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236: The Fastest Way To Make 5K/Month From Scratch With Greg Mercer, Mike Jackness And Scott Voelker

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The Fastest Way To Make 5K/Month From Scratch With Greg Mercer, Mike Jackness And Scott Voelker

Today I’ve got my buddies Greg Mercer, Scott Voelker and Mike Jackness back on the show. If you listened to last week’s episode, we were all together in San Diego to film the 5 Minute Pitch and while we were together, we recorded a couple of podcasts.

Anyway, today we’re going to collectively answer a question that I get asked all the time. If we were to start all over again, what would be our fastest way to make $5000/month. You’ll be surprised at some of the answers. Enjoy!

What You’ll Learn

  • How to make $5K/month with only $5k in starting capital
  • How I personally would make $5K with no money at all
  • How to build an audience
  • Is ecommerce the best way to go?

Other Resources And Books

Sponsors

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

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

Ahrefs.com – The best all in one SEO tool out there that I personally use to improve my search rankings for my blog and my online store. Click here to win a FREE 3 month membership.
ahrefs

GoBrandWin.com – The fastest and most effective way to grow your email list for free using group giveaways. Click here to signup for free.

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

Transcript

Coming Soon!

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235: How To Succeed In Ecommerce Today With Greg Mercer, Mike Jackness And Scott Voelker

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234:  What It Takes To Succeed In Ecommerce Today With Greg Mercer, Mike Jackness And Scott Voelker

I just got back from San Diego, California where I spent 3 straight, grueling days filming The 5 Minute Pitch, our new Shark Tank like show, with Mike Jackness, Greg Mercer, Scott Voelker and a variety of awesome guest judges to be announced later.

Anyway, the four of us recorded this podcast on the very last day of filming to reflect upon the 32 companies that just pitched to us. And we discuss what it takes to succeed in ecommerce today. Enjoy!

What You’ll Learn

  • What is takes to succeed in ecommerce today
  • Should you double down on what’s working or diversify?
  • Can you get by selling commodity products?
  • The most important factor for success

Other Resources And Books

Sponsors

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

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

Ahrefs.com – The best all in one SEO tool out there that I personally use to improve my search rankings for my blog and my online store. Click here to win a FREE 3 month membership.
ahrefs

GoBrandWin.com – The fastest and most effective way to grow your email list for free using group giveaways. Click here to signup for free.

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

Transcript

Episode5MPPt1Final2

Intro: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into the strategies they use to grow their businesses. So I just got back from San Diego, California, where I spent three straight grueling days filming the 5 Minute Pitch, our new Shark Tank like show with Mike Jackness, Greg Mercer, Scott Voelker and a variety of awesome guest judges to be announced later.

And over the course of these three days, we filmed over 24 hours of footage. And the first night we were actually in front of the camera from 8:30am to 11pm. Now life as a poor man’s Z list movie star is very difficult, and the four of us recorded this podcast on the very last day of filming, to kind of reflect upon the 32 contestants that just pitched to us. And we basically discuss what it takes to succeed in ecommerce today.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Super excited to talk about Klaviyo because they are my email marketing platform that I use for my ecommerce store and I depend on them for over 30% 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.

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 sent. Klaviyo is the most powerful email platform that I’ve ever used and you could try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to give a shout out to Privy who is also a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now, 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%.

I’m also using their new cart saver pop up feature to recover abandoned carts as well. 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.

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.

Scott: All right. Here we go fellows, sitting now here in San Diego out on a patio, might be a little helicopter noise but we’ll get through it. Get that mic a little closer to you, Mike.

Mike: Okay, here we go.

Scott: Mike, get it closer to your face. So we have Mr. Steve Chou, Chou. It’s sexy Chou but someone [overlapping 00:03:09] this is inside joke. We have Mr. Mercer here. Mr. Greg Mercer. We have Mr. Steve Jackness. I mean, Mike Jackness…

Mike: That’s another inside joke.

Scott: In the house and of course, myself.

Mike: We all did it though. That was what’s funny.

Scott: It is, it is. Well, we had each other on each other’s podcasts. And we talked about this 5 Minute Pitch thing.

Mike: Now it’s a wrap.

Scott: It’s a wrap. We’re sitting here having a couple of cocktails and getting ready for dinner actually, we’re actually waiting for dinner; we’re going to go get dinner. But we wrapped up, and we had three days together and…

Mike: It was a lot of fun.

Scott: A lot of fun. But man, I’ll tell you what, it was a lot of words, a lot of work.

Mike: But they always say when you’re having fun, you’re not working.

Scott: That is true. That is true. What I want to do here though, is while it’s fresh in all of our heads; we got to spend some time with some really awesome bootstrapped businesses. A lot of them are bootstrapped. Some of them were pre revenue; some of them were already making some really great money. What I want to do is kind of talk about like this space, it’s changed since three years ago, probably a year and a half ago. What do we like about what we’ve seen? What do we feel like is the essentials to being successful with a bootstrapped business? Like can it still be done?

Mike: 100% can still be done. We just saw twenty something of the 32 companies that are crushing it. So that obviously can still be done. A lot of them are still young. The thing I think that’s really key to your question is, I think the most important thing now is uniqueness and defensibility. It cannot be in any way shape, or form a “me too” product. You have to have something with some intellectual property, something that’s defensible, because you’re really creator, or it’s really hard to knock off. I think those are probably the keys in my mind.

Scott: I agree with that. And it was fun seeing all these different businesses, right? A lot of different types of businesses, we saw software businesses, we saw marketplaces, people who invented their own products with patents, and similar we liked some me to businesses, right. I would say that Amazon is still a great place to get started. I think we saw that with a lot of our contestants when they were trying to get started. They were trying to make those first few dollars, Amazon’s by I think everyone would agree that it’s a great, easy place to get started, then you can pivot into something else. What are your thoughts Steve?

Steve: I was surprised at how swayed I was at someone’s personality. Like, I went into some of these pitches thinking well, without giving away the product, it was a commodity product, really saturated, and I was ready to write it off right away. But this guy’s personality and the fact that he just put so much passion into his presentation really swayed me. And so it just reminded me of the importance of really putting yourself out there as like a personal brand in front of your products, which will make everything a lot more successful.

Scott: That was definitely a common theme, wasn’t it? All of the ones that were doing well are around the tips to companies that maybe weren’t doing as well or need to improve was, it helps to have a face to a brand is someone that can get out there and that can be relatable, and someone who you want to purchase from.

Steve: It even overcame the numbers in a lot of cases, right? Sometimes the numbers didn’t really add up but the guy’s personality just put it through or gals.

Scott: Yeah, we had an equal number of guys and gals. We did which was really exciting. And there were some very successful women actually. And there’s one and I’m not going to give it away. If you guys want to follow along, you better go over to 5MinutePitch.com and sign up over there. You can’t obviously enter the contest anymore. But you can sign up to get notifications when we air new episodes, it’s going to be a full season, it’s going to be amazing. It’s going to be exciting. And you’re going to learn a lot through this process too, because as you hear us kind of give advice or even just feedback, you can kind of learn. There’s one business in particular came in with an idea.

Now, he didn’t make it through, almost made it through, he made it through the first round. But he didn’t move on because we almost gave him the advice to pivot and switch gears a little bit, which he took. And he did do that. But I think it’s also being someone that doesn’t marry to an idea. Or if you’re that early, can you rebrand or can you switch and pivot and I think you can. But I really just think that if you have not even just the face, but if you have the presence in the market, if you have a me to product, I still think you can sell that product, if you are the one that people are going to want to buy from.

Mike: Yeah, I mean, at the end of the day, almost everything in some way shape or form is a “me too” product because like everything, almost everything has been invented. There’s still things that get invented but there’s very few people that really do that. It was definitely pervasive with the personalities. There was some awesome stories, there was one guy that was talking, again, I don’t want to give things away. But the story…

Scott: Go to 5 Minute Pitch to check out.

Mike: Go to 5 MinutePitch.com, sign up today to be notified. But this guy was talking about how he like went down to the pool [ph] and like put the inventory in the back of a U-Haul truck that he rented. And like you got to be willing to hustle and go all in, in your business. And it definitely that was a theme throughout the entire thing.

Greg: Another common thread that I really picked up on is people who create a brand or market their product that is very much like a powerful or even sometimes like one sided tight brands. I don’t know great words to describe this. But let me give an example. If you were selling soap, for example…

Steve: I was going to use the same example, go on.

Greg: And if you said that this soap is only for tough men or girly hands can’t take this soap or being very binary and like almost creating enemies in your branding but at the same time creating a like lawyer passionate following. So they feel like they fit inside of the area that you’re marketing to, I really like companies like that, especially in saturated or just very competitive niches.

Steve: One thing that really hit me, and I got affected a lot by the personality of the person presenting. One guy, he had a spotty internet connection and it was a wireless connection. So he actually went out in the middle, bought 150 feet of Cat 5 cable, wired his house for internet so that he can participate in the 5 Minute Pitch. And as soon as I heard that story, I was like, man, I love this guy. I know he’s going to succeed.

Scott: Yeah, again, we heard a lot of stories of people that could have just given up. There’s one in particular, made it on a very, very popular TV shopping show, I won’t mention the name, we won’t give it away, and had huge success, then had a huge like obstacle. And you could have given up on that, hasn’t given up and is going to be a pretty cool little story to follow here when they’re being sent through or not sent through, they are being censored, we’ll just say that right there.

Mike: There were several companies though that you could say that about. There was someone that got into a bad cash flow situation, there was someone that – I think it was actually same person who had cancer, which is an obstacle to overcome, there was just the people running out of inventory, and like the guy I was just talking about the guy going down to the pool and doing this. Entrepreneurs, like the successful entrepreneurs are going to face adverse, I felt I faced so much diversity that I could tell you.

We don’t have time to get into all that. There’s been some really crazy stories, but you have to be willing to deal with that. And my friend Grant, who I used to do the podcast with, would say that the reason I’m successful is because I learned how to fail forward. So when you fail, you take that as a way to go forward and learn from that and become a better entrepreneur. And I saw that theme here throughout almost all of the pitches, which was really neat.

Scott: Yeah, let me ask you guys this question. And maybe we can just hand the mic around here. Like, what do you think that something that stood out from just about everybody, what was one thing that stood out to you of why they’ve even gotten to where they are, and why they’re not even afraid to even share what they’re doing publicly, because they are going to be sharing it here on the show, right? So they feel so confident in what they’re doing, they’re willing to go out there and say, you know what, I’m going to do this, and I don’t care who knows.

Steve: I think it’s because a lot of the people who are successful were actually using the products that they were developing. They were experts in their field and they found deficiencies in the tools they were using, and decided to create a better product. And the fact that they’re actually using it, they have domain knowledge over the product they’re trying to sell.

Greg: Everyone that made it through the first round, I think it’s easy to say that they were all just like pure hustlers. They just made things happen or made it work. They hit all kinds of obstacles; they had to step outside their comfort zone. But it’s like everyone shared that same trait, that they were just like hustlers. And it didn’t matter what their background was, or their education, or if they hadn’t experienced it, or whatever else. They were just driven to make it happen.

Mike: I can speak to this for personal experience. And we have a podcast. I talk about pretty much everything we do completely openly. And the reason I can do that confidently is because I feel like what we do as a business adds tremendous value to the product and the community, and the people we serve. And if you’re just creating a me too product and trying to “hustle” like in the more bad sense of the word where you’re just trying to buy and resell something, and just make money in a short term experience, of course, you’re going to be more guarded on what you’re talking about. But we’re creating a brand and products that our fans and customers love.

And I think that’s why the people that came on the 5 Minute Pitch here, they all exude that, right? They all had a lot of passion; add a lot of value, either by creating something really original or even taking products that weren’t necessarily original and adding a lot to those products.

Scott: I got something for you though here, because this kind of — and I want your opinion, your opinion and I’m pointing Mike, Steve, because I agree with you, but I disagree with you. Here’s what I’m saying. Okay, for myself, right now, I started a brand with a partner 18 months ago. I feel like I wouldn’t have had as much of a head start if I would have let everyone know. And I think Greg can probably speak to this, if he wants to be honest. If you’re going to build a true brand, unless you just want to show the process. If I’m just going to show you the process, I don’t care if the brand gets hacked.

It’s kind of like the niche site duel that Pat Flynn did with Spencer or Spencer did with someone else. They’ve all told me it’s been hacked, backlinks and negative backlinks, they try to bring you down; someone else tries to rip it off. If you get a head start, I agree with you. But if you were going to do that right this second today and do that from day one, I think you’d be at a disadvantage. Now these people have all started. So that’s why they’re not worried about that. But if they started from scratch, it’s going to be harder. Would you agree or disagree that it would be harder to start with publicly going out there and sharing everything you’re doing even though you have the chops. Like with ColorIt, you kind of started before you started sharing everything, correct?

Mike: We actually pretty much shared it from day one.

Scott: Did you?

Mike: I threw caution to the wind with this. I’m going to — this is not advisable. First of all, I agree with you, but let’s start there. I agree that probably it puts us at a disadvantage with sooner talking about all the things that we’re doing. It gives you an opportunity to have more people copy though. Well, that’s a great idea. Like, I’m sure as soon as the first people talking about garlic presses, soon they’re all being copied. So I get that, I really do. But I’m also at a point where we’re financially independent and secure and I’m more confident in myself. And I don’t care about that as much.

And one other thing is I don’t ever profess to sell 100% of everything in that particular niche anyway. I’m not going to sell all the colored pencils in the world or all the gel pens, and we’re cutting out our own lane. And if I let someone else catch me, I always feel like that’s my fault for not working harder or doing a better job. So I’m a little bit weird when it comes to this. But I have to agree with you. I think you’re dead on it. It puts us on a spot that we don’t need to necessarily put ourselves into.

Scott: Right. And I’m looking at Steve; he created his brand before he really…

Steve: So I got my opinion on that. And when I started My Wife Quit Her Job, my wife was actually really scared that people were going to knock off Bumblebee Linen.

Scott: Oh, yeah.

Steve: Fundamentally, there’s nothing really — there’s no IP involved in that.

Scott: But you guys are doing personalization.

Steve: We do personalization but this is even before personalization. I started the blog before that, it was just me too products. And it’s still to a certain extent is me too products even though we have our own designs now. But I was confident in just my ability just to market and I just wasn’t worried. We actually had a whole bunch of knockoffs believe or not. We had like hummingbird linens and I think — I’m not even joking and Queen Bee linens.

Scott: Queen Bee.

Steve: And people clearly that were reading the blog and that sort of thing and they even used our photos to put up a mock shop. I don’t know if they were actually selling anything there. But over the years, those guys just slowly trailed off.

Greg: I think actually hearing you three guys, what comes to mind is an idea is worthless without execution. And it doesn’t matter if they also have the idea to start Bumblebee Linens or also had the idea to sell colored pencils are coloring books, that there’s a lot of execution involved, right. These are at the end of the day still businesses and businesses are a lot of work. You have to get up every day, you have to sometimes grind and do the stuff that’s not sexy that we often don’t maybe talk about or write about. And these are just like monotonous tasks that you kind of have to do every day to grow your business.

Mike: They hear about it on a 30 minute podcast, it sounds so sexy. And then they realize like when they go try to do this for a year, how much execution it does take. And it’s a lot more work than probably they realize.

Scott: Yeah, I’m going to speak to like I said, because I get that question every now and then. Like, why are you publicly doing it? For me personally, when I went in with this partner, it’s almost now I’m trying to protect the partner because they are depending on this business, more so than I would be. So because of that and also we have an exit strategy. We didn’t want to hurt that. But I agree with you. And I’ve often thought about doing that almost like Greg’s doing like a public case study. I even thought about doing that with niche sites to be honest with you. I thought about doing a public niche site to show people how to build content, how to build an email list, how to set it up properly, how it’s going to take time, it’s going to take 12 to 18 months before you see any traffic at all. I mean, Mike, you can speak to that. I know you can as well Steve.

Steve: You see this in blogging all the time, people will just outright copy your content or just slightly reward it. But those blogs are never successful. It’s all about the brand and the person behind it, the voice.

Scott: Yeah. And I kind of want to go on that a little bit. Like how important do you think it is right now for someone and like Greg said, I agree. And I advise people start on Amazon. But that’s not where you end, that’s where you start and so the launch pad. I look at that as a launch pad, it can be a significant channel. You can make a lot of money. We have one person that we’re sending through that is making 95% of money on there, over 500 skews like 35k net a month, like a beautiful brand. Most of it is on Amazon.

But they have a pretty good product that they don’t have to worry about someone just going and ripping them off. They still could though, they still could. But how important is that, Mike that you have something that you could either blog about, or you could create content around and bring people in versus it just being the product?

Mike: Can I answer the question about Amazon just real quick.

Scott: Yeah, yeah.

Mike: Because I’m really passionate about this. I started actually off Amazon. So I’m one of the crazy ones that started doing it all off Amazon and all of us have courses and podcasts and teach this stuff. I think you’re absolutely out of your mind if you don’t get started on Amazon.

Scott: Absolutely.

Mike: If you’re getting starting in ecommerce, learning how to pick, pack, and ship and deal with logistics and labeling and customer service, and all this different traffic and everything else is a massive undertaking. You have so much other stuff you can focus on, like getting the product right and photography and building a good listing and at some point, there’ll be this crossroads where you’re going to want to grow your off Amazon channel, because you don’t want all of your eggs in one basket. But you have to have a business that’s large enough to want to diversify first. I think you have to be well in the seven figures before you hit that crossroads.

So for me, I completely agree with you, like you would want to get started Amazon, let them take care of all those headaches. You don’t even realize what those headaches are, and you can learn about those later. Worry about taking baby steps in the beginning.

Scott: What’s your thought, Steve?

Steve: I think you got to be a little bit careful. I know for the students in my class, they start on Amazon, they have some success, but then they just kind of lose track of their brand. And it’s like a drug really, it’s like a drug. So you get used to it. And that’s where the money is coming in. And you may as well just put all your fuel to the fire there. So I encourage them to once they have some traction to work on their site in the side. Just kind of build it up. Don’t divert all of your resources. Definitely, like press the Amazon channel until you’re kind of saturated or done the best that you can. But you got to think about building that brand. And that can really only be done outside.

Mike: Running a website requires you to learn how to like take payments, to launch listings on your own site, to deal with sales tax collection, to do email marketing, Facebook ads. I mean, the list goes on and on. And you can eliminate all those things if you start with the Amazon thing. And I completely agree with Steve as I was saying, this Crossroads at some point you cross over to that makes sense for your business. But if you’re getting started as a solopreneur, it’s going to be an overwhelming amount of stuff if you try to start selling off Amazon as your first point of contact.

Scott: Let me ask you guys a question that is a question I struggle with every single week. How do you decide or know when to double down more on what’s working versus diversifying, you’re trying to do more things?

Greg: All right, but wait a minute, though. Let’s ask the question. Are we talking about just business in general, are we talking about — are you alluding to if Amazon is working why don’t you just double down on Amazon versus doubling down on maybe just building your business?

Scott: I’d like to hear just like your general thinking around it. And I think that can pertain to different areas. Amazon is a good example right? The Amazon stuff comes very easily to me, it’s very easy for me to double down on it and launch more products. And if I look back at like my history as an entrepreneur, I think actually most of the mistakes I’ve made are trying to diversify more or trying to do more things or start a new project or a new whatever else instead of really doubling down on like what I’m great at. I don’t have an answer here; this is why I’m asking you smart fellows. It’s something I struggle with every week.

Steve: It really comes to a gut feel for me, and I’m just kind of a paranoid person in general. So I’m like Jackness.

Scott: You are more projected, Jack is more paranoid.

Steve: Right why do you say?

Scott: I’m going to let you keep going here. But I just want to let people go to 5MinutePitch.com because you’re going to want to sign up for this because there’s a lot of smack talk going on here.

Steve: And what’s nice is we all got different personalities.

Scott: Yeah, so continue.

Steve: And they all conflict.

Scott: Mr. Chou.

Steve: Oh, we’re talking about what, risk tolerance

Scott: Yes.

Steve: So for me, I treat everything like a drug. If I get too addicted – and my income goals aren’t as lofty as Mr. Mercer’s for example, who wants to start like a nine figure company. I just, I’m satisfied with like a seven, probably just a seven figure business. So as soon as it gets to a certain point, I want to protect that income. So that’s why it’s important for me to diversify.

Scott: Yeah, I’m very similar to you. I think you and I are both very similar. I know what Greg is saying like, if something is really working, like just double down and put more gas on it. I get that but I also look at for me, like safety net. I’m building an asset that I know is stronger than just doubling down because if I double down and I’m collecting that money, what am I doing with that money? Am I just putting it into a bank account, am I taking that money and reinvesting it? And then if I am reinvesting it, is it still dependent on the thing that I’m doubling down on?

So those are the things that I think about. Lately, I’ve been talking about basically diversifying because I want to take advantage of the opportunity but I do not want to bank on that. And if it goes away, then I’m going to feel really, really like scared in a sense, right? It’s like, oh my gosh, I bet on this one horse, I should have been probably betting on more than just the one horse.

Mike: I have a lot to say about this subject. Yeah. Scott wants to tell me to stop talking so much. That was another thing that was up.

Scott: It was, you got really chatty.

Mike: I did.

Scott: At the later parts of the day. And maybe alcohol, I don’t know.

Mike: We’ve been out here drinking a beer.

Scott: You had about a third of a beer or three quarters of a beer. So maybe you’re going to chat a little bit more, we’ll see.

Mike: Well, I’m philosophical these days. I’m philosopher Jackness now. But so the current question that Greg asked was when do you double down? And Steve was just saying I’m paranoid. And these two things actually kind of go hand in hand in some ways because when you’ve been an entrepreneur for any length of time through multiple economic cycles and just business cycles and whatever else it might be, you’re going to experience a bunch of different things. And I’ve been through a lot as I’ve been on my own doing — I quit my job in 2004. I was an entrepreneur my whole life, but I have been doing this since 2004. And I think that there’s a lot of sound philosophy behind doubling down on something that’s working, just keep on doing what’s working until one day you get your toast, or your hand on the door or whatever…

Greg: Amazon shuts you account down.

Mike: Amazon shuts your account down, that hasn’t happened but like I mean that type of a thing.

Greg: A listing gets suspended.

Mike: We have.

Greg: How does that feel?

Mike: It’s not interesting, it does not feel good, thank you.

Scott: Hold on a minute. Let me just pour a little salt on that one. How does that feel my friend?

Mike: It does not feel good. Okay. So when that type of thing happens, you get rattled, you get paranoid. And when you’re younger, just like anything else, when you’re young, you feel indestructible, and you don’t think this will happen. But when you’ve had multiple things like that happen, you start to get more paranoid, more guarded. I don’t know what the right answer is here is the bottom line. At the end of the day, I think all of us struggle with this. Like, I definitely struggle with this, like almost on a daily basis.

And there isn’t necessarily a right answer. I can say — there’s a couple of sayings like, if you chase two rabbits both will get away. And I have a propensity of trying to do too many things. And if you are doing too many things, you’re not necessarily doing one thing at the highest level or selling. But at some point, what I would say here, just to wrap it up without talking too much more…

Scott: It’s getting chattery.

Mike: It’s getting chatty. I don’t think you should diversify until you have a business you need to, until you are past your risk profile. When your risk profile gets to a point where, like if you think every day like if my business got shut down, Greg is about to say something and make fun of it. I want to just stop talking. I already know I’m going to be made fun of, all right go make fun and go ahead.

Greg: I mentioned I’m not going to make fun of you Jackness. My advice or what I just want to say here is, I think for 99.9% of the people listening this podcast right now, actually, the answer is to double down on what’s working, whatever is making them money and to do a better job at it. Again, like I get the whole paranoia and that these different things happen and whatever else, but there’s also a certain level of just devoting your brain power and your time and mental energy to other projects that probably statistically speaking are not going to be successful as whatever you’re good at and can actually make money with. So yeah, that would be my advice for everyone listening.

Steve: Funny Greg, do you actually follow your own advice, because wasn’t there a period where you were on this acquisition spree and you had all this stuff going on?

Greg: Yeah and that’s what — I started this whole thing off with saying like if I look back in my entrepreneurial career that I would say like those are actually the biggest mistakes that I’ve made that are like trying to like do more or go to do like other things instead of like really just like double, tripling down on my core strengths and what actually works really well for me.

Steve: That’s assuming that money is your goal or success in that certain avenue. I like to diversify sometimes to just build a different skill set altogether.

Scott: Yeah well, and I want to again with Greg, are we talking about let’s use an example, Amazon is working really good. I’ve got someone right now in my inner circle okay, and his whole goal before he became part of our inner circle was just continue to launch products, stay ahead by launching more products. Then all of a sudden competition is going to come in, you’re going to lose those products, you’re just going to keep staying ahead that way. And to me, you’re always going to be behind because that inventory that you can no longer sell is going to then hurt you because you can’t get rid of it because you know that that’s coming, they’re coming for you.

But if you were to diversify or at least — and again doubling down could mean doubling down on your brand. It could be like building out your external channel, it could be building out your content, building out traffic to your own site. Like our website right now for the new brand started from zero. We have over 70,000 uniques every single month and that’s growing. We’re putting AdThrive on there now, we’re going to have stuff that’s not even linked to an Amazon product, not even our own physical product, maybe $5,000 a month comes in recurring revenue now. So is that worth doubling down on?

Steve: I just want to take a moment to thank Ahrefs for being a sponsor of the show. Now, I’m a huge fan of their tool and in my opinion Ahrefs is the best all in one SEO tool out there to rank in Google search. And recently, I completed a search engine site audit for mywifequitherjob.com and Bumblebeelinens.com and Ahrefs was indispensable. For example, I used Ahrefs to do a deep dive into all my posts to find the highest volume, lowest competition keywords to target in search. And in fact, recently, I used Ahrefs to rank a blog post in Google from position 20 to position five for a big time keyword in the span of just one month by switching around my title and H1 tags.

I also use Ahrefs to spy my competitors’ sites to see what keywords they are ranking for, and then I write a more comprehensive post and eventually outrank them in search. Now those of you who know me know that I hate spending money on tools, but I actually pay for Ahrefs and that should say something in itself. Right now, I’m giving away nine three month Ahrefs’s memberships for free. To sign up, head on over to mywifequitherjob.com/giveaway, once again, that’s mywifequitherjob.com/giveaway to win a three month a trust membership. Now back to the show.

Greg: There’s no right or wrong answer with these and that’s what makes it so hard. And that’s why I want to get the…

Scott: I love it.

Greg: Absolutely. And that’s why I want to get you guys is like thinking behind it or maybe just how you think about these different obstacles. Because I think this is actually fundamentally one of the most challenging questions or one of the most challenging things that entrepreneurs run into. And we saw all throughout the 5 Minute Pitch. We saw different people, for some people, I was like, don’t launch that second product. Like you haven’t even given the first product what it deserves yet. You need to still give that some more love and get it some more customers and whatever else. And then there were other people that I was like, man, that’s going really well, whatever else, it makes sense now, kind of try to do this other thing. And it’s a very, very challenging question. I’d like to start with that, I struggle with it every single week.

Mike: I think that a lot of entrepreneurs struggle from shiny object syndrome. And if there’s one thing that’s probably got me in trouble over all these years is that. So I’ve been like laser focused on ecommerce over the last like seven almost seven years, six years. And it’s really helped. I mean, like, just sticking with. Now, obviously, like, we’ve got multiple brands, we got a lot going on within ecommerce but at least I’m staying focused within ecommerce. And I have not allowed myself to get sucked into other things even though there’s been a lot of really interesting and cool opportunities; I’ve been trying to stay within one field at least. And even then, I’m not saying I’ve done everything right. But shiny object syndrome is definitely always…

Greg: I was just thinking though, I know about a podcast, a course…

Mike: It’s all ecommerce. I’m going to defend it; I’m not saying it’s going to be…

Steve: It’s like saying I’m doing all this stuff, but it’s still business. It’s just business, right.

Mike: I mean, it’s fine. I get it. I like the criticism, we can talk about more about this offline because…

Scott: Off line, let’s talk about it now.

Mike: We can talk about now, let’s talk about it now. You guys can grill me now if you want. But there’s a lot to be said. I mean I get more fulfillment from doing the podcast. The podcast has led to this. Like if it wasn’t for that…

Scott: I have a question for you because I get this question. So if that’s the case, and you enjoy like building businesses, why don’t you just build like more businesses? Why do the podcast? Why do ecommerce? Like courses and training? I get that a lot. Like, why don’t you just go build 10 businesses?

Mike: That’s not easy, building a business is not easy.

Scott: It’s not, and my answer always and I want your take on this and all of you really is like, and it sounds kind of cheesy, and all that. But when you can have an impact on someone else’s business that actually allows them to have, that’s pretty awesome. And I’ve got a guy in the inner circle as well, that he employs very similar to one of our contestants, employs stay at home moms. So the bigger we grow his business, the more stay at home moms he employs. Why wouldn’t I be proud of that? Like, why wouldn’t that feel good. But that can play into your mind too, because you get the haters and all that stuff. But what’s your thoughts on that? Why are you doing that? You want to just make money, don’t you, Mike?

Mike: Well, the problem is that I do, everybody wants money, but I can tell you that it’s become less and less of a factor because and this can go off on a huge tangent, but there’s like the money to happiness quotient, and you get diminishing returns very quickly. Like, the more you make, you just want more stuff. And eventually, things don’t make you happy. And I’ve been through…

Scott: I agree with that.

Mike: Yeah. So I can tell you the things that give me immense satisfaction are actually ripping at Steve Chou. That is my favorite thing to do. It really is, like of all the things and that’s the only reason I keep doing ecommerce is I can rip on Steve Chou.

Scott: Steve Chou.

Mike: Yeah, but you were just talking about this. First of all, how do I go sign up for the inner circle?

Scott: What’s that?

Mike: How do you sign up for the inner circle?

Scott: Oh, that’s great. I’m glad that you’re plugging in, thank you. It’s TASinnercircle.com, its application only. You have to be at a certain level.

Mike: To get to inner circle.

Scott: Yes, it’s a great group.

Mike: So, the thing that’s really actually bought a lot of satisfaction to me, and I’m sure all of us have experienced as we all have similar stuff going on, the comments that we get when you’ve changed someone’s life, we’ve let them quit their job. We’ve allowed them to get their business out of a hole, helped them when they’re struggling just like be someone that cry on their shoulder, that stuff brings me way more satisfaction than seeing one of my products sell better. And that’s really the honest truth. I know it sounds like BS, because like, that’s the stuff you’re supposed to say on a commercial. But I’m a weird, twisted person.

Greg: What do you got to stay there Mr. Chou?

Steve: I want to say that it was kind of rewarding, right. We were on the 5 Minute Pitch, and all of us — some of the contestants referenced all of us in changing their lives. And that was very rewarding. And when you get to Scott Voelker’s age, your priorities start to change.

Scott: I’m the oldest one in this group too.

Steve: Yes.

Scott: That’s pretty sad.

Steve: We call grandpa Volker.

Scott: Actually it’s going to be papa. I’ve already agreed on the name. I am, I got a daughter who’s 23, she’s probably ready, yeah.

Steve: When you get to Scott says he starts getting a little preachy.

Scott: It’s true, it’s true.

Steve: For me it’s all about the happiness quotient. So I’m taking on projects now that just make me happy like 5 Minute Pitch, podcast, the blog, focusing on…

Scott: There’s really no money being made here for us.

Steve: Oh yeah.

Scott: In 5 Minute Pitch.

Steve: We’re in debt actually in this project.

Scott: As of right now, actually if you want to be a sponsor of the 5 Minute Pitch, reach out to Steve Chou at My Wife Quit Her Job. Is that how they would get ahold of you?

Steve: There’s two…

Scott: Yeah but you’re going to take care of the sponsors. Yeah, just email support@theamazingseller.com if you’re interested in being a sponsor. We have not locked all of the sponsors in, but we do have some interest, so go ahead.

Mike: I was just saying that you know life’s taking a turn for the worst when you’re paying to be happy, like to hang out and have this happy to stay there. Steve was just talking of that’s pretty much what’s happened with the 5 Minute Pitch. We’re all like…

Scott: That’s pretty awesome.

Mike: Just write us checks so we can like hang out together be happy for three days.

Scott: This is good for our lives. I’m not going to lie, this has been pretty awesome, some really great guest judges I’m not going to give them away so you guys can go over and watch the 5 Minute Pitch when it airs. It’s really great judges, great conversations, great connections, and great people that we’re actually helping. And I think that even though they’re not going to win maybe most of them because we got like one winner, they’re all getting value, and the people watching this you’re going to get value.

Mike: I mean I love doing this stuff. I can’t wait to — we know who the finalists are as we record this but I’m going to get any of that away, but we got some finalists that are going to be coming to the…

Scott: How about the twist?

Mike: No, no.

Scott: No, no just tell them that there was a twist.

Mike: There’s a twist at the end, but I can’t tell you what the twist is. But the finalists are coming to Sellers Summit in Miami. If you want to be a part of that, is it sellerssummit.com Steve?

Steve: Sellerssummit.com.

Mike: Sellerssummit.com. Come get your ticket. There’s not many tickets left. So you guys have got to go do that soon because it’s a very small, tight knit conference. It’s one of my favorite ones that go to every year mostly because Steve allows me to speak and it gives me opportunity to feel good about myself for about three minutes until he tells me I did a horrible talk. But besides that, it’s a great conference. The thing I really love about it is it’s a smaller conference compared to some of these massive conferences out there. You get an opportunity to talk to other likeminded entrepreneurs, get away from the office for a few days, and really commiserate in some ways with other entrepreneurs, but also learn a lot and just get away from the office and think about something different for a few minutes.

Steve: What I like about my event is that I got the stage and I can make fun of anyone I want. And I got the mic and no one can…

Scott: I’m actually afraid this year. I am.

Steve: Oh, we got funny photos.

Scott: That’s right.

Steve: That I have to work with.

Scott: Yes, yes.

Steve: I need to tap into Liz’s archive there.

Scott: No, it’s a great event. I will be there again; thanks to Steve, he invited me back. It’s my fourth time being back. Yeah, this is this is pretty crazy. So I’m excited to be back. I know a lot of people, there’s a lot of people that are repeats that come back as well. So, it’s always a pretty nice group.

Mike: It seems, I mean, from an outside perspective, it seems like half the audience. I don’t know what the real stats are.

Steve: Yeah, actually, we sold over 50% of the tickets within a week of the ending of the last one.

Scott: And why don’t we talk about this real quick, you make a lot of money on the event, don’t you?

Steve: No. Man, for the amount of work involved.

Scott: And I’m starting to learn this right now.

Steve: Yes, that’s right with Brand Accelerator.

Scott: Brand Accelerator live. It’s…

Steve: You don’t realize what it takes.

Scott: It’s a lot of work. And I actually I questioned myself and you kind of warned me before I did it. I just wanted to do it because I wanted to bring the community together. And I wanted to have my own thing, and I’ve got something I’m going to reveal there that I’m working on, a little secret project. But yeah, man, it’s you don’t make any money really. You got to put a lot of money down first also. You’re taking a big risk, and it’s really to help the people. I mean, you could do so much more doing a workshop or a webinar or something like that, right. But it’s really about the people, the community, you, and Toni. We got to give Toni some credit here.

Steve: We do. We should give her a shout out. Well, yeah Toni, you are awesome. She’s the secret behind the success. She is, she really is.

Scott: But yeah, it’s really not a money play. It’s really bringing community. And you have a great community now that comes there, like every year.

Steve: And our events are going to be similar. We purpose to kind of keep it kind of small, so everyone can hang out and meet each other, develop their own masterminds, keep in touch.

Scott: And there’s been a lot of that, right. I’ve heard a lot of people say, I’ve met so and so at the event, we’ve kept in touch, we have our own little weekly mastermind or monthly mastermind. So because it’s lonely, man.

Greg: That’s why we got to put on 5 Minute Pitch just so we can hang out.

Scott: I know, I know. This has been a great three days. Actually, it’s tiring, though. I said this, my hips are sore just from crossing my legs in different ways.

Mike: And you’re looking different [inaudible 00:40:53].

Scott: But all right, let’s wrap this up. I think we have dinner plans that should be arriving here soon. Anything else you wanted to add about any takeaways. Like, give me one takeaway right now that’s just kind of like in your head from the 5 Minute Pitch.

Mike: I mean, this is going to sound so stupid. But I’m going to say I love my life. Seriously, man, like, it’s been great hanging out with you guys and the guest judges. I love doing this stuff. Like, it just — this is such a — it’s been so awesome. I really like – Thanksgiving is coming up as we’re recording this. And I’ve been thinking a lot about this type of stuff. I’m just thankful that I’ve been able to live such a cool life, I’ve been able to travel, do cool things, meet cool people, be an entrepreneur, and not have to live on someone else’s terms. This is the type of thing where you’re really realizing that’s really cool for me.

Scott: How about you Greg?

Greg: My biggest takeaway from this is, it was an excellent reminder that I just love working with entrepreneurs. It’s just like such a passionate group of individuals. I love hearing all their different stories. It’s really easy just to get stuck behind their computer week in and week out, and not really have those connections with other people. And hearing all these different individual pitch, all their very different businesses, all the different ways to create businesses and how they have really changed their lives, just like had a huge impact on their whole lives was pretty magical, special.

Steve: I agree with Mike. It’s funny, all my friends back home, they’re all — a lot of them are Asians and we’re all engineers, lawyers, and doctors. I just don’t get a whole lot of entrepreneurship love. So, I just realized that I just love hanging out with entrepreneurs. And the more I can do to build the community or have events like 5 Minute Pitch or Brand Accelerator, I’m there, man.

Scott: Yeah, I agree. I mean, I don’t know. Like, it’s funny, I want you guys just take on this one too, this is another one. I didn’t think about this one. Like, you get to a certain level though, right? And you think, oh once I get there, it’s kind of like, you’re done, or you made it. And then you get there and you’re like, oh, wait a minute, this is cool but what’s next, right? Like what’s going to energize you. But from here, I think what I really learned from the people that we were able to hang out with is just like Greg said, they’re hustlers. They want, a lot of them want the lifestyle, they want a lifestyle business. But they want to also create something that they can be proud of, and that they’re passionate about. And a lot of passion ran through this group, a lot of passion.

Steve: You got to have a higher purpose too. I know for me, we did it so we could stay at home and spend more time with the kids. But if you’re just doing it for the money, you’ll probably eventually feel a little bit empty and you’ll be looking for something else.

Scott: Yeah, and I mean, money is good, right? Money allows us to do really cool things, and travel and whatever, or just spend more time with your family or your friends or do this stuff. I basically flew here, five hour flight to get here to hang out with you guys and then also hang out with some cool entrepreneurs for three days, and run through this process. And that’s what I’m really finding is just like, I’m really being able to meet cool people like you guys, hanging out with you guys, building our relationship deeper and expanding our minds. And I mean, who knows where that’s going to go? But just these people that were able to help. This is really so just satisfying.

Mike: Yeah.

Scott: So, all right, let’s wrap this up. All right, let’s wrap it up. I know we kind of rambled a little bit there at the end. But that’s just because…

Mike: Is anybody still listening to this thing?

Scott: I don’t know, I think they are. All right, 5 Minute Pitch. I’m going to give you guys one more pitch on that. All right, head over to 5MinutePitch.com. Register over there, or sign up, you’ll get notifications. You can also probably go on Facebook and find it around there too. I know, Steve, you posted some stuff over there and I’m posting some stuff. But yeah, just follow along. It’s great to follow along, get some information from just listening to these people’s stories, how they got the ideas, how they kind of got to where they are, where they’re going, the advice that we’ve given them, some feedback, all that stuff. You’ll definitely learn through that process. So yeah, let’s, let’s wrap it up. Mike, what do you want to say man? You’re good; you want to wrap it up, you want to give some words of wisdom?

Mike: Words of wisdom. I think you got to be ready to come on Five Minute pitch Season Two. I’m announcing it right here. Are we going to do this or?

Scott: Yeah, I think so. I mean, we got to figure out everything else. But yeah, I think so. We’re going to say 95% yes.

Mike: Something like that.

Scott: All right.

Mike: All right. Serious words of wisdom.

Steve: Yeah, give me that.

Mike: You don’t have to plan everything in advance and like worry about everything in advance. I mean, I think that the 5 Minute Pitch is a perfect example of this. We had a general guideline of what we wanted to do here but we knew that we could create a good final product. And it’s interesting if you knew what was kind of happening behind the scenes, it was a little bit of a poop show in some [inaudible 00:45:59] cards. But I think that the final product is going to come out good because they were really good contestants, we’re all pretty confident that we can produce good content.

And I think it’s important because like if we had sat around and tried to plan every little detail, we never would have got this off the ground. We were just like, let’s do it. And we did it. And we figured it out. I think that we haven’t seen the finished product. We’re still figuring some of this stuff out but we got to this point. And I think when we see the final product; we’re going to all be really proud of it.

Steve: Mike. First of all, I think we’re giving ourselves a little bit too much credit here. This would not have happened whatsoever without Liz. She is the brains behind the project. If it was just us, I don’t even know if we would have made it out to California to be honest with you guys.

Scott: We wouldn’t be sitting here.

Steve: We wouldn’t be sitting here.

Scott: For sure.

Steve: Exactly. We were like, hey, did you guys book the contestants? No, man, I thought you were supposed to do that.

Scott: If you’re thinking about coming to the 5 Minute Pitch, because you do have a business, you’re an entrepreneur, but you’re scared, I’ll just let you that every single person that made it into the final around thought they absolutely had no idea and that they would have been the worst person pitching on it or whatever else. It just goes to show that I think everyone doesn’t realize how good they actually are, how good of a business they actually have. So if you’re on the fence or just thinking about a consider, I would recommend for you to apply.

Greg: Yeah, so head over to 5 Minute Pitch.com. And you can go ahead and register there, and then get more information about if you want to apply for maybe season two.

Mike: Is that it, Mike drop, Mike drop. All right, Mike, Mike, drop, drop.

I don’t know about you. But I am super excited for the 5 Minute Pitch which is going to air sometime in January of 2019. If you want to get updates about the show, head on over to 5MinutePitch.com. And we’re actually taking applications for next season already. So sign up now. For more information about this podcast episode, go to mywifequitherjob.com/episode235.

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

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

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

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

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

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234: How To Grow A 7 Figure Pet Supply Store By Giving Back With Kenric Hwang

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234: How To Grow A 7 Figure Pet Supply Store By Giving Back With Kenric Hwang

Today I’m really excited to have Kenric Hwang on the show. Kenric is someone who I’ve known for a very long time we both got started in ecommerce at around the same time.

Many years ago, he started a successful outdoor products company, sold it and then started another company called Max & Neo which sells dog collars and accessories online.

Now Max & Neo is no ordinary dog collar company and Kenric has managed to get tons of attention on social media and the press because of one key value proposition. Enjoy!

What You’ll Learn

  • Why Kenric sold his outdoor products company and why he’s more passionate about Max & Neo
  • How Kenric has grown Max and Neo to 7 figures in such a short period of time
  • Kenric secret to press coverage and social media virality
  • How Kenric sells commodity products so effectively
  • Why Kenric is anti-dropshipping

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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GoBrandWin.com – The fastest and most effective way to grow your email list for free using group giveaways. Click here to signup for free.

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

Intro: 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’ve got an old friend on the show, Kenric Hwang and Kenric is someone I met randomly many years ago via the Fast Lane forums. And we’ve hung up on many occasions over the years at various events. But Kenric runs Max and Neo, which is an ecommerce store selling pet supplies, and he’s managed to totally blow up his sales because of a single strategy. And in fact, I wouldn’t even call it a strategy but you’ll have to listen to find out.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Super 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. Now Klaviyo is the only email platform 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 sent. Now Klaviyo is the most powerful email platform that I’ve ever used and you could try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to give a shout out to Privy who is also a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now 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. 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%.

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

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 Kenric Hwang on the show. Now, Kenric is actually someone who I’ve known for a very long time. I believe we were first introduced through Billy Murphy and we actually met for the first time at Ecommerce Fuel Live a long time ago. And since then, we’ve hung out a number of times at various entrepreneurship retreats. And Kenric actually got started in ecommerce a year or so before I did, and he was actually known on the Fast Lane forums in case any of you follow MJ DeMarco.

Anyway, Kenric started a successful outdoor products company and sold it and since then he decided to start another company called Max and Neo, which sells dog collars and accessories online. Now, Max and Neo is no ordinary dog collar company. And Kenric has managed to get tons of attention on social media and the press because of one of his main value propositions. And I’ll leave that a mystery until the interview starts. And with that, welcome to the show Kenric, glad to have you back.

Kenric: Hey Steve, I’m glad to be here and finally be on your podcast.

Steve: Yeah, man. It’s been a while. I had to wait until you got back from Africa.

Kenric: Yeah, I was just on an African Safari and it was really, really exciting and interesting. But back in the States right now.

Steve: So Kenric, you got a pretty interesting history and background. Please give the audience a brief overview of how you got into ecommerce in the first place.

Kenric: Okay, well, like you mentioned, I started ecommerce I think a year or two before you. I remember it was 2007 when I started my first company. And back then the landscape of ecommerce was very different and I wanted a way to make money and to live wherever I wanted to. So, I basically did some research and ended up finding out that drop shipping was the way to go. So when I started my first ecommerce site in 2007, it was a 100% drop ship store.

Steve: Oh okay.

Kenric: Yeah. And that did really well. And I found the limitations of drop shipping a couple of years in.

Steve: What were the limitations just for clarification?

Kenric: Well, the biggest limitation was I was limited to what products I could carry because I could only carry products that people were willing to drop ship. That was one. But the biggest one was what happened my second Christmas was that my best seller — so I worked very hard to SEO my website up to the front page of Google, I was ranked top three for my products. And what happened was my main product was selling very well. And when I went to order it from the drop shipper on December 5, it was I think December 5th, I sent the order to the drop shipper and they were sold out of that product for the rest of the Christmas season.

And so yeah, so that really sucked because here I had a top ranking website and I had a hot seller and I had no product to sell. And that’s when I realized I wasn’t in control of the stuff that I was selling. So I could do all this work and have no product to sell because everybody else with the drop shipping company, we were all using one drop shipper. And that drop shipper was just distributing my products out to every other ecommerce store. So basically, everybody in the country ran out of stock of this product on that same day, or I should say everybody else who drop shipped this product ran out of stock on that day.

Steve: I see.

Kenric: So, a fundamental change for me was the next year I said, there’s no way I’m going to run out of stock. So I have to carry my own stock. And what I did is I went to the drop shipper and I said hey, how many of blah, blah, blah do you guys have in stock and they said 500. And I said, I’ll take all 500 of them. And so I bought all their stock out. So guess what happened that year? I was the only store that had it in stock. Yeah. Everybody else who drop shipped went out of stock like on December, on Black Friday because that’s when I bought all the stock. And then I was able to sell all 500 units throughout the course of the holiday season.

Steve: Is this the outdoor products company or no?

Kenric: Yes.

Steve: Oh, it is. Okay, because I vaguely remember you manufacturing your own products for that.

Kenric: Well, that was a precursor to that because from carrying my own stock that one Christmas, I went to importing my own designs and things the year after because I learned how important it was to be in control of my inventory. So, I went from a 100% drop shipping company to basically carrying 95% of the products that I sell.

Steve: Can you comment on how the margins grew when you did that? Like what were your margins drop shipping versus when you actually owned the label and the brand for the product?

Kenric: Yeah, they grew just immensely because when I was — so if I look at one product that had a $100 price point, I was paying $79 for it drop ship plus shipping. So I would get about $79, I mean I would be charged $79 plus about 10 bucks for drop shipping. That same product when I ordered it from China, I was able to land it for $37.

Steve: Wow okay.

Kenric: Yeah so it was just huge and once I did that once, I was like why am I drop shipping all the rest of these products because my store already had traffic; it was ranked very high in Google. So it would have traffic and I would know what products sold very well. So as soon as I would identify like, hey, this product is selling very well and all I’m doing is sending these orders to the drop shipper, I would look at how to import that product, not the exact same product but my version of that product from China.

Steve: Would you say that drop shipping today is a good option to figure out what sells, or would you just bypass drop shipping all together?

Kenric: I haven’t done drop shipping in a long time. So I don’t really know. I just know that you are not in control of a lot of things when you drop ship. Actually, one other reason that I didn’t like it was every year, the drop shipper would say, our costs have increased, and they’d raise that price. So for example, that $79 product when I started the first year it was $69. The second year it was 79, then it was like 85 the third year, and there’s nothing you can do about it right? What are you going to tell the drop shipper? He’s like, we need to raise this price to $90, all you can do is raise the price on your ecommerce store.

Steve: Right.

Kenric: And I think right now, it’s very — in my opinion, it’s very hard to rank these types of stores where you get any type of traffic without running a lot of ads to get to the point where you know what’s like a good product, and what’s a bad product.

Steve: I would agree with that. Yeah, the SEO game has changed dramatically in the last 10 years or 11 years.

Kenric: Yeah, yeah, definitely. Yeah. 2007 it was pretty easy.

Steve: So what did you — oh sorry, go on.

Kenric: Oh, I was going to say that was when you just got a domain with your keywords in it and got some back links. It was much easier than it is now.

Steve: So ultimately, why did you — I remember your store being very profitable, and I’m just kind of curious why you ended up selling that company.

Kenric: I decided to sell the company, I think it was — so I started in 2007 and I sold the company earlier this year. And it did take about; I think it took about 12 months to sell it. So I decided to sell it back in 2017, and the main reason was I just was not into that business anymore. I remember back in 2007 and let’s say the first five years I was always writing blog posts to get the websites ranked higher. I was shooting a lot of video and doing my own product photography, and at some point I think it just became a moneymaker for me, and I just felt like I had to do something else. Also at some point I think the money becomes less important as you go through your progressions running a business, and I was getting pretty comfortable I guess.

Steve: So did you have any alternative sources of income prior to it being sold?

Kenric: Well, I actually started Max and Neo a year before I decided to sell my first company. And so I was running the two companies, the outdoor company and Max and Neo at the same time, and I was devoting let’s say 50/50 to each one. And at some point, I felt like that I wasn’t giving Max and Neo enough attention, and I wanted to grow that a lot more. So I felt like I had to let go of the outdoor company in order to let Max and Neo basically grow faster or to free it up.

Steve: Okay, so for the people, for the benefit of the audience so what is Max and Neo and what do you sell there?

Kenric: Okay, so Max and Neo sells dog products. We sell dog leashes, collars, harnesses, supplements, and blankets and just things that you need for your dog. What sets us apart is that for every product we sell, we donate a product to a dog rescue or a shelter. And that’s really why I was so passionate about starting this company because I wanted to help dog shelters and rescues. And if you contrast that with my outdoor products company, that one just became a moneymaker to me.

So there was two totally different motivations in why I would wake up during the day. One was like, okay, I got to work on this outdoor Products Company, because I need to keep the money coming in and I just can’t let that business wither away. And then I would work on Max and Neo because my main goal of Max and Neo was to donate as much as possible. So that basically came to a head and I was like, I have to sell this company if I’m going to grow Max and Neo to where I think it could go.

Steve: But Max and Neo was far less profitable than the outdoor Products Company right?

Kenric: Correct.

Steve: Okay. So at that point, it sounds like you were comfortable from a money perspective and you actually didn’t need the money that the outdoor Products Company was generating.

Kenric: Yeah. So the company was doing — it started in 2007. And it started to take off in about 2010. So I basically had a seven years of very, very good income, which I saved a lot of it and that’s when I just began looking for something that I was more passionate about or something that would be just more fulfilling to me, so a reason to wake up in the morning I guess, and that’s what Max and Neo was to me. So for those — I guess I’d like to just go on a quick tangent, for those who don’t know what dog rescues and shelters do is that, let’s say somebody finds a stray dog, it usually goes to like a local County Humane Society.

And those places they basically hold on to a dog for let’s say a week or 14 days before they have to decide what to do with the dog which is sometimes it’s just, it’s not a good situation for a dog. So somebody who runs a dog rescue will take these dogs from these local humane societies and they’ll basically try to place them into a home. So let’s just say there’s like in my case, I work with mainly German Shepherds. So if a German Shepherd arrives at a humane society, a German Shepherd Dog rescue will try to pick it up and rescue it and basically take it to their own facility where they take care of the dog until they can find a permanent owner for the dog.

And these rescues are usually almost always all nonprofits and they run on donations and things like that. And where they generate their money is through donations or through adoptions and things like that. And they pay for all the expenses themselves. So, whenever you go to a rescue to adopt a dog, they don’t just hand you the dog without a collar or a leash. I mean, how would you take it home? How would you get it into your car?

So basically what they do is they’ll give you the collar that’s on the dog, they’re basically giving to you, right because it comes with the dog, and then they usually give you a leash and maybe some other things like a little bit of food and things to get you started. All this comes from money that they spent to get these products. So I was basically trying to figure out how can I make it so they don’t have to spend their money on these products and they can spend it on other things?

Steve: I know for your store you pretty much give one to one, right?

Kenric: Yes.

Steve: And that can’t be that profitable. So, is profit a part of your motivation at all, or was it just the giving back part? I mean, in order for it to be self sustaining, you have to be able to generate a profit right?

Kenric: Correct. Well, I guess this is what’s more because I ran my other ecommerce store and I got it to where it was profitable, and I wasn’t feeling fulfilled from it, I sort of knew that just starting another business just to make a bunch of money was probably going to end up at the same place, and I definitely didn’t want to do that. So when I first started this, I actually looked, and I was like, okay, there’s a lot a lot of dogs that are in bad situations and I wanted to help dogs. And a lot of people do, a lot of people want to help dogs and animals, and things like that, and I basically just took that progression. I’m like, okay, how do I help dogs?

And then I decided like, okay, dog rescues help dogs, so then how do I start my own dog rescue? That was a thought in my head but starting your own dog rescue is not really scalable right? You have just one dog rescue, so I was looking for something that was bigger. So then I then came to the thought, how do I help rescues? And that’s when the thought of donating to rescues came into my mind.

And yes you’re correct; my margins are very low because unlike other ecommerce stores, all my cost of goods are double. So whereas if you go buy one product from one place, they give you one leash, so their cost of the goods is one leash, my cost of goods is that leash that I sell to the customer plus the leash that I donate to the rescue, plus the shipping involved with shipping that leash to the rescue. So my cost of goods for one sale is very high.

Steve: How did you decide what products to sell? I mean it seems like the stuff that you sell is like a commodity almost, right?

Kenric: Yes. But again, I based it on my main mission which was to help dogs/dog rescues. So, I basically only sell products that dog rescues need. So it’s actually it’s a little backwards, I figure out what the rescues need and then I figure out how to get the product to them.

Steve: Interesting okay.

Kenric: Yeah, it’s very different than a profit first motivation because most of the times you’re like, oh this product is $10 and I can sell it for 30 and maybe I have to ship it for 10 and I only make $10 off of it right? What I do is I go; does a dog rescue need let’s say salmon oil right? So like dog rescues need salmon oil because it makes their food more nutritious for the dogs. And then I’ll do the numbers and I’d be like, oh I can’t make any money at this. But this is what is interesting, sometimes I’ll be like, but I’ll only lose $1 a sale, and I’ll be like that’s still good because let’s pretend I lose $100, but I could donate 100 bottles of salmon oil, that’s pretty incredible if you think about it, because a bottle of salmon is like 20 bucks.

So if I were to go out to a store, I can buy five bottles and donate them to five rescues, but with my current business model, it it’ll cost me $100, I could donate to 100 rescues. So we do have products that lose money. And I know that’s crazy to say. And those are products I knew we’re going to lose money going into them. But I always go back to my mission first, right? Is this product helpful for dogs and dog rescues? And if the answer is yes, I don’t mind subsidizing a money losing product with a product. Like let’s say the dog leashes make money, the salmon oil loses money. Well, both of them together are net zero for me, let’s say, but for a dog rescue, they’re getting leashes and salmon oil, right. So the overall impact to society is good, right? It’s plus EV right.

Steve: So, let me ask you this then, how do you make sales? So one, your products you can find in a lot of different places and share your donating, but how do you stand out and how do people know to come to your store and not someone else?

Kenric: Well, the main driver really right now is dog rescues are talking about us on social media. I mean I think in this age of social media really makes it easier for a company like mine to survive because we donate so much and we do ask them to post on Facebook and Instagram when they get donations. And it just seems to pick up steam because the more the more we sell, the more we donate, and then the more rescues talk about us, then the more we sell, and then the more we donate, and it’s just like a snowball rolling down the hill.

Steve: Interesting, so almost all of your sales are driven by the rescues promoting you?

Kenric: No, I wouldn’t say that. I would say a decent amount of them are but we still do the normal ecommerce thing where we’re running PPC, we sell a lot on Amazon and on our website. So on Amazon, I’m running a lot of PPC ads. And it’s definitely hard to be competitive, especially on something like Amazon because we’re definitely not the lowest price but we’re not the highest price either. So, one thing I didn’t want to do, which this is a little pet peeve of mine is there are a lot of companies out there that donate to good causes. But when I look at those companies, what they seem to do, they seem to inflate their price by a lot and then use that which increases their profit, and then they donate with that.

And I sort of feel like that’s like, it’s not like 100% honest way to do it because if I decided to, let’s say, a normal dog leash sells for $15, if I decided to sell that same dog leash for $25 and then I donate one for one, I mean, there’s I’m not sacrificing in any way, right? My margins are actually the same as if I didn’t donate. What I’m doing is I’m pushing the burden of the donation on to my customers by asking them to pay an extra $10 for the leash that should have cost them $15 instead of 25.

Steve: But the end result is the same right? The shelter gets their donation.

Kenric: Yeah but the supporter of the shelter is really the person that’s forking out that donation if you really think about it, right? Because let’s pretend I’m a normal company and I sell it for 15 bucks, and instead I’m like, I’ll sell it for 25 and donate and now I’m still a normal company as if I were — my profit margin would have been the same as if I was a normal company that did not donate.

Steve: Sure. Sure.

Kenric: Does that make any sense? So I didn’t want to put the burden of the donation on to…

Steve: The consumer.

Kenric: Yeah, or onto a supporter because these rescues have very loyal supporters. I don’t want them to spend an extra $10 just to get that donate, they should pick my product, because it’s a good product, a high quality product that they were going to buy, even without the donation and the donation is just an extra added benefit.

Steve: Okay.

Kenric: That makes it very easy for them to choose my product, right. Because if were like at the store trying to choose two products and one gave a donation but costs double the price, it would be very hard for you to do right.

Steve: Right. Well, okay, so how do you launch one of these? Let’s take dog collars, for example. How do you launch that on Amazon? There’s just so many, it’s probably flooded with them.

Kenric: Well, I think that’s the biggest difference is you don’t really — when you’re starting a company like this, you don’t really launch on Amazon, right? It’s not — I think gone are the days on Amazon where you just launched a product on Amazon. You really have to, in your mind you have to be building a business, right. There’s a big difference in mindset when you’re saying, I’m launching a product versus I am starting a business. So, I started with one single dog leash, but I knew like in my brain, I knew what the company was going to look like five years from the day I launched.

So really, I put that product when I put it on Amazon, that’s all I did. It just it went on Amazon. And then what I did was I launched my Instagram and my Facebook and my website and I started driving traffic to Facebook and Instagram. And a lot of times, I in the first year when we didn’t have a lot of sales, I pre-donated which basically means, I’m going to donate to the rescues that I want to donate to first and then the sales will catch up to them later. And that was a way to basically let the rescues and people know like, hey, we’re here and we donate stuff to you guys.

Steve: So how much runway did you have? Because let’s say the rescues and your whole social media strategy didn’t end up working, then you’re out and it’s not really a self sustaining business, right?

Kenric: Correct. But that’s where I got lucky in that I had my outdoors products company that was basically paying for all this stuff and my living expenses.

Steve: Okay.

Kenric: So, I definitely wouldn’t recommend somebody on a limited budget doing what I did. But I was in a good position to do it because I didn’t have to worry about profits. That’s why I was able to go like I didn’t care about the profits when I started the company. I basically — I just want to say I basically looked at it as if I were a mini VC backed company to start.

Steve: Right, where you could just spend whatever resources to get the buzz and then eventually in the long run, make it a self sustaining company.

Kenric: Yes. Correct.

Steve: Let me ask you this, why are you donating physical products as opposed to just writing a check to these shelters? Presumably it’s a lot more work to ship physical products, right.

Kenric: Yeah. Well, first of all, there’s actually a couple reasons for that. Actually, the main reason is leverage, so because I’m experienced at importing and also at designing products and things like that, I can leverage my knowledge better than a dog rescue can with a check. So, let’s say I donate — actually this is an interesting story because this is what gave me the idea in the first place. So, a lot of times a dog rescue would say, hey, we really need dog collars. Can our supporters, can people please donate dog collars.

And I would see these posts on Facebook and you would look at the comments, and you’d see somebody would go run out to PetSmart and buy a collar for $15, or they would actually buy like five collars right? So they’d spend $75 and they’d be like I bought five collars for your rescue, and the rescue would say thank you so much. And whenever I saw that post, I would be like, wow, for $75 I could definitely import let’s just make it easy. Let’s pretend it’s $5 a collar. So in my mind, I would say like, well, I could import 20 – sorry — 15 collars, right. So the rescue got five collars, and I could have with that same amount of money, I could have given them $15 collars.

So, if I sent a rescue a $75 check let’s say, their volunteers would have gone to PetSmart and bought five collars.

Steve: Okay that makes sense.

Kenric: Yeah where I could take that money and basically I could be like, hey, here’s instead of sending them a $75 check, I’d sent them 15 collars which to them is worth way more than $75 in cash.

Steve: Right because they are going to spend it on dog products anyways presumably.

Kenric: Yeah and they’re going to pay full retail where I can basically give them two or three times. I could basically leverage that money because I can import. But another reason is I didn’t want at first, for some reason this is a pet peeve of mine. So I see some company that’s like I literally saw some companies that were like we donate 100% of our profits to know blah, blah, blah cause, and I’m assuming us as entrepreneurs we know we can fudge that number right? You can pay — if my business made 100 grand, I can decide I want my CEO salary of $100,000 for this year right. And then guess what, the actual business made zero dollars in profits, so they have nothing to donate to the rescue.

So I didn’t want that to be — I didn’t want to be vague, because donating one for one, you know that you’re getting one — rescue is getting one leash when I donate one leash. If I said I was going to donate 10% of the profits for every leash that’s sold, if you go pay $15 for a leash, you don’t know what my profit margin on that leash is, right. I mean, let’s say I make $5 on that leash. Well, that’s a 50 cent donation to a rescue. They can’t go do anything. How many…

Steve: They can’t audit that yeah.

Kenric: Yeah. But even the 50 cents they have to get 30 of those 50 cent donations to buy a $15 leech, right. So it’s just not efficient. In my opinion like when it comes to physical products that I can give, or I can donate, I can totally — I would rather use my leverage to donate. But when it comes to stuff like vet bills and stuff, I can’t donate health care to dogs. So I want the rescues to save the money and use it on that.

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Let’s talk about how you get business through social media. And maybe this wasn’t intentional or not, but I know you post a lot of videos and each time you do I’ve looked at your page, they get a ton of shares and likes. Can you talk about kind of what your social media strategy is?

Kenric: Yeah, I mean, when I started this, I actually wasn’t thinking like, oh, I’m going to use Facebook or Instagram.

Steve: Exactly, it just happened organically but yeah.

Kenric: And I think a lot of it is I mean, first of all, it’s dogs and we’ve all seen how many views dog videos get on Facebook. So it’s something that people already engage with a lot. And actually to start with, we weren’t posting that much, but we basically every Friday we do a post that announces which rescues are getting donations and I think people really love that. I think what that shows is that, hey, we are out here donating every week. And the reason I started doing that is because there’s a lot of — we got some feedback from some rescues that said, hey, it’s so great you’re donating so much, these other places that claim to donate we never receive donations from them.

So sometimes you’re buying something online and you’re like does this company really do what they say they’re going to do? And we’re using social media to just put it all out there right. We list the exact rescue and the date that they are getting it. So people know that we’re sending it out and we’re being very transparent and public about that. So I don’t want anybody to come back to us and say like, hey, you didn’t donate like you said you were going to because then they go through our post and be like look at all this stuff we sent out this year.

But getting back to your question about — I forgot to answer is about physical products. And this is something I did not know getting into this is that the donation aspect is actually a lot more work than the actual selling aspect because with ecommerce there’s everything is made for it right. The order comes into Shopify and then it goes into ShipStation and it prints out a label, you just put it in a box and you send it out. That stuff is like the easy ecommerce part and the donation part is like, oh which rescue which rescues haven’t we donated to for the last three months, and what kind of rescue are they? Do they have big dogs, little dogs, because we don’t want to put in all large dog collars to a Chihuahua rescue?

So, it’s like that part is actually way more work than us shipping out dog collars from our website. So that’s something I didn’t realize starting because I was always thinking like, why don’t other businesses donate one for one, they probably have margins to do it. But now that I’ve gone through this, I realized why because basically I’m adding a whole division in my company to just handle donations, right? And that division has to be paid for. I have employees that do that part. I have a bigger warehouse because of that part. And that part doesn’t generate more money. In fact, it decreases the profit. So it’s like from a pure profit in business standpoint, it’s like a lose-lose division.

Steve: I mean, you guys are profitable, right? I mean, otherwise it wouldn’t be self sustaining. And so it’s just the way you’ve handled things through social media. And it’s like a win-win all around it seems.

Kenric: Yeah, we were profitable but I would say our margins are tiny.

Steve: Are single digits tiny or?

Kenric: Let me think about that. With the donations and everything, they probably are. They’re probably single digits or very low single digits because our gross margins if you count the cost of goods is double the cost of every product. So our gross margins are already very low from ecommerce standards, so they’re already low there. But then you add in the added cost of extra employees just to do donations, and the shipping of donations is — I mean that kills us all the time. We pay about $10 a box and we donate about let’s say 300 bucks is a month right now. So that’s $3,000 just shipping donations.

So, I’d say our margins are — they’re probably hovering right around 10%. I haven’t calculated them in like a month or two. But that’s probably where they are. And they go up and down, but it’s basically they’re low that if I didn’t sell my ecommerce business a year ago, we would have trouble funding all the inventory let’s put it that way. Because we got a stock up inventory months in advance and we double that inventory compared to anybody else.

Steve: So back to the social media, so you post videos and then you have the shelter share on Instagram and whatnot. And then the buzz is just natural at that point, because there’s so many people who want to help these shelters and rescues.

Kenric: Yes, so here’s my take on it. So, if you’re running a normal ecommerce business and let’s say you’re trying to get some buzz on Facebook and you’re like, we’re going to give away $100 to one person who comments on the bottom of this post, nobody is going to share that because you’re sharing when you — you’d comment like Steve, you would comment your name on that post right? But it does you no good to tell your friends because you’re lowering your odds of winning.

Steve: Unless you said the last person who comments wins.

Kenric: Yeah. But then wouldn’t you have to say something like this is over at eight o’clock eastern time. And then like 7:59, like everybody’s like jumps on, that’s not really true either.

Steve: That’s true.

Kenric: So the interesting thing about this I think about just my business is that when somebody gets a donation, by them sharing to tell somebody else like, hey, this company will donate to your rescue, that doesn’t lower their chances of getting a donation. We donate to everybody who applies basically. I’ve had rescues told me like, they thought we were a scam because they were like, I don’t understand this, we just apply, and then we get free stuff. They’re like, this is way too easy, there’s got to be a catch somewhere down the line.

So what happens with our social media post is like, people only share stuff because they really want to help others right? So they’ll share it because it gets more people. When more people buy, more rescues get donations. And when they tell other rescues, those rescues get donations and then those supporters may buy, and then they get more donations. So everybody is in the same boat here, right. Everybody is trying to help dog rescues get more donations from us. And that’s what we’re trying to do.

We’re not trying to limit our donations like the first 1,000 people get this, because people have asked us like are you ever going to cut off your donation list, so no more rescues can join? And I basically them I say, no we’re never going to cut that off. Because if we were, if we made it a very scarce type of thing, people would stop sharing it right. It’d be like oh only we know about this. We don’t want – scarcity is a very different motivator than abundance, and when things are abundant, people want — I think they shared a lot better or they want to share it.

Steve: One thing I also wanted to touch on is you have a very interesting employee philosophy too right. Can you comment on the people that you hire, and what your actual employee policies are in the office?

Kenric: I’m trying to understand…

Steve: You don’t remember what I’m talking about it?

Kenric: No, did we talk about this?

Steve: We did at the medication, you mentioned that everyone can bring their dog and then you told me all these stories like, everyone you hire has to be a pet lover or just happens to be a major pet lover.

Kenric: Yeah, I mean I think that the thing about being a pet lover or a dog lover is a given especially when you work for Max and Neo, there’s just no way we can have somebody there that doesn’t like dogs or doesn’t have a dog.

Steve: But you don’t have to let them bring their pets to work though. And I remember you telling stories about how you had pets like chew up a whole bunch of product and ruin product.

Kenric: Well. Yeah. I mean, that hasn’t happened a lot, we put a kibosh on as soon as it happened. But I don’t get mad at the dogs for that, they’re just dogs, the dogs. But that was always a dream of mine. I worked in the corporate world for 10 years, and I always thought to myself, like, if I had my dog here, I wouldn’t be in such a hurry to get home, because when you have a dog and you’re at work and you know the dog has been at home, either just by himself all day, you sort of want to get home, right? It makes you leave work very early or just leave work at the first chance you get.

And so, I remember thinking of that to myself when I was in the corporate world. Like I’d totally bring my dog to work, he just sit under my tube. And so I knew when I started my company, even my outdoors company, you can bring your dog to work. I just knew that that would never be something that I wouldn’t allow.

Steve: I found that interesting.

Kenric: Yeah, I think a lot of businesses are getting more pet friendly and things like that. But I also foster a lot of dogs and I foster — when I have a foster dog, one of the biggest things about having a foster dog is introducing the foster dog to things that they I guess didn’t have. So, a lot of times we’ll get dogs at the rescue that have never been inside. They’re literally an outdoors dog where somebody got the dog and all they did was feed him when they were in the yard, and they never came inside the house. And they basically have no social skills.

So, the good thing about that is when I get a foster dog, I’ll bring them to work, and they’ll meet all the employees and they meet the FedEx guy and the UPS guy and things like that, and it’s very good for them. It helps them get socialized and it helps them get adopted so that’s another reason why I do that, but I definitely want work to be a fun place to go.

Steve: Yeah. So it sounds like everyone brings their pet or their dog to work.

Kenric: Yeah. They do.

Steve: So Kenric, we’re coming on 40 minutes here. And I know you got some big plans coming up for the holidays. Where can people find you? How can they support your company and what’s in store?

Kenric: Yeah. Well, yeah. So I guess to answer your second question first, our website is called MaxandNeo.com, and that’s Max, M-A-X, and is spelled out A-N-D and Neo is like Neo from the matrix N-E-O. And by the way, just as a side note, they were — Max and Neo is named after me and my brother’s dogs that we had. And on Facebook, we are at Facebook.com/MaxandNeo and also the same thing, Instagram slash or whatever, at Max and Neo. So yeah, so I’m actually pretty excited for this holiday season.

We actually haven’t announced this, so I think people are going to hear it here first. But we are going to — so I guess I should back up, so this idea came when if you look at our Facebook posts we get a lot of like thank you for sending us donations, you guys are really good and thank you for doing this, it’s helped us out so much. And it really got me thinking because how we’ve talked about what I do on Facebook, and I was thinking like wait, the rescues are the ones that are really driving this for us. They support us so much and we just support them by donating products to them, but they’re really some rescues out there that are just really driving it out there.

So as a thank you to rescues, what we decided we were going to do is basically donate to every single rescue on our list for the Christmas season. And we have about 2,000 rescues on our list and we decided to basically surprise them by having every rescue get a donation. And I don’t think we talked about this. But normally the way it works is, let’s say we have a list of 2,000 rescues, we donate, let’s say in January, we donate to the first 300 rescues on that list. And then in February, we donate to the next 300 rescues on our list and so on and so on.

So, each rescue will get a donation about once every, let’s say four or five months going through that cycle. So the fact that we’re going to donate to all of them in one month is a really big deal for us and for them, because now they’re not waiting. Every rescue knows they’re going to get a donation in that month for the holidays. So, that’s going to be a big task for us.

Steve: I mean, you don’t have a lot of employees either, right? I mean, that’s a lot of boxes and a lot of stuff that needs to go out to 2,000 rescues. That’s crazy.

Kenric: Yeah, we did some numbers on how many boxes we can pack a day and things like that, and it’ll take us about one to one and a half months to pack 2,000 boxes. And it’s going to be pretty big because there’s going to be about close to a quarter million to a million dollars worth of stuff inside those boxes. So it’s a big Christmas present.

Steve: A big Christmas present, it’s a great cause and I will do my best to help you get the word out about it.

Kenric: Yeah definitely, we appreciate any help that we can get.

Steve: So Kenric, I really appreciate you coming on the show and talking about Max and Neo. It’s clear that you’re very passionate about dogs and that you’re in this for altruistic reasons as your profit margins would show you can’t really do what you do without loving dogs.

Kenric: Yeah exactly. It would be — I guess if it were run by profit, it would just — I don’t know, I think a lot of people would have given up. Can I just say one other thing?

Steve: Yeah go for it.

Kenric: It just popped into my head which is how I know this is the business for me to run, because this happened to me early on where we were just starting out and we had a shipment of leashes. It was like second or third shipment of leashes, and we started getting bad reviews on Amazon of them falling apart or something. And I think it was like let’s say it was a $10,000 order, it might have been 10, or $20,000 order and the leashes were falling apart. And I’d just started this, put all this money into it and I was really mad at my manufacturer.

And I switched manufacturers because of this, but it would have been really easy to say like, well, this business just went down the tubes. I got to throw away 20 grand of inventory when I wasn’t even making a lot of money. But what kept popping into my head was like but if I close up shop, what’s going to happen to the dogs? If you have that kind of thought in your head, you know you’re never going to give up, because you’re not doing it for you, you’re doing it for another living being, and they’re counting on you to make your business profitable or to make it sustainable so they can enjoy a happier life.

And when your motivation is something like that, like there was never the thought of like closing up shop. It was like okay, I got to find another manufacturer and let’s just keep going, because you’re not driven by profit, you’re driven by the well being of something else that’s counting on you. So I just wanted to say that because that’s a very important driver. Basically, I think that’s something that if you could get that one step feeling that is not about profit, I just don’t think you can fail with that type of motivation.

Steve: It’s weird because your case is very interesting because it’s the altruism that is actually causing you to be profitable also. It’s like a self fulfilling prophecy.

Kenric: Correct yeah. And I think that’s because people, I think people are inherently good, they want to do good things, and they will support good people and good companies, right?

Steve: Yeah.

Kenric: And so I think a lot of this is hindsight after running this company for a few years, but it’s not something I saw like to start with, right. And yeah, I believe 100% in what you just said. It’s definitely I think that’s just the way it is with society right now.

Steve: Yeah, well Kenric, once again, everyone who’s listening, MaxandNeo.com. All proceeds, basically you buy something, he donates that exact same thing to a shelter or rescue. Kenric; thanks a lot for coming on the show, man.

Kenric: Sure. And also just – sorry, last thing. If you guys have any rescues that you want to add on to our list, go to our website, and go to the ‘suggest a rescue’ button, because we want to add as many rescues as possible. Sorry Steve.

Steve: No worries man, we’re good friends so it’s all good. All right, take care, man.

Kenric: Thanks a lot and thanks for having me on.

Steve: Hope you enjoyed that episode. I’ve known Kenric for a very long time, and he’s generally not the most expressive guy, but I’ve never heard him so passionate about a business before and I’m happy that he’s found his calling. For more information about this episode, go to mywifequitherjob.com/episode234.

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

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

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

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

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233: Advanced Strategies To Recover Abandoned Carts With Ben Jabbawy

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233: Advanced Strategies To Recover Abandoned Carts With Ben Jabbawy

Today I’m excited to have Ben Jabbawy on the show. Ben is the founder of Privy and we randomly met at the Shopify Unite conference several years ago.

At the time, I had no idea who this guy was and what he did. And likewise, I’m sure he’d never heard of the number 1 hankie vendor on the Internet.

But we kept in touch and today, I’m a loyal user of Privy and he’s been a great email marketing resource for me. In this episode, we’re going to do a deep dive into shopping cart abandonment.

What You’ll Learn

  • Ben’s backstory on why he started Privy
  • The difference between abandoned cart and abandoned checkout emails
  • The biggest mistakes merchants are making with cart recovery
  • Best practices for cart recovery
  • How implement a cart saver popup

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

GoBrandWin.com – The fastest and most effective way to grow your email list for free using group giveaways. Click here to signup for free.

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

Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. Now today I’ve got a special guest with me on the show Ben Jabbawy who is the founder of Privy. Now, you’ve probably heard me talk about Privy on this podcast before because it’s one of the tools that I use in my ecommerce store. But today, we are going to go into great depth about cart abandonment. And to give you a heads up, there are actually two strategies mentioned in today’s episode that I’m actually not doing with my online store that I will definitely be implementing for the holidays.

But before we begin, I want to give a quick shout out to Privy once again. Privy is the tool that I use to build my email list for both my blog and my online store. And you know what’s funny is after talking to Ben today, it turns out that I’ve only been scratching the surface of what Privy can do. 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 signups increased by 131%.

But you can also use Privy to reduce cart abandonment with cart saver pop ups and email as well at one super low price. So bottom line, Privy allows me to turn visitors into email subscribers and recover lost sales via pop up, and email as well. So, head on over to preview.com/Steve and try the tool 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. Always blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my e-commerce store, and I depend on them for over 30% of my revenues. Now Klaviyo is the only email platform out there that is specifically built for 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. Now, Klaviyo is the most powerful email platform that I’ve ever used and you could try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O, 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 My Wife Quit Her Job Podcast. Today I’m excited to have Ben Jabbawy on the show. Now, Ben is the founder of Privy, the tool that I use to manage all my email capture forms. And I actually randomly met Ben at the Shopify Unite conference several years ago. I think Ed Hallen of Klaviyo introduced the two of us and at the time I had no idea who this guy was and what he did. And likewise, I’m sure he had never heard of the number one hanky vendor on the internet.

Well, we kept in touch and today I’m a loyal user of his tool. And he’s actually been a big help for me for anything email related. And looking back, it was just one of those chance relationships that turned into something more. Anyway, with the holidays right around the corner, Ben and I are going to talk about some advanced cart abandonment strategies. And with that, welcome to show Ben, how you doing today?

Ben: Hey, Steve, I’m doing great. Super excited to be here.

Steve: So we’ve chatted a lot. We got a chance to meet up at the Klaviyo conference a couple months ago, but I actually don’t even know the back-story of Privy, like when did you decide to start this company and why?

Ben: Woo, man. So when did I actually start the company or when did I launch the ecommerce?

Steve: When did you launch the ecommerce product and what were your motivations? Like how did all this stuff get started?

Ben: Yeah. So we launched the product that people know us for in 2016. We had been tinkering with this idea of direct to consumer was going to need a different set of tools, than what B2B marketers were using. B2B was using HubSpot and Marketo and those are great solutions. But if you’re marketing directly to consumers and selling transactionally online, it was just going to require a different set of brands and workflows that are built specifically for those vendors in mind. And at first, we actually we didn’t really start on ecommerce, we were in retail. But in 2016, we really found our footing when we entered the Shopify market.

Steve: So that’s actually when we met right? I think you just launched then when we just met.

Ben: Yeah, you and I met in 2016 at Unite. That’s right.

Steve: Right. Okay, and you probably just — wow, okay, I got you at the early stages, awesome.

Ben: Yeah.

Steve: So Ben, we all know that cart abandonment is a huge problem for ecommerce store owners. Let’s actually start with some stats, I know what the stats are for my store but in your experience with Privy, like what percentage of users have you seen abandon their cart?

Ben: Yeah, so we’re seeing upwards of 60, 70% of carts going abandoned. So you’re spending all that money driving the traffic to the store, getting the word out, you’re getting excited, they’re further down the funnel adding products to the cart, and then seven out of those 10 people will actually abandon the cart before completing purchase. So it’s a huge, huge opportunity.

Steve: And I don’t know if you know the answer to this question, but what are some of the primary reasons for that happening?

Ben: Yeah, so it’s not always price, right, especially it goes down on browsing. Certainly that’s a big part of it. People are just kind of tinkering, but price is definitely the number one reason that we hear, also…

Steve: Is it shipping price or because they should in theory, already know the price when they’re looking at the product and adding it to the cart.

Ben: Yep. So in many cases within price, we hear shipping price or tax like the all in price once that’s calculated and checked out, that is the number one reason that we hear. There’s also a ton of reasons that people leave around, they have questions about the product. So, thinking about guarantees, or reviews or whatever it is, how it actually is going to function, that that drives a ton of abandonment as well. And in some cases, there’s a small percentage that’s actually like the payment isn’t accepted, or errors at check out that cause a portion of abandonment as well.

Steve: Mm-huh. I’m just thinking that if one of these three things that you just named was actually the factor for not checking out, then would an abandonment strategy help because you’re not going to fix some of those things, right?

Ben: Yeah, yeah, I mean, I think, look, part of it is just people get distracted on the web, right? So attention spans are short. And so, I think that’s why you hear so many people placing an emphasis on an abandonment strategy. Certainly price is something you could work on, answering questions is something that you could work on. But yeah, there’s going to be just like in any business, there’s a certain percentage of these abandoned carts that happen that you probably can’t address. But that’s a smaller percentage compared to the ones that are leaving for price or because they have questions etc.

Steve: Yeah, and then I know what my abandoned cart percentage is, it’s roughly 20 something percent, but what are some of the…

Ben: That’s not bad.

Steve: Oh, it’s not bad. I think I read on one of your posts that people are getting 30 to 60 and so that’s why I kind of wanted to ask what those people are doing differently.

Ben: Oh, you mean in terms of recovery?

Steve: Recovery yeah, recovery yeah.

Ben: So you’re saying if you send 20 abandoned cart emails or 100, 20 will actually…

Steve: That’s correct.

Ben: No, that’s pretty good. I mean, we actually are seeing a lot of people that are in the three and 4% in terms of recovery.

Steve: Really?

Ben: Yeah.

Steve: Are you talking about three or 4% off of a single email. I’m talking about across three emails cumulative.

Ben: Oh, okay. So then yeah, I would expect closer to 20 then that seems in line, yeah definitely.

Steve: I think I read one of your articles that people are getting between 30 and 60, though. How do you achieve that? Or maybe it wasn’t one of your posts; maybe it was someone else’s post. I was doing research last night.

Ben: Yeah, that doesn’t sound like it was ours, so that may have come from somewhere else. But you could imagine that if you’re combining a couple of different tactics and I’m happy to talk about them, but if you’re thinking about cart saving pop ups over check out but then look for cart value and the exit signal; I can talk about some of the numbers there. If you’re also sending multiple abandoned cart emails, and then if you’re also doing something like through Shoelace retargeting, you could definitely imagine how the numbers get up above 30%.

Steve: Okay, you just named a bunch of things there. And let’s kind of just start with all the different aspects and kind of break it down to the people listening. It’s harder on a podcast, because they’re just listening and it’s not visual. So let’s just start with the different strategies that you’ve implemented with your clients.

Ben: Sure. Yeah. So first things first, while someone is actually on the checkout in process, you can tie that with this widely used concept of exit intent, right? So if I know that someone’s on the checkout page, and they’re exiting and there’s still value in their cart, then I can actually predict before they ever leave the checkout that they’re about to abandon their cart. And so at Privy, we’ve developed this concept of what we call a cart saving display. It’s exactly what you’d imagine; you can target it just to those people as they’re leaving your checkout process with that money still in the cart, you can design and target a last minute offer.

Steve: What are some metrics that you use to predict that they’re actually going to leave?

Ben: So we’re looking for exit intent. So on desktop, that’s going to be their mouse accelerating towards closing down the browser tab, or moving their mouse to type in a different destination and the URL bar. And on mobile, if you’re thinking about exit intent, it’s either switching between browser tabs on mobile like you can think of just that double click or on the checkout exit intent, we would look for clicking the back button.

Steve: Okay, and so when you detect one of these factors, oh, you’re talking about like a pop up?

Ben: Yeah. Yeah. So you could choose how to display this. But it could be a fly out, it could be a pop up, it could be a spin to win wheel. That’s really up to the merchant. But what you would do is you would use those triggers in your campaign and marry that with a minimum cart value and the fact that they’re still on a URL that contains checkout.

Steve: Interesting and you would you — what are some offers that have worked? Is it usually like some sort of discount offer?

Ben: Yes. So what we see is that a very simple cart saver that targets exactly that people on checkout leaving with either a 5% offer free of shipping offer or maybe 10%, that’s going to help you prevent 10% of carts that would have otherwise gone abandoned before they even leave the site.

Steve: Interesting. I always have a conflict when it comes to just giving coupon codes this way, because you kind of train people, right?

Ben: Yeah.

Steve: So how do you prevent that from happening?

Ben: Yeah. So one of the interesting techniques that a lot of our marketers use is this concept of not just a generic cart saver but a tiered cart saver, right? And so maybe you know your average order value very specifically, right? And maybe if someone has less than average order value, let’s say it was 50 bucks, you know what, you don’t want to train bad behavior. So if they have less than that in their cart, you’re going to let them abandon, but if they have three times average order value, let’s say they had 150 in their cart, then you may want to get a little bit more aggressive and maybe you just target that segment of cart abandonment with a cart saver. So that’s one thing.

The other is just around loading like a fly out that’s asking for, hey, it looks like before you go, did you have any questions about this product? Let us know, we’ll get back to you. You can use a number of different kinds of mechanisms to just try to do everything you can before you let them leave your site. I think that’s like the number one takeaway that shocked us before we launched, the concept of a cart saving display was how comfortable we as merchants are letting everyone leave the site before we try to do anything.

Steve: Let me ask you this question. At least for my store, I know that people in check out they’ll go back and look to see what’s in their cart, and continue shopping. They’ll go to check out but then they might go back and add something extra. Is there a way to just flash this pop up when I know they’re going to leave the site to a different URL versus staying on the site?

Ben: Yeah. So, there’s a number of different kind of triggers you can think about, right. And so maybe exit intent on mobile is treated differently than exit intent on desktop. Certainly it’s something that a lot of our users do anyhow, that is segment different campaigns. So, in terms of this scenario that you’re talking about, there’s no way to necessarily like understand if the back button in this case is going to fire them back to like Facebook, versus back to your site. We don’t really have that level of detection, but that’s an awesome, awesome idea.

Steve: Okay. And so how do people set things up then? You talked about desktop versus Mobile. What are some examples of how you could set it up?

Ben: Yeah. So on desktop, a lot of people like to use our full screen overlay option. So this is a pop up maybe with a background image that literally takes up the entire page, you’ve probably experienced those. And that can be hugely powerful on desktop for a cart saving display. But on mobile, that’s not really anything we would recommend. So maybe on mobile instead of a pop up, you’re using a fly out, that’s kind of just takes the bottom third or the top third of the screen, right? So you may care about the design based on the device.

You may also look for different signals, right? So certainly on desktop, a mouse leaving is a good signal, but maybe on mobile, there’s just a time right? If someone’s on the checkout page with a certain amount of money in their cart for two minutes or a minute, maybe that’s a good signal to load a last minute kind of offer.

Steve: Interesting. Do you know how people mostly set that up with timers exit intent?

Ben: Yeah, so with cart savers, almost all of our users use exit intent for a cart saver looking for that signal, and they marry that with how much money is in the cart. So they may be presenting larger offers to people that have higher values of product in the cart.

Steve: Okay, and what does it exactly mean for exit intent on a desktop, is it when your mouse hovers away from the window or when it clicks the back button or?

Ben: On desktop, we look at mouse movement and acceleration. And so if your mouse is quickly accelerating to close the browser or to the URL bar at the very top, then those would be the two signals we use based on the mouse location and pace essentially.

Steve: Okay, and so if I were to move my mouse quickly, just outside the window to click on another window, it would not come up then?

Ben: No it shouldn’t.

Steve: Okay. I always wonder if the term exit intent, it seems like a lot of people have different implementations. I was just kind of curious how you guys did it.

Ben: Yeah, I mean there’s a number of different ways to handle that.

Steve: So we had the cart saver, what is another method to recover a cart?

Ben: Yeah. So historically, I think everyone talks about checkout abandonment emails. And so, what that means for those that are new is that like Shopify actually has a free tool that does this inside the Shopify admin. If someone gets far enough along in the checkout process to have included their email address, then if they leave before completing purchase, Shopify lets you send a checkout abandonment email and that is hugely powerful. I think MailChimp says that checkout abandonment emails drive 30 times the revenue of other emails that are sent. And there’s no doubt that that’s hugely powerful.

But the challenge that we’ve seen is a lot of your abandonment that happens on your site actually happens on the cart page with people who have added to cart or on the checkout with people who have added to cart, gone to check out, and have not gotten far enough along in the checkout to include their email address. And so it’s kind of like this dirty little secret of checkout abandonment emails where right now even all the ESPs that piggyback off of the checkout abandonments in Shopify actually aren’t able to recognize a large portion of who is abandoning their cart.

So, even though checkout abandonment emails work very well that can be very effective, Stephen your case it sounds like you’re recovering 20% of carts through that mechanism. That’s awesome. Imagine if you were able to send those same exact emails that are working so well to a larger percentage of the pie that was abandoning their cart.

Steve: Walk me through the process.

Ben: Yeah. So let’s say you’re already using something like Privy to convert first time visitors into email subscribers with a pop up, right? So that’s probably converting about 10% of traffic to your store, or somewhere around there. So some of those people, the moment they register there, they become known entities to your database. And then Privy continues to track those people when they browse and add, and let’s say we’ve done exactly that. We filled out a form in this visit and we added a red t-shirt to cart, but at that point, Privy knows who you are, and your abandonment email system or Shopify does not know who you are, right?

Steve: Right.

Ben: So at that point, if I leave the site with that red t-shirt in my cart, the only system that A, has proper opt in and B, has the ability to identify who that email address is that just left the site would be Privy in that case, right?

Steve: Okay.

Ben: So versus if that same person filled out the form, added to cart, moved to the checkout process and started filling out my email and check out, at that point your normal checkout abandonment system would be able to send that abandoned checkout email.

Steve: So for most people who are doing email capture, there’s really no way to communicate with your shopping cart that you have an address right?

Ben: That’s correct yeah. I mean you could certainly sync the email addresses to Shopify or MailChimp, but that’s not — that’s considered offline data. That’s just an email address. It’s not the email address tied to the visitor behavior.

Steve: Right. And so the piece that I’m missing here is traditionally, the way I’ve used Privy was as an email capture form. But if I’m going to do an abandoned cart with Privy, I would also want knowledge of what’s in the cart, right? Is all that information past as well?

Ben: Yes, yeah. So we know which products are in the cart. We know your previous browsing history, what products you looked at, all of that stuff we are storing alongside your form submissions inside Privy.

Steve: Okay. And so what are some of the rules then, in terms of sending this email and what would you contain in this email? Like, what does the email look like and when do you send it out exactly?

Ben: Yeah. So in the same way that we would recommend for your cart saver it’s thinking about that tiered approach, right? We would recommend something similar here for cart abandonment. So in the Privy cart abandonment solution, probably the first email should be set for an hour after abandonment. And at that point, we actually wouldn’t recommend including a coupon. I would recommend keeping that short and sweet and saying, hey so and so, I’m reaching out from Ben’s t-shirt store and we noticed you left some products in your cart. Did you have any questions about how that red t-shirt fits or the sizing or anything? If you have any questions whatsoever, let me know. If not, here’s a link to complete your checkout.

So just that soft reminder with the offer to kind of answer any lingering questions that they have preventing them from purchase can be hugely impactful. Then you might consider a second email that’s maybe six or 12 hours after abandonment and maybe at that point, there’s some more information about the product. This would be an appropriate time to think about a small coupon if the purchase is still incomplete, and then perhaps like you did in yours Steve, you actually have a third email in your series as well. So definitely keeping it to kind of two to three is where we’ve seen a lot of success for our merchants, and that’s where their kind of recovery rates climb from three to 4% to something much higher than that.

Steve: How do you determine how much time to wait before sending out each email?

Ben: Yeah, I mean, I think it’s kind of for starters; it’s a guessing game, right? We see every merchant just start with that one hour email or a 24 hour email. In my view, waiting 24 hours is a little bit too long just given the way that we engage as consumers on the web. So, definitely starting with one hour for the first not necessarily including an offer in that, and then I think it’s really a question on then the next two. And I would kind of decide on when to send the second and third based on anything else you may be doing like are you using retargeting ads. And if you are, then there’s a chance that that person will see a retargeting ad the same day, so maybe two emails in one day is too much. But if you’re not doing anything to supplement your checkout emails, then one at one hour and the second at six or 12 seems appropriate.

S; I know for mine, I think my third one actually converts higher than my second one. I think I had that set at 48 hours and the second was that at 24 hours. It’s weird. I can’t explain it though.

Ben: Yeah. And this is for the linen store, right?

Steve: That’s correct. Yes.

Ben: Okay, and [inaudible 00:24:58]. So, you have three emails, what is kind of the message of each? And is there an offer in each?

Steve: There is not an offer, I don’t because — after talking to you today, I think what I’m going to do is go back and create a separate abandoned cart that is only for high ticket item purchasers. Like if they have a cart that is over like 100 bucks or so, I’ll probably going to try to give them a coupon and keep my existing one for people with carts that are maybe like below 50 bucks or something like that.

Ben: Yeah.

Steve: But I’m not doing that right now. So what I do is the first one is just like a gentle reminder. The second one says something like, hey, we still have your cart saved for you. And the third one is your cart is going to expire soon.

Ben: Nice, that’s cool.

Steve: And so that’s how I have it set. I’m kind of against coupons in general, but I can see the value in giving that out to someone who’s going to be a big customer because we actually reach out to these big customers later and try to make them long term customers that buy over and over again. Because the larger customers at our store tend to be event planners with a lot of buying power. So that’s just a unique case obviously for our store.

Ben: Yeah but I look, I think like one of the reasons we’ve grown a lot is because people want to bring a level of specificity or relevance or personalization whatever buzzword you want to use to how they display messages on their site. And we feel that that’s exactly what they should be doing in their checkout abandonment emails and cart abandonment emails as well. So, I think your instinct around treating high value ticket abandoners and lower cart value abandoners differently is like that’s where you can start to chip away at each of these segments differently because they kind of are acting very different.

Steve: How do you make sure that your abandoned checkout emails don’t interfere with your just abandoned cart emails?

Ben: Yeah, so we’re actually rolling out integration. So basically, just to clarify how most people in the industry do this, if you use something like MailChimp, what they’ll do is they’ll actually piggyback off of the Shopify checkout abandonment API to understand which draft orders have been abandoned essentially. And if eligible, they’ll help you send that email. So it’s all based off of the Shopify checkout abandonment, and we do the same thing, right. So we’ll basically piggyback off of that and our recommendation is if people are going to adopt the Privy cart abandonment solution is that they just simply turn off that email from Shopify.

Steve: I just wanted to take a moment to tell you about my brand new service that will help you grow your email list for free through group giveaways. This service is called Gobrandwin.com, and we’ve had amazing results so far. In one of our last giveaways, we gathered almost 12,000 emails and grew the email lists of participating ecommerce stores by over 56% overnight. Now, does getting more customers and more emails for free sound interesting to you? Here’s how it works.
If you own your own e-commerce brand, and you have a following, you contribute a gift card from your store valued at $200 or more. We will then assemble gift cards from other participating brands with a similar customer demographic and turn it into one massive sweepstakes giveaway. Now, everyone is going to send this giveaway email to their entire customer base, and drive them to a special landing page on Gobrandwin.com. We will acquire email addresses. Now consumers enter their emails, we send them special offers from your store and select a grand prize winner.

And after the sweepstakes is over, you will receive the full list of entrants and instantly grow your email list. And because my co founder and I have a pretty big network, we will also send the giveaway entry form to related influencers within the same niche and instantly augment any sweepstakes that we run. So bottom line the concept is very simple, we all help each other promote each other’s businesses, get free promotion from bloggers, and share the customer base. Now, if you’re interested in growing your email list, then head on over to Gobrandwin.com. That’s G-O-B-R-A-N-D-W-I-N.com, that’s Gobrandwin.com, and it is 100% free. Now back to the show.

Okay and here’s just something that just popped into my head just now. Is there a way to send special pop ups or emails if I recognize that a certain person with a certain email address is hanging out in our store?

Ben: Yes, definitely possible. How would you want to do that based on how many orders they’ve made or?

Steve: Like if I know that there’s someone who’ve spent a lot of money in the past, and their cart might not meet my threshold right now but I want to give them special treatment.

Ben: Yes. Yeah. So we offer a whole slew of targeting rules, so we call them for displays on your site. And one of those is how many orders they’ve made, or how much money they’ve spent on your site.

Steve: Oh, so you keep track of that?

Ben: Yeah. So, that would be kind of how we recommend it. We don’t let you actually input a user’s email address to target but we do let you run all sorts of advanced targeting rules and pair those together so hitting a very specific segment with a specific message.

Steve: Yeah, I mean, obviously, that’s the better way to do it, right? Otherwise, you have to maintain this email list that you have to manually update.

Ben: Right. We want to take the heavy lifting off of you. So as long as you have an idea of what that message should be, then you can design that in Privy and add the proper targeting rules to hit that audience. Just keep in mind that the more advanced you get on the targeting rules, the smaller the audience becomes that matches all.

Steve: Sure. I mean, obviously these would be very specialized abandoned cart solutions specifically targeting a small subset of people that are maybe high ticket item people similar to what we already discussed right?

Ben: Right. Yeah.

Steve: Can you comment on email abandoned cart versus the cart saver pop up versus Facebook ads and push notifications as a means to recover abandoned carts?

Ben: Yeah. So and it’s good. It’s good, right. Like the holiday season is coming up. One of the things that we’ve seen in general and then I’ll dive into that is that over the holiday season, you should expect about 100% lift in traffic. That was what we saw across all our merchants’ stores last holiday season. So, all that means is if 70% of your carts go abandoned normally, and you’re going to double your traffic over the holiday months, then that 70% is going to reflect a much larger amount of carts that go abandoned.

So, if there’s two things that you can do that are incredibly low cost, one would be to set up a cart saving display, and if you’d like targeted just to the people that have a certain amount of money or higher in their cart, big spenders about to leave. That is incredibly low cost; you don’t need to pay to do that. The second thing is whether it’s just the free checkout abandonment email from Privy — sorry, from Shopify, or a solution like Privy, I absolutely recommend that you have some sort of abandonment email funnel set up before the holiday season.

And lastly, if you do have some budget to spend, I think for the holiday season, I would recommend focusing on driving the traffic to your site from your existing list, and then focusing any sort of paid marketing dollars you have around retargeting on Facebook or Instagram the people that are leaving your site without completing purchase. And a lot of the audience probably doesn’t have huge budgets to drive pay on social and that’s fine. So I would look at that as kind of like a third really important stat if you have some budget.

Steve: Okay, I mean traditionally Facebook retargeting of abandoned carts, the audience size for that is going to be large and I can’t imagine you’re going to be spending a whole lot of money on that. It’s not going to be that expensive, right?

Ben: Exactly, and those are the people that are such high value and so high intent that are literally at the bottom of your funnel, and perhaps if they didn’t leave because of an issue with your product or a question, then at least this is just another way to stay top of mind without having to send six abandoned cart emails let’s say.

Steve: Great, let me ask you this question and it just kind of popped into my mind again. When you’re using the cart saver during checkout, you probably want to deliver the coupon code right away, as opposed to having them leave the site and maybe check their email and then come back?

Ben: Yes, yes, definitely so 100% recommend in any case that you always reveal a coupon code on the site if that’s the point of what this person signing up for. So in a cart saver, if they’re on checkout, and leaving and you load something that says, hey, wait, complete your purchase now, join our email list and we’ll give you free shipping code, then you would want to reveal it right there on the confirmation of the pop up as opposed in an email.

Steve: Actually, now that I think about it, we already had their email because they’re in checkout right. So would you just want to display the coupon period?

Ben: Yeah, so there’s two camps here, and both can be incredibly effective. In some cases, if they’re on checkout, you actually don’t have their email yet, right? So we do see some of our users target a form that reveals the coupon code.

Steve: I see. That makes sense.

Ben: And then we have other users that that say, hey, I want to run the same exact campaign, but I want to target the people whose email addresses I actually already know. And I don’t want to ask for their email again, and I just want to reveal the code. So you can actually do both of those things inside of Privy. And we definitely like the more sophisticated the marketer, the more we see that branching. If we know the email address, obviously just reveal the code and if we don’t, we still want to try to capture the email just in case they still leave.

Steve: So when you reveal this coupon code, can you have it automatically entered?

Ben: Yes, so for Shopify we call it the magic coupon script. So whether it’s a master unique code but the same coupon code is what everyone gets. Or if it’s a unique coupon code, we can have it so that it automatically is entered into checkout, whether that’s on desktop or mobile. There’s huge value in that. We know how frustrating it can be. If you’re on a mobile device, you sign up, you get a coupon code and then you have to like remember this long thing. That’s not a really great experience. So we built the coupon script to do exactly that.

Steve: Nice. If we can move back to just email real quick, what are some subject lines in email copy that have worked the best in terms of conversions?

Ben: Yes. So you’re talking about like general email or…

Steve: I’m talking about abandoned cart emails in particular.

Ben: Yeah, so I think this is where own brand adds a lot of value, right? So if you have like a very human casual tone in your brand, weaving that into the subject lines is a great time to do that. I think with distractions and everything like that, a lot of times, just like a subject around, hey, don’t forget, you have this in your cart. That can actually be more effective than you might imagine, especially when you weave that kind of tone into it that they would expect. I think avoiding the offers in the beginning, in the subject line especially, is just going to help with deliverability and avoiding the promotional inbox. So I think we typically recommend that you stay away from that.

Steve: What about the second email assuming there’s no coupon?

Ben: Assuming there’s no coupon in terms of what we would recommend for subject.

Steve: Yeah.

Ben: So in this case, this might be a good opportunity to educate people, right? So, maybe the subject is still centered around like, you still have product in your cart or your cart is expiring soon, something to that effect. But the body of the email may just be pertinent to include a bit more information about your business. A, they may have forgotten about who you were in the last six or 24 hours and B, certainly they may have forgotten what’s in their cart. So, reminding them of those two things in that second email would be important.

Steve: Okay, so Ben, we’ve actually covered a lot of stuff. I was hoping that what you could do is if someone who’s running a store is actually not doing any of these things today, how would you recommend that they proceed, and what needs to be implemented before Black Friday?

Ben: Yeah, so A, we’re doing a free webinar about cart savers and abandonment over the holiday season. Our goal is to walk away with definitive steps you can take no matter how close to Black Friday. So, I highly recommend checking that out. Second, I would do two simple things. I would turn on a cart saving pop up from Privy that loads based on how much money is in someone’s cart and them being on the checkout experience with the exit intent trigger. I would also flip on…

Steve: So, this is only for checkout – sorry, the cart saver pop up is only for checkout?

Ben: Exactly.

Steve: Okay, got it.

Ben: Yeah, and that should help reduce about 10% of carts before they ever leave, a huge value right there. The second thing I would do is I would — whether it’s the Shopify free checkout abandonment email or the Privy $10 a month abandonment email, I would immediately get at least one email set up with or without an offer.

Steve: Okay. And then the advantage obviously with using a service like Privy is that once you have the email, you can show this send this email for any sort of abandonment whereas the Shopify only solution is there’s only standard checkout right?

Ben: That’s exactly right. Yeah, so we will help you send those abandonment emails to a larger percentage of people that are actually leaving products either in their cart or in checkout.

Steve: And on the cart saver pop up, the mobile should be a smaller portion of the screen real estate whereas do you recommend like the full screen takeover for desktop?

Ben: Yeah, for desktop cart savers we do recommend big involved, so full screen takeovers with messages, wait, before you go, reveal code now if there’s an offer, that has huge value. And for mobile definitely sticking with the fly out ideally positioned on the bottom is going to be best for the mobile experience.

Steve: Okay, that’s it, anything that I’m missing Ben, it seems pretty straightforward. Oh, so do you recommend using the timer in conjunction with the exit intent or just the exit intent?

Ben: I don’t know, the timer is kind of it seems to work really well. But as a consumer it feels a little bit kind of gimmicky. So, I think certainly feel free to experiment with it. But we found in a cart saving experience on the site, you don’t need a timer to really have a massive impact on reducing abandonment.

Steve: Okay. And then, of course, if you want to go the extra mile, you’ll have a separate abandon sequence for high ticket purchasers where you can actually give out a coupon and drastically improve your abandoned recovery rate.

Ben: That’s exactly right. So, if you’re just getting started, just make sure you have these concepts in place. And for those that are more advanced, definitely think about a tiered structure based on the value of someone’s cart that is leaving behind.

Steve: Well, Ben, if anyone has any questions for you about cart abandonment, you already mentioned your webinar. I apologize; I already forgot what it was, if you want to specify that again and where people can reach you online.

Ben: Yeah, so you just head to Privy.com, P-R-I-V-Y.com. We have very clear call to actions on when the webinars are and a checklist for preparing for Black Friday. That’s going to be up through the holiday season.

Steve: Cool. And if anyone needs any help implementing all this stuff, you guys have a support team that’ll help out right?

Ben: Oh, yeah, we have live chat support, we have customer success. We are staffing up quite a bit for the holiday season.

Steve: Cool. Well, I know that I am actually not doing many of the things that we discussed today. And so I’m going to put on my implementation hat and get this stuff done before the holidays for sure. But Ben thanks a lot for coming on the show. It’s really valuable.

Ben: Thanks Steve. Yeah, my pleasure, great to be here.

Steve: All right. Take care.

Hope you enjoyed that episode. Whenever I talk to anyone on this podcast, I always leave with yet another action item for my store. But the tips in today’s podcast are actually simple to implement and I’ll definitely have them ready by Black Friday. For more information about this episode, go to mywifequitherjob.com/episode233.

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

I also want to thank Privy for sponsoring this episode. 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 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 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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232: Facebook Chatbots – Creative Business Use Cases With Dana Tran

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232: Creative Facebook Chatbot Use Cases With Dana Tran

Today I’m thrilled to have Dana Tran on the show. Dana is someone who I randomly met at Social Media Marketing World and I must say that I’ve been super lucky when it comes to bumping into random people at conferences.

Dana runs Thinktuitive where she focuses on writing content for Facebook Messenger bots. In fact, she has a premium course called Bot Essentials that helps non techie entrepreneurs build their own chatbots.

In today’s episode, Dana’s going to teach us how it’s done.

What You’ll Learn

  • The two main Facebook chatbot programs that she recommends
  • Creative implementations of Facebook Messenger bots
  • How to implement an abandoned cart bot
  • How to create questionnaires to provide product recommendations
  • How to combine Facebook Messenger with email
  • Which lead gen method should have higher priority, email or bots?

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

GoBrandWin.com – The fastest and most effective way to grow your email list for free using group giveaways. Click here to signup for free.

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

Intro: 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’ve got my friend Dana Tran on the show. And Dana has actually slowly become my go to gal when it comes to Facebook Messenger bots. And what I like about her is that she knows her stuff and she has a technical background. And today what we’re going to do is we’re going to discuss some practical use cases for bots.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Now, I’m always super 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. 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 how much they purchased, piece of cake, and there is full revenue tracking on every single email. Klaviyo is easily the most powerful email platform that I’ve ever used and you could try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to give a shout out to Privy who is also a sponsor of the show. And Privy is the tool that I use to build my email list for both my blog and my online store. Now what does Privy do? Well, Privy is an email list growth platform and they manage all of my email capture forms. And I use Privy hand-in-hand with my email marketing provider. Now, 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.

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 Dana Tran on the show. Now, Dana is someone who I actually randomly met at Social Media Marketing World, and I have to say that I’ve been super lucky when it comes to bumping into random people at conferences. Dana runs thinktuitive.com where she focuses on writing content about Facebook Messenger bots. And in fact she has a premium course called Bot Essentials — I’m not sure if the name has changed, that helps non techie entrepreneurs build their own bots.

Now, as you all know, I’ve been really into Messenger bots for quite some time now. And what I like about Dana is that she’s the perfect blend of tech and communicator. Today, she’s going to teach us about Facebook Messenger marketing. Welcome to show Dana, how you doing today?

Dana: I’m doing great, thanks so much for having me on. I’ve been listening to you for I don’t know how long now, so it just feels such an honor to be on the show actually.

Steve: It’s actually – the pleasure is actually all mine. So Dana, we did meet randomly at S&MW, give us a quick background story. Tell us how you got into Facebook Messenger bots in the first place?

Dana: Well, I am — I consider myself a digital coach. I teach and help small businesses how to build interactive bot experience to help them increase the engagement and of course, all without coding. I focus mainly on non techie entrepreneurs. And my background is a mixture of tech with HR, and I specialize in E-learning and process improvement. So, back in the days when I used to be a consultant, I mainly worked on HR IT enterprise system, kind of not the most exciting things in the world. But I helped businesses become more productive and efficient with the help of technology.

And I found out about Messenger bots during their F8 conference. And this was back in April 2016, I think. And I was just watching it online and learn about Messenger bot. And I just thought like wow, there’s just so much possibilities here. So, now I’m applying the same skill set that I used to have when I used to be a consultant working with larger companies. But I’m applying that to help smaller businesses become more productive, efficient, and show them how they can leverage Messenger bot to engage with visitors and customers, and providing them an interactive, fun experience.

Steve: Cool. I must say, I’ve never met anyone who combines tech and HR. I didn’t think that really exists. Anyways, so one of the themes of Traffic & Conversions and Social Media Marketing World this past year was Facebook Messenger, and chatbots, chatbots, chatbots. So, what I was hoping to do today was maybe to go into depth on some of the best use cases that you’ve seen for businesses and Messenger bots. And let’s assume we have someone who’s running an ecommerce store, how would you implement a bot? And what are some creative cases that you’ve done or seen in the past?

Dana: Well, with Messenger bot, I mean, I want to back up a bit just in case there’s somebody listening, and they don’t know what a bot is.

Steve: Sure.

Dana: So, a Messenger bot is a program inside Messenger that can automatically interact with people, answer common questions, and provide them with relevant information in an interactive way. So, that’s what a Messenger bot is. It’s not a replacement for your website, your email marketing, or any other tool. You really need to think of it as an additional tool that you’re adding to your current tool kit. So, what I like to do with Messenger bot is to provide value, educate with users, engage with them to move them along the customer journey from being a visitor to a subscriber, to a lead, and eventually a customer, which is what all businesses, the goal is to get people to eventually become a customer.

And what you want to do is prompt them to take small actions, and also use it as customer support, which is really, really critical. And I think with internet, we’ve been in — over the past several years, it’s always been about pushing information out to user, blasting out information. And I think we kind of lost that human touch to it, because everything can be automated. And Messenger bots are great at automation, don’t get me wrong. But I also like to use it to have live one on one human to human conversation, because if a user needs something, and they have a question, you can actually reply back to user.

So, suppose a user is out there researching your product, and they stumble upon your Facebook page, they can send you a message to your Facebook page, and you can reply back to them. Now, you can also embed a chat customer plug-in on your site and it’s that little bubble that appears in the bottom right hand corner. And I think you have it installed on your site.

Steve: Yeah, I have it on the site yeah. It’s actually a great way to close the sale actually.

Dana: Yeah, because sometimes people have certain questions that only a human can answer, right, a bot can’t answer everything. It’s not that smart yet. But that chat bubble, it kind of replaces — did you have like a natural live, like a live chat tool there before?

Steve: I did not actually. I put that in just to get Messenger subscribers, and now we have someone in the Philippines manning that thing full time.

Dana: Oh, wow. Okay. Yeah. So with some sites, I’ve seen them take down their live chat software, and just replace it with Messenger because it’s free. You don’t have to pay anything. And you can have a combination of like automated response through the Messenger bot, as well as live or hire somebody in the Philippines to man the live chat. And the one thing I like about it is when you compare it to the live, the traditional live chat software is that you can start a conversation from Facebook page or the website and say, you send them a message and the person to reply back and say, your guy in the Philippines is only manning that thing for 12 hours a day, let’s say because they need some sleep too, right?

Steve: Yeah.

Dana: And you’re out at the grocery store. And he happens to reply back. Because you’re replying back on Messenger, you can actually reply back instantly. With live chat, when you reply back, it sometimes sends you an email notification, and then you have to go back to the website, and then you reply back. It’s not like in one central location. So, with Messenger being a communication tool, first and foremost, you can use it to have this great conversation and to help close the sale. That’s one thing I really like about it.

Steve: Yeah, absolutely. I mean, what’s nice is all the messages are stored. Everyone uses Messenger today, for the most part. And so, all the conversations are already stored there. Unlike live chat, where they might actually have to go back to your site or use that specific chat window to communicate with you, Messenger is always present.

Dana: Yeah, and they don’t have that time out, like have you ever chat with somebody on a site, and then you open a whole bunch of tabs. And later when you go back to that tab, it’s like, sorry, the conversation is now closed. And you’re like, oh, I have to wait again to have another conversation with the user.

Steve: Totally, totally.

Dana: It’s really helpful that way.

Steve: I mean, there are other features right now that the Facebook chat bot doesn’t have, sorry, the Facebook Messenger live chat doesn’t have a lot of these metrics that some of the other live chat programs have. But I mean, the benefits outweigh the negatives right now, it might be at least.

Dana: Yeah, I think in your opinion. I mean, some still stick to live chat. I’m not saying live chat softwares are really bad, but it just depends on case by case basis. And I think the best way is to kind of test it out and see what works best for you. But another use case, the other the other thing I guess I want to warn people about is the limitations of Messenger. Even though you say it’s great, when it comes to your Messenger subscriber list. So unlike email where you can migrate your email list from one platform to another, you cannot do that easily when it comes to bot building platforms. So, you need to kind of test out the platform and choose wisely.

Steve: So let me ask you this, since you’re on that topic, what do you recommend for ecommerce, which platform?

Dana: Oh, boy. I mean, my two favorite platforms right now is ManyChat and Chatfuel in no particular order. I use them both actually. I have to Messenger bots; one is on ManyChat and the other one is with Chatfuel. And both have a payment feature where you can actually get users to buy a product directly in Messenger. Both can actually hook into third party databases if you want it to so that you can send data and even like so if you want to collect an email address inside your Messenger bot and send that to your email marketing software, you can actually do that. But yeah, I would say just test it, it just depends.

Steve: Let me ask you this, what is the primary difference between the two in your opinion?

Dana: Right now, the biggest difference is the user interface, the user interface. So with ManyChat, it has a mind map field to where you can kind of visually see how things are connected to each other. So, it can be really useful, except if you have a really big flow, then when you zoom out, you can’t really see anything other than squares and a whole bunch of lines, that doesn’t really mean anything to you anymore.

Chatfuel has blocks. So it’s the sidebar where you can see all the different blocks with labels on it. And in each block, you could put in content like your texts, images, and things like that. But you don’t see how they’re linked to each other. But it’s okay, if you have a very complex bar, and you have a lot of logic built into it, because if you have a mind map with 100 different squares and 100 different lines and like, what does that really — you’re not getting any value from it anyways. So I would say that’s the biggest difference.

Steve: So what you’re trying to say, I guess, is both tools are pretty much equivalent in terms of functionality. It’s just a matter of which you like better.

Dana: I mean, if you want to get into the really nitty-gritty detail, I have, I think I wrote a fourth…

Steve: Oh, okay you’re right. I remember that. I actually, I will just link that up instead of going through this on the podcast yeah.

Dana: Because you asked me, what’s the biggest one difference, right? Then I would say what comes to mind most is the user interface. But if you’re talking about like nitty-gritty detail, then there are differences that both are adding. And I think I update that article every month now, to tell you the truth, because they’re adding new features to it all the time that it becomes outdated so quickly. So refer to that if you want to know about the specific detail.

Steve: So, one thing I did want to ask you about is when I run email campaigns, I have an abandoned cart, a repeat purchase sequence, a post purchase sequence, let’s just take abandoned cart, for example, is there the equivalent in Messenger bot land for that?

Dana: Yes, there is. So when it comes to abandoned cart, there’s two ways of kind of accomplishing that, right. The first way is easier. So, let me talk about that first. The first way is, if you have a gallery, let’s say, inside your Messenger bot, and it shows your product and there’s a bit of description about what your product is, how it’s great, what you can do is add a button to that just below that image, and have people check out right, and pay for that product directly inside Messenger.

Steve: How does that work exactly? Do you have to upload your products or is it literally loading your site into Messenger? Like, how does it work?

Dana: You could do it both ways, actually. So you can open up like a web view inside Messenger that loads your website with product detail. Or you can have a image of your product and a buy button. And when a user buys and clicks on that button, it would send you a notification and it would prompt you to fulfill that order depending on what your…

Steve: Does that mean you would have to link up your chat bot with your shopping cart, for example, then?

Dana: If you’re doing it the web view way, then yes. If you’re doing it just through the gallery, the native Messenger gallery, then you would just add a buy button and you would just get an alert after people pay you through Stripe, let’s say.

Steve: So once they pay through Stripe, you get a notification. But that notification needs to add an order to your shopping cart back end, right?

Dana: Yeah, you could do it that way. I mean, it depends on if you have only a few products, then that’s probably easier. If you have hundreds or thousands, then you would probably need to hire a developer to kind of help you integrate everything. So it kind of depends on what you’re looking for, because I’ve seen for example, Lego has an amazing bot actually if you haven’t had a chance to check them out. But what they do is they create a questionnaire that asks you like who are you buying for? What’s your budget, what theme they like? And after you answer those questions, it gives you a recommendation of five products because Lego has probably millions.

Steve: Millions, yeah totally.

Dana: So they ask through questionnaire, they kind of help you pick out the right one for you, or whoever you’re buying for. And then under those five product recommendation, they have a little buy button that takes you to the website. And I think what they do as well before loading that buy button is they give you a discount code for free shipping that expires in X amount of days, or whatever it is. So it kind of pushes you to make that purchase a little quicker than you would otherwise.

Steve: I see. So that’s actually ingenious. So, is that, as soon as you get on Lego’s site, and you initiate a chat, this wizard, I guess to help you find what you want to look for, is that the first thing that pops up?

Dana: Yeah, that’s – well, I don’t know if that’s — that’s one of the options that you have. But if you do have, say 1,000 products or hundreds, I wouldn’t recommend creating a catalog inside Messenger, because it’s kind of like walking into — just imagine walking into like a big, I don’t know, Costco or something, you can kind of get lost. And you’re like, okay, what is it that I’m looking for, and you’re just wandering around the different aisles to kind of see what product there is, right? With Messenger bot, and if you have a lot of products, I would say pretend that that’s a virtual sales associate that you’re building.

And what you could do instead is get that sales associate to ask each user, what are you looking for, and just help narrow down what the choices are, and then give product recommendation that suits them.

Steve: Based on your best sellers, for example probably, right?

Dana: Yeah, best sellers because like, at the end of the day, it’s kind of like Amazon, right? When you go onto Amazon, there’s just so much products. You either use a search, they also have personalized products for you that you can kind of see based on your past search history. Because with Messenger bots, suppose that you have a user that interacts with your bot before and you tag them, and you save certain information about them. So you already have a rough idea of what they’re interested in. You could send them a broadcast, I mean, now and then to make recommendation on what you think would be the best product for them. Like, you don’t want to send them a catalog with 100 products in there.

Steve: Sure, absolutely yeah.

Dana: They’re just going to go crazy. So use — it’s a very different mindset when it comes to building a Messenger bot, because you got to think about, okay, how can I use this creatively to actually help my users? It’s not like a WordPress site where users can just browse. It’s your window is very limited, because if you think about your texts that you get from your family, your friends, it’s very short text. It’s never a 500 word article and it’s never a whole bunch of images. Whenever somebody sends you a text, they kind of limit and think about, okay, what would Steve be interested in? And then they send it right.

Steve: Yeah, I was just thinking about this right now, in the case of my own store, we had different gifts based on the occasion. So we could have a bot where we just ask them, what occasion are you shopping for a gift for?

Dana: Yes.

Steve: And then based on the responses, we could give, like, the best sellers for that given occasion for a given person.

Dana: Yeah, you could do that, occasions, you can ask them maybe favorite colors, if they have been eliminated down? Do they like flowers? Or do they like initials, let’s say. And you can show them different patterns and things like that. And instead of — because with a gallery card, it’s — are you familiar with the gallery card?

Steve: Why don’t you go ahead and explain it?

Dana: Yeah, a gallery card, it’s basically kind of like a slide show where you have an image. And right underneath each image you have a area where you can have a title and a description. And then below that is buttons where they can learn more about the product or you can buy the product. So each gallery, you’re only allowed up to 10. And this is where the user scrolls hor – no wait vertically or…

Steve: Horizontal, left to right.

Dana: Horizontal, yeah left to right, thank you. So they can only scroll horizontally but there’s only 10 options. And I think that’s — I mean, a lot of people complain and they’re like, oh, why doesn’t Facebook allow you to have 20 or 100? Like, do you really want to scroll through like 100 product recommendations?

Steve: I mean I think 10 is actually a lot in my opinion.

Dana: Ten is a lot. And I think Lego when they give the recommendation, I mean, take a look, and see what they do. But I think they only send like five. So it’s only like a quick scroll and you can see all the options. So, I really like what they did with theirs because it’s really fun. You’re not overwhelmed by so many different products. And the recommendation is relevant because you answered those questions, and they’re providing product recommendation based on your answers.

Steve: Is all this done through buttons and not through text at all?

Dana: Yes. So with Messenger bot, we’re not quite there in terms of it being super smart. If you want to allow users to type in actual questions, then what you could do is integrate it with third party kind of artificial intelligence tool like Dialogueflow, is one of them. But I find that people don’t really — typing requires more effort than like tapping.

Steve: Oh no, absolutely, I was just curious.

Dana: So it’s always better to give people an option to tap on buttons. And I always reserve actual text for when you’re getting users to fill out a form or submitting a question, or of course chatting with customer support, you want to give them the option to just say whatever they want to say in that case.

Steve: Let me ask you this question; is it in a store’s best interest to try to check out a Messenger versus doing the checkout on their own site?

Dana: I’d say it depends on the number of products you have because I mean, at the end of the day, it goes through Stripe. You can sell digital — sorry, you cannot sell digital products though through Messenger. So, if you have a store and you’re selling an eBook or something, then you cannot have it the payment process through Messenger. That’s not allowed by Facebook. It’s not a Chatfuel or ManyChat limitation; it’s a Facebook policy that you need to follow.

But I think either way kind of works because going back to the abandoned cart, I think I mentioned the first way is to get people to if somebody taps on a product and say you give them — going back to the Lego let’s say, you give them recommendation and they looked at the product details for those five recommendation, and they don’t check out, what you could do is since you already tagged them in the system and you set that, oh they already seen the product recommendation, you can enroll them into an autoresponder sequence that follows up with them in I don’t know like a day to remind them that, hey, you were looking at these, did you want to check out? So in terms of cart abandonment, that’s one thing that you can do.

Steve: Does that imply then that you need an autoresponder per product in order to do it the way you just specified?

Dana: Not necessary, you can just say, like, oh, you were looking at the product before and just send them, and just point to like the gallery above.

Steve: I see, as opposed to the specific product, which would be a better implementation, right?

Dana: Yeah, because if it’s only a one product, then you could follow up with it. Again, if you have a lot of product, then it might be more difficult to scale if you’re just using Chatfuel or ManyChat, because you need to build all these things manually. But you can say, like, oh, check out the gallery above and just have a arrow emoji pointing to the gallery above to kind of get them to look back at what they were looking at.

Steve: How does the bot know that you actually did not finish checkout?

Dana: You would — when you show them the — when you make the product recommendation, and you send them the product gallery, you can automatically enroll them into a sequence. But if they made the purchase, then you could actually remove them from that sequence.

Steve: So that would be something that your cart needs to tell the bot or whatever software to be used that the purchase went through and to take them away from the…

Dana: Definitely yes.

Steve: Okay. And that requires — is that something that your software handles or is that something that’s built into like Shopify, for example, or BigCommerce?

Dana: I don’t know about Shopify or BigCommerce. If you’re doing it natively through Chatfuel and ManyChat and you’re getting people to check out through their software, then you could do it that way.

Steve: I see. Okay. But if you’re taking them to your site for checkout, then you’d probably have to code something up with the API in order to remove people from an autoresponder sequence. Is that accurate?

Dana: Yeah, so with cart abandonment, I said that there’s kind of two ways. One is the built in payment processor inside of Messenger. The other way is suppose you want them to check out through your website, which has nothing to do with Messenger at this point. So they’re just browsing your website, they add something to the cart, what you can leverage is it’s called a checkbox plug-in that you can add to your website. And if they added to the cart, you can actually trigger and enroll them into a sequence if you wanted to.

But the tricky thing about the checkbox is it’s no longer pre checked. The user would actually have to check that checkbox. And it’s something that Facebook removed. I think they might reinstate it. I’ve heard of them kind of talking about reinstating that pre checked status. But one thing that you could do is have that checkbox and there’s actually a software called Recart that can actually help you with that.

Steve: Yes, that’s a Shopify plug-in, right?

Dana: Yeah, that’s a Shopify plug-in. Yeah, they can actually send to Messenger and that is actually probably the easier way to do cart abandonment through a website with the help of Messenger than to kind of build it on your own. It’s possible, but…

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From what I remember how that works is it used to be pre checked so that when someone added something to the cart, they were automatically opted into – they got a Messenger message sometime later that said, hey, were you looking at this and you didn’t finish checkout. Now that it’s not pre checked though, I guess the chances of them checking it are pretty slim. I know, for mine, it’s like a 1% or something in the single digits for people that check. I give a free gift on add to cart. That’s how I get people to do it. And the percentage of people checking that box even though I’m giving something for free is pretty low.

Dana: Oh, wow.

Steve: So that’s just my story though yeah.

Dana: I would say it’s harder with if you’re doing it inside of Messenger because you can track whether they viewed a product or not. It’s probably a little easier than to get them to physically go out of the word to check that little checkbox on your website.

Steve: Yeah, it’s a tiny checkbox too, yeah, exactly. Okay. So it sounds like then that the easiest way to implement this is to actually use the payment system associated with Chatfuel or ManyChat because it’s much easier to take them off of the autoresponder sequence for example, and add them on.

Dana: And add them yeah. But what you could do is, if you have a product page, you could send them to a quiz or something from your website to that quiz and teach them more about whether this product is a right fit for them and then retargeting them that way. That’s another way of doing it. But you want to provide them with some reason to actually go from your website to your Messenger bot in order to retarget them, right?

You either have a quiz or have some reason where they can learn more, or click on that button to subscribe and get a discount. Because what you could do, and I think you can build like almost like a wheel of fortune inside Messenger, when you provide them with a random discount or prize and send them to that wheel of fortune feature inside Messenger. And that way you can kind of retarget them at a later date since they’re – you’re kind of gamifying it then you send to them.

Steve: Right. One thing that’s also not clear to me is, and I know ManyChat sent out some emails saying that their payment system has been has been updated, and it’s unclear to me. So if you take payment through ManyChat, for example, what is the notification like? Where does that order go exactly?

Dana: At Stripe.

Steve: At Stripe? So that takes the payment information. But what about the specifics for the order and all that stuff, is that just something that you have to pre bake into the tool?

Dana: No, there’s a section in ManyChat where you can see all of your order history. And you can also send a notification to yourself if you wanted to.

Steve: What does the notification look like? Is it an API or is it an email? What does it look like?

Dana: Right now I know it’s an email. I’ve been kind of playing around a bit with the API side of it. I don’t know that they did a lot with the API. But right now, it’s just basic email I believe. I might be wrong having…

Steve: I see. So it sounds like the flow is you set up some transactional stuff with ManyChat, and then you get the order, you get the email, and then someone has to just manually enter that into your back end system for fulfillment.

Dana: Yeah, unless you want to go through Stripe API.

Steve: Right. In which case, you would probably have like a web hook or something then, right that would automatically…

Dana: Yeah, I think that would be the best way too.

Steve: If you want to automate it, oaky.

Dana: Yeah, Stripe is the main — I mean, that’s where your actual information is anyways, like the for sure because they made the purchase. So hooking through Stripe, I would say is the easier way to do it.

Steve: Sorry, for the listeners out there, we’re probably getting a little too technical there. I was just thinking in my mind how I would implement this with my own store without having to do any manual entering. And just for the benefit of the listeners out there, Stripe has these — has a really nice way where when someone makes a payment, you can actually — it’ll tell you exactly what they bought and everything. And then you can kind of tie that into your back end. There must be some plug-in available for this. And maybe if I find it, I’ll link it up in the show notes.

But okay. So I think we’ve beaten abandoned cart to death. What are some other great examples that you’ve seen in the ecommerce space for bots?

Dana: For bots, I mean, creating a questionnaire or a quiz. I’m a really big fan of that, because it just allows — it puts the user in control, right. I think I mentioned it before with Lego as an example. But it’s…

Steve: So let me ask you this, how would you initiate that questionnaire?

Dana: How would I initiate?

Steve: Yeah, how do you get someone to take it?

Dana: So when you want to drive traffic to your Messenger bot somehow. So you can either have them go to your bot through your Facebook page, or a Facebook post say that you promoted or your website. And you could say something like, having a hard time deciding which product is best for you, try taking this quiz, the short quiz and our bot can help you out, something like that.

Steve: Okay.

Dana: When the user clicks on the button, it would initiate the quiz and it would start, and it would ask them some questions. Now, when it comes to asking these questions, it’s not an interrogation. Don’t ask too many questions because if the user makes a mistake midway, or they want to start again from the beginning, it’s not easy to do that unless you build it into your quiz. So just make it really simple, use buttons to allow them to answer. I think with Lego, they only ask like three or four questions, just enough to kind of get an idea.

And then after that they share the results with you. Now, it’s not just about product recommendation, but you could also ask them like what are you trying to learn about a product, right? So you had somebody selling something about I don’t know, like skincare, right? You can also ask them, are you suffering from dry skin, or oily skin, and just use it to send users the right information that would benefit them. Because with Messenger bot, the difference between Messenger bot and a website is when you’re on a website, it’s the users’ job to look and scan your website to find where to go, and what to click to find the right information, right.

You can browse the top navigation bar, you can search, you can look through all the different thumbnails and colors and pictures and whatever you have on your site. Messenger bots, you don’t have that luxury. You have a very fixed small space. And I’ve seen people trying to copy and paste and cram all their information from their website into a Messenger bot, and send large amounts of text and images. And it just does not work well at all.

Steve: Yeah, so it sounds like you just need to be a lot more concise. And then keep the questionnaire very simple, pick your best selling products or your winners, and then try to steer people in that way.

Dana: Yeah, it’s like a toy guy, right? It’s like, okay, what do you want to look at today? Ask them a question. And you your job when building the bot is to build all these different possible scenarios that a user might go down. So they might go down one way or another way. And you build out those separate experience and you’re putting the user into the driver seat to allow them like to let them pick where they want to go.

Steve: Let me ask you this, how have different companies that you’ve interacted with, how do they mix email with Messenger, because I still feel email still drives a large quantity of traffic and sales to my shop. And I’ve been at least conflicted on which I want to grab first, because not everyone is on Facebook Messenger, especially in my customer demographic.

Dana: With Messenger, the type of information that you can share is very different. So, I like to use Messenger where it’s very short bursts of information or reminders is a really good one. Say you’re hosting a webinar or a live event or anything where you want to send a reminder, that’s a really great way to follow up with users and remind them. If it’s something that’s more lengthy, like say, 300, 400 words, it’s going to be tough to try to break that down into a Messenger.
I don’t know that you can easily do that. I’ve used both. It just depends on what type of content you want to send out. And at times, I’ve actually sent out a Messenger notification or a Messenger note or a broadcast, I’d say, and redirect people to video or PDF where there’s more information because I don’t try to put everything into Messenger.

Steve: What about in terms of getting an email address? Like, would you go for a Messenger subscriber first over getting an email subscriber?

Dana: With Messenger, it’s easier to opt in, it’s just one click. Users don’t need to fill out a form. So with if you’re on a website and you have you ask people, oh, do you want to get a free PDF or a free coupon or something. All they need to do is click on the sent Messenger and they would automatically get it. They don’t need to type in their first name. They don’t need to type in their last name. And then you also have the issue of the open rate, because open rates on Messenger is still I believe, about a 70 to 90% as opposed to email address where it’s 20 to 30%. It’s just so much lower. So, right off the bat, you already — a lot of people that you’re sending the email to are not going to open and read it in the first place. So that’s one thing to think about.

Steve: I guess, for your — let’s take you, for example, do you always go for the Messenger bot first and then an email or do you get an email first?

Dana: For me, because I’m teaching about Messenger, I’m actually only collecting Messenger right now, I don’t even bother with email.

Steve: Interesting.

Dana: But that’s only for me.

Steve: Right, yeah I know.

Dana: It’s very different because I’m trying to teach people on Messenger. And chances are if you want to build a Messenger bot, then you’re going to have a Facebook account and Messenger.

Steve: Sure, that’s true.

Dana: So, it’s a little different for my case. I wouldn’t say that that applies to your audience. But with yours, if you have a Facebook account, it’s so much easier to get people to opt in with Messenger. And afterwards, what you could do is ask them and follow up in that message. After they click to subscribe to your Messenger bot is ask them, hey, do you want for me to reach out by email, and ask them to type in their email address. Or there’s actually a feature available both in ManyChat and Chatfuel now where a little bubble pops up.

And in that bubble, it’s kind of like an auto fill in chrome and it includes the user’s email address. And when the user taps on that email address, then you can get that email address and send it using Zapier, for example, to your email marketing software so that you’re linking the data from your Messenger bot to an email marketing platform.

Steve: Okay, is there a way to do it outside Zapier at this point because my personal thought on Zapier is this like this kind of glue so to speak. That’s like an extra cost where if you just stitch them together natively, do you know have a way to just stitch them without using Zapier at this point?

Dana: Yeah, so they Zapier or I think it’s Zapier because…

Steve: Zapier, okay.

Dana: I always have to say that in my head, but they’re very expensive. So one of the things I’m actually working on separate on top of ThinkTuitive is a SaaS product called Codeless Bot, and its web hooks that allow you to send data collected from your Messenger bot to a third party tool like your email marketing. That will eventually — it’s in progress right now, but will probably introduce several email marketing platforms. We also integrate with Airtable. So that way if somebody makes a purchase let’s say, and you want to send that into a spreadsheet in Airtable, you can list out who bought it, what they bought, so that you have a place where you can analyze your data. I’m very analytical, so I just love doing that.

Dana: I see. So you’re developing something that kind of would replace Zapier.

Dana: So kind of, we’re not exactly a Zapier alternative. It’s kind of a hybrid between Zapier and hiring developer because we don’t have a user interface where you can drag and drop, and create your own triggers and actions to build everything. It’s more of a done for you plug and play, solution.

Steve: That does a specific thing, right.

Dana: Yeah. So Zapier, you have to build and put stuff together. It’s kind of like if you go to Home Depot, and you buy your lumbar and you’re trying to build a [inaudible 00:42:45]. We’re more of an IKEA where it’s like, that’s what you’re going to build. So just follow the simple instructions and you’ll have a piece of furniture at the end of it.

Steve: I’m just curious. I mean, you’ve studied a lot of chatbots, what have been some ecommerce store strategies when sending broadcasts and promotions that you’ve seen?

Dana: So with broadcast and promotion, you got to be very, very careful. I went to F8 this year. That’s Facebook’s annual conference. And it was just in May of 2018. And one of my biggest takeaways from that conference, I would say is that the Wild Wild West of Messenger bots and promotional messages are coming to an end.

Steve: Oh, okay.

Dana: Yeah, so like before, I mean, they have policies and rules in place, but it wasn’t a really big priority to monitor. I don’t know if that’s the right thing to say. Like, they didn’t have the manpower to monitor all the promotional messages. But right now, as bots are getting more and more popular, they want to keep the system free of spam. They’re trying to avoid it turning into email, because with email, if you look at like a inbox that you have, there’s probably just tons of email saying, you know, promotion ending today sale on, they don’t want that to be the case.

So you have to be very careful when you’re sending promotional messages. And if you’re sending promotional messages to those who are not even ready to make a purchase yet, then they’ll probably report your bot as spam. And then your bot will get banned from Facebook, which is nobody wants that.

Steve: Oh, I didn’t know that. Okay, so then, now they’re actually — have you ever heard of any crackdowns up to this point?

Dana: Oh, tons.

Steve: Oh really? Okay, what happened?

Dana: They’re sending out promotional messages, which is not allowed. Messenger bot — I mean, when you’re using Messenger bot, you’re trying to engage and educate users about your product. You’re trying to provide value; you’re not trying to just push everybody to make a sale. And what they’re doing is just sending out a broadcast announcing a sales, and the worst one is actually around Black Friday, because I subscribed to quite a few around Black Friday. And I just got messages after messages saying sale ending or sale starting, and all of that was actually not allowed.

And I got some promotional messages from really big — I won’t name names, but really big, well known national store, like clothing companies that are doing this. And I asked Facebook, I have a guy that I — a really nice guy that works at Facebook. And I actually asked him and I said, is this allowed or, you know, big brands doing this because people are going to follow big brands and copy their strategy.

Steve: Sure, that’s true.

Dana: And I said this company that’s really well known company is doing it, is that allowed? And he said, actually no, that’s not allowed. They’re breaking the rule. Okay, that’s good to know. So don’t use it to push for promotional. And I know, let’s continue with the clothing example. You’re saying, okay, so if I don’t have promotional messages, what am I supposed to send? Everything is essentially encouraging people to make a purchase, right?

Steve: Right.

Dana: So there is one bot, I don’t remember the name right now. But what they do is they sell women’s fashion, so women’s clothing and every — I think every week they send out a message about style inspiration. So here’s what you can wear for the week. So design trends, just to give people ideas about what to wear to work for that week. And of course, the message itself is actually providing value because it’s providing people with ideas on what to wear. And of course, if people are interested in those specific outfits, they’re going to ask where can I buy it?

But the initial, the original intent of that newsletter that they’re sending out is to provide people with ideas and inspiration. So they’re educating, they’re engaging, their sole purpose yes it is to encourage people to make a purchase but it’s not, please buy this outfit right now.

Steve: You know what’s funny is I think I was talking with McHale of ManyChat, and I sent out a broadcast once where I was like, hey, here are some of the new arrivals for our store, but he said, that was a gray area.

Dana: Yes, that is true.

Steve: Okay. But in terms of inspirational clothing ideas, that to me almost sounds like a gray area too. But I guess it’s a little bit different. I guess we need to phrase it a little differently.

Dana: Yeah, you need to phrase it differently. I mean, when they don’t — when you look at there’s, it doesn’t seem like — it’s almost like an Instagram gallery, which you’re just seeing pictures of people or like, take a look at Sephora. What they do is they actually show you how to apply different makeups to leave a specific look, right? At the end of the day, they’re trying to get you to buy their makeup, but they don’t say there’s a sale on with this brand or lipsticks on sale. They don’t say that. They say hey, it’s Friday. Are you looking to go out tonight? Here’s a great look for the weekend or for the night. And they teach you how to apply those things. So with that, it’s education.

Steve: And then once you interact, you can give them a coupon, right?

Dana: Yes, that is true. So within a 24 — if the user interacted with your bot during the past 24 hours, then you can send them promotional messages. That’s allowed. But if they have not interacted with you during the past 24 hours, then you should not be sending them any promotional messages.

Steve: Okay. Hey Dana, I want to give you an opportunity to talk about your company, and what you’re working on as well. So what is ThinkTuitive all about, what is your course all about and your software?

Dana: Thank you so much. My site is ThinkTuitive.com, so it’s resources, articles, and there’s also a free mini course on how to get started with building a Messenger bot. And if you’re looking for something more in-depth, I do have a premium course called Bot Essentials. If you’re looking to build some more slightly advanced feature for your Messenger bot, but you don’t have a developer and you don’t want to pay crazy Zapier fees, then you could also check out codelessbot.com.

Steve: Can you spell that for the audience?

Dana: Yes, C-O-D-E-L-E-S-S-B-O-T.com

Steve: Codelessbot.com okay. Actually one of the reasons why I like you Dana is because you are catering to the non technical people which is a lot of the listeners for this podcast.

Dana: Yeah that’s one of my goals. And if those are all still so hard to spell, you could also visit DanaTran.me, that’s DanaT-R-A-N.M-E and it’s just a quick link to kind of my site Codeless Bot and as well as my contact detail if you want to reach out for some reason. Then there’s DanaTran.me.

Steve: That sounds great. And Dana, I will link all those up in the show notes. And you should check out Dana’s bot because — I forget — see I get you on Facebook Messenger. But I remember I tried to go through, I went through your site once and you have a really good bot. I actually thought I was talking to you for a split second until … so.

Dana: Yeah. Good. Thank you and welcome to my bot all the time too. And she actually replies, she’s actually very friendly. So and then…

Steve: I mean, it’s called Dana bot, but you know.

Dana: Yes, it is.

Steve: I still wasn’t clear. Well hey Dana, thanks a lot for coming on the show. I really appreciate your time. And I’m glad we actually finally got around to scheduling this interview.

Dana: All right. Well, it was really a great pleasure to be on the show. So thank you so much.

Steve: All right. Take care.

Hope you enjoyed that episode. Dana lives and breathes this stuff every day. And she’s been a great help in getting my Messenger bots in order. And in the grand scheme of things, we’ve actually only scratched the surface when it comes to Messenger marketing, and I’m excited for what’s to come. For more information about this episode, go to mywifequitherjob.com/episode232.

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 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 where you can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. So, head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

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

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

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

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

231: How My Student Teri Miyahira Makes 6 Figures Selling Vegan Makeup Online

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231: How My Student Teri Makes 6 Figures Selling Vegan Makeup Online

Teri Miyahira is a student in my Create A Profitable Online Store Course and I’m really happy to have her on the show today. Teri runs ShopTeriMiyahiraBeauty.com where she sells vegan, cruelty free makeup online.

And what’s cool is that Teri sells a subscription box which means that she gets recurring revenue every single month without having to lift a finger. What’s also cool is that her company is 100% bootstrapped and does not use paid advertising either.

How has she accomplished this? By creating a rabid fan base. And today we’re going to dig deep and find out how Teri generates so many sales.

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

What You’ll Learn

  • How Teri came up with the idea of selling vegan cosmetics
  • Teri’s motivations for starting her business
  • How she validated her niche before she began
  • How she generates traffic and sales
  • How she convinces people to sign up for her subscription box

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Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. Now, today, I have a very special guest on the show Teri Miyahira. And Teri is special because she’s a student in my Create a Profitable Online Store course. And she’s making six figures selling vegan makeup online at shop TeriMiyahiraBeauty.com. And in this episode, we’ll break down how she’s built her business from the ground up without Amazon.

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? Well, Privy is an email list growth platform and they manage all of my email capture forms. And in fact, I use Privy hand-in-hand with my email marketing provider. Now, there are a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in e-commerce.

And right now I’m using privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%. 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, I also want to give a shout out to Klaviyo who is also a sponsor of the show. And I’m always blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my e-commerce store, and I depend on them for over 30% of my revenues. Now Klaviyo is the only email platform out there that is specifically built for 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 sent. Now, Klaviyo is the most powerful email platform that I’ve ever used and you could try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O, 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 My Wife Quit Her Job Podcast. Today I’m really happy to have Teri Mira here on the show. Now Teri is actually a student in my Create a Profitable Online Store course. And she joined quite a while back when the price was only 800 bucks. Anyways, she’s been doing amazing with her business shop TeriMiyahiraBeauty.com. And Teri Miyahira Beauty is Teri’s cosmetic line where she sells beauty products from clean and naturally derived ingredients with an unwavering policy against animal testing. And I kind of want to ask you about that in a little bit, Teri.

But what’s cool is that Teri sells a subscription box which means that she gets recurring revenue which is pretty sweet. And what’s also cool is that her company is 100% bootstrapped and does not use paid advertising either. Now how has she accomplished this? By creating a rabid fan base for her products. And today what we’re going to do is we’re going to dig deep and find out how Teri came up with her business and how she managed to get the word out about her cosmetics. And with that, welcome to the show Teri, how you doing today?

Teri: Hi, Steve. I’m doing well. How are you doing?

Steve: I’m doing good. And what’s funny about this Teri is right before this interview, I was watching your YouTube channel where you did a before and after makeup tutorial and I was like, holy son of a… I’m thinking you are demonstrating some type of foundation. I was like, whoa, makeup makes a huge difference. And as a guy I don’t normally notice, but it was magical.

Teri: It is, it’s very — you could put on your mask and then take it off at the end of the day.

Steve: It’s almost deceptive.

Teri: Yep exactly. Especially if you like to put on a lot of makeup like I do.

Steve: Well, no, it’s just that one foundation. Anyways, I’m going to post that video probably in the show notes if you don’t mind just so people can see. It sells itself actually, that one video probably sells your products. So Teri, how did you come up with the idea for your cosmetics and what makes your products different actually? There’s a lot of cosmetic lines out there.

Teri: Right. So what we do is that we are natural vegan and cruelty free. And depending on what people are looking for, you could find cruelty free, no animal testing brands very easily like at a drugstore or in your mall. But then if you want to take it one step further, you could do vegan or you can take it all the way and you could do natural. So, there’s different levels in the clean beauty market now. But for my brand, we actually hit all three points, which is actually very difficult to find in the clean beauty space.

Steve: Why is the animal cruelty part very important to you? Do you have pets or are you passionate about that?

Teri: Yes, so I do. I do have a little Yorkie and a Shih Tzu Poodle mix, those are my fur babies. So yeah, and I personally have always tried to do more cruelty free animal friendly, things like that. So I also do a vegan fashion, also donating the whole thing.

Steve: Okay. So what were some of your motivations for starting a cosmetic line? Like what were your goals for this business?

Teri: So the quick genesis story was that my day job before I had started the line long ago, about 10 years ago, I had started in print magazine and print media as a writer and journalist. And then I eventually started transitioning more into operations and business development. So my last job, “my last day job” was back in 2015 and I was doing operations and business development for a tech startup. And during that time I had started my green beauty blogging. So, I would work my day job and then at nights and weekends or early in the morning at like four in the morning, I would be recording YouTube video, so I started on YouTube.

Steve: This is before you had a product, right?

Teri: Yes.

Steve: Okay, got it.

Teri: So I started the channel about 2013 I think, it is a while ago already. And then I started the actual cosmetic line at the beginning of 2016. So, I had been blogging for a few years before I even started the line. And I chose the green beauty niche specifically because it’s always been kind of a hobby of mine even before the whole idea of green beauty and clean beauty became mainstream, because now you know how like Sephora just came out with their clean beauty section, Target is starting to transition more, CVS is starting to do the same thing with carrying more clean beauty products.

But way back about 15 years ago, none of that existed mainstream. So I was hunting down cleaning products on my own since like for a very long time. So that’s why I decided to start the YouTube channel because I couldn’t really find bloggers that were in the clean space and talking about green beauty makeup. So that’s why I started the channel.

Steve: Okay. And then I know you had a corporate background. What was this blogging, was that a means to quit your job eventually? And did you enjoy working when you were working?

Teri: Yes. Yeah. I was — actually I was really just blogging as a hobby. I really didn’t think it was going to turn into a business necessarily. I was just doing it for the fun of it, because I always consider makeup as a hobby and I still consider makeup as a hobby. So that’s why I started blogging in the first place because it was just a way for me to also justify my huge amount of makeup purchases back then. But I would be able to play with makeup, talk about makeup, blog about makeup, and I did enjoy my day job. But at the same time, I learned a lot from that day job from working in corporate and doing that kind of thing. So it ended up being a pretty nice transition when I decided to go off on my own.

Steve: Okay, and then when you decided to do a cosmetics line, I imagine that sounds pretty intimidating to me. How did you go about validating that your cosmetic line would succeed before you even started investing any money into it? Or was it kind of like a leap of faith type of thing?

Teri: It was a little bit of both. But really what was happening was — so doing all the blogging in the first part of it for a few years; I started getting a lot of brands approaching me about promoting their product to my audience. And it just got to the point where it was just almost around the clock, different brands that I didn’t even know about up to brands like Honest Beauty by Jessica Alba, for example, they had approached me about it as well. So I started thinking I can do sponsorships, which does make like a good amount of income, or I can try to start my own brand because I was promoting lipsticks, eye shadows, blushes, and things like that to my audience from all these other brands, so why not start my own and then get the margin on it, right?

So that’s where I started to — in my mind, kind of the seed was there for me to start the actual business. But it was also a leap of faith situation, too because then it was like, what if I — again, it’s like what if this doesn’t work or whatever it may be, because I had a day job as well.

Steve: But you were probably pretty confident because the stuff that you were promoting was clearly selling, otherwise brands wouldn’t be approaching you.

Teri: Exactly, because I knew that they had to have an ROI on whatever influencers or sponsorships that they were doing. So when they approached me, then they were getting some sort of ROI on their end. So that’s when I really started thinking instead of — I still do sponsorships now but instead of promoting other people’s, why don’t I try to do my own.

Steve: Yeah, that totally makes sense. So how did you actually get your blog popular or was it more YouTube?

Teri: It all started with YouTube. So YouTube is still a really good driver for us. It went from YouTube to Instagram and then Facebook and the blog and that’s kind of like the order it had went in.

Steve: So in terms of YouTube, do you have any tips for us on how you got your YouTube channel popular?

Teri: A lot of it ended up being in this sort of niche because of how the green beauty niche has still not necessarily really exploded and become mainstream yet. So that’s why back in the day there weren’t really many people on YouTube that were talking about green beauty. So I think from like a search like SEO search perspective, I think I just ended up showing up in people search results. So really kind of niching down ended up being really good in the beginning of growing the channel and all that.

Steve: Did you do any — was it like deliberate keyword research or was it just you were doing it for fun and then you just were really into the green beauty part of it and it just naturally happened?

Teri: Yes, it was definitely one of those things where it naturally happened. I wasn’t necessarily looking to create an audience in order to create a business. But it ended up being that way, which was probably the best way to have started the business in the first place.

Steve: And how long did it take for your YouTube channel to just kind of gain traction? Like how many videos did you put out until brands actually started approaching you and you built up your influence?

Teri: At one point way back in the day, I think I was at maybe about two or three videos a week, something like that. And now I’ve leveled off really to just one video a week, but sometimes it might just go on to like two weeks depending. But I think I’ve also gotten better at learning how to repurpose my content as well.

Steve: So let’s talk about that. So how does it work? You put out a YouTube video, do you use that content for your blog and do you have a podcast as well?

Teri: No, I don’t have a podcast yet. So it’s — and this is what I — when I talk to brands about their content and social strategy, this is exactly what I tell them to do is if they can start with a video, and then from there, they’re repurposing it onto their blog, they’re cutting it up into social, they’re taking stills or photos or what have you from the video and then putting that into social, all the thing about how people will do YouTube videos and then they cut the audio and then they make it into podcasts. So you could take really one piece of video content and do it multiple different ways. Like even if you’re taking thumbnail photos, for example, for the YouTube video, then you could just take extra photos during that photo shoot session in order to repurpose that on social on your blogs, etc.

Steve: So what does your process look like today when you create a piece of content? It starts with YouTube, I would imagine, right?

Teri: Yes, a lot of it starts with YouTube and now I do Instagram stories. And that’s really where a lot of my focus is right now is Instagram stories.

Steve: Interesting okay.

Teri: Yeah, just because this is probably one thing to note as well is that since the middle of last year, and with the brand not running paid traffic, there’s been, for us at least a very noticeable difference in the amount of organic traffic that we’ve been getting. So I’ve been trying to really study the algorithms, how Facebook’s throttling reach, now Instagram, and YouTube’s doing the same thing. So the organic reach is definitely different in 2018 versus 2016, 2017.

However, with that, I’ve been going more towards Instagram stories from the last few months because I noticed that the reach on Instagram stories, it still feels like it’s not being as affected by the algorithm as a regular post feed, for example, like a regular Instagram post on your feed or Facebook post on your page, right? So that’s why with Instagram stories and especially good for the introverts out there, because with Instagram stories you’re not necessarily live, so you can batch your content and create it ahead of time whether you’re recording a short video for stories or you’re taking photos and posting it to Instagram stories.

So you don’t have to do an Instagram Live or a Facebook Live or a live webinar, or something like that. You can really still take advantage of kind of a better algorithm with Instagram stories and not have to do live content.

Steve: So you have your YouTube video, how many Instagram stories can you get out of one of your typical videos?

Teri: Well, usually what I do is I won’t chop up the YouTube video for the Instagram story, but I’ll have like a camera setup and then I’ll take clips with my phone like my iPhone.

Steve: Oh okay, yeah.

Teri: So instead of my DSLR and doing it that way, it’s easier for me to still have the studio setup and then I’m taking footage and photo from my iPhone within that same setup.

Steve: Instead of using the SLR?

Teri: Yes, only out of laziness.

Steve: Okay. I was going to say; maybe it looks more natural if you’re doing it out of your phone.

Teri: It definitely does look more natural because it feels more behind the scenes. But really, it’s out of my laziness to pitch from the DSLR, chop it up in iMovie, and then take it into my phone to post it on Instagram stories. Or you could take it from your computer into Planory if you use Planory, and then from there you can upload your Instagram Stories content onto Planory which then links to your Instagram.

Steve: I’m sorry; I’m not familiar with that software. What does Planory do?

Teri: Oh, so Planory is specifically for Instagram. So, if you do Instagram regular feed posts, or you do Instagram stories, then Planory has both an app version for your phone, or a desktop version which is on their website. And it’s a scheduler for Instagram, so it could do automatic posting on Instagram, you could schedule out in advance in the future. So I do a lot, like all of my content planning really goes into Planory.

Steve: I see. Okay, and so you’re doing one of these shoots, do you just shoot all of your Instagram stories for the entire week during that one session?

Teri: Sometimes it depends. So, depending on what I’m talking about in the video, I can get a few days worth of clips, but a lot of times I’m mixing it up. So it could be a combination of what I’m shooting from my YouTube video mixed with something like what I ate that day. Or if I went to a coffee shop, then I’ll take a photo of the coffee I order, things like that just to make it a little more behind the scenes, a little more organic looking. But for the most part, I’m pre shooting at home in my little studio setup, and then uploading everything in batches.

Steve: And in terms of sales, like how do you attribute sales to like YouTube or stories, or is it just — how do you know what’s working?

Teri: So this is where my strategy gets really interesting. And then this is essentially where we grew the business because right now, we started the business in 2016 and sales to date have been almost 300,000 in sales, $300,000 in sales. And in 2017, we had about $175,000 in sales with a 60% margin. So, when people ask me like how do you do that without running paid ads, it all comes down to content, and content in the middle of your funnel. So, when I consult with brands, this is what I tell them, that me personally my strategy is running traffic to pieces of content to an offer.

And the content in this case is their social media posts, blog posts, YouTube videos, or if you’re like a podcaster it would be your podcast. So a lot of times people think that in order to run traffic besides running Facebook ads that they need to run traffic by posting a lot of posts on Instagram or posting YouTube videos in order to drive traffic to the website. But I do it a little differently in the sense of I think of all of these pieces of content as middle of the funnel, and that I’m actually driving traffic to my Instagram posts or I’m driving traffic to my YouTube videos just because of the algorithm change.

So, when Instagram, YouTube and Facebook’s been doing it for a while, when they started changing their algorithms significantly, especially like Q3 of last year, that’s when I started noticing the dip in the organic reach, and that’s when I really started to think about my strategy in the sense. So now, in terms of 2018 and moving forward, I’m primarily focused with how do we run traffic whether it is paid or organic, but two pieces of content and then from there going into an offer. But in the middle of all that, we’re building an email list.

Steve: So your offers and your content, is that on your own site, or are you driving people you mentioned directly to your social media sites?

Teri: It’s a little bit of both. So, what we could do is there’s a few different ways. And hopefully, let me know if this starts sounding confusing now that we’re talking about email as well how the funnel works. So let’s say somebody finds me on my Instagram, and you’ll also notice on my Instagram and my YouTube, I don’t really talk about the brand. I don’t really talk about the products that I sell. And that’s all part of the strategy is that what I’m trying to do is I’m trying to build loyalty first and then selling second. Whereas a lot of times with e-commerce, we’re trying to push product and trying to get sales first, and then we’re trying to create loyalty in like the middle of the funnel.

So because — I want to say because I started as an influencer, I always think of audience loyalty first. So that’s why the way that I do the strategy is that if somebody finds us on Instagram, and then they see all the content and they’re like, okay, we’re talking about green beauty, we might be talking about all these other brands, all these other products or tips and tricks and like how to apply makeup or how to create a smoky eye, right?

So we’re hooking them with the content and then we’ll start doing call to actions for sign up for the email list to grab my top 50 organic and vegan makeup shopping list. So that’s one of our lead magnets. So then from there I’m getting them from social, from YouTube on to the email list, and then from the email list is where we start selling. So we’re really selling on the back end.

Steve: I wanted to take a quick moment to tell you about a brand new service that I just launched that will help you grow your email list for free. First off, my business is called Gobrandwin.com, and it’s a service that helps e-commerce sellers build their email list through group giveaways. And in fact, in our most recent giveaway, we managed to increase the email list size of the brands who participated by 40%. That’s right, we generated over 11,000 email subscribers, and the average list size of the companies participating in the giveaway was just 25,000.

So if that makes you excited, here is how the service works. If you own your own e-commerce brand, and you have a following, you must first contribute a gift card toward your products valued at $200 or more. And this is the prize for the sweepstakes. We will assemble gift cards from other participating brands with a similar customer demographic into one gigantic sweepstakes giveaway. All participating brands will send our co branded giveaway email to their entire customer base, driving them to a special landing page on Gobrandwin.com. We will acquire email addresses and Facebook pixel data. We will also send the giveaway entry forms to related influencers in our blogger database. And between my co founder Toni and I, we have access to almost 1,000 bloggers in our database.

Consumers will enter in their email addresses; we’ll send them special offers from your company, and select a grand prize winner. And after the sweepstake is over, you will receive the entire list of entrants and instantly grow your audience. So bottom line, the concept is very simple and it is absolutely free. We will help each other promote each other’s businesses, get free promotion from bloggers, and share the email addresses. So if you’re interested in growing your email list, then head on over to Gobrandwin.com, that’s G-O-B-R-A-N-D-W-I-N.com. And once again, it is 100% free. Now back to the show.

So you’re trying to remain unbiased in terms of your content it sounds like, right? And in that email funnel, are you only promoting your own stuff or do you promote other people’s brands as well?

Teri: Correct, we’re promoting other people’s brands, promoting let’s say, the pieces of content that just released. So it could be a new YouTube video, it could even be depending on the Instagram post, we might even try getting people from the email to check out the Instagram. Or it could be a promotion. So a lot of times, what I do is I try to do the Gary Vaynerchuck jab, jab, jab thing.

So in through email, we’re typically doing about three pieces of content to one promotional offer, or it could even be five pieces of content to one promotional offer. It really depends on what the offer is, but I try to do ah three to one ratio on the email side, so that’s on the back end. And then on the front end, it’s even more so as far as it could be like a six to 10 to one offer, six to 10 pieces of content to one offer.

Steve: Right interesting. So you’re promoting everyone else’s products, including your own so people don’t think that you’re really pushing stuff to make a profit for yourself per se. Is that…

Teri: Correct yeah.

Steve: So let me ask you this question then, it seems like with this strategy, I would have named my cosmetic line not my name, right, I would have named it something else that no one would ever know.

Teri: Right.

Steve: But in this case, it’s obvious that it’s your line, right?

Teri: Right. Yeah.

Steve: Okay interesting.

Teri: Yeah, exactly. And you could do that. So in the strategy, what would have really made the most sense in that aspect was to name it something different, because then it really would have just blended in with everything else that I’m talking about too. But in this case, since what’s really the driver for — what’s been the driver since day one of the cosmetics brand is that it is tied to my name. I think that also played a factor in the initial sales for the business.

Steve: Okay, that makes sense too. So is email your primary driver then would you say?

Teri: For sales, correct yes.

Steve: Okay interesting. So it’s mainly a content play just to get people onto your list and then you do most of your selling on your list. Can we talk about your subscription box for a little bit? How does that work? Do you just try to go for the subscription in your email list or?

Teri: Yes, so once people get on to the email list, they tend to be really warm already because they’re already familiar with me, they’re familiar with the brand. They know that I promote other people’s products; I promote my own products, so they have a really good handle on what we’re all about and I’m always very educational based and information based for the content. So by the time somebody gets to the email list, there’s already that sort of trust factor that’s already gone on. So that’s where the subscription box selling really occurs is on the email list.

Steve: But don’t they have to try the product first before they’re willing to get the box or?

Teri: It kind of depends, because some people they just really like the deal that they get with a subscription just because it’s such a good deal for that many products. And it’s a month to month, so they could try it for one month and then cancel if they want to. There are some people where their first one or two orders would be for an individual product on the site except that they also realize that it’s such a big like in terms of savings for the subscription box.

That’s why a lot of people though, tend to share our subscription box first, but this is only because of people already knowing and being familiar with the brand because you know how like in recurring subscription models, a lot of times people will say, to sell it more in the middle of the funnel, like try to get a trip wire in there, try to get it like an individual purchase in there.

Steve: Yeah.

Teri: But it really depends on how by the time they see your subscription offer, how warm they are. If they’re really not warm at all, then yeah, do the tripwire, do the individual purchase, and then go into the pitch for the recurring. But if you’re leading through content that’s more educational value driven and helpful, you could go and jump to the subscription way sooner than you think.

Steve: How much of a discount are we talking about here in the box versus the individual products that come in the box?

Teri: So to get kind of a sense of what it is, let’s say for example, eyeshadow on the website could be for $25, and you can get anywhere between three to four products in a subscription box for 49 to $59.

Steve: 50% off, is that about right?

Teri: Yeah. So that’s why of course, it’s going to be a lesser margin. But then as long as you’re kind of structuring your subscription box correctly and right, then you could have a very long customer lifetime value. There are some people on our subscription where they’ve been like two years on the subscription. It’s insane.

Steve: When it’s as magical as what I saw on YouTube, I would sign up for life.

Teri: I hope yeah, exactly. And that content, right? So that’s why I lead with content. And that’s why when I consider myself an introvert, even though it obviously doesn’t seem like it because of the YouTube and everything like that, but I consider myself an introvert. My Myers Briggs personality test also says I’m an introvert, and that was all the YouTube and things like that, that was really just a skill set that I had to develop.

And that’s also the reason why I kind of structured the business and the marketing as I did, because if you don’t like feeling salesy, and if you don’t like to really push your product to people, or feel like you’re pushing your product with posting on Instagram every day about your product, or trying to push people with your Facebook posts to go to your website twice a day, or three times a day, then I’ve sort of built my model and my strategy with just my personality in mind where I want to be helpful. I want to be helpful to people, I want to show them a foundation routine; I want to show them how to create a smoky eye or how to wear red lip during the daytime.

So I want to be helpful, I want to give value, so that’s where I built this entire model around. It’s me really wanting to give value, to help people, and that’s all in the front end. And then on the back end, once they get onto the email list then I could offer, hey, by the way, I have my own vegan cosmetic company. Here is what we do, and then give them an offer that way.

Steve: So in terms of this subscription box, it’s kind of like a no brainer, right? You’re getting such a big discount. And do you still get 60% margins on the box as well?

Teri: When it goes to the box, we’re looking at more of a 30 to 40% margin.

Steve: Okay got it. And in terms of keeping them on the subscription box, is there anything special that you do?

Teri: As far as retention, not really, because we just try to give a really good value on the product, we try to create and manufacture products that are in line with the brand. Since people are already subscribing, we know that they’re very passionate about natural vegan cruelty free, so we just really try to keep in line with that as well as seasonal too for seasonal colors or seasonal textures or formulations. So the box products evolve as the year goes on. And also we launch products through the subscription box a lot of times too. So our subscribers will get first dibs on a product that might not be out yet.

Steve: I see nice.

Teri: So, we do a little bit of that and that kind of keeps the fun in the retention. But on average, our retention is typically about four to five months for the subscription.

Steve: Okay yeah that’s pretty good. And do you sell on Amazon by any chance?

Teri: No Amazon.

Steve: I’m just curious what your thought process is there, or is it just a channel that you will eventually get to?

Teri: I’m really not sure because I had actually a very long time ago before I even started this iteration of Teri Miyahira Beauty. I had one skew for skincare that was on Amazon and this was before the big gold rush of Amazon too, and I started this right when I think Ryan Daniel Moran, right when he started to really publicly talk about Amazon and his success that I learned from him. So I got onto Amazon. This was years ago. I can’t even remember how long ago.

Steve: Yeah, this is at least three years ago I want to say.

Teri: Yeah, at least. Yeah, I want to say it might have been like three or four years ago and I had one skew on Amazon. It started to gain traction on Amazon. But then I started realizing just the different quirks of Amazon, the whole thing of you can’t build your email list; you don’t have direct access to your customers. You don’t really have much control as far as like the look and feel of your page, and then it went into the whole thing of what if I want to get my customers from Amazon and show them other things on my website so the on Amazon to off Amazon. So I actually got off of Amazon before everybody went on to Amazon it felt like.

Steve: Okay, yeah.

Teri: Yeah, so I’m not on it now. I’m not sure we’re going to go on it later. So I’m really not sure, but I don’t have any plans in the near future though.

Steve: Okay. I did want to talk — some people have sometimes come to me and they want to sell some sort of beauty products. And I’m just kind of curious what the process is. Did you know how to create beauty products before you started the business?

Teri: No I didn’t know.

Steve: Okay. So can you just kind of walk me through that process? Like how do you even create beauty products?

Teri: Okay, so, because of all of my experience with the beauty blogging and being really familiar with ingredients, that’s how I started thinking about formulations on my own. And so, a big part for beauty products is really knowing the ingredients, and the ingredients that you want to work with. Because when you go and you approach for example, cosmetic chemists or manufacturers that have their own chemists, then a lot of times the chemists are going to formulate to what they think and what they’re used to. So and this is part of the reason why with the green beauty industry right now, it’s growing, but it’s also starting to get a little diluted.

And this is what I tell people, because you go to a cosmetic chemist, if they’re not used to formulating green and not many are used to formulating green in particular, they’re going to try to give you a formulation that might not be in line with your vision of the brand. So, if you don’t know ingredients, then you might not really know how to work best with the chemists. So the way that I work with chemists is that I’ll actually give them an ingredient deck and be like, hey, I want to create a lipstick with these ingredients, these 15 ingredients, what do you think?

And then they’ll come back to me and be like, actually, I’m not sure if we could do this. Can we do this other synthetic ingredient? I’ll be like, oh well, instead of that synthetic ingredient, can we go with this other natural ingredient that you might be able to source. So it ends up going back and forth. So the first thing is really if you want to get into beauty, it’s knowing the type of ingredients you want to promote from a marketing standpoint. Like if you only want vegan, you only want all natural, you only want all organic, etc. Or let’s say you don’t want any dyes, like any synthetic dyes.

And then from there, you can then work with chemists. And then it’s a back and forth, but you have to really guide the chemists in what you want. Because otherwise, they’re just going to be picking kind of either off the shelf ingredients from their R&D or you could always do your own R&D for ingredients as well. But that also gets into ingredient distributors and your supply chain becomes really complicated. So when I work with chemists, I try to work with their ingredient suppliers and what they have direct access to already. But with that comes along the whole thing of they are used to working in a certain way.

Steve: Where do you find your suppliers? Did you just Google cosmetic manufacturers, or were you already kind of familiar based on your prior profession?

Teri: Oh, it was literally all research on Google.

Steve: Okay. And then you don’t know how anything is formulated. So I would imagine in the beginning you kind of have to take what they tell you, right? Like, these are the ingredients, like you just need to include these ingredients that you want to include, but then you can leave the rest to the manufacturer, is that kind of how you proceeded?

Teri: Yes. Yeah. So I don’t tell them like hey, we need three grams of coconut derivative whatever or two grams of a plant wax. I don’t tell them one gram, three gram, la, la, la in terms of the ratios of things, I just give them a list of ingredients that are kind of like my wish list, and then ask them like hey, can you do this? Can you create the lipstick? Can you create whatever the case may be? Sometimes they’ll — a lot of times they’ll say yes, but sometimes they’ll actually say no. So in the event that they say no, you just have to try to find another chemist that can do it for you.

Steve: And how much do you have to order?

Teri: It depends on the manufacturer. So there are some manufacturers where it might be 1,000 minimum, 5,000 minimum, 10,000 minimum. But there’s also some manufacturers where you could get into an agreement with them, where in one year’s time, for example, you plan to push out 5,000 units of a lipstick skew, but your first shipment might only be for 500 of it.

Steve: How did you proceed actually with your line? What was your initial order and how much did you actually invest in your business?

Teri: So what I did was I actually pre sold.

Steve: Uh clever.

Teri: Yep. So you know how with online courses and info products, a lot of people they pre sell first in order to get the initial momentum and then from there, they take that funding and then they create the product. That’s exactly what I did for this business.

Steve: So you went and you emailed your list and you said, hey, I’m releasing this cosmetic line. And then how many did you end up pre selling?

Teri: I ended up pre selling let me say – I’m trying to remember, this is so far back. I want to say about maybe 400 units total something to that extent.

Steve: Okay. And 400 units and then so what was your first order size then?

Teri: It was literally 400 something units.

Steve: Oh, okay. And did you collect the money up front as well?

Teri: Yep. And I told them, I told my audience, this is a pre sell, we’re not shipping until so and so date, and then working it out with the manufacturers to make sure that they could deliver by that date. But that’s a really tricky way to do it, though because a lot of manufacturers especially like in my experience in the last few years, a lot of manufacturers, they just need way more time than they tell you.

Steve: Sure. But these are all in the US or no?

Teri: Yes?

Steve: Okay. Does selling cosmetics require any sort of certifications and testing?

Teri: No, because it’s like the vitamin industry, it’s unregulated in that sense. You don’t have to submit to the FDA. As long as your labels are FDA compliant in that sense, then you’re really good to go. You don’t need to be a chemist on your own. You don’t need to be like you personally as a founder. You don’t need to be certified or go to school or anything like that. I have a bachelor’s degree in communication. So yeah, I’m very far from being a cosmetic chemist right now. But yeah, that’s really what it takes to start.

I would definitely suggest for people that are looking to get into the cosmetic manufacturing business to make sure that you have enough cash flow in the beginning in order to create your units because there are MOQs for manufacturing. So you just have to make sure that you could hit your MOQ and that you could then go ahead and sell it. So that takes marketing, that takes the units putting into production, things like that.

Steve: How many skews did you start with during that initial run?

Teri: Maybe like four.

Steve: Four skews, okay. And do you remember what they were?

Teri: I want to say it was like an eyeshadow, blush, bronzer, highlighter maybe, plus powder.

Steve: I was just kind of curious how you made that decision. But I would imagine I wouldn’t understand the answer anyways.

Teri: I can tell you.

Steve: That’s okay. I am kind of curious to why you haven’t used paid ads because it seems like Facebook ads would be ideal for marketing your products.

Teri: Yes. And they will be. We started dabbling in the last few months with Facebook ads in the different iterations and all of that. So it’s coming because of how we have to definitely now just with social between Facebook, Instagram and YouTube and the algorithm changes for organic reach, we’re just not getting the organic reaches what we used to as far as driving the organic traffic. So, now is the time where if you’re a physical product seller and you’re just starting out, I would highly suggest having both the paid traffic strategy and an organic traffic strategy. So that’s why now, 2018 is my big learning how to do a lot of Facebook ads as far as my goal because that’s definitely the route that it seems like the landscape is taking.

Steve: Okay, and for all those people out there who are thinking about starting, what were some of your biggest challenges in just even getting started?

Teri: A lot of it was time, because when you’re selling physical product and you’re a solopreneur, and you’re just doing everything, you’re doing the customer service, you’re doing the fulfillment, and then in my case it was the R&D, working with manufacturers…

Steve: Are you still by yourself by the way or do you have employees now?

Teri: Oh now I have a team.

Steve: Okay.

Teri: So back then it was just me doing everything between doing all the content, and the marketing, and then the R&D, and the manufacturing, and fulfillment, and what have you. So, what was interesting though is that when people ask me, who was your first hire? Is always by myself, I don’t have a business partner; I don’t have outside investors or anything like that. So back then or even now, people would ask me, who was your first hire? My first hire was actually a 3PL.

Steve: Nice.

Teri: In order to outsource the fulfillment, because I knew that I couldn’t really outsource supply chain and manufacturing and working with chemists, and that all had to kind of come from me, right. I also could not outsource the marketing, which was the YouTube videos, the social media posts; I had to do all of that. And I still do all of that just to make sure that all the brand voice is very consistent with the messaging and the vision for the brand too.

So my first hire was the 3PL even before I hired my customer service. And the reason was because I knew that if I would have let go of the fulfillment part of it first, that would free up so much of my time and also because I just didn’t want to have to deal with packing so many orders and then taking it to the post office or to wherever. And I knew that if I could put my time from fulfillment into marketing or customer service or R&D or product development, that I would be able to move the business forward much faster if I was still just doing it on my own plus than having a 3PL partner. So the 3PL that I use is called ShipBob.

I could also give you the name for it in show notes later, but they are the 3PL that I use. I’ve been using them — I want to say I switched to them maybe in like month three or four of my business. So they handle the inventory, they handle the warehousing, and they handle the fulfillment for both the subscription box kitting as well as for the individual orders for the online shop. So they take care of the entire fulfillment process for me.

Steve: What was your criteria for shopping for 3PLs?

Teri: So the way — so here’s an interesting story on that. So because of how I was working with a lot of different brands as an influencer before I started the business, I already knew vaguely about 3PLs just from hearing it from the other founders of the brands that I work with. I mean I’m always talking shop with everybody, so even when I was an influencer and a blogger but way before I had my own business. I was just talking shop with them, like hey, what are you guys doing or whatever the case may be.

So I was already hearing about the different stories of using 3PLs, of how there’s some 3PLs where you have to have 1,000 units per skew in their warehouse even for them to consider you for the 3PL, or you have to call into the warehouse physically on your phone to tell them that you’re shipping units like that your manufacturer is shipping units to them. So I already kind of had an idea of how a 3PL worked and operate. So when I started the business, I already knew that, okay, most likely I’m going to have to outsource the fulfillment process.

By about month two or three, I started getting really tired of fulfilling myself because it was like out of my house, and I was doing it literally by myself because I don’t have any business partners. So just sitting there for hours just putting together cardboard boxes and then filling them with critical and doing all of that. So that’s why by month two or three, I was thinking in my head, okay, I need to figure out the 3PL thing. So I wrote on my To Do list, find 3PL. A week later, I still didn’t get to that part of my To Do list of course because I’m always behind on work.

And then out of the blue ShipBob, one of the ShipBob representatives just cold emailed into my customer service inbox, and was like, hey, if you’re looking for a fulfillment partner, then we’re ShipBob. And that’s literally how it happened. So I just took it as a sign from the universe. I follow James Webb more and I’m all about that whole thing. So, I took it as a sign from the universe that I just need to go with this company because of how it was on my To Do list for the last week and I couldn’t get to it.

But luckily, I looked into ShipBob and they have investor backing, they have fulfillment locations all over the country. I’m not like affiliated with them or an ambassador with them in any way um. But I’ve just been with them from that point up until now, so it’s about two years. They just launched like a competitor to Amazon Prime shipping which is a two day shipping but for e-commerce businesses that are not an Amazon.

Steve: Seller Prime you mean?

Teri: Yeah exactly. So kind of like an FBA but you don’t have to be on Amazon. So they do two day shipping now, they do split inventory so you can distribute your inventory across their different warehouses so that your customers can get the lowest price on shipping, so your zone A customers will be getting their product or will be getting the order fulfilled from a zone A warehouse for example.

So, I already knew even way back when that they were in a different like tech website articles and Chicago newspaper article, so they were already getting press as their own company. So as like a background, I was kind of looking into their company to see what they’re doing, saw that they’re really heavy into their tech and they kind of consider themselves as a tech company.

Steve: Sure.

Teri: So that’s where I knew like, hey, this is the company I want to go with because of the different stories I was hearing about working with traditional 3PLs. Because of the 3PL industry itself is very antiquated, to say the least. So you could run into situations where they could be nickel and diming you in your service contract with them. And at the end of the day, you still don’t even know how much you’re going to get charged for your warehousing and fulfillment. But with ShipBob, they make everything super simple with their pricing. It’s all inclusive.

They literally hand you a chart and be like, this is how much it is going to cost for us to ship something out to this zone for this weight and you’re done. Or like it’s $5 to just store this many units. They’re so transparent with their pricing even way back when, up until now. So that’s why I knew that the fulfillment piece was going to be something where I had to get off my plate. And I just think I got really lucky that ShipBob just kind of landed, fell from the sky, and landed on my lap at the time that I needed it. Yeah, so that was the whole story.

Steve: So I have to ask you these questions because I always get asked these from people who take my class. How much money did it take you to start this and then how long did it take you to actually get the product ready and put up your site?

Teri: So how much, well I mean, I pre sold everything.

Steve: So technically zero, right?

Teri: Technically zero. There was I guess “sweat equity” because I did have an audience beforehand, so I didn’t have to run to paid advertising just to grow a list or something like that. So if I were starting now then yeah, I would be putting money into content marketing and building a list and running the ads to build the audience, and then launching. Which I know like, I’ve heard of a lot of companies doing that now. And then what was your other question?

Steve: How long did it take you to get your first product ready and set up the site and that sort of thing?

Teri: Oh, so I set up everything through Shopify, and it took me about an hour.

Steve: Oh, wow. Okay.

Teri: Yeah, super easy. I picked Shopify because I knew it was out of the box. And I also knew that they had a very extensive app store so that if I needed all the tie ins on the back end, I’m not a coder, I’m not a web developer, I don’t know HTML, I could go on to YouTube and figure out really basic, if I needed some HTML coding, but I don’t do any of that, I’m a writer. So, especially way back then, so I didn’t know the technology. So, I was really trying to find solutions from like a tech and software standpoint that could do the job for me, and that was easy enough for me to understand.

That’s why I went with Shopify, and that’s why it took like an hour. So yeah, so it was not much time commitment, not much monetary commitment, but it was also again, it was sort of sweat equity, and building the audience organically up until that point.

Steve: And then the formulation of your product to just getting that first kit out, how long did that take?

Teri: I was talking to manufacturers maybe for a few months before that. So I want to say if I can remember correctly, I want to say about four months or so.

Steve: Okay, that’s not that bad.

Teri: It’s not bad, especially because it’s all USA based, so you don’t have the language barrier as far as if I had to do something overseas like China or anything like that there would have been the language barrier, so I think it would have been a little longer. But since it’s like one of my manufacturer is in San Diego, so I literally have gone to their facility a few times just to meet with them so it’s really simple. So if you are doing – that’s a good thing about if part of your marketing messaging is made in the USA which besides the point that you would be able to do a higher MSRP price point for being a made in the USA brand for marketing, but also when you’re sourcing, when you’re creating products with USA based manufacturers, the lead time is just cut in like a cone.

Steve: No, no, I can imagine that and no communication problems either.

Teri: Exactly.

Steve: If you were to give one piece of advice to someone who wants to start their e-commerce business, what would that be from your point of view if you were to pick one thing?

Teri: Oh, that’s a tough one. I haven’t thought about that before. I want to say if I only had to give one piece of advice, it would be…

Steve: I already know the answer. I’m surprised it’s taking you so long.

Teri: You know it.

Steve: Yeah, just start with content, right? Build an audience.

Teri: Yeah. But that’s yeah, it is. It’s start with content, build an audience. I was trying to think of what if I could take it one step further because I do it all the time. But yeah, it is content, it is the audience. But it’s also don’t feel like — don’t pressure yourself to sell. And that’s where the content piece comes in. Because I even though I run a business, even though we have these numbers, I don’t like to sell. So that’s where the content comes in. So if you’re still kind of wary and especially if you’re just starting and you kind of have that fear of selling, start with content, lead with value and then create an audience.

Even if you’re running paid traffic to your pieces of content, you’re still giving value first. And I think that if I had not been an influencer first, and if I had to feel like oh, I have to be sale, sale, sale, promotion 24/7, I kind of feel I don’t know how the business would have started back then. But I think I got lucky because of how I was an influencer first.

Steve: Absolutely. I mean selling cosmetics of all things would have been a hell of a lot harder if you didn’t have that audience behind you.

Teri: Yeah.

Steve: Because it all blends together, right?

Teri: Yeah.

Steve: I mean, at least from a male perspective until I started watching your YouTube videos in which case I became a believer. So Teri, we’ve been chatting for quite a while. I really appreciate you coming on the show. Is there — if anyone wants to find out more about your business, where can they find you?

Teri: Oh, so they could also find my shop TeriMiyahiraBeauty.com for my vegan cosmetic brand, and I also do consult with other brands from content social media marketing standpoint. So, I could also give you a link for that because I actually don’t advertise that part of my business even though it’s a completely separate aspect because I get all the inbound leads for that. And so I can give you a link to that as well.

Steve: Sure yeah, absolutely. Cool. And Teri, I’m afraid you’re going to have to take the Myers Briggs test again. I don’t believe you are an introvert.

Teri: I’ve taken it like three times.

Steve: And what I’m going to do, for everyone listening is I’m going to take one of Teri’s oldest YouTube videos from the beginning and post it in the show notes just to show you that anyone can get started on YouTube, and you don’t have to start looking as polished as Teri does today.

Teri: It’s a skill set, it’s definitely a muscle.

Steve: All right Teri. Thanks a lot for coming on the show. Really appreciate it.

Teri: Great. Thank you so much.

Steve: All right, take care.

Teri: You too.

Steve: Hope you enjoyed that episode. I just love it when a student in my course is kicking butt and you can tell by the interview that Teri is both driven and extremely competent. If any of you out there are interested in learning more about e-commerce, you can check out my full blown class at profitableonlinestore.com. For more information about this episode, go to mywifequitherjob.com/episode231.

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

I also want to thank Privy for sponsoring this episode. 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 them because they’re 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 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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230: How An 8 Figure Business Launches New Products On Amazon With Bernie Thompson

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230: How An 8 Figure Business Launches New Products On Amazon With Bernie Thompson

Today I‘m lucky to have Bernie Thompson back on the show. Bernie is someone who I had on back in episode 157 and in case you’ve forgotten, Bernie runs an 8 figure business called Plugable.com which is a company that sells USB and Bluetooth devices online all over the world.

In addition, he’s built all of his own tools in house to manage his Amazon business which he now offers to the public called Efficient Era. Anyway, the reason why I have Bernie on the show today is to talk about how the Amazon landscape has changed in just a single year and how his business has evolved.

What You’ll Learn

  • How launching new products on Amazon has changed in the last year
  • Bernie’s updated strategy for product launches
  • How Bernie determines which keywords to target
  • Bernie’s number 1 strategy for sales

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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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GoBrandWin.com – The fastest and most effective way to grow your email list for free using group giveaways. Click here to signup for free.

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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 in business. Now today I’ve got my friend Bernie Thompson back on the show. If you don’t remember Bernie, he runs an eight figure electronics business on Amazon called Plugable. Now things have changed a lot in Amazon land in just the past year. And today, we’re going to talk about the Amazon landscape and how Bernie launches new products today.

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 personally use for my ecommerce store, and I depend on them for over 30% of my revenues. Now Klaviyo is the only email platform out there that is specifically built for 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 could try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to give a shout out to Privy who is also a sponsor of the show. And Privy is the tool that I use to build my email list for both my blog and my online store. Now what does Privy do? Well, Privy is an email list growth platform and they manage all of my email capture forms. And I use Privy hand-in-hand with my email marketing provider. Now, 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.

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 lucky to have Bernie Thompson back on the show. And Bernie is someone who I had back on episode 157. And in case you’ve forgotten, Bernie runs an eight figure business called Plugable which is a company that sells USB and Bluetooth devices online all over the world. And in addition, what’s cool about Bernie is that he’s built all of his own tools in-house to manage his Amazon business, which he actually now offers to the public, and that company is called Efficient Era. And in fact, I’ve been using Efficient Era for my Amazon business for the past couple years, and I have nothing but good things to say about the software.

Anyway, the reason why I have Bernie on the show today is to talk about how the Amazon landscape has changed in just a single year since I last had him on the show. And as you know selling electronics is quite possibly one of the most competitive niches that you can go into. So it’ll be interesting to see how Bernie continues to adapt and evolve his Amazon business. And with that, welcome to show Bernie, how you doing today?

Bernie: No, great. It’s great to be back on Steve.

Steve: So just in case the listeners don’t remember your business, can you give us a quick recap of what you sell, how many products you have, and how often you actually launch new products?

Bernie: Yeah, so we started in 2009 like everybody does with one product. We’re now up over a little bit over 100 products, about 120, 130. We try to launch two to three a month if we can. I used to manage the USB Bluetooth teams actually at Microsoft and Windows, so we often say we’re a technology company first and an Amazon seller second, and that kind of comes out in the way we do business. So we across those technology areas we try to be right on the cutting edge, right on the bleeding edge kind of tracking the standards bodies, tracking the chipsets that are coming out and trying to have a complete line of products at least in the USB space. So yeah, so that’s the area we’re in with Plugable.

Steve: Yeah, I mean that’s quite an aggressive launch schedule right? So you’re launching a product a week almost.

Bernie: Yeah.

Steve: So, I was just curious, last time we spoke you were all Amazon for the most part. Have you started selling on other channels now, not outside of Amazon, but mainly on your own channel I guess, on your own website right?

Bernie: No. We still do not sell on our own site, your choice there is basically do I send that traffic to a marketplace platform where that traffic will kind of spin up a flywheel and generate even more sales, or do I take that sale and kind of build my brand, build my own customer base, kind of independent of these marketplaces? And still to this point, even though we often think about it and debate it, and at times I kick myself, we still send all the traffic we can to the marketplaces to get our products spun up there particularly Amazon.

Steve: Okay. Yeah. And since you launch products so often, you’re like the ideal person to ask, how has launching new products on Amazon changed in the past couple of years?

Bernie: Yeah, I mean, when we first started in 2009 through about 2012, I mean, it was this kind of like, Gold Rush period for the early sellers where if you had a pretty good product and a pretty good price, and you just did a few things better, like even simple things like just having a good listing, you had a pretty amazing hit rate. I mean at least every other product or so was a pretty big hit. So it’s progressively just gotten harder and harder over the years. I don’t think there’s been any kind of really dramatic point where it’s suddenly became way harder. It’s just tighter and tighter each year, starting about five years ago.

You started having all these kind of mastermind groups and people really realizing that Amazon was a place to kind of start a business quick, and then three or four years ago you started having that happen with all the Chinese sellers who many of whom are very close to factories. And then throughout it all, for us in the electronics category, there was a very important brand that launched right around the same time we did and that’s Amazon basics. And so the competition from Amazon basics just keeps kind of tearing at the top of every top selling category, every top selling product starts facing Amazon basics competition after a while. So yeah, just in terms of pure competitive picture, definitely tighter each year.

Steve: So, has your launch strategy kind of changed as well with the increasing competition?

Bernie: I think we had a really, we’ve had some things that are consistent that have actually remained the same year to year and then other things where we really did a horrible job before and then we’re doing a better job now and maybe that’s essential for us to keep up. I think the thing that we’ve done kind of well all along is had a clear brand and a clear message Plugable, where we sell USB products. We can help you connect this with that. We’ve got a lot of great information and content out there to help you figure out what you need to buy and all compatibility works. And we do content and we do videos, and we just invest in enormous amount in content marketing around that.

That actually was what we have done consistently well the whole way back to 2009, but those early years we were erratic with our advertising. It was mostly Google AdWords the first few years, but we did kind of flopped that whole budget over to sponsored products within a year or so of sponsored products coming out. We saw that the effectiveness per dollar was way higher with sponsored products than it was with Google AdWords, but kind of other marketing aspects. In a way we’ve always, historically we’ve been a kind of an anti marketing company.

Our technology sells itself and we support our products so well, yeah, right. And so, what sounded kind of cool in the early years started looking foolish I think a few years ago. And so, we’ve been going through a process of really trying to kind of put ourselves back to school on marketing and do a lot of classic marketing activities like having a PR agency. We have a PR agency this year for the first time in the company’s existence.

Steve: Interesting.

Bernie: We have a dedicated marketing team that we’ve built over the last year. I didn’t have a single marketing specialist two years ago. So a lot of kind of back to basics, how do you market products are necessary now on to even to keep up on Amazon and certainly to flourish on Amazon. And that’s a big change. It wasn’t really necessary a few years ago. You could just kind of launch and do a few things right, and now you’ve got to do a lot of things right.

Steve: Can you talk about like when you launch a new product, what the exact steps that you go through to launch it?

Bernie: Yeah, so we’ve started doing business plans on every product. It used to be that we did a simple kind of just a business model where we looked at input costs and Amazon fees and what price we’d be at. And now it’s turning into something that has to be a more full business model. We have to look at, okay, so what are the keywords we think we’re going to be able to rank for, for this product, things that are differentiators for the product, more broad kind of keywords for this category.

Steve: How do you decide on those keywords and what tools do you use to research that?

Bernie: Yeah, so our tools in Efficient Era don’t cover this area in terms of keyword research right now. So we’re using a mix of mostly Helium 10, and then there’s a lot of other kind of good keyword tools out there. We have Jungle Scout, we have Viral Launch, Sellics is another great tool. So, we’ve tended to focus in on Helium 10 so far, but I think there’s other good tools out there. And it’s basically because we need to understand what run rate do we need to get up to be number one, or at least first page for these keywords that we think that our product is relevant for and our maybe our key differentiators also.

Steve: So what are the keyword volumes that you go through, and kind of what are your assumptions in determining whether you want to launch that product or how to launch it?

Bernie: We don’t worry too much about — so we’re fortunate that we have the funnel. So okay, sorry, when you’re thinking about this and you’re kind of analyzing whether to do a product, one of the key analyses is for the keywords that are important for this category, what’s the run rate? And can I afford in a first purchase order to go — can I afford to get enough of that product and potentially have a discounting or giveaway strategy and a strategy with ads where I’m going to spend above ACOS for a while, and other sorts of kind of sunk investments in the product? Can I afford to have all that inventory, and all of those costs and succeed in that category?

And I think every seller has kind of limits in terms of how big of a category can you target and be able to realistically look at that. For example, we just recently went through an analysis where in the past we’ve competed head to head with Anchor, which is a well known really awesome company directly in our space kind of a direct competitor. And so, we were looking at maybe taking another run back at very simple USB chargers which is a very mature category. And we were looking at a situation where the run rate is tens of thousands of units per month for the top seller in that category.

So we would be, when we did out the business model, we would be having to make about a quarter million dollar sunk investment just in inventory to be able to make a run at the top of that category. And so, we’ve just made the decision we’re going to hold off on that for now. We’re going to wait for some technology inflection point or something. But we don’t feel like we’re well — we don’t have a high enough probability of succeeding to be able to kind of dump that big fixed investment right now in this kind of mature category.

Steve: When you’re talking about the run rate, are you referring to like giveaways or severely discounted products?

Bernie: Yeah.

Steve: Okay.

Bernie: It’s the whole combination of things. So, it can be giveaways although we don’t actually tend to do a lot of giveaways. It can be discounts, which we do, do direct discounts that we’re doing with coupon codes, Lightning Deals, best deals. The tools that we have written kind of for ourselves, we can analyze that. So when you actually start doing all of that stuff, we calculate how much are you giving away in promotions, how much we pull from the ad APIs, how much are you spending on ads. And so, I can actually see once I kind of started down that process with product in the Efficient Era tools, am I still profitable? Or am I running to this business plan that I created where I’m actually planning to lose money for some number of months with a goal of getting the run rate to where I’m first position or first page for these keywords.

And it’s kind of why we need to create these business plans now because I am going to run negative for a few months intentionally. It’s my sunk investment I have to do to succeed anymore on Amazon, but I don’t want to be too negative or I don’t want to be off plan or I can put the business at risk if I go too crazy. So, we now need to do a lot more planning up front and then have a lot more kind of tools to help us monitor how we’re tracking the plan after the fact.

Steve: So to be clear, what you’re trying to do is you’re trying to match the sales velocity of some of the top players, in your case Anchor on the front page, and you’re going to need to sell a required number of units by any means necessary to meet that sales velocity and get on the front page?

Bernie: Yeah, that’s right. And in that algorithm that Amazon — so to this point really that sales velocity, how many units you sell determines your search position largely, it’s the number one factor in search position, and it’s over a couple different timeframes. It seems like Amazon uses some sort of combination of maybe one day, three days, seven days sales, and probably longer periods 30 day, 90 day. So it’s not a exactly precise thing. And there’s always this danger with all things Amazon that they’re going to shift their algorithm.

There’s been some discussion lately of clearly they had been doing their algorithm based on units previously, but there’s been some discussion and concern that maybe in a few categories Amazon often test things first with category specific changes that they switch to a revenue based velocity, in which case doing deep discounting would really start becoming ineffective. So yeah, so you got to also, in addition to go after some big category, you’re talking about really big dollar amounts, you also have an enormous amount of Amazon risk that Amazon is going to — you’ve built this ineffective business model around some Amazon behaviors that could easily change.

Steve: Yeah, so I guess in your case, let’s say you’ve done all this business planning and then it’s time for launch. It sounds like you hired a PR company. How do you do the launch? So you have the product in hand and you have the listing up, what are some of the first things that you’ve been doing?

Bernie: Yeah, I mean, the main thing is the basics of just correctly educating the market. I mean this product exists for a purpose; it’s probably leveraging something that’s new about technology. It’s just getting that story out. So this is kind of the classic marketing and content marketing stuff. So, being really honest with ourselves about what are our differentiators for real not something that if people really did understand this product space, they would agree, oh yeah, this is a great product for that, and really spending our energy highlighting those things.

Steve: When you mention highlighting those things, are you talking about on your YouTube channel or in press releases? Like what are your main channels?

Bernie: Yeah, so it’s YouTube is a very important channel for us. So that’s definitely a main channel, also just simple text, blog posts that are also email blasts that go out to our email lists. And press releases are a lot, they’ve been something that is a lot less effective really for a long time now, probably 10 or 20 years press releases have been in a state of decline. There really isn’t much press out there to pick them up.

But you can work more kind of one to one with people in like in our area in the tech press, then when you — they tend to be very well informed. And so, when you truly are putting out something that is new or leveraging something new, when you can get their attention and explain that to them, then that might turn into an article where your products are mentioned, et cetera, et cetera. So yeah, a lot of marketing energy across a range of activities.

Steve: Okay, so it sounds like when you’re ready to launch a new product, you put out content, you blast your list, and you probably publish something on your YouTube channel just to create awareness of this new product that’s out. In other words, you already have some of these channels in place to help you launch a product.

Bernie: Yeah, that’s right.

Steve: Okay. I’m just curious though, if you are starting without any of that stuff, how would you proceed and what percentage of your sales come from that versus some other things that you’re doing on Amazon?

Bernie: I think in addition, the big thing in addition to those things and the thing that everybody has access to is on Amazon ads, sponsored product ads. So we’re definitely spending a huge amount. In terms of actual spend more on sponsored product ads than we do on the rest of those activities generally. And the great thing about sponsored product ads is it is this well, the cost of them is in a sense going up as there’s more competition for those keywords. Really, it’s a very effective mechanism of getting people to see your product and you can really control this spend. So what we’re doing is all of that kind of keyword analysis that we did as part of the business plan for the product, we’re immediately advertising and trying to win those keywords.

So we use our own tool Efficient Era to do that. And so we basically just need to seed our tool with some of those starting keywords and then our tool, each week we’ll go through and recommend bid adjustments up and down based on conversion rates and other metrics, and it’ll also mine the advertising data for more specific searches that people do. That’s one of the cool things about Amazon advertising data is when I advertise on a word like shirt, Amazon will actually come back in the advertising data with all the combinations of keywords that people actually searched for when shirt was one of the words. So they’ll come back and say, white shirt or a shirt for the Broncos or whatever.

And so then our ad tool picks up all of that stuff, finds the high converting keywords and prompts you with recommendations to say, now turn this into an actual keyword that you’re advertising on. And Amazon’s keywords have kind of three levels of match, broad, phrase, and exact and as you kind of promote a keyword up those, your ads are shown to fewer people, but you don’t need to bid as high, like on an exact match. It will only show if the person types in exactly that phrase. But then if you have advertised for exactly that keyword that will tend to win the kind of keyword bidding that goes on behind the scenes better than a broad match.

Steve: So before we go into the details of all that, which we will definitely go to in a minute, I just wanted to make sure is Amazon sponsored product ads probably the largest piece of your launch strategy, is that accurate?

Bernie: Yeah. In terms of dollars it is. In terms of time, it’s not but dollars yes.

Steve: Okay. And before we get into the software and whatnot, I just wanted to take a step back for the people who don’t quite — who aren’t as quite familiar with Amazon sponsored product ads and walk me through like your strategy. Like let’s say if you didn’t have the tools, how do you decide on the keywords? What do you bid on it first, and then how does that evolve into these exact and phrase match keywords that you were just talking about?

Bernie: Yeah, I think — so it’s very similar to the kind of business model analysis. At first, you’ve probably got some really broad searches that a few of those people are going to actually turn out to be interested in your product. So you’re wanting to think both in that way broadly, what could people be searching for, for my product? But then you also want to think more specifically, okay, so what are some kind of unique characteristics of my product, maybe some of the things that were originally why I chose to launch this product that I could identify some very specific searches that my product should be very, very compelling for?

And when you start out, you might find that on those very broad searches, you get a lot of random purchases or maybe not much traction at all because you’re one of — the primary issue on Amazon is you’re in a sea of other products. And you really need to be kind of very specific and very kind of honest with yourself about why would somebody actually buy my product. And so you identify those characteristics, and a lot of times that’s where you get your initial traction with a product.

So, you might have a product for example, that is let’s say a shirt, if you’re only advertising on kind of a broad keyword like shirt, you’re going to have a very low kind of impressions to click ratio because people are searching for all kinds of shirts unless yours is some sort of extremely appealing shirt, not a lot of people are going to click on that ad when they’re doing that broad search.

Steve: What’s a good guideline that you use for a click through rate?

Bernie: Oh boy, that’s a good one. I may actually, I will answer that question in a second, I’m actually going to pull up real data.

Steve: Do you run automated — auto campaigns anymore or do you just start out with broad?

Bernie: Interestingly yeah. So Amazon has these two different campaign types, auto, and manual. And we do run Amazon’s auto campaigns which are kind of basically just a set of budget and forget it kind of campaign. And we wouldn’t do it except initially there’s a little bit of utility there in terms of keyword harvesting. But that’s not the biggest part of it. The biggest part of it is Amazon has a few ad placement types where they show ads that are only possible with the auto campaign. So, one example of that sort of placement that turns out to be really effective is in the checkout process on Amazon. You’re actually shown especially that last landing page after you’re done buying your product and you’re completely through, they will recommend a bunch of other products to you at that point.

For people who are on the seller central side of things, the marketplace side, doing an auto campaign is the only way that I’m aware of to get a placement there. Also placements on competitors products, only with the auto campaign do you get certain types of those placements. So yeah, so we still — and in fact our tool when you create a campaign for a product recommends creating both an auto and a manual campaign for every product.

Steve: How do you adjust the budget for the auto campaign compared to the other campaigns that you’re running?

Bernie: Yeah, it’s still the same thing where you’re looking at well, the number one metric that we look at is ACOS. And that’s just simply the advertising cost of sales for every — what percent of your overall ad generated sales are you spending in order to kind of get those sales? And it’s a nice number, because it lines up also with your margin. Like, if you have let’s say, a 10% margin on your products, well then you know if you’re selling at a 10% ACOS, you’re about breaking even on those particular sales. Now, you also want to think about the fact that you can’t always make money on every sale.

So, we talked about when you’re launching a product, you have to be willing to invest. So on that product where you might net a 10% margin, certainly at first you might have to be willing to have a 20% ACOS and basically lose money on every sale just to get the momentum going, very similar to doing a giveaway or something. And then even later on, you might want to for a long time just simply be breakeven in your targeting because each sale that you generate through advertising kind of spins up the flywheel on your product, it moves you up in search position. And so each sale really is not just that sale. It’s also ancillary sales that you get because of your better search position. And you’re doing a weak form of customer acquisition.

Amazon really tries to maintain control over the customers on the platform. And even though they say you’re the seller and it is your transaction, in reality, they of course don’t allow remarketing and all that but still, there is a little bit of stickiness to every customer, and it varies a little bit per category. So again, that’s another kind of multiplier or additive effect where your ad generated sale that customer who becomes familiar with you and your brand has a lifetime value that’s probably bigger than just that one sale. So again, it’s another reason why it’s good to be thoughtful about ACOS but a lot of times you’ll actually want us advertise at an ACOS that is higher than your profit margin on the product.

Steve: I wanted to take a quick moment to tell you about a brand new service that I just launched that will help you grow your email list for free. First off, my business is called Gobrandwin.com, and it’s a service that helps e-commerce sellers build their email list through group giveaways. And in fact, in our most recent giveaway, we managed to increase the email list size of the brands who participated by 40%. That’s right, we generated over 11,000 email subscribers, and the average list size of the companies participating in the giveaway was just 25,000.

So if that makes you excited, here’s how the service works. If you own your own e-commerce brand, and you have a following, you must first contribute a gift card toward your products valued at $200 or more. And this is the prize for the sweepstakes. We will assemble gift cards from other participating brands with a similar customer demographic into one gigantic sweepstakes giveaway. All participating brands will send our co branded giveaway email to their entire customer base, driving them to a special landing page on Gobrandwin.com. We will acquire email addresses and Facebook pixel data. We will also send the giveaway entry forms to related influencers in our blogger database. And between my co founder Toni and I, we have access to almost 1,000 bloggers in our database.

Consumers will enter in their email addresses; we’ll send them special offers from your company, and select a grand prize winner. And after the sweepstake is over, you will receive the entire list of entrants and instantly grow your audience. So bottom line, the concept is very simple. And it is absolutely free. We will help each other promote each other’s businesses, get free promotion from bloggers, and share the email addresses. So if you’re interested in growing your email list, then head on over to Gobrandwin.com, that’s G-O-B-R-A-N-D-W-I-N.com. And once again, it is 100% free. Now back to the show.

Yeah, so which brings me to my next question. When you’re launching, what is your target ACOS versus your margin?

Bernie: Yeah, for us it’s probably about double our target margin at first.

Steve: Interesting okay.

Bernie: And we’ll do that basically until we start getting traction and start getting data. And then once data starts coming in, then our Efficient Era tools then can start refining our bids and our keywords, we can get a sense of is this product kind of succeeding or failing. And there’s definitely times where we launched a product and it just, it hits the market like a rocket in the ground, it’s a thud and we’re not getting traction anywhere, we’re not getting conversions. But we have to spend for a few weeks until we really know whether it’s that sort of situation or whether we have a rocket, something that is just resonating with the market and taking off.

Steve: So it’s not like there’s a dial for ACOS, right. So how do you determine your initial bid and then what determines whether a product is a rock versus mediocre which is knocking it out versus knocking it out of the park?

Bernie: Yeah, so in sponsored products kind of natively from Amazon yeah, ACOS is not just a knob but it actually isn’t a lot of the tools, like in our tool it’s a knob. You set an account level target ACOS and then you can override that on a per product basis. So we can override it to be a higher ACOS when we’re launching and then later adjust it down to kind of a more normal mature ACOS. So there are tools like ours that can turn ACOS into a knob. Yeah we don’t know ahead of time whether we’re going to have a breakout or a failure. It usually takes at least four to eight weeks of data.

One of the big debates among sellers on Amazon has been what do you do about the relationship between reviews and conversion rate and ad spend? When you first launch a product and you’ve got no reviews, your ad spend is going to be a lot more expensive because you’re going to be sending people with these ads to the product. And when a person comes to this product with no reviews, it’s just going to convert more poorly than if there’s a bunch of social proof around that product. So now we’re getting into the whole issue of kind of review gamesmanship and all of that sort of stuff.

So, we’ve never paid for reviews or done any of those sort of review gamesmanship things. And that’s meant that we have to be very patient and we have to basically spend more money at first because we know that in those early weeks there’s a real uphill battle to generate those first few hundred sales so that we can get our first handful of reviews. And so, we don’t really know whether a product is going to be successful or fail until we’re kind of through those early weeks.

Steve: How do you decide what to bid?

Bernie: So there’s a bid recommendation API. And so we pop up a default bid when you create a campaign using our tool and we use our tool ourselves. And then we don’t worry too much about that initial bid because it’ll quickly get adjusted to the target based on the target ACOS to be constantly reminding you to, okay, we recommend bidding up on this bidding down on that. And so in a way, your starting bid becomes a lot less critical because you’re going to be adjusting it every week from then on out based on the actual data.

Steve: Okay. And then in terms of losing money in the beginning, you said it’s about double. How long do you do that for?

Bernie: Yeah, there’s no fixed time, it’s till it kind of catches fire. So it’s certainly weeks. If we’re in two months where we’re losing money, we’re starting to look at this as a failure scenario and everyone really scrambling to try to find other things other than just ad spend to kind of recover what might be a product headed for failure.

Steve: I guess what is your definition of catching fire? Like is it based on conversion rate or?

Bernie: It ultimately comes down to, are you executing to that business plan that you created at the beginning? Are you getting to top position on the keywords that you are aiming for? You’re probably not going to be completely there after a few weeks, but you hopefully are making really solid progress there. And if you’re not, that’s when you’re headed for the failure scenario.

Steve: I see. So you’re monitoring your keyword rankings and for the competitive industries that you’re in, I can imagine that sponsored product ads will take you to the front page alone in just a couple weeks. So it sounds like you’re just monitoring the keyword advancement.

Bernie: Yep. Yeah.

Steve: And what is like good advancement? Like let’s say you start out nothing and in a couple of weeks, where do you have to be in order to deem that you’re making progress?

Bernie: Yeah, I mean, it’s very category specific. First of all, you’ve got these very kind of deep competitive categories. And then also we’re looking at a range of keywords. Again, kind of going back to, we’ve got a few broad keywords that have, gosh, if we can be number one on this broad keyword, we would just be killing it. But we also have those very much more narrow, kind of key differentiators of the product that probably don’t have a ton of search volume around them.

But if somebody is actually searching for that, ours is going to be a really great product for them. And so, we’ll tend to make — see visible progress on those key differentiators first, and we better, we should be able to see progress on those key differentiators first, and then maybe we even get to the top of those keywords and only then would we be able to kind of make progress in on some of these broader keywords, really kind of category level keywords because maybe these key differentiators we have identified are something that’s really compelling to the market.

And because we do that thing, people say, hey, this is the best product in this category now, because it did these few things really well. Other times, it’s not enough that those key differentiators are interesting to a few people but not a lot of people. And then you might have something that is kind of a success, but it’s not really a category winner.

Steve: So I don’t want to oversimplify Amazon ads here, because I know in real life when you start running ads, there’s a lot of things that can happen, right? So one, you might be bidding on something and you might not get any impressions for your keywords. You might not get enough clicks; your conversion rate might be super low. How do you deal with these different situations? Or what is your tool kind of doing behind the scenes that helps you address these issues?

Bernie: Yeah, they’re really hard to kind of figure out, and so we actually almost had to create our tool before we understood this stuff. It’s a combination of doing it manually and then also coding it in the tool. So as the tool is doing these recommendations bid up, bid down, refine this keyword to be more phrase and exact, add these keywords, add this campaign, each time there’s a recommendation where the tool is giving a reason why, maybe the ACOS is below target, maybe this keyword is converting at this great rate, this very high conversion from impressions to clicks, we actually will say that right in the tool.

So the way I actually use the tool is in a given week, I’ll get hundreds of individual recommendations for our own account within our own tool. And I’ll run through them and actually you can basically accept or reject each recommendation. I’ll run through them and kind of reject ones that are based on specific reasons, usually for us it’s compatibility that the recommendation the tool is making is not right from a compatibility perspective. But then other than that, I basically just accept all of them.

But if I want to learn and kind of use the tools, the ad data to kind of understand where is this product succeeding and where is it may be weaker than we thought, we have all the data there and we have these reasons that for every recommendation, it’s kind of been put through an intelligent rules engine, and we can tell you why the tool is recommending what it’s recommending.

Steve: What about the case when — and this has happened with a lot of the students in my class. They start bidding for a keyword that they think they should be indexing on but then Amazon doesn’t give that keyword a lot of impressions for some reason.

Bernie: Yeah that’s right. Yeah, that’s actually a really key thing, if your keyword, if you’re not indexing on it organically, then there’s no sense bidding on it. You can bid up and up and up and Amazon either will give you zero impressions or just a handful. So, it’s actually not deployed right now, but one of the things we’ve actually added, it’s in the dev branch right now over the last week is just to check when you’re looking at the keyword. And usually what it will say is impressions too low is our reason. We just provide a simple button there where you can click and you go to a URL and see whether your product comes back on that marketplace for that term. And you can see whether it’s indexed or not.

And if it’s not indexed, well, then this isn’t really an ad problem. You’ve got to work on that indexing problem first, with back end keywords or changes to your description. And then once that’s fixed, you can come back to ads. And bidding and assuming you fixed the organic indexing problem, now you’ll be able to start winning with impressions even with potentially lower bids.

Steve: I was hoping you could provide some guidelines. So you’re in the process of looking up like what a good click through rate is at least for your category. Of course every category is going to be different. But I was just curious for electronics what that might be, and what a good conversion rate is for your electronics products in general.

Bernie: Yeah. So let’s see. So we’ve got about — make sure I get this right, so about 1,000 impressions per sale is a norm. And so, let’s take it through the full steps of impressions to clicks to sales. So it’s about 50, so about 50 impressions per click and 1,000 impressions per sale approximately.

Steve: So 2% click through rate, did I do my math — and what was the number of clicks to sale?

Bernie: About 50, clicks to sale, I didn’t do clicks to sale. So clicks to sale is about 15 clicks for each sale.

Steve: Okay so under a 10% conversion rate. So I’m just curious, what are your guidelines in general for a successful keyword for a given product?

Bernie: Yeah, we’re focused on doing the ad adjustments. These ratios are super important and we want to see improvement in them. I think a lot of is category and product specific. So right now, eventually, I think a lot of those numbers we will have some recommendations in terms of you are way off of norm on the high side, congratulations. Or on the low side, and you probably should — the right action to take when a lot of these ratios are on the bad side is to improve your listing, or either make it or tighten your keywords. I mean, make your listing, your keywords more specific to your product, make your product more specific to what the audience wants, and then make your product high converting, good images, good text. And those are the ways that you can kind of move some of those ratios that we were just talking about.

Steve: I guess my question is like your tool is based on ACOS. So does it even matter when the dollars come into play? Like as long as your ACOS meets a certain amount, does it really matter what your click through rate is, or what your conversion rate is? How does everything work together?

Bernie: No, you’re right. It doesn’t. We present those numbers but those numbers actually aren’t needed to do any of the recommendations in terms of the ad adjustment. The ad adjustments really all kind of key off of that ACOS and the ability to set that ACOS at a per product level if you want us you really get kind of precise about this. And then within a product, you can set the ACOS kind of higher when you launch and then later adjust it lower when the product moves into a kind of a mature profitable phase. And the tool allows all of that.

Steve: I guess if you’re someone doing sponsored product ads without any tools, and geez, you just want some general guidelines on whether what you’re doing is good or not, or if it could be better. So let’s say you’re meeting your ACOS targets, but clearly your conversion rate is low but you’re still you’re still meeting your target. But how do you know that you need to improve?

Bernie: Yeah, it is hard I mean because — so how do you know you need to improve? I mean, well, a lot of it comes down to what’s happening kind of at the individual keyword level. If you’re over bidding on some overly broad keywords, you’re driving a bunch of wrong traffic to your ASIN and that’s costing you money. Even worse, sometimes in some product categories it’s actually believe it or not costing you reviews in the sense that if you drive the wrong people to your product, and they buy anyway, that’s a prime scenario for it to become a negative review in the end.

So in a way it’s kind of cool because everyone’s motivations are lined up. I mean, you as a brand and as a seller, you want to drive people to your product who are going to be really ecstatic about this product, they’re going to be as soon as they see it, they’re going to want it. And as soon as they buy it, they’re going to be happy with it. But the way you achieve that is through keyword refinement, adding and removing keywords to kind of hone in on relevance and then you’re bidding up or bidding down, both for your business so that the keywords achieve the right profitability level, but also, so that you’re spending the money where it drives the most relevant traffic to you.

So, it’s hard. I mean, for us, I mean, we have just within our account of we have tens of thousands of keywords across our whole tool. We manage over 10,000 ad campaigns and so millions of keywords that are managed across all the sellers that use our tool. It’s overwhelming. I mean, basically, before we had our tool and we were probably spending a little bit less on ads then, we had a kind of a full time person. He was spending about two to three days a week just managing the ads. And with the tool help, and there’s a bunch of great tools out there, not just ours. But with the tool help, he’s been able to get that down instead to like, three or four hours, like half a day. So it’s been a huge time savings.

But we got to spend that time because if we’re not spending that time, we’re not honing in our ads and our ad spend to get the right people. And then the other thing that’s happening here that we hinted at is we’re training through these ads and through all this what’s happening with the keywords on these ads, we’re training Amazon search engine about what our products are relevant for. So this is not just about the people who buy based on the ad, it is actually a system for spending money to train Amazon about where your product is relevant so that in organic search, there’ll be showing your products for those keywords too.

Steve: Right yeah. No, that makes a lot of sense. I’m just curious. So during launch, you said you’ll run and lose money for a little bit. How do you decide when to kind of taper it off and actually either choose to break even or make some profit?

Bernie: Oh, gosh, how do we decide? I think it again; it’s that it’s that momentum level that we need to kind of fulfill the business plan. When we have products that fail, we often have way too much inventory and we go through this painful process of kind of unloading the inventory over way too long a time period. And there’s always questions in our minds of should we basically be paying to get rid of this inventory by spending money on ads, or should we just dump it on price and we use a variety of strategies.

But in the more fun scenario of a successful product, we’ve invested and kind of gone negative in terms of our spending for a few weeks or maybe a few months and now the product is – Amazon is all trained up on what keywords this product is relevant for, our ads are humming, we’ve got our ACOS has really kind of dropped down to a healthy level, and we’ve moved to the kind of top position or our target position on the keywords and now we’re just trying to kind of maintain this product at that kind of level of run rate and level of keyword position with our ad spend and so we can kind of drop our target ACOS more into a profitable territory at that point. And of course all the organic sales are profitable.

Steve: I guess your tool you said you have a target ACOS right? So does that imply that it’ll keep spending to try to get to that target ACOS, so does that in fact mean that if your product success, your ACOS will still drop, or will your tool just spend more to meet that target ACOS? Do you understand what I’m asking?

Bernie: Yeah I do. Yeah. So the tool will always kind of manage to the ACOS if it can. And so it’ll be kind of recommending bidding up. So, yeah, I know it is true that we need to make the decision at some point in our tool to kind of drop our target ACOS to say, we’re shifting from kind of launch mode to profitability mode, otherwise, the tool will kind of keep going at that ACOS. So, this is actually where some of those other data points like a good conversion rate or just that our keyword search position that we keep talking about, that stuff getting healthy can be the signal to tell our tool to, okay, let’s kind of switch into profitable mode for this product.

Steve: Okay, so I mean, is hitting the front page one of those criteria? I mean, obviously if you’re number one, you can dial it back. But I’m just curious what your criteria is.

Bernie: Yeah, I think for those differentiated keywords, those highly targeted keywords, we want to be number one, not just front page. For some of the broader keywords, a lot of times especially if it’s a big category, we’ll be happy with front page. Amazon is a kind of all spoils go to the victor kind of market, a big head and a long tail. So, you can easily get a doubling of sales from second search position to first search position in some categories. So we’ll fight for first position if we can get there, but in some cases, it’s just not realistic and so we get the first position on things that the product is really special for and accept kind of just first page on some of the broader keywords.

Steve: So in general, is your philosophy to break even on ads and then depend on the organic sales, or do you believe in making money on your ads?

Bernie: Well yeah. So stepping back kind of bigger picture, we had really low ACOS a few years ago, so we were always making money on ads a few years ago. So this is a shifting picture. Today it’s more the model, it’s not are we wanting to break even or make money, it’s more that we’re going to lose money at first and then our products that kind of fail to achieve what we hoped for, we’re probably going to just lose money in total on the whole business plan for that product. But for our products that kind of make it, that become successful, we’re going to aim to be profitable certainly for organic of course, but also for our ad generated sales.

Steve: I guess what I was trying to get at is there has to be some correlation between profitability and like you could lose money on ads but the flywheel spin so fast that you’re making more money organically, whereas if you’re making money on ads, you might be getting less organic sales. Is there a way, an easy way for you to test that and determine what the optimal bid is so to speak for a given keyword?

Bernie: That’s actually a really great question. I think that is kind of the next step for us. I think we haven’t figured that out with our business and our tools don’t support thinking quite that way yet. But I totally agree that we know all the things I’ve said that it’s not just the ad generated sale, it’s how that spins up the flywheel. It’s not just the ad generated sale; it’s the lifetime value of the customer. But I think if you can turn those into numbers, it really could improve your decision making because then you could have a much clearer picture of, oh yeah, if we are breaking even on ads, that’s actually foolish, we should be always losing money on ads because we’re going to get even more back in organic and in lifetime value of the customer.

So yeah, so I think our tools I’m aware of that. And I think we’re not yet smart about that. And our tools will be — I think you kind of need a tool help for that and our tools aren’t there yet, but we’ll get there.

Steve: I mean, the only reason why I ask is like when I run Facebook ads, sometimes the numbers don’t work out, but I’m generating a lot more sales with my other channels. And miraculously, when I turn Facebook ads off, some of those other channels decrease along with it. So clearly, there’s a correlation, but it’s really hard to measure.

Bernie: Yeah, yeah. And there’s some hope on Amazon that we might actually be able to measure all of it. And so we’ll be enhancing a lot more with our Efficient Era tool set and that’s a great example of an area where we need to.

Steve: I mean, it sounds like to me, at least based on this conversation, it’s almost like you need a tool now, especially if you’re dealing with lots of keywords to kind of organize them and show you how to bid because it’s just too overwhelming to manage a whole bunch of keywords for a whole bunch of products.

Bernie: Yeah, no, I totally think that’s true. And unfortunately, there’s a lot of good ad tools out there. I mean, there’s at least a half dozen that I can think of and ours is really good. We use ours to manage our own business. So, yeah, no, I think that’s right. It’s too overwhelming if you don’t use a tool.

Steve: And Bernie, hey, I want to give you a chance to talk about your tool a little bit. So what would you say is the key differentiating factor? You just mentioned there’s a whole bunch of tools that help you manage your sponsored ads. What would you say is one of your key differentiating factors of Efficient Era?

Bernie: Yeah, I mean, it’s kind of an all in one tool so there’s a few things. One is the ad tool is a great ad tool that is very transparent about the recommendations. So you can kind of choose to accept everything, or you can look at each one individually. And we’re very transparent about kind of this trigger. This reason caused us to make this recommendation so you can use to learn, you can get — it can be really picky and kind of you’ll keep control over things or you can just kind of let it run and just take its recommendations. Either way it saves you a ton of time.

Because our tools kind of originally came from things that we developed for our own business, they’re comprehensive. They cover areas from profit dashboard to this ad tool, to post order emails, to review tracking, to comprehensive databases of all the Amazon information like orders that you can search through and filter and export different ways, returns tracking, product health looking at kind of reviews over time and how is the product doing. So, what we’re headed towards with their Efficient Era tools and we’ve gotten a long way towards this is really we want it to be not just an ad recommendation, but really a business recommendation engine.

We’re constantly notifying you, hey, there’s this problem, somebody changed the category that one of your products is in, here’s an email alert and that’s one of the things we do, here’s how to fix it. Or here’s an opportunity, you’ve launched a product two weeks ago and you still don’t have a sponsored product ad for it, we’d recommend you go create a campaign, and here’s an automated tool that’ll do that for you, so that we’re really kind of an AI intelligent way of improving your Amazon business. And we’ve made significant progress towards that.

Steve: Interesting. So I guess the eventual goal is to have everything talk to each other, right? These aren’t individual tools. They’re all tools that kind of work together.

Bernie: Yeah, that’s right. And that’s pretty different. There’s some good tools out there that are very, like you say, are kind of very separate independent tools. Yeah, and we’re really different than that, because we’re highly integrated, we’re able to do a few things a lot smarter because we’re using all of the data to help make a smart recommendation.

Steve: So for example, if I ran out of stock and I don’t know, will that ad stop, or close to running out of stock ?

Bernie: Amazon stops the ad when you run out of stock and you no longer have the buy box. We are just about to launch kind of a comprehensive buy box notification that untangles when you lose the buy box, was it a pricing issue, was it an out of stock issue? Today Amazon suspends the ASIN and so you’re getting the dogs of Amazon, the dreaded dogs of Amazon when you go to your product, or all these different other reasons why you might lose the buy box. So we’ll untangle that. We’re not doing proactive turning off ads on triggers like getting low on stock, maybe that’s something that we might do in the future.

Steve: Okay, well, hey Bernie thanks a lot for giving us a lesson on how you run Plugable. As I always mention, I think selling electronics is really competitive and borderline crazy, but you managed to make it work. And what I like about you is that you eat your own dog food, you have the tools that you actually use for your own business. So in fact, all of your words carry a lot more weight, at least to me.

Bernie: Yeah, yeah, no, electronics is a hard space, but it means we are forced to get good at what we do.

Steve: Absolutely. Well Bernie, thanks a lot for coming on the show.

Bernie: Yeah, appreciated Steve, talk to you soon.

Steve: All right. Take care.

Hope you enjoyed that episode. As an eight figure seller, and probably one of the most competitive markets on Amazon, Bernie goes through a lot of product. And because his margins are razor thin, he really has to optimize everything. And as a result, his processes tend to be super efficient. For more information about this episode, go to mywifequitherjob.com/episode230.

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 e-commerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. So, head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

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

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

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229: The Trump Trade Tariffs – Everything You Need To Know With Nathan Resnick

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229: An Expert's Opinion On The Trump Tariffs With Nathan Resnick

Today I’m really excited to have Nathan Resnick back on the show. If you don’t remember Nathan, he is the founder of Sourcify which is a company that helps you find manufacturers to produce your products.

Anyway, Nathan has been on television multiple times in the past month to talk about the Trump tariffs and since he’s an expert on the topic, I thought I’d have him on to discuss his thoughts. Enjoy!

What You’ll Learn

  • The current state of the tariffs and which products they affect
  • What impact the tariffs have on large businesses vs small businesses
  • How to find vendors outside of China
  • The short and long term impact of the tariffs

Other Resources And Books

Sponsors

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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

Intro: 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, this week, I invited my buddy Nathan Resnick of Sourcify to give his expert opinion on the Trump tariffs. We talk about which products are affected and how to best avoid the brunt of the impact.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. And I like 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. 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 sent. Now, Klaviyo is the most powerful email platform that I’ve ever used and you could try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

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

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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 back on the show. And if you don’t remember Nathan, he is the founder of Sourcify, which is a company that helps you find manufacturers to produce your products. And prior to that, he owned two e-commerce companies, Yes Man Watches and Cork Supply Co., and recently actually, he spoke at my annual e-commerce conference, the Sellers Summit. Anyway, Nathan has actually been on TV multiple times in the past month to talk about the Trump tariffs. And since he’s an expert on the topic, I thought I’d have him on to discuss his thoughts. And with that, welcome back on the show Nathan, how are you doing today, man?

Nathan: What is up? I’m doing great. Thanks so much for having me.

Steve: So first off, can you just kind of summarize why Trump has issued these tariffs in the first place? And what kind of are his demands from China at the present time?

Nathan: It’s crazy. And I kind of want to start the conversation saying, I’m not political at all. But what I’ll say is, these tariffs are crazy. And I think he is trying to position himself with these tariffs thinking that these products are going to now be produced in America, which there are companies that we work with are rapidly diversifying their supply chain across Asia. And so for him, and I think the US government is just a way for them to make money. Really what Trump doesn’t even realize it and what he said actually, last week is that China is now paying us billions of dollars in tariffs, but really tariffs are paid for by American companies that are importing products from China.

And so it’s really in my mind just a bit ridiculous, but at end of the day tariffs are a way for the US government to make money or to balance out trade. And if you look at the trade between America and China, there’s a huge deficit. We’re importing way more than we are exporting to China.

Steve: I know, but realistically does the US have the infrastructure that China has to produce all these things at low costs?

Nathan: Oh, we don’t. I mean, that’s really the global economy. If you look at it from my more bird’s eye view, there’s a reason products are produced outside of America. And the reason being is it’s just the way that the currencies work. If our dollar equals 6.8 renminbi right now, then you know that our dollar is going to go further there. And really, I almost break it down to the ground floor. When you’re in Guangzhou or Shenzhen, let’s say you’re going to the Canton Fair coming up here in October, and you’re over there and you’re going out to dinner, you’re probably spending almost a fifth or a 10th less on dinner than you would here in America.

And that just shows the way the international economy work is that our dollar goes a lot farther. And you know what; you know the Chinese government is doing? And I’m not exactly sure if I should say this in this way. But they’re actually, they’re putting, they’re making the renminbi at almost their all time low a year low. So right now, the dollar is extremely valuable compared to the renminbi. And so our dollar is going to go a lot further than it would last year, a year before, and the reason being is the Chinese government, they’re trying to enable US corporations to have more buying power in China, even with these tariffs.

Steve: Hmm-mm interesting. Okay. But then, doesn’t the factory kind of get screwed over then?

Nathan: Well, in this case, the factories are really screaming. I’ll tell you, I was in China two weeks ago at our Guangzhou office. And you go to these, even the fabric markets there in Guangzhou and everyone’s screaming, they’re saying, hey, well buy fabric here, but can we send it to Vietnam? Can we send it to the Philippines? Can we send it off to Cambodia? And even at Sourcify, when we work with these companies to produce products across Asia, there’s probably been about a 30 to 40% increase in companies requesting to produce products outside of China, and I’m talking in India, Vietnam, Thailand, the Philippines.

And if you look at larger enterprises, if you look at the Nikes or Adidas of the world, these organizations have already been producing outside of China for a long time. And so really, what’s scary with these tariffs is that in my mind, they’re just starting. Trump just put a 10% tariff on $200 billion of Chinese products last week, and that tariff is going to be increased to 25%, starting January 1, 2019. Now, they’re still actively negotiating and trying to figure out really what’s going on with this trade war.

But if you’re an e-commerce company, and all of a sudden, you have to pay 25% more tariffs, you’re going to want to figure out, how can I avoid that tariff? And I’m happy to dive in the ways that you can avoid the tariff. Some, I will say will be legal, and some are a bit under the table. But I’m not recommending the under the table ways at all.

Steve: So before we get into that, can you just give us a quick update on kind of the current state of the tariffs and what products they are affecting, kind of give us a timeline and how it started out and where we are today?

Nathan: Yeah, a hundred percent. So it started out a few months ago. And really, originally, it was more so targeting industrial and agriculture products, where you’re talking about steel, you’re talking about soybeans, you’re talking about products that will probably not affect your general e-commerce entrepreneur that’s selling consumer products. And then all of a sudden last week, tariffs got put on electronics, cosmetics, clothing, home, and home furnishing products and TVs. I mean, these tariffs now are really actively affecting HTS codes that companies like you and I are importing under. And so it started to all of a sudden have an effect in the e-commerce world. And really, that’s scary.

I mean, if you’re an e-commerce entrepreneur, that’s just starting out running on thinner margins. These tariffs are going to have a direct effect on your business. And really probably the first question that comes to mind right there is, how do I find out, how do I know if these tariffs are affecting my product? And so what I do right now is really ask your freight forward. If you’re importing products, even just at a smaller scale, whether it be a pallet or just one container, so ask your freight forward and say, hey, do I have to pay a higher tariff?

And your freight forwarder should know, right off the bat if your HTS codes that you’re importing under are affected. And really, that’s the first way that you start, you can also definitely go on Google and do some research yourself. But I think at the end of the day, your freight forwarder should have the most knowledge in regards to all your products affected.

Steve: Okay and then what impact would you say the tariffs are going to have on larger businesses like we were talking about CVS earlier, versus smaller businesses?

Nathan: I mean, it’s crazy on the larger scale. They’re hurting; they’re trying to avoid them as fast as they can. I mean, there was this story, it must have been two months ago, where there was this company that was trying to import or it was they were actually exporting, because on the other hand, China has lifted tariffs on products that American companies are trying to sell into China. So it’s back and forth, these trade wars, but there was this company that was exporting soybeans from America to China, they literally missed the cutoff time by 30 minutes. And they started paying $12,000 a day just to have their container ship off the port waiting to figure out what’s going to happen with these tariffs. Because if they have brought those soybeans to port, they would have to pay $6 million in new tariffs just based off these new tariff increases.

And so from a larger scale from these larger enterprises, the effects are huge. And so what these companies are doing are diversifying their supply chains very fast, which means a lot of these production lines in Vietnam or India are a lot of times already booked their capacity for the next year. You really have to dive deep and figure out who is going to be a supplier that still has some capacity for your products outside of China, or you find ways to diversify or get around these tariffs in maybe not the most cleanest way.

Steve: So, what would you say is the short term impact versus the long term impact? Are you already starting to see prices increase?

Nathan: Yeah, I mean, I would say short term impact is that you as a company need to start negotiating right away with your factory to see how can I balance out these increased tariffs, because on the factory side of the table, you’re going to want to try to lower costs there and cut your unit costs on that end. On the consumer side of the table, we as American consumers are going to have to start paying more for these products. I mean, I actually wrote this down as estimated by students at the London School of Economics, that each American citizen is going to have to pay $127 more over the course of the year for average products that they’re buying, whether it be TVs, or clothing, and washing machines. I mean, you’re really going to see a direct effect.

And, at the larger enterprise level, you have toy companies like Hasbro that are saying during their earnings call last week that the company will move production outside of China immediately as fast as they can. And so, not only are you seeing the effect with just families here in America and having to spend more for products, but larger enterprises are having to figure out how they can really diversify their supply chain.

Steve: So, let’s say I needed to — let’s say I wanted to negotiate with my vendor, would you mention the Chinese renminbi against the US dollar? Like, does it all kind of balance out right now, when it’s only like a 10% tariff?

Nathan: Yeah, I would say 10% tariff. It depends how much you’re importing. But yeah, it definitely does balance out in some sense. I would say too, though, from the factory perspective, I know even our supply chain team, they’ve been getting a swap just with inbound requests from factories outside of China saying, hey, we can enable you to produce these products and avoid these China tariffs. And so even on the factory end of the table, you have factories, sales reps that are now hitting us up outside of China more activity using these tariffs as a sales pitch. And I would say inside China, the smarter factories are saying, hey, well, the renminbi is that almost a year low, we’re really trying to balance out our currency here. And so there’s not a huge effect.

I think it also just depends how you pay your supplier. I’ve heard of a lot of e-commerce entrepreneurs having great payment terms with their suppliers, not having to pay right up front, or 70/30, excuse me, 30/70 or maybe having 60 day payment terms. If you can flow some of your cash with production, then you might be able to have less of a direct effect right now with these tariffs.

Steve: So, I mean, is it just a really bad time to import from China?

Nathan: Yeah, I mean, well, especially right now with the holiday season coming in, even the freight lines are crazy, all industry is going nuts trying to ramp up for the holidays. And with these tariffs, it’s really, I think, become a bit of a mess. But I think the smarter companies are planning long term. If you’re a company doing business right now, you probably already got your holiday season planned out. You’ve got your POs in for the holiday season, and are already midway through production. And hopefully, especially if you’re producing in China with the Chinese New Year and the Spring Festival coming up there in February, that you’re going to have production in inventory ready to last yourself throughout that time period. Because otherwise you’ll probably run out of inventory or just probably take a trip to Vietnam or India, or Thailand or something.

Steve: I guess the reason why I’m asking that is I was wondering if you have any predictions on what will happen and whether this will get resolved, whether you should hold out on buying large amounts of inventory until this kind of blows over?

Nathan: That’s a great question. I mean, from what I’ve seen in the media, I’ve talked to reporters at CNN and CNBC, and Forbes. And it’s very interesting because from the news perspective, I mean, this is great press for the newscasters. I mean, they love talking about this, and I honestly think it’s going to become, it’s going to continue to rise. I think Trump really has it in his mind that by putting on these tariffs, he thinks that number one; he thinks that China is paying for these tariffs, which is not true. And number two, he thinks that we’re going to see a shift in production back to America, which I don’t believe is going to happen, just because it’s going to be way too expensive to produce most of these products here in America.

And so I think hopefully, he’ll come to a realization and the government will come to a realization that really what this is causing is just American consumers and companies are paying more for these products. And these companies are now just diversifying their supply chain outside of China, or making some tricks under the table to avoid these tariffs.

Steve: Okay, so let’s talk about that now. What are some ways to avoid these tariffs?

Nathan: Yeah, so we’ll divide by legal versus illegal. And I do not recommend the illegal.

Steve: Start with the illegal stuff first because I’m sure [overlapping 00:15:35].

Nathan: Yeah, I mean, so, right off the bat, you have transshipments. And transshipments are legal and transshipments, what they are, is when you’re sipping a container, let’s say from Guangzhou to Long Beach, and you have to ship the cargo, ship has to stop in Malaysia, or Thailand or whatever maybe. But what a lot of these freight foreigners are offering now is with these transshipments, they’re going to change the country of origin on your products. So they’re literally telling you, do not put those made in China labels on your products, we’ll change the country of origin during the transshipment when we stop over in Thailand, or Malaysia, or whatever may be, so your products are actually on paper imported from China.

And so that’s one way to avoid this. Trans shipments are legal, but the act of actually changing the country of origin on your products is illegal. On the other hand, this is something that’s probably a bit more common in general, with smaller scale e-commerce entrepreneurs, or companies that haven’t necessary gotten the scale, but just lowering the value of the actual Bill of Materials, saying that, instead of buying this product for $10 per unit, you’re buying it for $1 per unit. And so the actual tariffs that can be levied on your products is much lower. So instead of having a total dollar amount of 10,000, you have $1,000. And so, really at the end of the day when tariffs are applied to the import value of your products, the value of the products is much lower than they actually are. And so you kind of slide into the cracks that way.

Steve: Hold on Nathan real quick. I know some of my vendors had done that for me without even me asking.

Nathan: Well, yeah, I mean, it helps them too, because they also have to pay an export tax in China. So it is in some sense win-win, but is it actually legal?

Steve: What is the risk actually, is what, because I feel a little uncomfortable by it. I mean, this happened a lot early on. And so have you known people to get caught by this?

Nathan: Not on a small scale. There’s definitely been some fines at a larger scale, but the border patrol and just the organization that is really balancing out these tariffs and forcing them, they’re not going to have time to deal with companies that are importing $10,000, or even sometimes even $100,000. In the grand scheme of things, it’s not that much. And so, the risk of getting in trouble at that level is extremely low. At a larger level, if you have companies like Bass Pro, one of the biggest toy makers in the world, if they get caught doing this, there’s definitely some questions and media attention that will come their way.

So I would say, as a e-commerce entrepreneur, the risk is very low. And really, the other solution that I want to note on is actually doing fulfillment at or in China, for example. So, if you’re importing products, and they’re under $800 per parcel, you actually are exempt from customs duties all together. And so what we’ve seen actually is number one, a lot of fulfillment companies or a lot of factories start to offer fulfillment options in China. So you’re shipping products direct to consumer from Asian based fulfillment centers, whether they be in Hong Kong or in China, and shipping these products directly to consumers here in America. Your shipping rates are definitely going to be a bit higher; it depends on the shipping method you use.

And also, sometimes I think, just with international logistics, if you’re shipping product, just one by one from overseas, it’s got a higher risk of it getting lost or damaged in the mail. So I don’t know if that’s the best option.

Steve: But is that a realistic option?

Nathan: I mean, there’s companies like actual companies I know top of mind, one called Fulfillment and one called the Floship. They both have facilities in Hong Kong and Shenzhen, I think. And they’re doing D2C fulfillment out of China, and they’ve had success there. There are companies that work that way. I would say, a lot of times, though, you see more kind of drop shipping oriented type of companies shipping through this route, because just the customer experience doesn’t have that high of a level. I think, with today’s world with two day Amazon Prime shipments, consumers expect the product to come fast. And when you’re shipping from a fulfillment company in China, obviously, the products aren’t going to come as fast, probably a week at the fastest. And so it’s something to consider when you think about your customer experience. But at the end of the day is it an option to explore? Yes.

Steve: So in regards to relabeling the boxes to have a different country of origin that sounds kind of risky to me.

Nathan: Yeah, it definitely is. I mean, it’s not something that I am recommending by any means. But it’s a way that some companies are avoiding these tariffs. And I think that the end of the day, you got to sometimes explore all options. But I would say the best way to avoid these tariffs is to explore other options to produce in other countries. And I know, for example, we have companies that we work with right now that sell into large retailers like Wal-Mart and Target that are producing in India and Pakistan, and finding way better rates producing in those countries than China, because the labor rates, it’s crazy right now in China, with the growth of the economy and the infrastructure there, labor costs have definitely gone up.

And when you think of a product like arrow [ph], or clothing, or even any bag, like the main cost outside of the actual raw material is actually the labor. So when you’re having to spend let’s say half an hour to produce a bag or something, that’s labor cost. And so if you go to India or Pakistan, where the labor costs are even less, you’re going to be able to have better production rates. And so that’s something that I’d really look into. There are some great factories outside of China.

And, it’s crazy, like when I look at China, when I was first over there 10 years ago, and look at it today, 10 years ago, you go to a factory and they’re picking you up in a pretty rundown car, there’s not all these nicely paved roads and there’s not all this crazy traffic. And now you go to these factories, you getting picked up in Range Rovers and Mercedes Benz and you’re thinking to yourself, they must have made some money on some of the margins with their production runs.

Steve: So given that, like let’s for like the little guy, how would you find suppliers in countries outside of China? Like, there’s no Alibaba for like Pakistan or Vietnam?

Nathan: Yeah, it stems from network I think 100%. And even here at Sourcify, it stems from our network, when we go into these other countries. And I’ve done trips this year alone to Vietnam, Thailand, and the Philippines, and have one plan for India later this year. And it’s a different ecosystem. Number one, when I go to China, China is a great country, don’t get me wrong, but am I going there to enjoy the environment, no. When I was in the Philippines, I mean, we’re looking at this factory in the south in the city called Zamboanga and the beach was right across from the factory. I was like, wow, this is actually great environment, I wouldn’t mind hanging out here for a few days. Whereas, when we’re in a factory in China outside of Guangzhou or wherever may be, it’s not always the nicest area.

And so, I would say for a smaller buyer, like there’s definitely some different trade shows, you can exploit, there’s the gifts and premium show in India. I think it’s later this month, I think it actually coincides with the Canton Fair. I can double check, and I’ll send you the dates on that later. But, I mean, there’s definitely some other trade shows in other countries. And what I would do too, is you actually can Google some of the trade organizations that they have in these countries. There’s free economic zones, there’s the Clark free economic zone in the Philippines, there’s the Zamboanga free economic zone in the Philippines.

These organizations are actively looking to boost local trade. And it’s amazing, because these free economic zones; they have no import or export taxes for companies that are set up in these zone so a lot of factories go there. And there’s no taxes or very little taxes for these companies in these free economic zones. And so, if you’re working with a factory that’s in a free Economic Zone, you could literally be importing product into that free economic zone for free and exporting that finished product for free back to your home country. And there’s been talks I know with the Philippines and America to get into some sort of free trade agreement. And NAFTA, the North American Free Trade Agreement just got resigned, which is awesome. So, you could explore options to produce in Mexico. And down just south of the border in San Diego, you have the Economic Development Council of Baja and the tier one or region there.

Steve: So I know that when I go to like the Canton Fair, I know it’s actually worth my time, because the trade show is just so large. But these ones that you mentioned, I think you mentioned one in India, is it a much smaller scale? Like, how can you be a lot more efficient with your time and finding these factories that are outside of China?

Nathan: Yeah, I mean, I would say it stems from network. So, feel free to ping me up to try to introduce you to some people outside of China. I would say, for any e-commerce entrepreneur going to some of these smaller shows, it’s probably not going to be worth your time. I mean, I think the beauty of the Canton Fair is that you have so many different factories at your fingertips there. But what you could explore is there’s some trade shows here in America. I was at a magic sourcing trade show and the sourcing direct show at ASD market week in Las Vegas.

And those aren’t big shows from a sourcing perspective, especially compared to the Canton Fair, but they actually diversify the amount of suppliers that they had there. There was a lot of booths there from Turkey, from India, from Vietnam, from Korea, it was pretty cool. I mean, honestly, and a flight to Vegas is usually pretty cheap. So it was pretty cool. I mean, that’s something that I would definitely recommend. I’ll send you the dates on when those trade shows are.

Steve: Okay. Yeah, it sounds good. What about from an online perspective, though? Like, is there like some sort of directory or some central location where I can get access to a lot more of these factors that are outside of China?

Nathan: None that comes to mind. And that’s probably a pretty big, good business opportunity right there, it’s creating some sort of international Alibaba. I mean, I think Alibaba does have some facilities and factories that are outside of China. And when you search, I mean, when you search Alibaba, you can specify the country, so you could try to just specify countries that are obviously not China and see what comes up. But as far as my knowledge, there is no go to online directory that’s focused outside of China.

Steve: Okay. And is that something that you guys do though?

Nathan: We definitely do diversify company supply chains at more of an enterprise level. At a smaller scale, I would recommend like the factory confirm Chrome extension that we have, I’ll send you the link for that. It’s pretty cool tool that enables you to analyze factories in real time. But I’m happy to help. For me, I’m a former e-commerce entrepreneur myself, and now just focus on the supply chain side of the business. And that’s what I love.

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Can you kind of describe generally I guess, what the infrastructure is like for China compared to some of the other third world countries like Pakistan, Indonesia?

Nathan: Yeah, 100%. I mean, I’ll describe the Philippines right off the bat, because I was just there last month. And it’s a lot different when you think of the infrastructure. And I would look at it from almost the freight forwarding world where in China you have FOB in Ningbo, you have Guangzhou, Hong Kong, you have all these different major ports along the coast and you can ship containers very readily out of these ports. When you look at the Philippines, pretty much every factory is shipping FOB Manila. And so what that means is that they’re transporting and they’re taking responsibility for your product because it’s FOB terms that they’re taking responsibility for your product to get it to Manila to get it to that container ship or whoever your freight forwarder there that’s picking up the container in Manila and putting it on the cargo ship or air freighting it back to your warehouse.

But there’s just not nearly as many ports that are shipping on FOB terms internationally in the Philippines or India or Thailand compared to China. And so from a logistical point perspective if you think about it from a factory side of the table, these factories are oftentimes spread out pretty far from these main ports and so they’re having to handle the transportation costs to get your product to wherever you have those FOB terms from. And I think also the other hand to if you ever get terms on DDP rates, then you’re going to have — it’s going to be harder. I remember in India most the production quotes that we get are all FOB or x works because DDP out of India, just with freight is a lot more complicated to calculate than out of China.

Steve: Can you kind of comment on the prices of some of these countries compared to try to China?

Nathan: Yeah, I mean, it’s pretty incredible. Really, especially for the cut and saw industry, like, let’s say you’re producing any sort of fashion item or bag or any kind of cut and saw oriented product, just because the labor rates outside of China, and India or Pakistan is much less. We’re talking about like t-shirts like a nice shirt that is literally you have like $2 and 20 cents for DDP like duty to the repaid delivered t-shirt that’s got a print on it and that’s got pretty good fabric. And so some of the rates are incredible but that’s at a much larger scale. I mean, that’s a really company that’s spending close to $10 million on production. And so their rates and the margins that these factories are making are much lower.

But even then, if you can try to fit your production run in with a factory that is producing for a larger buyer, and sees the growth of your product and really likes your brand, and there’s not too much that separates the production line that they’re doing for this larger enterprise and you’re small e-commerce company, there could be great synergies to explore. And I think that’s really like the — it’s like a double edged sword. Like, it’s great that the supply chain world is so relationship based. But on the other hand, you have very little transparency. If I asked you right now, what’s the name of your factory? Like, I wouldn’t expect you to tell me, it’s just like, not that – it’s not a question that you ask other e-commerce entrepreneurs, because that’s like a trade secret, that’s a trade secret of your business.

And so I think that’s like kind of the craziness of the supply chain world in the e-commerce arena, is that like, if you see a company that’s crushing it, and they’re selling socks, and you also want to start selling socks, well, you can’t just go up to that company say, hey, who’s your factory? I also want to start selling socks. They’d be like, well, why would we tell you and they’ll probably actually try to pitch themselves as a middleman that will produce socks for you.

Steve: So, would you say in these other third world countries, that they tend to work with larger guys, like are there opportunities for some of the smaller people, or even the people that are just starting out to look there?

Nathan: There is, I mean, it’s definitely smaller facilities. I would say, from a larger level, most of the facilities that we know, that we’re connected with are bigger, but there’s definitely a lot of growth in smaller facilities there. And I think the beauty of it too, is as a e-commerce entrepreneur that’s growing and looking to extend your product categories, it’s not going to make sense for you to go work with a factory that has 10,000 employees. If they can produce a million units a month, and you’re producing 10,000 units, it’s not going to make sense for them, or for you to work together. I mean, you’re going to be the smallest fish in their pond. And it’s very unlikely that they’re going to spend that much time or give you that much attention.

And so for you, especially if you’re starting out, or just kind of starting to see some growth, it’s going to make much more sense to work with a smaller midsize factory that you can start taking up maybe 20 or 30% of their capacity with rather than just getting a percent capacity here, 5% there. I mean, really, I think the key to finding a good factory for e-commerce Company is finding one that they can grow with, finding one that they can really scale with and build a relationship with.

Steve: I guess what I’m trying to get at is, what are the big disadvantages of going outside of China?

Nathan: I mean, the disadvantages are I would say just the visibility. You have really, in China, the infrastructure is very strong, you have a lot of options, there’s a lot of material sources there with different fabric markets or raw material sources. And outside of China, it’s just not as developed. You’re going to places where sometimes they don’t have good internet access; sometimes they don’t have access even to running water. I mean, it’s really sometimes a bit crazy. And you look at some photos or some of the infrastructure in countries like India or Bangladesh, I mean, there’s flooding, there’s even it was crazy, like when I was in China two weeks ago, that typhoon hit, and I was flying out of LA, and my plane was delayed three hours because the typhoon was supposed to basically hit Guangzhou and we were supposed to land.

And so you have especially outside of China, I think you are more prone to face more natural oriented disasters and more production problems. Whereas, in China, and especially if you’re working with a facility that has more inspection certificates, it’s more likely to be stable, it’s going to be a stable production environment. So you add more risks to the table. But that’s not to say you should be scared. I mean, I think it’s really important right now, especially with these tariffs in place that you are motivated and excited to explore other production opportunities.

Steve: What about the other way around? Are the Chinese tariffs on US products, is that going to affect anything?

Nathan: Yeah, I mean, it’s affecting companies that are exporting to China and China selling into China. Are many e-commerce entrepreneurs doing that right now? Not necessarily. Is that a huge opportunity? Yes. I mean, I know a lot of companies that have done pretty well in China, but it takes investment. You either got to go set up your own store on TMall or Taobao or find a distributor or really try to figure it out how to hit a molder niche in the Chinese market. And I think it’s much easier said than done. If you don’t have experience selling into China and don’t know how those consumers interact with your product, it’s going to be pretty challenging.

I mean, I always find it surprising when companies ask about selling into China or other Asian countries because the market is so big and seemingly so untapped, but if you’re struggling to sell products to consumers that you know so well here in America, it’s very questionable to me how you think you can do so much better selling products in China, if you don’t know that market at all.

Steve: Okay, I mean, we’ve been talking a lot about Philippines, Vietnam, Pakistan, but what are your thoughts on sourcing in the US at this point?

Nathan: I mean, sourcing the US is an option that should be explored. I think that the costs are definitely going to be higher; the experience can be hit or miss. You definitely have a lot of US facilities that are going to give you sometimes even a worse experience than you would get producing abroad, but I think at the end of the day, it comes down to cost and your margin. And if you’re spending 30% more to produce your products here in America, and your brand doesn’t revolve around that made in America aesthetic, it’s probably not going to make sense for you as an e-commerce entrepreneur because if you’re spending 30% more to produce these products than your competitors, well then you can’t have that cost per acquisition that these other companies can take in because their margin is 30% higher than yours.

Steve: I guess with the 25% tariffs coming down, that might even things out a little bit.

Nathan: Yeah, but I mean, well, here’s what I would say though too, is in the e-commerce world, I would say, outside of your brand, really what it comes down to is your margin. If I know that I can produce my products for let’s say, even 10% less than you can, then I can go spend 10% more to acquire a customer while staying profitable. Whereas, you can’t spend that 10% more because you’re spending 10% more to produce your product than I am.

Steve: Where are some places that you would go to find US manufacturers?

Nathan: There’s sites like Thomasnet, there’s Makers Row is American based manufacturing marketplace that it’s pretty cool. Those are the two main sites that come to mind, Makers Row and Thomasnet. And that’s definitely some options that I would look into. I mean, I think there’s definitely opportunity to potentially produce in America, but I would first explore outside of China and other countries in Asia.

Steve: Okay, so Nathan to kind of conclude this little talk that we’re having here, where do you see things going looking one year out just your own personal predictions?

Nathan: Yeah, I mean, one year out, I would say companies that are smart are going to diversify their supply chain outside of China. I think China in general has gotten more expensive. I mean, when we started exploring production outside of China almost two years ago for some of the companies we work with, there was so much just amazement, because it’s really ripe with opportunity. When I look outside of China, when I look at countries like India, or the Philippines or Thailand, it almost reminds me of China 10 years ago, when companies were really starting to scale up there, and the infrastructure was just starting to grow.

So I assume, and I think that companies are going to continue to transition production outside of China. I don’t, I honestly don’t think there’s going to be a huge shift of production back into America. And I do think these tariffs are going to affect a lot of consumers, a lot of American companies, and even Chinese factories.

Steve: Can you real quick comment on these other countries outside of China, and what kind of their specialties are? So you mentioned like cut and saw, and was that the Philippines or Pakistan? Do these countries have some sort of specialty?

Nathan: Yeah, so Pakistan, India can be great for leather, a lot of cut and saw fabrics, basically any textiles or bags, sometimes hats, shoes, you can produce across India, Pakistan, Vietnam, Thailand, and the Philippines. I would say more electronic oriented products; it’s going to be very hard to diversify your products outside of China. That area around Shenzhen, it’s just so good for producing electronics that I don’t really know anywhere else in the world that has that capability like that. But for other products, sun glasses I think are mostly in China, and even kind of all those little types of gadgets, those kind of small price products, it’s all done around Yiwu and it’s going to be pretty hard to diversify those outside of China. But there definitely are some hidden gems out there. And I really encourage people to look for production opportunities outside of China.

Steve: So it sounds like the primary opportunities outside of China are in the textile space.

Nathan: Yeah, textile, handbags, bags, backpacks, all that.

Steve: Okay. And if you sell electronics, China is probably going to be the place to be. What about plastics?

Nathan: Plastics, you can do some like injection molding in Vietnam, in India. China is definitely still really good for plastics, but there are opportunities to explore outside of China.

Steve: Okay, cool. Nathan, this is a very enlightening talk. Where can people find you if they have questions for you besides on TV and MSN?

Nathan: Yeah, I mean, they can find me on LinkedIn or Twitter, Nathan Resnick, and feel free to check out Sourcify. We’re the fastest growing B2B manufacturing platform that helps hundreds of companies produce products around the world. And I really appreciate you having me on today.

Steve: Cool. Thanks for coming on.

Hope you enjoyed that episode. And even if you don’t currently sell online, these latest rounds of tariffs will actually affect everyone. And if you do sell online, you better have an alternate sourcing plan going forward. For more information about this episode, go to mywifequitherjob.com/episode229.

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 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.

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

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

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228: Improving Email Deliverability And Powerful New Klaviyo Features With Jake Cohen

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Improving Email Deliverability And Powerful New Klaviyo Features With Jake Cohen

Recently, I attended Klaviyo’s first ever email marketing conference in Boston and while I was there, I recorded a bunch of podcasts. Today’s episode is with Jake Cohen who is the director product at Klaviyo and an expert on email deliverability.

In this episode, we discuss some of the awesome features Klaviyo just released but the best part are the nuggets that Jake provides on how to improve your email deliverability. These are strategies that I was not aware of and I’m definitely going to change things up.

What You’ll Learn

  • Klaviyo’s new feature that will allow you to track any parameter to trigger email campaigns
  • How to improve your email deliverability
  • How to dynamically change up your set depending on customer behavior
  • How often you should prune your list

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

Pickfu.com –  Pickfu is a service that I use to get instant feedback on my Amazon listings.  By running a quick poll on your images, titles and bullet points,  you can quickly optimize your Amazon listings for maximum conversions.  Click here and get 50% OFF towards your first poll.

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

Sellers Summit

Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. Now recently I attended Klaviyo’s first ever email marketing conference in Boston. And while I was there, I recorded a bunch of podcasts. And today’s episode is with Jake Cohen, who’s the Director of Product over at Klaviyo and he’s actually an expert on email deliverability.

And in this episode, we discuss some of the awesome new features that Klaviyo just released. But the best part of the show to be honest with you, are the nuggets that Jake provides on how to improve your email deliverability. These are actually things that I did not know. And I’m going to be changing up some of my email strategies for sure after this interview.

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 they’re a bunch of companies out there that will manage your email capture forms, but I like privy because they specialize in e-commerce. Right now I’m using Privy to display a cool wheel of fortune pop-up. Basically a user gives their email for a chance to win valuable 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 Klaviyo 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 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 my email marketing platform that I personally use for my e-commerce store, and I depend on them for over 30% of my revenues. Right now Klaviyo has a special offer to help ecommerce businesses like yours prepare for the holiday season. From planning your email schedule to creating powerful holiday target segments, Klaviyo is actually offering their expertise for free.

So go to Klaviyo.com/BSCM and sign up for a free holiday strategy assessment. This assessment will be geared towards the needs of your business, chock full of strategies and tactics that will help you make more money, so sign up now for free at KLAVIYO.com/BSCM, 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 My Wife Quit Her Job Podcast. Today is day two of the Klaviyo conference in Boston and I was lucky enough to have Jake Cohen with us from Klaviyo. He gave an excellent keynote this morning on the brand new features that Klaviyo is introducing. And just to be upfront with you guys, normally I don’t actually go on a podcast and talk about new features of just some random tool. But I really felt that these brand new features are actually very compelling and it actually makes Klaviyo like light years ahead of anyone else that’s out there and I have the man himself here to explain these features. And one thing okay, I just want to start with this one feature that really made me excited.

Jake: Sure.

Steve: It was the custom objects. And I’m a geek, right. I’m an engineer and what this feature is, and I’ll let you elaborate but it basically allows you as a store owner to pass any arbitrary information over to Klaviyo that you can then use to trigger email campaigns and actually have the data that you pass through. And so…

Jake: Nailed it.

Steve: If you could just provide some like practical applications of this in case I got too technical for the audience there.

Jake: Yeah, I’ll try to not get more technical, teasy with that kind of thing. Great summary by the way, that was really good. You’re totally hired. Yeah, that’s the idea, right? So when we’ve talked to a lot of different customers and there’s these kind of buckets of information that they have that they want to use in their marketing. So you’ve got your customer data, things you know about different people, your sales data, and then your marketing engagement data. And then there’s this kind of other bucket, which is it tends to be very business specific. Probably the most common thing which we talked about today is gift cards.

And so like lots of businesses have gift cards, it’s a great way to get some revenue in before you know what you want to buy. But what ends up happening a lot of times is people will get a gift card, but they won’t necessarily spend all of it or they’ll forget that they have it right.

Steve: And is that a problem though? If they forget that they have it then…

Jake: Well, so here’s the interesting thing, maybe not, right. So that’s breakage is what you’re talking about. Breakage isn’t necessarily bad. You don’t have to give anything away, you got cash. Sure, I know that that’s like a viable long term business strategy. People don’t ultimately spend money. But it’s certainly not the worst problem you could have. Instead, what we found when we talk to store owners, is that when someone has a gift card, there’s certainly a percentage of people that only spend that gift card amount, and then pay for shipping. But a larger percentage of people actually use it to buy more items than they would have in the past to try more things.

And in that case, you start to build the relationship where someone can try your inventory, try your products; hopefully, they said they liked it, because you have good products, and then they come back and buy again. And the gift card just kind of makes it easier to start that next phase of the relationship where they become a purchaser.

Steve: Okay, so what is this customer object API? How does that solve the gift card problem and getting them to redeem the card?

Jake: Yeah, so gift cards are objects is the technical term. And the way this API works is, you can pass us anything you want. So you can say, like, I want to share with you that there is a gift card, when it was created, how much is on it, and the last time that the value changed. And so what you could do is, when you pass that over to us, what we do is we expose that in the UI. So without being someone who is an engineer that’s looking through all the different databases and writing, command line scripts to try and get stuff out, you can literally say, hey, I want to trigger a flow when the amount of the gift card changes. And then you want to say, like, hey, I noticed you spent something, and you could put a filter and say, if the gift card value is above zero in 30 days, I want to send an email and say, like, hey, you have this much money left, and put some recommended products right in the email.

And so what ends up happening is you’re taking into account this very specific piece of information about your business, and you’re creating an opportunity, a moment to help your customer basically benefit, because they forgot about something, and they’re going to save some money on their next purchase.

Steve: And I would imagine that there’s scarcity in this gift card. And chances are people are going to spend more than what’s on the gift card, right?

Jake: That’s what we find yeah.

Steve: And that’s really powerful. And I would imagine, once this is out, there’s going to be just all these Shopify apps and whatnot that automatically take advantage of this, right. So really, there’s not going to be any coding involved.

Jake: For like a store owner.

Steve: For like a store owner.

Jake: No, in fact, the way that we’ve designed the feature — so what — there’s only a limited time when I’m up there so I can only share so much. One of the things that’s part of this work is we’ve extended the flows feature, the template editor and the different campaigns too so that you can automatically select for example, a trigger from a custom object to start a flow. So as soon as the data is in right, you can access it through the regular UI that you would have within Klaviyo and you can just like easily whip that up and take advantage of it in the same way that you would from a placed order event or any other piece of information.

Steve: So just to be clear for the audience members who aren’t familiar with Klaviyo, what Jake is saying here is that once Klaviyo has this gift card information, you can actually whenever someone makes a purchase and deduction that you’ve card, you can actually use that as an event to trigger an email autoresponder sequence…

Jake: That’s right.

Steve: To get them to buy more.

Jake: As one example yeah.

Steve: Just as a simple example yeah, but it’s going to be a lot more powerful than that for geeks like me, especially.

Jake: Yeah.

Steve: You call me geek?

Jake: No.

Steve: Okay. So the other thing that I thought that…

Jake: Me too, we’re in good company.

Steve: Yeah. The other thing I thought that was actually really cool was the analytics, the additional analytics of Klaviyo. I know there’s a whole bunch of slides.

Jake: Yeah.

Steve: I don’t know if you want to just kind of give a brief overview of what you think that the majority of store owners out there will be concerned about.

Jake: Yeah, so this is — I’ve spent a lot of time thinking about this. I think in April of this year, maybe March or April of this year, we got a lot of feedback, we did like a big poll with all of our customers. And we were like; if you could change one thing about Klaviyo and make it better what would it be? And like resoundingly, it was reporting. People were like, man, you just can’t see anything in the product, you have all my data, you make it impossible to see. And we were like, we most definitely need to solve that.

So the customizable analytics feature, which is when you come on the dashboard, there’s a series of tabs, one of them is analytics. We designed it in a way that’s completely customizable. So we’ve built some default dashboard. So we’ll show you the things that we think are important, so you don’t have to work very hard. But if you’re specific about seeing the data that you want, within a certain time interval, or a certain time range, or you want to see certain metrics that matter to you most in a certain order, like if you can just drag it all around and switch everything up you want and like you’re done.

And so, we’re actually really excited about this, because if you look around at other platforms that sort of give you some reporting on how things perform, there’s one of two problems. The first problem is it’s incomplete. So you don’t really get good views, you get some views. And then you’re like, hey, what should I do? And they say, oh, well, you can export a CSV and spend your life in Excel. And then you can find what you want, which is not helpful, or it’s a very technical experience, where you have to basically understand how to work within a Redshift cluster and write cron jobs that are going to go like clean everything up and then automatically work with a visualizing tool so you can go see and it’s like, who the heck wants to do all that stuff, right?

And so we tried to take approach where, like, you don’t have to work hard, and you can be as flexible as you want. And what we also announced which is coming which I’m really pumped about is the Report Builder. So as an extension of customizable analytics, you can just see what you need to see. We think there’s kind of this other bucket of analytics where people have these sort of more sophisticated, more robust, more specific questions. So they want to know hey, when someone buys – I’m making up an example, if someone buy shoes first, what’s the thing that they most often buy next?

It’s actually really hard to understand without buying some other service that’s going to integrate all your stuff and then it’s like crazy, but we already have all the information. So, we just have to give you guys an experience where you can basically select a couple of inputs to get a report out. And what I didn’t announce because it’s coming later is we’ll add visualizations to that too. And so eventually you’ll get this experience where you can have a really sophisticated question, you can store that and then you can go see it anywhere you want, and so it becomes a really dynamic experience where all your data is at your fingertips and it will tell you anything that you want to know, you just have to ask.

So just for the benefit of the e-commerce users out there, Klaviyo actually has all your data, all your sales data about everything a customer purchased when and how. And I teach a class on this and a lot of people just use Google Analytics. Google Analytics is actually very complicated to extract information, and it’s often incomplete too because sometimes like the pixel doesn’t fire and then Google might not get the data whereas Klaviyo has all the real data. And what they’ve essentially done and I’m just paraphrasing…

Jake: Yeah, that’s clever.

Steve: Is that they’ve allowed you to extract all of your sales information and generate your own reports and it’s just really powerful, and you have infinite freedom to look at whatever key component that you’re looking at. Jake used the example of shoes, maybe you can say hey, tell me what other products were bought with shoes, all that stuff you can just generate reports on the fly and get accurate data for.

Jake: Nailed it yet again [overlapping 00:11:27].

Steve: Wonderful. And then okay so one thing I was kind of excited about was your new lifetime value of customer features. And the main reason I’m interested in that is because in the past I’ve created custom audiences of my best customers, but sometimes a little haphazard right? I send that over to Facebook and I run ads, but because Klaviyo has hired this data analytics group, I guess, is it…

Jake: The data science.

Steve: Data science team right, they can now predict based on customer behavior how much money a particular customer is going to spend in their lifetime. And then you can create segments in your email for this and then use that for Facebook ads to create lookalike audiences. I’ll let you explain since I’m clearly not the expert, I’m just — all this stuff I’m talking about is what I gathered from your presentation.

Jake: Yeah. No, no, no, it’s great. So yeah, so we hired — yeah, this data science team, they’re awesome. And there’s a series of really, really good blog posts that they publish, that explains the models that they created, the experiments that they went through, how they went to figure this out, because it’s a bit of it, it’s kind of a journey, it’s a little bit of a wild west industry where everyone says they have the answer. But it’s math, right. So it’s like, let’s publish the math and let’s talk about it and make sure it’s right. And so that’s the approach that these guys take, which I love.

What they basically figured out is if you look across the aggregation of customers within your account, the likelihood that any of them will spend, how much they spend, and how frequently you can distill that and apply it to an individual profile to help understand how you specifically might spend. And so what they’ve done is made projections for the next year for every single profile in your account of what they’re going to spend.

And what we do is when you want to gather that information; we compute it on the fly every time you want, because every time there’s a purchase, or a new customer, the model changes the results. So it’s the most up to date information every second that you go use it as opposed to something gets stored and stale after a long period of time. So that’s how it works.

Steve: What do you see are some main practical applications that store owners can use with this information?

Jake: The one that I like the best, which is one of the ones we talked about is you can take your predicted lifetime value, this is exactly — okay, here are a set of steps of what I would do right now. If I was running a store, number one, I would take, I’ll create a segment of all the profiles in my account, which is just email address has an ad sign in it. I would export that and I would select all the predictive analytics. Once I had that out, I would look at what the average lifetime value is, and then I would take the top 20%, when you spend it out, I’d figure out what that number is, and I’d build a segment of anyone who’s predicted lifetime value is above that number.

Once I had that, I would do exactly what you said, I’d integrate with my Facebook ads account, I would turn that into a custom audience, I’d build a look like audience and I would target them with an offer to try and get them to come into my store if I did offers, if I did just, whatever, some call to action to acquire them. And I track how that’s performing over time. And like, guarantee you’re going to get some good people that way. And these are going to be like your best customers long term, who will buy from you over and over and over again?

Steve: Yep. And I would imagine you would also send out an email campaign to those people alongside of the Facebook ads, right?

Jake: So it’s a more loaded question. It depends on what your campaign strategy is. I probably would not recommend just like, here’s your list, go send something. Again, our sort of big vibe, and spirit here is like, you want to build more personal connections over time. What I might want to do is, if I were having a big sale, or a big product launch, where I was going to talk to every single one of my people anyways, sure, I might stagger my campaigns. And I might start with these top spenders and see how much revenue I can generate just focusing on them and have the content speak to hey, we noticed that you’re an amazing customer and we appreciate all your business. And so we’re literally sharing this with you first, and everyone else is going to get it next week.

So like limited supply, get it while it’s hot, and I bet you’ll see a lot that way, then you can start to open it up to everyone else. And yeah.

Steve: One thing that I’ve noticed in terms of deliverability is if I email someone who’s much more likely to open an email, then my overall deliverability works better. So what I do is I email the guys who really love me, and then the guys who are less engaged I know, like at some point later, I would imagine you can apply that here as well right? Email your highest lifetime value customers first.

Jake: Yeah. So this is cool. I’m the deliverability guy and so you’re. This is perfect; we’ve unlocked this amazing treasure chest of fun things.

Steve: I hope the audience is interested Jake, so let’s not – we could go all day on this.

Jake: Okay, yeah, so the thing that’s interesting, that’s a little bit counterintuitive about deliverability, so this is when the inbox clients make a determination as to whether or not to deliver your message. The inbox clients don’t know anything about your sales, and they don’t care. And so, what’s fascinating about this is we as store owners are like, but wait a second, someone who buys from us is obviously interested, they’re obviously engaged. But from an email perspective, they might never open an email. And in fact, you could be harming your deliverability by sending to people purely on the basis of whether or not they’re a customer and not on the basis of whether or not they engage with your the emails, because the inbox providers don’t know.

And so in fact, if your letter of the law of deliverability, which is a little bit extreme, but for theoretical applications, good to know, if you’re going by the letter of the law of deliverability, your sales data doesn’t matter. So it’s just straight open rates, just straight, well, opens. And so, and it gets even more complex, and I have a blog post about this, that explains like the secrets of each different inbox client, what signals they look for, how to…

Steve: Okay, send me the link; I’ll link it up in the show notes.

Jake: Yeah, totally. Different inbox providers, sort of like signal different things. And so for example, Hotmail, if you send to people who have not opened in the last six months, they will flag you, and they will start to penalize your placement, because what they do is they look at engagement over that time period, not really granularity beyond that. Gmail is much, much, much more sophisticated. And so what they’ll do is if let’s say you’re a daily sender, if you send every day for 7, 14, 21days, and someone doesn’t open, they’ll penalize you for that person. And if there are a lot of people like that, they’ll penalize you overall. And only has to do with opens.

And so like the best practice, and we’ve got some articles about this too, is to include in your segmentation some logic that says, like, has opened within the last depending on how frequently you send three, four or five, six months, and that will make sure that there are people who are generally engaged, so that you’ll stay out of deliverability trouble.

Steve: Okay, do you send to those people first or do you intermix them in with your…

Jake: Again, it’s kind of like how strategic you want to get. You could, there are some people that like, just don’t send campaigns to people unless they’ve opened, and they let their automated flows take care of making sure these people start to engage. Because where you get into trouble is, if you send campaigns all the time, or to a large number of people, but you’re sending to people that haven’t opened lately, that’s going to have enough signal, enough volume that the inbox is going to look at you as a sender and go, you’re bad. Your flows have a higher likelihood of being opened; always have higher open rates, because they’re triggered by events that your customers go through.

And so a really, really clean strategy is you sign up a — you hook up a welcome series to a form and people start to open that. And when they open, they make their way into the segment that has the criteria has opened recently, and you can start to send those campaigns. And then you can create a flow that is sent only to people haven’t opened a long time offering them something to try and get them back into the cycle of stuff that you can send all the time. And that’s a really clean way to keep high engagement, really good positive deliverability and make sure that your emails get in front of the people who have to see it.

Steve: I just want to take a moment to thank Pickfu for being a sponsor of the show. If you currently sell on Amazon like I do, then you know how crucial the quality of your Amazon listing is to the success of your e-commerce business. So for example, I’ve run experiments on my Amazon listings, where simply replacing the main image with a different photo resulted in a 2X increase in conversions. But how do you choose the best and highest converting photos for your listings? How do you know that you’re using the most profitable images for your products? And how do you know that your bullet points are convincing? This is where Pickfu comes in.

Pickfu allows you to solicit real human feedback about your Amazon listings in 10 minutes or less. And you can target the exact demographic of your end customer. So for example, let’s say you sell napkins and you have two main product images that you want to test. You would simply go to Pickfu, list the images, target female Amazon Prime members over the age of 35 and hit go. Within 10 minutes you’ll get feedback of which image people are more likely to buy along with specific feedback on why they made their decision.

In fact, I’ve used Pickfu to almost double the conversion rate on several of my Amazon listings by testing my images, bullet points, and product titles. And what I like about Pickfu is that you get results quickly unlike traditional split testing, and you can use this to test book covers, landing pages, basically anything. Not only that, but it’s super cheap to run a poll and right now you can get 50% off your first poll by going to Pickfu.com/Steve, once again, that’s P-I-C-K-F-U.com/Steve. Now back to the show.

Okay, that’s fantastic. I did not know that.

Jake: Oh, yeah.

Steve: You didn’t even cover this in the speech this morning.

Jake: Other stuff.

Steve: This is the other stuff. Well, let’s go back to some of the cool features that actually destruct my eye. One of them was the ability to actually change your store, depending on behavior within Klaviyo, right. So I think the example you used was, if it’s a guy and I ended up shopping, and I signed up shopping for men’s clothing, the next time I come on, I am shown men’s clothing.

Jake: Oh, you mean the dynamic web personalization.

Steve: Yeah. So how does that work exactly?

Jake: So this isn’t released yet. This is the next big thing that we’re working on. But the way it will work is using the information that we collect on your behalf about people, whether they’re men, whether they’re women, whether they’ve looked at certain products, or purchased certain products or certain collections, that kind of stuff, our recommendation engine will pull out, and this works for emails today, we’ll pull out some of the products that we think fit for that person. And it roughly works by pulling best selling products, excluding stuff that they’ve purchased in the past, and then reordering it based off of stuff that they looked at, or purchased.

And what will happen is, depending on the logic that you set up, when someone comes to your site, we’ll know who you are, because we will have cookied you, and you will have signed up, and we’ll have this information. And you could have a widget kind of show up on your screen that says, hey Steve, we recommend the following things, we think these are right for you. And so as a consumer, you have this experience where you feel like someone is actually doing some hand-picking if you will off products that are right for you to both increase the personal experience that the store can give you, but also increase the likelihood that you buy it, which is good for the store too.

Steve: Cool. So this feature is not released it yet? Do you have any, like preliminary data from live shops that you kind of bating this with?

Jake: No, we’re in the design phase with this right now. So the feature that we talked about this morning, where you can target list and segments for forms, there are some really rich underlying technology there that’s going to be used for the onsite personalization. So, we’re designing the right experience to get this live right now. But we’ve got the sort of core tech in place to make it happen. And so that’s where it’s at, we expect it will be coming out in the month — next, probably, like one to four or five months, something like that.

Steve: Okay, Jake, the reason why I’ve been kind of rushing through this interview a little bit is because I know you have to speak in a little bit.

Jake: Yeah.

Steve: Do you know how much time you have left?

Jake: What time is it?

Steve: It’s 3:11 right now.

Jake: 3:11?

Steve: Yeah.

Jake: I probably have to go.

Steve: Probably okay.

Jake: Let’s do a couple more minutes.

Steve: A couple of minutes, okay. So I want to get back to deliverability because it actually applies to everyone who’s listening.

Jake: Cool.

Steve: So you mentioned that one flow where you’re using your automated flows to determine who you should send a campaign to. Are there any other tips that you have to improve deliverability?

Jake: Honestly, there’s two things. One, every three or six months, there’s a pretty healthy group of profiles that you should probably suppress, which means like unsubscribe, like not send to anymore. This is, in my experience working with people, it’s really hard because you’re like, ah, but there’s like missing value in these people. They might buy something. And if I send a campaign, maybe one day, they’ll buy something. And it’s like, maybe, but probably not. And so it’s a good idea to build a segment of people that you’ve sent, I don’t know, 20 emails to in the past two years, but haven’t opened any, and they’re just gone, you know what I mean? And suppress those people.

And the reason is when you send to them, it’s a huge signal to the inbox providers that you’re not cleaning your list. And I go to this conference called M3AAWG. It’s the — what is it, the Mail Messaging Anti Abuse Working Group.

Steve: That sounds pretty geeky.

Jake: It’s super geeky. It’s like the extreme gray beard under lords of email around the world, like get together and decide what to do with email. It’s wild, but they’re literally looking for ways to penalize senders that don’t respect in boxes. And so if you just think about earning the right to send the message and removing people who don’t want it, and being respectful, you’ll be in great shape. And the second thing I’d say is like, actually, don’t worry about it that much.

If you use Klaviyo, we have some very high quality shared infrastructure that we have our sender send on and we are monitoring automatically every single send from every single person that we remove bad senders and promote good ones. So, we have huge volume and great relationships with the ESPs like, it’s just not something you should stress about if you’re respecting in boxes, you’ll be in good shape.

Steve: So what you’re saying is when you’re sending to people who aren’t opening, that will affect your overall deliverability. Is there some sort of best practice on who these guys that you prune, what are the rules that you’re using to suppress?

Jake: It kind of depends on how frequently you send, but like a good — like you can’t go wrong type of a segment is people who have received 10 plus emails in the last two years and opened none.

Steve: Okay, just get rid of them, that sounds like pretty conservative.

Jake: Yeah, it’s very, very conservative. You won’t like harm your business really materially in that way. And like you’ll help your deliverability. Something that’s really interesting, Josh was on a panel yesterday, he works with JackThreads. He tells a story, they had 16 million email addresses and then realized that they were all unengaged and eventually had to go down from 16 million to 5 million to 1.1 million to 300,000 to 30,000 email addresses is all they had left.

Steve: Ouch.

Jake: And then they’ve built their list back up to 300,000. He’s making more money today with 300,000 emails than he was with 16 million.

Steve: That’s crazy.

Jake: Because along the way, he got mass blocked by Gmail and put immediately in the spam folder, every single email because he wasn’t respecting the inbox. And now – oops, that’s mine, I got to go. Now he’s the biggest fan boy in the world of making sure that you respect the inbox and you send to people who want it because it works.

Steve: Okay, well Jake, I’m going to let you go. You got one last talk and then you’re home free right?

Jake: Yeah, this is — I mean I could do this all day, it is my favorite thing in the world to do, this is like vacation for me.

Steve: All right man. Well, Jake, I really appreciate your time.

Jake: Likewise, thanks for having me.

Steve: All right, take care.

Hope you enjoyed that episode. As you can probably tell from the interview, Jake is a total email geek and his insights on deliverability really blew me away. For more information about this episode, go to mywifequitherjob.com/episode228.

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

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

Now, I talk about how I use these tools on my blog, and if you’re interested in starting your own 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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227: Email Marketing Takeaways From Klaviyo Con With Austin Brawner And Toni Anderson

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227: Email Marketing Takeaways From Klaviyo Con With Austin Brawner And Toni Anderson

A few weeks ago, I attended Klaviyo’s first ever email marketing conference and it was an amazing event. In this episode I go over some of my key takeaways from day 1 along with Toni Anderson and Austin Brawner of Ecommerce Influence.

What You’ll Learn

  • How to create optin forms to attract higher LTV customers
  • Is giving away coupon codes for an email a good idea any more?
  • Some overall statistics for email optin rates
  • Creative ways to gather email addresses
  • How to improve open rates and click through rates
  • How to improve email conversion rates
  • Do text based emails outperform html emails?

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

Pickfu.com –  Pickfu is a service that I use to get instant feedback on my Amazon listings.  By running a quick poll on your images, titles and bullet points,  you can quickly optimize your Amazon listings for maximum conversions.  Click here and get 50% OFF towards your first poll.

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

Intro: 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 last week I attended Klaviyo’s first ever email marketing conference in Boston with my partner, Toni Anderson. And there, we actually met up with Austin Brawner of the Ecommerce Influence podcast and decided to record a couple of sessions together. Now in today’s episode, we do a breakdown of day one of the conference including some key email marketing takeaways of the day.

But before we begin, I want to give a quick shout out to Klaviyo who is also a sponsor of the show. And I like 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. 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 easily the most powerful email platform that I’ve ever used and you could try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to give a shout out to Privy who is also a sponsor of the show. And actually at the Klaviyo conference, I had the pleasure of meeting the CEO Ben face to face as well. And Privy is the tool that I use to build my email list for both my blog and my online store. And what does Privy do? Privy is an email list growth platform and they manage all my email capture forms. Now they’re a bunch of companies out there that will manage your email capture forms for you, but I like privy because they specialize in e-commerce.

Right now I’m using privy to display a cool Wheel of Fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%. 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.

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. We are broadcasting from Klaviyo conference in Boston. And what was cool is I didn’t think that I was going to actually know anyone here, but it turns out my buddy Austin Brawner is here speaking and I brought my business partner Toni Anderson with me. And what we’re going to do today is we are going to do a recap of day one of the event and kind of go over some key takeaways because we attended quite a few sessions between the three of us. And we’re just going to talk about what we learned.

So I will start first. And one thing that surprised me was one of the things that – I can’t remember, one of the Klaviyo guys got up there and he said that the wheel of fortune is bad, right. And I was curious about it. And he showed some other good examples of opt in forms. And they were giving away coupon codes without any context either. So you have this wheel of fortune, which also gives out coupon codes, and then you have a good example of a coupon code. It just didn’t quite make sense to me because if you’re giving out a coupon code, no matter what, then shouldn’t those two things be equivalent. I don’t know, do you guys have an opinion on that?

Austin: So yeah, I totally agree. It’s an interesting point. And I think with the wheel of fortune, the wheel to type options, where I feel like people run into trouble is setting them and forgetting to clean your list, right? Like, it doesn’t really matter if you are bringing people in from a discount that’s static or a discount that’s spinning. The one that’s spinning is probably going to attract more emails. But if it does attract more emails, you need to clean your email list or you’re going to get in trouble. And you’re going to have a bunch of emails that bounce and junk and that sort of thing.

Steve: Right. It actually kind of goes back to the philosophy earlier of like single versus double opt in. I’d rather get the emails upfront, put them through a sequence, and then prune as opposed to potentially driving someone away in the beginning, or using something that’s less high converting and then letting it go. I don’t know. Do you have an opinion Toni?

Toni: Well, I thought it was interesting. As soon as I saw that slide, I wrote a note, ask Steve about wheel of fortune, because I know it’s something that you’ve talked about a lot.

Steve: Yeah, I had great results with it. So yeah.

Toni: And I haven’t used it. But I use a pop up with a discount. And that’s actually my highest converting flow in my all of my flows. So I actually I didn’t see there was much of a difference either. I find the wheel of fortune annoying personally as a shopper. And I think because you talked about it maybe and other people, it’s everywhere now.

Steve: That’s true. Yes, I have mentioned it on the podcast. And then all of a sudden, like, I see all these stores using it.

Toni: Well, and I wonder how much of it is maybe saturation.

Steve: Probably now. In the beginning, when it was a novelty item, it worked really well. Like, I think my email sales got boosted by like 130% or something like that when I first started using it.

Austin: Sure. I think it’s a great tool. But it comes down to like everything with email capture; it all comes down to what your offer is. And it doesn’t really matter the technology that you’re using. It’s like are you providing quality offer? Are you making sure that the emails you get are quality afterwards, are you checking them and just monitoring your open rate? Because you don’t want to have poor open rates that lead to down the road issues with deliver ability. But yeah, no, I think the biggest thing is just focus on your offer. That’s the most important when it comes to email capture.

Steve: Cool. And then one thing that I just jotted down here in case the audience is interested, the median opt in rate for an email form according to Klaviyo stats was 1.8%. And then the top 10% of opt in forms opt in at 6.5%. And the decay rate per month is somewhere on the order of 1.4% of people kind of drop off your list on a monthly basis. So, I thought those stats were surprising. I think my top email form is at like 3% or something like that. So I’m obviously not in the top 10%.

Austin: I get the privilege of taking a look at a lot of different email opt ins, and for different businesses I work with. So the best I’ve seen consistently is 12% opt in rate. And so, I’m going to talk a little bit about this in my presentation tomorrow. Generally, well I have seen above 10% a couple of times. And both of them were with quizzes that were highly relevant to what the outcome people wanted to get. So both of these were quizzes related to skincare. And they would rate people. You can get your skin — like your skin or reading and ask people — that’s something that’s very much important to people that they’re looking for skincare, they can get a better idea of what products they need. They go through a quiz, and then from there they can get directed to the correct product. So those are the things I’ve seen that are kind of the most effective.

Steve: I can see that working really well because you want to know what your skin type is so you can buy the product. So it’s actually providing some value in a way, right?

Austin: It’s providing value, and also delivers the product that is perfect for you at the end of the quiz. It’s like a perfect little fit in certain products that will actually work.

Steve: I know for me, this whole coupon pop up thing is already getting saturated. I feel like any store that I go on instantly has a coupon pop up these days. And so I’ve been mixing it up over the years. I actually had an EBook that I was delivering. So if someone’s looking at handkerchiefs, I had a crafts eBook, if someone was looking at napkins, I had a napkin folding eBook. And then when I did the wheel of fortune it jammed. And maybe it’s time to move back to the old school way now that the coupon thing is getting really saturated again, I don’t know. It shifts over time.

Toni: One of the things in that same session he talked about was the, I think they called it a welcome mat where it takes over the whole screen. And actually that for me as a shopper causes me to immediately not want to be on the site. He is trunk Club, which is a completely different user experience. But I’m wondering, Austin, in your experience, how do those work, because as a shopper I find them, I’ll click off the page almost immediately.

Austin: So I think it’s always dangerous to think about what you as a shopper do because I feel the same. I have not; I don’t really open that many emails. I’m not a big — I despise my email inbox even though I’m the person helping people send thousands of emails. And so, for me they’ve always worked very well like taking over the page and delivering. But again, it goes back to has to be quality offer. So you’re not going to go away from the page if it’s something that you really want. If it’s just an annoying bad offer, we’re going to give you 5% off for your next purchase; it’s going to be annoying.

If it’s something super relevant, a good example I’ve seen a client I worked with for a while this, they had a discount and they sell national park maps. They are really beautiful, custom designed. They had a discount offer for a while and then they actually switched that up to a giveaway for a park pass for the national parks. And it was way more aligned with what their customers were looking for. And it was one of those things where they could stick it right in front of people and deliver it in kind of an abrasive way, but people were like, okay, well, actually, I do want a national park’s annual pass. It sounds awesome. I’ll put my email in and also it didn’t cost anything for them except for one pass a month, which is way cheaper than giving 15% off.

Steve: Oh yeah, it’s a good idea. Yeah, one thing — there was one example in the presentation. I think it was — was it a shoe club or something? I was sitting next to you and I think what they do is they try to get you on a subscription. But they give you $20 towards a gift card first, and then you pay $20. But essentially they’re getting on the list and there are essentially making you pay money right up front for a subscription. This is only for shoe fanatics. And then at the same time, you’re attracting lifelong customers who are really into shoes that will buy over and over again. So I thought that was really clever.

One other key takeaway I had that was pretty clever, which is something that I’m actually not doing right now, there are a bunch of emails on my list that have not opened in a very long time. And the first thought is to send them a win back campaign. And I have, but still no one opens, right, because you haven’t opened in a long period of time. And so one takeaway that I got was that you can just create a custom audience, add those guys and run them on Facebook ads to try to get them back because clearly, they’re not opening your emails. So you might want to try a different channel. Any other takeaways from you guys?

Austin: I think my biggest takeaway from the sessions in day one is how important it is to focus on your product and make sure — so there was a presentation the second half of day one, which was about customer loyalty and about — put on by smile.iOS. And they were talking about the experience that people have with your product, and how if you’re competing, there’s a realm of confidence that Amazon has that you just should not be competing in. That’s price, convenience, and select in like selection. If you’re competing on any of those things, you’re going to lose; you’re just going to lose. They’re better at it than you, they’ve been doing it for longer, they’re going to continue, they’ve got more resources in you.

So, my biggest takeaway is just to take a look at whatever you’re selling, and look at the product and say, is this truly something that is unique, is it quality? Is it outside those three things that Amazon specializes in? And can we compete on experience versus price selection and convenience, because the long term even the short term really, you’re going to lose if you’re competing on those three things.

Steve: I agree. And in a way, that is why with my store at least, we’ve kind of doubled down on the personalization. And we emphasize fast turnaround times and will basically take care of the phone; you have a human that you can contact about the personalization to go back and forth with. And even though Amazon does have that, it’s less personal. And so it’s a pain in the butt to handle personalized orders. But the profit margins are very high. It’s just one of those things where if you put a little extra effort, it kind of differentiates your company, and that’s how you differentiate yourself from Amazon. And I think for us, actually, the other stuff that we sell to be quite honest, will probably become commodities except for that. So that’s why we double down on it.

Toni: I think we’ve all been in Mike Jackness talks about email marketing. And he in ColorIt emails people, I mean I think there’s like 90 some emails in his flow. When we were listening to — I can’t remember his name this afternoon, but he talked about same…

Austin: Mike Gracewicz from Taylor. It’s a really tough last name, but he’s from Taylor Stitch.

Steve: Yeah.

Toni: And he talked about looking at your customer buying cycle. So are they buying like at 30 days and 60 days? Then why are you emailing them for seven, eight months? And that was actually something interesting that I started thinking about, because I took Mike’s advice and I have a fairly long email sequence as well. But I might change it up now and work on some of that segmentation that he talked about in his session.

Austin: Yeah, I think that’s a really good point. He also made another point about — somebody asked the question, what do your emails look like? And he responded, he was like, well, they’re generally just one image in a panel direct to that product. He’s like, for a long time, our designer continually wanted to make these beautiful long emails. But I kept looking at the click map and everyone was just clicking on the first thing. So he changed it up and he had the designer, he’s like, I’d rather you make five emails rather than one big long, beautiful one. And let’s send those five emails to spend way less time, and his results have been the same. Yeah, I think that’s a really good point.

Also, the other thing that he mentioned around welcome series, which a lot of people, this happens to I think most businesses; most of the revenue is going to come from that initial email, right? Somebody ops in, most of the revenue, maybe 80% is going to come from that initial email. And sometimes people will invest too much energy in the fives, like the remaining five emails after the first email, when the one that’s moving the needle is that first one. Until you’re really, really large, doing like millions of dollars a month, a lot of your energy is best spent on higher leverage activities than tweaking emails.

Steve: Do you have an example of what you mean for that first email? Now, how do you focus on that first email? Like, what are some things that you can do?

Austin: Well, I think — so the examples that he gave today were focusing on making sure the subject line is super compelling. He focused on giving the best offer possible right away, like the best offer that they could give and remain profitable. That’s what they’re doing, because their idea, and right or wrong, this is something that can easily be debated is that they wanted to increase conversions for people who come to the website, and they wanted, if they could increase it by let’s say, 25%, by providing a better offer, then it’s worth it for them. Because until they get a customer to make their initial purchase, they don’t — like their marketing — your marketing can’t really kick in until they’ve even tried your product.

Steve: Yeah, totally Austin. Just kind of along this whole topic, I just think to myself, a lot of times, you’ll hire like a web designer, and they’ll make a site that looks beautiful, but it might not convert as well as just a very simple design that has a simple call to action above the fold. And one thing that I found interesting in one of the talks was that the consensus seems to be from all the different Klaviyo folks that text based email seems to outperform HTML emails. And I know that from my blog, at least, I haven’t done it with my store, because we wanted a little bit of branding on it.

But from my blog, text based blew away anything with graphics in it. And I don’t know why I didn’t do that, why I’m not doing that with my store. But for some reason, maybe there’s just a mental block that I have. But I feel like the store needs to have a logo on it, and then a picture of my product. So, maybe I’m going to go back and experiment with that.

Austin: I think it’s a great idea and something so easy to test. You can just send split test between text and panel image, not very hard to set up and see which one performs better.

Steve: Yeah, in your experience, what have you seen with your clients? Because I know you’ve had a lot of clients.

Austin: Yeah, I mean, text email generally performs equal to or better than spending all the time with imagery and branded emails. The only thing is, I feel like, it’s not necessarily sustainable, right? Like you want — if you have a brand, a beautiful — if you’re selling beautiful cowboy boots, then you want to, you might be able to juice sales with a text email here and there. But overall, like your messaging, you want to deliver those beautiful images so that people see your product, and then here in their mix in some text based emails, maybe around promotions.

That’s something you could do for Black Friday, right? Try a couple of branded promotional image based emails, and then have one direct from the CEO saying, hey, I just wanted to make sure you saw this, you’re a loyal customer. Why don’t you — here’s the link to the sale for the next couple of days. Also works really well like for VIP customers just a direct personalized email.

Steve: Just to be clear, though, a text based email; does that mean it’s completely text, meaning you don’t even have like an image of your company? That’s one thing that wasn’t quite clear to me.

Austin: I don’t know what they were specifically talking about.

Steve: Okay, but the ones that you were just talking about, is there even like a logo at the top, like even a small one, or is it just flat out playing text, no HTML at all?

Austin: Flat out plain text.

Steve: Okay.

Austin: Even like just text based with a little bit of HTML I would say performs equal to or better than image based, but you could also strip entirely out and just send a text based email.

Toni: So it’s interesting because the second email in my welcome flow is a totally text email that actually makes it seem like I’m talking directly to them. And there’s not even a link to the store. And that is my most opened, that’s got my highest open rate. And people reply to me in that email. So I mean, I think it does work, but you definitely can’t do it all the time. Because I’m like, I’ve had people email me and say, hey, I want to shop at your store. What’s the link? I’m like, you managed to email me@my.com address but…

Steve: What is that? Can you give us an idea of what’s in that email?

Toni: Yeah, so I just say hey, here I’m the owner of the company; I want to tell you my story of why I started it. And then I — it’s like three paragraphs; it’s not even very long. I mean it’s probably 13 sentences total, and then my last thing is like PS, hey, I want to hear your story, how did you get into this?

Austin: There’s another one, another store that does something similar to that called Kindred Bravely, they sell maternity like nursing wear. One of the things they do I think it’s brilliant, after you make a purchase, a few days later you get a text based only kind of inspirational message from the founder that says at the bottom sent from my iPhone. So it looks like it was just composed on the fly, sent directly to you. And it’s like because their entire market is mothers, and so they basically talk about motherhood and how, keep being strong as a mother sent from my iPhone. I thought that was brilliant, it’s like that’s a really good…

Steve: That’s so deceptive. So one thing they did talk about also today were all the various automated sequences that you can run. And one thing that I found interesting is that they actually published the revenue per subscriber, the average for some of these sequences. So for example, a browse abandonment. This is if someone’s already on your list and they look at a product but they don’t check out, the average on Klaviyo is on the order of 50 cents per email per visitor, an abandoned cart was $2 and 75 cents per visitor, and the welcome series was like 25 cents per visitor so on average. And I know you work with a lot of clients Austin, is that in the realm of what you see or?

Austin: So when one thing about this statistics it’s so…

Steve: Yeah, I know yeah it’s out there.

Austin: It really depends on average order value, right? So all those statistics are totally skewed by average order value and larger businesses that sell products…

Steve: Oh, no. I’m so sorry. The presentation was segmented by average order value. What I quoted was the one that falls in for me, which is 50 dollars to $100.

Austin: 50 to $100.

Steve: Yes.

Austin: Okay, yeah. So I have to like [overlapping 00:21:04]

Steve: …top of your head. No, I was thinking you were going to say, well, since they were my clients and I was working with them, my numbers would be a lot higher.

Austin: No, I think that it’s good to have benchmarks like that when you’re trying to get a better understanding of whether or not your sequences are compelling or working. But one of the things I always tell people is like generally I’ve seen browse abandonment do about 50% of the revenue that you do through abandoned carts probably do through browse abandonment. That’s generally what I see someone who’s doing a good job. If you’re not doing that, there’s probably some opportunity there. But it’s tough. It’s tough just off of the metrics.

Steve: Sorry, I put you on the spot there. So, one thing that came up over and over and over again today was this thing about attribution. So, someone might open an email, see your ad but then two days later click on a retargeting ad and then the retargeting ad gets credit and Klaviyo takes credit for as well. Right, because in analytics, it’s last click attribution and in Klaviyo, I don’t know what the default is. But it’s on the order. Do you have it off top your head?

Austin: So the default is whether or not somebody opened up an email.

Steve: Okay, but within how many days?

Austin: Oh, I think the default is somewhere between three — I think it’s five but then you can adjust it and like generally you should be adjusting it from five to a much lower time window if you’re sending more than one email a month.

Steve: I just want to take a moment to thank Pickfu for being a sponsor of the show. If you currently sell on Amazon like I do, then you know how crucial the quality of your Amazon listing is to the success of your e-commerce business. So for example, I’ve run experiments on my Amazon listings, where simply replacing the main image with a different photo resulted in a 2x increase in conversions. But how do you choose the best and highest converting photos for your listings? How do you know that you’re using the most profitable images for your products? And how do you know that your bullet points are convincing. This is where Pickfu comes in.

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In fact, I’ve used Pickfu to almost double the conversion rate on several of my Amazon listings by testing my images, bullet points, and product titles. And what I like about Pickfu is that you get results quickly unlike traditional split testing, and you can use this to test book covers, landing pages, basically anything. Not only that, but it’s super cheap to run a poll and right now you can get 50% off your first poll by going to Pickfu.com/Steve, once again, that’s P-I-C-K-F-U.com/Steve. Now back to the show.

Right, so which kind of brings me into my point like no matter what you do whether you’re running Facebook ads, Google ads or email marketing, each tool is always going to set the attribution window to their benefit so that it seems like they are driving more of the conversions. So you really got to dig deep, I think Facebook has a view through conversion by default that you should turn off right? If someone just happens to be scrolling by and they look at your ad, they’re going to take credit for it if they end up buying. Someone with Klaviyo if it’s set at five days, a lot can happen in five days, right? It could ultimately be multiple retargeting ads, Google AdWords, anything comes into play, and if everyone takes credit for all that, it can really screw your metrics.

So for example, your metrics might say that you made 100% increase in a month but then when you check the actual numbers, it’s much, much less. So I’m curious, Austin, what do you set your attribution windows out? And how do you deal with attribution?

Austin: Well, in Klaviyo specifically, it really depends on like I was mentioning earlier, how many emails you’re sending per month. If you’re sending one a week, then maybe I’ll put the attribution window down to like two days like that, if you’re sending multiple per week, then definitely down to like one day and adjust kind of based on this to a certain extent gut feeling. If you feel like there’s a lot of more attribution than is actually happening, then you should definitely shrink it down. Because like Steve said, you don’t want a seven day window and then you’re emailing three times during that week. Everything is attributed email at that point. So I just would adjust it based on that.

But I think that’s a really — that’s something that everybody struggles with; there’s no clear answer to how you attribute sales. There’s models that are built, but that’s a really difficult question. And again, it did come up multiple times because everybody is asking that, how do we attribute; because everyone is trying to take credit and everyone is trying to earn more of your marketing spend by taking credit. So, I think it comes back to just having a little bit more of a holistic approach and recognizing that you want business growth over the long, long haul, and being performance driven is good, but sometimes it doesn’t — sometimes it can limit your long term growth if you just have to focus on getting ROI on every single channel at all times.

Steve: So anyways, I had this problem with Facebook ads where I really wanted my top of funnel to convert at like 3x and it was just very frustrating when it didn’t happen. And it was only after I just took all of my funnels holistically could I sleep at night, just because I’m a very metrics focused person, right. So one thing I did want to talk about to kind of end this was what are some creative opt in forms that you’ve seen? We talked about [inaudible 00:27:11] and we talked about giving out coupon codes. For both you guys, what are some ones that might work for you, or what have you seen that has been really especially creative?

Austin: So I mentioned it briefly earlier, but I can go into a little bit more deeply. I’m very into looking into like the quiz type funnels, not necessarily like the ask method quiz funnels, but more — so we’re hitting the point now where we can, it’s very easy to assign properties to people based on selections and answers they’ve given us. So if you’re using Klaviyo or Drip or whatever email service provider you’re using, you can ask people questions and then have their answers sent passed over as properties on to their record, and then learn what they’re interested in, what they’re not interested in, how often they purchase from you, and use that down the road. You wouldn’t have to know exactly what you’re going to use that information for, but you’ll have that to be able to create segments in the future.

So the things that I see that are quite unique and that are interesting are quizzes that you can ask people that are providing value to people that are giving them interesting answers. I know a beard brand that runs an interesting quiz, it tells you what type of beard’s man you are, it gives you products based on the type of beards you have which is kind of cool. I’ve seen…

Steve: I always ask [inaudible 00:28:39] if he’s going to start an Asian line, it always makes them laugh. I got to shave like once every three months. Sorry, go on, I interrupted you.

Austin: No, that’s I mean, that’s the thing he’s going to come up with a product, the thing first, you got over the product. So those are interesting right now. I think we’re seeing a lot of kind of chat bots capturing emails, which is interesting using Facebook Messenger for that, and then passing that along to Klaviyo, that’s a tool you can use. Those are the things I’m probably most interested in that are unique. All the same stuff continues to work. All it matters is if you have a good offer and if you can display that offer in front of people. If you don’t have a good offer, nothing you do no matter how crazy the wheel is spinning or how in your face it is, it’s not going to convert.

Steve: All right, here’s a hard one for you, Messenger or email? What’s your priority and getting first?

Austin: So for me, it’s still email at this point. I think depends a little bit on the product that you have. And it also doesn’t — it doesn’t need to be either or, right. You can capture an email through…

Steve: It’s not either or but I have my answer to this. I’m just curious what you’re going to say, but you do have to decide which one you want to try to get first, right?

Austin: Sure. Yeah. So for me, it’s still email right now. That could be changing over the next the next year. I think that there’s still some work that needs to be done with some of the platforms that are delivering, so there’s a lot of infrastructure behind email at this point, right. We’re at Klaviyo conference; they’ve invested millions of dollars into building a system that delivers emails reliably, predictably. And Messenger is still new, right? There’s not as much infrastructure around delivering those things. The reliability is not there as much, not in the sense of deliverability, but incentive the product delivering the message. So for me, it’s still email but that is subject to change Steve.

Steve: Interesting, you left that open. You kind of played both sides of the fence there. So for me, I have a similar sentiment as you do. I always try to go for the email first, mainly because Messenger is controlled by Facebook and they’ve already changed the rule as a couple of times. And who knows what’s going to happen, like you’re putting all your eggs in something that someone else controls, whereas email you always control for yourself. So what I usually do is I go for the email first. And then almost immediately, I go for the Messenger while they’re still hot with a separate offer. And I also find that that Messenger to email is a little bit clunky, because sometimes you have to use like a glue tool to get that to work.

Austin: I like the visual of this person who just typed in their email. And now they’re hot. Steve is going in for the Messenger. They’re sitting there, they’re all hot. No, I totally agree with you around the terms and conditions with Facebook. The writing’s on the wall, when you start thinking about Messenger marketing down the road, they’re running out of supply and advertising. So everywhere, you’re able to deliver toll free messages, toll free ads. They’re no longer going to be toll free in the future, you can be paying for every message you spend.

Email is something that you can deliver. The reason why email is so powerful is because you’re not paying a toll per message that you send, you’re paying email service provider, you’re not paying a toll to Google or anybody. So yeah, the writing’s on the wall with Messenger. They’re going to be charging for it.

Steve: It’s already actually in their docs actually, it’s in beta.

Austin: It’s in beta, so get it while the getting is good, where it’s cheap. But if you build your entire list around that, realize that you can be paying to reach that audience, just like you’re paying to reach your fans in the past if you’ve gone through this, but we’ve gotten to this before so many times, Instagram [overlapping 00:32:48], so shiny.

Steve: So were there any other key takeaways that I didn’t touch upon, because we kind of went down my notes, but you guys probably had your own separate notes.

Austin: The only thing I’ll mention, it was brought up a couple times in one of the presentations that someone was talking about — so the premise of one of the talks was to move away from having discounts and move towards other ways of bringing in customers, maybe and a lot of…

Steve: True fans.

Austin: True fans, customer loyalty, that sort of thing. I think it’s, you have to ask yourself truly what your business is and what your product is. So, one of the things he mentioned was around referral programs and the power of referral programs. So referral programs can be incredibly powerful. But your product has to lend itself to being talked about. I can’t imagine, I don’t know, do you have a referral program Steve?

Steve: We do not.

Austin: And I think I do, I can’t imagine it being an incredibly profitable driver of sales for you guys.

Steve: But that’s correct. It probably would not be. But one thing I got an idea was from today; they had this like, one year sequence for anniversaries, which I’m actually not doing. And the average divorce rate is about seven years, so maybe we’re going to have a seven year sequence.

Austin: That’s true.

Steve: Yeah, exactly. That’s another takeaway, which I just recalled right now.

Austin: So I think it just comes down to knowing what your product is, what your business is. Is it something that people would ever talk about with their friends? And if they do talk about it, then yeah, referral program might work. So it’s really being strategic about the things you initiate in building your business. Not everything is good for every business; it just happens that some things are good for certain businesses. Like that skin quiz I was talking about, that like is very, very good for that type of product. Other businesses, if you’re selling microfiber towels, probably not as good, maybe, but probably not.

Steve: I was just thinking about how I would do a wedding quiz, but I don’t think it would work.

Toni: Actually going back to the customer loyalty, I like that sneaker example where you joined the VIP, you actually paid to join. And it was kind of tricky because it was like 1999 to join, but you got the $20 gift card. So right there there’s a little psychological game for you.

Steve: As you can tell, Toni is a prime customer for this.

Toni: I am.

Steve: She has a ton of shoes.

Toni: I do. I would totally pay to join a shoe club. But I actually think that’s an interesting one because they aren’t giving you a discount. And they’re actually forcing you get your credit card before you’ve even really shopped with them, which I think is really — like I’d be interested to see, they didn’t give us stats on that one and I would really want to know how well. I don’t know, have you worked with any company that does that?

Austin: So I work with a company that does something similar to that. And they have kind of their own Prime membership on the back end. After somebody makes a purchase, you can immediately upsell into paying $20, and you will get back your initial shipping cost. So, it makes the offer really, really sweet where I think if you purchase two times, you’re going to come out ahead with this deal. And you recoup your shipping costs, which I think is around eight or $9 right away with this yearly membership. So that’s been successful for them. And it’s been successful not selling it in the front — it’s [inaudible 00:36:24] selling on the front end like getting people to get a gift card before they buy. But that’s another way to do it be maybe right at the back end. And that’s been successful for them.

Steve: Yeah, I’d be curious to see more stats. Maybe I’ll have to have that company on the podcast.

Austin: Yeah, see what’s actually going down.

Steve: Exactly.

Austin: To the Steve Chou case study.

Steve: So I can do a hanky of the Month Club.

Austin: Yeah.

Steve: Make them commit to five hankies.

Austin: That’s actually not a bad idea, or just one.

Steve: Cool, well thanks a lot for coming on both of you and we’ll probably end up doing a wrap up tomorrow. This conference is two days and this is just day one.

Austin: Steve, this has been a lot of fun. Thanks for putting this on. And it’s been funny, I don’t know if you guys — so you can never know where we’re at. We’re in a conference room here. And it’s funny because as we’ve been recording, five people have been coming in and out, so it’s been a lot of fun recording.

Steve: And I just want to add that Austin is sporting a beard which I haven’t seen on him yet. So that’s why he’s been mentioning beard brand. I suppose you’ve been on that site.

Austin: Well, that’s the beauty of having a podcast. Nobody actually knows what you look like.

Steve: Although there were a couple people that did approach you

Austin: Yes.

Steve: Fan blowing over Austin. Oh my god. It’s Austin.

Austin: I think this Klaviyo conference is where a lot of my people are. People love Klaviyo brands, on Klaviyo, so it’s actually fun.

Steve: So tomorrow we will — Austin is speaking tomorrow. So I’ll give like the skinny on his talk tomorrow and I’ll be sitting on the front row heckling as well. And thank you Toni for being the co host as usual.

Toni: Thanks for having me again.

Steve: Of course.

Hope you enjoyed that episode. I actually ended up learning a ton from the event and I got a chance to meet up with the CEOs of many of the popular email marketing tools out there. Stay tuned for my next recap of day two of the event where I interview some of Klaviyo’s engineers regarding email deliverability. For more information about this episode, go to mywifequitherjob.com/episode227.

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 e-commerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. So, head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

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

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

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226: How To Design A Product From Scratch And Fully Fund A Kickstarter In 18 Hours With Shirley Tan

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226:  How To Design A Product From Scratch And Fully Fund A Kickstarter In 18 Hours With Shirley Tan

Today I’m thrilled to have a very special guest on the show, Shirley Tan.

Shirley is someone who I met at the Traffic and Conversions Summit. I actually don’t remember exactly how we met but we hit it off immediately because a long time ago, she founded American Bridal which was a company I competed against when I first got started in ecommerce.

Anyway, Shirley sold American Bridal long ago but she’s back with a completely brand new product called The Posture Keeper. Recently, she launched a kickstarter campaign that was completely funded in 18 hours. So today, we’re going to learn her process for manufacturing and how to fund raise like a pro.

What You’ll Learn

  • How Shirley came up with the idea for the Posture Keeper
  • How she manufactured it so quickly
  • Why she decided to patent the product
  • Her initial investment
  • How to generate buzz for a kickstarter and get funded in 18 hours

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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Pickfu.com – Pickfu is a service that I use to get instant feedback on my Amazon listings. By running a quick poll on your images, titles and bullet points, you can quickly optimize your Amazon listings for maximum conversions. Click here and get 50% OFF towards your first poll.

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: Welcome to the My Wife Quit Her Job Podcast. Today, I’m thrilled to have a very special guest on the show, Shirley Tan. Now, Shirley is someone who I met at Traffic and Conversions. And I actually don’t remember exactly how we met, but we hit it off immediately because a long time ago, she founded American bridal, which was a company on my radar screen back in the day because I’m in the wedding industry.

Anyway, she since sold that company, taken some time off. And now she’s back in full force with a brand new product called the Posture Keeper. And recently, she launched a Kickstarter for this product and had it completely funded in just 18 hours. And today, we’re going to kind of learn her process for manufacturing her product from scratch, by the way, and launching such a successful campaign. And with that, welcome to show Shirley, how you doing today?

Shirley: Hi Steve. I’m so excited to be on your podcast.

Steve: So how did we meet actually? It was at T&C for sure.

Shirley: I believe it was. I think it was at Traffic and Conversion probably three to four years ago.

Steve: I think we just started talking, right?

Shirley: I think, well, what it is, is I recognized you from your podcast, and being a follower of yours online. So I was like, hey, there is Steve standing right there. I just got to muster up the courage to go say hi.

Steve: Yes. Unfortunately, I’m not very intimidating.

Shirley: Yeah, yeah, I approached you. So I introduced myself.

Steve: So Shirley, give us the quick background story. I’m actually curious why you sold American Bridal years ago. And then what happened when you took your time off, and why did you come back and decide to release this brand new product?

Shirley: So let’s see. So, I created American Bridal back in the 1990s, I’m showing my age here. And from a mail order catalog, we went online when the internet got in that if you so to speak, right, so 1997, right around there. And so that’s when I — I was already in the wedding business for a while. And we sold products to our showroom in our wholesale/ retail business. And when the opportunity in 2009 to sell the business, we had grown it to nearly year over year, about 7 million with actual revenue of six and a half. We decided to — I decided too that I wanted to take it bigger; I want the American Bridal to be become bigger. And I felt that theknot.com who is the premier wedding company, even to this day is the vehicle to get there. They can help me grow it.

Steve: Okay.

Shirley: So, that didn’t happen exactly that way. As they say, when you have plans, God has ideas, other ideas, right. And so they bought it from me, I worked there for a whole year. And after I left and two, three years later, they decided to have a different strategy. So, not only did they not continue American Bridal but they revamped their whole e-commerce to move it all strictly drop ship. So, they went from being a fulfillment house in Redding, California, with over 150 people to just a skeleton crew of people who just add products into their platform and then just do everything drop ship. So, I don’t have like direct information since I’ve left, this is just my me guessing.

Steve: Sure. So you sold because you thought that your business was kind of plateauing at that time, or?

Shirley: Well, so we have actually grown to six and a half million and the prior year to that was probably 6 million, and the prior year to that was four and a half million, something like that. So, I didn’t necessarily think it was plateauing, but I knew that to compete, I didn’t have the financial capital to get it to the next level.

Steve: I see, because it was an inventory based business.

Shirley: Inventory based business is they had a big warehouse out in Redding, California. Their operational cost was much more efficient and scalable, right. So for that reason, I thought that they would be a good partner to do that.

Steve: Okay. And then after you sold the business, you took some time off, and then what made you kind of get back into the game?

Shirley: It was a way to stay married. So let’s see. So it’s a double edged sword, right? When you have too much time on your hand, you can get yourself into trouble. And then when you have too busy, you can get your — you don’t have balance of life. So, after I took some time off, I renovated — I have a non compete, so I had to like be a good girl and don’t do anything that would make them mad at me. And then after that — so during that time, I did some renovation to our house. We’ve been wanting to do that for a really long time. So I used to work in a retail hardware store, I have experience in home reno, I love home renos. And so that’s what I did. And so why did I go back?

Steve: And tell us about the product along the way, like what it does, and how you came up the idea.

Shirley: So, I went to — so during this time when I was working for the Knot and working, I started thinking about consulting. So, I did some consulting for a while. And during this phase of my life, I was already having a lot of chronic pain challenges. And I work for myself now, a little bit more flexible schedule. So, a lot of my days would consist of going to the doctor, getting tests, then taking pain medication, going to physical therapy, you just like, you name it, I did it, right. And it was through all of this frustration that I created my own prototype. I never really set out to be an inventor, I’ve always been more like, hey, I’ll buy and sell products that are already proven right. So I never thought of myself as an inventor. I’m an accidental inventor, if you will.

And so through that challenge that I had years ago, I made my own mock up, a prototype that through a backpack basically, that I wrapped around my chair, and I used it in the way that I use Posture Keeper now, which is to hold me up so that I don’t slouch, so that I don’t lean forward, which is my biggest crime in my poor posture behavior, which is I sit at the edge of my seat, I lean forward and I’m leaning into the computer because well, I want to see the computer bigger, better or [inaudible 00:07:35]. I don’t even know that I’m doing it. I think that’s what it is, is most people that do this hunching over, they don’t realize they’re doing it until they’re hours into the behavior.

Steve: Yeah, so just for the benefit of the listeners, Shirley has developed what she calls the posture keeper, which allows you to sit up straight in your chair, so that you don’t have problems later on with your neck and your back.

Shirley: That’s a great description, I couldn’t have said it better myself.

Steve: Just trying to set the scene here. And what I really like about Shirley’s story is she’s not an inventor. She’s never created anything. And yet, she managed to manufacturer this product from complete scratch. And it’s got a bunch of pieces and it’s pretty unique. And so, I kind of wanted to get your story on that, and how you got started with just the manufacturing phase. Can you just walk me through it, because I know there’s a lot of people out there who want to manufacture their own stuff, but it’s kind of intimidating when you first get started.

Shirley: And it is, especially when you didn’t set out to go do it, right. So I’ve always bought, I’ve been to the Canton Fair several times, I’ve always seen how you could just say, oh, that’s an existing product, maybe I’ll make it bigger, make it smaller, change this material, this and that. So, I’ve always been able to do that when I’ve seen something and improve upon it, private labeling.

Steve: Yeah, exactly.

Shirley: And I’ve done that. I imported in that context, but I’ve never invented something from zero and go, how do I do that? And so, I actually had — the posture keeper I have today is like my third version of it if we were counting. And I actually initially came — the first idea of posture keeper came from straps. It was just going to be like very similar to the posture correctors of today that’s selling well in the marketplace. So I go some version of that tied to the chair, but it was too complicated, too many moving parts. It was too — when you just look at it, it was like a big gigantic mess. And so I threw that out the door after four months doing that.

Steve: So I’m sorry, you created your own?

Shirley: So I created — the first initial posture keeper was made mostly out of straps.

Steve: Did you make that yourself like you sewed it yourself or?

Shirley: Yeah, so that’s another story for that as well. I had to — I don’t know how to sew, I didn’t know how to sew and I can only basically stroll straight lines even today. And I had to cancel some pieces and I had to learn how to operate a sewing machine with this.

Steve: So your very first prototype is something that you put together. Did you have a pattern made or did you literally just sew some straps together and create your first…

Shirley: I literally sew some straps together and…

Female: I don’t know what you mean by…

Shirley: I’m sorry about that.

Steve: It’s okay, I’ll cut it up.

Shirley: Yeah, I’m sorry. I’m going to turn off the phone. So I literally, I put a bunch of straps together. I bought some wedding material, some buckles and parts and components and started making some things together.

Steve: How did that turn into something that you can actually manufacture, though?

Shirley: So after three versions of this, I was able to come up with the version that I have now, which is well, you have to put together basically. You have to try all these different pieces. So for example, the lumbar support is a product that currently exists in the marketplace. It’s a memory foam pillow shaping the lumbar, but what the issue was with what’s in the marketplace is most of the lumbar are too thick. They’re over five inches thick. And so my challenge with that is that it pushes you off the chair that you have in a typical office chair because it’s so thick. So, I felt that people would not be happy with that if I’m not able to reduce it.

So, there’s this image of me cutting the phone with an — I tried different ways. I manually cut it with a utility knife, so the final way to properly shave off the lumbar pillow was to use a kitchen knife.

Steve: Okay, so basically, from what it sounds like you manufactured all your first three pieces by hand. You kind of taught yourself how to sew and all that stuff. I’m just curious like how do you actually take that to a manufacturer? Have you found a manufacturer yet for this? I assume you have, right?

Shirley: Yeah, and that’s the first thing I did first. I wasn’t comfortable with launching the Kickstarter without having that piece nailed down. That was critical for me, because I needed to make sure that the factory can deliver on what I show.

Steve: Okay, how did you find your factory?

Shirley: The factory guy was actually introduced to me by Kevin Harrington, who was one of the original Shark Tank.

Steve: Oh nice, okay.

Shirley: Yeah, so I was very comfortable in meeting him. Kevin introduced me to him. I met him, I saw his process. We went to China and I saw how the factory was going to — how it’s run. It’s not a little small cottage industry that some uncle has put together, and it’s a real bonafide factory that they have standards.

Steve: Were you worried about them taking your idea and stealing it?

Shirley: Ordinarily, I would be but because I met this factory through the connection of Kevin Harrington and I just knew that at some point you have to trust. And I knew that they weren’t going to do that.

Steve: So did you take a pattern to them, or did you just hand them your prototype and say, hey, can you make this?

Shirley: Yeah, that’s basically what I did.

Steve: Okay. So the factory just had this ability to I guess undo your work and find what all the pieces were and did you have to pay for that upfront or?

Shirley: No. And that was the other thing too, when you work with a factory and they see your vision and they’re in it more than just [inaudible 00:14:17]. Normally you would have to, you would have to pay for a sample, you would have to pay for all the different versions and minimum and all that stuff. But because I came into this under, I basically borrowing from Kevin Harrington’s his credibility, his relationship. So, I came into this really fortunately that this gentleman Ken made it very easy for me to just work with him and work with his factory.

Steve: Okay, and then we talked a little bit about this prior to the interview, but you decided to patent your product. And I guess that had nothing to do with people copying you in Asia and more for just protecting the rights in the US, right? Or can you just walk me through like the pros and cons of patenting?

Shirley: So Kevin Harrington when I first showed him the idea, he encouraged me to pursue it. So, he showed me some other products, he goes your product is better than this other product, and you should file a provisional patent immediately before you show this product to anyone else because I’ve never seen anything like it. And I think you have something near if you do it right. So I said, okay. And so, once I did that, and once you’ve talked to Kevin Harrington, you can’t go back, right.

Steve: That’s true.

Shirley: Oh, well I flicked that on you, right. So, I don’t know, it’s just me, maybe it’s just me. But once I went down that path, I decided that okay; I’m going to trust that this is happening for a reason, right. And really because I also believe that it has helped me so much that you could help other people. So the process of the patent was after I filed the provisional patent, you have one year to do something about it. So, that initial filing the provisional patent basically locks in the idea that you’re pursuing this concept, okay, so that’s all that does. And I haven’t even officially come up with a name yet I believe. I think I just — I don’t think I had a name yet, I can’t remember exactly. But I filled the provisional patent under my name…

Steve: How much did that cost you by the way to file that provisional patent?

Shirley: I can’t remember but it was probably 1,500 or 2200.

Steve: So not that much.

Shirley: Not that much, enough that I would be willing to take a risk to do it. And then once I was nearing my provisional patent, I think that was April or something like that, then I decide — so I had much closer, right. I had all this year to come up with a final design, what I call the final design, come very close to it, right. And so, that’s when I filed the utility patent because now when you submit that, you actually have to have drawings, you have to describe how the components work, what part does what.

Steve: What happens after a year if you don’t do anything with the provisional patent, it just disappears?

Shirley: I’m not quite sure. I think you might have to start over again, or you can’t use that and if there was a gap, somebody might say that there was a lapse, and therefore that maybe they can come in, in the middle. I’m not exactly sure and I wasn’t going to try to find out.

Steve: Sure, of course it’s not that important. I was just kind of curious.

Shirley: I’ve been in it, right. So not just the provisional patent costs, but I’ve spent this whole year working on the prototype, so I wasn’t going to walk away from it.

Steve: So it’s funny. So this prototype, you essentially manufactured it yourself, and then you brought it to the factory. And so was there an initial investment on your part at all outside of like the patent I guess?

Shirley: Yeah. So I had to have 30 of them made. Once we finally agreed on all the measurements and the bill of material that it takes to get this product produced, I had to bring in my own 30 pieces to — actually how many have been made, 30, 30 plus five. So I have like 35 pieces that I initially brought in to try with friends and family and to get it out to the media.

Steve: Did you kick those 30 pieces yourself? Like, it’s weird that the factory was willing to just make 30 pieces for you. Or did you hand make 30 pieces?

Shirley: No, the factory made 30 pieces for me.

Steve: Okay, so how did you negotiate that?

Shirley: Again, it was the relationship…

Steve: With Kevin okay.

Shirley: With Kevin’s factory guy.

Steve: Got it. Okay. So he knew that you were serious. And so that’s why he was just willing to do that for you. Okay.

Shirley: And really he believed in the product. It was very interesting story because he let his wife try it. And his wife goes, I want this. I’ve never met his wife, but his wife is on my side. So, that helped a lot, I’m sure.

Steve: Why only 30 pieces then in your first run? That doesn’t seem like that many.

Shirley: Because the foam had to be manually done. They had to hand — like I said, the readymade foam for the memory foam, you cannot just buy it off the shelf. So they had to cut it to my specification. And therefore they had to do by hand. So like, just like my first two that I did, I did it by hand; they had to do that 35 pieces by hand.

Steve: Okay. And then in terms of the price of these first 30 pieces, I imagine it’s a lot more expensive?

Shirley: No, there are fair. It was the price that they would have charged me. It cost me more to bring it air freight. The air freight killed me, not killed me but…

Steve: Yeah, comparatively percentage wise yeah.

Shirley: Yeah, it was ridiculous. I was just like, oh my god.

Steve: So you didn’t basically have — like the factory you kind of already got from Kevin and it was kind of pre vetted and you only trusted them. So, all those issues went aside and then they believed in your product so they were willing to do a small production run.

Shirley: Yes.

Steve: Let me ask you this question. Like if you didn’t have Kevin, like did you try to do this on your own before you met Kevin?

Shirley: No.

Steve: No. Okay.

Shirley: No. But I would have done exactly the same process, right. I think my hurdle would just be a little bit more challenging unless I get lucky. Which is you find the right factory; they’re willing to do it for you. A lot of it is accommodation. I think I don’t think I’m that special, right, that I just happened to get lucky in this one. But I hear a lot of good stories about factory willing to accommodate the importer or the customer in the right circumstances.

Steve: How essential do you think it was that you actually went to the factory and met with the guy? Do you think you could have accomplished all this stuff remotely?

Shirley: Maybe, maybe. I mean, I met with this guy, I met his people. He picked me up at the hotel, with my factory guy. So, we had meals together, it’s a lot of relationship, right? They think I’m funny because I’m Chinese, I look Chinese, but I can’t speak the language. So they just think I’m kind of funny, kind of like what kind of a Chinese person are you?

Steve: Yeah, that happens to me all the time too.

Shirley: And to find that you don’t speak Chinese.

Steve: Actually, what happened to me was I tried to speak Chinese to them. And then they replied back in English.

Shirley: I feel you, brother, I know what you mean.

Steve: So what would you say were some of your main challenges just on the manufacturing point, before we kind of moved on to the Kickstarter?

Shirley: I think it’s still the communication. There’s a lot of details, I’m a stickler for detail. I still drive, even though Ken is — my friend Ken, the factory guy is now leading all of this. And he keeps telling me, don’t worry Shirley, I got it because I am that kind of personality. I worry about everything. And therefore, I need to make sure I double check, triple check everything. So that’s just, it’s just my own anx [ph].

Steve: And in terms of like the kitting, there’s a lot of pieces in your thing. Are they in charge of sourcing all the little pieces and assembling it all together?

Shirley: Yes.

Steve: And everything is just kind of available in China like all the parts and everything.

Shirley: Yes, but things takes time, right? So my advice to people who are listening and wanting to do something like this where you have, the factory don’t make everything, they have to source the components. So it’s about availability, it’s about timing; it is also about how resourceful they are. So, I mean everything is made in China anyway. But it’s still a challenge of procuring the number of units that you want to get it done. And a lot of how much the factory end up pricing a product depends on the pricing that they can get if they have to buy components from places that they don’t really make.

Steve: Right, okay.

Shirley: So keep that in mind as a factor. And just because they quote you this first price doesn’t mean that it will always be that way. As the volume goes up, they can go back to their component supplier to say, hey, our volume just went up; we are now buying 20,000 of these pieces. How much is it?

Steve: Right. So Shirley, you got these 30 pieces. Why did you decide to do a Kickstarter versus selling an Amazon?

Shirley: So, I really had for long, I struggled with that same question for a really long time, at least a couple of months and one, because with Amazon I’m familiar how to do it, right? I sold off stuff on Amazon, I know how to – there’s a lot of resources on that. I’m part of different groups and I have a lot of resources to help figure that out. With Kickstarter, I’ve never done it. I only have a handful of friends that have ever done Kickstarter. And so, I wasn’t even sure how to go about it.

But I think the reason that pushed me over in making that decision of doing a Kickstarter is one, I wanted to see if I could do it. That’s probably a big chunk of it. And then too, I really believe that for something that is not a ‘me too’ product that you need that push, you need that early adopter community that will come in and say, I’ve never seen this before. I really like the product; I want to support the creator and that community to give you that social proof. And also, it removes my risk, right? If this community of people who I don’t know is willing to come in and give me their pre order, they’re willing to give me their money, trust me to create it. That gives me that proof that my product has greater potential to be adopted by the masses.

Steve: I guess your product is a little unique in that aspect. Like, people probably aren’t searching for posture keepers on Amazon, right? Do people actually search for these types of products?

Shirley: Posture correctors, posture trainers it’s like actually a good category. There’s a lot of skews now coming up under that space.

Steve: I see. So conceivably, you could have listed this on Amazon because there is search volume for these keywords.

Shirley: Conceivably, I could have done it that way. I just thought that the Kickstarter community is so cool and that again, if I could get these early adopters to give me that social proof. And also, remember, I’m still in the pre order stage, right? So I don’t have to risk inventory right now if I didn’t meet my campaign goals. And so, whereas with Amazon, I would have to tell the factory guy says, yeah, you need to give me 3,000 units before for the rest of it. Now, hey, I’ve been nice to you all this time. Now, this is official, right? And he has to not give me a small team to make it but now he has to run it through his regular production. So that changes things.

Steve: Okay. So would you recommend that everyone do a Kickstarter then prior to just taking the risk up front with all the inventory on Amazon?

Shirley: I think it depends on your stomach for capacity to ride the wave, I guess. I mean, Kickstarter can be — the biggest challenge I had was — is building the email list. I have to admit, it’s a big struggle.

Steve: Okay. I mean the reason why I’m asking you this question is because I kind of know how Kickstarter works. And it’s not like you list something on Kickstarter and it magically generates money. You have to promote your own Kickstarter, right?

Shirley: That’s right. That’s right, just like you would have to promote your Amazon listing, right. It’s not any different from that.

Steve: I guess the differences though, is that Amazon has this huge built in marketplace. Kickstarter kind of does too, but you kind of need to jumpstart it before you get to leverage any of that traffic, right?

Shirley: That’s true, before the organic algorithm kicks in for your product to rank.

Steve: So you said that you didn’t really have a huge email list and it was a problem. So, did you have an email list prior to your Kickstarter?

Shirley: No, no. My email list consisted of friends and family and people who I’ve done business with in the past.

Steve: Okay, so how did you meet your goal in 18 hours? Like what was your process?

Shirley: I cultivated that email list like you wouldn’t believe. So I just like I just went after, you have to work with what you have, and that’s all I had at the end of the day. And we had actually some smaller number of email list that we’ve been doing for pre launch, our pre launch campaign.

Steve: How did you do your pre launch campaign, how did that work?

Shirley: With Facebook advertising.

Steve: Okay, it was that successful. And how much were you paying per lead? Like, do you remember?

Shirley: Yeah, it was pretty high. So, in the early stages, it was probably about 5, $7. And I think we got it down to about $3 or so. Still pretty high is what people tell me.

Steve: Per lead, right. And did you separate out those people when the Kickstarter came on board?

Shirley: They’re definitely not different bucket lists in our email.

Steve: Okay. And were they profitable, like the ads ultimately?

Shirley: I think some of those people; I mean they’re targeted ads, right? So those people did sign up. I couldn’t tell you at this very moment, because we’re still in the middle of all this. I couldn’t tell you how many of it came from that list, because some of these people bought under a different name. Sometimes you can’t tell from the email some people sign up.

Steve: So you developed a pre launch list via Facebook ads, do you know how big that list was approximately?

Shirley: Yeah, it was just slightly under – let’s see, probably was slightly under 350ish or so.

Steve: Okay, yeah so not that many.

Shirley: It’s very small from what people tell me.

Steve: So you took that list and then you pointed that at Kickstarter, what am I missing? What about the other like how did you generate so much money so quickly?

Shirley: So a lot of it came through from the friends and family lists and the people who I have done business with in the past. So on that email list, I had I believe probably 3,000 or so.

Steve: Oh, wow. Okay. And these are just colleagues that you’ve worked with?

Shirley: People — if you are on my Gmail and I emailed you, and you emailed me, you’re on my list.

Steve: Okay and these are just like personal contacts that you’ve had.

Shirley: Over the years. I mean like you, I know a lot of people through conferences and just being in the business for so long. And a lot of those people supported the campaign. I’m really humbled and grateful and just — and they came through. I didn’t even set out to complete the fully funded within the first 24, the first day, if you want to say. But during the afternoon, about five o’clock when I saw the number at seven, I was saying, hey, wait a minute; we could do this, right. So really, I just like just reached out to all those people, even after I already emailed them, like okay, come on, you guys. You guys, we can do this. So, really supportive group of people that really want to help me out.

Steve: Did you get any momentum from raising all that money so early, like did Kickstarter end up featuring your product?

Shirley: So I shortly learned, I was shooting for — it’s called stock pick, right, or campaigns we love or something like that. And I shortly learned that they don’t do campaigns we love if your product is somewhere what they might feel that it’s close to being a medical product. So, even though my product is not really medical, but they feel like it might be borderline and therefore if it’s borderline then they just kind of push you over to that category. So, I was bummed to hear about that, of course I didn’t know that before I got in. So, not that it would really change anything, but it definitely would have boosted my campaign, more visibility, right.

Steve: I guess what I’m trying to get at is did Kickstarter actually help you raise the money in any way?

Shirley: I think so. I think so, a lot of it is ranking, so you rank on different categories, like product design. And so that initial push that they give you, they give you the benefit of the doubt, if you want to call it that. And then they ended — until new projects come on, if you’re able to hold the momentum, then you don’t get pushed down, or even as new products are coming in and they’re popular too, there’s a lot of good products. So you have to be able to hold that momentum.

Steve: So now that you’ve met your goal, and I guess your Kickstarter has as of this recording of 22 days left, after that initial push what is your strategy to kind of make even more sales?

Shirley: So, one of the things that we’ve done is sign up with an agency to drive momentum, they have their own list of super backers that they have access to cross marketing campaigns. So cross promotional campaigns, so I’m counting on them to do what they’re really good at, right. So, I really come to respect that the agencies can really add a lot of their value to the campaign because they just done so much of it, right. And initially, I thought I could cobble it all together and work pieces because I’ve done, I alluded to doing construction earlier in our call. And so I I’m used to being the general contractor. I’m a really good project manager and organized in that way.

And so, I thought I could cobble it together by being the general contractor. But now I realize that when you don’t have a big list, you don’t have a community which other people do, right, they start off with a big community, and then they leverage that community to drive the traffic. When I don’t have those pieces, you’re going to have to use something else if you want to get closer to a higher number. And that’s what I’m hoping for.

Steve: Okay. And I know the agencies take quite a bit cut, and so if it doesn’t end up being that profitable, are you just doing it for the emails at this point?

Shirley: I’m doing it for the emails and also still my outlook on this is that can I get this product in more people’s hands, because if I could get in people’s hands and they use it, then post Kickstarter life that there’ll be other people going, yes, I missed the Kickstarter but I want one. And I don’t care. I don’t care if I don’t get it for the early bird price.

Steve: Okay. No, that makes sense. And then by the way, I’m going to post the link to Shirley’s Kickstarter underneath this podcast and it’s very well done. And I noticed that you actually got some doctors to endorse it. How did you get them to endorse it? And what was your outreach, like what was your outreach plan outside of your friends and family?

Shirley: So, I actually developed this product with help of a chiropractor and I’ve been showing him the product. I’m not a science person right, I don’t have a medical background, but it was through all my challenges that he just basically said you need to sit upright. And if you stopped leaning forward, your nerves won’t be pinching; you won’t have all these problems or less of it. So, that’s really what precipitated this product, this backpack invention years ago. And so when I was started making this product, so I said to him, why don’t people just use the backpack like I did, right? He goes well, because you’re going to incorporate a lumbar support system that the backpack don’t give you right and it has to be comfortable, it has to be you can get in and out of it easily.

So, if you just attach your backpack to your chair, some of it will fall off. I mean, it is not hooked up properly; some chairs are tall so not a lot of backpacks would work. Those were my challenges that I had to overcome when I was bringing my design because you can’t just wrap a backpack around the chair. If you’re a six foot tall person, you can’t do it because it wouldn’t sit on you properly and it wouldn’t be comfortable, you would just never use it. So because I happen to be small, the backpack prototype worked for me but I had to design it so that it works for all people of different shapes and sizes. And that was the biggest challenge is designing it that way. Where’s originally the backpack was behind the chair and came forward because that was the…

Steve: In terms of proving to people that it works though, how did you accomplish that?

Shirley: I think when people see it and they — so people go, yeah, I always get skeptical which is actually fine. I like that because when they actually use it, they go oh my god. So intellectually they understand, but when they sit in it they go, oh my god, this is amazing. It really will not let me lean forward. So people get it instantly especially after they’ve tried it on. So, I hope that the videos and the campaign images and through the imagery we were able to accomplish that, but people are smart, they can see it.

Steve: So what is the future? So once the Kickstarter is over what is your plan?

Shirley: So, we’re going to deliver, we’re already working with the factory to get all the materials together where we have to estimate how many pieces we’ll get made. And so we’re preparing all of that, we’ll deliver on all the Kickstarter pledges first, then after that we’re going to set up shop on – we’ll turn our Shopify store into a shopping cart, and then I’ll probably sell on Amazon.

Steve: Okay. And then in terms of Amazon, I guess, is most of your efforts — I guess what is your plan? Is it to focus more on Amazon, your own shop, or is that TBD?

Shirley: We’re going to do both; we’re going to do both. I think we — I mean you cannot be in e-commerce without being on Amazon these days. But at the same time, I think what we could do is maybe — so as an example, there’s other colors, right? There’s other colors, there’s other personalization that we can do to the product that we can offer on our Shopify store and on Amazon we could just offer let’s say, the black right, a black available everywhere. And that will be the one that we will sell most of.

But other people want — some people want other colors, they want other personalization. So, we have to think through those pieces of how we want to differentiate so we don’t compete with our Amazon business if you will, and still be able to build up this other our other ancillary related products.

Steve: Cool. Yeah, well Shirley, definitely going to post the link to the Kickstarter beneath this podcast on the show notes. And if any of you guys have posture problems, or anything, I encourage you to check it out. And Shirley, where can people find you online?

Shirley: They can find me on LinkedIn, I’m Shirley Tan. They can find me on Facebook, Twitter, I’m everywhere, Instagram, so I’m everywhere.

Steve: Cool.

Shirley: [inaudible 00:41:24].

Steve: Well Shirley, I appreciate you coming on the show and teaching us how you manufactured your product from scratch and launched a successful Kickstarter. I mean, from my gather from this interview, a lot of it is just hustle. And you created your own prototypes. You found the factory and then just through networking, you had contacts and then from there you decided to launch a Kickstarter and the Kickstarter is just very thorough, it’s actually very well done. It’s one of the best I guess Kickstarter campaigns that I’ve seen, just very thorough. It’s like this endless long form sales page.

Shirley: Yes. And I really, I spent weeks and weeks on this and going back and forth, how detailed, too much detail, back and forth. In the end, I didn’t want to — I wanted people to see all the benefits of having improved posture and correcting that behavior that you can correct the behavior with the right device.

Steve: Yeah, no, absolutely. I mean, if even if you guys aren’t interested in the product, you should go check it out just to see how thorough the Kickstarter page is. Anyway Shirley thanks a lot for coming on the show. Really appreciate your time.

Shirley: Thank you Steve. Thank you so much.

Steve: Take care.

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225: Dropshipping, Negotiation And Emotional Decisions With Andrew Youderian

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Fireside Chat With Andrew Youderian On Dropshipping, Negotiation And Emotional Decisions

Recently, Andrew Youderian and I took an epic 5 day camping trip in the wilderness of Montana. There was very little internet so we decided to record a few podcasts along the way.

This episode is part 3 of a 3 part series where we discuss the other side of entrepreneurship. Today’s topics include the state of dropshipping, the art of negotiation and how emotions affect our decision making.

What You’ll Learn

  • Andrew’s views on dropshipping as a long term business model
  • The art of negotiation and how to hedge your bets
  • How emotions often cloud our logical decision making process

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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, just like last week, today is a completely different type of episode. My buddy Andrew Youderian of Ecommerce Fuel and I recently went on an epic five day camping trip, and we recorded a couple of episodes together in the wilderness where we chat about business and life. Today we talk about the state of drop shipping, negotiation, and how some of our decisions are emotional rather than logical.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. I like Klaviyo because they are the email marketing platform that I personally use for my e-commerce store, and I depend on them for over 30% of my revenues. Now Klaviyo is the only email platform out there that is specifically built for 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 sent. Now Klaviyo is the most powerful email platform that I’ve ever used and you could try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

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

Right now I’m using Privy to display a cool wheel of fortune pop-up. Basically a user gives their email for a chance to win valuable prices in our store and customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%. 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. Andrew Youderian and I, it’s day three of our epic Montana Yellowstone Park road trip. Right now we’re sitting in front of a campfire, no internet access, nothing to do except hang out with each other. And today, what we did is we went hiking. We went to the Upper and Lower Falls, we saw some bison. But as usual, today we talked a lot about business, we talked about life, we talked about other things.

And so we’re just kind of kind of go down and maybe summarize some of the topics that we talked about because they’re probably going to be interesting to you business owners out there. And one thing that did come up is Andrew as you know he’s sold to businesses. He sold Trolling Motors and Right Channel Radios, and he also created a seat back organizer. I think the brand is what, Rough Riders is that correct?

Andrew: Rough Routes.

Steve: Rough Routes, that’s right. And so I thought it would be interesting for Andrew to share first of all why he sold Trolling Motors and Right Channel Radios and why he’s thinking about giving up the Rough Routes product.

Andrew: Yeah, I sold the two businesses for different reasons so the Trolling Motors business because it was the least profitable business of the three I was running at the time, and I wanted to focus my efforts elsewhere. I sold the CB Radio business because it was a drop ship, exclusive drop ship business. And as we’ve kind of talked on multiple times on this trip, it is getting harder and harder to resell other people’s products. Yeah and the seat back organizer was an interesting product…

Steve: Before you go into this organizer, drop shipping, like what was — I don’t think we covered this right? What are your views on drop shipping going forward as like a long term business model?

Andrew: I think it’s getting increasingly difficult. I think it will only get harder. Either you can do it in very specific niches where you can add a lot of value and where the niches lend themselves for maybe confusing purchases or needing a lot of customer support up front, but I think it’s only getting more difficult.

Steve: What was your average order size, do you remember?

Andrew: Yeah, it was about 120 bucks per horn.

Steve: So do you think drop shipping is still viable for big ticket items like trolling motors, for example, versus smaller items?

Andrew: It is but the problem is when you think about that is you’ve got no inventory costs and so your profit per order, anyone out there is potentially — you compete with more people when the profit per order is $100, right? So say you’re selling — the margins are small, 10%, and you sell $1,000 trolling motor, you don’t have to have — you have no inventory costs or capital requirements. So you get more competition because the whole profit order is going to be higher.

So it is potentially more viable, but you still have to overcome what I call the friction barrier. Like, even if you provide the web’s best site for big screen TVs in terms of education and product knowledge, you still have to have some reason they want to come buy from you versus Amazon once they find what they want. So you can do it. But I still think it’s tricky.

Steve: I mean, do you think that drop shipping is more viable for big ticket item as opposed to like a $50 or $100 item?

Andrew: Not necessarily. I think if standalone, yes, actually, I’ll say that. If you’re trying to individually sell smaller type items, I think that is much more difficult because you just don’t have the profit per order. I think if you’re going to do smaller orders or sell — if you’re going to drop ship items with smaller — has smaller price point, you need to be able to sell a lot of accessories with it because that’s where you make the money with drop shipping.

Steve: I see. And the accessories naturally have higher margins, right?

Andrew: Yeah of course.

Steve: Okay. All right so I understand. Okay. So in the Rough Routes, that was your first private label product, right? You actually went to China, you had it manufactured yourself, and you listed on Amazon, right?

Andrew: Yeah. Not private label, because I didn’t, I designed it from scratch. So it wasn’t something an existing product I put my brand on, I designed it kind of from the ground up. But I guess yeah, I private labeled. Yes. Not white label, so yeah private label.

Steve: I mean, it was your brand on it, right?

Andrew: Yeah.

Steve: Rough routes?

Andrew: Yeah, right.

Steve: Okay. No one else can sell that exact same thing under label.

Andrew: No.

Steve: Okay. And so you actually bought a barcode and you listed that on Amazon? Yes.

Steve: Okay got it. Okay. Yeah, I qualify those private label.

Andrew: Okay yeah, got it.

Steve: And so how did it go and why are you thinking about stopping that product?

Andrew: When I started doing it, I did it primarily because I wanted to build something from scratch for the experience to learn how it worked. I did something very much to scratch my own itch. We’ve been having this funny battle throughout the whole trip Steve, I will pull up my paper map, and you will pull out your digital map on your phone. And it usually takes you five minutes to realize you’re not going to get anywhere with it. And I usually find where we’re going in like 30 seconds.

Steve: I just want to add that Montana is the only place where paper maps are a viable business.

Andrew: So I — there weren’t any organizers on the market, the backseat organizers that really held large full atlases. Anyway, yeah, so I designed this product and it was — I learned a lot and it was fun. But I think I got — I didn’t think about the size of the market enough when I designed it. And I was okay with it. I knew there was a good chance I can design this that it was going to be not the next big business for me. But at this point, they’re selling kind of onesie-twosie on Amazon here and there, but they’re not going to be an enormous business going forward.

Steve: So let me ask you this. How do when to call it quits because in theory, you could put a little bit more marketing behind it, maybe some more content marketing behind it and triple the business or 10X and maybe even I don’t know.

Andrew: Yeah, but it would still be a really small business and it’s not something that I want to do compared, and it’s not something I think relative to the other things that I’m doing that is a strength or passion has that much potential.

Steve: So that being said then, why did you even do it in the first place if you didn’t think it had that much potential?

Andrew: Perhaps because I really wanted to get the experience of understanding how building a product from scratch works. And I wanted to get the experience of understanding how to work with suppliers well, how to design a product from the ground up and understand Amazon too.

Steve: Okay.

Andrew: Yeah, because I’ve gotten more from being a store owner first and foremost, to kind of transfer me a little bit more into a somebody who manages a community of store owners, but still really important to understand the things that they deal with and face.

Steve: And with that knowledge do you perhaps plan on starting another e-commerce product line going forward?

Andrew: No, not in the near future. I’m definitely doubling down on the community and the job board and trying to spend all my efforts on making those as valuable as possible.

Steve: Yeah, I know earlier today, when we were talking about how crappy selling physical products can be. And everywhere you go on the internet, you hear about all the good things and all the rah-rah, yeah start a business, start a business. So, I thought it’d be interesting today to share some stories from both of us, actually. And I remember Andrew; we were talking about returns, handling returns and chargeback.

Andrew: Oh yeah, yeah.

Andrew: And you told me this one horror story. I’ll let you tell it with Trolling Motors.

Andrew: Oh, yeah. I mean, this is getting really old because it’s something done a long time ago. But yeah, we were in the trolling motor business. You’d be selling these $2,200 GPS power trolling motors. And anytime you sell a big ticket item like that, you get people who are trying to scam you. And I think once or twice we definitely shipped at least three or $4,000 worth of trolling motors to people and ended up finding out they were scams which is brutal, right? Like that’s a tough — that’s a hard thing to swallow, yeah but it’s kind of part of the game.

Steve: We were just talking about drop shipping large big ticket items.

Andrew: Yeah.

Steve: So the thought of dealing with fraud is infinitely worse for a big ticket item drop shipped?

Andrew: Oh 100% yeah. You sell linen Steve.

Steve: The thing is with our linens, we’re not — our products aren’t the type of things that people will actually buy charge back and try to scam us with right? Again, I can do that with like handkerchiefs.

Andrew: Well, I’m going to go home and start doing that now.

Steve: But you might do with the trolling motor or a right channel radio or radio right?

Andrew: More likely Yeah.

Steve: Right. So how did you deal with that problem, like how did you prevent that from happening?

Andrew: A lot of it was we were on Shopify at the time, and they have some built in risk analysis which is nice. But on top of that we would look at the bill to ship to. Almost all of the fraudulent orders we had, had different bill to ship tos. We’d look at that, in any of those we came across we’d be much more careful about. We’d look at the email address. It’s funny a lot of those scammy, those fraudulent orders, you could tell that the email was fake on it.

Steve: How? What if it was like SteveSmith@gmail.com.

Andrew: I found that fraudsters weren’t that intelligent. They put like 12345@gmail.com.

Steve: Interesting.

Andrew: You just think, there is no way this is an email address. Not all the time but a lot of the times. So that we would look at, we’d look at the name. If it seemed like a strange name – again it sounds odd because there’s a lot of unusual names out there, but again some really weird ones that didn’t even make sense with some of the fraudulent orders. And then we’d also call the number, and a lot of times if it’s a legit order, you can get at least a voicemail or something like that. If you try it for a couple of days, you can get somebody on the phone. For most fraudulent orders, not always, there’s some really smart scammers out there. But a lot of the times you wouldn’t be able to get ahold of somebody and that was a big red flag.

Steve: Mm-hmm. Okay. So you would do this test — like what were your rules? You obviously can’t do this with everything right?

Andrew: You could do it with — our rules were kind of okay, pay special attention to the orders that came across that had different bill to ship to, look at those. If anything looked fishy on them, then call or email them. And if we couldn’t confirm by a call or email, then we wouldn’t ship the order. Oh there’s a deer Steve.

Steve: What’s that?

Andrew: There is a deer right behind you, the other way. All right, you’re not going to believe me just this quick.

Steve: What, are you lying?

Andrew: No I’m dead serious.

Steve: We are out in the wilderness and there are bears. Andrew has been trying to scare the crap out of me actually in regards to bears, oh there Steve a bear. What, what?

Andrew: It’s working really well actually; it’s probably the best part of the trip.

Steve: I’m not afraid of deer though. There’s a couple of interesting things that speaking of Andrew BSing me all the time. We did have a little bet today, that was kind of interesting.

Andrew: You’re going to bring this up really after the results?

Steve: Yeah.

Andrew: You’re a bigger man than I thought.

Steve: I think we are. So we actually ended up hiking to the top of a fire tower. And for those of you who don’t know what a fire tower is, well, why don’t you explain it?

Andrew: A fire tower is just a big tower on the top of a big hill where usually you have one or two people stationed for the summer, especially in the fire season where they have a great vantage point to look for fires. And you can hike to the top and it’s a great panoramic view from the top of this tower.

Steve: So we hike to the top, and I’m just looking around and I see this like patch that looks just like a golf course right. It’s got a green perfectly cut out. It looks like it’s got a sand trap, padding green. I’m like, Andrew, that looks like a golf course, what do you think? That’d be a great place to put a golf course. And then Andrew was like, I’ll give you three to one odds that that’s a golf course. And I think Andrew knew that it wasn’t a golf course.

Andrew: I think you knew it wasn’t a golf course.

Steve: Yeah, but I wanted to see how far he would go. So what I said was — you give me three to one odds, if you were so sure this was not a golf course, why weren’t you giving me like 101 odds, are you willing to give me 101 odds?

Andrew: And what I choose is if you’re so sure it is a golf course, you should give me one to one odds or three to one odds that it is a golf course.

Steve: So that bet never went anywhere because we couldn’t even prove that it was a golf — it was like way too far for us to walk. So we couldn’t prove it. So Andrew proposed a more realistic bet something within walking distance that we could actually prove. And he was like, hey Steve…

Andrew: No, no, no, no.

Steve: I’ll let you tell it.

Andrew: I’m sorry. I didn’t mean to interrupt. You were the one who insisted it was sand; you pointed out and said it was sand.

Steve: I pointed out?

Andrew: I think so.

Steve: Okay. Well, anyways, it’s like 70 degrees outside, I’m sweating. It’s hot. It’s really hot. And I was like, oh look, there’s a little white patch of sand right there. Andrew is like no, that’s snow man, that’s snow. But you got to understand, like this entire place on this fire tower, you look around, you can’t see any snow. And there’s this white patch there that looks like sand, like a sand track for a golf course for example. So Andrew, what he does — well, I’ll let you tell how you phrased it because he kind of tricked me into betting him.

Andrew: I did that okay. That first time I did not trick you into betting. Secondly, there was snow capped peaks all around us. So I’m not sure how you didn’t think it was snow.

Steve: There was no snow anywhere on those peaks.

Andrew: There was snow everywhere on those peaks.

Steve: It was hot lustrous vegetation.

Andrew: We will see if — is it okay if in the show notes we post a picture that I took from the lookout tower and listeners can decide to…

Steve: did you really take photos?

Andrew: Of course.

Steve: Oh man.

Andrew: The listeners can decide if there were snow cap speaks in the park.

Steve: All right fine, go on with your story.

Andrew: Oh, I just I mean when we started betting, I was just kind of bet you that it was snow, you thought it was sand. At first I went to five to one odds. But then I thought there’s no reason I should give you five to one odds on this because I know I’m right. But at the same time, I don’t want to give you the satisfaction of having a great leverage deal. So, I feigned a little bit of ignorance and doubt thinking like even though it’s 99.9% sure it was snow a mile away thinking like oh okay, Steve, I think maybe you are right. I’m not sure about this. Maybe you are. I still think it’s snow, but I’m not so sure. Let’s do one to one.

Steve: And that was just the right thing to say because I wasn’t 100% sure that it was not snow, and I wasn’t 100% sure that it was not a sand trap for an old golf course. So as soon as I heard some doubt in Andrew’s voice, I was like, okay, I’m probably right, because there’s no snow anywhere luscious green 70 degrees outside. So, I ended up taking the stupid bet, I paid 20 bucks.

Andrew: You still haven’t paid me.

Steve: I still haven’t paid him yet. Well. Okay. Here’s the thing. He’s like, you can either pay me 20 bucks or you let me pat you with a snowball as hard as I can. Of course I’m going to pay him 20 bucks; my dignity is now worth 20 bucks. Anyways, we walk over and yes, it is snow. I didn’t realize you documented it with a photo.

Andrew: But I think kind of the takeaway here is thinking about how we thought about this with a couple of things. One negotiation and also two, kind of the expected value when you bet for things, betting to a level that you feel confident with. I love betting with different odds and giving people different odds because a lot of times if you give that straight up bet, people won’t bet, but if you give people a three to one, five to one, ten to one odds on something they’re much more likely to bet. So I don’t know. Do you think of it like you like — I love to bet, you like to bet. Do you think about that a lot when you bet or even maybe even more so when you make financial decisions?

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I generally don’t like to bet unless I’m pretty sure I’m going to win.

Andrew: Like today.

Steve: Like today. Well, I wasn’t sure until you feigned your little, oh you know what, maybe it isn’t. That’s really clever. But that golf course bet or whatever that hole was at, I was trying to negotiate you down so I could have a fun time and not really take a huge loss just in case I was wrong. Whereas you were trying — if you gave me five to one odds, I probably would have taken in a heartbeat, but you improved your odds overall. And I was a sucker; I ended up just getting one to one odds.

Andrew: The outcome was still the same for me. I would have won either way but I reduced the amount of risk I had, right.

Steve: That’s correct. You mentioned earlier that you weren’t 100% Sure.

Andrew: Right. I was 99% sure.

Steve: Okay 99% Sure.

Andrew: Correct. But still it would have been really painful on that 1% to pay $100 to you perhaps because I’m cheap, two partially because I never want to pay $100. But yeah, I mean, a lot of it I think a lot of times too, is if you can think about ways that you can still get the same outcome, but reduce your risk, it’s a beneficial thing to do.

Steve: Yeah, clearly, I have more to learn in this department. So Andrew applied all of this over me for the rest of my life.

Andrew: Not nearly as much as the grasshopper and Lucas bet that we had the day before.

Steve: That’s true. Well, one other thing we also talked about was where to invest our money, because right now I’m in a lot of cash and I think you are too, right. Yeah. And we are looking to buy a house in Southern California, and Andrew was just starting to talk about investment and property. And the climate in California obviously, is a lot different than the place where you’re looking at right, and I think I casually mentioned that most houses it just makes more sense to rent than to buy right? And then you said, well, if I put 20% down, can I at least break even on a house? And I said maybe not. It’d be border line but probably not. And then you thought that was crazy right?

Andrew: Well, you — I’ll start a little bit with it all started with you potentially thinking about making a move to LA. If you do move to LA, I asked, would you sell your house in the Bay Area or would you keep it? You said, well, I’ll keep it. I said, okay well, the cash flow meaning that assuming you had a mortgage on it and maybe you put 20% down, would the rent from the house that you rented out be enough to cover your mortgage, your insurance, and your maintenance? And you said probably not. So it would be completely a appreciation play at that point.

Steve: Right, but you also have to keep in mind that my house has more than doubled since I bought it and it’s been nine years.

Andrew: Sure.

Steve: And it still goes up, like I think it went up 20% last year and this year it’s already up in the double digits again.

Andrew: Yeah, and that’s kind of crazy. I mean, that’s phenomenal for who owns in the Bay Area. But from my perspective, I thought it was interesting that you would buy an asset like that purely based on the appreciation play versus the cash flow play, because you’re really you’re betting at that point that appreciation continues. And there was also a part of it though too that was emotional for you and maybe you can touch on that because it wasn’t — you were very — you strike me and I know you really well, you’re a very logical person, you think through financial decisions fairly clearly.

But in this case, there was a big emotional component that even that didn’t — that kind of prevented, at least in my opinion, prevented you from looking at an investment from a pure return standpoint and banking all on the very risky proposition that this crazy bull market in housing continues to go. So what was like – what are the emotional reasons why you would have kept that house?

Steve: Yeah, there was a couple things. So one, my parents made most of their wealth from real estate and once you have a house — so our house is pretty much paid off. And so by keeping it and renting it, that cash flow is very consistent. And you made the argument like you could take that cash; put it somewhere else to make a lot more money. But I feel like just emotionally, I guess money from renting is rock. It’s pretty rock solid, especially in the Bay Area where there’s a very finite amount of land. And there’s high to — I guess the only risk would be if high tech like totally tanked which I think is unlikely to happen.

And the fact that more jobs are coming in, in fact, there’s just not enough room to build anything, I think the appreciation will continue. And if anything, even if the appreciation doesn’t continue at breakneck speeds, we’re not going to lose any money. The property value probably isn’t going to go down. And if you remember the downturn back in 2008, 2007, most of the property where I live remained pretty much flat. It didn’t really drop too much, at most maybe 10%.

Andrew: Yeah, I thought it was interesting that you were baking a lot of — and I’m not a real estate investor at all.

Steve: Neither am I clearly.

Andrew: Yeah, although real estate investors have wasted more cash.

Steve: Exactly.

Andrew: But I just thought it was interesting that even though it’s cheaper to rent, you still would hold on to it for the risk, like you said, like your parents made a lot of money in real estate versus the kind of the actual calculations of the deal, and the past expectations of appreciation. So, I hope it works very well. I just thought that was interesting.

Steve: I mean, I don’t always make logical decisions, you know right. Yeah, I mean, I’m quite illogical actually for a lot of things that you make fun of me on a regular basis.

Andrew: Well, let’s go through those. What are some of those things?

Steve: No, no, no, you’ve got to give something too, what’s something that you do that’s not quite logical that you do anyways?

Andrew: No, but I mean, there is a vehicle that we have been driving.

Steve: I was going to point that out.

Andrew: This vehicle we’ve been driving around and it is like the absolute worst financial decision I’ve ever made in my life.

Steve: How much did you pay for that vehicle?

Andrew: We’re not going to talk about that on this public podcast, but it was more than you should pay for a 30 year old vehicle.

Steve: Let’s just say it cost more than my BMW.

Andrew: Yeah, I guess yeah, it’s not been a logical decision, but it’s been a good investment in terms of like we’re doing this right now partially because we had the vehicle right?

Steve: That’s true and I’m not going to say anything more because I want to sleep in the vehicle tonight and not outside.

Andrew: But it’s — yeah so there are good non financial reasons to do things.

Steve: Do you have anything else to add?

Andrew: I think it’s good to take a break from business sometimes and get off. It’s been interesting watching our habits with like cell phones. We’ve checked in a little bit but being able to unplug is really nice, having really slow internet that prevents you from getting stuff done quickly or going through a lot of emails. I don’t know, do you feel like — what have been your thoughts on having really poor, really poor cell service?

Steve: I know for me, it’s always a blessing because I’m addicted to my phone. And so this is actually one of the reasons why my wife and I we like to go on cruises because we’re on a cruise ship there’s no internet. Well, I rephrase that, you can pay for internet, but it’s really expensive and my wife and I are too cheap to pay for it, or we’ll pay for the shortest plan and as soon as we log on, I type as fast as I can. It’s like a race against time to get everything else just because we’re too cheap. I like to think that this trip is the same way except there’s no cheapness in play. So most of the time we didn’t have internet access, right. Only when we saw Old Faithful, that area had very limited internet access. And it was really nice, because it kind of took my mind off work.

Andrew: Yeah, it’s good. It’s good to decompress sometimes and get off the digital grid.

Steve: One thing I do want to say is Andrew and I we’re kind of doing something interesting with these set of podcasts. And what we’re doing is we’re kind of alternating the parts on each other’s podcasts. So episodes one and three are on my podcast and episodes two and four are going to be at the Ecommerce Fuel podcasts which can be found at EcommerceFuel.com. And I think our trip is actually about to conclude. We got one more day left tomorrow, and we’re probably going to be filming another episode in the van right?

Andrew: Yeah either driving or stopping. I’m hoping to be able to time it perfectly so we don’t have time to get you home for a shower. So you have to sit on the flight sandwiched in between two people licking of camp fire and fish.

Steve: Well that’s good for me right, I need more leg room and enough movement.

Andrew: It would be good for me too because I want to hear the stories when you get back, probably business partners that you’ll need to be connected with in the future.

Steve: All right, well, stay tuned for episode number four on the Ecommerce Fuel Podcast.

Andrew: It was fun, thanks Steve.

Steve: Hope you enjoyed that episode. And in case you missed episode number one, it is over at mywifequitherjob.com/episode224. And episode number two is actually over at EcommerceFuel.com. For more information about this particular episode, go to mywifequitherjob.com/episode225.

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 them because they are 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.

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

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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224: Fireside Chat With Andrew Youderian On Business, Happiness And Wealth – Part 1

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Fireside Chat With Andrew Youderian On Business, Happiness And Wealth - Part 1

Recently, Andrew Youderian and I took an epic 5 day camping trip in the wilderness of Montana. There was very little internet so we decided to record a few podcasts along the way.

This episode is part 1 of a 3 part series where we discuss the other side of entrepreneurship and our views on balancing happiness, wealth and the keys to success.

What You’ll Learn

  • Our views on the balance between business success, life and happiness
  • How we invest our money
  • What’s your magic “number”

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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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Pickfu.com – Pickfu is a service that I use to get instant feedback on my Amazon listings. By running a quick poll on your images, titles and bullet points, you can quickly optimize your Amazon listings for maximum conversions. Click here and get 50% OFF towards your first poll.

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

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. Now today is a completely different type of episode. My buddy Andrew Youderian of Ecommerce Fuel and I went on this epic five day camping trip in Montana. There was no internet so we decided to record some podcast about business, happiness, and life. Now, I also gained some good jabs in this episode, so please enjoy the banter.

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? Well, Privy is an email list growth platform and they manage all of my email capture forms. And in fact, I use Privy hand in hand with my email marketing provider.

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.

I also want to give a 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 my email marketing platform that I personally use for my e-commerce store, and I depend on them for over 30% of my revenues. Now, if you want to achieve similar results as I have in email marketing, I encourage all of you to attend Klaviyo’s upcoming conference on September 13 through the 14th in Boston.

This event is the largest in-person gathering ever for the Klaviyo community. With two days and over 30 practical sessions, it is a no fluff, no BS e-commerce marketing conference. Get your ticket at Klaviyo.com/Boston. Once again that’s K-L-A-V-I-Y-O.com/Boston, 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 My Wife Quit Her Job Podcast. I am here with Andrew Youderian on an epic camping trip in Bozeman, Montana with no internet access. I’m not used to be disconnected from the rest of the world for this long. Apparently you do it all the time Andrew, but I’m just not used to it. And in fact, I keep finding myself checking my phone for bars, but there are no bars. And then finally after checking for maybe 20 times I finally became resolved to the fact that I’m stuck with you today for the next three days.

Andrew: It’s one of the benefits of living in Montana is they’ve taken out a lot of the cell phone service. They’ve really [inaudible 00:02:51] to reduce stress, increase quality of life, it’s really helpful. That’s why Montanans are so generally happy.

Steve: What’s terrible about this is I can’t piss you off because if I do, you’re just going to leave me in the middle of nowhere and I’ll have no recourse.

Andrew: Oh, there’s a reason I didn’t give you a specific instrument.

Steve: Oh, speaking of which we’re in — we’re camping in my dream van, which my wife will not let me get.

Andrew: Just come on, you would love it.

Steve: It’s called the Volkswagen Westfalia. It’s pretty sweet. It’s a camper van. It’s got beds, it’s got a stove. It’s got a fridge.

Andrew: Let’s clarify, it has two beds. It’s important.

Steve: No, I thought we’re going to sleep in the same bed.

Andrew: No unfortunately not.

Steve: We’re not going to sleep in the same bed?

Andrew: No, I’m sorry.

Steve: Uh man. Okay.

Andrew: Yeah, you’ve been really loving hard for that. But yeah, answer is still no.

Steve: So we’re sitting here in the middle of nowhere without any internet access. And so the only thing we can do is like talking stuff, right. And so we’ve been talking about a bunch of different topics today. We went whitewater rafting today.

Andrew: Yeah, maybe like a quick little.

Steve: Yeah, why don’t you do a quick little recap?

Andrew: A quick recap, you came into town. I knew this is — you want to do this, I want to hang out with you. So you came into town. We’re on a three night trip starting in Bozeman going through Yellowstone Park, looping back up kind of through a big pass and Red Lodge in the back. So, three days on the road and have adventure, mostly adventure, but also a little bit of we talk of course like our business a lot. And yeah, so we just figured, we both always wanted to do a few episodes from the road to talk about kind of just we’ve been doing a lot on the adventure side, but also a lot on the business and just kind of lifestyle.

Steve: I’m actually kind of surprised you asked me on this trip, right? I didn’t know we were at that level.

Andrew: I asked like three other people and none of them could come.

Steve: Okay yeah.

Andrew: Yeah, you were number four though.

Steve: That makes more sense. So, one thing that I noticed when I got off at Bozeman — so I live in the Bay Area, probably one of the most expensive place in the US to live I would say.

Andrew: One of, apart from New York where I mean, one of the two most expensive places to live.

Steve: Exactly. Yeah. So a big city and then I walk into Bozeman, and here’s what’s funny. I was actually stuck on the tarmac of my plane for 20 minutes because the airport didn’t have enough gates.

Andrew: [inaudible 00:04:55] place. We got a lot of construction going on.

Steve: It’s got like six gates or something like that.

Andrew: About eight, we got eight come on.

Steve: Actually, I was happy to get a real jet this time instead of a prop plane. Anyways, one thing that we started talking about earlier was we started talking about success. I don’t know about you, Andrew but I compare myself to a lot of people. And every time I do so, it just makes me kind of depressed.

Andrew: Yeah, I think its human nature, right?

Steve: It is. And that’s why I like to hang out with you. It makes me feel better.

Andrew: You’ve been rehearsing on that.

Steve: I wrote that one down in my notes actually. So, one question that I posed to Andrew earlier today, which is kind of interesting was, would you rather make $100,000 and live where people make half as much like 50K, or would you rather make 500k which would be five times as much where everyone else makes a million bucks and I have my answer. Actually, what’s interesting about this question is that Andrew kind of lives in the first category, and I kind of live in the second category which is in Silicon Valley. I do pretty well with my businesses, but I am by no means I would say one of the wealthier people where I live for sure.

Andrew: Yeah. It’s tough because they did studies about this, I think. And I mean, overwhelmingly, I think people chose to have less absolute wealth but make more than their neighbors. I think if you look at what people on average report, that’s what they say.

Steve: But what’s your answer?

Andrew: What would be my answer?

Steve: Yeah.

Andrew: I would like to say from a purely a character driven approach, I would like to say I would like to have more absolute wealth, but I think I’d like to say I wouldn’t compare myself to other people and I try not to do that. But I think at the end of the day if I was brutally honest with myself, I would be less happy like for example, you live in Silicon Valley. I’ve intentionally chosen, and Amy and I, and our family chose not to live in some of those really expensive places partially for just because you don’t want to spend the money, but also partially because I think it’s really important. I think it’s great to hang out with smart, interesting people that you can do that in a lot of places other than places that are crazy expensive.

And yes, we’ve personally made that choice not to live in some of those places. And I wish I — I’m kind of rambling. I think what I’m getting at is I wish I could say I would just look at the raw income and say I want the 500k when everyone else is making a million, but I think it would be hard to not let that impact my happiness in a negative way.

Steve: See, I asked Andrew a simple question, which was just one word. I just want a one word answer and he went off for like five minutes.

Andrew: I really wanted to explain myself. I feel guilty for my answer as well really.

Steve: So I would actually rather make 500k where everyone else makes a million because I know that I can probably get out at any time and live like a king.

Andrew: Mm-mm.

Steve: So you’re imposing right now and I’ve been trying to get Andrew to move over to California.

Andrew: Mm-hmm.

Steve: But you’ve experienced sticker shock right?

Andrew: Sticker shock is part of it, but yeah a big part of it yeah.

Steve: But I mean the weather here in California is a lot better than Bozeman for I would say at least half the year, right?

Andrew: Yeah. Yeah.

Steve: Would you say so?

Andrew: Mm-hmm. I mean I think California has undisputedly the best year round weather in the country.

Steve: Yeah, I mean, the question is whether it’s worth the money or not, and you already you had the sticker shock. And for me, it’s easy to leave California because everywhere else is cheaper.

Andrew: True. But this is also predicated on the fact that you are going to actually leave California. I would say, and I hope maybe I’m wrong here, correct me if I’m wrong, but I would say my happiness on a day to day basis of not feeling like all my friends are driving Teslas and I’m driving a 2008 Subaru Outback, which I do. That I think on a day to day basis, it’s easier for me again, I try not to compare myself, it’s easier for me, there’s less of a temptation to compare myself to other people when most of my friends are not outrageously wealthy, working at Facebook and doing things I couldn’t afford to do.

Steve: Actually, this reminds me of a story. So Andrew actually visited me in my house in the Bay Area. And I don’t know if you’ve seen his Volkswagen Westfalia, but it’s — at the time I — it looks much better now. But at the time, it was not easy on the eyes.

Andrew: Oh, don’t go there [overlapping 00:09:10] man.

Steve: And then dents all over.

Andrew: How about the tent, the little tarp for you sleeping on the ground. I can get that out, man.

Steve: So Andrew rolls up into my neighborhood. I mean, it’s just a nice neighborhood but there’s all these nice cars. And he rolls up in this Westfalia with tiny tires.

Andrew: Your butler wouldn’t even get in — your butler would not even get into it.

Steve: And then my wife — like I want one of these Westfalias. Don’t get me wrong. But my wife comes out. She’s like; this is the car that you want?

Andrew: You make her sound like way less sweet than she actually is.

Steve: Do you mind if Andrew parks at not in front of our house but maybe like in the backyard or something? So I [inaudible 00:09:47].

Andrew: I’m sorry for reducing the property values in your neighborhood for the time I was there. I apologize.

Steve: Yes, it is weather tax. So, I was trying to — so I’ve been trying to get Andrew to move to California. But you’d be a lot happier in California, won’t you?

Andrew: No, in some instances, in terms of the weather, yeah I love warm sunny weather, absolutely love it yeah. But I also think there’s creative ways you can do things like for example there’s some — again our family has thought about a lot of time, we’re actually moving to Tucson this spring, excuse me this fall to spend the school year there and then to try to come back to Bozeman in the summertime, because we have a really great community we love in Montana but we also really hate the winters.

And I mean moving to California is one option but another option is going to somewhere else. And Tucson, I feel like Tucson is a place that is a little undiscovered with a lot of cool things that isn’t on the radar quite yet. And the cost of living is much, much more reasonable. And so you can kind of we can kind of be able to arbitrage the weather, get the weather we want at a lower cost and still have some cool extra benefits like meals and spend time in a couple of different places. So it’s not just — so there’s other just kind of a third option. You don’t have to just pick the one.

Steve: One thing I actually don’t like about living in the Bay Area is that for one, everyone makes a ton of money. But they also work really hard too. I mention this on my podcast all the time, in order to live where we live and get a decent house, pretty much both need to work in order to get a good house in a good school district. And so, when it comes to work, life balance in a lot of cases, a lot of times nanny raises the child, or people are just really happy about getting their three or four weeks of vacation. They’re making a ton of money and got this nice house, but they’re working all the time.

I have a friend who basically works all day at work, comes back at six, has dinner with the family, but then he logs in and works again at night, and then usually ends up working one day at the weekend. And so the question is, is that really the lifestyle that you want? Is it worth it even though you’re making a ton of money?

Andrew: I guess if a lot of people really started asking yourself like the why question three or four times, why are you working so hard? Well, trying to provide for my family. And why do you want to do that? Well, because I want them to do well but I am also working hard to spend time with them. Where if you potentially went to live somewhere else and cut your cost of living by 50%, 60, 70% you can work a ton less and spend way more time with your family or build better relationships which ultimately is like if you look at what makes people happy and from a research and scientific standpoint, it’s relationships, hands down, that make people happiest.

Another thing we were talking about today which was interesting on the road just kind of driving over the din of the second most quiet vehicle in the world as we were shouting at each other, I asked you would you sell your business, and if you would like what multiple would — because you’ve said, I’ve asked you before and you’re like, there is no way I’m going to sell for 3X which is like the average e-commerce store multiple. Well, what about 5X, what about 6X? And I was trying to find your…

Steve: I started hesitating at 6X.

ANDREW: You did, 6X is the point you hesitated. And anyway we got into it and tried to figure that price point out. But you started coming up with a bunch of non financial reasons you wouldn’t sell which I thought were interesting.

Steve: Oh yeah. Like if I sold my business, I’d probably get depressed because I’d have nothing to do. As it stands right now actually, I feel like I’m not working enough. So my schedule right now looks like this. I wake up in the morning; I start working probably around eight, and sometimes a little earlier. And I quit around between noon to 1:00, and after that I pretty much work out and exercise, pick up the kids. And I don’t actually get a whole lot of social interaction either because most of my friends are working. But yeah, to answer that question I just did what you did. I just went on this long winded thing.

Andrew: It feels great, it was awesome.

Steve: Not only I could sell it, I got nothing else to do and it makes me happy right now.

Andrew: It does surprise me, a little tangent here, like in Bozeman I feel like there’s a great group of entrepreneurs I can hang out with. Really, really great people that are running their own businesses and that we can take time off in the middle of the week and go floating if we want to, or have a regular breakfast or get together. A lot of my friends are entrepreneurs and you surprise me, a lot of your friends….

Steve: Well, I’m Asian, so they’re either engineers, doctors, or lawyers.

Andrew: I love your friends. Yeah, I love friends. You don’t have very many entrepreneurial friends, especially bootstrap entrepreneurs.

Steve: Yeah, actually, I have a lot of entrepreneurial friends. But they’re all the traditional VC backed companies.

Andrew: Right yeah. But essentially, you’re talking some of the other things I thought were interesting on the why you wouldn’t sell your business. You talked about the value of some of the ancillary benefits like a network. Like you mentioned, you can drop into most cities in the US, be able to reach out to people, connect with people, hit up your list, which is really cool. But not all businesses you can do that. But all businesses have some fringe things and for you like that’s a pretty cool thing to be able to do.

Steve: I just want to take a moment to thank Pickfu for being a sponsor of the show. If you currently sell on Amazon like I do, then you know how crucial the quality of your Amazon listing is to the success of your e-commerce business. So for example, I’ve run experiments on my Amazon listings, well simply replacing the main image with a different photo resulted in a 2X increase in conversions. But how do you choose the best and highest converting photos for your listings? How do you know that you’re using the most profitable images for your products? And how do you know that your bullet points are convincing. This is where Pickfu comes in.

Pickfu allows you to solicit real human feedback about your Amazon listings in 10 minutes or less. And you can target the exact demographic of your end customer. So for example, let’s say you sell napkins and you have two main product images that you want to test. You would simply go to Pickfu, list the images, target female Amazon Prime members over the age of 35 and hit go. Within 10 minutes you’ll get feedback of which image people are more likely to buy along with specific feedback on why they made their decision.

In fact, I’ve used Pickfu to almost double the conversion rate on several of my Amazon listings by testing my images, bullet points, and product titles. And what I like about Pickfu is that you get results quickly unlike traditional split testing, and you can use this to test book covers, landing pages, basically anything. Not only that, but it’s super cheap to run a poll and right now you can get 50% off your first poll by going to Pickfu.com/Steve, once again, that’s P-I-C-K-F-U.com/Steve. Now back to the show.

It is actually, I mentioned this before but I use my podcast as just a way to meet people. And if I were to sell that man, I’d be lonely I think.

Andrew: Super and very social outlet is the podcast.

Steve: My primary social outlet — I mean I hang out with my wife a lot, but it’s mainly my kids right now. And I like going to conferences and so I try to hit like six conferences a year. But yeah it’s – you know what 6X might not even be enough, I don’t know.

Andrew: Really.

Steve: Yeah because what would I do with the money. So we can kind of diverge into this other topic like what do you do with your money, right?

Andrew: When you sell a business?

Steve: Yeah, so let’s say I sold it for like 6 million, what am I going to do with 6 million?

Andrew: You’re going to either do one of two things, put in index funds and just super boring Vanguard index funds or you’re going to wait for a huge market crash forever which we’ve both been doing and which has not materialized and feel like an idiot.

Steve: That’s true. Yeah actually Andrew we need someone who’s less risk averse to talk to us. Andrew and I we’ve been both waiting for the crash for a long time.

Andrew: You’re right, everyone else just gotten filthy rich while we lost like a third of our money too.

Steve: Well, let’s say you just got 6 million, what would you do with it seriously right now?

Andrew: $6 million?

Steve: Yeah.

Andrew: I would just put it in the bank and index funds and just live off of it, and still probably do what I’m doing because I really enjoy it. But get to a point where…

Steve: But you can’t do what you’re doing. You just sold it.

Andrew: What’s that?

Steve: You just sold your business.

Andrew: Oh, yeah. Okay. Good point. It’s kind of obvious, isn’t it? I don’t know, I would probably do something; I’ll take a little – for the first time I’d take probably 18 months off and travel.

Steve: 18 months off.

Andrew: And travel significantly with my family and spend a lot of time with my kids teaching them and stuff. They’re kind of in that school age right now and I think it’d be a lot of fun. And then from there, I would probably start doing something that was business related, potentially nonprofit related that I enjoyed that my skills could be useful in and thought could have a really potentially positive impact on the world.

Steve: For me, I have a lot of problems seeing my bank account get reduced from month to month. I think that would really bug me.

Andrew: I feel like — but the thing is, I feel I can vary. I think most people myself especially included, can very easily if I was lucky to ever enough have a $6 million dollar excellent, I think I could very easily live off the interest of $6 million. And that goes back to the kind of where you live right?

Steve: That’s true.

Andrew: In the Bay Area that’s going to be tricky.

Steve: I’m pretty sure I spend a lot more a year than you do. We were just talking about this like summer camp for my kids right now in California. It’s $500 a week per kid.

Andrew: Yeah, we should segue into something else which is interesting is the way we kind of raise our children, all the differences. You have — I tease you a lot about Russian math, you have your children, you are — I love teaching my kids things. I love teaching them more about kind of the world and geography and kind of in organic manner. If I see something, I’ll try to explain it to them. Anytime I try not to talk down to them, anytime a hard word pops up, I’ll try to explain it to them. So, education is very important to me. But I think you’re much more intentional.

Steve: So the way you put it makes your way sound so much better. It sounded really good.

Andrew: What, if my kids aren’t going to have like stress disorders 160.

Steve: Okay, where I live it’s an arms race. If you’re not in Russian math, you’re behind because all the other kids are doing Russian math.

Andrew: Another reason not to live in the Bay Area.

Steve: So, this is how I grew up in case you guys don’t know. So, I grew up studying for the SAT starting in fourth grade so that I could take them in sixth grade to qualify for nerd camp.

Andrew: This is crazy.

Steve: But nerd camp was awesome, I grew a lot during nerd camp. So, just to give you an idea how it’s structured, I took this math class at nerd camp. Its three weeks long, but you finished three subjects in three weeks. So, I finished algebra one, algebra two and geometry in three weeks and I passed all of them.

Andrew: What grade were you in?

Steve: I was in seventh grade.

Andrew: Seventh grade. Okay. Do you — so two, you think about education, you went to Stanford, a phenomenal school. You were talking earlier, though, you were saying that a lot of times the education you don’t feel like in Stanford is as good which I probably disagree with, but having obviously being much less qualified to make that comment than you. But you think that sometimes it’s not as good based on the fact that some of the teachers are researching a lot more, and kind of made the comment that you believe that the primary or at least a lot of times, the biggest, one of if not the biggest benefits of an Ivy League school is the network.

Steve: Yep. Well, the network and the resources, I should say.

Andrew: Networking and resources, but you could do what you’re doing now, which obviously, like you’ve had a job that you could have gone to, you get less satisfaction out of what you do now, but you could do what you’re doing now without the Ivy League degree. And I guess I’m thinking what I’m driving at here is some of the externalities if you really push people. I’ve seen people who have gone to Ivy League schools. Now, there’s a lot of benefits there. But also, if you raise kids from the age of like eight to try to get them into an Ivy League school, there’s a ton of pressure that you can put on their system that I would argue maybe isn’t necessarily healthy relative to the benefits there again.

Steve: I don’t know if they need to go to an Ivy League school, but I wanted so that regular school is easy for them. And they feel really confident. I think confidence is really important for a kid. Like if they walk in the classroom and they already know all the stuff, then that’s going to kind of boost their ego a little bit. I think a lot of times it’s just all about confidence, right? Even starting a business, it’s about confidence.

Andrew: That’s true. I mean, there’s many elements but that’s one of them. It’s having the courage to do it.

Steve: Well, now that’s just getting started. But knowing that what you’re doing will eventually lead somewhere and not giving up too early.

Andrew: But nobody knows. I think most people that started a business, myself included, you never know. I mean, a lot of times people I’m guessing ask you like, hey Steve, I’m thinking about doing this, is it going to work? And you have no idea. You can spend a month researching something and you still, you can maybe get closer to having maybe a I think this is 70% likely to work versus 20%, but you still have no idea. And so you go through and really push through it for at a minimum six months but more likely a lot of times years.

Steve: Yeah, I mean, I think it just depends on the person’s personality, right? This is why VCs invest in the person and not necessarily the business, right? If you have the right personality — and we’re not talking about trying to start like a multimillion, like $100 million business here, we’re just talking about like a six or seven figure lifestyle business. And a lot of that a lot of times when you’re talking about that threshold, personality matters a lot more necessarily in the business idea.

Andrew: I’ll give you that. That’s true. As long as you don’t have a horrific business model, if you have one that’s quasi reasonable, the work ethic, hustle, and commitment of the person is more important. Yeah, I’ll give you that.

Steve: Yeah. And you have to have the courage that what you’re doing is kind of on the right track so that eventually it’ll start making money.

Andrew: Yeah, that’s true.

Steve: I don’t know. So I want my kids to be confident. Like, honestly, if my daughter right now was not in Russian math, I think – yeah because math just does not come naturally for her. Yeah, if she wasn’t taking that, she’d probably be really discouraged about math.

Andrew: Yeah. But it’s funny, you can get beginning back to the comparison thing you made the comment, you really want your kids to do really well. And even just assuming, I think your daughter is much smarter than this, but for the sake of argument, if she was in the middle of the pack, like just say, if anyone is middle of pack in Silicon Valley, you go anywhere else in the country, and you’re probably going to be top EDS, 90th percentile. It kind of goes back to some story I heard somewhere, I was mentioning this earlier, where this family moved, they worked their whole life, this couple worked their tails off to get to Park Avenue.

They bought the cheapest place on Park Avenue and they were both really discontent because they had the cheapest place on Park Avenue and felt like the other people didn’t respect them. It’s not that they hadn’t done well in their life, it’s that they had self selected into a small sample pool of people who were outrageously successful, and by comparison, they felt awful, right.

Steve: I actually have a good friend that bought a house in the neighborhood just like that. It was a step above what he could really afford comfortably. And now he feels like he’s just spending money just to keep up with the Joneses, so to speak, and he’s always complaining about that to me.

Andrew: Why doesn’t he stop?

Steve: There’s other pressures too like that house is close to his wife’s family and stuff. But he feels like he constantly has to work really hard now, just so that he can afford this mortgage on the house.

Andrew: Yeah, that’s brutal.

Steve: It is brutal. It’s a nice house though.

Andrew: So you got back to how living in California it sets you at a high baseline so you can afford to live anywhere else. But do you think you’ll actually ever live anywhere else, like do you think you’ll take advantage of that parachute that you kind of created as a reason for living in California?

Steve: I probably won’t because my wife requires temperatures between 65 and 76 all year round.

Andrew: Jen, we can just build you a wonderful little like wing of the house that is like a cigar like humidifier but much warmer that just is perfect for that.

Steve: Actually you got a pretty solution to that, a pretty good solution to that, right?

Andrew: For the temperature?

Steve: For the temperature or for the weather.

Andrew: What do you mean?

Steve: In that you’re like kind of like a nomad in a way, right?

Andrew: Yeah, I guess so, yeah.

Steve: It’s almost like you’re a bird. You go west for the winter.

Andrew: We call that snow birding here.

Steve: Yeah, exactly. But that might have to stop once your kids get older.

Andrew: No, I don’t think so. I mean, we’re going to — I don’t think so because I think there’s some great benefits from public school or formalized education. But I also think there’s a lot of benefits for instruction from a parent who really cares about your kids, and this is not say that you don’t care about your kids. But it’s just having one on one instruction with your kids is hard to beat, and seeing the world and experiencing the world in more of a traveling sense and more of just kind of a hands on approach. So, I’d love to — I mean, I think once you get to high school that’s harder, but through middle school I think you can easily do. So we’ll see. I’m probably eating my words, eating crow here in about two months.

Steve: We’ll see. We got totally different like educational philosophies just based on how we grew up, right?

Andrew: Yeah, we do. So since we’re going to do like three or four of these, maybe we should wrap this one up. But do we hit any more other either the big three topics that we talked about on the road today, maybe we should cover before we wrap up.

Steve: Man, I can’t think of any more. Let’s just cut this one here.

Andrew: Cool. So tomorrow…

Steve: If we’re still friends tomorrow, there’ll be another episode.

Andrew: It seems like you just slandered me. I’m hitchhiking home.

Steve: Oh, by the way, that was interesting. That was the first time that I’ve seen anyone hitchhike before.

Andrew: You have never hitchhiked before?

Steve: Never. In fact, I’m like why are you sticking up your thumb man here like the fonz.

Andrew: That’s how you hitchhike. So we did a little, a self guided whitewater rafting today. And it was just us in advance. We didn’t have a shuttle driver. So, I hitchhiked back to get the car. Yeah, that’s how you — you put out your thumb like this to hitchhike.

Steve: No, no.

Andrew: How would you have hitchhiked, like jumped up and down, and waved your hands?

Steve: Well, I tried to fly down this dude and you were like, don’t do that.

Andrew: Well you were going to try to go to the [inaudible 00:27:08] if you could ride with them. It just looks like, yes, serial killer.

Steve: No, I was smiley, like I looked pretty…

Andrew: But all serial killers are smiley man, even people in super creepy uncomfortable situations.

Steve: Actually you looked a little bit more creepy in your sunglasses on, you had a life vest on.

Andrew: So two reasons why I did not have my sunglasses on because it’s important when you’re hitchhiking to make eye contact with people. Yeah sunglasses – well…

Steve: You were wearing your shades, weren’t you?

Andrew: No I wasn’t, I potentially took them off. I had this — secondly the reason I had a life jacket on was so people knew I was a rafter and a boater so that they would — hopefully if other boaters or campers were coming by, they’d be like, oh hey, there’s one of our crew. We can help them out. So, they know I’m not hitchhiking to try to go. If they see the life jacket, it’s a signal that hey, he just needs a ride 10 miles, five miles up the road.

Steve: Interesting.

Andrew: It was very intentional.

Steve: It was.

Andrew: I was subliminally signaling to people on the road.

Steve: Were you smiling? I couldn’t tell on your face.

Andrew: Oh, a huge grin.

Steve: Huge grin okay.

Andrew: As huge as I could make it without being creepy.

Steve: I thought they’d probably just pick me up because I stand out here, not that many Asians here in Bozeman. Like look at the Chinese boy, let’s go pick him up.

Andrew: Oh my goodness, you make it sound like we’re like a bastion of white power off here. You said there were a bunch of people who were Asian there on your flight?

Steve: Actually there were. I thought I was on the wrong flight in fact; a quarter of my plane was just…

Andrew: [Overlapping 00:28:23].

Steve: They must all be going to Yellowstone. They were all going to Yellowstone.

Andrew: Awesome.

Steve: All right, let’s end it right here.

Andrew: Everyone we will be back tomorrow.

Steve: Perfect.

Andrew: Good day one.

Steve: Hope you enjoyed that episode. We actually recorded three episodes total, and we’re releasing them in an alternating fashion on our podcasts. So, what that means is that the next edition will actually be on the Ecommerce Fuel podcast, and then episode three will be right back here at My Wife Quit Her Job. For more information about this episode, go to mywifequitherjob.com/episode224.

And once again I want to thank Klaviyo for sponsoring this episode. Next month Klaviyo is holding a two day conference for 400 e-commerce marketers and store owners with an awesome lineup of speakers. They’ve got experts coming in from Shopify, BigCommerce, Google, Octane, Recharge, Smile.IO, Swell, and other top e-commerce agencies plus panels with successful Klaviyo customers and a keynote address by Ezra Firestone. So, you can find out more at Klaviyo.com/Boston. Once again that’s K-L-A-V-I-Y-O.com/Boston.

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

Now, I talk about how I use these tools on my blog, and if you’re interested in starting your own 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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223: How To Scale An Ecommerce Business to 8 Figures In Just 2 Years With Kevin Chen

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How To Scale An Ecommerce Business to 8 Figures In Just 2 Years With Kevin Chen

Today I’m thrilled to have Kevin Chen on the show. Kevin is someone who I randomly bumped into at Traffic and Conversions and I’m lucky to have met him.

He runs Freedom Laser Therapy which is a company that sells a laser hair growth system to treat hair loss. Not only is the product cool but what’s even more cool is how he has successfully scaled to a 8 figure business in just 2 years.

In this episode, we’re going to talk about his exact strategies. Enjoy!

What You’ll Learn

  • How Kevin manufactures his hair loss products
  • The challenges of selling on Amazon
  • Why Kevin decided to focus on selling on his own site
  • Kevin’s Facebook ads strategy
  • An in depth description of Kevin’s funnels

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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Pickfu.com – Pickfu is a service that I use to get instant feedback on my Amazon listings. By running a quick poll on your images, titles and bullet points, you can quickly optimize your Amazon listings for maximum conversions. Click here and get 50% OFF towards your first poll.

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: Welcome to the My Wife Quit Her Job Podcast. Today, I’m thrilled to have Kevin Chen on the show. Now Kevin is actually someone who I randomly bumped into at Traffic and Conversions, and it actually turns out that he’s the cousin of Grant Yuan, who I actually had on the podcast last year. So, I guess entrepreneurship runs strong in that family. Anyway, Kevin runs Freedomlasertherapy.com, which is a company that sells a laser hair growth system to treat hair loss.

Now, not only is the product cool, but what’s even more cool is how they’ve successfully created an eight figure business. And today, what we’re going to do is we’re going to talk about the exact strategies they use to grow so quickly. And with that, welcome to show Kevin, how you doing today, man?

Kevin: I am doing awesome. Thanks for having me Steve. I’ve been a big fan of the podcast. So, it’s really exciting to be on here.

Steve: Yeah, that’s one of the things I really like about conferences, like you just run to these random people. And, we chatted for a little bit, and as soon as I heard your story, I knew I wanted to have you on.

Kevin: Yeah, and likewise, I saw you roaming around I was like, oh I got to go talk to Steve, I know that guy. So, I’m glad we got to connect, that was a great conversation.

Steve: So since a laser hair growth helmet is a little bit random, tell us how you got into this business.

Kevin: Sure. So basically, how we started was that back in 2003, my dad and his partner Craig had started a business in laser therapy, but that business was actually not for treating hair loss. It was treating nicotine addiction. So, it was a physical clinic in Los Angeles, where people would go into the clinic. There would be a beautiful girl there to treat you. And for 30 minutes, you get audio therapy, tranquilizing audio, and laser treatments that were intended to stimulate endorphin responses similar to that of when you inhale a cigarette.

So, there was a limitation with what you can do with a physical business, because you can only treat so many smokers in Los Angeles before you exhaust your demand. And so we sought out other options for us to expand the business. And one fortunate trip to Canada, my dad’s partner, Craig had actually found out about laser therapy for treating hair loss. And that was done in the clinical setting. So you went to a clinic, there would be a big machine, you put that over your head, and you get treated by low level laser therapy. And over the course of three to four months, you’ll start to see your hair grow back.

But the problem with that, of course, is when you have a clinical setting, you needed to go there weekly, most likely two to three times a week. And that was a — that’s a big hassle for someone to drive in there. In addition, the cost of going to a laser therapy clinic was so foreign to build up. So, we knew that there had to be a better way. And with that the iRestore Laser Hair Growth System was conceived. The brand was developed to serve that same market, but make these same solutions and technology available in their home whereas before it was only available in a clinical setting.

So, we recognized that there was an opportunity for us to take this online and ship this to every home so people can have this kind of new novel non invasive and side effect free solution. So, with the advent of platforms like Shopify and Facebook, we were able to take this opportunity and start sending out Laser Hair Growth helmets to people’s homes. So that’s how we got started. And it’s been about two years since we started iRestore brand.

Steve: So Kevin, how do you source these products? Are these like unique designs that you own like a patent for?

Kevin: Yeah, so with a product like this, you really have to go through a long and tedious process. So, with any medical device that has lasers in it, you need to go through the FDA. It’s considered a class of 3R device, which means you have to submit a FDA 510k application to get it cleared. That process is about anywhere from three months to 12 months. We actually had a submission previously that was rejected so we had to resubmit. So that was kind of a painful process, because it’s not easy. There’s a lot of paperwork, a lot of tests, a lot of all kinds of things that you don’t even want to think about you have to deal with.

Steve: Okay, so, I mean, there’s high barriers to entry for this particular product, because of the certifications.

Kevin: Exactly.

Steve: Okay. And you managed to scale that to eight figures in just two years, which is really impressive. And so what I was curious about is what have been your primary sales channels? Like are you selling primarily on your store or on Amazon?

Kevin: So our store was started after our Amazon business. Initially, we had started on Amazon and then we used that cash flow to finance our off Amazon business, which is on Shopify. Our primary channel for growing has been Facebook. So, our approach has been to set up a multi channel approach with typical things like Google hopping, Google AdWords, YouTube, Display, all that kind of stuff. But on the scaling side, it’s been all Facebook really for us, because as you know and your audience knows, with a platform like Google, its intent based, so there’s only so much demand that we can capture from Google.

Steve: Sure.

Kevin: Whereas something like Facebook is contextual marketing. So you’re allowed to market to a billion people if you had the budget for it. So that allows us to scale our business from there.

Steve: Is your business 50/50, Amazon, your own store? And you started on Amazon; I was just curious why you didn’t decide to just press the Amazon channel? Why did you decide to start your own store?

Kevin: Yeah, I mean, for many reasons. One is there’s only so much demand on Amazon, although that demand is growing year over year, and we’re thankful for that. There’s still a finite number of searches with buying content on Amazon, whereas on Shopify, if we drove demand off Facebook, we essentially have unlimited access to the roughly 80 million Americans that suffer from hair loss. And the second reason, of course, is to diversify, because if your business is all Amazon, that’s a very scary thing for you. As we all know, Amazon can drop the hammer any day and just suspend you for no reason.

And in fact, they have suspended us for about two weeks for basically no reason. And we have no recourse. You can you can frantically call them or sending messages, but seller support is one of the least helpful support out there. So, what can we do?

Steve: So your Shopify store makes more than your Amazon side, right?

Kevin: Correct.

Steve: Okay. Okay. So that’s really interesting. Let’s talk about your Facebook ads. I know you kind of hired a company to help, but I’d love to hear about how you’ve managed to kind of scale these ads. So first things first, like when you first approached this company, were you running any ads whatsoever at that point?

Kevin: MM-hmm, yeah, we’ve been running ads for since our first year. And initially, we had started off with another agency. But that didn’t work out so well, due to the relationship and I think just there was a mismatch there in terms of their strategy and our approach. So, we had gone to a different agency with the understanding that they were going to take on our account with a different approach. We have learned about them through another podcast. So thankfully, we were able to find a successful partnership there.

Steve: So can we talk about what were some of like the first steps when you started launching this campaign when it was successful? Like, let’s pretend you started out with nothing, like what did your creatives look like? What did your top of funnel look like?

Kevin: Mm-hmm. So I think the biggest thing on Facebook is that everyone has to understand that a great video creative is worth 1,000 images. If you can get a really good creative in there, whether it’s a minute or three minutes, and that really takes them through the process of understanding the problem, your product and your unique selling proposition and what it’ll do for them, as well as a good guarantee and offer, that really allows you to, in one video, take someone from a cold prospect to someone that may have by intent, or at least be very, very interested in continuing to stay in contact and hear from your brand again.

So, I think that’s been key for us, because we had a two minute commercial that we’ve been running since day one. And we still run it today successfully with a positive ROI, and that video has done really well for us. What we’ve done initially, since it’s so expensive to produce a video and so much time put into it, we’ve done the thing where we created many, many different variations of that same video. For example, you can create a shorter version that you can run on Instagram sub one minute, or you can have a longer version for Facebook, and then you can take advantage of the different ad formats available.

So for us in the beginning, it was all about leveraging the power of Facebook to the Facebook newsfeed to continue to show our ads to different audiences, a lot, a lot, of split test with different audiences and copy which is of course the first step to scaling anything, but essentially on Facebook, that’s super important. So for us, just testing nonstop and then finally adding more creative to the mix as we continue to build assets from our customers, or from testimonials, or even something more recent, where we had a clinical study done with a doctor who conducted a formal study with our product and that creative.

Steve: Can we talk about that first video? And was it professionally done? How long was the video? What was the content of the video, what did it look like?

Kevin: Sure, we produced the video ourselves, and it was a two minute video. Basically, we talked about the problem for the first 10, 15 seconds. Then we went into the product, talked about the certification with the FDA, and anything that helps us to build more trust with our audience. And after that, we went into the how to portion so how it works. We did a 2D animation and a 3D animation. We worked with one editor on this. So it was all done in-house. And from there, we went into the money back guarantee and the offer, and so that was about two minutes, and we walked them through the entire process.

Steve: Was there a lot of talking, or was it like caption based to express the value proposition?

Kevin: There was audio.

Steve: There was audio, okay.

Kevin: There was voiceover yeah. I think that makes a big difference. If you don’t have the budget for it, I think not having audio is fine, too. But to me, it’s really a different kind of feeling when you have someone talking.

Steve: I guess what I’m asking is did you rely on your voice to express the value proposition, or did you also have captions next to your images? I’m just trying to get an idea of how this video was created. Was it like a slideshow? Was it a high budget affair?

Kevin: It wasn’t a high budget affair, but it was certainly not a slideshow. We had — the audio was talking the whole time. We had text call outside in. So that helped to reinforce certain things. And I think the animation really helped to make it a really good video to explain how it works in a digital kind of way.

Steve: And what was your offer, your initial offer?

Kevin: Our initial offer — so in addition to a six month money back guarantee, that was a full money back guarantee, we offered a discount, which varied at different points anywhere from 100 to $200. Just to give you some context, our product generally sells for about $600, so that’s, you get the idea.

Steve: Yeah, that’s a pretty significant discount there. So was your — so this ad that you’re running, like which audiences did you initially choose, and how did you narrow down which audiences were working?

Kevin: So I think this varies with each product and market, but especially for us and hair loss, the distinction was pretty clear to me. It was going to be a gender distinction and an age distinction. So how you speak to an older woman is different than how you speak to a younger man when it comes to hair loss. So that’s the way we went about dividing and testing. We would test with older females, younger females, older males, younger males, and then within each of those groups, we would have multiple ad sets with different types of copy.

For example, some people would be in early stages of hair loss, so you want to speak to them, as sort of stop your hair loss before it gets worse, whereas for some other people, it may be more advanced. So it’s more about re-growing back your hair so you can look younger and get your hair back where it used to be. So I think that conversation is different when it comes to different audiences. And it’s important for us to split test the copy and create it too.

Steve: Was this with your first initial video that you did this, or? I just want you to just kind of rewind to like the when you only had the video and you were just starting out. You weren’t using different creatives then for the different age groups, right, when you only had that one creative.

Kevin: That’s right. Yeah, we just had that one creative. So it was more of a copy test.

Steve: Okay. And then how did you know like which audiences did you try first? And during this testing phase, how much money did you put behind it? And what were some of the metrics that you used to kind of determine whether something was working or not?

Kevin: To be honest, at first it was a segments that we talked about with male and female, young, old. And the metric that we were looking at initially, was always revenue purchase conversion value on Facebook. But since then, we’ve kind of changed the way that we look at things. But initially, it was all about ROI for us.

Steve: So you were just targeting like blanket males of a certain age group, like no interests or anything, it was just like…

Kevin: Oh, yeah, there would be interest and the main groups would be male, females and age, but we would — over that was interest like on the hair loss brands, or on hair care products. But the problem with that is on Facebook, you really aren’t able to select hair loss as an audience, because it’s such a vast audience. And there’s no specific targeting for that.

Steve: Okay. I was just — the reason why I was asking that was like Facebook is actually really smart now about conversions. And so I was just wondering whether you could just target an age group in male and still do okay and just let Facebook do the work?

Kevin: Mm-hmm. Yeah, back then it was really more of that kind of segmentation with demographics and overlaying with interest. But now we’ve really refined our approach, of course, with a larger customer list and email list. We build look alikes, and we overlay that with all the different attributes that we have. And that’s been performing better for us. So, if we were starting out, because hair loss is such a big audience, we kind of went really broad on it, and then niched down from there.

Steve: So with these ads, so you had your offer and it’s still a really expensive product, and it’s not an impulse buy, right. So I would imagine your — was your top of funnel profitable, like right off the bat?

Kevin: Yeah, I mean in the beginning, we really didn’t have much of a funnel to be honest; it was just let’s show this video to our audience. Let’s see if they buy something. And that was it. It wasn’t that advanced in the beginning.

Steve: Okay, but it was no, that’s fine. No, that’s fine, because a lot of people who are just starting out are similar situation. I was just wondering if you saw conversions right away with that ad or whether you had to just really work for it on the backend?

Kevin: I see. Yeah, we did see conversions from the very beginning. I mean, the ROI wasn’t super high in the beginning. But we had an email campaign to go with it, and continued to nurture them. So originally, the strategy was just to show them the same creative over and over and over again, that was our only strategy at first.

Steve: And what was the landing page? Were you trying to collect emails or was that just going straight to it like a product page?

Kevin: We took them straight to our homepage.

Steve: Okay. And so how were you collecting emails, and was it just like pop ups and that sort of thing?

Kevin: Yeah, we were using Privy and I was popping on giving me on the offer.

Steve: Giving him the coupon code.

Kevin: Yeah, yeah exactly.

Steve: I see. Okay. And so when you were first starting out, your ROI wasn’t that great but then you were converting on the back end with your email sequence as well?

Kevin: Yeah, our email sequence was a key contributor to our success in the beginning, for sure.

Steve: Okay. And so once the agency started taking hold of this, like what are some of the things that they did like right off the bat to scale your ads?

Kevin: Yeah, lots of things. I think the biggest part in partnering with a new agency was that we started to view our advertising and funnel as broken down into top, mid, and lower funnel. So, we started to look at campaigns holistically rather than watching every single ad set like a hawk, which is what I used to do. And I think that was incorrect approach. With something like Facebook, you really have to look at your account as a whole, by first understanding that you’re going to lose money on the front end, or maybe break even on that in order to get the customer pixels or get them as a lead on your website, and all kinds of things.

So, we started shifting the way that we structure things into cold campaigns and warm campaigns. And in the cold campaigns, we would identify the video creatives that made the most sense to lure the customer to our brand and product. And there were a couple creatives and one of them was the commercial that we continue to run. The other one was a clinical study video, which I referenced earlier. We had a doctor talk about our study. And the third one was a more creative one, where the whole goal of this video was to get someone’s attention. And what it was it was a collection of user photos. So, if you imagine a bunch of people wearing the helmet, it’s running up in red, it’s moving around a lot in your newsfeed.

And we kind of took that approach of having a really attention grabbing short video as well, 15 seconds. And we just showed that a lot to people. It wasn’t necessarily converting, but the relevant score was extremely high on that because people would make fun of it, they would tag a friend, they would share. So, that was our portion on the other top funnel.

Steve: So for these videos on the top of funnel, were you just running engagement ads or were you running targeting for conversions for the core?

Kevin: We actually tested this out where we ran — yeah, we tested this out, we rent on video views, we rent conversions. So different campaigns, and actually made a big difference. And I can tell you from our tests; we spent a significant amount of money and at the end conversion still won by far.

Steve: I see, over the engagement. I’m just curious because I talk to a lot of people who run Facebook ads, and some people run like the video for engagement for us just to get a lot of social proof, and then they turn that same ad and target for conversions to their cold audiences. And I’m just kind of curious, everyone has a different approach. And so you, it sounds like you tested engagement ads versus conversions. And for your conversions, were you doing purchase conversions or add to cart conversions?

Kevin: We tested both, but the one that really performed was purchase conversions.

Steve: Okay. And this is on the top of funnel, right?

Kevin: Correct.

Steve: Okay. And I’m just kind of curious, what does your return look like on the top of funnel?

Kevin: Top of the funnel typically, we weren’t looking for a high ROI; we were looking at 100% or 150% ROAS, which is just getting your money back.

Steve: Like breakeven yeah, okay.

Kevin: Exactly.

Steve: Okay, so you’re running those to a whole bunch of audiences, what does your middle of the funnel look like?

Kevin: Yeah, the middle of funnel is where it gets very interesting because we — one of the key strategies for our success has been to leverage social proof. So, we have a ton of customer testimonials. We’ve worked with a lot of influencers on YouTube and Instagram and we own the rights to most of those assets. So, what we do is typically once they watch commercial and enter into the funnel, we’ll split the creatives that we have into the different age groups and gender that we talked about earlier. Then we would follow them around Facebook and the internet essentially with those influencer or testimonial content. So, obviously an older man will see an older man testimonial, younger woman, younger woman.

So that was our strategy. And in addition, we took the same top funnel creatives and we continued to show them at the middle funnel. And you’d be surprised; sometimes people need multiple touch points of the same thing to convert. So, as we mentioned earlier top funnel, we’re just really looking at breakeven, but middle to the bottom funnel is where we’re really looking to convert. So, with the middle funnel, we also have things like DPS, dynamic product ads, which is super, super profitable. I mean, if anyone’s not running DPS and they’re in e-commerce, they need to be doing it.

Steve: I consider DPS bottom of the funnel though. So, you’re classifying that as middle of the funnel here.

Kevin: Yeah you’re right, that’s more of a bottle funnel.

Steve: Okay so it sounds like the middle of the funnel, you got testimonials from influencers, and you’re just showing them video testimonials to everyone who clicked on one of your top of funnel ads?

Kevin: Mm-hmm, and that’s on the video side of things. So in addition to that, we actually run other campaigns in the middle of the funnel, and I’m happy to go into that, too.

Steve: Yeah, let’s talk about it. I think — yeah, go ahead.

Kevin: Yeah, so one of the offers that we run is a free plus shipping campaign. Our core product is the laser device, which is that six, $700, but we had a suite of products that compliment, so we have a supplement; we have a shampoo, a serum, and now a vitamin hair gummy. So we ran a free plus shipping campaign for our supplement. And that was intended to be a lead generation campaign. But also, of course, we can convert them into even a low dollar amount customer; it was worth it for us. In addition to that, we’d also run giveaways. So we use Gleam.io to run giveaways. Basically, every month we give away our products.

Steve: Is this for middle of the funnel, or is this top of funnel for these offers?

Kevin: This is both top and middle. So we tested out both.

Steve: Okay. And what had worked well for you for these offers, like the free plus shipping…

Kevin: Middle of the funnel.

Steve: Middle of the funnel, okay. So, you’re getting people who are kind of already familiar with your site to take part in these offers.

Kevin: Yeah, exactly. The cost per lead is way lower on that.

Steve: Okay. I’m just curious for your free plus shipping offer. Are you actually making a profit on that or are you just trying to break even on that?

Kevin: We’re just trying to break even on that.

Steve: Okay. Okay, so when you’re calculating ROI, for example, for your free plus shipping offer, you have to look at like your email funnel and your back end as well.

Kevin: Mm-hmm. Yeah, we’re using Klaviyo. And basically, our main metric for free plus shipping is just cost per lead. However, the interesting thing that we noticed was when we run our free plus shipping campaign for one traffic. A lot of times they would just end up buying the kit anyways, because I think it just reminded them of the brand. And maybe they had it in a car or forgot about it, or something.

Steve: I see, okay.

Kevin: So if you look at it that way, our free plus shipping campaigns actually, we have a pretty good return on ad spend although that was not the intended goal of that campaign.

Steve: I see. So you’re free plus shipping offers — they’re kind of like ours. Like, we’re doing that too. And they end up getting the free one and then they buy other stuff, which makes it like slightly profitable in the end. Is that what happens with yours also?

Kevin: Exactly.

Steve: Okay. Okay. And then the — I’m sorry, what was the other campaign that you’re running, the giveaways, and that is…

Kevin: Contest.

Steve: The contest, right. And that is to your existing audience that works well, as opposed to top of funnel?

Kevin: We’ve done both, we’ve done top of funnel to cold traffic, and we’ve done it to warm audiences. But the problem with that is, I think when we have a cold audience campaign, there’s going to be a lot of freebie hunters. So, especially with a product like ours that’s worth $700, you got a lot of people signing up that may not actually be interested. So in addition to that, we just had a better cost related, we ran into warm traffic in the middle of funnel.

Steve: Interesting, can we talk about how your giveaway is structured so that it eventually turns a profit.

Kevin: Yeah, so we have a landing page setup with a Gleam.io widget, then we will run an ad, whether it’s static image or a gift. And one advice here is if you have any movement, whether it’s a gift or video, it’s going to perform so, so much better and it’s worth the time to invest into. And once someone enters the Gleam.io campaign, we would then opt them in to an email sequence. And in that email sequence, which is a flow in Klaviyo, we will talk about of course, the contest first and welcome them, then we will introduce them to our USP, unique selling proposition, then we will go into the core offering the products. And then at the end of that contest, which is run every single month, we will give them an offer, so a 10 to 15% off offer so we can hopefully convert that lead into a customer.

Steve: And so when you’re running Facebook ads for this giveaway, your conversion is just for a lead, is that correct?

Kevin: Correct.

Steve: What I’m trying to get at is like, there’s all these complicated things going on here. And it seems like the ROI calculation; it gets a little bit more complicated as soon as you start mixing Facebook ads with email, or whatever you have in your back end, right?

Kevin: That’s right. Yeah, I mean, the truth is, at some point it’s kind of impossible to get an exact calculation on these things, that’s why you have to look at everything holistically.

Steve: So let me ask you this. So what goals were you — what did you have for like cost per lead for both the free plus shipping offer as well as your giveaway? Like, how do you come up with these metrics?

Kevin: So our goal for cost per lead is under 250, and we kind of just backed into it by doing some math about what we think what number of people will convert into an actual customer. But I think the other side of this too, is that with a product like ours, we felt like awareness was a big component of it. So we also looked at things like cost per click. So, if we’re able to get people to share this and talk about it, and comment on it, we felt that there was a lot of benefits to that too, in addition to getting the conversion, because we understand that not everyone will have hair loss but certainly everybody knows somebody that has hair loss so that that kind of played into it.

And being a data driven person, it kind of sucks to not be able to attribute everything correctly and exactly, but I think there’s intangible amount of value from people just seeing and sharing that contest with people.

Steve: Yeah, I think your product is actually really well suited for Facebook, because it has a very clear value proposition and a huge number of people have this problem. And people tend to talk about it, because so many people have this problem. And I’m guessing that’s one of the main reasons why ads are working so well for you as well, because everything’s just so clear, at least in my mind.

Kevin: Yeah, I think we got lucky, certainly when we started the business, we didn’t know all these things, check the boxes. It was, of course vanity sales, right? Everybody wants to look good, look younger, look sexy, attract the opposite sex. The other thing too, is it’s a high ticket item but it could be an impulse buy for somebody because there’s a natural sense of urgency built into the product, because you’re going to keep losing your hair over time. I mean, you’re going to have less hair tomorrow than you do today. So there’s kind of a natural sense of urgency built in and that works to our advantage, of course. And it’s just vanity; people are willing to pay a lot more for it. And it’s something that you can see. If your dad’s balding, you’ll see his head, you’ll recommend something like this to him. So, all these things were top end.

Steve: So are your dynamic product ads, are those the ones that are creating most of the conversions?

Kevin: I wouldn’t say that they’re creating most of the conversions because we do have a lot of video creatives running. But in terms of return on ad spend; those are the highest performers by far.

Steve: Sure, okay. And in terms of scaling, like when people scale their Facebook ads, sometimes they’ll increase the budget, and then all of a sudden the conversions go down. What was your formula for scaling these ads to as high as you have to run an eight figure business? Are there any tricks or any tips along those lines for scaling?

Kevin: Mm-hmm. Yeah, for us as you scale, I think the key thing is that you can’t continue to show the same thing to a small audience. So, in the beginning, when you’re starting out, you can have a smaller audience because your AdSense is not that great and you’re really trying to find your absolute best audience. But as you start to scale out, you need to go out to broader audiences. And that is going to require a lot of playing around with different interests and targeting. For us, what we did was, we would take look alikes and essentially expand out from 1% or 2% to 5%, and then we would combine different lookalikes into a larger pool of audiences. So, initially we, we might have had a few hundred thousand. And now we’re scaling out to audiences of a few million and letting Facebook do its optimization.

Steve: Are look alikes performing better for you than other audiences?

Kevin: Yeah, look alikes by far are the best performers.

Steve: Okay. And so when you were developing these look alikes in the beginning when you had nothing, can you kind of talk about the progression? Were you just looking for, like video views in the beginning and followed by add to carts, like how were you creating these lookalike audiences?

Kevin: In the beginning, we were using conversions, of course, but we didn’t have as much data. And then we were using video views. That was a big one. So anyone that viewed 50, 75%, we would group into one audience and build a look alike off of that. As we matured our business, then we started adding different data points into that equation. So things like a larger email list and reminiscing with — I mean, crossing that with our page likes or video views. So basically, we would mix a bunch of different lookalikes together to build even larger audience. And then we would continue to do that, as we found more success with individual groups.

Steve: I guess one thing that’s still not like clear in my mind is like you started out right off the bat with this two minute video and it immediately started returning like 100 or 150% return on ad spend. That sounds a little unusual to me. And I was just wondering if there’s just any iteration in the beginning, did you get these results like right off the bat, or because the video was just so good?

Kevin: I mean, I think the video is pretty good, yes of course, but the one thing that we did now that you mentioned I remember is we tested out a lot of different creatives in the sense that it was all the same thing. But in the beginning, first five seconds, we would test out a ton of different things. So, we tested out something like a red screen, it flashes a red screen. So, the video is automated so you want to get their attention. So we tried different tactics to get people’s attention. And then once we got their attention, we will have text slide in the initial three seconds. And we tested a lot of different texts in that initial screen.

So, we would have things like money back guarantee mentions versus questions versus different types of things. So, that was our initial strategy was run a bunch of video creatives with different intros. And then once we found something that worked, we would then split test all the copy for it.

Steve: And can you talk about like some of the click through rates that you were getting, what metrics were you kind of using to determine whether something was working or not? Or was it just straight conversions when you’re comparing the different ad variations?

Kevin: Yeah, back then I didn’t know anything about Facebook. So we were just looking at revenue and conversions, to be honest.

Steve: Okay. And then, I guess what was the fundamental shift when the agency took over that really allowed you to balloon your revenues?

Kevin: Yeah, the fundamental shift was nothing thinking about ROI, at least not short term ROI but considering our business as this ever growing thing that is going to continue to build a list and pixel audiences and generate momentum from there. So, we started looking at things like cost per click, cost per view, basically anything that meant that we earned an opportunity to talk to the same person again, whether that’s getting through our website, or on the email list or watching a video. So, I think that was the biggest shift for us was looking at cost per pixel, especially for those front end campaigns, and then perhaps not only hanging on conversions only for the lower funnel campaigns.

And we didn’t really have all these middle of funnel campaigns that we talked about earlier, with contests and free plus shipping. And so we signed along with the new agency. So that also contributed to a lot of the winners campaigns that we started to get through. And in addition to that, we started scaling up our influencer efforts. And that’s been really, really good for us, because as you know, influencers that have a very, very in tune on audience, they’ll buy anything that they say. In addition to that, we always made sure to negotiate in a way that we can reuse assets. So it’s a win-win for both parties.

Steve: How did you find your influencers? Did you use any service or did you just do straight outreach?

Kevin: Yeah, we actually had a PR agency that did the outreach for us. But what we found to work a lot of times was just to go to YouTube, and type in all these hair loss keywords, and then look at all the videos. Eventually, you’re going to get suggestions from YouTube on all the hair loss videos, and you just reach out to all of them. That’s what we did. And the one thing that I will suggest, at least it worked for us was that we would always reach out to people that actually have the problem of hair loss instead of just someone with a million followers, because we felt like there was more authenticity, if someone was speaking from a true problem that they had, rather than just an advertisement for our product.

Steve: Yeah, no, that totally makes sense. So, it sounds like the fundamental shift for Facebook ads is like not straight ROI. But that implies that a bunch of your ads now and your campaigns are actually losing money, right? And just collectively, they’re making money and collectively they do really well. But so is that true? I’m just reading in between the lines here.

Kevin: Yeah, that’s right.

Steve: Okay. And so you have to have faith then in those ads that are hemorrhaging money or losing money, that it’s driving your other ads at the bottom of the funnel, and making those convert better with a higher return on ad spend.

Kevin: Yeah, you hit on spot.

Steve: Okay, so how do you — okay, so my next question is how do then whether that middle of the funnel add that might be losing money is actually having a positive effect overall?

Kevin: Well, the thing about Facebook is that it’s really hard to know to be honest, because last click attribution is not everything. I think anyone that’s been at Facebook knows that they only track back last day, and they only track for 28 days. So we’re not able to only look at return ad spend and make a decision off of that. So, as an advertiser that’s not in there day to day, I really am looking at it from the campaign level, and then also on account level. So, what is it that we’re comfortable at losing money for this middle of the funnel campaign? And how much money are we making back on the bottom funnels, and then holistically as a whole count what kind of ROI are we getting?

So that’s been really the key for me is not really looking at the ad sets so much. I mean, of course, we have individual goals for different campaigns and ad sets, but at the end of the day, we are looking at return on ad spend. And we’re also looking at things like outside of Facebook, right? How is stuff performing outside of Facebook, we know that Amazon business has been growing because of the Facebook ads spend, there’s been a direct correlation there. So, it’s really hard for me to say this one metric, or this exact number is what’s contributed to our results, and this is what I look for, because it’s really not perfect in attribution.

Steve: Yeah, I’ve asked you for selfish reasons because these are some of the same issues that I face with my ads, right. There might be something that’s losing money and I have to debate with myself whether to continue doing it. I mean, it’s driving people to buy things and I know that I have their contact information, I have their messenger and I have their email, and they’re going to buy again later on. And it’s just hard for me to correlate and decide whether to continue with that ad, or scale it or not. And so that’s why I was just trying to glean some insights on like you how you’ve been able to I guess, take that leap of faith with your ads, that there’s a general positive correlation with everything else when you’re running these ads. Does that make sense?

Kevin: Yeah, yeah, it makes sense.

Steve: Okay. And I did want to talk a little bit about Amazon, since I know you’ve had a bunch of challenges. First of all, when you’re on Amazon, you’re selling an expensive product, right? You said it’s like 600 bucks.

Kevin: Right?

Steve: You can’t do giveaways because it’s just cost prohibitive, right. And so I was just curious how you managed to seed your listings early on when you first launched there.

Kevin: Yeah, it’s another one of those things where when we started out, it really was a very rudimentary basic strategy with our product, hopefully, they will buy it, maybe they won’t. So, in the beginning, there was really not any kind of strategy to drive any traffic towards Amazon if I’m being honest. But fortunately, we were in a category where there was a high barrier to entry, and there was not a lot of stuff being done by the competitors. So, once we started getting some PPC running sponsored ads, headline search, and product display, we were able to gain some traction. And once we gained some traction, we really made a big effort to make sure we reach out to customers to get reviews and make sure that there’s a lot of social proof on there.

And from there, we really saw the conversions start to go up, and our rankings go up. And pretty soon, we were number one for all the niche keywords. So to answer your question, we really didn’t have an advanced strategy. It was more just to sell things, do all the standard stuff that everyone else recommends.

Steve: Well, I mean, I think there’s a lesson to be learned in what you did, right, you chose something that was kind of a pain in the butt to get approved, get FDA approval and certifications, right. And just by nature of putting more work up front, that has made your product much more unique and have less competition overall. Whereas I see a whole bunch of other people right now, they’re just choosing like really simple to source products that have a whole bunch of competition. And it makes the launch — it makes the getting the product part easier but then the launch process so much harder. And so I don’t know if you had the foresight of doing this by just choosing something really difficult, but it seems to have worked really well for you.

Kevin: I wish I could say that. But the truth is we didn’t. We just got really lucky. But I absolutely 100% agree with you on that. I definitely, I think the days of private labeling and selling me too product is over. You really need to differentiate on Amazon. And if you’re not able to have a product that is yours, you’re really just trying to squeeze some money out of people for a few months. And that’s not going to be a sustainable listing because you’re not building a brand if you’re not differentiating and creating product that’s difficult for someone else to create.

Steve: Yeah, can I ask whether you’re using any Facebook Messenger marketing right now?

Kevin: We are, but we hadn’t got a lot of success with it to be honest. One of the things though we’ve done is just we’ve done an abandoned cart with messenger. That one’s performed pretty well. So if you guys don’t know out there, you can — there’s an app, I think it’s called ShopMessage that you can install on your store. And basically what it is, it’s a below the add to cart button, you would have an opt in box. And if someone checks that box and adds to cart but they don’t purchase, they’ll get retargeted with messenger ads. And you can follow up I think up to 48 hours after the abandoned cart. So that’s done really well for the little amount of time we put into it. I think that’s the best return on ad spend, I mean, return on investment that we’ve ever had.

Steve: The problem is you can’t have that box checked by default anymore. Facebook took that away. They grandfather people way before.

Kevin: Exactly. Yeah, so we unfortunately got grandfathered in, but what you can do is give them an offer and then they’ll opt in something like that.

Steve: Yeah, that’s how we’re doing it right now with our site. Just curious, with your dynamic product ads, are you doing anything special with those, like are you splitting them up to like 1, 3, 7 day, 14 day time periods and doing different offers for each?

Kevin: The dynamic product ads we’re not really splitting up into different offers, it’s really the same offer that we’re showing. We do split it up by time since last visit. One thing that we’ve done though that’s very interesting is that we’re able to — I actually saw this in the news feed about a month ago, and I wanted to test it out was we put gifts into the DPS.

Steve: Yes, I’ve heard about that. Yes aha.

Kevin: And that’s really performed well for us. I don’t have the exact numbers here. But you can imagine having something move around in a carousel or whatnot, really grabs their attention.

Steve: So you went ahead and switched out all the images in your product feed with gifts for your products?

Kevin: We didn’t switch it out; we just added it to the mix.

Steve: Okay, in one of the custom primers.

Kevin: In addition to that.

Steve: Oh okay. And so far, that’s been really positive for you?

Kevin: Yeah, it’s been great for us.

Steve: Interesting. Okay, what else do I have to ask you about DPA? So, you said you split out into different time periods, what are those time periods?

Kevin: Yeah, generally with our product, we’ve seen people convert as long as outside of 30 days. I was looking at Google Analytics earlier, I think about 10% of our converters are actually 30 days or more. And because of the way that Google Analytics tracks things, we know that the number is actually bigger in reality. So for us, because it’s a high value product that requires a lot of research, and there’s actually a decision process, we even go out to 60 days, 90 days. But with a lower ticket item, we wouldn’t be showing ads for that long. The DPS, obviously, the highest converting one is going to be the seven days, the 14 days, and 30 days.

Steve: So, does that imply that you’re bidding differently on those? Is that the only difference?

Kevin: On the audiences are for though from the visit?

Steve: That’s correct yeah.

Kevin: Yeah, that’s right.

Steve: Okay. I think I’ve covered most of what I wanted to cover here. I did want you to give like a little testimonial about not putting all your eggs in Amazon’s basket, because I heard you on the EcomCrew podcast with Mike, and you ran into some major issues with one of your listings on Amazon. If you wouldn’t mind just kind of retelling that tail for the audience here just to kind of convince them that they really need to kind of diversify and own their own site.

Kevin: Yeah, absolutely. So, as I mentioned earlier, we started off on Amazon and there were a few competitors on there but really they weren’t doing too much. And as we started to gain some traction and climbed out in the rankings, we noticed that — we started getting hit by a lot of one star reviews, and these were just typical one star reviews. They were reviews with photos, with illustrations, I think one of the reviews was like a huge essay with five paragraphs going into the details of why our product sucks, and that was going on for a few months. And it was crazy because we were just like, oh my god, at this rate, if we keep getting hit with one star every week, or every few days, we’re going to be at three stars or two and a half stars pretty soon.

So, we actually took some measures to reach out to Amazon. We did a few things, so we reached out to Amazon. So, what you can do is you can reach out to Jeff Bezos, Jeff@amazon.com to see if the executive team can do something for you. We also did seller support, we did our performance manager, we did everything that we could. In addition to that, because we read about how Amazon actually will take you more seriously if you get a lawyer, we lawyered up. And we had our lawyer to write a letter, also send it into Amazon. But after all this effort over the course of a few weeks, all they did was remove one review. And that was it, when all these reviews were clearly fake reviews from the competitor.

In fact, one of the reviews was left immediately after purchase before the product even got to the customer. And I pointed that out to Amazon and they didn’t do anything about it. So it was just ridiculous, man. So, the lesson there was that Amazon does not give a crap about you. And you need to kind of defend your own listing and make sure you take the right measures to diversify an off Amazon business in case something happens to your business on Amazon.

Steve: Did your efforts prevent any further one star reviews from happening or did you just have enough reviews to counteract it?

Kevin: Yeah, I mean, it was twofold. One was to continue to get good reviews. The other one was continue to follow up with seller support. I think the truth is, they may or may not have done something, but they just don’t let you know. They just tell you, we received a message and we’ll look into this. And of course, you never hear back. What I’m hoping might have happened was that they might have reached out to somebody that they suspected of doing this and warned them or something. But I don’t think so. So at the end of day, it’s really for us and our efforts just kind of got flushed down the toilet.

Steve: Ah, man, that sucks. Well, Kevin, hey, I didn’t realize we’ve been chatting for like over 50 minutes. And I want to be respectful of your time. Where can people find more about your product? I’m sure some of my listeners have hair loss problem. Where can they find you? Where can they find your product and that sort of thing?

Kevin: Yeah, you can learn more about our product at iRestorelaser.com. And over there, I would definitely recommend any of you guys to sign up for our email list and see what we’re doing there in Klaviyo. And also I can guarantee that we’ll follow you around the internet with our Facebook ads.

Steve: Yes.

Kevin: And you’ll get a chance to watch all the videos that we’ve been talking about, maybe opt into our contest or something. And who knows you might win something. And if any of you listeners out there do have a thinning hair problem, I’d love to give you guys an offer. So, if you guys go to our website and put the device in your cart, and put in the code Steve, S-T-E-V-E, we’ll give you $150 off our kit and that offer will last until the end of April.

Steve: Well that sounds great. Actually you should probably make it last longer than April because this episode is probably not even going to go out until like July or August.

Kevin: Okay let me do the last part again.

Steve: Okay.

Kevin: We’re so sorry.

Steve: No wherever.

Kevin: So we’ll learn more. Okay yeah, sure you guys can learn more about us, and our business at IRestorelaser.com, and from there I would encourage everybody to sign up for our email list. You can see what we’re doing on Klaviyo, we’ll be sure to bombard you with emails every single day. And in addition to that we’ll pixel you on Facebook so you get to see a lot of our Facebook ads that we talked about today and maybe opt in to our contest to win something.

In addition to that, I’d love to offer your audience Steve a offer to our device. If you go to our website iRestorelaser.com and put in the code Steve, S-T-E-V-E, We’ll give you $150 off our device or a kit, and you’re going to try our products as well and see our creatives. Our shampoo is really amazing. So I’ll just use it myself.

Steve: And I’ve seen Kevin in real life, and he has a nice rich head of hair on him.

Kevin: Yeah it’s all…

Steve: Even though you know it.

Kevin: Yeah, it’s all the device.

Steve: Yeah. All right Kevin. Thanks a lot for coming on the show man. Really appreciate it.

Kevin: Yeah, thanks so much Steve, take care.

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222: How To Sell 25,000 Online Courses Without An Audience With Joe Nicoletti

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222:  How To Sell 25,000 Online Courses Without Your Own Audience With Joe Nicoletti

Today I have my friend Joe Nicoletti with me on the show and Joe is probably one of the most successful online course creators that I know.

He’s sold over 25,000 courses which is a ridiculous amount and he’s got this great down to earth and step by step teaching style that everyone loves.

In this episode, you’ll learn how he started from nothing and built a 7 figure business with no audience of his own.

What You’ll Learn

  • Joe’s motivations for starting his first hit product
  • How that first product evolved into a full time business
  • How to get started with your first product
  • How to get people to sign up for your course if you don’t have a big list
  • A step by step launch strategy for your digital product

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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Pickfu.com –  Pickfu is a service that I use to get instant feedback on my Amazon listings.  By running a quick poll on your images, titles and bullet points,  you can quickly optimize your Amazon listings for maximum conversions.  Click here and get 50% OFF towards your first poll.

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

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Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. Now today, I’ve got Joe Nicoletti on the show. And Joe is probably one of the most successful course creators that I know. And he sells his online courses without his own audience, crazy, right?

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? Well, Privy is an email list growth platform and they manage all of my email capture forms. And I use Privy hand in hand with my email marketing provider. Now 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 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. Always blessed to have Klaviyo as a sponsor because they are the email marketing provider that I personally use for my e-commerce store, and I depend on them for over 30% of my revenues. Now, if you want to achieve similar results as I have in email marketing, I encourage all of you to attend Klaviyo’s upcoming conference on September 13 to the 14th in Boston Massachusetts.

This event is the largest in-person gathering ever for the Klaviyo community. With two days and over 30 practical and substitute sessions, it is a no fluff, no BS e-commerce marketing conference. So, get your ticket at K-L-A-V-I-Y-O.com/Boston. Once again that’s K-L-A-V-I-Y-O.com/Boston, 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 have my buddy Joe Nicoletti with me on the show. And Joe is actually someone who I met at FinCon on multiple occasions. I think our wives actually went shopping together causing all sorts of monetary damage and they had a great time. And Joe, he’s actually one of the most successful online course creators that I know. I think he’s sold over 25,000 courses, which is a ridiculous amount. And he’s got this great down to earth and step by step teaching style that everyone loves. And he’s also got a great story to tell. And I’m just going to let Joe talk about it. Welcome to show Joe, how you doing today man?

Joe: Hey man, doing great. Thanks for inviting me on. I’m super excited to talk about the story and everything else that we’ll dive into.

Steve: Yeah, I’m so glad to have tracked you down. I mean, it’s been like six months since the first request till now. So I want to take advantage of these moments.

Joe: Let’s do it.

Steve: So Joe, you got a really cool background story that I really want you to share with my audience. What were some of your motivations for starting out with your first hit product? And how did that evolve into like a full time business?

Joe: Oh my gosh, yeah. So I was just your typical, I like to say, average Joe from St. Louis, Missouri. And that’s kind of what I always tell people like hey, if this average Joe from Missouri can do this thing, then anybody can. I know this is kind of cliché to say, but I’ve lived it, I really believe that now. I was just your typical Joe working in corporate job for my gosh, I was in the same job for like 10 years or so. I stayed at my jobs a long time because I just believed the whole, do a good job, do your work, you’ll get promoted, climb the ladder, and it just wasn’t happening for me. I was showing up early and staying late. I was doing everything I was supposed to do in these just small little 3% raises per year.

And I’ve always been ambitious. I always had the entrepreneurial bug, tried a lot of things, failed at a lot of things. And I was kind of at the point where I was giving up, to be honest. I was like I guess the entrepreneur thing is just a dream. It’s just a myth or some people get lucky. And so I was just doing the corporate thing. But life happened. And my wife got pregnant with our second child at this time, and we just like needed more space. We were living in a small condo. And I was like, all right, I guess I’m going to have to start making some extra money, right? So let’s get a second job I thought.

So like, what can I do on nights and weekends? I didn’t really want to work in the restaurant business but I was like, I can deliver pizzas or something. So, I was literally trying to get pizza delivery jobs. I remember I applied to a couple near where I worked. I thought I could shoot over there after work, I don’t know make a couple of hundred extra bucks a month doing that. And the funny thing was, and this was like, this was the start of my journey online. Funny enough, I kept getting rejected from these pizza places. Like here I was, I was a manager in my day job. But yet, because I didn’t have previous pizza delivery driver experience, I wasn’t getting hired. And I was like, this is ridiculous.

So, kind of bruised my ego a little bit like man, I’m just like, I’m not advancing in the corporate world like I thought, I can’t even get a stupid pizza job. Like, what am I going to do? I was like this is just not where I saw myself. I was young and I’m like, I’m going to be a millionaire by the time I’m 25. I remember thinking that as a teenager. And then you’re like, okay, life’s a lot harder than that. So, here I am with a growing family, we’re barely making ends meet, we forget about vacations or any kind of thing like that. We’re just trying to pay the bills, and I can’t even get a side job.

So at this point, I’m like, what else can I do? Like, honestly, I’m just thinking about this driving home in rush hour traffic one day, and I’m like, okay, let’s do what they all say. Like, take a look at your skills, what can you do? People always told me, I’m resourceful. And I just kind of hated that. I’m like, that’s stupid. What can I do with that? Like if I’m the guy who’s somebody says, how do I get to there and I’m doing directions, I’ll draw them like a color coded map and like overboard, right? Then I realized maybe I could teach something, I have no idea and basically, stumbled online through different sites that I would search literally.

I searched like how to make money online, right? I did that thing. And I just thought this stupid, I don’t want to sell weird things on eBay, or — and then I ran across people, actually teaching people, helping people and making a really good living. I ran across folks like Pat Flynn, and Michael Hyatt, and internet business mastery, and all these kind of things. And I just got addicted and just devoured everything I possibly could. So I thought I don’t know what I’m doing, but I’m going to start. That was like — that’s why I always tell people now like start before you’re ready, start even though you’re scared, start even though you have no idea what you’re doing, because that’s where like your ideas will come from. So I started a productivity blog way back in the day.

Steve: Was that efficient life skills?

Joe: Yeah, it was. And that’s where I just like experimented with random things, just completely random. Like my daughter learning how to tie your shoes was like one of the hardest things I found like teach a kid. We like totally take it for granted. And we found this cool, quick way and she literally picked it up in like five minutes. I was like, all right, let’s make a blog post about it. And I think to this day, it’s still gets just an insane amount of traffic, because obviously, a lot of other parents had this particular pain too. And that’s where it kind of took a direction. I was like, hmm, okay, people really like their problem solved. What else can I do?

And so I just had this kind of radar of posting things, blog posts, just like get in the game, but also looking for like, I don’t know, what problems can I solve? I was jealous of people that just knew from day one what they wanted to be or what they wanted to do, that wasn’t me. But I found this funny software called Scrivener. And for those of you who don’t know, it’s a writing software, kind of like Microsoft Word, but souped up on steroids where you can do all kinds of things with it. It’s kind of meant for like long form writing like novelists, things like that.

I was using it to organize all these random blog posts. I had like three different blogs by that time just trying everything. So I was using it to organize stuff. And I loved it. And I kept seeing people talk about it. And it’s kind of like that familiarity thing where like the second you buy a car, you see that brand everywhere now. So it was like articles on Scrivener were popping up. And this one article popped up from Michael Hyatt, who I was following and it said, why he’s using Scrivener for all of his writing. And I was like, oh cool. Well, let me see what he says about it. I’m using it too. And started reading through the comments.

And then people just kept talking in these comments. Like, I want to learn Scrivener too, but it’s too hard. I tried it and I gave up, the learning curves too much. If only there was a course on it. And then since I was this hyper aware of looking for pains, I was like, hmm, could I create a course on Scrivener, like people seem to be wanting that. Then of course the self doubt and all that stuff kicked him. I know, who are you to create a course on that? Why would anybody listen to you?

Steve: Were you an expert on Scrivener at the time though? You were not, right?

Joe: I was just a casual user of it, like I wasn’t, I would never consider myself an expert. I definitely hadn’t even written a book with it. And here I was like, how could I teach people to use Scrivener to write a book? And it was just one of those things where I also challenge people now all the time to just instead of saying, why you, what if you just said, why not me? And then it’s like well, I don’t know, why not? And if I wouldn’t have asked that question, and actually just followed through with the experiment of trying it, it scares me to think how different my life would be. It was just that little key that unlocked the potential for everything.

I remember thinking, well, worst case scenario, it’ll be a total flop. But at least I’ll learn the process of like setting up a curriculum and making an online course. And this was like four or five years ago before we had all these cool course platforms. So, I had to literally like learn how to make the course. And so I started making it. And I kind of I was naive, ignorant, which I think are good things when you’re starting out, because I didn’t know how to make it perfect. I just knew let’s make it to help somebody. So, I was literally reaching out to people one on one on Twitter and things like that, sharing with them what I was making, and would they be interested in something like this? Would it be helpful? And what else would they want me to include in it?

Steve: Did you have a large Twitter audience when you were doing this?

Joe: Oh, my gosh, yeah, super large. I mean, it was like seven people. I just started like, what I say, I started from scratch. It was like, I didn’t even — I had no clue how to acquire a following at all. So I was literally just jumping in. I remember having a conversation with somebody really early on, and asking them like what is a hashtag exactly? And like why do these even matter? Like, what are you supposed to do with them? And he’s like, oh, it’s a way for people to talk about things, and you can search hashtags. And I was like, okay, and then I remembered that conversation, let’s see if there’s a Scrivener hashtag. Sure enough, there’s people talking about Scrivener on Twitter. And so I was like, well, I’ll just jump in there.

And that’s just literally how it started. I was getting feedback, people were responding. And I was just starting to build these relationships, learning about what writers wanted, and so forth. And any chance I could get to jump on Skype or connect with somebody and talk with them, I would take it. So that’s literally the humble beginnings of how I started. And I was just sharing what I was making while I was doing it. And it was working.

Steve: So Joe, let’s say someone in my audience wanted to create their own digital course, I would imagine the steps that you would follow today are different than when you got started, right? So, if you were to start today, what would be like your first step? And what’s kind of like a logical progression?

Joe: Yeah, so the things that — like I did a lot of things right but I also did a lot of things wrong and would have, I could have done everything a lot faster. And so today, I actually teach a course on how to basically do what I’ve done called easy course creation.

Steve: Perfect.

Joe: And a lot of the mistakes that I made early on were making something that I thought people wanted or should care about. I think a lot of us have that idea. It’s like I give the funny example of sometimes there’s people that think you shouldn’t have six pack abs, you should have a three pack abs. I’m like nobody wants that, though. So stop trying to convince them that they need three pack abs, they want six packs. So make that. And then that’s just kind of where it starts is to really find out what people want. They’re already having a conversation in their head about what their pains are, what their struggles are, and you need to just jump in there and find that.

So today, I teach and it’s just you’re never wasting time when you’re researching the audience, and you’re collecting their actual language, and just hunting and searching. And so many people want to just dive in and start making something. But it really is that groundwork of making sure you could write a page out of their diary before you ever start making that thing.

Steve: Where are some great places to do this research if you have no audience whatsoever?

Joe: Yeah. Oh, my gosh, that’s what’s amazing about the opportunities today is we have all these tools like number one, Google is amazing, obviously. So you can jump in and just type your topic and forum and you can find forums anywhere. Obviously, Twitter is a place where I started. You really got to find out like where your audience who you want to serve, where they hang out. So writers happened to be on Twitter. So that’s the only reason I jumped over there. Some people are on Facebook, some are on Reddit. So, you just got to do a little digging, find out where they hang out.

There’s forums, Facebook groups, Twitter. There’s also tools like BuzzSumo.com where you can type in a topic and it’ll show you all of the popular blog posts or anything written about that topic and which articles got shared the most and things like that. And that’s exactly how I started developing relationships with like influential writers that were bloggers who had the audience that I knew could benefit from my Scrivener course in the beginning. So, I would literally just type in Scrivener into BuzzSumo, see if any popular bloggers had written about it. I would jump over, read the article, see if they had a lot of comments and engagement, whatever, like, okay, this particular person does.

Are they active on Twitter, by chance, I would hop over there to see their profile. Oh, cool. They’re actually responding, posting stuff. And I would start mentioning their blog and sharing their articles and just kind of building that relationship that would eventually form to some of my biggest affiliate partners today, which also in turn, would grow my list with webinars. And it’s just that kind of groundwork in the beginning that…

Steve: How do you how do you approach like a big blogger? Like, for example, I’m not saying I’m a big blogger, but I rarely check my Twitter feed. Like, occasionally I’ll check it. But I rarely converse on there. I don’t know, I guess it takes a little bit of skill involved to get someone’s attention. I’m just curious how you did that early on. Like, I know Michael Hyatt was like one of your earliest and biggest affiliates, right? How did you get his attention?

Joe: Well, so the thing is, you don’t start with like the A players like you. You don’t start trying to reach those. And if you do, you could start early. But that’s a long game, right, unless you get introductions. And so what I found was like, okay, there was no way I was just going to get introduced right to Michael Hyatt, or because I didn’t — I got to find out who knows him first. So, you just think a little bit strategically about, all right, well, who might be their inner circle and who might be their inner circle’s inner circle and just kind of go out a little bit. And so I would first start with the smaller blogs and maybe do a couple reach out to them, get some results first.

And so I did some really small webinars in the beginning, got some sales and then would approach somebody else and say, this is the results that we got, this is the testimonials that we got, and it would just kind of build from there. And I always, always asked anybody I met; do you know anybody else that would benefit from this? And would you be willing to give me an introduction? And somebody always knew somebody and nobody ever told me no, and I thought, what’s the worst that could happen? They say, no, or, yeah, I know somebody Joe but I’m not going to introduce you, like, okay, I can handle that. Like, I’ll just go to the next one, right?

And for an introvert that was kind of a big deal but I just got over that. And it’s funny if I put like this timeline out, it’s all because of reaching out and meeting somebody and asking for an introduction. And then one day that led to somebody introducing me to Andy Traub, I believe we both know Andy. And Andy is like the super connector, right? He knows everybody. So you can meet one super connector.

And then Andy introduced me to Jeff Goins who has a huge writer following, and we connected and of course, once Jeff and I did a successful promotion, and then his audience loved it. Well, now, that’s a really big testimonial that I can use to approach whoever Jeff knows. And then because of Jeff, I met Joanna Penn who has another huge audience. And so really, it’s just spending the time building relationships, adding value. And so that’s the thing.

Like with you, Steve, if I didn’t know you, and I was trying to get ahold of you. If I was trying to reach out on Twitter and you weren’t responsive there, then I try Facebook, or I’d try — so like, try to find out where you were. If I was having no luck there, I’d try to find out who knows you and try to build relationship with them and then maybe get a direct introduction. So like same thing while I was on Smart Passive Income podcast, Pat Flynn, who was like my first hero, right, who I learned online business from the beginning. And I met Greg Hickman, who happened to know Pat Flynn. And I was like, hey, it’s been my dream to be on Smart Passive Income, would you be able to introduce me. And sure enough, that’s how it works.

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How important was it to go to conferences? Like I know we met at FinCon, but how big was that in terms of your networking?

Joe: That was pretty big. For me, what the conference really did for me, and I remember I came through St. Louis. I was just starting my Scrivener idea at that point. And I remember, it was a big deal talking to my wife about purchasing a ticket, because this was — I was trying to do the pizza thing, we had no extra money. I was like, I want to go to this conference just coming through St. Louis. And it was FinCon back then, it was like what, four or five years ago came through St. Louis.

Steve: St. Louis yeah, that’s where we met, I’m pretty sure.

Joe: Yeah, and I went there, I had nothing going. I was like a complete nobody. But what I remember taking away from that was just meeting as many people as I could, and realizing, hey, these are just people too just like me. I thought they were like special, like there had to be something different and like they just took action on their ideas. And of course, I got to share what I was thinking about with several people and I got some great takeaways and ideas. But yeah, some of those relationships that I met, I met you there, I met gosh, some of the people that ended up being in my mastermind later, many years later, just all from that initial conference. So conferences is like a, I don’t know, when you say it’s like a shortcut almost.

Steve: Yeah, I mean for me, I’m kind of like an introvert in certain ways, and I guess offline so to speak. At a conference, I’m much more social. But I’m very hesitant to reach out to someone randomly like on Twitter, or via Facebook or email just because I don’t get any feedback or facial.

Joe: Yeah.

Steve: You know what I’m talking about?

Joe: Absolutely yeah.

Steve: Did you do most of your damage online or at conferences in terms of…

Joe: I couldn’t really afford to go to conferences. So I was in a place where I really didn’t have a choice. Yeah, I remember like that’s really not my style, either. I’m glad I stepped out of my box, though, because some of my best friends are people I met online, it’s crazy. I never would have thought that, but I remember thinking, I kept hearing people all the time, they would say that like you can’t do it alone. You need to build relationships and I was the introvert, I was like, no, no, no, I don’t want to do that. Like, I’m going to try to build it alone. I don’t think I need people for what I’m doing.

And just my introvertedness, I didn’t want to reach out; I didn’t want to get uncomfortable. And finally, I was like, all right, I’m not making any traction. Let me try this. And so I thought, okay, I’m going to reach out, great, what do I do? How do people do this? So, I remember thinking — I was in the efficient life skills. There was this other blog that was kind of like mine? I was like, what do people do? Do they go on Facebook or something and message them, and say, I like your blog. So that’s literally what I did. Like, I messaged this one guy, and I’m like, hey, I like your article. It looks like we’re writing about similar things.

And he was like, oh yeah, what’s your site? And he’s like, hey, we should we should hop on Skype. And it was like, oh, okay, this must be what people do. Like, let’s do that. Let’s hop on Skype. And I was like, I never used Skype. I remember setting it up with my mom to try to like test it with her so I didn’t look like a fool. I was like, okay, so this is a Skype call. And so we did that. I jumped on and we just chatted, and he was like, oh, do you know so and so? He’s like, really great with social media. I was like, no, I don’t. He’s like, let me introduce you. Next thing I knew, the next day I was hopping on a Skype call with him. And from there he was same thing.

And so like all because I had no idea and just reached out to somebody randomly basically, let’s just put things in motion. And then one guy would give me a little confidence, like you’re doing that, like you’re so far ahead of where I started. I was like, oh really? Cool. Okay, so maybe I can do this. And so a lot of it’s about your own internal growth, stepping out of your comfort zone, and just not being afraid to try things.

Steve: Did you lay this groundwork before you launched your class, or did you already have the class together and then start doing your outreach?

Joe: So one of the things I’m glad that I did, which I actually struggle with more now, because I sometimes I know too much now I think, that’s why I talk about sometimes just who is it Steve Jobs who says like, stay what is I forget, stay stupid, stay something. I think what he meant by that was just like…

Steve: Stay foolish I think is what…

Joe: A fool yeah. Like, some of the things I’m glad I was foolish about was, it was just natural for me to be like, well, I’m not a total expert in this. So I need to find out what the people want. And that was my goal was always to be just about the people kind of on accident, because it wasn’t like about me. And so now I have a lot of things I want to teach. And so my tendency is to be like, well, I’m going to make this because I think they need that. But instead, I was just reaching out literally, to people, and then building what they said they needed. They’re like; do you have a section on how to make an eBook in your course that you’re making? And I was like, no, but I will.

And then I was going to study how to do eBooks with Scrivener. And then I would make a tutorial and I’d literally come back and like share like here’s a preview of it. What do you think? And what I found was I didn’t need to be an expert for people to care about what I was making. I just needed to know a little bit more than they did. That’s all they cared about. And nobody ever asked me, well, what are your credentials? Why should I listen to you?

I was so afraid they would. It was just all about, oh, that’s awesome. You just showed me how to do something I wanted to learn. That was it, they didn’t care who I was. So, it’s kind of freeing to think it’s kind of freeing just to say, like, people don’t really care about you that much.

Steve: Yeah, they just want to learn. It doesn’t matter about your credentials unless it’s something I guess that requires credentials, I guess. But very few things do these days.

Joe: Yeah, not that many things where people just want to — they go online to learn something, they need a quick result, they don’t want to spend hours researching it. Just like think about what we say to ourselves like when we’re looking at a tutorial, even today, when I’m like how do I do this? Well, let me search YouTube. And then if a guy’s rambling on in the beginning, telling me all about him and his credentials, I’m thinking in my head, like dude, just get to the point. I need to know what I need to know so I can get back to do my thing. And that’s kind of how people are. So they just, they go online, they’re looking for information. It’s a whole new ballgame today with all these opportunities, and it’s pretty exciting.

Steve: So let’s say you have your course down. How do you launch it, like you have no audience? So when you first completed this Scrivener course, how did you actually get paying customers?

Joe: Yeah, I remember being all excited about having my course, it was probably about 75% done. And I was like, okay, it’s good enough to start getting it out there. And I remember I had one of those moments just like I did about how to connect with folks. Now it was like, okay, how do I tell people about this. I was like, oh, this is that marketing thing, it is kind of important, right? So it’s like making your thing is part one, now you got to get it out to the people. And so I would literally spend like an hour every day on Twitter, just doing the one to one thing, and I was getting sales that way, which I was super excited about.

And I think back then, I was afraid to charge money for my course. And so I would make 100% off coupon code and handed out for free to people. But it was great feedback in the beginning. And then people were like, oh my gosh, I’d pay this or that for that. And this is great. And I can’t believe you’re only charging 27 bucks.

Steve: Interesting, so you gave it away to people on Twitter. You just said hey, here’s a download link.

Joe: Yeah, I used Gumroad back then because it was just super easy. And then I would just create 100% coupon code. And because I was afraid to like, just reach out and say, here’s my thing but it costs money, right? And so I would say I’m building this, I’m looking for some feedback. Here is it, would you be interested, I’ll give you a free coupon code. And they were like, of course, like, well yeah. And so I’m glad I did that because I did get some really good feedback. And it built my confidence because people were like, this is great.

And so I would, then I would open up a conversation with them like, oh well, do you think it’s — is it worth $27? And they are like, are you kidding me? I’d pay 97 for this. And I’m like, oh my gosh, are you serious $97? I just couldn’t fathom just making money from something that I had made. It was amazing. And so people kept encouraging me to make it better, put more out there. And slowly I did. I said, well, let’s try $47. And people were buying it saying, this is great, I recommend this to my friends.

Steve: This is through Twitter still.

Joe: Yeah, this is still very, very network, one to one, not scalable. And then I started thinking, how do I scale this, right? How do I get a bigger audience? I had no money for ads, so I couldn’t run Facebook ads. And not to mention, I had no clue how to do that. And so that’s when I started researching and just goggling right how to get your things out there and different strategies. And I remember webinars was one of those. I was terrified of ever doing a webinar. But one of the folks I met Andy, happened to know Jeff Goins like I said, and he set it up with Jeff to like, hey, could you do a private webinar for Jeff’s tribe writers group? He’s like it’ll be a smaller group. He’s like would you be able to do that? I was like, well, yeah.

He said just come on and teach what you know about Scrivener, and then we’ll tell them about your course at the end. I was like, yeah I could do that. Right? And he’s like, okay, can you do it in a couple of hours. And I was like, oh my gosh, I was still working my day job. I like flew home on my lunch break to do this webinar, super terrified, I was going to be live. And I did the webinar and people loved it. We sold like, I forget how many, I think then it was like we made $1,000 in sales. And I was like, I made that on my lunch break. Like, that’s crazy. And I was just like, that was the most money I’ve ever seen in a short period of time like that. And I was hooked on webinars after that. I was like, this is great, like to get…

Steve: So at this point you didn’t have an audience at all and so you kind of leveraged Jeff’s audience?

Joe: Exactly yeah. And not to mention that I set up the registration page, and I remember reading enough about people saying, build an email list, because then you can serve people better and you can tell them about updates. So I was like, all right, I’m going to make a registration page, Jeff sends an email to go register for the webinar, which I’m going to teach, now they’re signed up for my email list too. And so just like that, I had an email list of 1000 people who I knew were interested in Scrivener. And so I was like, well, let’s do more of these, right.

And so that’s when my Twitter strategy kind of shifted to let me find more people who have an audience already, instead of me, taking two to three years blogging and building that audience. I wasn’t very patient. So I was like, if I could leverage the time that somebody else spent building their audience and they can vouch for me, and just send them straight to me, in the meantime, I will teach them something they want to know. And so that’s what I did. I started asking for introductions. And I remember reaching out to some folks several times; they turned me down at first. Then I did this webinar with Jeff, we got good results, I’d go back to them, share the results. And they were like, oh well, yeah, maybe we could do something.

Steve: Did you know Jeff before you did the webinar, or was it a cold introduction?

Joe: I didn’t, it was just a cold introduction. I had been trying to get in touch with him for a while but just never — it is tough when you’re dealing with somebody who’s very busy, they’re very successful. They get asked for things all the time, right? And so you don’t want to — I made the mistake of just leading with an ask many times. Hey, would you be interested in a webinar? Yeah, yeah, yeah, they never even see it. And so you just have to be a little strategic, try to get them results.

Steve: That’s interesting that Jeff allowed you to give a webinar to his audience and he’d never seen you present before?

Joe: Never seen it, but the only reason he did was that he trusted Andy.

Steve: Got it.

Joe: And I got to connect with Andy. And so that’s why if you can meet somebody within their sphere of influence, like that’s the open door, and that’ll get you past any gatekeeper or anything like that. And so that was my strategy of like, just connecting with folks. And you never know who knows who. And so, just taking the time to do that, not being afraid to ask for introductions, because that’s the ultimate shortcut. You’re not having to deal with emails whining in somebody’s inbox that they never see because a personal introduction, you just go boom, straight to them.

Steve: And then that — and Jeff, he benefit from this because he took half of the proceeds?

Joe: Yeah, that was always my thing was like, hey, you spent all this time creating and building your audience, I spent all this time creating this product, let’s just meet in the middle 50/50, we’ll split any sales that come from it. And in the meantime, I will teach your audience and give them something that will be worth their time. And you’ll look great because you brought me on to teach them. So, regardless whether they buy anything or not, they’ll love you for it, it’ll be the best teaching I can possibly deliver for that hour. And it was and it was great.

And then people would buy it who were interested, and we’d split the commission 50/50, and it was a win-win for them. And I was like, I didn’t really know that true win-wins existed like that where we talked to the audience, they got something for free. Those who wanted more, could get more, they were happy, the affiliate was happy, because he got a good, great commission. I was happy, obviously, because we made sales. And I was like, let’s just keep doing this. And I didn’t have to spend a cent on advertising, right? It was just — and the webinar worked really good too, especially because I wasn’t a credible name yet.

So, I didn’t have this huge following if somebody was going to Google me, but all I needed was a vote of approval from them. And so that credibility transferred, because they trusted me enough to bring me in front of their audience. And that’s literally to this day, I don’t have a blog. I don’t, I just didn’t go that route. But I grew my email list super fast. We have over 100,000 on our email list now. And that’s just from webinars.

Steve: That’s crazy.

Joe: And people can’t believe, they’re like you didn’t blog, you don’t have all these sign up forms on your website. And like, no, there’s no website, there’s no signup form.

Steve: So today you don’t have a — I mean, you only have a website that serves as like a sales page for your products, you don’t have — you’re not putting out content on a regular basis?

Joe: So yeah, I didn’t — my business was built zero from content marketing, and basically all from affiliate marketing basically.

Steve: Wow.

Joe: Yeah, it’s kind of crazy. And some people are encouraged when they hear that, like, oh, there is another way. You mean, I don’t have to just like blog my face off for two to three years and build the audience and then create a product? Like, no, you can create it backwards. Find the audience first, find the pain they have, create the product, and then build relationships with those who have that audience. And it feels like it’s taking longer in the beginning, like you’re not making any traction. But once you start to make that traction, the snowball effect, it just grows exponentially.

And so within a year, I went from zero to a thriving growing email list, which I learned later, will buy from you over and over again. And so there’s that, and then a thriving business to where I was like quadrupling my day job income, and here I was trying to get a couple of hundred extra bucks delivering pizzas. So it was just kind of a crazy transformation.

Steve: So, let’s talk about some tips because clearly, you’re really good at getting to know people and networking. So what are some of your tips for when you’re first starting out, and you’re trying to get that first webinar blogger or whoever?

Joe: So don’t be afraid to do things for free, like do small webinars, do a webinar yourself, do a webinar that has only 10 people on it. Just get results, start, and that’s great too, because these webinars, you’re able to interact with folks, and you’re able to ask questions and get feedback live. And that’s really just the most important thing you can do in the beginning.

Steve: I mean would you even suggest doing a webinar with an influencer where they get to keep all the proceeds and you get the email list? I mean, have you ever done that too?

Joe: Yeah, I haven’t done that myself. Everybody’s always been super generous and say, no, we’ll split it. But I’ve heard people do, that’s definitely a good incentive, or at least do like a 75/25 where you just stack it in their favor heavily. The one thing I did do well in the beginning was, I tried to put myself in their shoes and thought, okay, if I’m super busy, if I don’t really trust this guy, I don’t know how it’s going to work, the last thing I would want is for this to be like, feel like work for me, right? Like, I want to make this as easy as possible for them.

And so I would always approach it with a, hey, this is going to be a done for you service, like, I’ll handle all the technology, I’ll even give you the emails to send that you can just swipe copy. So you don’t have to think about that. I wanted them not to have to think. They just basically take a chance on me and get commission if it works. So, I set up all the registration pages, I went live, we used my technology. And I said, all you have to do is literally send a couple of emails and show up and I’ll make you look like the rock star because I’ll just give your audience so much and I’ll make it look like you organized the whole thing. But basically, I did.

And so that was always my goal from the beginning, is just make it as easy as possible on them to where they don’t have to have any bit of friction. And I would even tell them, hey, you don’t even have to show up. I would just go overboard. And they were like, wow, that is great. Like, you don’t know, a lot of them would tell me like you don’t know how nice it is to really not have to worry about this. Because that’s what they’ll see a lot of times is like, oh, this is going to take me a lot of coordination and thinking about, and I got to set up the page. And then I got to think about the emails to write.

And they don’t have to do that, especially these guys. They’re already making money; they don’t have to do it. And so some of them, they didn’t care about money at all, like they were already doing very well and their key to their — key to their heart so to speak, was their audience. And I would try to learn about them from their blogs. And you could tell some of them like, they really care about the audience. And so I wouldn’t lead with pitching them the money, like I will give you 75% blah, blah, blah. I lead with, I can see your audience really craves this information, and I believe we really can help them.

And then it would be kind of like, oh, and by the way, I always, do a 50/50 split, and yada, yada. That’s where they’d be like, oh, I get questions all the time about Scrivener, and I never really know how to answer it. So this would be great. And so you got to find what works.

Steve: I just wanted to take a moment to tell you about a brand new service that I personally just launched that will help you grow your email list for free. First off, my new business is called GoBrandWin.com. And it’s a service that helps e-commerce sellers build their email list through group giveaways. And here’s how it works. If you own your own e-commerce brand, and you have a following, what you do is you contribute a gift card toward your products valued at $200 or more. Now Go Brand Win will assemble gift cards from other participating brands with a similar customer demographic into one massive sweepstakes giveaway.

Now, all participating brands will then send our co branded giveaway email to their entire customer base driving them to a special landing page on GoBrandWin.com where we will acquire email addresses and Facebook pixel data. We will also send the giveaway entry forms to related influencers in our blogger database. And between my co founder and I, we have access to almost 1,000 bloggers in our database. Now, consumers who enter the giveaway will enter their email addresses, we will send them special offers from your company and select a grand prize winner. And after the sweepstakes are over, you will receive the full list of entrants and instantly grow your audience.

Bottom line, the concept is very simple. We all help each other promote each other’s businesses, get free promotion from bloggers, and share the spoils, which in this case, are the email addresses. If you are interested in growing your email list, then head on over to GoBrandWin.com, that’s G-O-B-R-A-N-D-W-I-N.com. It’s 100% free, so sign up now. Now back to the show.

Yeah, I’m just trying to think from my perspective, if someone came up to me and wanted to do a webinar, I would be less concerned about the money and more concerned about the information that was to be delivered. So I guess, if I saw this person in action, and they really delivered quality content, I’d be much more inclined to do it.

Joe: And you got to think like they’re taking a risk on you, right? Like, just like you would be taking a risk because now you’ve built this credibility with your audience. And you don’t want to ruin that. And so you got to think of it. And it’s different. Like when I was — because I was coming at it from a place where I was hustling, I was struggling, I needed money bad. Like, that was my motivation. But that doesn’t mean it’s theirs. And so you have to think about it. Put yourself in their shoes.

And that’s what I would do on Twitter just reaching out to folks too was like would I want to just be hounded with a questions and requests? Like, no, so for like months, like six months to a year, every time Michael Hyatt would post a blog and he posted on Twitter, I’d comment on it, I’d share it, I’d like it, and just jump in a conversation. Never once asked for anything until one day Michael, I guess probably noticed, I was always showing up, recognized my name. And he asked me a question on Twitter. I remember that day like it was yesterday.

He was like, is there a way to work with my editor who uses Microsoft Word with Scrivener? Because he went through my handle, saw that I was Scrivener coach on there and I posted Scrivener tips and things like that. I was like, oh my gosh, he’s asking me and I said, you know what, I don’t know the answer to that. But let me get back to you. I will find out. And I dropped everything. And like spent a week researching it, finding out what other authors were doing. And I came up with this method, this workflow, recorded them a super like good video. I thought this is my chance, right, because he asked me now.

And I just went over the top, made him a video, responded back on Twitter. I was like, hey, I think I found the perfect solution for you. And he was like, great, email it to me here. It’s like, boom, right? We have direct access to his email. He’s looking for it. Like, this is so much easier rather than me just knocking on his door constantly. And so that, like I said, that was six months to a year of patience and just reaching out and giving back and sharing and doing what I could.

Steve: I’m just trying to think of my own experience here. Like the people I noticed, especially on Twitter are the ones who constantly tried to share my content, or re-tweet it, and it’s a long term play, right? I might not notice it for like a full month. But if this continues for like six months or longer, I’ll know who that person is.

Joe: Yeah, because we get people all the time. And the same with me now, they will pop up a time or two and you’re like, that’s nice. But you notice the ones that have perseverance that stick around. I mean, that’s how — do you know Bryan Harris of Videofruit?

Steve: Yeah, he was on the podcast not too long ago.

Joe: Okay, cool. Yeah, that’s how I met Bryan. He’s one of my best friends today actually. It’s funny, because on Twitter, I remember anybody who would mention or have a question about my course, as it became more and more popular. Like, hey, I have a question about this. And Bryan would see that and he’d comment. He was like his course is legit. It’s one of the best courses I’ve ever taken. And I remember, I’m like, who is this guy? He is very nice. I did not ask him to just jump in here and say a nice thing about it.

Like, you notice people like that, who complement your work and stuff like, and so of course, I’m curious, right? You click through their profile. Like, who is this guy? Oh, my gosh. And I clicked through his blog. I’m like, he’s legit. Like, this is crazy. And then I message him, and let’s chat. It’s funny how things work, but it doesn’t take a lot. Especially if — something else I’ve learned is really powerful. Think about this. Like, if somebody were to message you, Steve and say, like, I’ve taken what you recommended I do in this article, or here or there and I did it. And I got these amazing results. Like, how…

Steve: Yeah, you bet, hell yeah, I’m going to contact them.

Joe: Yeah, you’re going to be like, let me hear more about that, right, because, it makes you look good. And it’s a credibility for you. And so you kind of think, how can I make them look good? How can I help them share, them whatever, increase their audience, help their audience, find the things they care about, and focus your time there.

Steve: I’ve actually used that exact technique, it works really well.

Joe: It does, it really does. And so you just have to be a little strategic about it, and have patience and find something you can help with. So, like in the beginning, I remember thinking, I really, I can’t introduce anybody to anybody, because I didn’t know anybody. I remember feeling bad about that, because people were like, oh, I can introduce you to so and so. And I’m like, I’m sorry, I can’t introduce you to anybody. So, I was like but you know what, I’m pretty good at graphic work.

And I was like, do you need anything help with a design, like eBooks are really big there. I was like I could design eBook cover for you, whatever. And like they were thrilled with that, like are you kidding me? I’ve been wanting that thing redesigned forever. Like sure, that’d be super helpful. And like, that was a big deal to them. And it was something I could give. So, always just find your skill set, whatever it is, and just don’t be afraid to offer that.

Steve: That’s really great advice Joe. Really quick, I just, I did want you to talk a little bit about some of the tools like what are you using for webinars? What are you using for courses? And what are you doing to just kind of monitor social interaction?

Joe: Yeah, so today, I’m really a huge fan of these course all in one platforms, like Thinkific.com and Teachable.com, they make things so much easier, like stuff that I think spent the better part of a year trying to build, it was like, done it all for you. So, I highly recommend starting on a platform like that. And what’s great is, yes they have a fee, but they handle all the technology and headache stuff for you. And it’s usually a free plan to start with. And so you can grow together, it’s just like a perfect solution really.

So a lot of times I tell folks, if they want to start like I did, like look for the pain, look for who you want to serve, and start reaching out, help, have the audience build it with you. And you can start with a free plan on Thinkific or Teachable and like kind of start fleshing it out a little bit in there. It’s fun to see a course kind of take shape. And so that that’s kind of what I’m using today. For course platform I use everything on WordPress and like would build it myself, but the more things would break and plug-ins weren’t communicating with each other, it was just like uh. So that’s what I’m using these days for that.

For webinars I use GoToWebinar just because it’s just like never breaks. We have a lot of people on our webinars now, but I’m also…

Steve: Thousands right from what I heard?

Joe: Yeah, and so I made the mistake early on of trying to go a cheap route with a service and people got kicked off and it crashed. And I was like uh. So that’s been the most reliable for me. But I know a lot of folks are having great results with things like Zoom and a lot of other ones. There’s just a lot of great ones out there now. And then…

Steve: Email marketing… sorry.

Joe: Yeah, I had email marketing.

Steve: What are you using for email?

Joe: We use Infusionsoft for email marketing now because we have like all of our courses, and we’re kind of complex. Starting out though, like if your business isn’t in certain like really complex or anything like that, I definitely wouldn’t use Infusionsoft. I would probably use ConvertKit, a huge fan of just their interface, the way they’ve laid it out. It’s just super clean and nice and again, a tool that didn’t exist when I started.

Steve: Yeah. Joe, I didn’t realize well, we already been talking for like 45 minutes, and you just have a new kid and I want to be respectful of your time. So Joe, where can people find more about you, get ahold of you, maybe check out the products that you have to offer?

Joe: Yeah, so the best place today still is right where I started on Twitter. So I’m @Scrivenercoach over on Twitter. And I am slowly starting to build out kind of a resource page over on JosephMichael.net. So my Scrivener kind of pen name is Joseph Michael online. So, you can check out that, it’s a work in progress but we’re going to be putting all the programs and courses that I’ve designed over there, and so you can check them out.

Steve: Yeah, and you’re launching a course on how to get a pizza delivery job right? Is that coming out soon?

Joe: Yes just avoid it entirely.

Steve: All right man, take care Joe, really happy to have you come on the show. Really appreciate it.

Joe: Thanks Steve. It’s been fun.

Steve: All right. Take care.

Joe: All right.

Steve: Hope you enjoyed that episode. Joe is probably one of the biggest hustlers that I know, and he basically started with nothing and now he runs a seven figure online business selling courses. For more information about this episode, go to mywifequitherjob.com/episode222.

And once again I want to thank Klaviyo for sponsoring this episode. Next month Klaviyo is holding a two day conference for 400 e-commerce marketers and store owners with an awesome lineup of speakers. They’ve got experts coming in from Shopify plus BigCommerce, Google, Octane AI, Recharge, Smile.IO, Swell, and other top e-commerce agencies plus panels with successful Klaviyo customers and a keynote address by Ezra Firestone. Find out more about this conference at Klaviyo.com/Boston, that’s K-L-A-V-I-Y-O.com/Boston.

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

Now, I talk about how I use these tools on my blog, and if you’re interested in starting your own 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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221: Advanced Techniques With Amazon Sponsored Product Ads With Edward Ruffin

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221: Advanced Techniques With Amazon Sponsored Product Ads With Edward Ruffin

Today I’m thrilled to have Edward Ruffin on the show. Edward is in charge of sponsored products ads over at Sellers Labs and he was one of the speakers at this past years Sellers Summit.

During the event, I really got to know Edward well and I discovered that the man is truly a sponsored products ads fanatic and he lives and breathes it 24/7.

So today, I brought Edward on the show to talk about the latest and greatest with Amazon ads. Enjoy the show!

What You’ll Learn

  • How to launch a product today with Sponsored Product Ads
  • Advanced ad features that few people are using
  • How to run headline ads
  • Common mistakes that new advertisers make

Other Resources And Books

Sponsors

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

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

Pickfu.com – Pickfu is a service that I use to get instant feedback on my Amazon listings. By running a quick poll on your images, titles and bullet points, you can quickly optimize your Amazon listings for maximum conversions. Click here and get 50% OFF towards your first poll.

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. And today I have Ed Ruffin from Seller Labs with me on the show. And Ed is one of my go to guys when it comes to Amazon sponsored product ads, now why? It’s because he lives and breathes ads for hundreds of clients every single day, and today we’re going to get a lesson from the man himself.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. And I like Klaviyo because they are the email marketing platform that I personally use for my e-commerce store, and I depend on them for over 30% of my revenues. Now if you want to achieve similar results as I have in email marketing, I encourage all of you to attend Klaviyo’s upcoming conference on September 13 to the 14th in Boston Massachusetts. This event is the largest in-person gathering ever for the Klaviyo community. With two days and over 30 practical sessions, it is a no fluff, no BS e-commerce marketing conference. Get your ticket at K-L-A-V-I-Y-O.com/Boston. Once again that’s K-L-A-V-I-Y-O.com/Boston.

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 a 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. Now there are a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in e-commerce.

Right now I’m using Privy to display a cool wheel of fortune pop-up. Basically a user gives their email for a chance to win valuable prices in our store and customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%. So, bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve. Now onto the show.

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

Steve: Welcome to the My Wife Quit her Job Podcast. Today I’m thrilled to have Edward Ruffin on the show. Now Edward is in charge of sponsored product ads over at Seller Labs, and he was actually one of the speakers at this past year’s Sellers Summit. And one of the things that I do for speakers on the last day of the event is I hold a special mastermind session for the speakers.

And during that mastermind, I really got to know Ed really well. And I discovered that the man is truly a sponsored product ads fanatic, and he actually lives and breathes it 24/7 and I’m not even exaggerating here. Anyway Today I brought Edward on the show to talk about the latest and the greatest with Amazon and ads. And with that, welcome to show Ed, how you doing today man?

Ed: Doing great. I really want to thank you for having me on Steve, and I can definitely speak back to that, I do live and breathe sponsored product ads. And I am a huge nerd when it comes to advertising on Amazon. And a lot of people can try to knock me for that, but I’ll take it with pride. I definitely do wake up and think about ads. And I do it all day every day, and I really enjoyed talking about it at your conference as well. And I just want to — I want to say I’m glad to be here and I’m excited to talk about some things today.

Steve: And you also stay up to the wee hours of the night thinking about sponsored product ads too from what I remember?

Ed: I definitely do, I stay up quite late. I’m always like reaching out to clients and responding to the client emails. And it can be pretty intimidating sometimes to some of my employees, but I tell them like, hey, you don’t have to be like me, I just promise, like I’m just get really excited about these things. And I want to get people set up correctly and I want them to succeed in the sponsored product ads. I think it actually; it really makes other people want to do the same thing like within office hours if they need to, like do not really extend yourself too much, by all means.

Steve: So, I’ve had people already on the show talk about sponsored product ads. So, what I was hoping to do today is let’s like skip, just like skip the basic stuff and go straight for the intermediate and advanced tactics. And I know that when you were at the event, so Seller Labs had a booth at the event, instead of like a traditional booth what Edward did was he signed up one on ones with Amazon sellers and he went through their accounts and he told them ways that they could improve their Amazon sponsored product ads. And so, I thought I’d start by asking you, you looked at a whole bunch of people’s accounts during those three days and what were some of the common mistakes that you saw and common improvements that could have been made for most Amazon sellers?

Ed: Yeah. So, I saw quite a different array of different people’s accounts. I think I met with over well over 20 people; I have like these 20 minutes to dance with them. And it just gave me time to look at their ads and see what they were currently doing, and it really just gave me a chance to peek inside their account and see like what could be done better. I will say some of them, they were like beautiful, and I think they were just as much of a nerd about PPC as I was. So there were a couple of them actually at the conference that I was just like, listen, like you’re doing everything great. And this is awesome. Keep at this, here’s my card. Let’s meet up and geek out together later on about this.

Steve: So you found a new friend.

Ed: Exactly, I found some new friends that were just as nerdy as I was. But there were some things that I did see kind of across the board. And this isn’t really limited to just like the people that I met at your conference, this is kind of some things as I see all the time. But in particular at the conference, one of the biggest things I saw was people were running these campaigns and they had them running for quite some time and they had all this data, but then they just didn’t know what to do with it.

And really, when I say data it’s like they’ve been running the campaigns for quite some time, they have a lot of keywords, which also leads to a lot of user search terms inside of their campaigns. And they were just like, I don’t know what to do, because I had these thousands of search terms, a lot of them are not relevant to my product, and I just don’t know what to do to really get the most out of these campaigns. And I kind of looked at him and I was like, that really is a great question because you gain all this data with your sponsored product ads, you have these beautiful campaigns running but then it starts to build up and then you start losing money because you’re not diving into your campaigns.

So, one thing I saw pretty much across the board was just a lot of people weren’t diving into their campaigns to look at the search terms and they weren’t setting these crazy search terms as negatives or anything. And what I really mean by that is, they just kind of had it running and they were hoping for the best, they weren’t doing any of the cleanup process that’s really required to maximize your profits on your sponsored product ads.

Steve: I can actually relate to that because it’s a process, right? It’s something that you have to do consistently. And so, you have to get in there and then you have to set these as negatives. And it’s a tedious process, because the keywords are constantly appearing, the negatives are constantly appearing. So, I was just curious, do you have like a process for that?

Ed: Yes. I mean, really like whenever my team or I were first starting to manage someone’s account, and we were doing the ads for them, when we create some new campaigns, we let them run for like a week or sometimes a little longer than a week just so they can get enough data. And we usually do a first like cleanup process about that time and that’s just where we go through their search terms, and we look at the ones that have nothing to do with their product. This does seem like a really daunting task, but it’s not honestly because really if you’re selling let’s just say an apple slicer and I know everybody wants to sell an apple slicer, it’s the hottest product in the market right now.

But let’s just say that you’re selling an apple slicer and you have a campaign running and you’re going to start getting these odd search terms. And that’s just because Amazon is trying to drive traffic to your product and they’re trying to find out exactly what type of traffic converts for your sponsored product ads. But you’re going to get these search terms that have nothing to do with their product, you may start seeing terms for mouse or keyboard, or let’s just say garlic press or Gatorade or something of that nature. So, it’s really easy to just go through and you can pull up your full search term report if you want to, or you can go in at a campaign level inside our tool at night and actually see like the search terms for a particular campaign or a keyword.

And we start cleaning those up by setting those odd phrases as negatives. And this is just really just going through and just seeing things that catch your eye. After about a week or so they may not have enough data to throw up any red flags, but just the term itself can be a huge red flag. And we just go through; we set them as either negative exact or negative phrase keywords. That’s also something else a lot of people weren’t doing was using both exact and phrase negatives. And we just cleaned it up. We do that initially, just like after the first week or so, and then we continually go back in there and check it every so often to see also if there’s just terms that are not converting.

So it’s not just the ones that had nothing to do with your product but also if you think that you are getting a lot of traffic for red apple slicer, and it turns out you don’t, then you may want to set that certain search term as a negative possibly because it’s just leading to a lot of clicks and no conversions by chance.

Steve: So how do when it’s an ad problem versus a listing problem?

Ed: That is a wonderful question, it really is. I think the biggest thing is when it comes to it being an ad problem, that’s just where you’re kind of going after unprofitable keywords and ones that aren’t relevant for your product. And that’s kind of just like overextending yourself and trying to say, well you know what maybe someone that searches apple peeler will also want to get an apple slicer at the same time. So it’s just like having these types of hunches, but not having any data to back it up. And then after a while, you may see, okay, wait a minute, when people search for apple peeler, they want to buy an apple peeler. And you just have to kind of go in there and negate that or like pull the keywords themselves.

So like, that’s more like the AdSense like the ad side of that where you’re just setting things up kind of for failure without knowing it because you’re trying to overextend yourself. When it does come to more of a listing issue, that’s when you’re noticing that you’re constantly showing up for terms that had nothing to do with your product. And that really goes back to Amazon doesn’t have someone who is working 24 hours a day who’s going through every listing and saying, okay, cool, this is an apple slicer. Okay, cool this is a garlic press. Oh, cool look, this is a monster truck for kids. It’s an RC car. Nobody is doing that at Amazon.

So, Amazon looks at your listing and pulls in like the keywords and everything that you have inside of it to really decipher what your product is. And that’s where it gets problematic because if you’re noticing that you’re showing up for all these searches for these random keywords, that means Amazon is trying to drive traffic to these keywords because they think that that’s what your product is and that’s where it’s a listing problem, because that shows that you just didn’t pull out your listing correctly and you weren’t successful in telling Amazon exactly what your product is, and a lot of people can lose a lot of money that way.

Steve: So what are some other things that you saw that could be improved on some of these accounts? Like you mentioned, a lot of these people that you talked to at the Sellers Summit already knew what they were doing. So what are some things that you spotted that could be improved upon?

Ed: Yeah, I mean, like a lot of them they had done some really great keyword research. They had done the research, they have done all these keywords that they saw that had a lot of traffic going to their products and really were relevant keywords for their product and they had these beautiful campaigns running, but they weren’t competitive enough. This is something where it’s just really about getting your feet wet and trying to capitalize on the traffic that Amazon is pushing towards you. You have to be competitive.

I’ve really seen a lot of people that have done the research, they have these awesome keywords, they see the potential for traffic, but then they’re bidding like the bare minimum on these keywords. And they’re like, I’m just knocking at the traffic that I want and I’m just not getting the conversions that I really need for this product. And the thing is you have to be competitive when you’re doing sponsored product ads. I mean, there’s no if there, there’s no buts or anything about that, you have to be competitive because you want to capitalize on that traffic and you want to show up for those keywords, because you know that you’re going to do well for them, why would you not want to show up for them?

And so really, I saw people that were bidding very, very low on the suggested bid range or they were just like, not really adjusting the bids as they need to. And same thing goes for the budget. They were just kind of keeping the budget at a flat rate. And if they were maxing out their budget all day, every day, they were still not increasing it. And that’s something else that you…

Steve: How do you know what to bid, how do you know what a high bid is? Do you just take the higher end of the recommended range?

Ed: Yeah, so normally I do that honestly, a lot of times I just see the suggested bid range is really just like what Amazon notices the bids being throughout the day normally. It is just like an estimate. So I never take it 100%, I take it with a grain of salt, of course, just like everything else. But I usually do go towards the higher end of the bid, if not even more than the bid range that they provide. And this is really just a good tactic because you can get more data in a shorter amount of time. And that means you don’t have to wait a month before you optimize your campaigns.

You can wait like a week or two instead because you’re going to have a lot of data that’s coming through, because you were competitive, because you did show up for these keywords, because you did get these clicks. Then you can finally say okay, cool, I got this data really fast. Now I can bring down the bid on the keywords that got clicks, but didn’t convert as much, or I can actually pull some of the keywords that got clicks and didn’t convert at all. So, I do go towards the higher end of that suggested bid range, and then I adjust it as needed. I’m usually not the type of guy who pauses keywords I’ll be honest with you, unless there’s no conversion.

So, by starting off with a higher end of the mid range, I can just slowly scale it downwards over time if it’s not converting as well as I wanted to. And that helps me maintain my ACOS as well because it helps me control how much I’m actually spending. And this is a much easier approach as opposed to starting off at the bottom end of that range and then slowly going upwards, because that’s going to take two or three months to really get where you need to be if you’re being really cautious. So I saw people that just weren’t being as competitive as I wanted them to.

Of course, this does go back to whatever your budget is, you should work towards that. I don’t want to ever tell somebody to spend $30,000 on ads if they don’t need to, but it’s just willing to kind of play the game a little bit more and be able to work [inaudible 00:14:41] to get that data that you need.

Steve: Sure, I mean this is common with Google AdWords too. You always bid high and you never end up paying what you bid when you bid really high anyways. And you just want to get data as quickly as possible.

Ed: Exactly. Yeah, I mean, it’s really just like that you’re just telling Amazon okay, I’m willing to spend up to this amount. But I mean, you could be spending like 50 cents less, or like there’s probably certain times throughout the day where other people aren’t running ads, or they’ve already met their daily budget and those bids drop, like at certain points of the day, depending on the market that you’re in, or like type of category. You may see that like at 6pm, you just you don’t have that much going into your ad, but you’re still getting great conversions. Maybe that’s just because everybody else in that category, their ads went out of budget or people just aren’t running ads at that time.

Steve: So when you make adjustments, like how often do you wait, how long do you wait before you look at the data again to make another determination?

Ed: So honestly, I do it every two or three days. And that’s just because of the clients that I’m working with. They are high volume and since they are high volume accounts, they do a lot more data that comes in, in a shorter amount of time. But normally I do tell people to look at their accounts two times a week or something like that, maybe a little less sometimes if you just have like a very steady stream where you’re kind of more on maintenance mode with your campaigns. You can just look at it maybe once a week and that’s just because you don’t want to overcrowd your data.

You definitely don’t want to smother it, you don’t want to look at it every day because you’re going to be like well, oh dang, this keyword got 12 clicks today and no conversions and you may see it as a negative or pause it and the next day you get 10 conversions for it. So, I usually look at it every few days. So I’ll look at the account and adjust it as I need to. Another tip for that as well is I usually look at like the past two weeks or the past month of data whenever I’m looking at the data. That way it gives me more of a range of the kind of like second scene and it helps me get a better average amounts so I’m not just looking at like one day or two days worth of data. And it allows me to not make such crazy judgmental calls on some of these keywords that I won’t mess myself up in the time I have coming forward.

Steve: So for people that are impatient, is there like a certain impression count or clicks, like some sort of guideline that you use before you take any action?

Ed: Yes I mean, so impressions I really just use to make sure that I’m getting seen. I really kind of look at impressions last honestly, just because it didn’t cost me anything. It doesn’t cost anything to be seen. So, I usually just use impressions as a last like notify of how this keyword is doing. I do primarily look at clicks. Normally, my rule of thumb is I wait so something has at least 10 clicks before I make that judgment call. And what that really means is, I wait until it has 10 clicks to say, okay, should I lower the bid some, should I increase the bid, or should I just go and pause those keywords?

So if I have something that has like 10 clicks and no conversions, I’m like, all right, now this is not working out. I may have wasted like 20, $30 on this keyword and it’s just not converting well. At that point if I’ve gotten 10 clicks, and it’s been like a few weeks or so, or something of that nature, I will potentially think about pausing that keyword just because it hasn’t converted for me. And the way it’s trending, I don’t want to keep on spending money on this keyword going forward because I’ll potentially be spending more money that’s not going to convert for me.

But on the other side, like if I have something that has 10 clicks, and it has like six conversions or seven conversions I’m like, heck yeah, this is doing great. It’s converting well, it’s providing the traffic and the conversions that I want, I may up the bid some to remain competitive on that keyword going forward. And then the third case, of course is like where you have something that has 10 clicks, and maybe one or two conversions. That’s one of the cases where I may just lower the bid because it’s still showing that that keyword is profitable. It is giving me the conversions. That’s awesome, but it’s just not at a really good rate. I want to lower the bid so I’m not spending as much on those conversions that happen every now and then.

And that allows me to maintain my ACOS and make sure I’m not just throwing money at a keyword that’s converting once every blue moon, but I’m still showing up for it just not as often as I was before.

Steve: So, as you’re running other people’s campaigns do you tend to be really aggressive in terms of ACOS, and just try to break even on your ads or even lose money and just let the organic takeover, or do you tend to take more of a stance of being profitable for your sponsored product ads?

Ed: So honestly, the end game is to be as profitable as possible. But it really does depend on exactly what the client wants. That also depends on the category as well. So usually whenever I go into this, I’m completely straight up with the client. I’m like, hey listen, we need to know what you want to do with your account going forward. Do you want to be aggressive? Do you want to spend a little more money and actually lose some money but build up your brand like just like what you’re saying Steve and actually get that organic ranking running and moving upwards? Then there’s also the way of just breaking even and then being profitable.

So the first thing that we do is we kind of determine their breakeven ACOS on their campaigns so we can kind of know exactly what their account overall ACOS is and their target is and we try to at least break even to begin with. But of course, we try to maintain breakeven at first because there is kind of like a swell upwards of spend at the first segment of running ads, and then we taper back down to be more and more profitable. But it really does depend on the category as well because people that are in things such as the supplement marketplace…

Steve: Yeah sure.

Ed: They are like 100% ACOS. That’s fine because they’re looking for that return sale, they’re playing with the big guns, up on the big guns and they’re really trying to get as much traffic as possible to build up brand reputation. But I always do want to be profitable, so I always keep that ACOS goal in mind that I try to always undercut it, and I try to just like trim it down as much as possible so it can get something more of a maintenance mode where I’m just trying to optimize it every now and then.

Steve: Okay, so what are some of the more advanced tactics that you aren’t seeing people use that they should be using?

Ed: Yeah, so I mean, one of my favorite is using both auto targeting and manual targeting campaigns. I know that sounds like well hey, everybody does that, everybody knows what those are. They run those all the time. Yeah, they do but it’s knowing why you’re doing it. That really helps you understand what the benefits of both are. Of course, everybody knows that manual targeting campaigns, you’re telling Amazon which you want to show up for, you get that top of page placement if you’re really aggressive and you’re trying to get that higher bid, so that gives you a unique placement.

But people don’t know about auto targeting campaigns as much. People usually will just run auto targeting campaigns just to get the ball rolling, then they pause them, or they archive them completely. And I’m like, no, what are you doing? Keep those running. And the main reason I tell people to keep auto targeting campaigns running is because you get unique placement with auto targeting campaigns. There’s placement that you get with auto targeting campaigns that you cannot get with manual targeting campaigns.

And that’s huge because some of the placements are like whenever you’re looking at a listing, and assess sponsored product items related to this one, those are auto targeting campaigns right there. That’s Amazon advertising other people’s products on your listing and it’s kind of giving you that extra traffic. Also, whenever you add something to your cart on Amazon, there’s ads there as well. Those are also auto targeting campaigns. And whenever you actually buy a product, like you’ve actually spent money on a product and you’ve already given Amazon money, they’re like, oh cool, thank you for buying this product, here’s some more ads. Those are also mainly auto targeting campaigns.

So you want to have both of those running like all the time is what I say. I say have them running all the time so you can get all the placements possible. You can show up in the normal search, you can have that top of paid search, be on competitors’ listings, the ad to cart, and the actual thank you page as well. Those actually convert really, really well. So, I tell people all the time, you have to run these all the time and you have to kind of be somewhat aggressive with it.

And you really do want to open that up to build out your strategy because especially if you’re building out a brand, you want to have that brand recognition, you want people to see your product more and more. You don’t want to have just your product showing up on page seven of the search results. You want to see it on page one up top, you want to have a headline search ad as well and also show up on competitor listings. And when people are adding other items to your cart, you want to show up there too. You want to build up that brand recognition so people see and they’re like, wait a minute, like this has shown up a lot and it does look pretty nice. They have a nice listing. I actually know what the product is. I may consider buying that because I’ve seen it so much. So, a lot of people just miss auto targeting campaigns.

Steve: So you bid on the auto campaigns as aggressively as you would on the manual ones is what I’m hearing.

Ed: So you can. Honestly auto targeting campaigns are a heck of a lot cheaper than manual targeting campaigns. And that’s just because the placement is different and it’s more reliant on Amazon actually driving that traffic. So when I say be aggressive, I’m not saying like bid $20 on a click or on a targeting campaign, but go up to like $1 or $2 depending on the category and you’ll see the trend over time to what the actual cost per click is. And that will allow you to kind of gauge exactly what you’re spending on average for a click for the auto targeting campaign. Then you can kind of taper down or taper back up if you need to, depending on what that range is that you’re seeing for those clicks that you’re actually getting. So, it is nice to be more aggressive though in general for sure.

Steve: So you mentioned auto targeting, the ads show up in the headlines? I didn’t know that.

Ed: Yeah, I’m sorry. It’s just like — it’s just using the auto targeting and manual targeting and headline search ads.

Steve: Oh, got it got it. Okay actually let’s talk about this for a little bit, the headline search ads. So what is your strategy for those?

Ed: Well, first of all, they are my favorite ad of all time.

Steve: Really, okay.

Ed: Because I get to spread my wings and be creative and make it look beautiful for everybody and everybody loves the ads. But in all honesty, I really do just love headline search ads. I really enjoy first of all there at the top there on the sidebar now, they have some other placements as well now which is awesome. They’re not just that top of the page headline search ad that you see or are so used to. But with headline search ads they’re so nice, because you get to be more creative. You get to create a headline that’s catchy and gets people’s attention while also using an image that you want to use.

And what I really mean by that is whenever you’re building out a headline search ad, you get to choose the image to the left of the app. You’ll have an image and then you’ll have the three items that you’re advertising. The image over to the left, you can actually choose the lifestyle image of someone actually like using your product or just like a really awesome picture of your product that has some Photoshop skills behind it, or like has it outside or has somebody using it or something of that nature. You can even have like your logo in it. So that actually leads to better conversion because people see that and they’re like, wow, this is a different image.

It’s not just like your normal stock photo of a product that has a white background is just really, okay, this is a product, but you actually see someone using it. And whenever a headline search ad is actually viewed on a mobile platform, that may be the only picture that’s actually showed to somebody. So that can be like your one chance to actually pull someone in and look at your product. So with headline search ads, they’re so important when it comes to building out a brand because you can express your brand more than you do in just like a normal sponsored product ad, because you can have a headline that says like use this to help out with this or a great gift for dad if it’s Father’s Day or something of that nature.

So you can try these different types of headlines as long as I think they’re then like having 50 characters very, very short. But you can express your brand more to kind of show like more what your brand is about and what is pushing while also having an incredible image that you may not have in any of your other ads. And those are awesome, I love them.

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How does your strategy differ for headline search ads versus the regular ads?

Ed: So, with headline search ads, there is always a chance that they will not convert as much. When it comes to someone that has a brand for instance, a headline search ad may mainly just be targeting their brand name and some of their primary products they are trying to advertise. When it comes to something like a normal sponsored product ad campaign, I may be thinking about like just the type of keywords that will convert. With a headline search ad, it’s more building up that brand awareness.

And I go into it knowing it may not convert at the same type of rate that a sponsored product ad does just because I am advertising more products at a time, and it is kind of going out to a somewhat possibly wider audience. So, every time I do this for a new client I do say hey, just giving you a heads up, it may not convert at the same rate that you are used to with your sponsored product ad, but this is going to help you build that brand and help you show up for these other searches.

And you can also use headline search ads more to target competitor brands. That’s something that you can’t do as much with sponsored product ads. Like if I’m selling an apple slicer and my brand name is Edwards best apple slicer ever because that’s a really good brand name by the way, nobody can take that from me. And let’s just say that Joe over here has Joe’s best Apple slicer. If I’m doing a sponsored product ad campaign, and I have a manual targeting campaign running, and I’m targeting his brand specifically, I’m not going to convert as well possibly just because I’m just going to have the normal ads that show up. It’s just one image.

But if I’m using a headline search ad, and I’m targeting my competitor brand names and other competitors that are in the space or like products, and I’m targeting to show up for the searches with a headline search ad, I’m providing more value to the potential customer that’s coming through on Amazon. And they’ll see that and they’ll see this is like another option to the product; they’re going to see the awesome lifestyle image. They’re going to see the headline, they’ll learn more about the product right there. And then also they’re going to see three different images of possibly other products that I’m offering as well.

So they can be used more for a competitive strategy. There’s actually a lot of clients that I’m working with right now. There’s this one product on Amazon, this one brand that I swear targets every brand on Amazon. It is crazy. And of course, I can’t speak about it, but they’re just they’re very competitive. But it’s actually it’s really astounding on how wide their competitiveness is because they’re using these headline search ads to show up like that.

Steve: So you keep mentioning the word brand with headline search ads, so does that imply that you’re willing to break even or take a loss on these for the sake of branding or is the strategy basically still the same in terms of profitability for these ads? I mean, obviously you want to be profitable, but is the strategy different or is the purpose different?

Ed: So, I would say the purpose can be more focused on brand because like of course you have to have Brand Registry 2.0 to actually have headlines search ads. So Amazon is doing this more in the fact of building out these brands. And my stance just my personal stance on headline search ads is more of like breaking even to some profit, but I usually use these to really just kind of target outside of the normal ads that I’m really running. So, I usually go into the space like with a mindset of knowing okay, this won’t be as profitable as the normal sponsored product ads normally, just because I’m trying new things like trying to target competitors, and trying to really go out to these other types of products that are on Amazon.

But I mean, like really that being said, if I have a headline search and I’m only targeting my brand name, I’m going to have an ACOS of like 2 or 3%. And I’m going to have awesome profitability because people are searching for my brand and they had this beautiful ad come up, they’re going to click on it, it’s going to convert more than likely. So it really does depend like how competitive you’re being. If you are just using a headline search ad just kind of the same way that you would for a sponsored product ad like just targeting like apple slicer or apple peeler or whatever like that, you can still kind of see the same type of return if you’re being kind of really I guess cognizant of what your current bids are and where your range is.

You definitely don’t have to go negative when it comes to headline search ads, but really like my team and I we use this to really branch us out and to not steal traffic because that’s such a bad word to use steal, but to really try to enhance our brand by reaching out to other potential clients that are – sorry, potential customers that are used to other brands on Amazon.

Steve: Sure.

Ed: So I do kind of, I say that this can be a little less profit usually or it may just be more of a break even just because I want to build up that brand and kind of show people what the brand is capable of.

Steve: So, if you’re targeting other brands, does that imply that the copy that you use is a little bit different as well, like do you compare yourself to the brand, or do you use reviews like that?

Ed: So really know no. Amazon is picky when it comes to the headlines that you use honestly, like the headlines can’t do any claims that you can’t back up. You can’t say like world’s best or the one and only, or proven the cure of cancer or anything like that. You can’t do anything of that nature in the headline or it will be really denied. So like I usually just use the headlines to just say like just a little something about the product, like stay sharp and [inaudible 00:32:57] or something like that, or I don’t even know if you can do guarantees like money back guarantee. I don’t think you can even do that. But I do something like that.

So right off the bat, someone already sees some type of added value to the product that I’m presenting. And they really learn right off the bat exactly what my brand and my product is about. But one of the cool things about headline search ads is like all the ones that I’ve ever gotten created and then they were denied and shut down by Amazon with an iron fist, I was able to actually open up a case with Amazon and talk to them about it and they told me exactly why it was denied and what I need to do to fix it, and then I can normally actually resubmit it and it’ll get approved.

So, usually it’s like a lot of times I tell people to go into it having like five or six different headlines setup and of course split test them, if they all get approved, have them all running simultaneously, or try them like on and off to see what headline converts the best. But that headline is like one of the first ways to kind of throw out the hook for somebody potentially coming to your brand and coming to buy your product.

Steve: Okay, okay, what else you got Edward?

Ed: So, one of my all time favorite tips man is the product placement reports, and what this actually is, this is — it’s not really a hidden report but it’s one a lot of people don’t know about. It’s actually report that shows you which ad is getting the top of page placement and if they’re converting. And what this is really used for I’ll kind of back up a little bit is a lot of people are asking me about bid plus and they’re like hey, is bid plus worth it? Should I turn on bid plus? Should I let Amazon just take my money? Should I tell Amazon I’m willing to spend more? Amazon already gets all my money, man Amazon takes a lot of my money, that’s coming out here honestly. So my answer…

Steve: Actually if you want to back up and explain bid plus first.

Ed: Yeah. So bid plus is really something that you can turn on at a campaign level. And what it does is it says okay Amazon, I’m willing to allow you to raise my bid up to 50% so I can get that top of page or middle of the page placement on page one for your campaigns that you have running. And the kind of the theory behind this is if your ad is at the top of the page, or actually like kind of like middle of the page sometimes to those are the two that convert really well, then you’ll get better conversion rates because it’s showing up first, it’s kind of blending in with the other top of the page products, the ones that are ranking organically and you’re just telling Amazon, you know what, I’m willing to spend more because I feel like my product will convert if I’m getting that top of page placement.

And so, one way to do this is just say, heck yeah, let’s turn this on all the campaigns, and see what happens. But that’s not my way of doing it because I’m very analytical. I want to see some numbers behind it. So there is a report that you can find in your ad reports. It’s a sponsored product ad placement report. And what this does is it shows you the campaigns that are running in a certain time period that you have chosen, and it says okay, this one was at the top of the page, or this one was other. It says other page, it doesn’t say like bottom of the page or page seven. I would love it if they did that but it just says top of page or other placement.

And what this allows you to do is it allows you to see if campaigns that have that top of the page placement if they’re converting better, if they’re actually providing the return that you want. And this is really awesome because then you can say okay cool, on average campaign X, Y and Z really do convert better whenever they are at the top of the page. And if that’s the case, I will turn on bid plus for those campaigns. And this is just kind of giving me more, I guess it’s backing up my idea more, it’s telling me okay, there actually are numbers to back this up.

I can see that this actually is going to work out, and I will turn on bid plus because that will tell Amazon okay, I’m willing to spend more on these campaigns because if it is at the top of page placement, it will lead to better conversions. And of course you’re happy about it because you’re getting those conversions. The customers are happy because they actually do enjoy your product but especially Amazon is happy. One thing that I see a lot of people get upset about is Amazon spends all this money; they try to drive conversions yadi yada. Amazon is doing that for the customer.

So I want — you will understand that you’re willing to spend more because you’re willing to actually get your product to a potential customer on Amazon. And if you can back that up with data and see okay cool, I’m at top of the page, and it converts well, I’m willing to spend that extra money to get that top of page placement. And of course it really is a great way to do that to get you kind of a wider range of people looking at your product.

Steve: So, what has been your experience with bid plus because you deal with so many clients, in general what has been your experience versus just increasing the bid altogether?

Ed: So really, it’s just, it gives you more control I guess, and it doesn’t make its way out to do things a lot more manually. Of course you can go in there, and you can look at your campaigns, you can see if you have like a swell up and conversions that you want to increase your bid, but really bid plus is nice because it’ll kind of somewhat guarantee that you’ll get that top of page placement if possible, or the middle of the page placement. And I keep on saying top of page or middle of the page because Amazon actually does give you kind of both of those placements for bid plus because it is where the highest conversions happen across the board.

But it just makes it more automatic. You don’t have to constantly be monitoring things like that. Of course, you can still go back and look at this ad placement report, and see if you’re still getting conversions at that top of page placement. But it really is just an easier way to do this without having to manually adjust bids or like…

Steve: Got it.

Ed: It’s on a keyword level, or do it like at a campaign level and then just be like, well, I just wasted all this money. So this allows you to really get more of like a peace of mind knowing that it actually will potentially lead to more conversions for you.

Steve: Okay, so I mean your basic strategy is look at the product placement report, find out the ones that are converting well when they’re at the top and then just turn on bid plus for those?

Ed: Right yeah. And I’d say especially for like whenever you do have like a holiday coming up, or if you have a very seasonal item. If you are really like focusing on like just three months of the year, even just one month of the year to make up all your sales, you may want to do this for your advertising just because you want to capitalize on that traffic, especially in Q4 or like if there is just like some sale that you’re running for a day, you may want to pop bump that up to the top of the page, that can kind of give you more visibility as well.

So, yeah, bid plus, I used to actually not be a fan of it, because I was one of those guys. I was like, Amazon wants my money. Amazon wants to spend all my money, but then I was like, wait a minute, if I can actually justify this with metrics from a report then heck yeah, I’ll go ahead, and do that. That makes 100% sense to me.

Steve: I mean you were just talking about the holidays and that’s actually a good segue. Do you do anything different as like prime shopping seasons start?

Ed: Yeah, I mean, so prime shopping is amazing. I mean, the holidays are getting bigger and bigger on Amazon even like they have things like Prime Day I know, then just Q4 is especially huge. I turn up the aggressiveness leading into like those time periods especially for when it comes to Q4 I’ll probably be starting that in August I’ll be honest with you.

Steve: Interesting okay.

Ed: The real reason why I say that is because we want to have as much organic data before Q4 hits, before q4 takes off so we can know what the traffic was like beforehand. And so, a lot of the different tactics that I use is I will kind of blow out the budgets so we have more room to get more traffic in a day. Also be more competitive with the bids, I will increase the bids, but it’s just like a one day event or something like that. I will possibly double the bids, and then also double to triple the budgets possibly. And that’s just because it makes sure that my ads won’t run out of budget because if they run out budget then next thing I know, I’m not being advertised and I cry and I can’t sleep at night.

So, I opened it up and I make sure I have that room to spend more. I do have to kind of change the mind frame and have to explain this to the clients is like, hey, we’ll be spending more, but you will see higher conversions because people are willing to spend, they are in the mood to spend, and I will just double or triple the budget and same thing with the bids too. This is also a good time to use that product placement report to see if I want to turn on bid plus for some of the campaigns as well, because if they’re converting well normally, I definitely want to have bid plus on when it comes to the holidays too.

Steve: So the reason you start so early in August, is that because you’re trying to increase the sales velocity leading into the holiday season as well?

Ed: Yes, so definitely just like showing the increase can help with their algorithm and help you with your ranking organically too. And it is harder to do things like launch your product around the time of the holidays because you’re still trying to index for certain keywords and you’re still trying to find out what Amazon thinks your product is. That’s why I say people, telling everybody now optimize your listings, optimize your listings before there’s millions and billions and trillions of people on Amazon looking at products, because if you’re still showing up for the search for a bicycle and you’re selling an Xbox, then something is wrong and you’re going to lose a lot of traffic.

So, that’s why we start so early, because we can see what the normal traffic trends are. We make sure we’re showing up for the right types of terms in our auto targeting campaigns. And we also really want to make sure that our manual targeting campaigns are targeting the correct keywords that are normally converting. And then as we roll into Q4, like in the holidays or any type of events, then we can just kind of blow that out because we have the data to back it up. We’ve seen it work organically before and also just with our normal sponsored product ads, and then we go into it with more confidence because we’ve already done the research, already targeted the keywords that we want to target. We’re already looking to get better results right off the bat because we’ve already done the hard work beforehand.

Steve: Okay. I know it at the Sellers Summit; you mentioned some of the more advanced tactics like day partying and that sort of thing. At what point do you start doing that last I guess 2 to 3% of optimizations?

Ed: Yeah. So I mean, day partying honestly, that’s something that I would do, I would prepare for that especially before you hit something like Q4 or any type of holiday because day partying if anyone that doesn’t understand that, that really is something where you’re running your campaigns at a certain time of day. It’s not just having them run all day so their budget runs out; it’s allowing them to run at only the best time of day for you. Before we actually put this into our tool, this was a very, very manual process.

You had to actually manually go into Seller Central and pause the campaign at a certain time of day and then go back in and re-enable it and it was easy, and I had some people that did that, and I was like you guys awesome. You’re very, very meticulous and I love it. But you have got to get some sleep man, because you’re waking up to turn on and turn off your ad. So we’ve built this into Ignite, the tool that we offer, and it allows you to just set the time of day where your ads are going to run. And this means it will actually enable the ad at that time of day and then will end the ad at the time of day that you specify, because we see that everybody’s budget resets at 12 midnight on Pacific Standard Time. And most people’s budget runs out by 9am PST.

And that just goes to show that people are not really doing the research. They’re not seeing what time of day their campaigns are converting the best and they’re wasting their budgets. So, what I usually suggest is, this sounds like a lot of work, but I promise it’s not. You create multiple campaigns, let’s just say you create 24 campaigns and they’re all running for one hour of the day. And this allows you to really see exactly what time of day your products are getting the most traffic but also converting the most. So you can create the exact same campaign 24 times or even just 12 times, have it 12 times being two hour segments. And this will allow you to see what time of day is best for that product.

And instead of Ignite, we actually do have a copy campaign button so you don’t actually do this yourself. You can just have one created and copy it and you can actually choose the day, the time of day that you actually want it to run. And after a week or two, or more like two weeks, you will have some usable data that shows you okay, at five or 6pm PST, I get the most conversions. So, I may want to make sure I’m really focusing on my traffic, on my campaigns towards the latter part of the day, because that’s where I see most of my conversions. Most of the traffic actually coming through is doing well for me, and I may not want to run it in the morning.

And this also helps out if you have like a very, very odd product that only sells at night. Like if you sell coffee, honestly, this can be something as well. You may see people buy coffee more in the morning, or they may buy it at night because they realize, oh crap, I don’t have any coffee for tomorrow morning. This is terrible. How am I going to get through work? So you can actually see that trend and that’s one thing I really like too is like you can actually see trends in a way that Amazon doesn’t really provide you a way to see that yet.

Steve: So, have you found that the bids are cheaper at night then since everyone else has blown their budget by then?

Ed: Yeah, honestly, I’ve definitely seen that. Normally I do see that bids do go down from like — we see like most conversions from what we’ve seen happen around three and like towards the evening like six or seven or so because people are actually off work and they’re coming home and they’re eating and then they’re going on Amazon and buying stuff. So, we usually do see that normally people will just leave their budgets wide open and they their campaigns running and people do start running out of budget early in the day, and then as time goes on, since there’s less people bidding on those keywords that you’re going after those bids drop tremendously.

That’s also a good reason to always have an auto targeting campaign running because you can pick up on that traffic where people just aren’t bidding anymore, and you can get some really cheap clicks for like 20 to 15 cents and then you get a sale and you’re like, heck yeah, my ACOS is 1%. This is wonderful. So like I really do see like towards the end of the day that people do tend to have cheaper cost per clicks on average, and that really is just one of the times that you want to capitalize on for sure.

Steve: Okay. Hey, Edward, I wanted to give you guys a chance or give you a chance to talk about Ignite, and then your versions that are coming out because we’ve already been chatting for 40 minutes. So, I just want to say for the listeners out there, I’m using Ignite right now to manage my campaigns and I’m kind of excited with some of these new features. Ed, you want to elaborate?

Ed: Yes. So everybody, Ignite has been revamped. It is currently out, it’s wonderful. In the previous version of Ignite, it’s awesome because it helped you analyze your campaigns. You could do things such as day parting, then it could also get suggestions based on a target ACOS that you have, and this kind of is just like having a mini me or something inside your account saying hey, you should do this or hey, you should lower your bid here. And what we’ve really done, we’ve really taken that and we’ve enhanced it. The biggest update I think first of all is just the UI.

It looks beautiful now, it’s a lot easier to navigate and find out exactly what’s going on inside of your account. The suggestions are easier to see, they’re easier to understand exactly what’s going on with the suggestion and why Ignite is telling you that. And also there’s more bulk uploads and more bulk changes. So you can do things on a greater scale a lot easier. We had a lot of requests for this where people were having to go through and do things on a keyword by keyword basis. And we’ve actually opened it up so it’s a lot easier to do for more keywords at a time. And really, it’s just like I said before, it’s beautiful. It is a good looking tool. And I can say that for sure.

And then on top of that, we actually rolled something else out. It’s called Ignite Plus. And Ignite Plus is actually aimed for agencies or people that are managing multiple different sponsored product ad accounts simultaneously at the same time. And this is really awesome because you can actually add all the accounts with no problem, but then you can actually set up sub accounts. So then that way if you’re an agency and you only want Johnny to see let’s say Nesquik’s account, I don’t know why Nesquik is on my mind, but let’s just say you only want John to be able to log into that one account, you can now do that.

That way you don’t have to have all your employees going into all the accounts and possibly messing with something else that someone else has done, it allows you to grant access on that level. And also, one of my favorite things is monthly spend notifications. You can actually go into your account and set up monthly spend notification, because even like on my end, a lot of clients want to stay within a certain budget on a monthly basis. And I can know when you’re getting to a certain percentage close to that monthly budget.

So, lots of great updates have come out. I am a huge fan of the tool. It’s even better than it was before. And I definitely want everybody to check that out, and really just tell us what you think. And definitely reach out to us and tell us if there is anything else that you want or anything that you have as feedback on the tool. We definitely love to hear it.

Steve: Yeah, I know that if you’re running ads on Amazon, you pretty much need a tool. Now Ignite just happens to be the one I use and there’s other ones out there, but the interface for Amazon is just kind of clunky, and you really need something to help you run your ads. It just makes life so much easier.

Ed: It does.

Steve: Anyway Ed, I just wanted to thank you for coming on the show. As always, you deliver lots of value and I really appreciate you speaking at the summit this past year.

Ed: Well, I definitely appreciate you. Like I said, I really enjoyed that conference. I would love to come back whenever I can. I definitely love nodding out with someone about PPC, but people please do not hit me up like at 12am to just talk about PPC because I’ll do it, so you can always hold me to that. But thank you very much Steve for having me on, and I really look forward to speaking with you soon again about PPC as it advances as time goes on. So thank you again.

Steve: Yeah, it sounds good Ed. Take care, man.

Ed: All right. Do the same.

Steve: Hope you enjoyed that episode. Once again there are a lot of people out there that teach Amazon sponsored product ads, but Ed is the one guy I know who actually personally gets his own hands dirty on a bunch of different campaigns. For more information about this episode, go to mywifequitherjob.com/episode221.

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 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. And next month Klaviyo is holding a two day conference for over 400 e-commerce marketers and store owners with an awesome lineup of speakers. They’ve got experts coming in from Shopify, BigCommerce, Google, Octane.AI, Recharge and top e-commerce agencies plus panels with successful Klaviyo customers and a keynote address by Ezra Firestone. You can find out more about this conference at K-L-A-V-I-Y-O.com/Boston.

Now if you’re interested in starting your own e-commerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening. 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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220: Why I’m Giving Away $50,000

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220: What Is The 5 Minute Pitch?  Meet The Judges For My New Show

Scott Voelker of The Amazing Seller, Greg Mercer Of Jungle Scout, Mike Jackness of EcomCrew and I are launching a brand new show called The 5 Minute Pitch. What is the 5 Minute Pitch?

It’s a Shark Tank like show where we’ll be giving away 50,000 dollars to one lucky business. 32 companies will be selected to pitch Greg, Scott, Mike and I and the winner will be selected on a live show with all of us.

It’s going to be an awesome show and we’re going to start filming in the fall.

If you are interested in submitting your business, head on over to 5MinutePitch.com.

Click Here To Sign Up For The Chance To Win $50,000

What You’ll Learn

  • How to become a contestant on 5MinutePitch
  • The judges criteria for picking the winner
  • How to become a sponsor of the show
  • The details of how the contest is going to work

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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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Pickfu.com – Pickfu is a service that I use to get instant feedback on my Amazon listings. By running a quick poll on your images, titles and bullet points, you can quickly optimize your Amazon listings for maximum conversions. Click here and get 50% OFF towards your first poll.

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’ve got Scott Volker of the Amazing Seller, Greg Mercer of Jungle Scout, and Mike Jackness of EcomCrew to talk about a brand new show that we are all launching together this fall. It’s called the 5 Minute Pitch, and it’s a Shark Tank like show where we’ll be giving away $50,000 to one lucky business. And in today’s podcast episode, we’re going to talk about the criteria for the companies that we will be selecting along with more details about the show.

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? Well, Privy is an email list growth platform and they manage all of my email capture forms. And I use Privy hand in hand with my email marketing provider. Right now I’m using Privy to display a cool wheel of fortune pop-up. Basically a user gives their email for a chance to win valuable prizes in our store. And customers love the gamification aspect of this, and when I implemented this form email sign ups 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.

I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. And I’m always blessed to have Klaviyo as a sponsor because they are my email marketing platform that I personally use for my e-commerce store, and I depend on them for over 30% of my revenues. Klaviyo is the only email platform out there that is specifically built for ecommerce stores and here is why it’s 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. 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 Mike Jackness, Greg Mercer, and Scotty V on the show. These three guys are my partners in crime for a brand new show that we’re starting called the 5 Minute Pitch. Now what is the 5 Minute Pitch all about? It is basically a Shark Tank like show. We will be giving away $50,000 to one lucky business. 32 companies will be selected to pitch all of us, and the winner will be selected on a live show with all of us. Anyways, in case you guys don’t know who Greg Mercer, Scott Voelker, and Mike Jackness are, we’re going to take some time today to kind of get to know the judges a little bit, their backgrounds, and how the contest works. So what up fellows?

All: Hey, hello.

Steve: So what’s interesting about the 5 Minute Pitch is that all three of us, or all four of us, I should say, have completely different personalities and backgrounds. And so Greg, why don’t you talk about how the content is going to work and how the application process looks like?

Greg: Application is open right now at 5MinutePitch.com, and it’s open to all bootstrapped online businesses. So if you’re selling physical products, or info products, or have a software company or a membership site or anything else online, and you are bootstrapped, then this competition you are eligible for. So you’re going to go online, you’re going to apply for it. We’re going to choose 32 contestants which will be narrowed down to eight. Four of those people will then fly out to pitch to us live and one winner will be chosen for the $50,000 prize.

Steve: Cool. And in terms of the criteria for the people who are applying, well, that’s Scott here, what are some of the criteria that you’re looking for in some of the brands that are going to be applying?

Scott: Yeah, I mean, my biggest thing is the people, right? The people behind the brand, what the mission is behind the brand. It doesn’t have to be like it has to be this fantastic like mission but it’s got to have some purpose, right? I want some purpose behind a brand that we’re going to be working with. And I think just, I want them to have some type of direction already. I want them to have some type of definitely forward motion, right?

Like we want some movement, since we’re here we can turn some dials and flip some switches to make their business even better. But I want them to, number one have a story of some kind, or the reason why they decided to do this. And then from there, I also want them to have some type of plan of what they would do with that $50,000 to help them really get that extra boost.

Steve: And what would you say is like the most important factor and what you’re looking for Scott in deciding on a winner, or who advances to the next round?

Scott: That’s a tough one. I mean, I think the one thing like I said, is I want them to have some momentum. But also I want them to have like I can see that if they did have that 50,000, or even just 50,000 and a little bit of mentorship, which we’re also going to be giving, if I’ve seen that that’s all that they really needed, that’s what I’d be looking for. Because I mean, in all honesty, we’re looking to be able to go back to these people six months or a year and say, how did it help you, and they’re like, wow, three extra, 5X to my business. And now I’ve got this business that’s grown because of being on the show and then that little bit of help, and also that extra money. So I guess that would be it.

Steve: What about you, Mike?

Mike: Yeah, I mean, Scott stole my thunder, those are definitely things we’re looking for. I’m looking at some of the other people that we looked at from the previous iteration of this, when we did this with Greg. The things that I thought that were — that really shine were personality, but it’s already covered. I mean, I think that people that resonate well with the audience that’s going to be listening to this, people that are highly motivated, that put everything on the line.

My favorite story from that was a guy that just received the six figure, a real estate commission and put all that into his product, just like all in and it was just like, he didn’t just like order a 500 sample size order, he ordered like a full container of his product. And he was just like, now I got to figure out how to sell those. Having some type of side story like that was really cool. One of the other people that got really deep in it was a couple that the guy was a military, ex military and military family had been moving around and stuff. And they had thought of this idea during that time. So having that is really cool.

As Scott was saying, having something that you could really use our help with this. I mean, not having a company that’s already super well established. We’re not looking to invest $50,000 in the company, and own five or 10% of it, or whatever it might be. This is a gift or a grant, whatever way, which way you want to look at it. And we’re looking to help someone where this is going to make a monumental difference in their business and their lives. So those are the types of things that I would be looking for.

Greg: Speaking of different personalities Steve, I’m looking for some numbers in this business. These guys are looking for the personalities behind it, and the story behind it and stuff. I want to know some numbers about your business, how you’re acquiring customers, what’s the cost per acquisition? And what are the unit economics per sales, how scalable is this, how big is the market? Those are some of the things that are going to be looking for when I’m choosing who to move on to the next round.

Mike: Yeah, it’s actually a really great point. Because I remember one of the businesses that really turned me off, one of the things that turned me off when we did this before was someone that wasn’t going to disclose some stuff. So I think you got to be ultimately like pretty transparent when you’re coming in and doing something like this.

Steve: So if you guys were to kind of rank based on your own personalities, the product, the team and the numbers, how would you rank those three in determining which business goes to the next round?

Scott: Well I think…

Mike: Go ahead, I was going to say, I’ll go first. But I’ll let you go first.

Scott: Go ahead. Go ahead. I don’t want to steal anything from you. Because I’ve got some things that you might like go, oh Scott, you stole it from me?

Mike: I only got, I said I’m to answer one of three things here. This is a simple question, but I do think ultimately, the product is probably the most important thing. I mean, as much as people are cool, it is a business. And I think that if you have something that’s really unique, and it can become a seven or eight figure business, I think the product is probably the thing that I would pick over the other stuff.

Scott: And I was going to say product.

Mike: So I wasn’t stealing your thing.

Scott: But I have something to add to that. I don’t think it’s just a product, I think its products. I think it’s figuring out other angles that you’re going to because sometimes you find that ceiling on that product, that you’re only going to be able to go so far. So if we can have other products in the product suite, or actually a plan of other ones that they want to add, but they can’t fund them for whatever reason, that actually is really important. Because now we can say, well, yeah, if they got two more skews in their lineup, their audience is going to want that.

So yes, you have to have a good product. If it’s not a good product, like we’re not going to be like, oh, yeah, like, sure your numbers are okay. But it’s not going to work because we know that it’s a trendy thing, right? It’s a fidget spinner that’s going to go away. So it’s not just the numbers, it’s actually the product, the market trend. I think so we’re looking at those things. But like Greg said, we are going to be looking at the numbers because the numbers help us decide if there’s something that can be done here or if you take the money and you apply it that you will see growth. But yeah, I do think product is a big one.

Mike: Probably the best example of how product is really important, no matter how you look at a handkerchief, you still can’t make Steve Chou cool.

Greg: I’ll have to go out and say that all you guys are wrong.

Scott: Oh, Greg just said we are wrong.

Greg: Product is the least important out of these three.

Steve: I have to agree with Greg.

Greg: The numbers are the most important, then the team, then the product. I don’t care what your product is. You can have some weird membership site or some I don’t know, like weirdo physical product. I don’t care about any of that. If you’re acquiring customers for inexpensively, they have good margins, you’re making good money on all this, the market is big enough, I don’t care what your product is. And then the team is the second most important to me, because the team are the people who are able to make this work, they are the ones that are able to acquire the customers; they are the ones that are able to sell the product. So if that product were to go where they are more likely to be able to do it again. So I say Steve, numbers, team, and number three, product.

Steve: Mm-hmm. For me, I always like to say that the first part — Okay, we didn’t go down the structure, right? The reason it’s called 5 Minute pitch is because we’re going to have 32 people and we’re going to limit their pitches to five minutes. And we’re going to do a hard cut off, and we’re all going to have buzzers and we basically buzz people into the next round. So for me, I would say the product is probably the most important in getting past the first round. But then once you get past that first round, I think it’s all about the people.

And here is why. I think even if you have a product or the numbers aren’t that great, or they should be good, but even if they aren’t the best, I think ultimately, if you have the right people, they should be able to pivot around that problem, solve all their problems in advance. So you want people at least the way I’m going to be judging it is how flexible they are, how open minded they are to try new strategies and that sort of thing to grow their business, even though they might not have the strongest product at the present time.

Scott: All right, well, wait a minute here. Wait a minute here. So, okay I’m going to challenge that Greg. So, I’m selling a fidget spinner. I’m doing awesome by the way. And that’s all I am. I’m just selling it to that audience, right? Who is the audience? I have no idea. It could be these kids spinning this thing. And yeah, I’ve got a great a great crew that can find other potential products. But I’m always chasing that product. So I don’t see the clear path. So that to me, for me personally, again, everybody’s different, that’s a little bit riskier.

I’d rather say you’re going in the bass fishing market. And in that bass fishing market, I know that now and 10 years from now, I’m going to be serving that market with these different products versus saying, like, I got to figure out that next Hatchimal thing, right? So I’m not looking at the trend necessarily, like that would for me personally, I wouldn’t want to invest in that. So, I would be challenging you that on the panel, my friend.

Steve: Just to be clear, we are not investing in any of the companies who pitch, the $50,000 prize is a gift,

Scott: That’s true. Sorry about that. Did I say, invest?

Steve: I wanted to make that clear.

Scott: Okay, but if I personally was, I meant that, I meant that if I personally was taking my money and throwing it in a business that I’d be looking at those things. But anyway, go ahead Greg.

Greg: What’s important to me is that a team has been able to find a niche or a product or whatever else and it has been able to make it successful. So for me personally, Steve talked about earlier, different personalities on the board, I don’t really care what your product is, or if I see that this is a long term niche that I think is going to be highly profitable or viable for long term. What’s more important to me is just that you’re making it work now and you’re the team that has assembled this and make it work. And just as a reminder everyone, we’re not just talking about physical products businesses here, info products, software companies, membership sites, any type of online businesses are eligible to pitch to us during the 5 Minute Pitch and we encourage you to do so.

Steve: Cool. Mike you’ve been silent here which is unusual.

Scott: He doesn’t want to get involved.

Mike: It’s your show man I’m…

Steve: I just want to take a moment to thank Pickfu for being a sponsor of the show. If you currently sell on Amazon like I do, then you know how crucial the quality of your Amazon listing is to the success of your e-commerce business. So for example, I’ve run experiments on my Amazon listings, well simply replacing the main image with a different photo resulted in a 2x increase in conversions. But how do you choose the best and highest converting photos for your listings? How do you know that you’re using the most profitable images for your products? And how do you know that your bullet points are convincing. This is where Pickfu comes in.

Pickfu allows you to solicit real human feedback about your Amazon listings in 10 minutes or less. And you can target the exact demographic of your end customer. So for example, let’s say you sell napkins and you have two main product images that you want to test. You would simply go to Pickfu, list the images, target female Amazon Prime members over the age of 35 and hit go. Within 10 minutes you’ll get feedback of which image people are more likely to buy along with specific feedback on why they made their decision.

In fact, I’ve used Pickfu to almost double the conversion rate on several of my Amazon listings by testing my images, bullet points, and product titles. And what I like about Pickfu is that you get results quickly unlike traditional split testing, and you can use this to test book covers, landing pages, basically anything. Not only that, but it’s super cheap to run a poll and right now you can get 50% off your first poll by going to Pickfu.com/Steve, once again, that’s P-I-C-K-F-U.com/Steve. Now back to the show.

Scott: So can I add one more thing?

Steve: Go for it yeah.

Scott: So, my thing is here too, and again, I think we’re all looking at this not just as collectively, we’re looking at it as if Greg was going in business with someone, what he look for and what would he feel comfortable in? Me personally, if I had someone that had a strong presence in a market, that’s really the first thing that I would look for, if I could choose. So, if someone already had a following, someone already had a list, I know I can sell them pretty much anything. It’s like you’re an influencer now in that space. So, if I’m in bass fishing, and I’m known for bass fishing, I know I can pretty much sell anything to anyone about bass fishing.

So and I honestly think that I could personally help someone at that level. Not saying that that’s the only requirement, but I’m just looking at in that direction versus of, okay, I have a team that can go out there and build this thing. So then I know that they’ll replicate it in another market. Makes sense?

Steve: So, the product doesn’t matter as much to you so much as the platform.

Scott: Yeah, yeah, I guess if they’re already doing physical products, and they’re really good at it, then yeah, what Greg is saying is 100% true, right? They can adapt that to another market for sure. But I’m looking at it as like a runway for the future for this business, right. So if they’re specialized in a certain market, because that’s what they’ve been known for and they’ve spent all that time and everything into that, that shows me that they’re going to be able to just keep going down that path. Versus them pivoting and saying, okay, now I got the money I’ve already figured out over here. Now, I’m going to figure it out over here into crochet or crocheting or whatever, right. So that’s what I’m saying. That’s the difference for me.

Mike: I think the thing that’s cool about like having this group and doing this is that we all look at things a little bit differently. And this is what made all the cool debates at the end. So I’m looking forward to getting the pitches and us debating at that stage of what makes a business worthy to move on to the next round at that point, or ultimately win. And a part of this, we’re also going to open it up to the audience. So, I think when it gets from down the eight people, we agree, we’re going to do a round of audience participation to get down to that final four so we have a little bit of everything.

So, I think that the business that ultimately wins is going to be really well rounded is what it comes down to. They’re going to have more than one competitive advantage than kind of like, they’re not going to just have a great product, but probably a great team and also have good numbers.

Greg: And a huge benefit of entering this competition, even if you’re not the one to win is you are going to get feedback from the judges along the way. It’s like, hey you know what, you weren’t selected to go on the next round, but if I was you, I would change this or that and keep doing this thing and focus more on that. So everyone gets a certain level of mentorship from the judges, even if you’re not selected to be the winner.

Mike: Yeah, you also get exposure for your business. I mean, I bought a couple of the products from the Go Pitch Win stuff. I mean, they were we’re cool things. And not only — one of the products I bought just to like help them out. I was like, they’re cool. So I want to buy one. And one of them was something that I wanted myself. So you get exposure, I mean, all of us have really large audiences. And you’re going to get exposure as a business to a bunch of people as well.

Greg: Actually the message I heard when I interviewed them for the winning episode, they said that their sales have been through the roof ever since the Go Pitch Win episode went live. Also another huge advantage of pitching.

Steve: Yeah nice. And just a couple of notes on the application process, you will be required to submit a video. And what I encourage you guys to do is just be very natural in the video, tell your story, expose your personality, just like let it loose and act yourself. Because the applications that we will tend to accept will be those that have the most personality in addition to the product and the numbers and that sort of thing. And Greg just mentioned that he had a previous show called Go Pitch Win where the winner got a whole lot of new business. Well, that actually works for the sponsors as well.

All four of us, we have large audiences. So, if you’re a company out there, or you want to sponsor this show, feel free to reach out to me or Mike at Steve@mywifequitherjob.com, because we’re going to be putting a lot of episodes out, and these are going to go to all of our four combined audiences for a lot of reach. Anything else you guys want to add? Greg, about the application process, what you guys are looking for, how to actually get chosen to be even to take part in the actual contest?

Greg: Just to let you know we are recording this, this fall, starts fall of 2018. And once we’ve reached the 32 contestants for the first round, we’re going to be shutting down the application process. So, I’d encourage you guys to apply sooner rather than later, applications are currently open. Like I said, once we’ve received 32 that we really like, we’re going to shut that down.

Scott: And I would just also say, if you just want to follow along, like I think Mike had mentioned, or you did Steve, you can just sign up there as well and then you’ll be notified. And this will be audio form, but it’s also going to be highly production value, also for YouTube, and any other platforms that we post the video itself. And so again, applicants, you’re going to get exposure and also sponsors, you’re going to get exposure. And I think that’s also something just to touch on really quickly, Steve, maybe you can just add not anyone can be a sponsor, right?

Steve: That’s correct.

Scott: They’re only going to have to be or they’re going to have to basically be approved by us. But they also have to be ones that we believe in, or that we’ve used or other people that we know have used.

Steve: Absolutely, yeah, for the sponsors, just like normal for all of us, we’re going to be very selective about the sponsors that we choose in addition to the candidates. And one thing I will say is that we’re investing our own money into this, the $50,000 Prize. We’re hiring the camera crew, a professional crew essentially to film this and produce the podcast as well as the YouTube channel. And so it’s going to be a lot of fun.

It’s actually an excuse for me to actually get out of my house and get together with these guys in person, and actually to get to know and meet all the candidates out there. One of the reasons why I run my conference Sellers Summit, is so I can ask physically go out there and meet other people, mainly because when I first got started, it was a lonely process, guys, anything else you want to add?

Mike: I just want to say I’m looking forward to it. We did this with the old Go Pitch Win thing; it was a lot of fun. I already know we’re going to have fun and looking forward to doing it.

Scott: Yeah, I just think that people that are listening to this episode, and that will be watching or listening in the future, you’re going to learn something too even if you aren’t at this level yet. If you’re just starting or if you’re in the beginning stages, you’re going to learn from listening to these conversations, and also just how other people started their business and how their idea became. And like I think that’s an important part because people all think that they have to know that all the numbers are perfect before they pull the trigger. And I think that you’re going to probably be surprised at how these people started their business but also got the idea to really go into business for themselves.

Steve: And I will say, I’m speaking for myself here, but my filter is going to be off on this show. So, I’m going to like speak my mind, I think you guys will too. We got all four of us…

Scott: Time in [inaudible 00:22:01].

Steve: We have an interesting dynamic going on where…

Mike: I’m just curious why the filter on because I’m not sure I’ve ever seen that part of Steve. Like what am I missing here?

Steve: So if you guys want to apply, go to 5MinutePitch.com. It’s the number 5 and then M-I-N-U-T-E-P-I-T-C-H.com. And hopefully, from listening to this episode, you get an idea of all our personalities and how we kind of evaluate things. We all have an equal vote, so depending on how you put your presentation; you might want to try to cater to all of us in our criteria for selecting the companies.

Mike: One of the things we didn’t really talk about yet, talking about equal vote, you might be wondering about that since that was brought up, there’s four of us and how do we break a tiebreaker? And that’s actually, we have some guest evaluators where everyone can judge us I guess was what I was looking for coming on. We don’t know exactly who they’re going to be and we’ve already reached out to a whole bunch of them and we have commitments, but we don’t the full field now we’re down yet. But there’s some pretty cool guest judges that are going to be in here to help us break the tie, and I think that’s going to be another cool dynamic because that each week as we’re running these, there will be a different guest judge as well.

Scott: Good point.

Steve: Yeah, absolutely. And we’re not going to – are we going to announce those judges, the guest judges ahead of time? Probably not right?

Mike: I don’t know, we’ll see. We’ll see.

Scott: I think we got to figure that part out. So stay tuned.

Steve: Stay tuned.

Greg: Dah, dah, dah.

Steve: All right, so just to close, if you guys are interested in applying or just following along and getting news about the show when it comes out, go to 5MinutePitch.com. And if you are a sponsor who might be potentially interested in sponsoring this show, send me an email at Steve@mywifequitherjob.com, and I’ll send you a sponsorship packet. Hope you guys enjoyed this episode. Once again I am super excited about the brand new show that Greg, Scott, Mike, and I are releasing in the fall. And if you’re interested in pitching your company to us with the potential to win $50,000, head over to 5MinutePitch.com, that’s the number 5-M-I-N-U-T-E-P-I-T-C-H.com. For more information about this episode, go to mywifequitherjob.com/episode220.

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.

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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219: Practical Applications For Facebook Messenger Chat Bots With Ben Beck

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219: Practical Applications For Facebook Messenger Chat Bots With Ben Beck

Today I’m thrilled to have Ben Beck on the show. Ben is someone who I met randomly during lunch at Social Media Marketing World. I sat down at a table and Ben started talking about chatbots which is something that I’m really into right now.

Anyway Ben is an entrepreneur, marketing consultant and author of the weekly monthly column on the Clear Voice blog and today, we are going to talk about the practical applications of Facebook Messenger chatbots

What You’ll Learn

  • Practical applications of Facebook chat bots for large ecommerce companies
  • Practical applications for brick and mortar stores
  • Practical applications for digital marketing firms
  • The best tools for Facebook Messenger marketing

Other Resources And Books

Sponsors

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

Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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Pickfu.com – Pickfu is a service that I use to get instant feedback on my Amazon listings. By running a quick poll on your images, titles and bullet points, you can quickly optimize your Amazon listings for maximum conversions. Click here and get 50% OFF towards your first poll.

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. And today I’ve Ben Beck with me on the show, and Ben is someone who I met at Social Media Marketing World and he’s a marketing consultant that specializes in chat bots. Ever since I decided to go all out on Facebook Messenger, I wanted to have Ben on to talk about the many different applications for chat bots that he’s been seeing from a wide range of industries.

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 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 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 sent.

Now Klaviyo is the most powerful email platform that I’ve ever used and you could try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to give a shout out to Privy who is also a sponsor of the show. And Privy is the tool that I use to build my email list for both my blog and my online store. 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. And right now I’m using Privy to display a cool wheel of fortune pop-up.

Basically a user gives their email for a chance to win valuable prices in our store and customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%. 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 Ben Beck on the show. Now Ben is actually someone who I met completely randomly at lunch at Social Media Marketing World. I basically sat down at a table and Ben just started talking about chat bots which happened to be something that I’m really into right now. I discovered that he was a speaker and then decided to have him on the podcast. Now Ben is an entrepreneur, a marketing consultant and the author of the weekly monthly column on the Clear Voice blog.

And today what we’re going to do is we’re going to talk about applications of chat bots in businesses of all kinds. And with that, welcome to show Ben, how you doing today man?

Ben: I’m doing so great, thank you Steve for having me on the show. I feel like it’s an honor because I listened to your podcast that you got a few weeks ago, where you’re talking about the technology that you used to run your business and it was fascinating. I’ve always loved marketing technology, and to hear how someone like yourself has used it to build a publishing business, it was just fascinating. So thank you for having me on your show.

Steve: Yeah, man. I’m just so happy that I went to Social Media Marketing World. I just met so many people just kind of randomly in the hallways too and you just happen to be one of those people.

Ben: Yeah.

Steve: So we did chat a lot about bots that day, but I actually don’t really know your entire background. Like how did you get into this field in the first place?

Ben: Yeah, so my undergrad degree was Business Information Systems and so the more technical side of business. And then I started my career actually as a web developer, so doing PHP code, building a website. That was before WordPress was big, so it was a custom built CMS that we had. And that technical side, I really enjoyed it but the company that I was at had a need for someone to apply that in the marketing sense. And so I started to apply it in marketing. And it’s blossomed from there where for three or four years after leaving that company I was working on marketing automation really heavily.

And then marketing automation the last year and a half, two years has really blossomed into chat bots. And so while I’ve been working for companies, I’ve also been doing a lot of side consulting and it’s given me experience with all these different marketing automation tools. And now getting into the chat bot space I’ve played with all of the big chat bot builders. Yeah, I love it. It’s just so cool to get to try new things and be learning and helping clients grow as I also grow in my own experience.

Steve: So just to be clear, like when you’re talking about chat bots, are you referring to messenger or are you referring to like text messaging and some of the other chat applications as well.

Ben: So I have only launched on Facebook Messenger, even though I’ve done some consulting for a client. They launched a text messaging campaign, and their whole business is around getting reviews, mostly for auto dealers. But they are a big review aggregator and they’re using chat bots instead of text messaging to do that, and they are growing hand over fist. They’re here and Utah with me, and this company is they are exploding in their growth because of their leveraging chat bots.

Steve: It’s interesting you mentioned like you’ve used all these different tools. What are some of your favorite tools just to kind of start it off right off the bat?

Ben: So my top four faves are ManyChat, that’s if anyone who’s done research on chat bots who’ve been around there, ManyChat is getting the most press right now. So ManyChat is the big one. Another one is Chatfuel. I like Chatfuel just because its ease of use is really good if I have a client who wants to build their own bot and they just want me to kind of teach them how to do it. A lot of times I push them to Chatfuel. And then the two other ones — so one used to be called API.AI, it recently well within the last several months was rebranded as Dialogueflow, and that’s Google’s product. They acquired API.AI and they’ve got a very robust tool.

Their tool is robust because you can build your chat bot once and release it in multiple places. And one of the really cool places you can you can release your chat box, so you can build the logic for a chat bot that would work on Facebook Messenger. And then you can take that same logic and roll over to an Alexa skill and actually lets you export the Alexa skill that you can then put on that you can then import over to Amazon’s developer tools. So, really cool stuff that I had I geek out on Dialogueflow, even though it is it is hard to use, you kind of need to be a developer.

Steve: It’s a Google product. So naturally, you probably need to know how to code right bit, right? You know, I actually jumped ahead a bit about myself — I jumped ahead a little bit in terms of chat bots. Let’s talk about what it is first, just in case there’s people listening out there that have no idea what is. And then I want to talk about some of the practical applications that you’re seeing some of the companies that you’ve worked with, and how they’re using these bots right now.

Ben: Great. So yeah, taking a step back to even I tell people I work on chat bots and their eyes kind of glaze over and they say, oh, really? Okay. Well, what’s that? Most of your listeners have probably used Facebook messenger to communicate with their loved ones, and a chat bot is when you interact with a business. And this can be from their Facebook page, there’s that blue button that hovers over the right sidebar on a Facebook page and you can click it. You just send a message.

If you send a message to a business and they reply instantly, then they’re likely using a chat bot. And it’s just an automated conversation that they’ve pre programmed to do certain tasks. I’ve got a business here in Utah that has a family fun center, and their chat bots are really simple. It’s only for frequently asked questions and for if people have questions about promos or hours, or directions to the location or the pricing per different activities at the family fun center. The chat bot can handle those different elements. So chat bots are…

Steve: What do they do if someone asked a question that isn’t part of the database?

Ben: Yeah, if they ask a question that isn’t part of the database and that happens frequently, the automated response says, I’m sorry, I don’t understand that but would you like to talk to a human. And there is a button they click, and they click that button and it actually places a phone call from their phone.

Steve: Ah, interesting. How is that implemented to place the phone call? Is it just built into these tools?

Ben: Yeah, all of the — I think all of the tools, the four tools out there, the ones I had started discussing, so Dialo