereas if they see something really amazing, and they tell their friends about it, they’ll end up coming back again, you can leave a good first impression and hopefully they’ll tell their friends or come back for more, or subscribe to the email list.

Anyways over time I’m going to make it a priority to make every single post on mywifequitherjob.com awesome. And as a result, right now and this is like a really long process, I’m actually painfully going through old posts and deciding whether to delete or rewrite them, and this is just going to take a very long time. I don’t know if you guys have been noticing lately, but on the blog there have been some older topics that I’ve completely rewritten and added a lot more value too. And quite frankly some of the older content had become obsolete, and I’m in the process of updating all that.

Now what’s sad about all this is that I actually had to remove a bunch of my earliest posts when I first got started in 2009. Back then my writing was horrible. I’m actually pretty shocked at how far I’ve come with my writing, and this is coming from someone who used to hate writing altogether, and who was extremely slow at it. Back in the day for me to write like a 500 word post would take me hours. I’ve gotten a lot faster over the years, which just shows that practice makes perfect.

In other news I also hired a new Pinterest person who will be trying to reestablish my Pinterest presence after a small debacle at the beginning of 2017. As I mentioned in a previous podcast, Pinterest ended up changing their algorithms which started to change the way I started doing things. Anyways that is pretty much it for mywifequitherjob.com in 2017.

I’m probably going to be doing more solo podcast episodes this year mainly because I’ve gotten a lot of emails from people who’ve been requesting it. I’m still going to do these interviews from really cool entrepreneurs, but also perhaps be throwing in some impromptu videos here and there. In general, I actually like doing videos, but there’s just so much prep time and setting up lights and all that stuff that in the end I’m just too lazy to do it. But hopefully I’ll just get on and just do some impromptu videos that require no prep, and I’ll try to do more of those in the coming year.

But for the most part, I’m going to be focusing on my class and pumping out the best e-commerce content out there based on experience. Here’s to a great 2018. I hope you enjoyed that episode. It was another record year for mywifequitherjob.com, and I only foresee it getting better as my audience grows from year to year. For more information about this episode, go to mywifequitherjob.com/episode192.

Once again I want to thank Klaviyo.com for sponsoring this episode. Klaviyo is my email marketing platform of choice for ecommerce 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 auto pilot. 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 also want to thank Privy.com for sponsoring this episode. Privy is the email 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. 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.

Now, I talk about how I use these tools on my blog, and if you’re interested in starting your own ecommerce 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 are 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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191: How Our Ecommerce Store Performed In 2017 With Steve Chou

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191: Everything We Did To Grow Our Ecommerce Store In 2017 With Steve Chou

My wife just closed the books for 2017 so today I’m going to breakdown the numbers this past year for my ecommerce store Bumblebee Linens.

It’s been quite a tumultuous year with all the traveling, the injuries and our kids activities but we still made it out with another double digit growth year.

Listen to the episode to learn how we grew our business in 2017!

What You’ll Learn

  • The highlights and lowlights for the year
  • How stalking customers can benefit your business
  • How we replaced half an employee with software
  • All of the usability changes we made to the 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.
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

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

MyWifeQuitHerJob’s transcripts are done by Outsource2Africa.com, an awesome transcription service that is half the price of other competing companies. Highly recommended!

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 what strategies are working and what strategies are not in business. Now today I’m continuing on with a three part series where I’m breaking down how all of my businesses performed in 2017. And specifically in this episode I’m going to go into depth on all the highlights, lowlights and improvements made to Bumblebeelinens.com which is my e-commerce store.

Before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Always excited to talk about Klaviyo because they are the email marketing platform that I use for my ecommerce store, and I actually depend on them for over 20% of my revenues. Now, Klaviyo is the only email platform out there that is specifically built for ecommerce, 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 bought, that is a piece of cake, and there is full revenue tracking on every single email.

Now Klaviyo is the most powerful email platform that I’ve ever used and you can actually 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 actually manage all of my email capture forms. And in fact I use Privy hand in hand with my email marketing provider.

There is a bunch of companies out there that will manage your email capture forms, but I like Privy because once 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 prizes in our store. Customers love the gamification aspect of this. And actually when I implemented this form, email sign ups increased by 131%.

There is other cool things that you can do too. So for example let’s say you offer free shipping for orders over 100 bucks, you can tell Privy to flash a pop up when the customer has $90 in their shopping cart to get them to insert one more item in. 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 the more advanced features, use coupon code MWQHJ For 15% off. Once again that’s P-R-I-V-Y.com/Steve, 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 Chu.

Steve: Welcome to the My Wife Quit Her Job podcast. My wife just closed the books for 2017. So today what I’m going to do is, I’m going to break down the numbers this past year for my e-commerce store Bumblebeelinens.com, and just kind of give you an overview of what changed in 2017, and how we achieved these numbers.

Now it’s actually been quite a tumultuous year with all the traveling, my injury and our kids’ activities, but we still made it out with another double digit growth year. Now if you listened to the last podcast episode, you are probably aware that I’ve been thinking a lot about happiness and managing stresses of late, mainly ways to kind of increase happiness and reduce stress. So the goal with my businesses has been lately to achieve steady manageable growth from year to year instead of putting the pedal to the metal and going all out and trying to grow, grow, grow.

Now if you think about it, there are actually many ways to grow a business. And the main way that most ecommerce businesses grow is by introducing new products. It makes sense, right? If you’re making a million bucks, the easiest way to double revenues is simply by doubling your skews. Now the other way to grow your business is by improving your marketing, reaching new eyeballs, or by selling more to your existing customers.

And the latter route is the route that we’ve actually been choosing to take the past couple years. After all I really enjoy building my marketing skills by learning how to run ads on Facebook, Google, Amazon, and Pinterest. I really enjoy doing conversion optimization, writing copy for sales funnels, and learning about customer psychology. And bottom line, I feel that those are skills that I can actually take into any business that I run.

And while launching many new product lines is probably the fastest way to grow and scale, it’s also stressful and logistically taxing. And I’ve actually made it a choice to spend more time with my family. By the way I have to brag about this real quick. My daughter recently took part in the spelling bee for her school, and she actually got first place for her age group and second overall for her school. The kid that won was actually a grade higher than her. So I’m really proud of her especially because she studied so hard for this thing.

Anyways, it’s the little things in my life with my kids that make me happy. So I decided to focus my efforts on making the core business better and improving revenue without launching new products per se. Now of course this might change in 2018 a little bit, because we recently just got back from the Canton Fair where we found a bunch of new vendors for some new potential product lines.

So if we have time and the stress is manageable, we may launch a couple of new products this year, but certainly not anything drastic. In any case, let’s start with the numbers. For 2017, year over year revenue grew 20%. Year over year profit grew 14%. Overall traffic to our website increased 10.5%, and the overall margins were relatively flat.

Now if you look at our business for 2017, a lot of the conversion rate optimizations that I did towards the end of last year as in 2016 kind of kicked in for the first part of 2017. And as a result, we were off to a great start for the first half of the year. If you’re curious what I did for 2016 towards the end, I’ll link up all the 2016 optimizations in the show notes.

But in the latter half of the year, I actually injured myself in July. And as a result of that injury, I was out for a few months and my mood was actually terrible, and I actually didn’t end up working that much on the business for a couple of months. But I still managed to get it all together and make a bunch of improvements to the site, which actually kicked in towards the last quarter of the year.

Now usually I talk about the highlights and the lowlights of 2017 whenever I do one of these income reports. So let’s just start with the lowlights first and just kind of get that out of the way, and build our way gradually up to some of the kick ass optimizations that I made this past year that increased sales and cut costs at the same time.

So the first lowlight of the year was that our Pinterest traffic took a major nose dive. They changed a couple of things with their algorithm, and as a result the traffic and our conversions for Pinterest tanked. In addition, they also changed the Pinterest ad pixel. And so I discovered this later on when I was looking at the stats, and I noticed that a lot of the information was missing. So I actually found out that they changed the pixel and I had to spend time re-implementing the pixel for the ads.

Incidentally, Pinterest is following along with some of the other major ad vendors like Facebook and Google in that they’re starting to track every single item that a customer browses through as they traverse your store and the entire process, which products they looked at, whether they made to check out, whether they complete the transaction. So the Pinterest pixel is a lot more complicated now.

Now getting traffic from Pinterest still hasn’t quite recovered yet, but at least my ads for Pinterest are converting once again. The next lowlight I want to talk about was that early in the year; I converted our site over to SSL completely because Google was enforcing that. And as soon as I did that, our site immediately saw a 15% drop in traffic.

Now this is funny because when I went over to SSL with my blog, I didn’t see any sort of traffic changes at all. But for some reason when I switched my online store over to SSL, it actually really affected the site. And as a result, a couple of months in our year were pretty terrible; I think July was the worst one. Thankfully, everything recovered one month later. It took about a month for the traffic to recover, and we are back to normal but one month out of 2017 was a total dud.

And the final lowlight of the year was of course I tore my Achilles tendon in July, on July 22nd, which pretty much put me in a major funk. I didn’t want to think about handkerchiefs, I didn’t want to think about blogging, I didn’t want to think about podcasting, I didn’t want to think about anything. And it was like this for a couple of months. I think I might have used a couple of the handkerchief to dry my own tears.

But things were stagnant on the marketing front for quite a long period of time as I learned kind of how to walk again. It’s funny, when you can’t walk, and you’re not feeling that great, it’s actually really hard to get anything done. In any case, with all that sad stuff out of the way, those are pretty much the major lowlights of the year.

Let’s talk about the good stuff. Now on the email front, my one big win for the year was going with a wheel of fortune pop up, which increased our e-mail sign up rate by 131%. Now if you guys aren’t familiar with the wheel of fortune pop up, it’s basically a pop up where you give an email address for a chance to spin a wheel. And as you spin the wheel, you get a chance to win prizes such as discounts from our store.

And customers love the gamification aspect of this, and as a result of implementing this, our pre-purchase sequence generated over 2x what it did previously the year before. And incidentally, back when I did this in 2017, there was no real easy way to do this for a non Shopify store. And so I actually ended up coding up my own wheel of fortune pop up. But now you can actually implement one for free if you use privy who is actually a sponsor of the show. So go to Privy.com/Steve and go check it out if you want to implement your own wheel of fortune.

Now what is cool about this wheel of fortune tab is that you can actually bias the results so the biggest prizes are not won as often. So basically you can set different probabilities for each one of the prizes in your store, which makes it pretty cool. And in terms of press mentions, we were featured in Country Woman Magazine and Pop Sugar. And what’s also cool is that now whenever I do a podcast interview on someone else’s podcast, I usually ask for a link back to my blog as well as my online store, and this has really reinforced the SEO efforts for both my blog and my online store as well.

In addition to the press mentions, we also did two influencer campaigns towards the end of the year. One was with a straight up YouTuber in the cooking space to advertise our napkins. And another influencer campaign was with a Finance and family blogger with a huge Facebook fan following. Now both campaigns did okay. Neither one was a home run, but we did not have to actually pay any money for either campaign.

For the YouTube campaign for the napkins, we actually ended up selling our napkins at wholesale cost because this particular YouTuber was running a subscription box. And once she purchased our product at cost, so we didn’t end up losing any money, we didn’t really make any money either, she then advertised her box with a link underneath her video pointing directly at those cocktail napkins in case people wanted to buy more.

Now I think in the box you only get six, and traditionally when you get cocktail napkins you usually buy a dozen or more. And so we ended up generating some business that way. Now in terms of the other influencer, the blogger, she was actually a friend of a friend who posted one of our promo videos on her Facebook page for one of our aprons. And she actually wore a personalized apron during a Facebook Live session, where she showed the audience how to do an arts and crafts project.

Now this ended up doing quite well, because she wore our apron, and then she posted on her fan page which has hundreds of thousands of followers. Now I don’t want to go too much in-depth about this, because I will end up writing a blog post about this. But overall, I think in terms of influencer marketing, we’ve done several campaigns at this point. It tends to be hit or miss, and you just have to keep trying different ones until you hit a home run.

Now I actually consider both of these campaigns successful, because they did make a pretty decent profit. But they did not move the needle in the grand scheme of things with the sales, with the overall sales for our online store. But what’s cool about doing these campaigns is that it got me in this mindset where I had to start stalking our customers again. And whenever I stalk our customers, and I’ll describe what I mean by stalk our customers in a little bit good things happen, I always get excellent feedback.

So first off, I have to say that my wife really hates it when I stalk our customers. She is highly against it, but I do it anyways to take one for the team. And so just to give you an example what I mean by stalking. On two separate occasions this year, I actually went and called every single customer who abandoned their cart in our store.

And why is this tied to our influencer campaigns and our Facebook campaigns? It’s because when I ran Facebook campaigns for our aprons early in the year, I noticed that our abandon rate was exceptionally high. And likewise when that blogger, she posted one of our promo videos on her Facebook fan page, I also noticed that the abandon rate was especially high like much higher than normal.

And so what I did is I went through and called every single person that abandoned their cart. And here was my script. I went in and said something like, hey we just introduced our line of aprons, and we’d like to get some feedback from you in return for a significant discount. And usually I got hung up on a couple of times, and some people got really mad for me calling. But I did get a decent percentage of people to actually have a very candid chat with me on why they abandoned their carts.

And here is actually what I found out, and this information was actually very valuable. So as part of running this influencer campaign, we actually ended up giving coupons out. I designed like a custom landing page where we give out coupons to these people. But here’s what happened, people will land on this page, they would get a coupon code, they would configure their apron. We were doing this for personalized aprons, they would personalize their apron, they would go to check out, and they would forget what the coupon code was.

We didn’t really choose a complicated coupon code, but as you’re shopping, sometimes it can take a while to decide what you want to personalize your apron on. And by the time they got to check out, they forgot the coupon code, they kept hitting the back button, but they couldn’t find the landing page with the coupon code and that sort of thing. And they got frustrated and they just decided not to go through with the transaction.

Now I called a bunch of people that day, and several of the people who I chatted with complained that they either, one forgot the coupon code during checkout and didn’t feel like looking it up again, or two they cannot locate where to enter the coupon code on the site. Now incidentally I purposely don’t make the coupon code field in your face on our site, because I actually don’t want people to go off goggling for random coupon codes especially on fake sites like Retail Me Not.

Anyway, so what I did was the next day I went ahead and I implemented auto applied coupon codes. So as soon as someone lands on that landing page, the coupon code is automatically applied. And on every single page there’s like this little piece of text that says, don’t worry, this coupon code blah, blah, blah will be applied automatically during checkout. I had that on the shopping cart page; I had that during checkout to reassure the customer that they were in fact getting a coupon applied. And so that solved that problem.

I just want to let you know that tickets for the 2018 Sellers Summit are on sale at sellerssummit.com. Now what is the Sellers Summit? It is the conference that I hold every year that specifically targets ecommerce entrepreneurs selling physical products online. And unlike other events that focus on inspirational stories and high level BS, mine is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business.

And in fact every speaker that I invite is deep in the trenches of their ecommerce business, entrepreneurs who are importing large quantities of physical goods, and not some high level guys who are overseeing their companies at 50,000 feet. The other thing I can assure you is that the Sellers Summit will be small and intimate. Last year we cut off ticket sales at around 100 people, so tickets will sell out quickly.

If you are an ecommerce entrepreneur making more than $250,000 or one million dollars per year, we are also offering an exclusive mastermind experience with other top sellers. Now the Sellers Summit is going to be held in Fort Lauderdale Florida from May 3rd to May 5th.

And as I mentioned earlier we’re almost sold out already, and I actually will be raising the ticket price from here on out every two weeks. That’s right; the ticket cost is going to go up every two weeks until the event. For more information go to sellersummit.com, once again that’s sellersummit.com or just Google it. Now back to the show.

Another complaint I got was that people were complaining about the shipping being too high. Now keep in mind that this blogger, she runs a blog that really caters to deals. She does a whole bunch of deals; she talks about coupons and that sort of thing. So I don’t know if this applied to our broader audience, but for her particular audience, free shipping was a big deal. And if you read a lot of industry articles out there, thanks to Amazon free shipping is now par for the course so to speak.

And at the time, our free shipping threshold was at $800, which actually works well for our customers. And it had worked well for several years prior to that because our customers tend to be wedding customers and they don’t really care about any of that stuff. They just want to get it done, they’re very price insensitive. But for our aprons, it caters to a completely different audience, and they tend to be more sensitive about free shipping.

So what we did was we ended up lowering the free shipping threshold to just over an amount where they had to buy more than one apron. And in this case we were marketing mother daughter aprons, and so if they purchased a mother’s apron and a daughter’s apron, they got free shipping. And so that addressed that issue, and whenever I got someone on the phone for the lady that complained about free shipping, I gave her free shipping, and then I just finished the transaction over the phone right off the bat and it went through.

A couple of the other ladies that I called, they didn’t have PayPal, which is what we do usually if they’re on their phone and they want to import all their address information, that sort of thing. They didn’t have PayPal and as a result they didn’t want to type in their address and all this stuff on their phone. And so what ended up happening is they were planning on waiting till they got back home to complete the purchase on their desktop.

And what’s funny about this is I asked these ladies, how come you didn’t just finish this transaction on your phone; do you ever shop on your phone? And almost everyone said yes they do shop on their phone. But the fact that they didn’t have PayPal, and they’re just not used to typing in all their information, they’re used to shopping on Amazon where everything is stored there.

And so because of that, I am now exploring integrating Amazon payments. I’m a little bit squeamish about sending Amazon my order information and that sort of thing, but the fact that so many people shop on Amazon today leads me to of fact that I may want to implement Amazon payments on my site. I haven’t done this yet, and this is going to be a project for 2018.

But one thing that I did do to improve the checkout process was that I implemented Google Maps API. And if you guys have ever used Google Maps, as you’re typing your address it actually automatically auto completes the address for you, so that the customer doesn’t in fact have to type everything in. For example, when I type in my home address, all I have to do is type in the first couple of characters and it instantly knows where my addresses, I just click a button and it just populates everything for you.

Okay, and so one thing I did, that was a really easy change, I implemented that in a single day. And I don’t have enough data to report on the results of that yet, but I know for a fact that it will improve mobile conversions. Next complaint I got from calling an abandoned cart person was that the cost of monogramming was too high compared to the cost of the product. So just to give you an idea, some of our aprons are only $15 a piece, and at the time we were charging $8 to monogram the apron.

So if you think about it this way, if an apron is let’s say $15, and you’re paying $8 to monogram, which is more than half the cost of the apron. Even though the total dollar amount isn’t that much, psychologically you’re thinking to yourself, wow, this monogramming is really expensive. And so thanks to the feedback of this lady, we ended up upping the apron cost a little bit, and dialing down the cost of monogramming to only $5.

And I asked the lady, a couple ladies who complained about this, I asked her if the apron was slightly more expensive; will that make any difference if the monogram was cheaper? And she said yeah, you know what, I think psychologically that would have made a difference. And so I ended up giving this lady a discount, and I put the order through.

And finally, one more thing about the shipping charges, because we lowered the free shipping threshold, my wife and I we were a little bit worried about losing money on shipping because shipping is really expensive. And so here’s what I did. I actually ended up talking with my buddy Mike Jackness about this, and he gave me a very clever solution. So we lowered our free shipping threshold, but we actually changed things around so that we didn’t lose money on shipping as a result of this change.

And here’s what we did which is pretty ingenious. The free shipping that people get now besides that we say it’s going to take anywhere between four to ten days to arrive. So we actually extended the fulfillment time. And then we offered two other tiers of shipping, first class a priority shipping, and we actually ended up upping our express shipping charges as well. And what’s cool is that even though some people were eligible for free shipping, they actually ended up opting for the other faster shipping options.

So I know this for a fact is we’ve got a lot of waiting customers and they want their stuff fast. So even though they qualified for free shipping, they still ended up paying a higher shipping cost to get their goods to them. Okay and so it still remains to be seen how this is playing out. But over the holiday certainly, I saw that most people or a lot of people I should say were still paying for shipping even though they qualified for the free shipping threshold.

Incidentally, if you guys run your own store and you’re not calling your abandoned cart peeps back, I just want to say that my conversion rate was super high on the call backs for abandoned carts. What I mean by that is every time I got someone on the phone who was willing to talk to me, I almost always ended up closing the sale. And what this actually made me think about was actually hiring someone full time to go ahead and call everyone back who abandoned their shopping cart.

I know my wife would probably kill me on this, and it’ll probably annoy customers, but just in the back of my mind I was thinking to myself, man we’re probably leaving a lot of money on the table by not addressing these abandoned carts, because sometimes email — we have an abandoned cart sequence via email, but there’s just something about getting someone on the phone that makes a huge difference.

Okay, the next major thing that happened this year was I was actually able to replace half an employee with just a piece of software. So back in 2016, we actually had four employees. But in 2017, we actually got by with just three because of this little optimization. Now to give you an idea of how this worked and what this piece of software is, I remember one day early in the year, I kind of walked in the office to just kind of help out, and I noticed that our employees were spending an enormous amount of time typing in someone’s personalization into these old PC apps that we use to run our sewing machines.

So basically an employee was spending anywhere from two to four hours a day simply transferring information from our website over to this old antiquated piece of software on the PC that basically is in charge of personalization that we then send to the machine. And the problem with using these old PC apps is that they can’t be automated. And it turns out they can. So I deliberately researched, I found this piece of software called WinTask.

And basically what WinTask does, it’s a tool that allows you to script certain things on your PC, on a Windows PC that is. And so based on the website when the orders come in, now I implemented this new feature on our site where you click a button. It outputs this file that you automatically run on a PC, and it automatically types up all the personalization data for every single personalized order in our system.

Now I don’t want to get into many details about this because I’m probably going to write a blog post about this. But essentially this saved anywhere from two to four hours of an employee’s time every single day, pretty awesome. As a result, we didn’t have to hire that fourth employee, and we were able to get by with just three.

Another thing that was new for this year were push notifications. Now I use a company called Visaly [ph]. But these aren’t your normal push notifications that you see online. Visaly actually knows your sales and the products that people are actually looking at. And basically you upload your entire product catalog, and then they send dynamic push notifications.

So for example, let’s say I was browsing a Christmas handkerchief, but I didn’t buy one. Well four hours later, I will get a push notification to remind me to complete the purchase. This is really powerful, very hands off. I don’t have to do any work, the software does its own thing and sends out these push notifications automatically.

So let me just give you some numbers here, and they’re pretty cool for the abandoned cart notification. Once again this is someone who starts to check out but does not complete. If they get a push notification, I was getting an 8% click through rate and a 22% conversion rate. Now if someone just viewed a product but did not check out, I was getting a 12.24% click through rate with a 6.21% conversion rate.

And then periodically I was sending out regular promotions just kind of enticing people to just come to the site and shop, and I was getting a 3.4% click through rate with a 1.88% conversion rate. Now keep in mind this is in addition to e-mail and all the other marketing efforts that I have going on. And push notifications actually work pretty well.

All right, and so that’s pretty much it for 2017. I wish I hadn’t gotten injured because a lot more things on my plate that I actually didn’t end up getting to. But going forward for 2018, we are working on cutting costs. Now what I didn’t mention earlier was during Black Friday, I actually ran the customer support line for Bumblebee Linens. And every time I walked into the office, I noticed a bunch of inefficiencies.

Now these are things that you probably wouldn’t notice if you weren’t there every day. But when you come in with this fresh mind, you immediately notice things that are inefficient. So in fact the reason I came up with the WinTask automation and kind of having a computer to do all the monogramming work was because I walked in the office and noticed that our employee was just spending a ton of time typing the monograms, and I knew that a machine could do this much better and much faster and much more accurately in fact.

Okay and so for 2018, I’m going to spend a little bit more time in the office, and we are going to tighten up the reins and try to cut costs, and basically cut the waste. In addition I plan on exploring more along the lines of using Facebook Messenger marketing and influencer marketing in the coming year. All right and so here is to a profitable 2018 for you guys, hope you found this episode useful.

Hope you enjoyed that episode. What’s cool is that our online store has achieved double and triple digit growth for the past ten years now. And what’s important to us at least is that it has allowed us to live the lifestyle that we want to live and spend more time with family. For more information about this episode, go to mywifequitherjob.com/episode191.

And once again I want to thank Privy.com 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.

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 auto pilot. 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 all these tools on my blog, and if you’re interested in starting your own ecommerce 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 are 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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190: 9 Lessons Learned On Business, Life And Happiness With Steve Chou

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190: 9 Lessons Learned On Business, Life And Happiness With Steve Chou

Happy New Year everyone! Today is a special New Years episode where I wanted to take some time to recap the year which was actually one of the most challenging years that I’ve had in a very long time.

Because I have a lot to talk about, I’m actually going to split this into 3 episodes. In today’s podcast, I’m going to go over some of the lessons that I learned this past year.

And in subsequent episodes, I’m going to do a detailed breakdown of how my businesses performed this past year and exactly what strategies I employed to grow them. Enjoy!

What You’ll Learn

  • Why goals suck
  • What contributes to happiness beyond wealth
  • Why growth for the sake of growth is not a great idea
  • How to appreciate what you have
  • What to do if you have no idea what to do in 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.
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

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

MyWifeQuitHerJob’s transcripts are done by Outsource2Africa.com, an awesome transcription service that is half the price of other competing companies. Highly recommended!

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 what strategies are working and what strategies are not with their businesses. Happy New Year’s everyone. Today I’m actually doing a special New Year’s episode. We’re going to go over all the lessons that I learned this past year in business and life.

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. Now Privy an email list growth platform, and they actually manage all of my email capture forms. And I actually 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 personally like Privy because they specialize in e-commerce stores. Right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives me their email for a chance to win valuable prizes in our store. And customers love the gamification aspect of this, and when I actually implemented this form email sign ups increased by 131%.

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.

I also want to give a quick shout out to Klaviyo who is a sponsor of the show. Always blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my ecommerce store, and actually over the holidays, I depended on Klaviyo 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 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 bought, piece of cake, and there is full revenue tracking on every single email sent.

Klaviyo is the most powerful email platform that I’ve ever used 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 is your host, Steve Chou.

Steve: Welcome to the My Wife Quit her Job Podcast. Today is a special New Year’s episode where I want to take some time to recap the year, which incidentally was one of the most challenging years that I’ve actually had in a very long time. And because I have a lot to talk about, I’m actually going to split this into three separate episodes.

And in today’s episode, I’m going to go over some of the lessons that I learned this past year. And in subsequent podcasts I’m going to do a detailed breakdown of how my business has performed this past year and exactly what strategies I employed to grow them.

In any case I first want to talk about my 2017 a little bit. It’s been a little over a year since I quit my job, and I want to talk a little bit about how my life has been like post day job as I’ve been running my e-commerce store and I’ve been blogging full time since then.

So first off let’s rewind back to October 2016. And I remember being really excited when I finally gave notice for my day job, and in fact the first three months of freedom were awesome. I worked out every day, I got in great shape. I went to all my kids’ sports games, I went to all their activities, I did pick up, I did drop off, spent a lot of time with family, and life was great.

But then I remember four months had rolled around, and I actually started getting bored. Now don’t get me wrong. I was still working on my businesses, and they actually both grew in the double digits in 2017. But something was missing in my life. I missed hanging out with coworkers, I missed being around people who are smarter than me for eight hours a day. I missed the challenge of working in tech.

And keep in mind at my job back in the day I was working for a company called Cadence. I was working with all MIT and Stanford PhDs, and everyone I felt was just smarter than me and I felt challenged every day. But once I quit, I almost felt like I lost part of my identity. I was designing hardware and microprocessors for over 20 years. And it was just kind of depressing for me to put that part of my life on the shelf, because when it comes to tech, like tech moves just so quickly, and if you haven’t been in tech for I would say over a year, it’s actually really hard to go back to it.

And so by quitting my job, I felt like I just basically put that chapter of my life behind me, and it made me a little bit sad actually. Now I can’t really complain because my schedule for 2017 was really fantastic. I would basically get up, I would work maybe from eight o’clock until eleven or twelve, have lunch with my wife on a regular basis, then I would work out, and then I’d basically have the entire afternoon free. And it sounds like a great schedule, right?

I finally had time to work on some of my other side projects that I was meaning to start. I had a couple of other projects lined up which I never talked about publicly. But unfortunately, they either didn’t pan out or they’ve been kind of just dragging along and not getting that much traction. And then in July I actually ended up tearing my Achilles tendon, which pretty much made me bedridden for several weeks.

And it was really debilitating. I couldn’t exercise, I couldn’t walk. My wife had to shuttle me everywhere, and in fact the running joke was I was like the third kid. My wife would have to drop my kids off at school and then she’d have to drop me off the doctor or physical therapy. And after I tore my tendon, I ended up spending a bunch of weeks just lying in bed watching Netflix. Incidentally I think I’ve watched every awesome Netflix series right now, so if you guys need any recommendations, I’m your man.

But after tearing my Achilles tendon, all of a sudden I was in the worst physical shape of my life. And as I was lying in bed watching Netflix, I remember waking up and thinking to myself, I’m actually really tired of having too much free time. I am too tired of not having enough mental stimulation. I’m too tired of the lack of social interaction, because I wasn’t really talking to anyone. All I was doing was just lying in bed and watching Netflix all day.

By the way this isn’t meant to be a depressing episode I promise. The good news about getting injured and having all this downtime and all this free time in the afternoon was that it actually forced me to sit down, think about my life, my priorities and basically what makes me happy in life. And today I kind of want to share with you guys what I learned this past year about happiness and business. So here it goes.

All right so lesson number one, and this first lesson is a little bit counterintuitive. So lesson number one is to not set goals. Now I remember way back in 2009 when I started mywifequitherjob.com. One of my goals was actually to make enough money with my blog to quit my job. And it happened in 2016 October, I ended up quitting. But here’s the thing, I ended up quitting without a plan, or without a next set of goals.

And that’s actually one of the reasons why I kind of think goals suck. Once you hit them, you’re kind of left wondering what to do next, because a goal, it almost sounds final, right? You’ve hit this goal, you’re done, now what? And so instead of thinking about goals now, a better way to think about your life and your business in my opinion is to have an overall vision and a purpose for what you’re doing.

So let me give you a quick example. Back in the day, I used to be super focused on growing Bumblebee Linens and My Wife Quit Her Job like basically maximizing its growth. And don’t get me wrong, business has been good, and I now run two kind of legit seven figure businesses. But here’s what I discovered, and this is more amplified I guess in the past couple of years. Growing our businesses further has not equivalently furthered our happiness, and when I say we, of course I’m talking about my wife and I.

And I remember back in the day when we were trying to grow these two businesses a lot and really quickly, whenever we set these goals and we met them, we were really happy. But the happiness only lasted for a couple days and then we forgot about it, and then we were back at the grind. And here’s the thing about growing really quickly also.

Growing any business quickly can be super stressful. Every new product launch, every new sales channel that you want to add, it just adds to the stress. And especially over the holiday season when the customers are coming in, I always pitch in and answer phone calls, and there’s always a mad rush to orders, and it’s not comfortable. I mean the money is good, but it’s just not a comfortable situation.

So these days, my wife and I, we shoot for steady manageable growth instead of putting our foot down on the gas, because the added stress and the extra money is simply not worth it. And don’t get me wrong, it’s not because we don’t like growth, but the fact that the additional money doesn’t add to our happiness leads us to question why we continue to try to really grow our businesses. And that’s why we’ve kind of dialed it back a little bit and are shooting for steady manageable growth instead of trying to spike growth which is very uncomfortable.

And this all goes back to this long term vision that we have. Instead of setting monetary goals or business goals, our long term vision and our goal with our business is actually to spend more time with family and reduce stress. And all of our actions, all of our decisions relating to our business revolve around this goal. And in fact, my main struggle because I’m a very motivated person in general, my main struggle is actually keeping my ego in check regarding growth.

I see some of my colleagues and some of my peers who are just killing it online and making lots of money, but they aren’t happy in their either their family life or their social life. All right so instead of setting goals, what you want to do is you want to have an overall vision for your lifestyle and work to make your business fit your lifestyle, because at the end of the day your goal is to be happy.

All right lesson number two. This is something I learned in 2017, there is much more to happiness then being financially free. I remember when I first quit my job back in October 2016, I felt like I had made it. I didn’t really have to worry about money anymore, and I had time to spend with family. And so I thought that things would be all good. I thought that things would be perfect from here on, that I’ll just be happy. But it turns out this last year was challenging for me because I wasn’t really mentally stimulated.

So when it comes to happiness, I like to break it down into five basic areas wealth, mental stimulation, family, social stimulation, and physical fitness. And if I were to rate these categories with my life today, in terms of wealth I’m doing pretty well, like we don’t spend that much money so we actually don’t need to make that much of it.

But both of our businesses bring in more than enough money to provide for the kids. We already have their college education kind of set aside, and we can pretty much do whatever we want to do. We already have our house, and as I mentioned before we don’t really spend that much money, so we’re pretty good in the wealth department. But what I discovered this past year was in terms of mental stimulation, that’s kind of been lacking for me.

As I mentioned before in my last job designing microprocessors, that took a lot of brainpower to kind of come up and solve these complex technical problems. And even though I’m still working on my blog, teaching my class, and trying to grow Bumblebee Linens, it hasn’t been the same level of mental stimulation. And so that is definitely a department that is lacking for me right now, and it’s something that I’m looking to improve in 2018.

Now the third factor is family. And in terms of my family life I think it’s pretty great. I never miss any of my kids’ activities, I’m there chauffer them around. I’m there to teach them basketball; I’m actually going to be an assistant coach this following season for their basketball team. So in terms of family, everything is great.

Social stimulation is another thing that contributes to my happiness, and that part has been lacking as well. And so now that I don’t have to physically go into any office, I basically work from home. And that’s actually been pretty tough for me, because I don’t get a chance to talk to anyone. And so that is definitely something that I want to improve in 2018.

I know I talked about going to a co-working space in the past, but the Asianness in me refuses to spend money on a space that isn’t really necessary, because I actually have the entire house to myself. But what I do plan on doing is probably doing a little bit more volunteering perhaps in 2018.

And the final factor that contributes to happiness is physical fitness. Now I didn’t think that this was a big deal, but when I tore my Achilles tendon and I couldn’t work out or do anything, it actually made me a little bit depressed. And I discovered it’s mainly because whenever I’m stressed out or whenever I have something on my mind, I usually go running or I play sports. And the fact that I couldn’t do that anymore kind of led to this decline in my physical fitness, which eventually made me a little depressed because I wasn’t able to go outside and actually do stuff.

And so once again you know now once I become healed which is hopefully going to happen in another two or three months I would say, I’m going to work on my physical fitness for 2018. So there you have it. When it comes to business happiness, it’s more than just about wealth. Instead of blindly going after growth, you’ve got to take into account the other factors in your life like mental stimulation, are you challenging yourself, is your family and love life adequate, are you getting enough social stimulation and is your body in shape?

Find the areas that are lacking and work on those instead of blindly pursuing wealth or trying to put the pedal to the metal with your business. All right, lesson number three that I learned, routines are important. I’m going to talk about my Achilles tendon again, but when I tore that thing, I was kind of lost for two months mainly because it threw me off my schedule.

As I mentioned before prior to my injury, I was probably in the best shape that I’ve been since college, because I was working out at set times during the week, and I never missed a workout. And similarly I was actually working on my businesses on a very strict schedule as well. So for example every Sunday I write a post at Starbucks for four hours. Every Thursday I work on Bumblebee Linens. Every Wednesday I run office hours for my class.

Here’s the thing, when I got injured it actually disrupted my routine, and when that happened everything went to crap. I stopped writing, I stopped working on our store, I stopped working on the blog. And what I tried to do is I tried to find random bits of time here and there to work on my businesses, but in the end nothing really got done because it wasn’t on my schedule. And it was only after I adjusted my schedule to kind of fit some of these pieces back in even though I couldn’t walk or move, did everything kind of fall back in place.

And so if you want to make forward progress with your business, always set aside blocks of time specifically in your calendar to work on these specific things in your life otherwise you will never make progress. Because when it comes time to making progress in business in life, consistency is the key. It’s not necessarily how fast you do something, but how often you do something, how consistently you are able to do something.

All right so here’s lesson number four. If you’re not sure what to do right now, if you’re not sure what business that you want to pursue, then just focus on making others happy. Now as I’ve mentioned before, I’m kind of in limbo right now. I’ve got lots of free time. A couple months ago I actually even considered getting another full time job. But in the meantime as I’m trying to figure things out, I’ve actually focused all my efforts on helping others, so helping students, helping readers, helping listeners with their businesses, and it’s actually made me very happy.

Now I’ve got a bunch of students in my class making six figures now, and I’ve even got a handful of students making millions of dollars per year. And in fact one particular student just wrote a book about her million dollar multimillion dollar journey, and I’m actually really excited to help her promote it. So I’ll probably bring the student back on the podcast to talk about it. But I don’t have everything figured out yet, but helping others and seeing them make progress has actually made me very happy in the interim.

Now based on my emails, I know many of you out there are kind of not sure what business you want to pursue, or what product that you want to sell. And here’s my advice to you, if you’re not sure what to do, or if you actually lack the money to go start a business, just go out and help someone. We are all experts or we’re all good enough at something to teach others something. So what you want to do is you want to document it, write a blog, put out a podcast, create some videos.

Putting yourself out there and building an audience will actually lead to other business opportunities going forward. I remember back when I started mywifequitherjob.com back in 2009, all I did was I started writing about my experiences running my online store Bumblebee linens. And it started out slow, but over time people started to find me. And they started to read about my experiences, and all of a sudden these people they wanted to start their own store because they wanted to spend more time with their kids and family.

And so I started building an audience, and even though I didn’t make any money for the first three years, people started asking me for a class. And after a while I started getting traffic as well, which I would use to promote affiliate offers. I was getting paid for advertising. And then I started my class, and that’s actually when all the money started rolling in.

I didn’t really have a master plan, but I just started documenting everything. And when it came time to monetize everything, I had this audience that I could sell to. Okay and so if you’re not sure what to do right now, just start documenting anything that you’re an expert at or anything that you’re good at and start building an audience now.

All right lesson number five which is something that really hit home for me after I got injured, you need to appreciate what you have in order to be happy. Now prior to my injury I was often jealous of a lot of my Stanford classmates, and every single year I attend this retreat with my other classmates in this entrepreneurship program that I was a part of at Stanford. It’s called the Mayfield Fellows program. And it’s basically a program of entrepreneurs.

And every time I go, I feel inferior because many of my classmates in this program have actually gone on to start eight and nine figure companies. And just as an example Kevin Systrom of Instagram was actually part of this program. Meanwhile I am hawking handkerchiefs and I’m teaching a class, certainly not a glamorous business that requires VC funding that will result in a nine figure exit.

So I always felt a little bit inferior kind of going to this conference. But the fact that I got injured and I couldn’t actually do any work or go to work has really kind of taught me to appreciate all the lifestyle businesses that I’ve started. Because I’m my own boss, I can actually afford to be injured for months and not have to go to work. I can spend as much time with the kids that I want. I don’t have any obligations whatsoever, and I have the flexibility to earn money from anywhere.

And so this injury has taught me to just be thankful of the businesses that I’ve created, and not to be jealous. Well it’s impossible not to be jealous completely of some my peers who are doing really well, but it’s been really good. And whenever I compare myself to someone else, that’s when I tend to get depressed. And so it’s still work in progress, but I’m trying less and less to be jealous of others and appreciate what I really have today.

All right let’s number six is to focus, focus, focus. Now since I had a lot more free time this year, I had my hand actually in a lot of different cookie jars. One I had this SaaS business I was trying to start, I haven’t told you guys about this yet because it didn’t go anywhere. I had another project in the influencer space that I wanted to start. Meanwhile there is also this pet coding project that I was doing in my free time as well.

And the end result, nothing got done. I fell into the trap of trying to do too many things at once. And in fact I see this quite often with the students in my class. They try to sell on Amazon, they try this on their own site, they try to learn AdWords, they try to run Facebook ads, they try to build their Instagram following all at once. And when you try to do too many things at once, it just doesn’t work. You don’t end up making progress on anything.

So in order to make progress, you’ve got to focus your efforts on one thing and do it well. And that is definitely going to be something that I’m going to be trying to do for 2018, focus less on trying to have my head a whole bunch of different things and focus on doing what I do best and doing it well.

Lesson number seven, work with people who will challenge or inspire you to do better. Now here’s something you probably didn’t know about me. I used to actually be against working with other people, because I tend not to trust other people to do as good of a job as I can. And I actually love being like a one man show. But over the years I’ve come to realize the importance of having a partner.

So for example Bumblebee Linens would never have happened if I did not work with my wife. And my conference the Sellers Summit would never have happened without Toni Andersen. And I’ve actually learned over the years that working on business projects is so much more fun and fulfilling when you partner up with somebody who will challenge you, or inspire you to do better. So going forward I will look for people that I really want to work with because that tends to make whatever project that you’re working on more fun and not actually feel like work.

Lesson number eight, treat your customers like royalty. Now I’ve actually always known that word of mouth is important to any business, but I actually didn’t fully realize it until this past year. Now a good portion of our business at Bumblebee Linens is B to B. So we get hotels, we get event planners; we get bed and breakfasts and even small airlines buying our products.

And in this past year we actually got a bunch of new B to B customers without actually doing a single thing. Usually the way it works we either cold call or we reach out to people who have purchased in large quantities, and see if they want to purchase more. But this recent crop of B to B customers just happened just out of the blue without us doing anything. And what was funny about this was that they were all in the fashion space, and they all had retail stores.

And it turns out that the fashion community is very small, and one of our best customers kind of switched companies and started spreading the word about our linens. And all of a sudden this past year more retail fashion shops started buying from us because of this one customer. And when you think of word of mouth, here are just some interesting statistics courtesy of the Research Institute of America for the White House Office of Consumer Affairs.

The average business actually does not hear from 96% of their unhappy clients, and each and every dissatisfied customer will on average tell nine other people. And if we put these statistics in perspective with a couple of numbers, every customer complaint that you receive means that you really have 24 other dissatisfied customers, and these 24 customers will go on to tell a combined 216 people about their negative experience with your business.

But if you address these customers who are complaining, up to 70% want to do business with your business again if the complaint is resolved, and up to 95% will do business if the problem is resolved quickly. Now instead of focusing on complaints, the same is true if a customer is really, really happy with your business. If a customer is really happy, they will tell their friends and the effect will be amplified in the opposite direction and they’ll tell other people about your business, and you’ll get additional business based on this.

Moral the story, don’t piss any of your customers off because they can do a lot of damage with negative word of mouth. And on the flip side, try to go out of your way to make customers happy, because they will actually spread the positive word about your business and get you more customers exponentially.

And my final lesson for 2017 is to take action. Now I know a lot of you guys who are listening to this podcast are on the sidelines and you want to start your own business, but you just haven’t had the courage to pull the trigger. And so I want to tell you a story about how I launched my Create a Profitable Online Store course. And I remember back in the day, a whole bunch of people were asking for a course, and it was always on my to do list, but I could never pull the trigger.

And finally what I ended up doing is I ended up launching the class. I gave a webinar and I just launched the class without any material at all. And I said, hey if you guys are willing to pay me some money, I promise you that I will put out content on a regular basis and put out a good class. And I ended up selling 35 courses and made about ten grand. And as soon as I collected that money, all of a sudden I was like, oh crap. That actually forced me to go out and produce the course that I just pre-sold.

Incidentally this course has made millions of dollars for me over the years. And to think back, if I never did that pre-launch webinar, I’d be missing out on millions of dollars today. And so if you guys are having problems taking action, put yourself out there, make some sort of commitment to yourself and just get something out there, because if you don’t take action and get started nothing is ever going to happen.

All right, and so those are some of the lessons that I personally learned in 2017. And looking back on this podcast now and just kind of listening to what I just said, it seems like injuring my Achilles tendon had a large part in a lot of the lessons that I learned mainly I think because it made me appreciate what I had, and it made me just kind of reflect on everything that just kind of happened this past year and what makes me happy. In any case I hope you enjoyed this episode. I will probably do more of these solo episodes going forward in the coming year. And here’s to a great 2018.

Hope you enjoyed that episode. As I mentioned before, 2017 was actually a very challenging year for me, mainly because I briefly lost sight of what makes me happy in life, and I hope that you don’t make the same mistakes that I did. For more information about this episode, go to mywifequitherjob.com/episode 190.

And once again I want to thank Klaviyo for sponsoring this episode. Klaviyo is my email marketing platform of choice for ecommerce 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 auto pilot. 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.com 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 ecommerce 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 are 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!

189: How My Student Chelsea Makes 6 Figures Selling Hot Cold Therapy Products Online

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How My Student Chelsea Makes 6 Figures Selling Hot Cold Therapy Products Online

Today I’m really happy to have Chelsea Frank on the show. Chelsea is a student in my Create A Profitable Online Store Course.

She joined over a year ago and she’s been doing really well with her business LifeAndLimbGel.com.

Chelsea sells hot and cold therapy products on both her online store and Amazon. But these are no ordinary hot/cold packs. They are designed to contour to your body for a perfect fit. In fact, Chelsea sent me a sample long ago when I hurt my knee and the quality of her product instantly resonated with me.

Anyway, today we’re going to dig deep and find out how Chelsea came up with her design and how she managed to get the word out about her therapy products.

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

Create  A Profitable Online StoreDid you enjoy listening to Jen’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

  • How Chelsea came up with her niche
  • Her motivation for starting her business
  • How her company had the gall to lay her off and still have her develop products for them
  • How she sources her products
  • How she markets her 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 what strategies are working and what strategies are not in business. Today I have an extra special guest from my Create a Profitable Online Store of course. Chelsea is a student in my class who is doing really well selling hot and cold therapy packs.

Now what’s funny about these student interviews is that I bring them on the podcast without any knowledge of their situation, and there’s pretty much zero preparation whatsoever. Anyways, when I interviewed Chelsea I was surprised to hear that she was down to her last one $100 in her bank account, and that she needed to start her business just to bring food on the table. Enjoy the interview.

Before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Always excited to talk about Klaviyo because they are my email marketing platform that I personally use for my store, and I depend on them for over 20% 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, and that makes it extremely powerful. So let’s say I want to send an email out 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 single email.

Klaviyo is the most powerful email platform that I’ve ever used 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.

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.

There is a bunch of companies out there that will manage your email capture forms, but I actually like Privy because once again 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 prizes in our store. And customers love the gamification aspect of this. And when I implemented this form using Privy, email sign ups increased by 131%.

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 you could try the tool for free. And if you decide you need the more advanced features, use coupon code MWQHJ For 15% off. Once again that’s P-R-I-V-Y.com/Steve, 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 Chu.

Welcome to the My Wife Quit Her Job podcast. Today I’m really happy to have Chelsea Frank on the show. Now Chelsea is actually a student in my Create a Profitable Online Store course. She joined over a year ago, and she’s been doing really well with her business lifeandlimbgel.com. Now she sells hot and cold therapy products on both her online store and Amazon as well as a few retail stores, but these are no ordinary hot cold packs. They are designed to contour to your body for a perfect fit.

And in fact Chelsea sent me a sample long ago when I hurt my knee, and the quality of her product instantly resonated with me. Anyway today we’re going to dig deep and find out how Chelsea came up with her design, and how she managed to get the word out about her therapy products. And with that, welcome to show Chelsea, how are you today?

Chelsea: Hi great, I’m doing great, thank you so much for having me on.

Steve: Yeah Chelsea, it’s actually been — I just checked, it’s been almost two years at this point, and I’ve always been curious how did you come up with the niche for your online store and your product?

Chelsea: Well, it’s actually a funny story. I had a background creating artificial arms and legs and prosthetics and orthotics. And when I was working during my residency, I kind of stumbled upon inventing this shoulder orthosis. And I was kind of upset about having to do it, because it took away from my real job. But all of a sudden I was really proud of myself for creating something that was making the company like hundreds of thousands of dollars, and really helping our patients.

And so I kind of decided, wow this is really cool, I like to make things and come up with all these fabrics and meet all these different people and different areas of like plastic molding and all that stuff. And so six months later I lost my job. And so it was kind of a blow. They wanted me to keep making that product for them, but I knew it wasn’t going to last. And so I just kind of said, you know what, this is my opportunity to kind of take this to the next level and see what I could do.

And I had invented a — they wanted me to invent a better shoulder ice pack that went inside of the ice wrap that I was creating.

Steve: So they laid you off and then they wanted you to invent a product for them?

Chelsea: Of course yes, after me making hundreds of thousands of dollars for them. Yeah that was kind of the way it goes. So kind of stinks, but at first I said no, but then I started looking into the profit margins of hot cold therapy packs, and they were huge. And I thought who makes these things? They’re usually made overseas, they’re made a lot of times with nontoxic or toxic or subpar ingredients that you really wouldn’t want your children to be around them if they get punctured.

And so I just kind of thought, this is my one chance. I got laid off, my husband at that time had moved our family, and we were living in poverty literally.

Steve: My goodness, okay.

Chelsea: So yeah, so and I had my second baby on the way. So we went to the tribe, my husband is a tribal member and borrowed money with $100 in the bank. So we shared our idea, pitched it to them, they loved it and they really kind of took us under their wing and helped us get in a position to where we could do this product.

Steve: May I ask how much money you started with?

Chelsea: So my grandpa had given me like $4,000, and it just wasn’t really going to be enough to scale it. I had some different plans with different materials and they weren’t working out. And so we only borrowed $7,000, but we had like $100 in our name. That was literally all that we have in the bank. That was pretty much it.

Steve: Let’s talk about your product because the listeners aren’t really familiar with it, and can you just give a little bit more detail of what your product is, how you get it made, and how you get a…

Chelsea: Yeah so the original product that I had created was a shoulder orthosis, and the shoulder is — it’s kind of pokey out and it’s hard to ice. A lot of times when people have a surgery, they’re compromising their other shoulder trying to hold the ice pack on, and it’s just – these body parts are all made differently, not really universal. And gel packs are just kind of a big chunky block that you hold in place.

So I thought, well why not create these just like an orthosis and just like a wrap that’s custom designed for each part. So what I started with was the shoulder, and it’s a little pou — little pouches that slide the gel pack in with specialized strapping that straps the pack in place and really contours to the body. The gel is flexible when it’s frozen, it allows a little bit of conforming and it’s also a little bit rigid so it’s not going to just lose out all around.

And the specialized inner fabric is laminated to a thin four way stretch plastic, so it keeps the skin from getting too cold or too hot, and allows the penetrating cold and hot therapy to just really reach those muscles at the right temperature without any thermal damage, and prevents that leaky watery mess that you get from most standard gel packs.

Steve: So here’s the thing, Chelsea when I received your product it was very high quality, and you mention that most of these things are made in China. Do you actually make all the stuff yourself, do you make it overseas or?

Chelsea: Yes, so I originally started out making every single thing by hand, and there’s about 22 components that go into each of our wraps. We have about five or six different wraps. And now I have four employees who make all the products. I don’t really do a whole lot of the selling or anything right now, but they’re still all handmade here in the USA. And we’re pretty proud of that, it’s really hard to compete against the margin, the other place. But I thought if we can do this and if we have great margins set up, it’s only going to get better as time goes on and as our abilities to purchase larger quantities.

Steve: Do you have a sewing background?

Chelsea: Not really. I mean I saw here and there, but in doing prosthetics and orthotics, you work with industrial equipment and industrial sewing machines. And so they were just — yes a little bit.

Steve: And how did you source all the materials, and how did you get started with this? It seems pretty complicated to me actually.

Chelsea: It is. I am a very good Google searcher I guess. I don’t know how else to say it. I spent hours trying to find the exact fabrics which are all taken off of materials that we had received from China, and just trying to figure out what is this, how can I make it better?

Steve: So the materials you source from China, sorry?

Chelsea: No I don’t, I get all the materials here except with this strapping is one thing that just making it here in the US, the price is just not quite good enough for me to buy. So I buy from US suppliers, but they are from China.

Steve: Got it, got it.

Chelsea: So there’s a couple of parts, but yeah, so just figuring out what works and talking to people like I know what I’m doing. There is a little bit of faking it.

Steve: How many suppliers do you work with?

Chelsea: Well let’s see, if there’s 22 parts, probably about ten to 15.

Steve: Ten suppliers, wow okay.

Chelsea: So yeah it’s a lot of — the labels come from different company, and it’s just like everybody is just kind of like a one niche thing. They do one thing really good and so they can’t supply me with everything.

Steve: And in terms of the assembly, is that done at your own factory?

Chelsea: Now my employees — it used to be — I mean literally these are made in-house meaning in my house.

Steve: Oh my goodness.

Chelsea: Yeah, so we all come together about one day a week and work making these products all together, and during the rest of the week they’re kind of in their own houses with their own set up.

Steve: Okay interesting.

Chelsea: So they’ve have my equipment at their houses, and then they kind of work during their free time and kids are at school.

Steve: Wow okay, so my immediate reaction is you should be charging a lot more for these products. I mean I thought it was a bargain based on what you’re charging on your site.

Chelsea: And we should, but we’re not — a lot of the things we’re still even if we’ve been around for five years, we’re still in the beginning stages. Yeah it would be nice and we definitely should, people will pay more for them, but we are moms, we all started out not making very much money. And so we really like to cater to everybody, we want everybody to have one of these if they have a surgery. And it’s so much more affordable, and it really helps with reducing pain and swelling after surgery.

Steve: So when you were designing these for that company that you used to work for, you obviously got to own the brand right, you were selling your products to them.

Chelsea: Oh yes, so I didn’t — I gave them a product that was not labeled with my brand, and I created my brand after, so yes.

Steve: You had full rights to everything, right?

Chelsea: Yup.

Steve: Okay, and so did you do any like validation before you invested that money?

Chelsea: Yeah, well it’s funny because I would look at the other competing products and I would really want to like touch them and feel them. And I was just like I can’t even justify buying these things for $80 a piece. I didn’t have that much money to even start out with. So I thought, well I just kind of went for it. I thought the margins are there, I know that there are better. I had experienced a lot of the products before in my workplace, and I just thought mine are going to be ten times better. I don’t have to touch them and feel them and look at the research.

So one of the things I kind of did wrong or I kind of had the field of dreams vision, like if I build it, they will come. But like especially with my website, I just thought, hey, if I put this out there and it’s the best, then people will just come, and that’s not really the case. People don’t know about you, it takes a long time to spread that word, but I just kind of was naive and just went for it, which to this day I don’t regret, but that was just who I was.

Steve: So what platform did you ultimately launch from? Was it your site, was it Amazon?

Chelsea: Yes, so we started just making a website before I even had the products finished, just because I thought, hey, this is fun, it’s something I can figure out before. And so we just started selling on eBay, and yeah and we didn’t know about Amazon at that time. And within like the first month I think we sold like $700 or something like that.

And so I was like, hey, this is working like people are finding these things and leaving me great feedback already. And it just kind of was surprising how fast it started, and then before I knew I was making $3,000 a month on eBay, and realized that that was probably a lot more than my website. So just realizing that it was going to work and I could keep that pace by myself, and just kind of started slowly scaling.

Steve: Okay and I remember doing your site critique actually. You had all this great site, you had an incredible value proposition, and it was just a matter rearranging things.

Chelsea: Yes and I realize now looking back how it’s hard to know how to market or like what’s so special about your products when that’s not my background. My background was in creating things, and that was great to get an outside perspective and just be able to say, oh my gosh, how could I not put those things right out there on the front page?

Steve: Let’s talk a little bit about how you got a retail presence. So I know you’re in a bunch of Mom and Pop pharmacies. How did you approach that?

Chelsea: So yeah we have been asked by many people that they want to carry our product. It’s a good product, it has great margins, it’s set up…

Chelsea: How did these people find you?

Chelsea: Well just having personal experience with the products, like a little martial art studio in Texas, hey, we see that you sell these. We were friends in high school…

Steve: Interesting.

Chelsea: They’re great, but then actually doing that, at that time we were shipping these products with a card about our personal story, a card about the rest of our products, kind of like with a little coupon, a card saying — or a piece of paper explaining the regular directions. And then the one that was unique to the products. So it’s four different little pieces of paper, all folded up, put inside of a bag, and then put a sticker over. So, that that was our packaging at that time.

And so it wasn’t really feasible for us to say yes, we realized if we were going to go retail, we need the packaging to say it all for us so that we don’t have to be buying these little postcards, and buying this piece of paper and folding in stickers. So that was a big struggle for us was the packaging. It needs to look great on a shelf, it needs to have the unique value proposition just right on there, it needs to stand out. And so it took us like two years to get to the point. Yeah I mean staring at a blank box is pretty daunting.

Steve: I don’t remember if it shipped in a box actually, when you shipped it to me, I don’t think it came a box actually.

Chelsea: No it didn’t, yeah it was a bag, yeah because this is new. This retail packaging just reached us in May. So yeah so we have literally like 40,000 pounds of boxes sitting in our garage now, which is really exciting because with the costs of how many I needed to buy and things like that, I just…

Steve: This is one thing that’s not done in the US, right?

Chelsea: Yes, so are our boxes are made in the USA, printed in the USA, but yeah that packaging, and then having to come up with the funds for it.

Steve: I’m just really curious since we’re talking about a product, like did you design the pattern and everything yourself?

Chelsea: Yes, so everything is me, and I’m not saying that like I’m bragging because some of it is probably really lousy. Like the logo is me, the website is me. It’s just kind of one thing at a time. So yeah all the patterns on the products, yeah everything is completely unique.

Steve: I’m just curious, did you ever get any quotes from like factories in overseas at all?

Chelsea: No because at that time just for example like I have my long wrap here, and it sells for $31 online, and it goes on the back, the head, and the knee, the ankle. It’s very universal, great product, but from start to finish the pieces that go into it are like $4, and this is the highest quality fabric. Now that we are very pretty efficient, we’re still sewing the labels on by hand, which that takes quite a while, but we can whip out a 100 of these things in a couple hours.

So just for us they are so heavy that shipping wise, we never went that route. We looked at alternative products and what they were costing, and we thought, we can do this pretty close and we know it’s going to be right every time.

Steve: Okay and then in terms of just the made in USA is probably a big factor also, right?

Chelsea: Yeah definitely although you know local wise I get a lot of negativity I guess you can say when I’m trying to sell this and promote it locally. They’re always, oh that’s so cute, you’re a little mommy that sits in her house and makes things. They will compare me to like, oh my friend makes candles, so that’s really cool that you make hot bags. But people don’t realize that it’s — well we are shipping these all over the world, and we have quite a following on. So I get a lot better reception when I’m dealing with the professional market.

Steve: So you sell to these small pharmacies, how has that been for you?

Chelsea: Good, so we’ve already — getting repeat orders and within a month is definitely showing that it’s working. We wanted to start there first to make sure that we’re not getting customer returns, make sure that seeing what’s selling. And so that’s been a great avenue for us so far. We are just in a few little ones and getting repeat orders and having them sell out of things is like, wow, this is this is exciting, this is happening. So makes us kind of say, okay this is working, and now we need to just be more aggressive and go further.

Steve: So what has been working, like if you were to rank, I guess is retail something that you plan on expanding more into?

Chelsea: Yes definitely, so just because our products are so inexpensive, it’s a lot of work for us even if we have ten orders to do ourselves and fulfill ourselves. It’s a lot of time for making $20 a time to ship out individual products. So we’re definitely focused on the big box retailers right now, and trying to be more aggressive in that area. Obviously I have a background in medical. I don’t think any other orthotics designs hot and cold therapy wraps. So it kind of sets us apart in that way. So we are hoping that — we got contacted by Albertson store.

Steve: Nice.

Chelsea: Yeah, so that’s very exciting for us. They reached out to us from rangeme.com which is kind of a wave to get your smaller products in the eyes of bigger box retail stores. But the problem is with the bigger stores, they only do their assessment and their viewing of new products like once a year. And so it’s just a long process for all these bigger places, but we’re definitely we have the margin set up, we’ve done orders of 8,000 gel packs at a time. So we definitely can just ramp production and scale.

Steve: Do you have all these equipment at your house; I’m just kind of curious?

Chelsea: Yes, so these are all made in-house like literally in my house.

Steve: For making gel packs too?

Chelsea: Yes, so it’s not as technical as you’d think, but we have all the equipment, it’s set up in my shop, and then my employees each have their own designated jobs. And throughout the week, they’ll do their parts at their own houses. So we have the lady that does the gel packs for us, she has all that equipment at my house and at her house. And so when she gets free time or puts in some hours, she probably works like 30 hours a week for me.

So she’ll get that set up and make a whole bunch of gel packs, bring them over here with box roll up and….

Steve: Do you have a very large house Chelsea, I’m just curious?

Chelsea: Well we lucked out, we were living in a 1,000 square foot house, and we had three kids and it was really crammed, and that was also my business headquarters. So we lucked out and two years ago we found a foreclosure house and it’s 3,500 square feet. And so yeah, now we’re set up. It was like God was planning this house for us because I don’t know what we would do if we were back in that 1,000 square foot house. We were having to buy, get storage units and work out of storage units, because it was kind of overflowing us.

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.

What’s worked the best for you in terms of marketing your business, is it the retail side, Amazon, eBay, your site?

Chelsea: Oh my gosh, well I’m terrible at marketing. Right now we don’t like pay very much for advertising or anything, so pretty much word of mouth is going to be hugest force. And we will get people ordering ten products at a time just from hearing about somebody. Or my doctor recommended this, and I’m like, cool, I’d like to meet the doctor, or obviously people are talking and sharing all over the United States.

And so that’s just been huge, and then we do a little bit of like pay per click advertising on Amazon just because it’s so available for me, and I have a lot of other areas I could be spending my time. And so that works really well. All of my products have great numbers, so I’d say just me just doing whatever Amazon recommends, and just me giving them money. My ACOS or whatever is like 10 to 15%.

So it works out really well because we have the margins there definitely. And so I just kind of feed them money, and it works out, it works out…

Steve: Okay, build your product and Amazon sends you money.

Chelsea: Yeah, I say more sales is good, and now we’re at the point because we — just getting this retail packaging in May, I thought, oh well then we’ll be ready. But unfortunately what happened in May was we switched our UPC numbers, and so I created new product listings and merged them. And unfortunately that started me over at zero.

Steve: Oh man, that’s terrible.

Chelsea: So it was a horrible, like it was devastating. We went from making…

Steve: Where do you rank now for switching up the UPCs?

Chelsea: What was what, I’m sorry?

Steve: Where is your rank now?

Chelsea: Because I lost like the numbers and the codes and it just started changing our product numbers and everything, making it more easier for stores. So looking back, I probably wouldn’t have done it, because I didn’t know that was going to happen. But just to have a print on the boxes and stuff like that is a little bit — but yeah, so when we started over at zero, so we went from making like $9,000 and $10,000 a month to like one.

So when I figured that out, it took me a while, and then of course we were closing out old inventory and sending them in new boxes. It’s just hard for when you’re still starting out to just; okay here is $40,000 worth of inventory to just sit there at your warehouse for now. So it’s taken us until about now to get things in stock.

Steve: Did you have to get it, take out any loans to kind of fan this inventory at all or?

Chelsea: We took — for the first $7,000 loan; we paid back within a few years. And then at that point we just decided, hey, this is working and I want to make a million dollars. I don’t want to just sit at home and make gel packs for myself. This is big enough to go into the retail store. So we took out the max loan that we could get our hands on, it was $20,000, and so that was what we did. And we wanted new custom bags with the gel packs, we wanted them to be — the bags to be made in the USA with our logo, and the heating and cooling directions printed on the bag.

And so we had budgeted for that as well as the retail packaging. And we asked them, can you please shoot for an under run, like this is maxing out our money. And they of course went over by thousands of bags, which we were under contract to buy. So that used up our entire loan, so then we were sitting there with a bunch of bags that we couldn’t sell in stores because we didn’t have the packaging, because we couldn’t afford both.

Steve: Interesting okay.

Chelsea: And so yeah, so then it took us until we got our tax return the next year, which was this year. So it was like a year of me saying, are you kidding me, because we were maxed out with our loan, having to pay it back and then not being able to ramp up like that, because we were fairly maxed out on Amazon, and on our website and eBay we could just — it was a little stressful with three employees and…

Steve: But you are back on truck now, right?

Chelsea: Yeah, yeah.

Steve: Wow that’s quite a story. I’m just curious, and so on the retail side, are you discounting by giving them wholesale prices on their order like 50%?

Chelsea: Yes, yes. So we have margins of 50% or a little maybe a little bit more, between like 45 and 60%. So and there’s definitely…

Chelsea: What are the terms that you’ve given them, like what’s the minimum order?

Chelsea: For a minimum order, we only have like 300 is the first minimum order, and then subsequent minimums are like $200. So that keeps it so that if they’re looking at the shelf and thinking, oh it’s getting a little bare, do I really want this or not, $200 is definitely doable.

Steve: Yeah that’s not much at all actually.

Chelsea: Yeah so and then if they — free shipping if it’s $400 to $500. So that allows us to keep, you know just make things work for us.

Steve: I’m just curious, do you check up on them every single month, or do they…

Chelsea: Oh I’m terrible. I’ve only — we just decided, oh this guy kind of seemed like he really wanted it, and so then I would call and say, oh you seemed interested in the product, oh within five minutes I’ve got a order coming through on my fax machine from them. So follow up really works. I just have to do it and just make sure, so yeah I have…

Steve: It seems like you’re very focused on product, right?

Chelsea: Yes, so and right now — at the beginning we thought, well, we should probably get somebody to sell these, and have somebody go to the doctor’s offices and sell these. And I’m like seven and a half months pregnant right now.

Steve: Oh my goodness.

Chelsea: And so it’s just not — it doesn’t have the right message to have me just walk into these places, oh this is our company, and feel free to order thousands of dollars because we’ll be able to fulfill. It just doesn’t have the right message. So we’re looking to have somebody kind of fill that role for us right now.

Steve: So let me ask you this Chelsea, I mean it sounds like you’ve underwent a lot of hardships with this business, is this something that you would repeat like if you had to start all over again, would you still start your business?

Chelsea: Oh yes, well for one thing I don’t think I could work for somebody else again. So I love doing my own thing, I love the creative aspects of, hey staring at a blank box, like it’s exciting to me to think, hey, I’m going to do it. And now I feel like, oh this has worked out, I would love to get it to a point and then maybe even start a new business. I mean now I know how to create a website, and to do all this stuff, it seems like I’m addicted, but…

Steve: Okay and you’re going to have four kids, right? So does it provide you with freedom?

Chelsea: Definitely, well and I mean and I’m not — some of my faults are definitely not just being super gung ho. I’m like you know I look at other companies, and they’re just really going, going, going, and I think you know what, that’s not always my goals, and that’s okay. So if it’s — this year if we’re just going to make a few thousand dollars, and I get to spend time with my kids and have another baby, then that’s fine, and I don’t think everybody has to just be like 900% all the time.

So I guess definitely given me freedom to do what I want. And then when those times come where I get the huge shipments of stuff, and then it can be go, go, go for a while. So it’s my own pace and my own thing, and so sometimes I’m putting in 40 hours a week, and other times I’m putting in 20 hours a week.

Steve: So I mean it sounds like you started your business for both the acceleration factor and the fact that it kind of allows you to free up your time so you can spend time doing what you want to be doing?

Chelsea: Yeah definitely yeah. I mean I created the first product myself for a business that didn’t appreciate it, and I thought, man, you just don’t — and then I lost my job, I thought this is crazy. I’m working so hard and no one’s appreciating me. And I thought, if I work so hard for me, how exciting would it be to be able to own all of it and to take it all the way. And I definitely think this product is going to be on major store shelves in the future.

Steve: I believe it too actually. I’m a firm believer in your product Chelsea.

Chelsea: Oh thank you.

Steve: I’m just curious though, so for some of the listeners who are out there who are wanting to start a business, like what — I mean it sounds — all the students that I’ve interviewed on the podcast, it sounds like you have experienced the greatest hardships. So from your perspective like what’s some advice that you would give the people listening who are kind of on the sidelines right now who might want to start something?

Chelsea: Well yeah, I mean we started this business not — we started out of a necessity because I needed to provide for my family, like literally I needed to provide food on the table. And so I was like I have to make this work, every month I have to have a profit or we don’t eat. And so it’s also, it was kind of exciting to do it like that. It gave me a lot of instead of focusing on, oh gosh, my husband is sick, we have kids, I lost my job. It was like, I am a business owner, it might not be a good business yet, but it’s going to be.

So I would say if you’re going to think about doing something, just know it’s going to be a lot of work. No one can do it for you, no one is the expert. You can go to people that know what it’s like, who am I supposed to go to if one of my materials fails or something like that? Nobody else knows this stuff. And so you just kind of either have to be confident about it and know, hey, I’m going to be able to make this work, or take a step back and re-evaluate.

Steve: I mean what would you say was your main struggle, and like what would you change if you had to start all over again?

Chelsea: Oh gosh so many things. Well I would just — it’s like you get tunnel vision sometimes thinking, like I had originally planned these products completely different. I was using a radio frequency machine to custom cut the plastic, and it was a special kind of plastic, and it was not working out, but I wouldn’t give up the idea. It was like, okay, I have put this much money into it, it is going to have to work.

And so it was hard for me to let go of the what wasn’t working. So it’s okay, it’s kind of like a tree with the leaves are going to fall off and die, and it’s okay to let them fall and focus on new leaves. So if I had it to do over again, I probably would just not be so focused on exactly how I want, maybe to take a step back and go, okay well, how am I going to do it now, or what if that wasn’t an option, and just you know focus on how to change it. If it’s not working, then it’s going to have to — you got to fix it fast.

Steve: Okay, well Chelsea where can people find your products, and if they have any questions for you, where can they find you?

Chelsea: Yeah, so I am at — my website is lifeandlimbgel.com. So that’s lifeandlimbgel.com. And we also sell on Amazon and eBay, and then we are in a few pharmacies, but they’re very local, we live in the Pacific Northwest. So hopefully we’ll be on the store shelves here, or maybe you’ll see me on TV soon.

Steve: We didn’t really talk about that, but maybe if that happens I’ll have you back on.

Chelsea: Yeah, so we have some things in the works right now to be featured on a television show similar to Shark Tank. We applied for Shark Tank last year and we made it to the second round which is really exciting, and then this year we got contacted by a different company with a Shark Tank like story. And so we decided not to pursue Shark Tank this year just because the other opportunity sounded so much more fun for me. And so we’ll see what happens with that, but if not, we can always reapply this year.

Steve: I can’t wait to hear about it.

Chelsea: Yeah.

Steve: All right Chelsea, I really appreciate you coming on the show, take care.

Chelsea: All right thank you so much.

Steve: Hope you enjoyed that episode. What I like about Chelsea is that no matter what hardships have been thrown at her. She’s persevered and created a profitable online business that she can be proud of, all of this with four kids as well which is pretty crazy. For more information about this episode, go to mywifequitherjob.com/episode189.

And once again I want to thank Privy for sponsoring this episode. Privy is the email capture provider that I 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 basically 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.

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 auto pilot. 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 all these tools on my blog, and if you’re interested in starting your own ecommerce 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 are 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!

188: How To Run A 7 Figure Ecommerce Business As A Digital Nomad With Greg Mercer

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How To Run A 7 Figure Ecommerce Business As A Digital Nomad With Greg Mercer

Today I’m happy to have Greg Mercer back on the show for the second time. If you’ve never heard of Greg, he’s the founder and owner of JungleScout.

In addition, Greg makes a killing selling on Amazon. Last time I interviewed him, he was doing 400K per month. Who knows how much he makes now? Anyway, I’ve known the guy for quite a while now and he’s spoken at my conference, Sellers Summit, multiple times.

One thing that always intrigues me about Greg is that he truly lives a nomadic lifestyle. Every time I chat with the guy, he’s in another country. Meanwhile while he’s traveling, he’s running multiple 7 or 8 figure businesses. So today, we’re going to figure out how he does it.

What You’ll Learn

  • How many skus Greg manages on the road
  • How to sell physical products without ever seeing them
  • Greg’s process for vetting and launching new products from anywhere
  • How Greg manages shipping disasters while traveling
  • Where Greg sends his products
  • What tools he uses to manage his inventory and team

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.
Privy

Kabbage.com – If you run a physical products based business, sometimes you need a short term loan to buy inventory to meet demand, especially during the holiday season. Kabbage helps small business owners access simple and flexible funding right away. Click here and get a $50 Visa gift card upon signup.
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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 what strategies are working and what strategies are not with their businesses. Now today I’m thrilled to have Greg Mercer back on the show.

Now we all know Greg as the founder of Jungle Scout, but most people don’t know that Greg is actually a digital nomad. He runs a multi-million dollar e-commerce business as well as a multi-million dollar software company, while traveling the world with no home base. And today we’re going to find out how he does it.

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. Now, Privy is the tool 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 all of my email marketing providers.

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 prizes in our store. Customers love the gamification aspect of this, and when I implemented this form, email sign ups increased by 131%.

There are other cool things that you can do too also. For example let’s say you offer free shipping for orders over 100 bucks, well you can tell Privy to flush a pop up when the customer has $90 in their shopping cart to urge them to insert one more item. 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 that you need some of the more advanced features, use coupon code MWQHJ For 15% off.

Now I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. Now, I’m always blessed to have Klaviyo as a sponsor because they are the email marketing platform that I use for my e-commerce store, and I actually depend on them for over 20% of my revenues. And right now with the holidays, they are close to 30% 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 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 bought, piece of cake, and there is full revenue tracking on every single email.

Now Klaviyo is the most powerful email platform I’ve ever used, and you can actually 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 is your host, Steve Chou.

Steve: Welcome to the My Wife Quit her Job Podcast. Today I’m happy to have to have Greg Mercer back on the show. Never heard of Greg, he’s the founder and owner of Jungle Scout, and actually a bunch of other tools now including Fetcher, Splitly, Jump Send, and there maybe a couple other ones that I can even remember off the top of my head. In addition, Greg makes a killing selling on Amazon. I think last time I interviewed him; he was doing 400K per month. Who knows how much he makes now with his physical products.

But anyways, I’ve known the guy for quite a while now, and he’s actually spoken at my conference the Sellers Summit multiple times. And one thing that’s always intrigued me about Greg is that he truly lives a nomadic lifestyle. And in fact, every time I chat with the guy, he seems to be in a different country. And meanwhile, while he’s traveling, he’s sitting there running his multiple seven or eight figure businesses. So today I thought we would kind of dabble a little deeper, and figure out exactly how he does it. And with that, welcome to the show Greg, how are you doing today man?

Greg: Steve, I’m doing fantastic. I appreciate you having me back. It’s always a blast talking to you, and yeah this has been a fun topic. It is something I have never really talked about like on a podcast or live before, kind of like my nomadic lifestyle. I mean people kind of — some people know I’m a nomad, but like not really getting into the weeds of this topic. So this is going to be – it’s going to be a great episode.

Steve: Just curious, where are you are right now?

Greg: I am in Budapest in Hungary.

Steve: Budapest, Hungary. Last time I talked to you I think you were in Canada, right, or Vancouver. And then you were in Spain, the last time also, another time, crazy.

Greg: Yeah, I don’t remember, it’s something like that.

Steve: So do you actually have a home base?

Greg: I have no home Steve. I sold — at one point I had a home. This was like three years ago. I sold it, my wife and I we sold our house, all our stuff, our cars. So literally everything I own, all my material possessions fit inside a small backpack in a carry on rolling suitcase.

Steve: That’s crazy. So your wife is like that too?

Greg: Yeah, my wife’s like that too. I was a little bit scared when we got started with this lifestyle. So I don’t know if this is for her. She’s – or should I say pretty light.

Steve: This is recorded.

Greg: Lots of clothes and shoes and kind of things like that. So I was like, man I don’t know if she can really do this, but she loves it. She jumped right on, same thing she just carries our child with one carryon suitcase and stuff, and yeah she doesn’t want to quit.

Steve: Cool man. Well, I don’t know too many physical product nomads. I know a lot of digital product nomads. So you’re definitely the minority, and I kind of want to know how you manage to pull it off, actually especially with your physical products. So I know you’re still selling on Amazon, right?

Greg: Yes, exclusively on Amazon.

Steve: And how many skews actually do you actually have at this point?

Greg: I don’t have that many skews. I think it’s under 200, under 250 or so.

Steve: Okay, so that’s still a good number of skews, right?

Greg: Yeah, I mean it’s all relative.

Steve: Yeah, so how do you manage to sell so many skews, and still be travelling around all over the place, like what is your process — let’s say you want to launch a new product, like what is your process without a home base?

Greg: Yeah, good question. That’s one of the first of so great about like Amazon FBA, right? We’re shipping stuff to their warehouses. But I do have — I have like three people on my team that run my physical products company, so they can accept like samples. But to be completely honest with you, I’m actually most of the time not even getting samples anymore.

Steve: No way, okay.

Greg: Yeah like we have this one company in Hong Kong that will accept samples, and the nice thing about that is they can get on like the next day being shipped out from China. They just like with their cell phone just record like a quick video of it, of like three to five minutes of them putting it together like trying to like gauge quality and stuff. And then they throw it away, I don’t know what they do with it after that.

So we’ve really actually, we’ve gone down to like never touching anything anymore. So you like they send us little videos of the sample, we never touch inventory because I get shipped from the factory straight to Amazon’s distribution centers. We just dispose of returns.

So it’s very much like it’s hard for me to fathom. It’s like I wonder like how many boxes I have in like Amazon’s warehouse. So if I were to look at all of them, it’s like would it take up — like I have no idea how much space it would take up. I mean would be like it’s…

Steve: It’s probably like a whole warehouse, yeah.

Greg: Heinous yeah.

Steve: Because I know you do oversize products too, right?

Greg: Yeah, I do a lot of like big and oversized stuff now. So it probably would be like, I don’t know, a 2,000 square foot warehouse? I have no idea honestly.

Steve: So how did you hook up with these Hong Kong people?

Greg: It was a recommendation of a friend. They started off actually just as a kind of a sourcing agent for us. To be honest, they didn’t do that kind of a job and thus, so they don’t do that particular task force anymore. But like another kind of job that we just asked them if they’d be able to do would be like sample inspections and they said yes. So we’ve kept them on for that, and don’t really use them as a sourcing agent anymore.

Steve: Can you talk about the sample inspection process, like how do you convey to them what you’re looking for?

Greg: Yeah, a good question. We don’t necessarily actually convey what we’re looking for. They’re pretty good about just like any sample they receive. Let’s just pretend like they receive like a chair. They’re pretty good at like understanding like, okay this is a chair; these will probably the types of things that they’d be looking for. So they will try to assemble it, they will like note if they had any troubles like assembling it, or maybe like a screw didn’t line up right.

Then they will like sit on it and stand on it and kind of jump on it, maybe like drop it from a couple of feet in the air. They do this online video, and they’re pretty good about being like, look at this like this edge. This edge didn’t come out of the mold very well, there’s a little like piece of plastic on it, or they’re inspecting it like a fabric. They’re pretty good at being like this feels relatively thick to us, things like that. We don’t necessarily say like, these are the 20 bullet points that we want you to look for in the sample inspection.

Steve: Okay, so did you have to train these people, or is this like kind of what they do for a living?

Greg: This isn’t what they do for a living. It’s a pretty like — not sketchy but kind of like Mom and Pop operation. This wasn’t exactly like an official thing that they do. We just asked them. Like I said, they were sourcing agents; we asked them to do this. And yeah it’s just this one young lady, like I said, she’s records everything on her cell phone, and that’s it.

Steve: And so you had to establish trust with this person at some point, right?

Greg: Yeah absolutely.

Steve: Okay, and did they take on new clients like with the listeners?

Greg: I don’t think so. I don’t think they’re too interested in it. We only pay them I think like 30 bucks or something to do that. So I don’t think it’s a very good moneymaker for them. I don’t even think they have a website to be honest with you. I don’t even think I could send traffic somewhere if I wanted to.

Steve: How did you find them in the first place?

Greg: A recommendation of a friend.

Steve: Okay. So if I paid him like 50 bucks or 60 bucks and said, don’t take any more customers from Greg, that will be…

Greg: On top of the goal, just say real quick that that’s only like one part of it. I still I actually do quite a few inspections now during manufacturing process as well. So I’ll do one during the manufacturing process, I get a whole bunch of pictures and information from that, and then I’ll do a final inspection before I ship a container as well. So this sample inspection is only a small part of it, because like anyone can make one good sample anyways. That’s why I don’t really take sample inspections like really that seriously anymore. It’s more so like, okay what do you actually produce on the production line?

Steve: What do you use for your inspections at the factory?

Greg: Asia Inspection.

Steve: Asia Inspection okay.

Greg: I think what’s one of the other big ones? I think we started using this other one, V-Trust or something, is that one of the other big ones?

Steve: There’s a whole bunch of them, like there’s like [inaudible 00:10:59], KRT Inspect yeah. Asia Inspection I think is like pretty cheap and a lot of people use them.

Greg: Yeah they’re pretty inexpensive. Yeah I would recommend them for anyone listening to this. I don’t have anything bad to say about them, like the user interface on the website is also — I mean it’s like a little bit junky, but it’s fairly like convenient as far as like communicating through like messages, and they can also do all the other inspections. Like if you have like a baby product or you have whatever else like a lab testing, they can do all that as well, so yeah.

Steve: So when you were — before you guys, before you had these guys, you were doing your inspections I would imagine, right?

Greg: You mean like…

Steve: The sample inspections, sorry.

Greg: Yeah sample inspections I was doing myself. I mean I could still do that, like I could still mail like one of the people who work for me could still receive samples, or I could still like mail samples to wherever I’m living at in the world, right? I mean what’s the difference between mailing a sample to Budapest versus the States?

Steve: I guess so, I guess you just have to be familiar — or if it’s just a sample, I guess it’s not a problem.

Greg: Right, it ships to my Airbnb, leave it there, give them a little…

Steve: Okay, and then you get the inspections, and then you just send everything off to Amazon directly, right?

Greg: Yeah.

Steve: What about when bad things happen, like can you talk about like a crisis situation that you’ve dealt with like while you’re traveling and kind of how you handled it?

Greg: With bad products or just any type of crisis?

Steve: Just any type of crisis, because I’m thinking to myself like we can leave for extended periods with our store, but sometimes like things come up that we just have to handle, like sometimes we’ll have to go back and handle it, or it just seems like I wouldn’t feel comfortable being away like all year round and just leaving this company running by itself.

Greg: Yeah. I can’t really think of like — so of course we have bad things happen to our companies all the time, I mean it’s just like part of business. But I don’t know, maybe just because like I kind of had this mindset, I can’t really think of anything that would be like difficult, or that’s more difficult for me to handle since like traveling. I’ve never really been the type to want to like handle inventory anyway. I don’t want to unload containers like myself at any point anyway. So I mean I don’t know how that for sure would help, yeah I don’t know.

Steve: Do you use any tools to just help you manage all these things as they go, to manage all your physical products and just figure out what the heck is going on at any given time? Like 200 skews is still quite a bit, right?

Greg: Yeah, you’re talking about like inventory management?

Steve: Inventory management, just people management.

Greg: Yeah so I guess like as far as like how I communicate with my team, it’s like over Slack and Trello. Trello is like our project management tool. That’s where we like put in the things in there that need to be done. We manage like POs in there, and really everything is managed in there. You just kind of know like, hey Greg, we need you to pay this, or a question, or what do you think about this product or whatever.

As far as like our inventory management, we use Forecastly [ph] for that. It works really well. Actually it has — they released like PO management inside there recently too, we need to switchover, tried using that inside Trello. But that’s about it really as far as like managing inventory goes, because we don’t do any FBM, fulfilled by merchant or anything like that.

Steve: Okay, and then we were talking earlier about how you started focusing on like oversize products. Can you kind of talk a little about like what are some of the complicated things related to that? I guess it doesn’t really matter since you don’t touch anything, but just curious what your thoughts are.

Greg: Yeah there’s still outsource some tips for the listeners though, like for example you have to be really careful with your shipping charges when you’re shipping these like big products. I saw some things that only like 300 or 400 units will fit in a 40 foot container. So it’s like those like pretty big products, you have to be careful that you’re really mindful of all the shipping charges. So it’s not necessarily — I think everyone has a good understanding of getting a container from the US to like the West Coast or whatever.

But depending on what warehouses Amazon is shipping them to you have to be pretty – you can get kind of get screwed and get — if you’re shipping into LA, and then have to send like three DCs that are like pretty far away, accumulate like fairly substantial cost compared to if you’re sending the whole thing into Moreno Valley. But keep in mind for anyone listening that you can create the shipping plans like as far in advance as you want. I don’t know about any limit.

So we will create them pretty early on. And also keep in mind, a little hack for everyone is like if you get a crappy shipping plan, you can delete it, you know delete the whole shipping plan. I’m not talking about like an individual DC, but delete the whole shipping plan, and try again in a couple days and see if you get a better one. So that is kind of a little bit of a hack that we actually use. We will like you know for like a whole month we might try to create like ten different shipping plans until we get one that we think is probably like the best one that we will get.

Steve: Who do you use for your freight forwarding?

Greg: I use Flexport.

Steve: Flexport okay.

Greg: Yeah they’re pretty good. I don’t think their rates are the best, but they do have like a really good platform, it’s really convenient. Once you’re set up in there, it’s like it’s not worth saving a little money to go with someone else for me.

Steve: So what’s your process for like an oversize product? Obviously you’re not buying a full container right off the bat, right? Like how do you test it?

Greg: Like if only 400 or 500 units in a container then yeah we definitely buy a whole container. We actually — we pretty much actually exclusively now order quantities based off how many fit in a container, so either 20 foot or 40 foot container. So that’s kind of like one of the first question we ask, how many fit in 20 foot container, how many fit a 40 foot container and then order inventory in those multiples.

Steve: I see, even like that’s just like a test order, right? You just try one container?

Greg: Yeah.

Greg: Okay, and so what do you do with this stuff like especially the oversize stuff that doesn’t move at all?

Greg: I never really have this problem, like I have — well I mean like of course some stuff like sells better than others. But if stuff ever like not moving fast enough, we only really go after products that we think we can sell like quite a few like at least like 300 or 400 a month minimum, but usually we shouldn’t be surprised, we could be something like 800 or 1,000 a month. So if they’re not moving as fast as we want to, we’re pretty aggressive like with the giveaways, or like giving out coupons or spending more on PPC or lowering the price until it starts moving.

And pretty much like our plan is like we’re either going to be selling at least like 500 units a month of these things, or we’re going to break even or lose a little bit of money and never order it again. We don’t have any skews that only sell like 50 units a month or something like that. We just would not let that happen. We do, do like keep dropping the prices until it starts moving really fast.

Steve: Okay. Can you talk; can you be more specific about kind of like what your process is like for a launch then? So let’s say you’ve launched something, and within the first month like how many units would you expect to sell before you start doing anything? Or do you start with giveaways to begin with?

Greg: We start with giveaways. So the launch process would be, we put the price at — so let’s say our goal for this price is sell for 50 bucks when we first put it up there. We’ll put the price like $50, but we’ll be giving away coupons for like I don’t know, we usually sell like 75% off. I would do that for the first like probably like two weeks, maybe giveaway like five or ten coupons a day. And of course we use Jump Send; I’m a little biased because it is our product. I think it’s the best.

So we give away like five or ten coupons every day for like well say like two weeks, and then we kind of see where the product is at by then. Usually by the end of two weeks, we’ve gotten like a few reviews just from these people like buying at a discount, or you’ll probably get a few organic sales in there as well. At that point that’s usually when we turn on PPC. So like we kind of stop coupons at that point. We turn on PPC with a really aggressive bid. So we’re ranking like number one for off like our main terms, and we’ll also decrease the price.

I think I said the target price of 50 bucks. So we’ll decrease the price to maybe like $35, $40. So it’s like a really good deal and we’re super aggressive on PPC. And at that point it usually continues to sell well without any more coupons because they’re probably like all the sales are probably mostly the sales from PPC, it’s a really good price, it’s price well below any other competitors, so that sales velocity keeps up. We can usually do that for like two, three, four weeks.

At the end of that point we’re usually ranking well for our keywords and that’s when we just slowly start to climb the price back up to our target price, and at this point it’s been a couple months. We at least have 20, 30, 40 reviews by then, and then that’s it. So I mean we definitely lose money in the first month, second month, the goal is probably like to break even, and then I look at all these like a long term type game, right? So like month three maybe we only have like five or 10% margins. Hopefully by month four or by month five, we have 25, 30% margins.

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So in the beginning your PPC, like you don’t even care what the end cost is, you’re just trying to move units.

Greg: That’s exactly right, because the biggest thing in Amazon’s ranking algorithm for keywords as far as in my opinion at least is sales velocity. That’s what we’re going after is just sales velocity. So that’s why we don’t really — as I said earlier, it’s not like I’m like just so amazing at choosing these products. I said earlier like we don’t really have products that just don’t move, we’re just really aggressive until they start moving well.

Steve: So let me ask you this, given your strategy then, like could you just pick a pro — like it seems like you’re a little bit more haphazard probably isn’t the right word, but you’re probably willing to go into more competitive niches with this launch strategy?

Greg: Not necessarily. So like we have a pretty like set criteria when we’re looking for these products, we’re looking for something that has really good demand, but it’s the lower end of competition for that amount of demand. So we definitely take a very data driven approach to what products we launch.

And also say for anyone not kind of familiar with my Amazon strategy that I have no cohesive or like well put together product lines at all. Also a comb and a lamp and a chair and the bumper for your Ford and like whatever else, I have no like nice cohesive like brands. It’s all just totally random stuff; whatever the data tells me is going to do well.

Steve: Okay, and then, so can you just kind of quantify those guidelines for people who haven’t heard them before?

Greg: Yeah so of course I’m using Jungle Scout since I’m the founder of it, but this is — I’m looking for existing demand in a particular niche. So all like let’s say I’m going to sell — I’m not very creative. Right next to me is a stainless steel water bottle; we use that as an example. I’ll search for stainless steel water bottle, or maybe even just water bottle. And if I want to sell this product, I have to see that there’s existing strong demand across the niche.

So when I search that, I run Jungle Scout, I look at how much demand there is for those particular products, and I want like at least 2,000 but preferably like 3,000 or 4,000 units of demand total throughout the niche. That just lets me know that there’s that many people searching on Amazon for this type of product and purchasing it. So that’s like the validation I need to know that there’s strong demand in this particular niche.

And then the easiest way to gauge competition is the number of reviews. It’s not only the social proof that the number of reviews gives that tells you how competitive a niche is, but it’s also like the sales velocity and sales history of a particular listing which again in my opinion is a major ranking factor. So niches that have a lower amount of reviews or less competitive.

So I just look for like in the top two results. I like to see like three or four sellers with maybe like under 50 reviews, and to me that would be like a good indicator that it’s not very competitive. So those are like basic demand and competition metrics that I use.

Steve: Is that why you’ve kind of strayed to like oversize products, because it tends to be a lot less competitive in that area?

Greg: Yeah the oversize products are definitely less competitive right now. Also we are doing like some more high dollar stuff, and again is little bit less competitive there just because it’s a higher barrier of entry.

Steve: Okay and I’m just curious, like whenever I talk to you, it just seems so easy, you know what I’m saying? You’re like yeah, never had any problems with quality and what not.

Greg: I’ve definitely had quality problems.

Steve: Okay, how about this, so let’s talk about like a little bit of vendor negotiation here. So let’s say you go through your factory inspections, certainly you’ve had problems where like on the inspection line things haven’t gone so hot, right?

Greg: For sure.

Steve: So what is your next steps when that happens? Assuming you don’t even have a relationship really with this vendor yet.

Greg: Yeah, so it’s definitely going to case by case basis. And I’ll just say like when you talk about like quality problems, I feel like probably like 70% of our inspection reports like fail based off like Asia Inspection standards. So definitely like lots of quality problems, but it’s really — then it’s like, okay let’s look at the reasons it failed, and they have like different grading scores, like oh it can only have seven minor defects or two major, one critical, whatever they are.

So, this is why especially like on higher dollar orders, or like orders where I’m ordering a few containers at a time, I’m doing DUPRO inspections, during productions inspections. So I feel like early on, so maybe if they’re making me 1,000 units, this inspection is done when only like a 100 units are done — are completed.

And the reason that these work really well, I’m a big fan of these now, and if you’re listening to this and you’re placing like smaller orders like a couple of a thousand bucks, and what I’m talking about here doesn’t make sense. But when you’re ordering like a $30,000 order, or a $40,000 order, like these bigger orders, then it’s like 200 bucks for inspection is a no brainer.

But if you can get feedback after like the first 10% of units are done, then at that point it’s pretty easy to work with the factory, show them the inspection reports, like look, Asia Inspection said you failed this inspection, these are the reason. So like these threads don’t match up, this loose thread is supposed to be cut off, you’re leaving it hanging off or whatever. So at that point it’s like it’s fairly easy for them to fix those 10% of units and correct it afterwards.

And I have in my original agreement with them different scenarios about them failing inspections, and how we handle it. So like I can opt for like a discount, and this will be on the final inspection. So I can opt for like a discount, or they have to fix it, or like different scenarios like that. So because we already have that agreement in place, I feel like they’re pretty — they don’t want to give me like a 20% discount, right? They would rather – it’s easier to fix the 10% units and stop screwing up on it. So yeah, it’s kind of like my…

Steve: So basically you iron out these defects early on in the process. So where do you schedule your inspections, at what point in terms of the production?

Greg: Like 10% or 20% would be a good – it’s like my preferred one for like the DUPRO inspection. And then all these bigger orders, I always do a final inspection, and that’s when the goods are finished, about to be loaded into the container.

Steve: Okay, and then and then it’s just off to Amazon directly.

Greg: Yup, you’re right.

Steve: Okay, have you ever had any problems with people hijacking you, taking your buy box, like you reporting them and then like it’s like playing whack a mole, because like every other day someone is hijacking you?

Greg: Yeah of course like any Amazon seller who has a bunch of skews has this problem. But I feel like it’s not as like widespread as what like if you like in the Facebook groups would make you believe. I don’t know if I don’t have that problem as much because if you’re selling the silicon grill gloves in a plastic bag, it’s like very easy to like hijackers to say it’s the same product.

But if you look at like my Jungle Snogs [ph] on Amazon, it’s like a very like customized box and there’s like changes to it, and that’s like representative of a lot of my products that have like this a little bit like nice or like very customized box, so it’s probably changed the actual product. So I think I’m very like less susceptible to hijackers because it’s like, well yeah I don’t have whatever the stainless steel water bottle that’s really that tall and skinny with that logo printed on the side of it, right?

I do have people that like hop on my listings. I only have like one unit that probably you bought it with a discount, and then selling it, like something really bent out of shape of that, but it’s like whatever dude. It’s like one, they steal one sale from you, life goes on, I don’t lose any sleep or care about that. But I don’t have that many problems with people who like try to get on my listing with like 300 units in stock. Sure it’s happened to me like a handful of times, but it’s not a major issue by any means.

Steve: So you have 200 screws right now, do you kind of just let those coast, meaning like it’s too hard to do micromanaging on all those skews? So once you’ve done your launch and you have your PPC, and sales are coming in, do you just kind of let it ride at that point for the most part?

Greg: Yeah for the most part. Yeah I mean they take a little bit of management or kind of optimization, or like if we sold 700 units last month, but this month we only sold like 250, then it’s like we need to go in here and figure out what the heck is going on. But there’s not much like ongoing work once you’ve set up like a great listing that’s doing well that has solid reviews and all that kind of stuff. It’s like one of the beauties about FBA.

Steve: Are you are using enhanced brand content at all?

Greg: Yeah for sure. So we do that on all of our listings.

Steve: On all of your listings okay. And for the ones that aren’t converting that well, what are some things that you look for or how do you do your analysis?

Greg: Yeah good question. I’m a big fan now of like a competitive matrix. So like comparing your product against other top sellers on Amazon, we’ll go and do that if items aren’t converting well. Let’s see, we spend pretty good money like on nice lifestyle images, I’m a pretty big fan of those. Let’s think what else…

Steve: I guess when you find something that isn’t covering that well, like what are your first steps?

Greg: I’d probably look — my first steps would be to look at the competition and just try like think from a neutral buyer, why aren’t they buying my product as opposed to the competition? Does it seem like a price sensitive crowd? Do my competitors just have much better reviews? Do they have much better listings as far as images and that kind of stuff goes?

So probably step one is just to look at the competition and just — it’s always like so hard to know for sure. But I feel like I’m pretty good at guessing like, okay if I search right now standing desk light or whatever, it’s like, okay understand why these top few are the best sellers, it’s like they have the best price, get great reviews, is the nice listing. Yeah the majority — and then of course one part of it might just be like poor ranking for your main keywords. And if that’s the case, then you have other problems besides listing optimizations.

Steve: So how do you boost the rankings for your main keywords? Do you do anything special?

Greg: Increased sales velocity. And so we might give away more coupons, we might get more aggressive like on our PPC bids even if we’re losing money on the ACOS.

Steve: Okay, so you do it kind of — you don’t get any tricks or grey hat tactics too?

Greg: No, I’ve kind of like experimented with some of that stuff, it’s like kind of fun to do. But I don’t — I think it’s like a waste, mostly that’s a waste of time versus like little like you have to join this webinar to know this special hack. I joined it, it’s like I tried this crap doesn’t work.

Steve: What about promotions, do you do like buy one get one free or quantity discounts on some of your listings to help them move, or do you just typically issue coupons Jump Send?

Greg: So for my initial promotion it’s just Jump Send, but if you went on a bunch of my listings right now, you would see that like if you buy two, you get a 10% discount, or like little things like that, or buy these two together if I do have two like products that go together nicely, and get 10% discount. So I do, do some stuff like that to try to increase sales velocity.

Steve: I’m just curious like as you are split testing your listings, which aspects of a listing actually have the greatest effect on conversions?

Greg: Price and — the two things that will make the biggest difference on split testing your listing is the price and the main image. Bullet points and description are pretty much a waste of time as far as I’m concerned. The title can help a little bit, but it’s mostly your main image to get people onto your listings, that’s like some more increased sessions. Most sellers on Amazon depending on what niche you’re selling in are fairly price sensitive, so price helps a lot.

And then after that if you’re like your sessions are good, your price is really competitive, but it’s still converting poorly, that’s when I’d usually try to make the rest of my images better with those things I was talking about like competitive matrix, really nice lifestyle images. Also like most of our images now will call out the features that are like our unique selling proposition on the actual images.

So you know like if it’s a little bit bigger or taller or it has this improvement that the other listing doesn’t, we’ll have like a little — the text on the image that kind of points to that and like really calls that stuff out. That type of stuff seems to work well. I don’t think many people actually read like description. So whatever you want the customer to know, put that on your images.

Steve: So given that you just said that, would you say that enhanced brand content is like last priority then?

Greg: I don’t — it’s so hard to know, right? Like we did some testing with some of these enhanced brand content, and it seemed like some listing — I see different numbers floating around there. But like in our actual experience, it seems like some listings it does help conversion rate a little bit than others. It didn’t seem to matter. I doubt that it ever hurt though. And our thing is like we usually have quite a few images from the photographer, like from our initial photos.

So it’s like at that point it’s fairly easy to put some extras in enhanced brand content. I also always I’m worried that Amazon is going to start charging for enhanced brand content, and I feel like if you already have it, then it’ll probably be grandfathered in. So we pretty much always immediately like go ahead and at least like throw up a few images for the enhanced brand content.

Steve: Okay, yeah I guess that make — I mean if you have the resources and the wherewithal to do it, you can just do it right away, right?

Greg: Yeah in my opinion.

Steve: Okay, let’s switch gears a little bit. Let’s talk – we kind of strayed from this whole nomad thing.

Greg: Sure.

Steve: But what people don’t realize is that you’re running these physical products and you’re running this pretty big software company as well. And so, how do you kind of split your time between the two, and how do you manage a team while you’re just all over the place?

Greg: Yeah, good question. So I spend the vast majority of my time on the software business. So I would I spend a maximum of three or four hours a week on my physical products company. I have a really good manager over there. I really like empowered him to like take action and use his best judgment, and he’s done a really good job with that. So not that I don’t have good managers on the software stuff too, but I guess the software stuff just like excites me a little bit more. It’s a little bit more fun for me, probably just maybe because I have been doing this long, or I don’t know.

So yeah the software side of things, it’s grown to I think probably like 35 people on the team now or so. Since the inception, it’s been a remote company. So like kind of all of our communication and project management and all this kind of stuff has been built from the ground up to be a remote company. I feel like that’s like kind of one of our keys to success.

And even — it even goes as far as like our hiring and our recruitment, we look for like specific traits in people that we think will like thrive in a remote environment, whereas other people are only better like in going to work and kind of like held accountable in that kind of. So all the project management is in the cloud, we use all like the Google tools as far as like sheets and whatever.

Steve: So there is no physical office, right? Like even for people who are all just happen to be in the same area, you don’t have an office rented for them that they go in, right? Everyone works from home?

Greg: So we actually just like three months ago rented an office in Vancouver because we had like ten people that live in Vancouver. So we ended up getting a little office there. But other than that everyone, just about everyone works from co-working spaces though, which I’m a huge fan of as opposed to working from home. So we reimburse everyone for their co-working spaces, and not many people work from home, almost everyone works from co-working spaces.

Steve: Can you kind of comment since you do both software and physical products, like if you were to start all over again and you just wanted to just make some money to maybe quit your job or whatever, which route would you take? What are like kind of like the pros and cons of each?

Greg: Yeah that’s a good question. So if I was trying to make kind of let’s say like replace my real job income, let’s say like 5K a month, maybe 8K a month or something like that, I would probably actually go with the physical products business. And I would start — of course I’m a fun of selling on Amazon. So I would kind of start there. I’ve been very fortunate with the software stuff; I’ve had really good timing. I had a product that had good product market fit, and I kind of took a lot of that for granted in the earlier days until I got more involved with other kind of people who were just like in the software type communities.

And I mean there’s a reason that like in VC funding, and rarely see around stuff are so prevalent in like the software space, because it’s very rare for like a company like Jungle Scout to start off like bootstrapped without much self funding and be able to make it. That’s a pretty rare story kind of like in the space, especially if you don’t have a programming background, just because hiring developers is so costly.

So if you were a developer, then maybe I’d say you could think about bootstrapping a product, and you could definitely — it’s definitely achievable to get to the 5K or 10K a month mark. But if you’re not a – especially if you’re not a developer, I’d definitely go with the physical products throughout.

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It just seems like for most people who aren’t developers they think that physical products might have like much higher initial outlay than like a software. I’m sorry if you are a developer, it seems like there’s a lot more money involved in starting a physical products business as opposed to a software business, but it seems like it’s the opposite?

Greg: Yeah, I would almost argue the opposite. But most of your big cost in the early days for a software company is going to be your development costs. So if you’re a programmer or you’re doing it yourself, then you’d have that argument.

Steve: Okay and then so for like a physical products business, like realistically how much can you start with, in your opinion, like how much you need?

Greg: If you’re trying to do the private label thing, it’s pretty tough to do with less than like two or $3,000 getting started. If you have $5,000, it’s fairly easy. If you have like 10K or more, than I’d say like you can get started and grow a decent size company like relatively quickly. So I’d say those to be like some rough guidelines, but of course there’s lots of outliers out there. People are puzzled with their first hundred bucks and now are doing really well and stuff like that.

Steve: What are your views on like the drop shipping models that you’re seeing? Every time I go to my Facebook feed, I see all these different business models, and I’m just kind of curious what your take is on all the different ones out there.

Greg: Good question, because I see these things all the time too, and I’m intrigued by it because it seems so like popular right now. Even like when I do like a Facebook live, it never fails that anyone says like, what you think about drop shipping. And I may not be like very educated about how people are doing it nowadays. I always think that more like I’ll call it traditional drop shipping of maybe like ten years ago where you have — you establish relationships with social wholesalers that are willing to drop ship these items for you.

You’re just in charge of selling the product at your e-commerce site. I haven’t really heard of many people that are like very successful with that particular model today. But I think — I mean do you know much about like what else people are doing today. It’s almost what you’re saying now, there’s like what I’m going to call like less legitimate businesses, like you sell a product on eBay, and people would do it off Amazon Prime, and send it to that person, right? But that’s not like a legitimate like long term business, that’s like just like a little hack until your prime account gets shut down.

Steve: Yeah, I was just curious; I mean I answer these questions every day actually.

Greg: Are there people like doing like a good job with the like what’s called modern or new drop shipping models?

Steve: Well, it’s always an uphill battle, right? You might have something that works, but then like a couple of months later it goes away. So it’s not really like a sustainable type of business in my opinion. I was just curious what your take was since you’re kind of more in tune with the people that are doing these various things on Amazon.

Okay let’s go back to the nomad thing. And so how soon can you actually become a nomad? Do you think like when someone is starting out, like what do you recommend people starting out, like if they want your lifestyle Greg with Amazon? Obviously you don’t recommend that they ship everything straight there on their first try, do you? Or like what’s like the kind of gradual steps to build up to your lifestyle?

Greg: Yeah, good question. Let me start by telling you and I keep saying [inaudible 00:45:03]. All right so first real quick as far as like the Nomad type lifestyle goes, like Southeast Asia is like super high like very nomadic type people, like in Shanghai or different cities in Bali and like that area. It’s like a really high quality of life for very inexpensive. It’s like if you’re living in like a US city right now especially on the west coast, you’ll be amazed like that year, your cost of life has decreased by 80% if you move to like one of those countries.

So you can get started at it without much money. You just need to be mindful or kind of like I guess how much runway is in your bank account, about how quick you need to be making money. I took a little bit more like conservative approach, where I guess I like replaced my income. And then before I quit my job, before I sold my stuff, before I started becoming a nomad, but like looking back I actually wish I would have done it earlier just because like what I know now, it’s like I wish I was just focused on this way earlier. I guess I was just like scared of it at the time.

But I think your question was what are the steps to move up to that? I think it would scare most people to just order a thousand units from China and have it shipped straight to China. So it’s like you’ll probably want to ship it to your house so you can like look and feel and hold these products that you just spent like your hard earned money on before you ship it into Amazon. That’s fine until you understand that.

Steve: For 1,000 units, do you recommend getting an inspection?

Greg: It will depend on the cost of the whole order to me. If it’s under like 2,000 bucks, then I probably, I wouldn’t do an inspection. You could — actually for my first like two years, I never did a single inspection.

Steve: Yeah, same here man, same here.

Greg: And I don’t have very many horror stories, like fingers crossed. So it’s definitely not required, but one thing I always did do is I made my sales rep take a whole bunch of pictures and videos just with their cell phone for me. And I actually had this written into the contract. So I’d be like, you have to take a picture on the assembly line, you have to take a picture of one of the first like the first carton being loaded up, and you have to take a picture before you close the doors of like the container and stuff like that.

So that’s kind of like a poor man’s inspection, right? Of course it’s going to be a little bit biased because the sales rep like choose which pictures to take, but it does help you spot like some issues. Like wait a second, this is mostly white; you just paint it red, like that would jump out in like this type of a poor man’s inspection.

Steve: Yeah that makes sense. We kind of did that too, but the problem is our stuff was fabric, and there was always fabric qualities that we had problems with, like not necessarily the design. Okay, that’s a good tip actually, so poor man’s inspection, first couple of units, ship it to your house, and then manually ship it over to Amazon for your first couple of units. Do you recommend like if you have a tight budget, how would your launch change, launch strategy change? Would you still kind of do the giveaways and then the heavy on PPC and lose money, do you feel like that’s a requirement?

Greg: Not necessarily, but if my goal — if you’re listening to this right now, it’s like, all right Greg, like I have a job, I want to quit my job and start traveling like what you’re doing. I would actually probably go into like a lesser competitive niche and just understanding that like I’m probably going to sell like a 100 units a month. But it’s like, all right, well a 100 units a month, if you’re making five bucks profit on each one, $500 profit a month, like you’re well on your way to — that’s like a great start to like getting to your goal.

The nice thing about those lesser competitive niches it’s like once you have like five reviews, and you did like you gave away like 20 units or whatever, don’t spend too much on PPC, then it’s a much more cost effective way to get started, because if you’re brand new, you only have a few thousand dollars to spend, it’s probably a little bit gut wrenching to like lose a thousand bucks the first month in PPC overspend, right?

Steve: Yeah totally. So in terms of like a less competitive niche, are you talking like a couple of hundred – like it sells maybe like a 1,000 units across the whole niche per month?

Greg: Yeah probably like 1,000 units and then like in that top ten. Like one dude has 100 reviews, the rest have like 20, 30, 40, and there’s a few guys in there with a handful of reviews that are still doing well.

Steve: Okay, so basically you’re advising them to just kind of get their feet wet, and just make a couple sales, get used to the process, and then gradually build up from there.

Greg: I think so. I think you are willing to learn. You learn so much more from that than like any course or any You Tube video or anything else. So I think it’s a great way to start.

Steve: Cool man. Hey Greg, I didn’t realize this, but we’ve actually been chatting for quite a while. And we jumped all over the place, I apologize for that. We were supposed to focus on your nomadic lifestyle.

Greg: I don’t know who will need this episode.

Steve: I don’t know either man. The thing is you made it sound so easy, like I was expecting all these like stories of like trouble and hardship as you’re doing this.

Greg: I can tell some of those as soon as you want. It’s not all just rose and butterflies.

Steve: But I mean you’re always like so easy going. I don’t think I’ve ever seen you pissed off or stressed at all. Like you were speaking doing hand stands at my conference.

Greg: Life is so sure enough to do and have some fun.

Steve: But yeah, I think like everything that we talked about today should in fact help someone who’s thinking about getting into this Amazon situation, and maybe eventually adopting this nomad lifestyle. So thanks for coming on man, always appreciate you hamming on, and I will see you next year in May.

Greg: It sounds fantastic. Thanks and take good care.

Steve: Yeah dude. Bye man thanks.

Hope you enjoyed that episode. To be honest with you, I really don’t know how Greg does it. I mean the guy works hard, but it seems like he’s also perpetually on vacation at the same time. But his lifestyle does prove that you can run an e-commerce business from anywhere without having to deal with inventory. For more information about this episode, go to mywifequitherjob.com/episode188.

And once again I want to thank Klaviyo.com for sponsoring this episode. Klaviyo is my email marketing platform of choice for ecommerce 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 auto pilot. 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 also want to thank Privy.com 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. 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 ecommerce 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 are 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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187: How To Navigate The Canton Fair And A Recap Of My China Sourcing Trip

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A Guide To The Canton Fair And A Recap Of My China Sourcing Trip

Today’s episode is a little different in that I’m not interviewing anyone. Instead, I brought my partner Toni Anderson on the show and we’re going to talk about our recent trip to the Canton Fair in Guangzhou China.

This was my 3rd trip to Canton and my 5th trip to China but it was Toni’s first time. So I thought that it would be interesting to talk about our experiences from the perspective of someone who’s a bit jaded about going to China and from someone who went for the very first time. Enjoy the episode!

What You’ll Learn

  • How to attend the Canton Fair
  • What’s the cheapest way to get to Guangzhou
  • What hotels to stay at
  • How to prepare for the fair
  • A strategy for covering as much ground as possible
  • Getting in and around the city of Guangzhou
  • Tips on communicating with vendors

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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 what strategies are working and what strategies are not with their businesses. Now as many of you know, I recently took a trip to China to visit my vendors and to attend the Canton Fair. And in today’s episode, I brought my partner Toni Anderson on the show to give a recap of our trip.

Before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. I’m always excited to talk about Klaviyo because they are the email marketing platform that I use for my store, and I depend on them for over 20% 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 tracks every single customer who shops in your store and exactly what they bought, and you can do a lot of things with that. So let’s say I want to send 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 single email sent.

Now Klaviyo is the most powerful email platform that I’ve ever used 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 I also want to give a shout out to Privy who is also a sponsor of the show. Privy is the tool I use to build my email list for both my blog and my online store. Now what does Privy do? 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 spin the wheel to win valuable prizes in our shop. And customers love the gamification aspect of this, and when I implemented this form, email sign ups increased by 131%.

Now there are other cool things that you can do too. So for example let’s say you offer free shipping for orders over 100 bucks. Well you can tell Privy to flush a pop up when the customer has $90 in their shopping cart to urge them to insert one more item. 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 the more advanced features, use coupon code MWQHJ For 15% off once. Once again that’s P-R-I-V-Y.com/Steve, 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’s episode is going to be a little different in that I’m not really interviewing anyone today. Instead I have my partner Toni Anderson on the show, and today we’re going to talk about our recent trip to the Canton Fair in Guangzhou China. Anyway, this is my third trip to Canton and my fifth time in China, but it was actually Toni’s first time. And what’s bad is that her stomach doesn’t really agree with Chinese food, so she really was a trooper in going.

Anyway, I thought it would be interesting to talk about our experiences from the perspective of someone who’s a bit jaded about going to China, that would be me, and from someone who has gone for the very first time. And with that, welcome Toni, how are you doing today?

Toni: I’m great, how are you?

Steve: I’m good, are you over your jetlag yet?

Toni: Not really.

Steve: I mean personally I’ve been going to bed at like 9am and waking up at like four or five. It’s been pretty bad.

Toni: 9pm right?

Steve: 9pm, oh sorry yeah, 9pm.

Toni: That’s theory people.

Steve: Yeah.

Toni: So what’s interesting, you and I are both friends of Andrew from Money Crashers, and he was in China when we were. And he messaged me when I got back and said, hey, how’s your jetlag? And I said, awful, and he said, yeah it takes a week to get fully acclimated back into your time zone. And I heard that from two or three other people that had traveled to Asia from the East Coast to the US.

And I think it’s funny because no one told me that before I left. So the first week that I got back, I spent the whole week trying to get back on schedule, and it was nearly impossible.

Steve: Yeah, I think we were chatting before this; you’re still waking up at like 2am, right?

Toni: Yeah, which is the time we were waking up in China which is kind of funny.

Steve: Yeah. I don’t actually remember taking this long to recover like the last time I went. I think it’s just a matter of age at this point, but anyways.

Toni: So then it could take me another four weeks to try to stay awake.

Steve: So I’m just going to start off by just talking about the logistics of our trip here. So this year we kind of booked our flights a little bit late. Flights to Guangzhou, they tend to be really expensive during the fair. So instead of flying directly into Guangzhou, we actually decided to fly into Hong Kong, and then we took a two hour train ride from Hong Kong station directly into Guangzhou. I think the price for a flight directly into Guangzhou was like $1400, whereas a flight to Hong Kong was only $800, and then the train ride is only 30 bucks. But the plane ride is actually pretty long. Toni, would you say this is your like longest plane ride ever?

Toni: Yeah, ever.

Steve: Okay, and then we sat next to each other for the entire 14 hours, and surprisingly we’re still friendly.

Steve: Yeah that’s right.

Steve: Yeah, but yeah…

Toni: Can I just say because I know there was a huge savings for us flying into Hong Kong, and I thought the train ride and that whole process was pretty easy. And I think as someone who hasn’t gone before and it’s not — I mean I couldn’t even tell you where we were on a map before I went. The whole process I think even if it’s your first time, it would not be difficult to fly into Hong Kong and then take the train over to Guangzhou. To me it was worth the savings, because the train ride was actually pretty pleasant too.

Steve: Yeah, I mean we had seats that were pretty comfortable and we both took naps I think during that trip.

Toni: Yeah.

Steve: I mean would it have mattered to you whether we flew in directly to Guangzhou or not or did you enjoy Hong Kong?

Toni: I did, I thought Hong Kong was really great. I’m glad I got to see it, definitely completely different from Guangzhou, right? I mean two totally different places, but I personally think that — because I’m assuming if you fly to Guangzhou, you’ve got to connect somewhere right, or is there a direct flight? Maybe not from San Francisco.

Steve: Well, there’s a direct flight into Guangzhou I think, maybe just really expensive.

Toni: Yeah, I mean to me it was worth the savings to do it the way that we did it, because it wasn’t difficult at all.

Steve: Okay, and our vendors — so the reason why we had to go to Hong Kong anyways is because two or vendors are actually in Hong Kong, they live in Hong Kong. And so on the way back from China, we actually visited with both of them, or Toni kind of did her own thing for a little bit. And then we did have a free day in Hong Kong where we kind of did some sightseeing which is really nice. I like Hong Kong infinitely better than China.

Toni: And I think too I know there was a big — Global Sources was going on in Hong Kong right before we got there?

Steve: That’s correct yes.

Toni: So if you’re timing it correctly, you could even fly into Hong Kong and do Global Sources and then go to the Canton Fair as well if you want to try to wrap in that into your trip. We didn’t do that, but it’s possible.

Steve: Yeah that’s what most people do actually. They try to hit both fairs, and they’re always scheduled conveniently so that you can attend both. The reason why we couldn’t attend Global Sources is because we were at Fincon. Otherwise we probably – it would probably have been worth it to go to that as well, right?

Toni: It sounded like from the people like Mike Jackness and Natalie who went to both, it sounded like it was a good experience?

Steve: Yeah absolutely, and then there’s also the Hong Kong Mega Show also all around the same time. And so if you were to do it all over again, like we probably hit all three. It just so happens that we had other commitments and so we couldn’t go to them.

Toni: Yeah.

Steve: So because we had Toni with us who has an — I don’t want to say an aversion to Chinese food, I would say you’re almost allergic to some sort of chemical, right?

Toni: Yeah.

Steve: Like upset your stomach. So we tried to stay near shopping malls, really nice shopping malls in Guangzhou. In general, like I’ve gone to the fair several times, I think the food sucks by the fair site, and a lot of people stay at the hotel that’s directly connected to the Canton Fair because it’s convenient. You just wake up and you walk over. But to me it almost feels like a prison to stay there because the food is so bad, so basically you go to the fair and you’re going back, whereas kind of where we stayed which was near this mall called the Taikoo Hui and the Grandview Mall.

There’s a whole bunch of different food choices and you get a chance to walk around the city and kind of experience the city life. So we stayed last — the last time we stayed at the Good International Hotel. This time we stayed at the Aloft. Toni what was your opinion of the accommodations and the food?

Toni: I thought it was great, and here’s something to think about, because I feel like unless you’ve gone to the fair, it’s very difficult to comprehend the size of the fair. So even if you stayed — I think it was a Westin that’s attached to the fair…

Steve: That’s correct, yes.

Toni: Even if you stayed the Westin, I would estimate you’re looking at 15 to 20 minute walk from the hotel to get to certain sections of the fair. So even though it’s connected, to me I know that our Hotel the Aloft, and it looked like several other hotels all had shuttles that ran from the hotel to the fair complex every what, half hour?

Steve: Yeah pretty much.

Toni: So even if you choose which I agree with you, I thought that Aloft — if you’ve ever stayed in like a W or an Aloft in the states is very, very — like you wouldn’t have been able to tell the difference in the rooms, except for the gas masks, that kind of gave it away.

Steve: Yeah.

Toni: But very similar.

Steve: But the air is so good there, I don’t know what you’re talking about.

Toni: Yeah, I don’t know why you would ever need a mask. But yeah I felt like convenience wise, it wasn’t hard. We got on the bus, I think what, two to three days, and there was no line, we just walked on. So to me I agree with you, like I like that we were close to that mall, because not only did it have a pretty decent food court with like 15 options in the food area.

They also had several sit down nicer restaurants with a variety of types of food. So they had I think a Japanese place, an Italian place, so it seemed like they had a lot of variety in what you could eat, and it felt very safe I feel like in that mall area. I never at any point felt like I needed to be any more cautious than you would in any city.

Steve: I mean that mall is actually really high end mall. Like every fancy store that you can think of, like Ferragamo, Carty, and Gucci was there, so it was clearly targeting high end customers. So it felt very safe and they are really nice restaurants. You didn’t really get sick either, right?

Toni: I got sick the day we ate at the fair.

Steve: Oh yes. So about that, about the food at the fair, it’s terrible, and it’s crowded too. Like there’s these food courts with fast Chinese food, and I think they had like a Papa John’s which we never ended up finding actually.

Toni: No, we searched but the other thing too is that the food area is in the basement, so it’s not only crowded, it’s dark and slightly creepy to even get there. But one thing that we did, actually this was your wife Jen’s idea is we brought some snacks with us that we picked up at the grocery store that happened to be in that mall. And so one of the days, didn’t we just eat bread and like a pizza or something?

Steve: We did, we just had snacks the entire time, and then — but we were starving by the time it was dinnertime I remember.

Toni: Yeah.

Steve: I know you wanted to try the chicken feet; we didn’t get a chance to try it.

Toni: Very sad.

Steve: Yeah. Actually at that mall, it has my favorite restaurant which is Din Tai Fung also. And so we did a meeting up with like Mike Jackness and his team, and we had dinner there one night which is kind of cool as well.

Toni: Yeah, that was a great restaurant, I highly recommended it, and it didn’t make me sick.

Steve: And what’s funny is I think I had more Italian food in China than I do in the States, because I absolutely did not want you to get sick no matter what, which is kind of funny.

Toni: Yeah, I was thinking that too, because we ate a lot of Italian here, and I haven’t had any since I’ve been back.

Steve: Yeah, we had Italian; we had steak, like normally we just go all Chinese, right? So that was different for us.

Toni: Well, I think at the fair like my big recommendation would be to not eat there. You can buy like bottles of water and sodas, and I think they have tea and stuff like that. That I think it’s perfectly fine, but I would just pack what you do have, like protein bars or anything. I mean you can you can take a backpack into the fair, so it’s not like they have some places where they don’t allow you to take bags in. I mean you can, people are rolling around suitcases.

So you could easily take enough food to hold you off for the day. And that would be my recommendation because I know we didn’t love the food there. It made me sick, and then a couple of people we talked to also said that what they had had was awful as well.

Steve: Yeah, just a word of warning, the sandwich with ham and cheese is what did it in for Toni. Does was it for the day for you I think after we ate there. So did you have any problems getting the credentials to go to the Canton Fair? We had done it like five or six years ago, but did you have any problems getting your badge or anything like that?

Toni: So I will say that the website — there was one main website that you have to use, and I’m sure you can put that in the show notes for people. But it is very difficult to navigate, and they don’t label things as we would expect them to be labeled I guess in the States. So you have to go through like a three or four step process to get your badge. So first you have to apply, and then there’s like a pre application, and then they get you the letter of invitation, and then at some point after that you get a badge, or you get the piece of paper that allows you to go get your badge once you get there.

So aside from it being a little bit cumbersome to navigate the website because it’s definitely not what we’re used to in the States or probably in sort of the Western European area, it wasn’t difficult. And I don’t ever hear of anybody not getting a badge. I mean it’s just more of you have to walk through the process.

Steve: I think the problem — I remember you had some problems early on and we kind of went back and forth a little bit. I remember you going on the website and you had to sign up for an invitation, and then you use that invitation to get a visa, right?

Toni: Yeah, you have to have the invitation. That’s why I think they make you do it first, so you do the invitation first. The invitation is what you use to get your visa, but then you also need the invitation to get the badge. And the invitation basically, you just have to — I don’t even think you have to be a store owner. I think you just have to say that you’re coming, right? I don’t…

Steve: Yeah basically yeah. I don’t think you need anything. Did you have any problems getting your visa, because we have the service that we use her, but did you use a service as well, or did you go to the embassy?

Toni: No, because there’s only five places where you can get a visa for China, and the closest one to me is Austin [inaudible 00:14:34]. So I used a service, I think — I don’t know how much a visa costs normally, but it seemed pretty reasonable the total price that I paid was about what you pay for a passport.

Steve: Okay, yeah that’s not bad.

Toni: And I think I got it, and I didn’t pay for expedited service because I still had several weeks before going. But I want to say I got it in a week.

Steve: Okay, yeah that’s about how long it took us actually.

Toni: I hesitate to say that for all the procrastinators that…

Steve: Yeah right.

Toni: I did mine I think six weeks now, and I was a little nervous because with a passport it can take, if you don’t expedite it, it can take that long to get a passport back. But I would – it’s definitely quicker than getting a passport, but I would err on the side of giving yourself more time.

Steve: Okay and then did you get a ten year also?

Toni: I did get ten year yeah.

Steve: So we can go every year for the next ten years?

Toni: We can.

Steve: So one thing that we — that my wife and I we forgot to bring this time are business cards, and did you have business cards prepped also or?

Toni: No, since you forgot I forgot.

Steve: Okay yes my fault, my fault. Like usually we have like a stack that we take with us, but to make your experience more pleasant, you can take your business cards along with you because they’re going to ask for your contact information obviously. So what we ended up doing is we just ended up writing our address and our email address for all the vendors in their little books. But overall, it wasn’t like a huge step back.

Toni: No and everyone — I was worried when you said you didn’t have them, but it seemed like you should have had them. Then I thought, oh crap, I should have had them too. And I was worried that it would be this huge hurdle to maybe getting people who didn’t want to talk to me at the booth, I wasn’t sure if the business card was more than just my information. I thought it might have been like people talking more seriously, but that’s actually not the case. I mean every person that I talked to, I just wrote my name in their book, and they didn’t care.

Steve: Right. Well, let’s talk about fair strategy here. So what I always tell my students is that you should go to the fair with an idea of what you’re looking for because otherwise it’s too big. What was your first impression of the size of the fair? Have you ever seen anything that big before?

Toni: No, and nothing if you haven’t been nothing will prepare you for how big it.

Steve: I was estimating like fifty football fields with the stuff. I don’t know, what would be your estimate?

Toni: I know it’s so hard. I kept trying to tell my kids, it’s so hard to — I mean it’s not just long, it was stories upon stories, right? So it wasn’t just football fields and football fields, like I remember for you to get to where you were based on where I was supposed to be at the fair, you had to take a tram, or a little golf cart shuttle thing?

Steve: We did yes.

Toni: And it still took you what, 15 to 20 minutes to get from the building I was in, to the building you needed to be in.

Toni: Yeah, like when we met up at the end of the day, it was like we always gave ourselves like 20, 25 minutes to meet up with you, so we weren’t late.

Toni: Yeah, so it’s just, it’s a lot. The nice thing is it’s divided into sections, so it’s not like if you go to section B, it’s a hodgepodge of things. It’s like section B with textiles, and that’s all it was. So, if you’re doing textiles, then you could just stay in section B three days, and you wouldn’t have to navigate anywhere else. So I thought that was a good way to make it feel a little bit smaller, but it still was not small.

Steve: One thing I will say is that you were in a different section which was accessories, and we were obviously hanging out at textiles. What’s funny is that we actually found two vendors in the accessories department, because it turns out that some of the stuff that we sell was categorized under accessories and not textiles even though they are textiles.

Tina: Yeah.

Steve: And so without you being there and without meeting you in your area, we would have missed out on finding two key vendors. So that was pretty good.

Toni: Yeah, and I think the strategy that Jen had or you guys had was really good. So we got — I think what did we do? We woke up in Hong Kong, we took the train, and then we basically went to our hotel and then went straight to the fair, right? I’m trying to remember.

Steve: Yup.

Toni: So we had what, maybe four hours or five hours until the fair closed that first day, and the strategy that Jen had was basically, we walked pretty quickly through several sections of the fair. So we weren’t walking into every booth and touching and picking stuff up. And basically, any booth that had something that might interest us, we got a card, and we marked their booth number on the card. And so that allowed us to visit, I think we covered a ton of ground that first day.

Steve: We did yes.

Toni: I mean I had a stack, I probably had 15 to 20 business cards at the end of the first day, and so then when we went back the second day, it was really easy just to go back to those specific vendors, and have conversations with them about specific products, orders, things like that. So I think that was a really good way to do it instead of just going the very first day and getting into a booth, having a long conversation and realize you’ve wasted your time, or who knows.

Steve: Yeah, and then all the booths are kind of arranged in a grid like format. So it’s relatively easy to find the booth once you jotted down the court nets [ph] of the booth. One reason why I like the doing a quick pass in the beginning is because if you go in and you find a vendor and you go and you talk, you don’t really get a good breath in the beginning. And oftentimes like some of the business cards that you collect that first day during the quick pass, you might not want to go back to the following day, because you might have found another vendor who had a wider variety or better quality items.

So if you were to go and spend all your time with this one vendor, and then later on you wouldn’t have enough time to cover the entire thing, you might have missed out on a possible better vendor.

Toni: Right, so I definitely — if you have the time to stay long, a couple of days and do that, that would be my recommendation on how to sort of navigate the fair. The other thing that I wish, and I know Jen said you guys have done that before, but I wish that we would have done this time was taking a notebook and stapling their business card into our notebook with notes, because I ended up writing a lot of notes on the business cards, and obviously there’s not a ton of space to write on a business card that already has their stuff printed on it. But that’s one thing I wish I would have known ahead of time, and I think it’s probably in that post that you have on the Canton Fair.

Steve: What’s funny is I like totally did not listen to anything I’ve written about in the past for this trip. I don’t know what the heck came over us, maybe we were just less prepared this time, or maybe it’s just that I’m jaded from going. Like we saw a bunch of our old friends, and what’s funny about like some of the vendor names is they all have Chinese names, but they pick English names.

So one of the dudes that we were talking to, his name is like Dweng [ph]. I don’t know any Asian Dwengs, but that was the name I guess that phonetically best match their name. One thing I want to ask you Toni is, what was it like for you not being able to speak Chinese?

Toni: So I know that we had talked before the fair about possibly hiring a translator to go with me to the fair, but and I don’t know if it was just specific to accessories because that’s where I spent the majority of my time, although I did spend some time in like the office supply and outdoor section as well. And I didn’t come across any booth where there wasn’t someone there that spoke English.

So I didn’t have a problem at all communicating with any of the possible vendors. In fact I was actually impressed at how well some of them knew English. We were talking about real specific things, right? You’re talking about pieces of jewelry or pieces of equipment that is not necessarily an easily translated word. And there was only one time in a booth where I couldn’t tell them, like they didn’t understand what I was telling them, what I needed, and it was something very, very specific.

So outside of that, I mean I don’t know how we talked over the week, but yeah I didn’t have a problem at all.

Steve: Okay, and did you have to dumb down your English at all, or were you just kind of speaking normal?

Toni: No, I was pretty much speaking normal. I mean it’s different in that there was not a lot of pleasantries, because you basically are asking them for pricing, you’re asking them for MOQs, you’re asking them who else do you supply for? So there was no like, hey, how are you doing, blah, blah, blah? You kind of cut through all that which was nice because it saves you a lot of time without all the chit chat.

But yeah, I think they’re probably used to these questions you’re asking anyway. And one of the main questions I had was how can I modify this? Like I’m interested in this, but I’m not interested in it as you’re showing it to me at your booth. So that didn’t seem to be an issue either.

Steve: And oftentimes they just gave you a quote right off the bat for those modifications as well, right?

Toni: Yeah, and that was really nice because I know if you’re using something like Alibaba to find products, and this is I told a couple of friends of mine that are more in the beginning stages of the e-commerce business, if you can swing a trip and try to find new vendors, I think it was a really easy way to get a lot of stuff done quickly. I know it’s expensive to go over there, but if you think about how much time you probably spend going back and forth on Alibaba with people, getting information, having samples, all that stuff, like to me this seemed just so much simpler.

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And Toni, I don’t know about you, but I always try to do a little bit of small talk in Chinese, but for some reason all the vendors always reply to me in English when I talk to them in Chinese. And so I take that as an indication that my Chinese isn’t good enough. What did you think about pricing and MOQs compared to like your experiences on Alibaba?

Toni: So they feel surprisingly low, and I know you had the same experience as well with some of the people you talk to, but the quantities were very low to me. And the pricing seemed a little bit lower than what — I mean I wasn’t comparing apples to apples, but I know what a lot of these things cost. So they seemed a little bit lower, but the biggest change to me was MOQs.

Steve: Yeah, just give us an example of what you’re getting, because I know that when we went around, like one vendor quoted us that we had to buy a thousand dozen, but then another vendor who sold something very, very similar, we only had to buy a couple of hundred pieces. So it’s like a huge range this time, which was a little bit unusual for us.

Toni: Yeah and I was getting anywhere from one 120 pieces which seems absurd to 300 which we do have vendors where it’s a 1,000 plus.

Steve: And I’m just curious, pricing wise for the vendors that you had to buy 1,000 plus, was the pricing lower at the fair for the smaller quantities or on par?

Toni: The pricing was lower across the board, but it wasn’t like half, it was probably 20% lower.

Steve: Okay. The reason why I’m asking this question is I know there’s a lot of middlemen on Ali Baba, and I was just curious whether you’ve been dealing with middlemen do you think versus like the manufacturers that are actually at the fair?

Toni: Right, so I know that one of our suppliers is a manufacturer, but I know another one is a middleman. So the pricing at the fair was definitely more competitive.

Steve: Okay, and would you say that — I mean this is your first time there, like you knew going in what you wanted to look for and what you wanted to source, but would you advise that people go there just like a shopping trip like if you have no idea?

Toni: I would say don’t go if you have absolutely no idea. I mean you can go, but you will be overwhelmed very quickly. I actually and I told you this, I walked the sports and outdoor for a colleague of mine that’s going into that business, a certain niche of that business, and I was overwhelmed after the first row of vendors, because I wasn’t sure what she was looking for or what she was interested in. And it’s just one, you get sort of the shiny object syndrome where you’re thinking, oh my gosh, I want to sell [inaudible 00:27:33], they look amazing.

And then you’re also thinking what is that, do I need it, and then like every other vendor selling very – one vendor selling similar things. So I know we walked through all these supplies and the same set of push pens were on every booth.

Steve: Yeah and I was just wondering how many of those that you talked to, because I know like we talked to different textile firms, and they all make similar things, but the pricing is like always across the board, like it’s different pricing because it’s different quality and that sort of thing. What was your experience in office supplies and accessories?

Toni: With the pricing?

Steve: Yeah, the pricing and quality, that sort of thing.

Toni: Pricing and quality definitely lined up, and since I spent the past two and a half years in the jewelry space, like I’m pretty good at detecting better leather from not as great leather, things like that. So there definitely — I can pick up something and realize like, hey, this is isn’t the quality that I’m looking for, but those things were definitely priced lower. And that just seemed to be across the board. Obviously suppliers that don’t have a lot of office supplies knowledge, it was just kind of fun to walk through it.

Steve: Yeah I know, obviously there’s some pretty cool office supplies.

Toni: Yeah, you get a little bit like every section you walk through and you think, oh that’s really cool, I want to — which is why I would hesitate to for someone to go with no idea at all. I would say if you know a general area that you want to sell in, so hey you want to sell women’s clothing, then you’d probably be okay. But if you just were like, I have no idea what I want to do — we actually, I think you and I met somebody at a conference that had been five times, you remember that lady that had been…

Steve: Yes I remember yes.

Toni: I can see why she does it, and when she told us that I was like, how could you have gone five times and not have a product? But after going, I could totally see why you could go five times and never a product. It’s so overwhelming.

Steve: I think between the three of us, we probably covered almost two thirds of the fair would you say?

Toni: Yeah, we didn’t go into pets, I don’t think we hit the pet area.

Steve: Or medical supplies either for obvious reasons.

Toni: That would’ve been scary.

Steve: Let’s talk a little bit about transportation.

Toni: What we did?

Steve: Yes, because we had a lot of adventures as I always do. So first of all like if you’re out there and you go to the fair, if you can’t speak a lick of Chinese, make sure you take the free hotel shuttles, or I would say take public transportation, like the subways are pretty convenient, or stay at a hotel that is within walking distance of the fair. Otherwise, you’ll need to use a taxi which sucks, because they’re all crooks. And I can say that I guess because I’m Chinese, but almost every single taxi driver we had in China tried to do something to us, would you say?

Toni: Yes, and I have to add this because this was something that I had this thought after we got back looking back on the whole experience, and I really appreciate being able to tag along with you guys, because I don’t think I could have just flown over there by myself. But I really felt like outside of the taxi experience, it’s something that you could do not knowing a lick of Chinese and not knowing — not having been there before. The only time where I felt like I could not navigate this alone was only when we were in a cab.

Steve: So a couple of words of advice even though this may not help you 100%, have the hotel print the name and the cross streets in Chinese for you. I actually had the card with me, and I showed it to every