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213: A Tour Of My New Business Venture GoBrandWin With Toni Anderson

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A Tour Of My New Business Venture GoBrandWin With Toni Anderson

As all of you know, I quit my full time job as an engineering director 2 years ago. And with 40 extra hours per week of free time on my hands, I’ve been searching for a long time for another project to pursue that would keep me happy.

In this episode, I’m going to formally announce my new business with my partner Toni Anderson!

Go Brand Win

Click Here To Add Your Brand To Our Next Sweepstakes

What You’ll Learn

  • Why giveaways are a great way to grow your email list
  • How our new service works
  • Why it’s free:)

Other Resources And Books

Sponsors

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

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

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

Transcript

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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!

212: Key Takeaways From Sellers Summit 2018 With Steve Chou & Toni Anderson

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Key Takeaways From Sellers Summit 2018 With Steve Chou & Toni Anderson

In this episode, I brought Toni Anderson back on the podcast to do a recap of Sellers Summit 2018.

The Sellers Summit is a conference that Toni and I throw every year. This is our 3rd straight year and it’s all about bringing ecommerce entrepreneurs together and learning new strategies on how to sell physical products online.

Today, we’re going to do a recap on what worked, what didn’t and some key takeaways from the sessions.

Right virtual passes for Sellers Summit 2018 are available for sale until July 1, 2018.

And as an added bonus, I also invited Scott Voelker from The Amazing Seller, Mike Jackness from EcomCrew and Greg Mercer of Jungle Scout to join me in a private Q&A webinar for virtual pass holders on June 28, 2018 at 10AM PST.

Click Here To Buy The Virtual Pass For Sellers Summit 2018

What You’ll Learn

  • The one change this past year that made a huge difference
  • Key takeaways from the Sellers Summit speakers

Other Resources And Books

Sponsors

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

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

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

Transcript

You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not in business. Today I brought my partner Toni Anderson back on the show to help me give a recap of this past year’s Sellers Summit, which is a conference that I give every single year. We’re going to talk about what worked, what didn’t, and talk about some of the key highlights and takeaways of some of the ecommerce sessions.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Always excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 30% of my revenues. 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. Privy is the tool that I use to build my email list for both my blog and my online store. Now Privy is an email list growth platform and they manage all of my email capture forms, and I use Privy hand in hand with my email marketing provider.

Right now for example, 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 we’re doing a special episode because I’m not interviewing anyone on the show. Instead I brought Toni Anderson back on the podcast. And what we’re going to do today is we’re going to do a recap of Sellers Summit 2018. And if you don’t know Toni, she is my partner in crime for the event. And this is actually appearance number five or six I think for her on the show. So if you guys have been listening for any period of time you’re probably already familiar with who she is.

Anyway, the Sellers Summit is a conference that we throw every single year. This is our third straight year and it’s all about bringing ecommerce entrepreneurs together and learning new strategies on how to sell physical products online. And today we’re going to talk about what worked, what didn’t, and some key takeaways from the event. So how are you doing today, Toni? Thanks for taking the time to come back on.

Toni: Awesome. Thanks for having me. It’s always a fun thing to do.

Steve: So it’s year three. Last year I remember telling you that I was worried about hitting a sophomore slump, but this year actually turned out great. And just when I didn’t think it could get any better, I actually felt that this past year was the best one yet. How did you feel going to this year?

Toni: I thought it was great too. And I think the main reason for that is the people.

Steve: How so, how were the people different this year in your opinion?

Toni: Well I don’t think they were different. I think they were the same, which is what made it better because last year, the very first year we knew what we were doing, but we didn’t have the relationships with the people. The second year, we had some people return from the first year. So it felt like we were seeing friends as opposed to just new attendees that we hadn’t met.

And this year we had a lot more returning last year — attendees from the 2017 event. So it really felt like when we saw people, we were excited because we knew them. We had been chatting with them off and on throughout the year, and we got to hear updates on their business. And so it was more — this year felt like we were just hanging out with all of our friends, don’t you think?

Steve: Yeah, no, totally. There was a much higher repeat rate this past year than the first year that we did it. And I felt like I was just seeing a whole bunch of old friends this time around.

Toni: Well, and it’s crazy, because we’ve already opened up ticket sales for 2019. And we’ve had almost half of our tickets sold already to previous attendees, which to me is so cool.

Steve: I mean, I think that’s indicative of the fact that I thought this was the best year that we’ve had, right? The fact that 50% of the people are willing to put their money down for something that’s not even happening for another year really says something about this year.

Toni: It must mean that we’re fun to hang out with, that’s what I think.

Steve: I think so.

Toni: Actually, I think we want to hang out with each other, which is fine with me too.

Steve: Yeah, that’s okay. I mean, you know how it is. We took the same — what’s cool is we didn’t really change up the formula, I didn’t feel like we did.

Toni: No, not really it’s pretty much the same.

Steve: And well okay, so one thing I personally liked was that we expanded the mastermind and we ended up getting a bunch of, I guess more seasoned sellers. And so that way, at least for me, I felt like everyone knew what they were doing this year. And I think that added a lot to the event as well.

Toni: I agree. And I think that getting — I think the mastermind helps us several ways. But I think one of the really cool things about it is that this year we had about 60 people and several masterminds. And so, all those people had an extra day together. And so by the time the actual event kicked off, even if they didn’t know each other on Wednesday, by Thursday night, they were all best friends because they had been together for 24 hours and really had been having really great conversations about their businesses. So they seemed to already have the friendship developed. And what was also cool, is even people that either didn’t qualify for the mastermind or were attending for the mastermind, a lot of people came in early just to hang out.

Steve: You know what I thought was really cool is that compared to the prior year, we’ve all kind of evolved as a group. So people who were in the mastermind last year at the 250K level, well, a lot of them actually qualified for the $1 million mastermind a year later. And so it was pretty cool to just kind of watch how everyone’s businesses has grown and evolved in just one year.

Toni: And that’s one of the favorite – my favorite things about the event is hearing about people who, a great example is Dean who came to our very first Sellers Summit and he didn’t have a product. If I remember correctly he had an idea, but he hadn’t launched or anything. And this year he was in the 250 and I think he messaged me the other day and said that he’s qualifying for the million dollar mastermind next year. So it’s exciting to see people who we basically knew before they even started their business and now we’re watching them and hearing their success and also hearing their strategies which I think is amazing.

Steve: Yeah it’s crazy, right? In just two years Dean took a business from nothing to a million dollars in revenue which I found is crazy.

Toni: I need to be Dean’s best friend now.

Steve: Yeah I got to figure out what he’s doing.

Toni: Yeah.

Steve: I mean that’s pretty fast growth in my opinion.

Toni: Yeah, on a pretty simple — I mean, he’s got a simple product. He’s not out there selling 500 things. You know, he’s got a real basic business model, which I think makes it even a better story.

Steve: Basically, he’s got one product with a bunch of variations, right?

Toni: Yeah. Yeah.

Steve: I mean, I don’t know about you but once again, I felt like I was kind of running on fumes during the event. I ended up speaking three times, and I’ve never felt like I could really relax. But I did have a blast. How did you feel about just kind of the event overall, from your perspective?

Toni: Well, it’s always interesting when you’re behind the scenes, because you see a lot of the things that go wrong that you hope the attendees don’t notice. But overall, I thought it was great. I had a great time and for me, it truly it is about seeing everybody and their relationships. And I actually get a ton out of the sessions. I think it’s why I love that we do the recordings because the ones that I don’t get to sit in, I’m able to hear later. But I found myself in a couple of sessions hoping that my phone didn’t go off with someone needing me so that I could actually sit in there and take the notes and learn while I was at the event.

Steve: Well, what do you think went wrong this year actually? I was trying to rack my brain for that.

Toni: You know we didn’t have any major — we had a few little glitches here and there, but for the most part, everything ran pretty smoothly during the event.

Steve: I mean, I know we were on time for everything. And then everyone showed up, which is good.

Toni: Yeah. Which I think is actually something interesting about our event that I see it’s very different than other events is our attendance rate is about 96% of people who buy the ticket. We have very few people buy a ticket and don’t show up, which I think…

Steve: Is that unusual. Actually, I don’t run a whole lot of events so I don’t even know.

Toni: I think it’s unusual. I think there’s a lot of people that buy tickets and then just — it’s not worth going, maybe they have something else come up. But we had an attendee this year that her son’s prom was one of the nights of the event and she agonized over what she was going to do. And she decided to come just for Saturday. And she said to us, I still remember her Pam, Pamela, she said at the end of the event, it was worth coming just for the day. So I think that’s one thing that people really want to be there. They really want to learn.

They really want to have those connections with people and I think this year just like every other year and the other one of my other favorite things is our speakers are so awesome and so accessible that I mean, I know that you get these emails because I get them too of attendees that email us afterwards and say, thank you so much for having this speaker. They took the time to speak with me after their session. They open their computer with my website; they go above and beyond what I think a lot of the typical speakers do at other events.

Steve: Oh, no, totally. I mean, that’s actually one of the things that we tell speakers, if you’re going to speak for the event, we’d like to stick around, just hang out with everybody.

Toni: Yeah. So I love that. And I love getting those emails at the end hearing those stories because to me, and it’s funny because, like, we get these emails from the speaker saying, hey, I learned so much at the event too. So I think our attendees are teaching our speakers, our speakers are teaching our attendees, our sponsors and our attendees, everyone’s connecting on a level that I think is really profitable for everybody’s business.

Steve: Yeah, and we’ve had a nice core of repeat speakers as well. And I feel like all the speakers have become friends with the attendees as well. So for them it’s like seeing old friends as well. So that’s another incentive for them to come speak as well.

Toni: Well some of our speakers and attendees have worked together on other projects. It’s just cool to see how everyone is growing and evolving over the years.

Steve: Yeah. And every year we send out a survey. And this year, the feedback was once again overwhelmingly positive in regards to the networking aspects of the conference. And we did it really straight from the standard formula, we kept everything small, catering lunch, had cocktail parties every single night. But I can’t really put my finger on it. I thought the networking was better this year. And perhaps that just has to do with the fact that more of the sellers this year were experienced. Any thoughts on that?

Toni: I think it has to do with that. I think it has to do with the fact that people already knew each other for the most part, and that if you were new, it was easy to kind of get in with a group because we also have the Facebook group that people who have attended the event are part of. So you kind of have the opportunity to network and meet people before you even show up. And I think that’s actually really important because I think we both have been in that situation where you go to an event and you literally know nobody, and you’re standing there at the first networking party in the corner hoping no one talks to you so you can be there for the set amount of time and then go back to your room, right?

And I think having the Facebook group and allowing people to virtually meet each other before the event, that way when you’re sitting there people are walking up to you, they know your name, they recognize you from a Facebook post or even a question that people are posting in the Facebook group. So I think that’s one of the reasons why the networking events get better every year is that we really push the pre networking in the group, and that way there’s no strangers.

Steve: Obviously so here’s one thing I thought we did really well. We encouraged a lot of people to do Facebook Lives in the private group, and by seeing a video of someone kind of give their introduction and their background that made people a lot more memorable when you actually met them in person. And I got to give a quick shout out to my boy Troy Gilboe. So Troy if you’re listening to this — so what ended up happening is Troy posted I guess an old goofy picture of himself, and then I turned it into a meme and then we all got into it and before you know it we were just going back and forth with these Photoshop battles.

Toni: I don’t think anyone should actually Photoshop battle you, but Troy is a great sport and he actually had some awesome Photoshop work himself.

Steve: He did.

Toni: Yeah I think he’s one of our most interesting attendee; this is his new nickname, right?

Steve: Most interesting man in the world yes.

Toni: Yes but I think that helps a lot because no one wants to be the outsider looking in, everyone wants to feel like they’re part of the community. And I think the Facebook group goes a long way in helping people with that, so when they get there they’re not — and I think having the networking events too every night is helpful. And then just keeping the event small and keeping everybody sort of in close proximity to each other, you’re always bumping into people in the hallway.

Even I noticed like for dinner people are going out to dinner, we have dinner groups, people are meeting up. I know everywhere I looked I saw attendees with each other, and a lot of them were like new attendees, with returning attendees, and everyone’s sort of meeting each other. So I think that all works together to provide an atmosphere where people are encouraged to build those friendships.

Steve: Speaking, which I do want to thank Susie. What she did, and this is not — this is kind of an outside event and Susie didn’t have to do any of this stuff. But she organized a lot of dinners and meals for the attendees so that no one felt left out. Like if you were brand new, you could go on this page, sign up for a dinner group and not feel left out at all.

Toni: Yeah, thank you. Susie was a rock star for us actually this year and last year, she’s coming back in 2019. So hopefully she’ll be helping us out again, she does this completely volunteer, she’s a complete volunteer for us and just took this on herself and really did an amazing job.

Steve: Absolutely. So Toni, before we get into the key takeaways, let’s start by talking about kind of what we did differently maybe this year that added to — we kind of covered some stuff already, but what were some of the differences between this year and last year?

Toni: So said one of the things we have everybody fill out this survey at the end the event. I think most people think, oh, they’re never going to even read it, right? But we actually read those and take them pretty seriously. And one of the pieces of feedback we got after last year was everyone loved those roundtable sessions that we do on Saturday afternoon but they wanted more. So of course, initially, I told Steve it couldn’t be done, it couldn’t be done. It was too complicated, too much work. And then I realized that even though it is…

Steve: We stopped padding ourselves on the — pad yourself on the bed too hard.

Toni: Well it is complicated, but I realized it’s actually something really valuable. And if that many — we got a ton of feedback on it. And so if that many attendees wanted something that I thought it was important that we figured out how to make it work, even if it was a little complicated, and it still wasn’t perfect the way it ran this year, and I think we can make it better I think, but I don’t know.

If you don’t know what our roundtable sessions are, we basically take about an hour and a half and all of our speakers host a table of about nine people where you can sit there and talk in depth whether it be about their session topics and maybe you went to their session and you had more questions, but they were a little more specific to your own business so you didn’t want to talk in front of the whole group, or maybe just didn’t understand something you wanted more clarification or you just wanted to continue to learn and learn from everybody else’s table. And so we do that.

And this year, we had two sessions. So you got to pick two different speakers or two different topic groups will be a better way to put it, and basically go in a deeper dive into that part of the business and that part of ecommerce. And I think that I’m glad that we did it that way. We gave people two options this year, because I think it was hard just to pick one honestly the first year, and people really want to learn while they’re there, so any opportunity we can to increase those learning opportunities we should take it.

Steve: I mean, I know for me, like when I’m watching a session, I’ll never ask a question. It’s just not my nature. Like when I was in college, I just sat at the back and I just kind of dozed off. It’s the same thing at the sessions. I’d rather just talk to the speaker one on one afterwards and the fact that we have these roundtables makes it just a whole lot easier to just raise your hand and the get courage to just ask a question in a small group environment.

Toni: Yeah, and not everybody who does want to, you know, especially most events, you have to take the microphone; you have to ask the question on the microphone. Not everybody wants to do that, and I totally get it. So I think that the roundtables provide an opportunity for people, or that they just don’t want to publicly share in front of 100 people, but they’re okay with sharing in front of five or six.

Steve: So one thing we also did was we kind of did away with the VIP ticket and then replaced it with two mastermind tiers. And the reason we did this is we found that people who are making 250K and people who are making over a million, they basically had different problems to talk about. And so I moderated one of the $1 million masterminds and we talked a lot about personnel and some of these scaling factors involved in growing a business, which were a lot different than some of the conversation that had the priority when I moderated the 250 plus mastermind.

Toni: I agree and I was in a 250 group this year, and a lot of the issues that we were facing in that group were next steps for business. How do we scale? How do we get to 500, 700k, a million? And what sort of things do I need to reduce in my business to make the other things more profitable? So I think you’re right. The conversations are very different. And I think I’m glad that we separated in this year. And we do bring everybody together for lunch and for networking. So it’s not like we’re completely segregating everybody. But I think when it comes down to specific business problems, it was better to have that separated groups.

Steve: And for all of you guys who aren’t familiar with what a mastermind is, basically a mastermind is where we kind of pre-vet sellers based on revenue. And then we kind of lock ourselves in a room, we cater in food, and we basically spend the entire day helping each other with each other’s businesses. Everyone takes a turn in the hot seat where they get to ask a question and everyone in the group basically helps them with that one problem. And we also all share a strategy that’s working with our ecommerce businesses and everyone has their own tactics. They all have their own strategies and it’s very rare that someone is not able to contribute something.

Toni: And I feel like I learned so much just moderating those and sitting in them. I feel like I leave that at the end of that day, just with so many ideas for new things to do in my business. It’s hard to, it’s almost too hard because you want to like do all these new things but you realize you need to stay focused.

Steve: Yeah, and what’s cool about it is we kind of go into this room with a pact that everything that’s talked about in this room, stays in that room. And what I always enjoy is how open and comfortable everyone is, and how willing everyone is willing to reveal their problems and triumphs. And we purposely, obviously, don’t put people in a group together that could be potential competitors.

Toni: Right, we actually spend a lot of time putting people in the groups for that very reason. And we have people fill out a survey and then we try to match people too with personalities. And so feeling like these people would be maybe not the best people in the same group versus other people that we think would mesh well together. And since we have a lot of returning attendees, it makes it easier to do that as well.

Steve: Absolutely. And I always end up learning a lot myself. And by the end I feel especially close to the mastermind attendees because when you spend eight hours in a room together, you get to really know each other in depth.

Toni: And the other thing, I think that I liked that we did this year, and I think we’re continuing to move towards this is we basically had — we’ve in the past had two tracks with more beginner and advanced and this year we did basically Amazon and off Amazon was our two tracks. And so, I really appreciated that because I’ve been focused personally on growing my off Amazon business over the past 12 months and so those sessions were really valuable to me, because that’s, I mean, I’m not — I love Amazon. I appreciate everything they’ve done, but I really focused on the other part of my business. And so to have those sessions to me was really valuable this year.

Steve: That’s actually a great segue into what the conference theme was about this year. So I got up on stage for the keynote, and I started off the conference by talking about Chinese people. The Chinese sellers are dominating Amazon right now. And they’ve really raised the bar in terms of what it takes to be successful in ecommerce. And so all the talks this past year were specially curated to help you succeed in 2018, build your own brand, and really stand out of the crowd.

I think the statistic that surprised me the most was that 25% of the sellers on Amazon are now based in China. And they have a lot of inherent advantages. And so that’s why establishing your own brand is even more important than ever.

Toni: Yeah, and I definitely I mean because we talk a lot about business off the podcast, but I’ve dealt with Chinese sellers since basically day one. And it’s made me realize how important it is to be building these other channels. And so I loved the fact – actually one of my favorite talks was Bernie’s on selling on Wal-Mart because I’ve been contacted by Wal-Mart frequently in the past six months. And after going to Bernie’s talk, I realized I don’t want to be selling on Wal-Mart right now, but honestly like I appreciated him getting up there and basically creating a case study on why it’s not worth it, most likely not worth it for your business at this right now.

He laid out like hey, but if your business meet this criteria and this criteria, then maybe you should be, but if you’re in this bucket it’s probably not a good idea and you need to focus more on these things. But I appreciated that he was really blunt with it because I don’t want everyone to get up there and sugarcoat stuff and make me think that everything is for me when clearly Wal-Mart is built for certain sellers right now and not for others. And if you don’t fall into that group, your time is better spent elsewhere at this stage in the game for Wal-Mart.

Steve: Yeah, no, absolutely. I mean, these days, I would say that if you are just selling a handful of products on Amazon, and let’s say you’re doing well, it’s still not going to be a long term sustainable business, or you’re putting your business at risk, I should say, because a number of things can happen like a group of Chinese sellers can attack you or something might go wrong with Amazon, they might ban you. And so it really pays to kind of spread out and diversify your marketplaces so to speak.

Toni: Yeah, and I appreciate like, that’s one of the things I appreciate about our speakers is they’re just really honest about these things. And so you don’t go in there — you don’t come out of a session thinking that you can do everything, you come out, I think more focused.

Steve: Yeah, and we did talk a lot of time about — we spent a lot of time talking about branding. And when it comes to brand, it’s more than just getting a logo and designing really great packaging, right? That’s just like par for the course. I think the only way to establish a true brand is to establish a connection with the customer, have the ability to bring them back over and over and over again until they are ready to buy and establish some sort of mindshare with the customer. And so a lot of the sessions this year were specifically curated along those lines.

So, for example, Mike Jackness, he gave an incredible presentation about Facebook Messenger strategy. And right now, a whole lot of people are not using Facebook messenger to market online. I recently just started doing it, I would say in the past four months, and I’ve been averaging 90% open rates and 30% click through rates, which is unheard of. Like if I look at my email, I’ll get like 20% open rates and maybe like 2% click through rates. And so I really enjoyed Mike’s talk.

Toni: Yeah, I missed, he’s one of the ones I need to — I get to listen to on the recording because I was not in there. But I’ve heard the same thing from everybody that was at that talk. Everyone is very pro messenger I guess that’s the best way to put it.

Steve: Yeah all the talk. So we never went to the same talk, right? Because I had to sit to moderate, so maybe we should just ping pong back and forth. So I just talked about Jackness, you want to talk about a talk that you went to?

Toni: So one of the talks that I thought was — and I love, Daniel Solid is one of our speakers. I think he’s attended every year, I think he’s spoken twice. Every time I go to his session, there’s always like one thing that he says as sort of like a mind blown moment for me. So this year he gave a talk about patenting and actually preparing your business to sell and an exit strategy. And I thought some of his ideas for getting patents and ways that you can create new products and create better products that you’re able to get a patent on were really, really interesting and stuff that I think most of us probably aren’t thinking about on a daily basis. And I feel like his brain is just always thinking about that kind of stuff.

So his he and I, it was funny because every time I have that moment, I look around the room, and everyone is frantically, they’re taking a picture of the screen, or scribbling down notes. So I always appreciate Daniel because he’s got these very different type strategies sometimes that I think aren’t as much mainstream as what we hear on other podcasts and reading different publications and stuff like that.

Steve: You know, what I like about Daniel’s style is that he’s a very long term thinker, like literally thinks like years in advance. And so, all the moves that he takes are for establishing a long term business as opposed to just making a quick buck in the next year or so.

Toni: Yeah, absolutely.

Steve: So one of the talks that I went to, which I know you wanted to go to, but I insisted on going myself was Dana’s talk.

Toni: Yeah you beat me.

Steve: What I like about Dana is she’s one of the sellers that I can really relate to because she just very down to earth. And what she did is she taught us her exact protocol for kind of gathering data and monitoring key metrics about her business. And one thing that her talk did, she made me really think about my priorities, like, what are my key objectives and what is the main reason why I even run my business? And so what Dana does is within 15 minutes every single day, what she does is she gathers key metrics about her business. And those key metrics basically just tell her what the health of her business is and where she needs to improve.

And it just takes a couple of minutes every single day and she gets like a high level overview for business. And that’s how she knows that her business is on track and meets her priorities and goals. I don’t know if I explained that very well. You just have to watch the actual talk to understand. But a lot of people they go into business not knowing what their objectives are and they don’t know what’s making a profit. They’re just spending money like crazy. Money is coming in but they don’t really have a firm grasp of all the metrics for their business.

Toni: Well and I think what I appreciate about Dana is that she doesn’t have this huge team, her businesses are very simple and her strategies are very simple and she bases everything on this sort of logic in numbers. So it takes a lot of the — I feel like this is a better idea out of it. And it really gets you to make decisions based on hard like numbers and facts, which I love.

Steve: Exactly. I mean, she has a gut feel for stuff but she always makes her decisions based on the numbers.

Toni: Yeah.

Steve: And her happiness actually, the happiness factor factors in.

Toni: Yeah, Dana is always one of my favorite speakers and I look forward to her. I look forward to just talking to her every year. I feel like I learn something every time I’m just standing by her. My turn okay. So another talk that I didn’t think that I would love but was actually very interesting was Nathan’s talk on your supply chain because we’ve been doing this for a couple years now. I feel like we have a pretty good system in order with dealing with our suppliers. But I think his talk compared with my trip to China and sort of finding new suppliers and seeing some maybe kinks in our system.

He basically walked step by step of things to look for in the whole process of sourcing and getting your products here where you think, I always felt like hey, we’re doing pretty good, our margins are decent. After listening to his talk, I realized, hey, there are some things that I can actually go back and maybe make some adjustments and even increase our profitability or just make changes in our business overall, to just help our productivity and things like that.

Steve: Yeah, along those lines, Greg Mercer gave a great talk about how he sells oversized items on Amazon. And when you sell oversized items on Amazon, it is very important to eke out every last dollar out of your supply chain. So Greg Mercer’s talk actually applied really closely with Nathan’s talk. And what’s cool about Greg’s talk is he gave a very detailed overview on how he ships flat pack containers directly to Amazon from the manufacturer without even seeing the merchandise. So he cuts out a whole bunch of intermediate steps and he ends up saving thousands of dollars in the process on shipping. It was eye opening.

Toni: Well, and I think too, that’s actually a question that’s come up in the profitable online store Facebook group over the past couple of weeks. I think I’ve seen that in there with people asking about that specific thing, or would you ship directly to Amazon? What are the risks? How is that going to work for your business? So that’s a talk I’m looking forward to listening to because I wasn’t in that one.

Steve: I think one person who attended Greg’s talk said that that one talk saved her thousands of dollars every year already. So that already made her conference worthwhile.

Toni: Wow. Well, on the opposite of saving money, I’m ready to spend money on Google Shopping after listening to Brett Curry’s talk. He gave a very step by step talk on how to set up Google Shopping, why you should be using Google Shopping campaigns, and basically how to get started doing that. And I think I met Brett with you a couple of years ago in San Diego. But I was excited for this talk because I feel like for a lot of brands, including what I’m doing, there’s not a lot of competition. And so way less competition to actually do like a Facebook campaign.

So I’m excited to get those started and actually just started working on that in the past couple — since I got back from Sellers Summit to set up some campaigns because he does a really good job of just walking you through just basic steps on how to get set up and how to get started. I think people — it’s a sort of a missed opportunity for people.

Steve: So I’ve been running Google Shopping campaigns for a very long time. And in fact, at the first Sellers Summit, I gave a session on Google Shopping as well. In these past couple years, Google has added a whole bunch of new features to Google Shopping to make it even easier to target people online. And so what we did this past year is I actually had Brett run my shopping campaigns, and he managed to increase the revenue out of my shopping campaigns with some of these new features. And it was — I don’t know, I didn’t get to attend Brett’s talk and I don’t know if he even referenced the case study at all. But the stuff that he talked about does in fact work. Did he talk about the case study at all or no?

Toni: Not a ton. He did reference it but yeah he really just kind of walked us through how you get started, basically the why of why you should be doing it and then how to set it up. And it’s pretty easy if you’re on a platform, it integrates pretty simply.

Steve: Right yeah. And I’ll probably be writing a blog post that details this case study as well, and so I’ll probably link that up once it’s available as well. So I attended my talk.

Toni: How was that?

Steve: It was very well received. And one of the main emphasis of my talk was that a lot of people they grow their revenues for their ecommerce store just by releasing more products. And that’s probably the easiest way to do things, but it’s also the most complicated and involves the most amount of work. A much better use of your time is to target repeat customers on both Amazon and on your own online store. And I gave a whole bunch of real life examples of how we’re doing that with our own store. And right now, only 12% of our customers, since we’re in the wedding industry are repeat customers, but they actually make up 36% of our revenues.

And so whenever a brand new year starts, just based on our existing customers, we already have a nice solid base of 36% right from the bat, which provides a really good foundation to grow your business going forward. As opposed to if you’re just constantly getting new business, the cost of new customer acquisition is always really high and there’s no guarantee that you’ll get those people back. So you’re kind of starting from scratch each time if you’re only going after new customers.

Toni: And it’s interesting because that was actually in the mastermind group that I was in. One of our primary conversations throughout the day was getting those repeat customers and focusing on those people that are your repeat business. That seemed to be a theme through many of the people that many of the attendees in the mastermind group, so I’m sure they were there in your talk or will be watching it. But it was definitely something that we talked about a lot, even in the mastermind session.

Steve: Oh, yeah, totally. I mean, it’s definitely the way to go. And that’s one of the key advantages of having your own brand, as opposed to just depending on Amazon.

Toni: Yeah. And while you were talking, I was actually in Casey’s talk from Viral Launch. And I have to say, I have to watch the talk again, because Casey has so much. There are certain people in the world that know so much about what they do that when they talk about it, it’s sort of infectious with their like excitement and just how excited they get about everything. And Casey is one of those people, and you’ve spent time with him too so you know his personality. When he gets going he’s like a freight train. And so his talks…

Steve: He’s like the LeBron.

Toni: Yes, he is the LeBron of product selection. So I actually want to watch it again because he gave us so much information in his 55 minutes or whatever the time he had just about how do you find products? How do you optimize? It was just it literally was a fire hose. So that’s one I need to watch. I actually had to step out in the middle too which didn’t help because he was just going and going and going. But his knowledge is like he didn’t need the slides, he didn’t reference anything, he just was, it was just off the top of his head and people were hitting him.

The question and answer in that time was also really good. It’s worth — I know so many people skip the Q&A at the end, because sometimes it doesn’t apply to you. But definitely watch the Q&A and that one because the questions that were asked were actually really good questions and they were applicable to anybody selling.

Steve: Yeah, and while that was going on, I think I was at Xiaohui’s — we just call him X.

Toni: Yeah.

Steve: He covered email marketing. And man, I know a lot about email marketing, and I learned a lot of it from X. But X managed to cover like all of email marketing in 50 minutes. I remember when he sent me the slides I was like, dude, there’s no way in hell you’re going to be able to get through all of this stuff because it was really dense, full of information, but he ended up covering all of it. It was an amazing talk, but it’s one of those talks that you’re going to have to watch multiple times to get everything taken in, because he basically covered almost every single email marketing strategy in this one session alone.

Toni: Yeah, and I got to eat dinner with him one night and I was just blown away by him, just such a smart guy. And that’s one of the talks that I missed. So I’m excited to watch that one now.

Steve: Totally. And we didn’t even have time for Q&A, so I bet his round table was packed.

Toni: Oh yeah, it was absolutely packed. I walked by it a couple times. Speaking of people with big personalities, I don’t know who got to see Zach Smith give his talk on Kickstarter campaigns. But he’s got — he’s another one of those people that you just can’t help but smile when you’re around him. Just the nicest guy and lives, eats, and breathes Kickstarter campaigns.

In his, he walked people through how to launch a Kickstarter and obviously he has a company that does that, but he basically taught people how they could do it on their own and some of the really — he went through I think they were the seven Ps of qualities that you had to have to have a successful Kickstarter. And basically if you’re missing one of those the chances of you being able to– and I’m not super familiar with Kickstarter campaigns, but I know vitality and those are pretty important to get to a certain point and then sort of takes on a life of its own.

So he went through that with the attendees and basically taught them how to find the right product to do that with because not every product fits. And then once you think you have the right product, the things that your product, the characteristics and the character [ph] of the campaign so that you can be successful.

Steve: Yeah I think Kickstarter is grossly underutilized. You know how — one of the main problems of ecommerce is that cash flow can be a problem; you have to put your money down in order to fund your inventory. And if you do a Kickstarter correctly, there’s a lot less risk involved because you’re actually making — you’re raising money to fund your first production run and that greatly reduces your risk.

Toni: Sorry. It was interesting to see he had some case studies that he shared of clients that they had worked with. And it was interesting to see things that they had done that it even turned campaigns around after an initial slower launch.

Steve: I think while Zach was talking, I was in Reza’s talk. And he talked about dynamic ads retargeting or sequential dynamic ads retargeting. And what I discovered from his talk is that I’ve been running my retargeting ads wrong this entire time. And Reza very clearly, you can tell Reza is an engineer because he outlined a really enlightening retargeting strategy that relies on telling stories about your brand as opposed to just going for the straight sale. And whenever you tell — when you arrange the ads in the way that he was talking about with sequential dynamic ads retargeting, you’re much more likely to get the mind share of the customer, which will lead to repeat sales and longer term customer value. It was an amazing talk.

Toni: Oh, I got to meet him briefly. And I can — just from his personality; you can tell that he is very detailed in that way.

Steve: Yeah, I mean, he’s very analytical. And he basically spelled out everything step by step. And as soon as I got home, I ended up implementing his retargeting. He runs the company that does this for you, but he also taught us how to do it step by step by hand as well. And that was the route that I chose to take.

Toni: Another…

Steve: I was just going to say especially because his software doesn’t support my shopping cart. Get to work on that Reza if you’re listening to this.

Toni: That’s right. A long time speaker alumni is Scott Volker. And if you know Scott, you know he is a great speaker.

Steve: Has low energy.

Toni: Yeah, he’s so boring. Yeah soft spoken. But Scott did a talk on how to launch a six figure brand in 2018 which I think everybody knows in the Amazon landscape for sure it’s just getting harder and harder. And he walked everybody through his whole process from not really brand — not really product selection but basically once you have a product, the steps that he’s taking to move forward and launching without any built in audience really.

And as always, Scott does a great job in just breaking down all the little details that you need to know. And working with, even if you don’t have any Facebook fans, or you don’t have any email list, or you don’t have anything you can still do – it’s still possible to do. And I think a lot of people think, oh, it’s too late to get on this, launching new brands and things like that. But he really gave a, oh my god, what’s the word, roadmap, gave a roadmap for being able to do that, even in this landscape, which is so competitive these days.

Steve: I didn’t get a chance to attend his talk, but I was in the adjacent room and there’s this pretty thick wall between our sessions and I could hear his talk from the adjacent room.

Toni: Yeah.

Steve: Which was soundproofed, yeah.

Toni: He’s not quiet but anyway, if you know Scott, he’s just great to have at the event in general because he’s one of those speakers that just talks to you all night long and help you with your business. And so we love that. And Chris Shaffer actually came; his partner came too and helped out with the roundtable. So it’s always great to have Scott and it’s always interesting to see what he’s working on, and he’s always willing to share that with everybody.

Steve: Absolutely. And while Scott was talking, I was in Edwards talk. And he did an amazing job on teaching people how to run Amazon sponsored product ads. And what I did this year is I purposely asked him to do a much more advanced talk since all the basic stuff is already covered, you can find out stuff online. And one attendee Pamela, who we talked about earlier, who attended his talk said that her ACOS went from 60 to 70% down to 15% within a week after implementing Edward’s strategies, which I thought was pretty amazing.

Toni: That’s incredible. And I know Edward poor guy, I think he met with any attendees that wanted to meet with him over the weekend. Every time I saw him, he had a computer out and was sitting with somebody working on their sponsored product ads. So just his willingness to meet with people one on one and walk them through it was phenomenal.

Steve: I mean, he enjoyed every minute of it he said. He’s kind of like a sponsored product ads geek. He pulls all nighters for this stuff, too. He’s just really into it. Yeah, I couldn’t understand it. But yeah, he just loves it so much.

Toni: Yeah, he was definitely busy. Another talk that I actually was very bummed I had to walk out of because I had to go take care of something was Brad Moss. He’s a former head of Seller Central. And he talked about accessing hidden analytics on Amazon to get repeat customers. And I’ve actually only heard the first 10 minutes of it, but that’s the one video that I actually have downloaded and ready to watch from Sellers Summit already, because even within the first couple of minutes of his talk, I was completely hooked and actually very irritated that I had to leave because I always learn so much from Brad anyway, just in our conversations, and I know that he’s got definitely special insight into these things. And so I’m very excited to hear what he has to say about this.

Steve: Yeah, I was bummed to have missed his talk as well because he always delivers. I think his last year’s talk was one of the most popular ones. And this year, the whole topic of getting repeat customers, he really hammered that home in his talk on how to do that on Amazon.

Toni: Which some people think is impossible. So I’m very excited to hear what he’s got to say.

Steve: They also said it cannot be done to have multiple roundtable groups at a conference. But…

Toni: Well, we’re breaking all sorts of rules now.

Steve: So while that was going on, Pam and I, we did a Q&A session this year about freight forwarding, and there’s all these inefficiencies in your supply chain. And the reason why we did a Q&A this year was to kind of cover some of the more advanced topics in freight forwarding, a lot of things in your supply chain that can be optimized. And I felt like we did a really good job of covering them all.

Toni: Well, and what I love about Pam is even if you don’t work with her, she’s still willing to sit there and help you and she is — I mean, like all, I think all of our speakers are amazing. They’re just so nice and helpful. And they’ll go out of their way. They’ll stay up late. They’ll come in early. I know someone was meeting with somebody early in the morning to help them. It’s just they’re always available and accessible. And Pam is just, it’s like she embodies a lot of that. I feel like she’s just always available, always smiley, always helpful, and she doesn’t care if you work with her or not, she just wants to help people.

Steve: I mean I think that’s a prerequisite to be a speaker. We get a whole bunch of speaker applications and we turn most of them down. And speakers that we do get; I’ve either met in person, had on the podcast, or they’re just people that we know personally. I tell them they’re going to stick around and they’re going to be really friendly.

Toni: And it’s funny because we have some speakers that asked to come back and speak because they enjoy our attendees so much.

Steve: Yeah, I mean, we do screen out the attendees to a certain extent too if you’re coming to the mastermind I guess.

Toni: That’s true.

Steve: So are there any more sessions that we haven’t talked about?

Toni: I think we’ve got, we’ve hit them all other than the — we closed out the event with a quick panel Q&A with Steve, Greg Mercer, Scott Volker, and Mike Jackness. And that was basically, we just passed around the microphone, let folks ask questions, and I think that was a fun way to end it just because it was very relaxed. Everyone was finished with the event as far as the pressure of speaking and doing a session with a PowerPoint. And so we just opened it up to the audience, let them ask questions. And that’s definitely one worth watching because we got people just kind of having a casual conversation.

Steve: Yeah, absolutely. And once again, I think tickets, when we sold them, they sold out super quick. I think we were done in February. We were done earlier than that for the mastermind.

Toni: Yeah.

Steve: And the main reason is we purposely limit ticket sales. It’s not a large conference.

Toni: No, we can’t do that. That’s impossible.

Steve: You can’t do that and maintain the level of networking that we have.

Toni: I agree. I agree.

Steve: So we actually opened up the tickets as you mentioned earlier in this talk to alumni only, and we’ve already sold 50% of our tickets for next year.

Toni: Yeah, so if you want to meet some of our alumni, if you want to meet Troy that’s our selling point.

Steve: So all these sessions that we talked about, we are still selling a virtual pass for this past year’s event. And one other bonus that we always do for virtual pass members is that we have a live Q&A. So I like to say that we’re bringing the conference over to you, in case you didn’t get a chance to attend. So all the video sessions are available for purchase, but we’re also going to hold a live Q&A webinar with a bunch of the speakers in the next three weeks or so. The exact date is TBD, but we’re going to do that to just answer any questions that you might have about the sessions.

Toni: And if you’re not able to attend the live Q&A, it is recorded and available for you to watch at your own convenience. But we really do like you to be there live because then you do have the opportunity to ask questions.

Steve: Absolutely. Yeah. So I’ll probably post the link to purchase virtual passes underneath in the show notes for this episode. And we already obviously decided where the conference is going to be next year. And where’s it going to be Toni?

Toni: It’s going to be in Miami at the Conrad Hilton, right on the bay. So it’s a great location. It is very close to the airport and also close to tons of restaurants and places to sort of hang out when the conference is not going on. The hotel has a great lounge area and tons of space. So it will be another great event for networking and hitting all the dinners with everybody. And I think it’s going to be another great space for us.

Steve: And what are the dates?

Toni: The dates are May 15 through May 17.

Steve: Yeah. I mean, one of the mistakes that we did this past year is we kind of overlapped this summit with the Canton Fair third phase, and that is not a mistake that we were making this next year.

Toni: No, we pushed it back a little bit for everybody. And one other thing we listened to on the survey for you guys is a lot of you didn’t want it over the weekend. So this year will be the masterminds on Wednesday. But then the actual conference is on Thursday and Friday. So you will be able to fly home Saturday morning to make all the sports games proms, graduations and anything else you’ve got going on that weekend.

Steve: Yep, that was one thing we changed based on the survey results as well. So underneath in the show notes, I’m going to be posting links to purchase the virtual pass as well as a pass for next year. And the fact that we’re already 50% sold out, I’m guessing that we’re going to sell out a lot quicker for this coming year.

Toni: I agree. I think I love our alumni coming back. I’d love to see some new folks there. We did make the mastermind bigger, the actual sessions are not bigger, but we’ve opened up another block. So we did add some more mastermind spots, so if you are interested in that — but those always do sell out first. And those are definitely things that we can’t — at some point we can’t add any more. So we don’t have a lot of flexibility with that.

So if the mastermind is something that you’re interested in, it’s definitely — and those are not recorded. There’s no way to access those for the main reason we want people to be able to share things honestly and not worry about anything getting out of that room. So that is definitely something if you’re interested in, I would not hesitate to purchase that pass.

Steve: Yeah, absolutely. And we’re not changing anything up for the third year. We are purposely keeping the event small and intimate to foster networking. And I think we have a really good formula and we’re not really going to change much at this point.

Toni: So you definitely want to join us next year. And if you’re not sure, grab a virtual pass from this year and just see what our content is about and see if it’s something that you think would help your business.

Steve: It sounds good. Well Toni, thanks a lot for taking part in this Sellers Summit recap.

Toni: Thanks for having me again and again and again.

Steve: Well, you’re a fan favorite. No one listens to me.

Toni: That’s another reason why they come to the summit too, right?

Steve: Yes, it is. It is true.

Toni: Lies, lies.

Steve: All right. Take care.

Hope you enjoyed that episode. Virtual passes for the 2018 Sellers Summit are on sale right now until July 1st. And as part of purchasing a virtual pass, we’re also hosting a special private Q&A webinar with Mike Jackness of EcomCrew, Greg Mercer of Jungle Scout, and Scott Volker of the Amazing Seller. Now this webinar will take place on June 28 at 10:00 AM Pacific. So to buy your tickets go to sellerssummit.com. For more information about this episode, go to mywifequitherjob.com/episode210.

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

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

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

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

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211: How To Self Publish A Book And Sell It On Amazon With Chandler Bolt

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How To Self Publish A Book And Sell It On Amazon

Today I brought my buddy Chandler Bolt on the show. Chandler is someone I met at a Fincon meeting in San Francisco. Then I saw him briefly again at Social Media Marketing World and knew I wanted to have him on the podcast.

Chandler runs Self Publishing School where he teaches others how to write and self publish your first book in 3 months working 30 minutes per day.

He’s the author of multiple best selling books and he’s an expert when it comes to going out on your own in the book business. Enjoy the episode!

What You’ll Learn

  • How to use an ebook to generate leads
  • How to successfully sell a book on Amazon
  • How to build your launch team
  • The most important aspect of selling a book
  • Why you should self publish instead of going with a traditional publisher

Other Resources And Books

Sponsors

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

You’re listening to the my wife quit her job podcast, the place where I bring on successful bootstrap business owners and dig deep into what strategies they use to grow their businesses. Now today I’m happy to have my friend Chandler Bolt on the show. Chandler runs Self Publishing School where he teaches other people how to make a living selling books online, and today he’s going to teach us how he does it.

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. 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 that will manage your email capture forms, but I like Privy because they specialize in e-commerce stores. 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 prizes in our store. And customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%.

There are other cool things that you can do too. So for example let’s say you offer free shipping for orders over 100 bucks, well you can tell Privy to flush a pop-up when the customer has $90 in their shopping cart to ask them to insert one more item. But bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve, and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ For 15% off. Once again that’s P-R-I-V-Y.com/Steve.

Now I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. Always blessed to have Klaviyo as a sponsor because they are the email marketing platform that I use for my e-commerce store, and I 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’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 that is sent.

Now Klaviyo is the most powerful email platform that I’ve ever used and you can try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again that’s mywifequitherjob.com/K-L-A-V-I-Y-O, now 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 brought my buddy Chandler Bolt on the show. And Chandler is actually someone I met at a FinCon meet up in San Francisco. And then I saw him briefly again at Social Media Marking World carrying a bunch of massagers and I knew I wanted to have him on the podcast.

Chandler runs Self Publishing School where he teaches others how to write and self publish your first book in three months working just 30 minutes per day. And he’s the author of multiple best-selling books and he’s actually an expert when it comes to going out on your own in the book business. And with that, welcome to the show Chandler, how are you doing today man?

Chandler: Hey Steve great to be here, thanks for having me.

Steve: Yes Chandler we didn’t get a chance to chat that much, but it looked like you had places to go with those massagers.

Chandler: Yes it’s that we were as Steve was mentioning, we were trafficking a version in Social Media Marketing World and our booth was next to a massage booth, they were fire selling these things in the end and I was caught in the middle as the transportation man for my team. And where we are — we were getting that boost setting up and having a good time.

Steve: So Chandler I know your background story but the listeners do not. So tell us how you got into the self publishing business.

Chandler: Yeah so my life changed when I wrote and published my first book. I was about 19 years old at the time believe it or not, and I was a C level English student and a college dropout. I was actually in the process of dropping out of school when I wrote and published my first book. And I always say that the book is the key that opens the door to Narnia, right? So if you see in the Chronicles of Narnia, it’s like this magical land that only exists and then they found this key, open this door, there’s this magical land.

For me that was what happened with my book. So the book was the key that opened this door like this world that really only exists for published authors. So for me that meant you know the book made close to $7,000 in the first month, and a few thousand dollars a month in passive income month after month after month.

Steve: Was this on Amazon or?

Chandler: Exactly.

Steve: Okay got it.

Chandler: It was just on Amazon. And then kind of since then it’s marked a multimillion dollar business. I mean we’ve grown Self Publishing School to little over seven million dollars in the last three years, and that’s bill off the back. So at this point I’ve done, I’ve written and published six books and those really like they bring leads for our business, they obviously bring passive income on a month in month out basis.

And then I think kind of the favorite, my favorite part is to see a bunch of people like in your audience, moms or people who say, hey I’ve accumulated all this knowledge over the course of my life whether that be my adult life, my entire life or my stories from being a kid, and I want to give back to others. I want to help people, impact them in a great way, but also like make some passive income or make some income that’s not tied to me training dogs for hours.

And so that’s kind of what we’ve seen is our students, it really just opens up a whole another world for them and I think gives them a lot of confidence. And then also it’s not a bad thing to be able to create some words and then like a year from — or sorry like three years from now still be getting checks.

Steve: Yeah totally.

Chandler: That’s X fifty bucks. I’m pretty pumped about that because that’s like some pretty good passive income.

Steve: Can you give us an idea — you said you had six books out, how much passive income is that generating you personally?

Chandler: Yeah so I think it’s about a couple thousand a month kind of in that range. Now we — and this is one of the things we talk about in the program, we structure books to fit your goals. So if your goal is to make as much passive income as possible, I’d be doing things very differently with my books. If your goal is to bring in business or leads for your business, then you’re going to structure it that way like really depending on whether it’s authority, depending on your goals you are going to do things quite differently from a marketing perspective.

So for me I try to give away as many copies of my books as possible because I know that that lead is worth like exponentially more for me, and they’re way more likely to become customers of publishing school, spend a few thousand dollars with us. It’s like that’s worth way more for me. So I’m not optimizing for book royalties. I’m actually happy to spend money on Amazon ads and all that. It’s like even if I break even on the books I’m happy because I know all the while I’m getting a whole lot of free leads, or actually I’m getting paid to get leads from my book.

Steve: Does that imply then that your books are free then for the most part?

Chandler: No they’re not free on Amazon, but like I’ll give away the audio book which is a huge lead gen for us. I mean in the month of January this year we did cash, so I was just showing this to Social Media Marketing World a TNC we did what seems like 1,500 leads.

Steve: Wow okay.

Chandler: But that seemed also like – and then on credit that was a nice top because we were launching a product but seems still like 26 of those leads were from a book that I wrote and published like two or three years ago. So for me I’m doing more lead gen. Now of course we still sell them on Amazon. We do some free question thing book funnel sometimes and create promotions around that, but kind of anywhere on our site, it’s impossible not to get one of my books for free. We just use that as a big lead gen and also kind of customer acquisition too.

Steve: So when you see a lead gen, these are like links within your book that lead to some sort of e-mail sign up form or something along those lines?

Chandler: Exactly. There’s two main things and this will be worth the price of admission just right here. So this is one of my best marketing tips is if you’re using a book to grow your email list is give away audio or video, and the first five pages of the book for free. Now if you look on any of my books, so you can go to search published on Amazon or a book launch on Amazon or any of my books, you’ll see this. If you click the look inside feature, you’ll see that I give away the audio book for free.

So imagine like how different our relationship is going to start off Steve where you’re browsing on Amazon, and some people think this, I think Chandler is an idiot, he doesn’t know that I can get this for free. But for me like I said a second ago that lead is worth way more than if they were to buy my Kindle book or print copy or whatever else.

And oftentimes they do go onto to purchase other formats of the book, but they can actually opt in without even purchasing the book through that look inside feature. And then obviously if they’re getting into the book or if they purchase the book they can do the same. They can get the audio or some people like to do video, or the other thing is just resources mentioned throughout the book.

Steve: Interesting, are your books about self publishing by any chance?

Chandler: I think three out of six of them are.

Steve: Okay.

Chandler: The only books are and then obviously now that I’ve kind of been obsessed with helping people write, and publish their first book, that’s what my last three have been about and those three others, the most recent three.

Steve: Can you kind of comment on just Amazon versus a traditional book publisher?

Chandler: How much time do you have?

Steve: Well just give me the pros and cons.

Chandler: I run a company called Self Publishing School, so you can kind of guess which side of the equation I’m on, and what my beliefs are. But so here’s the cool thing Steve, so and how many people know this but over 70% of all books sold are sold on Amazon.

Steve: Is that physical and digital?

Chandler: I think so. I think so, I can double check that stat, so both are stats though, less than — what is it, less than 16% exactly of best-selling e-books are from traditional publishers. If you flip to the other side to author earnings, 70% of author earnings are from independently published authors. I mean they’re either with a really small publisher or they’re self published. So basically what’s happening is self publishing used to be the redheaded stepchild, right? It’s the thing that you only do when you can’t get a publisher, and you’re not legit if you don’t have a publisher.

Now I’d say for 99% of people, it makes much more sense to self publish. And now obviously you’ve got to do it right, and the big objection is well, hey, I want to work with a publisher so they can do all this stuff for me. But the publisher is not going to market your book for you. That’s a common misconception. They’re going to ask you how you’re going to market it. It’s also going to take years of your life. You’re going to lose all your creative freedom and all of your control in the process.

So unless you’re [inaudible 00:11:38], unless you’re someone who’s going to get a million dollar advance, then also you want to sell internationally, then it just doesn’t make sense anymore because all of the power is back in the hands of authors with the books been sold on Amazon and the process is just getting easier.

Now there’s a lot of people who self publish the wrong way and who give self publishing a kind of a little bit of a bad name still. I say in five to ten years in my opinion the publishers are going to be out of business for the most part. You’re going to still have these big conglomerates just like you still have big cable conglomerates, just like you still have big record labels, but like they’re getting squeezed in a dying industry. And so for most people it just makes significantly more sense to self publish.

Steve: Is it possible to get on like the New York Times bestseller list if you self publish or even in like a physical book store?

Chandler: It’s possible to get in a physical bookstore. It’s difficult but it’s possible and especially Amazon has some physical bookstores so that they do that based on what sells the best.

Steve: Sure.

Chandler: It’s possible to get on the New York Times list, self publish is very hard. Now the thing a lot of people don’t know about the New York Times list is that it is an editorial list. Now this is highly problematic and it’s kind of a joke, and we’re going to write a blog post about this, how the New York Times list is a total scam. So editorial lists and so what that means is that if I’m an editor — so it’s meant to be a representation of books sold nation, right?

Right now it’s a complicated algorithm that says, okay, not only do you need to sell in like all the zip codes across the country, it needs to be local bookstores, small bookstores, some on Amazon, some from like big box Barnes and Noble. You need to have like two to four thousand of those that are from bulk orders so like companies or events, or things like that. So you need to fill all this algorithm.

Now the original intention was to keep people from gaming the system, but now, it’s just kind of people know the system so it still can be gamed. But then here’s the crazy part, so at the end of the day I find an editor at The New York Times, I could say, Steve I don’t like you or I don’t like your hair or the weather is bad outside, or my girlfriend just dumped me. And for any of those reasons I can keep you off the list. So it’s not a true bestsellers list.

Now USA Today on the other hand that’s a true bestsellers list, Wall Street Journal, that’s more of a true bestseller list for hard copy books. So those are two higher of a list of higher integrity but obviously everyone is still obsessed with The New York Times because of past prestige from like 50 years ago. So that’s the one that is coveted and everyone still goes for, but I really think that trend is going to change.

And here’s what kind of one final crazy thought on this, so here recently multiple people are being kept off the list who should have made it. So Michael Hyatt with his book Living Forward, he was the CEO and a publisher for 30 years, Thomas Nelson publisher. And they said hey, he’s like kind of in internet marketing land now, so we’re going to keep him up the list. He sold more than enough copies to be on the list. You need to sell about ten to 12,000 copies in week one, and I can’t really know what he sold but it was definitely more than that.

Jeff Walker here recently, same deal, launches a book, it was actually years ago I guess now come to think of it. But he launched his book launch and in week one he sold enough to keep him off the list — sorry he sold enough to make the list, they kept him off. And then he reloaded and not many people can do this. Jeff could do this because he’s just incredible and he has this huge following.

But he reloaded and went back even harder the second week and he hit number one week two. Now mostly being because they said, hey, we can’t keep this guy off or we’re going to look like idiots because the integrity will truly be compromised if we’re like purposely keeping this guy off for multiple weeks in a row. So he made it in week two. So there’s just things like that that you see that are happening that the landscape is really shifting and obviously you can tell how passionate about…

Steve: Yeah totally.

Chandler: In the dramas like this is scam. It just feels like what Uber is doing to the taxi industry.

Steve: Yeah totally.

Chandler: I’d like to still — I feel like we’re the Uber of the publishing industry which is saying, hey, this is a horrible experience. It’s a stacked deck, it’s rigged against the author, and the public is totally blind to it or feels like they can’t do anything about it and we can. There’s another way and there is a better way but it still starts with awareness around the problem.

Steve: So let’s talk about that. And so what does it take to become a successful author on Amazon?

Chandler: Yeah so hopefully people have stuck with us because we went straight to like book nerd like people who are here they had learned about the actual…

Steve: That’s like the number one question that most people have right, why not a traditional publisher, but anyways yeah.

Chandler: It is. It’s funny I have this conversation so much that I can’t believe it’s still a question that comes up, but in the minds of — I have to realize that in the minds of everyone else that’s not me in this day in day out, like they still very much like, oh traditional publishing will bust. So there’s a lot of education in the market that needs to happen and I’m trying to make sure that we do that. So what does it take to be successful on…

Steve: So let’s start from the beginning. So let’s have a book, let’s say I want to write about e-commerce, what are the steps, what should I be doing?

Chandler: Yeah so I mean there’s a lot that goes into it. It’s kind of a three step writing process. I mean step one you’ll get clear on what you’re writing about and get clear on who you’re writing to.

Steve: Well let’s take a step back. So you promise a book in 90 days, right?

Chandler: Yes.

Steve: So traditionally that assumes a certain length of book, and I imagine it assumes a certain amount of writing that needs to be in each day and a certain amount of time for marketing and that sort of thing, right?

Chandler: Exactly. So our target is fifteen to 40,000 words, somewhere in that range, but you do spend 30 minutes per day. Some people will just ship like lock themselves in a cave for a weekend or like in their office or whatever for a weekend and just write the book in a weekend. We’ve got some processes that kind of like speed that up. But either way yeah you got your link, you got your daily commitment, and then I think the big piece that a lot of people screw up besides the marketing, I mean I’m sure we’ll talk about that. I mean that’s what almost everyone in the marketplace just doesn’t understand and isn’t doing well.

But the marketing starts before you even write the book, and not many people realize that. So whenever you start with a broad topic, it’s not going to do well. And so one of my first things and one of the first things like our coaches do when they get on calls with people is let’s get crystal clear on what this book is, who you’re writing to specifically and also who you’re not writing to. So I see people in this stage that they try to go way too broad. So they try to please everyone and they end up pleasing no one.

Steve: So give me an example of one of your students for example that picked something that was too broad and how you narrowed it down.

Chandler: Yeah, so there’s a couple of examples. So I’m trying to think, so one of them is this from a while back and she was just incredible, she’s had a whole lot of success since then. Her name is Kelsey Humphries. So I think she had a book, it was like live your passion, fulfill your dreams, and accomplish your purpose or something. I mean it wasn’t that, but it was along that chain. We started talking and I’m like what are you actually saying here, because I don’t know if I’m a potential reader, I don’t know if I’m a fit or not just glancing at this book.

My general rule, and what we talk about as the litmus test is within two seconds I need to know what your book is about, and whether it’ll help me. So when I see the title and the subtitle, I need to know that instantly and you’re covered. If I don’t know that, that’s a problem. So, well I was like what are you really trying to do here, and I started talking to her. And it became clear that what she was really passionate about was helping people quit their day job. Later in the book she called it go solo, and I think the subtitle was how to quit the job you hate and start a small business you love.

So now all of a sudden you instantly know whether this is a fit for you or not. And that book I mean she got endorsed by Barbara Corcoran of Shark Tank, she’s going to interview Tony Robbins, Seth Godin like [inaudible 00:21:00] like all these incredible people and like that was kind of a launch pad for her. But I think it just all starts with getting super specific. And then, one more example that I’ll give, and this is one that comes…

Steve: So along the lines of the example you just gave, like small business in itself is pretty vague, right?

Chandler: No.

Steve: Like there’s a bunch of different types of small businesses, so would say would you recommend to actually niching down even more and like how to write a book business, or how to sell physical products online and that sort of thing in this specific example?

Chandler: Yeah I would, I would. We could probably kind of layer further than that. I mean it does still speak to like how to quit the job you hate and start a small business you love and go solo. I mean it speaks to that. But for me I’m trying to go as specific as possible with all my books. So as an example, my very first book, The Productive Person, I think gosh the subtitle on that was like basically spoke to – I’m forgetting it right now, but it speaks to this like it is for entrepreneurs who struggle with work life balance and want to take back control of their schedule and these are productivity hacks and things like that.

So now instead it’s like productivity hacks for entrepreneurs who’ve got work life balance wanting to take a control of their schedule. So like be specific and that’s what I recommend for others as well. One other just quick example that I’ll give is I was chatting with one of our students about her book idea, and we have a saying and I forget where I heard this but this isn’t original to me, but it says it’s easier to sell pain pills than it is to sell vitamins.

So, essentially meaning that people will whip out their credit card when something is painful, and they’ll stand idly by instead of buying vitamins. No one wakes up in the morning and says, I can’t wait to buy vitamins today. A lot of people wake up in the morning and say, wow my back hurts, and they reach for pain medicine, right? So that’s what really moves the needle with anything.

And now with books it’s specific. So she was writing a book about burnout, and the original hook and this just goes to show how important it is to really nail the hook from the beginning. The original hook was preventing burnout and kind of like steps to prevent burnout in the workplace. And I said this is great. You can actually talk about all the same things in the book, but what I would change the positioning is what to do once you burnout.

Steve: Got it, got it.

Chandler: Because like no one wakes up and says, hey, I want to prevent burnout in my job. But a lot of people will wake up and say, wow I’m burned out and they’ll start goggling things in that moment or they’ll go on Amazon and they’ll search searching being it’s in that moment. So I think the two takeaways just for the audience here is number one, get as specific as possible. There’s no such thing as too specific. And then number two, how do you address this so that it’s — or how do you position this so that it’s solving real pain in the eyes of the reader and not just a vitamin solution.

I just want to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you’re interested in starting your own online store, I put together a comprehensive six-day mini course on how to get started in e-commerce that you should all check out. It contains both video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online.

Now this course is free and can be obtained at mywifequitherjob.com/free. Just sign up right there on the front page via email and I’ll send you the course right away. Once again that’s mywifequitherjob.com/free, now back to the show.

That’s interesting because there is a lot of bestselling books that don’t necessarily follow that philosophy and they do fine. But perhaps that’s just because the author is just so big already.

Chandler: Yeah I’d say so, any that come to mind?

Steve: For example I’ve just – yeah I know that’s cool. I was just thinking about like the Dover [ph] book like Win Bigly. It’s not really that descriptive of a title, but Scott Adams has such a large following that I guess it doesn’t even really matter what he writes at that point.

Chandler: Yeah and there’s a whole what makes something get traction isn’t what makes it keep traction, right? So when I’m getting traction as a no name author, people need to know.

Steve: Okay yeah that makes sense.

Chandler: Tony Robbins is like money master of the game, okay cool, I need to get control of my finances. And even he launched a second book like a year later that was unshakable which is way more pain focused, so like how to prepare yourself for coming recession and that sort of thing. Okay so for someone who has a big audience like that, they can get traction with a couple of email blasts and TV appearances etc, and then what gives that book legs which is what gives every good book that sells thousands of copies legs which is it has to be a good book, right?

Steve: Sure.

Chandler: If you can come on a conversation with me and say, oh here is what it actually means and here is why it is good and you should get it, then sure it still takes more effort for that author to sell me on it, but there’s the virility in the word of mouth. But for a lot of first time authors, having a big title or a clever title is just not going to do it and it’s not going to help them get out of the gates.

Steve: So let me ask you this, do you need to hire an editor, or can this all be done kind of solo, what would you recommend.

Chandler: Solo I wouldn’t necessarily recommend it simply for the fact that I was just you know what I was just mentioning which is you need a good book and there’s a lot of people in my space in particular that just say, hey, just speak and get it transcribed and publish it. They’re just perpetuating crap and kind of into the universe. But that’s not my stance, but I think you need an editor. Now for my first book I didn’t have one, we self edited.

And then I’ll even say to some people it’s like, hey, if you’re on a budget, call up your high school English teacher and they would love to help with this. And that would be like just a defining moment for them that one of their students went on to become a published author, like that’s pretty cool for them and also it can be helpful for you.

But with my first book we self edited, and then the book did so well that we used some of the proceeds from the first month to go back and hire an editor and then we published an update or a revised version a month or two later. So you can certainly do that, but then also editors aren’t that expensive. So we have a post in the Self Publishing School where we can link up in the show notes about how much does it cost to publish a book. And so we kind of break down like…

Steve: What is that number approximately?

Chandler: Yeah so how much does it cost to publish a book, or just for editing specifically?

Steve: Just to publish the whole book.

Chandler: Yeah so the whole book, I mean like 200 bucks on the very low end to like 1,500 a couple. I mean you can really spend as much as you want, and most people spend way too much. But we usually say, hey, 200 on the very low end like fully bootstrapped, and then on the higher end like 1,000 to 1,500 bucks.

Steve: Are the bulk of those costs the editor?

Chandler: Yeah so the two main expenses are editing and also going to be the book cover. Those are the two, I mean don’t cheap out of the book cover, that’s also a takeaway I would give people. I’m amazed how many people will spend years writing a book and they’ll spend five minutes and five dollars on the cover. People judge a book by its cover. So get a good cover and pay…

Steve: What are some elements of a good cover?

Chandler: Yeah great question. So, there’s two or three things there. Number one I already mentioned, the litmus test of I need to instantly understand what the book is about. Number two, the title needs to be easily readable. And then number three it needs to stand out. So that means that the cover is clean, that means that the title is in the upper third of the book. And so I always talk about how there’s a difference between a good looking cover and a good selling cover. So designers will send you good looking covers, they just might not sell well.

So it’s a big designer thing to like put the title on the bottom part of the book. Don’t do that; put it on the upper third because of natural eye path movement. People go to upper third and then read down into the right. So those are like the main things, make sure that I instantly understand what the book is about, make sure that it stands out. This is like your billboard in Amazon. So you’ll notice my book launch has like an orange cover. My book published, it’s blue, but it has red on it which the subtitle really pops of that. And then yeah the third thing is make sure that the title is easy to read and then it’s in the upper third.

Steve: Are there any things that you do to kind of split test the book cover before it actually goes out?

Chandler: I put everything up for a vote. Now I know this isn’t exactly like scientific and a lot smarter marketers than I am will say like, you should be spending money on AdWords or Facebook ads or things like that. I put it out for a vote to hopefully my target audience, but this also is kind of part of what we teach which is like building buzz before the book launch.

So now that I’m getting all these people involved and by the time my book launches they feel like it’s their book that’s being launched because they’ve had input, and I’ll get a lot of good input on my covers. So I’ll send out on my e-mail list, I’ll post on Facebook and things like that, it just gives some really good feedback on the cover, and usually one, or two of them will jump out of people.

Steve: So let’s talk about this a little bit. So let’s assume you have no audience whatsoever, what would you do? Would you try to build an audience before the book’s even written, like what is the process?

Chandler: Yeah this is kind of a chicken and the egg conundrum and some people it’s exactly the question you asked, some people it’s should I start a business or do the book first? Should I get authority or publish the book? It’s kind of like chicken or the egg. So, for me personally, I was 19 years old and I had no following whatsoever when I launched my first book, The Productive Person. Now I had like I think a couple hundred friends on Facebook or something like that, and these were just like friends and family that I knew.

And so I scrapped for every piece of feedback that I could get, every review I could get on my book, all those things. So if that’s you, then I mean in person, you can show people your book covers. If you’re on Facebook or any social media, obviously you can post that there. You can email it to people who would be your target customers or even family, friends, things like that.

If you have absolutely no one in your life that could give you feedback, for most people I found that that’s not the case, for some people it is. But definitely for me I had no – I had 4,000 [inaudible 00:32:03] list off of the book, but that was just people who basically purchased the book and that was in like the first six to eight months. But I had — that list did not exist before I published the book.

Steve: Interesting okay. So let’s talk about the different options on Amazon, and then what is the launch process like for you assuming you have no audience whatsoever?

Chandler: Yeah so if you were — when you say the different options on Amazon, what do you mean by that?

Steve: KDP, KDP select, stuff like that. I mean if you could define those first and then what you would recommend for someone brand new doing this.

Chandler: Yeah, so there’s a few different options for publishing. So obviously you’re going to have the option to do Kindle, option to do print and the option do audio book. Now all of these are easier than you would think, and Amazon has made this like there’s no upfront cost and like say for print, for print copies or physical copies, they can print and ship on demand. So you’re not going to get stuck with 1,000 copies in your garage that you paid a bunch of money for. So there’s multiple options from a type of book perspective, so there’s ACX for audio books, there’s CreateSpace for print books and there’s KDP, Kindle Direct Publishing for e-books.

Now as far as a launch plan for people with no audience, so there’s a couple of things that I do. Number one is I go to launch team. Now this is simply a small group of people who support the book, this could be friends, family members, coworkers, colleagues, I mean the moms at your son’s football practice, I think this could be anyone. It is five, 15, 50 people and that’s a group of advocates. And I think we have a post on the blog about this, or it’s definitely in my book published. It goes into like more detail like, hey, what’s a launch team, how do you run it, all that stuff and the [inaudible 00:34:00].

So like the 10,000 foot view is it’s a group of people that support your book. They’re going to leave a review when it launches, and they’re going to get a free digital copy of the book ahead of time and I’m going to put their name in the book in the acknowledgments at first for that.

Steve: Do they have to actually buy the book in order to be able to leave a review that has an impact on the sales?

Chandler: They can download it for free in the free period which I recommend for a lot of people who don’t have an audience. I’ll do a two day free period before I actually launch the book to get downloads, to get reviews. We call it like the stealth launch, so it’s like it’s lying on Amazon just no one besides my launch team knows it yet. And then we do our proper push after that. It stays like two days and they can download it for free or they can also purchase it like for 99 cents or something if you’re discounting it when you first launch.

And so the launch team is the biggest thing that there is if you do nothing else, it’s the 80/20 of a successful book launch. And then the free to page strategy that I just kind of mentioned is something that I also recommend for people who don’t have an audience.

Steve: I’m sorry so the strategy here is just to get as many reviews as possible in those first two days during the free period, right?

Chandler: Exactly, and then I’ll submit it to a lot of free Amazon free sites. So these are sites that are built up around this.

Steve: Can you give us an example of one?

Chandler: Yeah, gosh I’m thinking of around 99 cents sites, so there’s BK [inaudible 00:35:29], there’s Awesome Gang, there’s some other ones. I’m trying to think of then the free sites, I can’t think of any off hand. We’ve got like a whole rolodex of these things.

Steve: So, these are sites that just distribute free books?

Chandler: Yeah, it’s like so Buck Books is — that’s when books are 99 cents so a buck, but then gosh it’s been so long since I’ve been in the weeds for my books personally. I mean I have some people on my team who handle most of this, so I’m drawing a blank on the free sites right off hand, but just know there’s a ton of them. And that helps with a ton of free downloads or to the free store and we transition to the paid store, and then we’re doing promos and stuff there. So that’s kind of what I recommend is you can rank pretty high, you can get a lot of downloads, you can get a lot of leads for your business if that’s what you care about, all those things pretty early on in the process from that kind of free to paid strategy.

Steve: What about pricing? So let’s say you’re done with the free part, you’ve gotten like let’s say 50 reviews from your launch team and you want to start charging for it, are there any strategies there on pricing?

Chandler: Yeah, so I’ll switch over from free to paid at 99 cents, and then I’ll – and this is just for a Kindle book obviously.

Steve: Sure yeah.

Chandler: And then I’ll stair step up the pricing like one week at a time. So there’s urgency around that and I have an excuse to keep talking about the book. And then I’ll land on a sweet spot for the Kindle book. Maybe that will be 2.99 on the lowest up to 5.99 or potentially even higher. Again it all depends on your goals, like if I want to sell or if you want to sell a lot more physical copies, then obviously I’ll price the Kindle book at like 9.99 which is the highest that you can price it without taking a haircut from a royalty perspective. So if you go over 9.99, you start making less royalties.

Steve: What is Amazon’s take actually at the top price tiers?

Chandler: Oh yeah I thought you’re about to say why would Amazon do that which would both be great questions. So it’s from 99 cents to 2.99 is you keep 35% of royalties, and then 2.99 to 9.99 you keep 70% of the royalties. So that’s the sweet spot, that’s where they want books to be priced. Obviously they’re highly incentivizing that. And then above 9.99 I think it drops down to 35% again.

Steve: I see interesting. So they want cheap books in their library?

Chandler: Cheap and not too cheap.

Steve: Right okay.

Chandler: They’re like hey we don’t want our e-book store full of crappy e-books that are selling for 99 cents, at the same time we don’t want people pricing e-books so high which the publishers were trying to do when Amazon first came out, because they’re like hey, we’ve got a traditional model, we don’t want disruption. So let’s just price these e-books way high like we would for other stuff.

And then what happens when no one buys e-books and then print books keep selling and then it’s like so they want it to happen in that sweet spot which is they say hey, we think this is a good value for the customer, it’s also fair compensation for the authors. And so there’s kind of a happy medium here without the publishers just giving them a big FU and charging it like 15 bucks for an e-book just so that you buy more of their print books.

Steve: Do you recommend if this is your first book doing an audio version of the book as well?

Chandler: I do, I really do. It’s actually a pretty good earner for me. And this is totally dependent on genre is my audio book, and I highly recommend it especially if you’re doing any sort of business beyond the book, because think about it if you didn’t — and now you can do it for relatively inexpensive to hire someone. It’s actually cheaper to hire someone else to do it than yourself. And if you do like I did and I went to the studio and stuff, I mean you could do a DIY and we have some — I think there’s blog posts or training, or something around that, like the DIY side of things on how to make an audio book. And you can certainly do that for cheaper.

But either way you’ve got an audio book that’s — I mean you’re spending hours with prospective customers. So now I like for example publish, when people get to the end of that we’ve spent hours together, so how much more likely to you think they are to go on and do business with me to check out the podcast, check out the blog, share any of that. They’re in our world now and it feels like we have a personal relationship.

Steve: That implies then that if you narrate it yourself that’s an advantage, right, because they hear your own voice?

Chandler: I think it is. That wasn’t my stance with my first ones because I was like I can’t be bothered. It’s not like I’m wealthy. I think it took me a day and a half to narrate my book. So it’s definitely more time consuming to do it. I’m so glad I did it. Now again I paid more because I went to the studio and stuff, but I’m so glad I did it because I just think you build this much deeper connection with the audience.

For example, I remember listening to the Five Love Languages by Gary Chapman. It’s read by him, and that sticks out to me and I thought like I know him as a person because I’ve listened to that book similar to like Brian Holliday reads all of his e-books, and like [inaudible 00:41:10] his audio books and things like that. So I just think you build a deeper connection.

Steve: And it’s just like podcasting, right?

Chandler: Exactly.

Steve: Tell them this is Steve for an hour. Okay, hey Chandler, I want to actually – we kind of stepped off the whole timeline, like you had a 90 day timeline. How much of that is writing, how much of that is promotion, editing and that sort of thing?

Chandler: Yeah so there’s you know we were ideaiting [ph] and getting clear on the idea and mind mapping, outlining etc for I think about, gosh I think it’s a week to two weeks. Then 30 to 45 days of writing, and then a month or so of promotion or build up. So that’s kind of the general 10,000 foot view of the timeline.

Steve: Okay and so the promotion and build up part, if you don’t have an audience there’s not much there, is there?

Chandler: With a launch team that’s a…

Steve: Oh the launch team got it, got it okay.

Chandler: We talk about building buzz. I mean so like really just let it be known that you’re writing this book. One of the big mistakes I see people make is they go in their writer cave, and then they come out and say, hey everybody, I’ve got this book, buy my book, buy my book, buy my book. And they just beat people over the head with it for like a couple of weeks and then go back into the writer cave. I’m just not a fan of that.

I would rather for weeks coming up like you know I’m taking like get a few pictures, I’m like you know screen shot in a coffee shop selling people the book cover, like really building up so that by the time it launches, it’s anticipated. It’s kind of like building that red carpet event where people feel like they’re behind the scenes instead of just surfacing like a submarine the week of your book launch.

Steve: Do you ever do any paid advertising?

Chandler: Yeah we do. We do mostly Amazon ads; those are working pretty well for us, AMS ads. Yeah that’s worked pretty well. I don’t do much Facebook ads, there are some tricky stuff with Amazon and Facebook’s Terms of Service, plus tracking is tough. There’s essentially workarounds, yes and there are people that teach courses on stuff. It is a bit of a gray area from the terms of service perspective for both sides. So I don’t really touch that. I mean also our Facebook ads are way more profitable and all of our other ads are way more profit when I’m sending them to things that we do and then looping the book in instead of going straight to the book.

Steve: Okay and then in terms of Amazon ads, does it work similar to physical products where you bid on keywords?

Chandler: Yeah it is. There’s two types, there are sponsored ad and promote — I forget what they call them right now, but I think it’s sponsored and promoted. And yeah they’re a little bit different. But yeah you can basically do keywords and they’ll show up based on those keywords.

Steve: Okay and then is there a particular type of genre or category of books that tend to be more profitable than others?

Chandler: Yeah so there’s — this is kind of a — are you baseball fan?

Steve: Not really actually, I like basketball.

Chandler: Do you know how baseball works?

Steve: Yeah of course.

Chandler: Okay cool. So I might lose most of the audience here, maybe, maybe not. So baseball analogy is nonfiction, is base hits, fiction is home runs.

Steve: Really interesting.

Chandler: Like sluggers in baseball, they hit home runs and they also strike out a lot with this. A base hit, even someone with a high on base percentage, they are just going to hit a bunch of base hits. So nonfiction it’s easy to get a win, and the probability is higher that you’re going to get a win. That win is just not going to be a go and it’s not to be as big of a win, because all – not all the money but a lot of the money on Amazon is in fiction books. And now this is crazy guys like you and me right Steve because we’re more like in the nonfiction world, self-help, probably like on the self-help book nerd side of the equation.

Steve: Aha.

Chandler: I’ll speak for myself. I read a lot of books and business books and sales and like all that stuff, and I can tell you the last time I read a fiction book it’s literally been probably since I was like in middle school. But that’s not normal, the majority of the population they read fiction books as a source of entertainment.

Steve: Interesting okay.

Chandler: This is hyper audiences of fiction book buyers who just buy like one to two books a week and just devour them, right? So if you go on Amazon, the top 100 on all of Amazon, they’re pretty much all fiction books. And actually funny enough, they’re like a bunch of erotica books like fiction erotica, like a guy with his shirt off with abs on the cover. It’s like a top selling a lot of that selling books in Amazon are in that genre specifically.

Steve: Interesting okay. So I guess it just depends on — like for your customers at least it just depends on what they want to write about.

Chandler: Totally yeah we have like fiction coaches and children’s book coaches and nonfiction and different courses for fiction or nonfiction and it’s kind of like a “choose your own adventure.” And I will say this, and this is kind of as we’re going in the homestretch here I think something that will be helpful, if you’re considering writing two books, write nonfiction first because it’s easier, it’s a whole lot harder.

Steve: Interesting. And I would imagine if you’re doing fiction, your audience probably matters a lot more than a nonfiction book, right?

Chandler: Yeah oh yeah and there’s just all these skills that you have to have as a fiction author that you don’t have to have as a nonfiction author as much. You can be a mediocre writer; if I’m telling you amazing stuff in the book you’re happy at the end of that book. You can say, hey that wasn’t very well written, but I learned a bunch. You can chance, not the case in fiction.

I need to be a good storyteller, I need to use consistent voice, I need to develop characters, develop the plot, develop conflict. I need to be — there’s a whole story arc that needs to happen. And if it rolls for like two or three chapters in a row, you’re going to put the book down and not be in. It’s like a Netflix series almost. It’s like I need to be able to keep you in that story for a longer period of time.

Steve: Okay interesting. Hey Chandler, we’ve been chatting for a little longer than I promised to actually. Where can people find you if they want to learn more about the self publishing?

Chandler: Yeah so self-ppublishingschool.com is our main site, or you can go to self-publishingschool.com/free. We’ve got some free training there that kind of builds on exactly what we were just talking about in this episode. So, three steps to writing the book, how to get clear on your idea, on how to launch it successfully, talk about launch team more in-depth, all that good stuff.

Steve: Okay and then the time frame is on the order of 90 days, and from what I read before you guarantee some sort of bestseller status, what does that mean exactly if you wouldn’t mind defining it?

Chandler: Yeah so it’s number one at least one category on Amazon. So that’s actually our best seller guarantee, and now this is not underwater basket weaving or some obscure category on Amazon, this is a proper category with more than one book in it. It’s like real bestseller.

Steve: Okay awesome. Well Chandler I really appreciate you coming on the show. I’m sure the audience will learn a lot from this.

Chandler: Thanks Steve. Thanks for having me.

Steve: All right man, take care.

Hope you enjoyed that episode. Chandler is one of the foremost experts in the online book publishing business, and I hope you got a lot out of the episode. For more information about this episode, go to mywifequitherjob.com/episode211.

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 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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210: How To Market Your Business Using Pinterest With Alisa Meredith

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How To Market Your Business Using Pinterest With Alisa Meredith

Today I’m thrilled to have Alisa Meredith on the show. Alisa is the content marketing manager over at Tailwind and she’s a Pinterest expert.

Now Pinterest is one of my top social media traffic sources but over the past year or so, Pinterest has made a bunch of changes to their ranking algorithms. So I asked Alisa to come on the show today to talk about what’s working today in Pinterest land.

What You’ll Learn

  • What you should be doing if you are a brand new shop owner with a blog
  • How often you should be pinning
  • What you should be pinning
  • How to automate the process
  • How to get more followers
  • How to find group boards and become a contributor
  • Alisa’s content strategy for pins

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Sponsors

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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Transcript

You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not in business. Now today I’m happy to have Alisa Meredith on the show. And Alisa is the content marketing manager over at Tailwind which is one of the premier tools that business owners use for Pinterest. Alisa is an expert when it comes to Pinterest marketing, and today we are going to talk about what strategies are working with the platform.

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 purchased, piece of cake, and there is full revenue tracking on every single email.

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

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%. 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 Alisa Meredith on the show. Now Alisa is someone who I’ve only met on Skype despite the fact that we’ve attended the same conference for two consecutive years, but for some strange reason we have never crossed paths. Anyway Alisa is the content marketing manager over at Tailwind and she is a Pinterest expert.

And here is the thing, Pinterest is actually one of my top social media traffic sources, but over the past year or so I would say that Pinterest has made a bunch of changes to the ranking algorithms. So I asked Alisa to come on the show today to talk about what’s working today in Pinterest land. And with that welcome to the show Alisa, how are you doing today?

Alisa: Hey Steve I’m doing all right, how are you doing?

Steve: I’m doing great. Give us the background story and tell us how you got started with Pinterest and how you ended up at Tailwind.

Alisa: Goodness so Pinterest it was just kind of a matter of curiosity, what is this thing. I started using it instead of using bookmarking; I would just save things there. And that’s really how people use Pinterest. So I started out as a user and then I got curious about how it could work for marketers, could it work for marketers? So I wrote an e-book because that’s what I do when I want to learn something is I write.

And it started to generate some interest. I got my first client that way and I was just amazed at the traffic and even the leads that Pinterest could bring in. So I was hooked years ago. And so over time I kind of specialized in Pinterest advertising, but I am a big believer in Pinterest organic as well. I’ve always used Tailwind; I’ve always used Tailwind for my customers. So when they had this opening for a content marketing manager, I was interested because it’s a program I believe in and the people over there are really great and smart.

Steve: So you actually enjoy pinning and you just do it on a regular basis even if it wasn’t for the business?

Alisa: Oh yeah I do. Yeah it’s just great for planning. I have a trip coming up, so I use it, I use just a general board and then it’s a secret board between me and the friend I’m traveling with. And then inside we have board sections which is like you mentioned a lot of new things come to Pinterest and this is one of them, board sections. So inside one board you can have a section for whatever you want.

So I have one for each of the cities we’re going to and all the things we want to do, then one for packing and just things I need to plan. So yeah I use it as a user which I feel like is important if you’re going to use it as a marketer to understand the mindset and to be able to put yourself in their position.

Steve: Okay I mean I got to admit this to you Alisa; I’m actually not a Pinterest — like I don’t enjoy pinning. It kind of just seems like a chore to me, but I see the value because I see the traffic coming from the platform. And I actually know a whole bunch of bloggers who make a living off of just several viral pins that just bring consistent traffic to their blog. And so what I was hoping to do today, so let’s say I’m like a brand new e-commerce store owner that has a blog, what should I be doing to kind of build my Pinterest presence? Like how often should I be pinning, what should I be pinning so to automate the process?

Alisa: Well first of all I just want to tell you that you are not alone. I think everyone I met at Social Media Marketing World; you know I didn’t meet you so I was meeting all the other 4,500 people there apparently. But they either said, oh yeah I use Tailwind like all the time, or I know I’m leaving a lot of traffic on the table by not using Pinterest, or I don’t use Pinterest at all but it still brings in a ton of traffic for me. That’s just a very common theme.

And my hope is that over the next year or so as people start to feel the impact of the changes that Facebook or their reach is declining, traffic referrals are declining, as they start to look at other places that they’ll consider Pinterest because it is — there’s a lot of potential as you said.

Steve: Yeah I do want to talk a little bit about what happened like last December I want to say, like my Pinterest traffic took like kind of like a nose dive and then it came back up. Can you just kind of comment real quickly about some of the algorithm changes that have been happening?

Alisa: Yeah so they don’t really come out and say publicly what’s happening with the algorithm which no network really does except for Facebook recently right? But a lot of times what it comes down to are seasonal shifts. So what I noticed particularly in November and December was that the big brands were buying up all the advertising. So even if we weren’t competing on the same keywords, the same audiences, it’s like they just took over.

So certain networks or certain industries will have huge rise in December, November and some will — it’s just a seasonal fall usually. If you compare it to the previous year you probably see some pick somewhere.

Steve: Okay, so let’s talk about Pinterest strategy. So let’s say I’m just brand new, what are some of the must have things that I should be doing just starting from the beginning from scratch?

Alisa: Yeah so you mentioned as a new ecommerce seller perhaps, and I’m sure you talk about this all the time about the importance of quality professional photography.

Steve: Absolutely.

Alisa: Yeah so that is going to be your foundation. And having your product photos is great and that’s good for Pinterest visual search. So Pinterest has really heavily invested in what they call lens which allows you to like click, take a picture of something on a street and then Pinterest will match it to photos in their inventory. Or take a picture of your outfit and Pinterest will match it to other similar outfits, or one piece of clothing, it will match it to another for you.

So if you have photos of just like a straight product shot, that can be good for getting found that way. However, the photos that translate into sales are the lifestyle photos. They actually convert to sales at 170% the rate of a product photo.

Steve: Okay.

Alisa: Yeah so you’re going to want those lifestyle photos. And illustrations I’m sure everyone who’s ever heard me talk is sick of hearing, but it’s so true. It’s very much like when you’re selling your house; you’re staging it for a showing. Your real estate agent will tell you to okay paint over that fluorescent green wall, take down all your family photos, anything that is just too personal and so the people who are coming through can picture themselves and their life, and their family in your home.

That’s the kind of the way you need to think about your Pinterest images. So Pinterest doesn’t really favor faces so much like Instagram is loves faces, can’t get enough. But on Pinterest you often see even fashion shots where you have a person in the outfit but a lot of times they’ll be cut off at about from chin level, you’ll only see chin level down. And that’s why because people are planning for themselves when they’re on Pinterest. They’re not looking to see how you look in that outfit, they want to picture themselves.

Steve: Interesting, so you actually don’t want to put any faces in, which is completely different than the way Facebook works?

Alisa: Yeah I should say I mean Instagram also loves faces, but Pinterest I mean you can definitely try it. I would try to try everything right, experiment away. But in general faces don’t do great. If you could have a slightly turned away, or wearing big sunglasses, or just cut off at a certain point, that helps a bit. But you definitely want those lifestyle images.

Steve: Does that imply like every store should have lifestyle images that are longer rather than — that are tall rather than short?

Alisa: Yeah so when you go on Pinterest it’s pretty clear to see what stands out. They say those taller images look better in the feed; they take up more room, and especially on mobile that’s going to be really important. So the suggested ratio hasn’t really changed, but the size Pinterest is giving right now is 600 by 900 pixels is good. You can go up to about 600 by 1500 before you start getting cut off in the feed.

Steve: Okay, I think — I have a Pinterest assistant too who does all my pinning and she was telling me that everyone should be doing 1,000 by 1,500 pixels, is there any merit to that or?

Alisa: Well that’s kind of the same ratio, right?

Steve: Same ratio but resolution wise does it help to have high resolution images?

Alisa: No Pinterest actually suggests 600 by 900.

Steve: Interesting okay.

Alisa: I don’t think you need to go any bigger than that. It’s not going to hurt but you don’t have to.

Steve: Sure, sure okay. So every product on the store should have its own six by nine images?

Alisa: Mm-hmm.

Steve: Okay better than lifestyle.

Alisa: Yeah and two, you might have noticed that descriptions are not as prominent anymore in the feed. So it used to be that you would see the image and you would see the rich pin data which is the information that Pinterest pulls from your website. So it comes up as a like a bolded headline and then you see the description underneath, but now we’re not seeing that. So sometimes we’re just seeing rich pin data on occasion, we don’t see anything but pictures.

So that makes it more important. If it’s not really obvious what your product is now with e-commerce sellers, it’s probably a little more obvious what the pin is. But if there’s any doubt about it, you want to add some text on it because people are not getting the extra context with the description like we used to.

Steve: Interesting okay. So are you implying then that we should put the name of the item on the photo in addition to maybe the price or not the price?

Alisa: No I would instead use rich pins because that pulls the pricing in from your website so you never have to worry about data pricing being out there on Pinterest. And if it’s obvious what your item is, right, so if it’s linens I mean it’s pretty obvious what the pin is about.

Steve: Right.

Alisa: But if it’s not text overlay can be great or if you’re doing a collage image which can be a great idea to have more than one item in a pin because it attracts a wider variety of people to that pin, then it might be helpful to have some text overlay. But all you have to do is just go to Pinterest and do a search for whatever it is that you’re going to be sharing. You get some ideas about what might be some affective text on the image.

Steve: Any tips on what to write in description?

Alisa: Yeah so your description should kind of tell a little bit of a story, but it also needs to be keyword conscious. Not keyword stuffing and not just listing your keywords but working them into the description really works, because Pinterest is a visual search and discovery engine that has its own SEO formula. And part of that comes from the description that you write, so it’s important to include that.

I actually got a J. Peterman catalog in the mail certainly and those are kind of hilarious but that’s kind of on the lines of the sort of thing you want to write. If I see a pin that has a description like I made this dinner for my family and even my kids loved it, that’s the kind of description that works on Pinterest.

Steve: Interesting okay. So, not just a description of the product, not on the doorstep but just something catchy.

Alisa: Yes something catchy. And also another change that came to Pinterest this year were hashtags. So I don’t know, have you noticed that?

Steve: No, no tell the audience about it.

Alisa: Okay so for years Pinterest said hashtags don’t work on Pinterest, don’t use them they’re confusing. And then they said; okay, now they do. So the way it works is there are now two different ways to search on Pinterest. We have a smart feed which is Pinterest algorithm which is dependent on things like pinner quality, material quality, the popularity of the pin, so many factors that many of which we don’t even know.

But then there’s a second search method which is purely big. So when you use a hashtag in your pin, it will show up in a hash tag search if anyone’s doing hashtag searches on Pinterest. I don’t really know how common that is but it will also work if someone has put a tag in the description of another pin to pull up your pin. There are some limitations to it. So it only works on pins not re-pins. So if you save a pin from Pinterest and add a hashtag, that won’t show up in hashtag search. It has to be something you pin yourself originally from a website.

And the other thing is [inaudible 00:15:07]. It’s the most recent fresh pin. So if you look at a hashtag search feed, you’ll see. It starts out this board was pinned five minutes ago, this one ten minutes ago and down and down and down the page they get older and older. So hashtags are a really great way to get your newer content surfaced more quickly, whereas the smart feed can sometimes take a little while for your pins to get into.

Steve: Can you define what those are?

Alisa: What’s that?

Steve: Using the Smart feed versus the hashtag feed.

Alisa: Yeah so the smart feed is based on Pinterest search algorithm which looks at your quality of your pins, your account quality, the popularity of the pins, the engagement of the pins, all kinds of different search factors. So when you pin, all your pins don’t go out chronologically. So you when you look at your feed, this is not a feed of just everyone you follow and their pins chronologically. It used to be that way quite a while ago.

Steve: Right okay.

Alisa: Now it’s much smarter. So Pinterest will kind of drip out your pins over time to start, will see how people are engaging or not with your pin and decide how much to show it, how quickly and to whom they want to show it. So that’s a big complicated thing, and the best we can do is just pin the best we can pin at the best times which we can go into in a minute. But then with hashtags searching, I feel like we have a little more control over how those do.

Steve: Okay and you found that that’s been working pretty well?

Alisa: Yeah I haven’t actually done a lot of analysis on it and I have someone coming on the Tailwind Facebook live coming up pretty soon to talk about that because she has done. But I feel like any kind of advantage we can get to get our newer content out sooner, I’m going to take advantage of it.

Steve: So you mentioned that the higher performing pins based on engagement tend to do better, so is there something that you do to test whether a pin is going to do well before you actually pin it or do you just pin it and if it does well you let it ride, but if it doesn’t do well do you pull it or do you just always leave it?

Alisa: No I mean there are people out there who encourage you to delete pins, but I feel like that’s a waste of time. It’s also can hurt you because I have had pins that have done nothing, nothing, nothing and then three, four, five months later all of a sudden they take off. So I feel like our time is better spent creating new content to share as opposed to going back through and deleting pins that don’t work.

Yeah but as far as like how to get those pins more engagement, it does matter when you pin because it’s kind of like how I understand the Instagram algorithm works. They start to kind of drip it out and then if you get good engagement at the start, then they will really kind of release the floodgates and let your content be seen by more and more people. So with Tailwind and Tailwind is a Pinterest and Instagram scheduler, what it does that’s unique, it has a smart schedule.

So it looks at your pinner, what you pinned and your followers, when they are most likely to be on the platform and engaging and suggests those times for you to pin, which means that your pins have a greater chance of that upfront engagement which means that they should be shown more in a smart feed over time.

Steve: I see oaky. And in terms of pinning frequency, so let me back up real quick. So let’s say you have product pins and you have like blog post related pins, like at least for me I found that the blog post related pins always do better. Is that the case of what you’ve see as well?

Alisa: Oh yeah definitely. So people go on Pinterest to discover new things, right? So 93% of pinners say they go to plan purchases. But the thing is they are starting way ahead of time. So it may be three months before they’re actually ready to make a purchase. So what they’re really looking for is something that’s inspiring and useful, and beautiful. And then later on they’ll be more open to those product pins. But Pinterest is unique in that you get to reach them up higher in funnel.

97% of those searches on Pinterest are non branded which is a great advantage for the smaller brands, for a new e-commerce seller who people aren’t looking for their brand, they’re just looking generally for what they offer. But Pinterest really has a pretty even playing field as far as that goes.

Steve: Okay so does that imply then that people need to have a blog with their store to be a little bit more successful with Pinterest?

Alisa: I kind of always felt so, but I’m not sure it’s practical for everybody. So I think that you can kind of compromise if you need to. So what you could do it and if you look on Pinterest, Target does a ton of advertising on Pinterest. So I look at what they do. They have one pin out which is two different dining room sets. And if you click on that pin, it goes to a category page which is dining room sets. And I think that’s really a smart way to bring in a wider audience and give them an easy way to purchase.

But what you could do which would be like a little more towards a blog side of things is you could create, it could be like a product page but it would have your lifestyle image so you’d have several products in it. And then on that page you could describe what it is, what this is good for like whether it’s great for spring time branches or baby showers or whatever kind of entertaining you’re trying to encourage there. And then you could have or easily linked to all those products so they can purchase each one separately.

Steve: So kind of like a custom landing sales page of sorts?

Alisa: Yeah somehow like 1,000 word blog post because we’re not trying to rank on Google, we’re just trying to have a good place for Pinterest traffic to go so that they feel like, hey, we’re still getting some other inspiration, some other idea and actionable tips but it’s also an easy way for them to purchase.

Steve: Okay so with a brand new account like how does one build the account because the account strength matters a lot right in terms of the visibility, yes and no?

Alisa: I mean yes and no. So you can get clicks on your website without even having a Pinterest account which a lot of people can attest to because there’s other people pin your pins and stuff, traffic starts coming. But I do recommend you start out with a strong strategy. So create a good profile and optimize profile using your keywords intelligently, and plan out your boards because once you start down that Pinterest rabbit hole things can get out of control really fast.

Steve: What are some best practices? So first of all you mentioned choosing the right keywords. What exactly does that mean on your account?

Alisa: Okay so when you are choosing your name, so mine is something like Alisa Meredith Pinterest marketer and content creator or something like that. So those keywords matter and your description matters as well, your board titles matter. Board descriptions are good practice, but I’m not seeing that they matter so much in search. You can do keyword search and look at just boards, and pull them up and half the time they have no description. So I mean I will say like whatever little advantage you can take, take it but I don’t think that matters too much.

But then keywords in your images like the images on your website of course you want to have them and you know this from optimizing for Google. You don’t want 123.jpeg.

Steve: Sure yes, yes.

Alisa: You want embroideredlinennapkins.jpeg. That matters on Pinterest as well and also the content on your site. Pinterest will look at that as far as figuring out what the content is.

Steve: Oh so Pinterest will actually crawl your site to see what the general theme is?

Alisa: Yeah.

Steve: Got it.

Alisa: Well they would like to relate your pin. So the way we can really see this in action is when we start promoting pins. Pinterest will allow you to dynamically target ads. And what that is, is Pinterest analyzing your pin and choosing the keywords for you. It’s fascinating. They won’t tell you what keywords they’ve chosen which would be really interesting if they would. But it’s based on number one; it appears to be the image you use. So if I’m going to use dynamic targeting, first I’m going to look at that image on Pinterest and see what Pinterest matches it to.

So if you pull up a pin, it will say underneath it more like this and it will show you what it thinks your pin is like. So that is a really good way to tell how Pinterest sees your pin.

Steve: Interesting okay. So let’s back up a little. I want to talk about promoting pins in a little bit, but for now I just want to focus on the organic. So would you start out by just pinning your own products, like what is the general strategy like should I pin other people stuff, should I be re-pinning more, like what’s the ratio?

Alisa: Oh I’m not a fan of ratios because I feel like people feel like it’s a rule. But I think it can be helpful for people who just like tell me what to do. But they’re lazy ones. So it kind of depends on how much content you have. If you have years and years of backlog content and you’ve never pinned any of it, well then you don’t really need to pin that much of other people’s stuff. But if you’re just starting out, you’re going to really need to fill up your Pinterest account with some other pins.

But in either case you do want to pin other people’s content because as you’re pinning really great quality content which people will engage with, that will also start to bring your pins up higher in search.

Steve: How does that work? So and I’ve seen other people’s accounts, they do this beautifully. They have different boards, different categories and then they pin beautiful images in each one of those categories. And then they have this really filled board, does that actually matter? Is it because people are looking at your board to determine whether they want to follow you or not or?

Alisa: Well most of the activity that happens on Pinterest now happens in search. So some people really care a lot about having board covers. Well I don’t think that’s a great use of time generally because for one thing it’s always changing and it is hard to figure out what to use. For another thing people will know they’re generally not browsing people’s Pinterest accounts, they’re searching. But as far as pinning other people’s content, I recommend everybody have at least one board that has just your own content on it.

So I have one for myself that’s only articles I’ve written. Nobody else has a board like that, I can guarantee you. And those boards tend to do really, really well and part of that I think is because most of the content on Pinterest are re-pins, and my board there is unique. It’s only you know it’s pins. But as far as everything else goes, you probably can’t create all the content that your ideal customer is looking for on Pinterest.

So you can create boards like multiple boards that would fit your content, you can have boards that are very similar in title and even similar in content. And Pinterest does not have a problem with duplicate content. So you could pin your pin to 15 different boards as long as it’s relevant. And in fact that is encouraged because it teaches Pinterest what your content is about. So I have a pin on my Pinterest board and then I have a pin on my visual marketing board, and I have that same pin on content marketing board that starts to teach Pinterest what it is.

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So what’s a little confusing to me is it seems like the performance of your pin really matters right, how well it does in a certain timeframe once it’s been pinned. So does that imply that your own boards can just be like a hodgepodge of stuff, like it doesn’t really matter anymore, it’s just really all about the quality of the pin?

Alisa: You mean a hodgepodge as far as whose content it is?

Steve: No not whose content it is but the way you organize it on your own boards, does that even really matter?

Alisa: No it doesn’t because really people are looking, they’re going to find you through search most of the time.

Steve: Okay so really when it comes to like organizing your own boards that’s really just for you, it has nothing to do with ranking, right?

Alisa: Yeah so I mentioned before that I like to use board sections in my private boards. So I might have a real general board and then break it down inside my board with board sections. But those board sections do not help with your SEO. Yeah, so people have asked, well does that mean I can just create one general board for marketing and have inside of that one for social media and one for blogging? No, you want to keep your board titles and themes very specific.

Steve: And that is to teach Pinterest how to categorize your pins?

Alisa: Yes.

Steve: Okay I understand, so it does matter then how you organize your boards, it just doesn’t have to be pretty, but it just has to be…

Alisa: Right.

Steve: Okay got it.

Alisa: It has to be relevant and you can do things like joining group boards can help get your pins in front of new people as well. There has been some talk that the group boards aren’t effective anymore, but I’ll tell you when I do an audit on somebody’s Pinterest account, usually I use heroin [ph] for that and I look at the board insights, and it will give you like the variety of the board and engagement of the board. And almost always one of the very top highest performing boards is a group board.

And then also on the other hand the group will usually be one of the worst. So it just depends on the group board whether it’s active, whether what’s being pinned there get pinned, whether they’re relevant, whether the pins lead somewhere where they’re supposed to or not.

Steve: So what is the strategy to get traffic then? Like if you’re just pinning your own stuff, that’s obviously not going to lead anywhere, right? You have to get followers and you’re to get on a group board, what is the overall strategy for traffic?

Alisa: Well again most of what’s happening is through search. So if somebody searches for embroidered linen napkins, you want yours to come up, right? So followers — I mean if you look at your home feed and you click on the little three dots next to the image or below the image, it will tell you why that pin is there. And you’ll see some are there because of a board you follow, right; so that means okay you do kind of want followers. Some are there because of other things you’ve engaged with, some are promoted and so on.

So there are a lot of factors that go into why you see what you see in the home page. But again most of what you’re doing is searching. So when you search, you can see pins from anybody.

Steve: So how do you rank yourself in the search algorithm too?

Alisa: So you pin lots of great stuff.

Steve: Interesting okay, so it’s all merit based at this point like there’s no — like in Google land you can game it somewhat by getting back links and whatnot. How does that work in Pinterest land?

Alisa: I mean there are probably people who hack things and I know there are people who will take other people’s pin’s and change the URL which is bad, bad, bad and we would never do that. But basically create beautiful content, create beautiful and engaging content that is helpful to people. So one of Pinterest big things is get off the platform and go do it. So they really are very generous with the traffic that comes from Pinterest to your website, but it’s up to you to entice people to want to click.

Steve: So, there’s a number of people that pin and pin, that obviously affects the search rankings, right?

Alisa: Yeah it seems to, now it’s interesting that this year they removed from desktop where you used to be able see how many re-pins a pin had. And the reason for that they came out and told us and I’m paraphrasing but basically they don’t want us just re-pinning because something is popular. They want to give all the content of a good content a chance to rise to the top and not just be sharing what people are sharing because it’s popular if that makes sense.

Steve: Yeah I know it does, it does. So from what I’m hearing at least it seems like you just pin your own stuff, you can get by just pinning your own stuff and if it’s good it’s good, if it’s not then it will get buried. And I don’t actually see the point in pinning other people’s stuff if your primary purchase on Pinterest is self promotion.

Alisa: Well except that if you’re printing other people’s stuff — I mean if your stuff is the best content in the entire world, most beautiful pins that ever were created and you can create an endless amount of them, you can get away with only pinning your own stuff. However, most of us can’t do that. Another thing I like to look at is inside Pinterest analytics, you can look at the people you reach section, and there’s a section there on interests. And that will show you. You can sort it either by people who follow you or just everybody who sees your pins and see what else they’re interested in.

So I almost always there’s going to be people interested in quotes. They’re usually interested in DIY, food, but other things are going to vary by account. So if you go in there and you find, okay, my followers are interested in motivational quotes but I don’t really do that. There’s still value in creating a board even if none of your content can’t get on there and then pinning other people stuff to it, because that will encourage Pinterest to then show your other pins to those people who are interested in that board as well.

Steve: In search you mean?

Alisa: Yeah.

Steve: Okay.

Alisa: Yeah in search or even in the home feed.

Steve: I see. So when you say followers though that implies it is important to get followers because those form the basis for your search rankings?

Alisa: No, no search rankings are not dependent on followers, at least not that we’ve been told. So in that dashboard I was talking about, you can either look at the interest of your followers, or the interest of people who see any of your pins. And those people who see any of your pins are those who are also finding it through search.

Steve: Interesting.

Alisa: Yeah so I feel like almost nobody can fill all those interests with their own content, but there’s still value in pinning that or having a board for that.

Steve: For your followers primarily, right?

Alisa: Or for anybody who sees you in search because that is showing that those people who are interested in your content are also interested in this stuff over here. So then pinning this stuff over here will bring your other stuff more to their attention as well.

Steve: I see, so if they’re searching for quotes and they see a quote then they just see a pin for one of your posts, they might go and browse.

Alisa: Yeah, yeah.

Steve: I see.

Alisa: I mean and it’s all very unscientific obviously but this is just kind of what we’ve learned from how we’ve seen things work and from the times that they do tell us how things work. But it really it kind of it teaches Pinterest, okay, this person is interested in this, they have also seen your pins on here so let’s share more of your stuff to them even if they’re not following you.

Steve: Interesting okay. This is like a complicated thing to explain.

Alisa: Quite a bit.

Steve: Well let’s switch gears to promoted pins. So you can buy these keywords in search and have your pins show up, right?

Alisa: Mm-hmm.

Steve: So how would one use that for physical products? So one you mentioned before that sometimes people plan ahead and they don’t actually make the purchase until three months later, right?

Alisa: Yes that’s right.

Steve: So does that imply that if I’m buying pins right now, there could be a substantial time frame before a sale?

Alisa: Yeah exactly. So, this is one of the challenges I think, for people who are starting out with credit pins is to understand that your sales cycle is going to be considerably longer than most other platforms. So if you sell using Facebook ads and you find that usually the conversion starts to peak at about two weeks, you’re going to count on at least double that for Pinterest. Yeah, but there are ways to track conversion.

So it takes a little bit of either custom coding or a special plug-in but you can actually track things like add to cart or sign ups and purchases right in the Pinterest provided pin dashboard which I find incredibly helpful because then you can see exactly which ad is working, what targeting is working to really result in a purchase.

Steve: So what are your strategies for setting up promoted pins and how does this differ from like in AdWords for example?

Alisa: Well you may have to tell me because I haven’t done AdWords in a very long time. I do know some people who come over and want my help with Pinterest promoted pins; they kind of want to recreate their Facebook ads, which is not entirely possible. But there are some other options which I don’t think anybody else has. So when someone comes to me and wants to promote something, we’ll usually start with just a couple of products because each campaign will be for that one product. So can you give me a product that you might want to promote?

Steve: So let’s say I have like hundreds of styles of handkerchiefs, I would have to choose one of those, is that what you’re implying?

Alisa: Okay, well here is a budget friendly idea. If you had maybe six of them that were so like had a certain theme, like they were good for springtime weddings, you could create a pin that had all six of them in one pin, and then you can promote that.

Steve: Like a collage you mean?

Alisa: Yeah, yeah so let’s do that because that way you can try out promoted pins on a bunch of products but in a kind of a way that won’t break the bank. So this will be one campaign, it will be our [inaudible 00:38:04]. In that one campaign we’re going to have many ad groups. So I’m going to have an ad group for different kinds of targeting. We have audience targeting, so I would create one that was a visitor audience target.

Steve: Basically add anyone who’s been to my site?

Alisa: Yes. But then we’d have a talk about okay does it make sense to target everybody went to your site or should we just target people who went to those six pages for those six handkerchiefs, or should we go for a category of pages. So we’d have to figure out like what pages or visitors who we really want to target. So then we would also look at your e-mail lists and see if it made sense to target any of those. And then we would think about okay are there pins already out there that we would want to target people who would engage with them?

So let’s say I go to your website and I find spring handkerchief number three, and I pin that product page myself. And then my friend Tina sees my pin and she saves it. Now you Steve can create an ad and target Tina because she saved that pin that I pinned of your product. Kind of crazy, right?

Steve: Yeah. So what you describe basically is traffic that I already have. What about like top of funnel stuff, how would you set that up?

Alisa: Oh no but that third one there, I mean she has never been to your website Tina. She clicked on my pin to go see your website, or she saved that pin but she hasn’t been there yet. So you can now target anybody who has just saved that pin that goes to that website.

Steve: I see.

Alisa: Yeah so that’s a really great way to get some cold traffic. You can also once you’ve run those three audience campaigns; you can look at what works really well. But maybe if you have a smaller audience size anything under 100,000, it’s kind of hard to get scale. So then what you want to try is an act like audience. So any of those other audiences you created if they’re working well, you can create a one to 10% match act like. So that Pinterest will look at your original source audience and then try to match it to other users who it’s not a lookalike like Facebook will look at demographics, job titles, whatever, Pinterest really tries to look more at their pinning activity, and what they are interested in.

Steve: So, based on what they’re searching for?

Alisa: Based on what they’re searching for, what they click on, board titles that they themselves may have created.

Steve: Okay so these are audiences and at the same time you’re picking keywords, right to bid on?

Alisa: Well you don’t have to, you don’t have to. So that would be reaching everybody on those audiences. Now if you found like especially if you had an act like that maybe wasn’t converting really well for you, you could add on top of that keywords.

Steve: Interesting so when you don’t use keywords though, what is there – yeah just to everybody but that includes blog posts and products, so how would you distinguish between the two?

Alisa: Well it’s like if you were going to do the visitor audience, you could say all right I only want to do people who’ve been to this blog post, or I only want to do people who’ve been to this product but not that blog post. You can get really specific about how you create your audiences.

Steve: So is that how do you recommend people start with their own audiences without any sort of targeting just to get those people back?

Alisa: Yeah. And but I also — so this is why we start with just a few products because inside my campaign I usually have eight plus ad groups. So right now we have four, but we could have more. So we have four, we have the visitor audience, we have the customer audience or your email list, we have your engagement audience, we have your act alike. So then we can move on to other things like interests. So Pinterest has 7,000 preset interests that you can target.

And an interest is Pinterest is trying to get inside of our heads and figure out what it is we are interested in. So it’s really kind of comical when you start to look at the different interests. You can target things like dogs. Okay well that kind of makes sense, but you can also do field tracks, man burns [ph], javelin throw, stretch marks. So, you might be like, oh I’m not going to have mine, but they have some pretty interesting ones.

So you can target any of those that you want and they can work really well if you find one that’s not super popular. So what happens is you can imagine when you do keywords it’s an unlimited number of combinations of keywords you could bid on. If you’re doing interest, it’s only 7,000. Obviously the competition for each is going to be higher so they can be really expensive. But then you have keywords so you can do broad match keywords which actually, this is kind of an interesting one.

And I was puzzled by them when I first started running them because I would export my data on my promoted pins and looking at the placement like where were these pins showing up on Pinterest. My broad match keyword ads were showing up in people’s home feed. And I said to my ad assistant what in the world is this, I’ve only targeted keywords, why is it showing up in home feed, they haven’t searched. It has nothing to do with search. It’s really just like create your own interests. That’s what broad match keywords are.

Steve: Okay, that’s really bizarre. So, along those lines then, so if you’re using like exact match on the keyword level, could what happened to you still happen then?

Alisa: No. So we have interest, we have broad match keywords. And now yeah we have keyword and phrase match keywords. I mean exact and phrase match keywords. When you use those together or each separate, you will only reach people when they search. So I had a feeling that they would convert a lot better, so I ran a test. I had 74; I had two sets of 74 identical ad groups. And one set of 74 I targeted with a broad match type targeting and the other was phrase and exact. And the phrase and exact converted at 60% higher to sales which makes sense because they’re not just browsing, they’re actually looking for what I’m selling.

Steve: Okay. I’m leaving with more questions than answers Alisa. No I’m just kidding. Yeah you know Alisa I don’t even think we can fit this in an entire episode because yeah it just seems like Pinterest has fundamentally changed a lot from like the last one and a half to two years.

Alisa: Maybe, but you know what, the principle still apply. So inspire people, meet them where they are, where they are on Pinterest is not a social network, they’re not going there to impress anybody. They’re going there to be inspired to play in and to become a better person.

Steve: So if we were to just kind of sum up everything we’ve talked about like at least on the organic side, it seems like you just want to be pinning the best pins, that you can organize your boards based on the keywords that you want to select, pin other people’s content based on the interest that you’re seeing that your followers are that you don’t have content for, and it doesn’t really matter at this point whether you have a large follower account or group boards. You just want to be pinning the best stuff out there, and let Pinterest kind of decide what’s going to flow to the top in terms of search.

Alisa: Pretty much yeah, although I would add that I do pin other people’s stuff aside from what I can create myself. So if someone has pinned an article a great article about Pinterest, about Pinterest promoted pins, I will pin that because I feel like and I know that if it resonates with my audience which is anyone who sees my pins not just [inaudible 00:46:24], that increases my clout on Pinterest for all of my pins. So it’s like that rising tide raises all boats thing, it’s a nice thing to do to share with people, but it also helps you out as well.

Steve: And in terms of like the number of pins, in terms of visibility, there are purposely hiding that to level the playing field. Do you find then that the pins that you see on the front page or in your feed have like a wide range of pins on them?

Alisa: Yeah so when I look at my home feed now, sometimes I see pins that are really recent like within the last week or so. So that’s encouraging to me that it’s definitely not too late for anybody to get started on Pinterest.

Steve: Okay and in terms of ads, you recommend starting with the audiences that you already have and then gradually reach out because you can reach people that have already pinned your stuff that are not familiar with your brand to start out doing that and then gradually move over to interests which tend to be more expensive followed by keywords?

Alisa: Well you know what I start them all at once because usually the people I work with have a smaller audience. So anything under 100,000 again is pretty small and hard to scale. So I find that we need to reach out to those colder audiences using keywords especially phrase and exact match. The other thing is when you get sales from Pinterest promoted pins, 70% of those people are new customers. So that’s telling you that you’re probably going to have to reach beyond your own audience.

Steve: Okay. OK well Alisa we’ve been chatting for quite a while. Thanks a lot for the overview of Pinterest.

Alisa: I enjoyed it.

Steve: Yeah thanks a lot for coming on the show. And if anyone wants to find you or your content, where can they find you?

Alisa: Well I blog over at Tailwind, so blog.tailwindapp.com, and I highly suggest that if you’re looking to save time on pinning because we didn’t really get into numbers, but you know you could spend a long time pinning, you do you want to schedule and you also want a stream of updated content to choose from. So I suggest Tailwind and Tribes. But if you want more promoted pin information, that’s my blog Alisameredith.com.

Steve: Okay and we didn’t even talk about what Tribes are. Are Tribes essentially what is replacing group boards in your opinion?

Alisa: Well, I mean group boards is part of the Pinterest platform. Tribes is on the Tailwind dashboard, anybody can use them though. So what that is, is like a group of likeminded bloggers will put their own content in and then share other people’s out, and so you can see like what kind of reach you got and how many pins and re-pins. There’s a chat function in there, so I’ve discovered a whole bunch of really great bloggers I never knew existed because of Tribes.

And I almost exclusively pin for my Tribe now because I don’t have to check the links when I’m — when you’re pinning on Pinterest, you’ve got to check and make sure the link is good because you don’t want to be linking to spam because you get reported, it will hurt you. But Tribes always has very good content.

Steve: So Tribes are basically groups of collaborative bloggers or content producers, right?

Alisa: Yeah.

Steve: Okay cool. Well Alisa thanks a lot for coming on the show, really appreciate your time.

Alisa: Thanks Steve, I enjoyed it.

Steve: All right, take care.

Hope you enjoyed that episode. Pinterest has undergone a bunch of changes in the last year and I thought Alisa gave a great overview of what it takes to succeed on the platform today. For more information about this episode, go to Mywifequitherjob.com/episode210.

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

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

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

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

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209: How To Make Sure Your Product Will Sell Before You Launch With Kevin Williams

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209: How To Make Sure Your Product Will Sell Before You Launch With Kevin Williams

Today I’m really excited to have Kevin Williams on the show. Kevin is someone who I met at the Ecommerce Fuel live conference. He was actually one of the keynotes there and I really enjoyed his presentation.

Kevin runs the site BrushHero.com where he sells a power cleaning brush that hooks up to your hose and spins with a lot of torque to clean up hard to clean objects like wheels, bikes, boats and more. He was also recently on the hit show Shark Tank.

Anyway, the reason why I brought Kevin on the show is to talk about his process for testing products so that he knows it will sell before he spends a lot of development money on a project. Enjoy the show!

Note: I apologize for the audio quality on this one. There was something wrong with Kevin’s mic but I guarantee you that the content is good.

What You’ll Learn

  • Kevin’s philosophy on design and utility patents
  • Kevin’s process for testing products prior to production
  • Why he decided to apply to Shark Tank
  • How Shark Tank affected his sales
  • How Kevin generates sales outside of Amazon
  • What it’s like to sell on Costco and Walmart
  • Which traffic sources and marketing tactics have worked the best for him

Other Resources And Books

Sponsors

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

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

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

Transcript

You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. Now today I’m happy to have friend Kevin Williams on the show. And Kevin is an e-commerce entrepreneur who was recently on Shark Tank, and he’s making a killing selling power cleaning brushes online. And the main reason I brought him on the show is because he has an excellent process of testing products so he knows whether they will sell before he spends a lot of money.

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

Right now for example, 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%.

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. Always blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 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’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 sent.

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

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

Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m really excited to have Kevin Williams on the show. Now Kevin is someone who I met at Ecommerce Fuel Live just a couple of weeks ago actually, and he was actually one of the keynotes and I really enjoyed his presentation. Now Kevin runs the site brushhero.com where he sells a power cleaning brush that hooks up to your hose and spins with a lot of torque to clean up hard to clean objects like wheels, bikes, boats and more.

And he was actually recently on Shark Tank literally a couple of weeks ago as well. In any case the reason why I brought Kevin on the show today is to talk about his process of testing products for sale so that he knows something will sell before he actually spends a lot of development money on a project. And among other things he actually does a lot of business. He does retail as well and so we’ll see what where the conversation goes. And with that, welcome to the show Kevin, how are you doing today man?

Kevin: I’m doing well Steve, thanks for having me.

Steve: So Kevin, you have a pretty interesting history and background, please give the audience a brief overview of how you got into e-commerce in the first place and how Brush Hero came to be.

Kevin: I can blame you Steve now by the way sort of, sort of. You were definitely along the path somewhere. I used to be what could best be described as a venture capital mercenary. So angel investors and venture capitalists would hire me to parachute into a company and fix it and prove it, sometimes close it. After a number of years of doing that, I felt that I had recognized that I had built a tool set for being able to test opportunities really, really early as opposed to spending tens of millions of dollars and then ending up closing at the end of the day.

So I was looking for ways of deploying what was sort of a derivation of the minimum viable product methodology that Eric Reese and some others were really developing about five, six years ago. And I hit on e-commerce and the beauty of digital marketing and the ability to really toss ideas out there on the internet and very efficiently test them in a short amount of time. E-commerce was an absolutely natural fit for that. I did a little bit of orient into affiliate marketing where we did a lot of rapid product testing of course over there and I was able to apply those concepts in the products.

And a former business partner/CEO of mine from my venture days approached me with this brush that he had found in the United Kingdom that had a patent on it and wasn’t really going anywhere over there. So we applied my methodology to it, and up with some quick results through some Facebook advertising and rolled from there.

Steve: So I didn’t realize that the product was very developed.

Kevin: Yes this is — I’m not an engineer. I like to play one at night but I’m not.

Steve: Okay so…

Kevin: [inaudible 00:05:46]

Steve: Yes so you stumbled upon this product from your friend in the UK, and you decided whether you wanted to buy them out essentially and bring it to the US?

Kevin: Yes so our MO is to generally buy or license patents. We found that there’s just thousands of ideas that are floating around out there. Everyone seems to have one, father in laws, brothers, uncles, whatever aunts who have been doing away at whatever cool utility part in their basement. But most of these people couldn’t market their way out of the box.

So I will admit we got sort of lucky with this first patent because it grew really rapidly, but the engineer who owns the patent still does is out of Oxford, England and he’s been working on it for some time. And we license [inaudible 00:06:38].

Steve: I’m just curious, you just go up to the guy and say we would like to license your patent? Like how do you figure out how much it costs and yeah what’s the process there?

Kevin: In this case it took a while. There were some things that were happening before I was involved. My partner returned the product. He’s a big car guy and has like a fleet of really nice cars that he likes to clean, and he was looking for a solution to his own problem. He had found this product in the UK. He bought one and said, wow this is really cool, and then he tried to buy another one from someone and he couldn’t find it. So he tracked down his original order, gave the guy just a cold call, and started talking about it. That call led to the idea of possible US distribution etcetera, and then I stumbled into the picture to basically run the thing.

Steve: What are the terms of such a deal look like; I’m just kind of curious? I mean you don’t have to give exact numbers, but I’m just kind of curious like what the royalties look like.

Kevin: So we pay a royalty on gross sales that are related to the core intellectual property of that particular product. It’s around 4 to 5% is what we usually pay on the primary product. If we develop a secondary product based on that intellectual property that royalty drops to 2, 2.5% depending on the product. But we always make sure that we lock up full on global rights to whatever we’re going to invest in. So we have the exclusive global rights to the underlying IP of this product basically forever.

Steve: Okay, so you’re like Mr. Wonderful, he always like…

Kevin: That’s sort of a sensitive subject; it’s not so Mr. Wonderful.

Steve: Yes, yes, yes.

Kevin: But yes we do form partnerships though with our inventors. We like to keep them involved and they’re incentivized to continue to develop products. And we generally end up with a first right of refusal for those products as well.

Steve: Okay. So you know that you want to license this and then of course you want to know if it’s going to make money in the US. So, let’s kind of walk through that process of validation.

Kevin: Okay so in this case we did have an actual product. So it was a little bit easier. Sometimes we do this sort of testing when we don’t have a product or if we’re just prospecting for intellectual property. Let’s just say a product crosses our desk that we think is cool, we think it might have legs, but we have been known to test products before we have a license or we have any product to sell. In this case we bought a few of them, we imported them. I am an amateur photographer so I set up the light box.

I shot some photos of it, I did a couple of quick clips of dirty wheel, clean wheel, then we set up a landing page in the US as just at the time we were using lead pages I believe. And the landing page was dead simple. It was just a sales language about the product, a video, me squatting next to my car cleaning a wheel, some other sales language under it, and a big call to action right in the middle of the page.

And the idea is we can then do — set up Facebook campaigns based on a couple of different audiences or ad sets, drive traffic to that lander and determine how many people clicked on that add to cart button. Now once they clicked on the add to cart button, they continued to buy the [inaudible 00:10:11] we had five or six of them. Instead they ended up on a page that said, oh no, all sold out, leave your e-mail here and if you’re interested we’ll sell you one when we actually have them in stock.

It’s awesome that we take some people off, sure but we really only directed about eight, nine thousand clicks to this particular lander. What I was looking for was purchase intent based on sort of a half way attempt at marketing. And in this case we had a CTR on the add to cart button of almost 8%. So 8% of the traffic that we drove in our most successful campaign was willing to click on that add to cart button. Now as we all know, there would be a lot of cart lost under there or whatever, but if this is a design that took me just a few hours to put together and I was getting an 8% conversion rate on it, I really know that I have something going on.

Steve: So what are your metrics for that, like what is considered a bad conversion rate, what is considered okay, and what is considered excellent for just add to cart?

Kevin: It depends entirely on the product. I want to see a bare minimum of a 3% add to cart rate, 8% would be exceptional. I mean I’ve certainly heard of people with higher conversion rates than that, but in our testing that’s one of the highest just add to cart conversion rates that we’ve seen in a seasonal product outside of holidays and special occasions and things like that.

Steve: Okay so a 3% add to cart rate would be like considerably lower on the actual purchase rate, so let’s say like a 1% purchase rate is that kind of what you’re shooting for?

Kevin: Sure, overall we want to see a 2.5 to 4% purchase conversion. But remember these landing pages we’re putting together are deliberately not — they’re sort of half done. We don’t want to invest too much time or effort into any of these concepts. What I know about myself, and what I know about humans in general is that the more time that they spend on designing, and caring for, and loving a concept, the more they’re going to fall in love with it. And once you fall in love with a concept, it’s really hard to walk away.

All of a sudden you start looking at it, oh it’s more than a half conversion rate, maybe that’s good enough, maybe I just didn’t do it right. And it’s hard to be agile and move fast if you fall in love with a product.

Steve: So given that Facebook ads tend to perform a lot better with videos, like let’s say you didn’t actually have the physical product in hand, how would your process have differed?

Kevin: So we do, do this a lot, usually we don’t have a physical product in hand. If the product doesn’t really exist as in we’re looking at a patent that it has some prototypes, we would make the prototype, we would doctor it using Photoshop. At the time it would have been me, but now we have a graphic designer who does that for us, maybe change the color, add some things in the background whatever it is, and hit the language a little bit harder.

You know video does perform better on Facebook; we’re very solid on video advertising. In fact we always look for products that have some sort of geniality to them like in the case of the brush, the wheel is dirty, then it’s clean. We have a have a cooking line, there’s the patent holder there. It’s actually one of the White House cook, and he’s a guy who’s full of personality. So on video he can really be full of life and really be presenting the product quite well.

But without video you may be looking for a slightly lower conversion rate. So when I give my range, if I don’t have video I may be looking for something more like a 3% versus 5 or 6%.

Steve: Okay and so I guess the whole process is kind of like an art form right depending on what you have and how you feel the Creative is, you expect different CTRs for this experiment. But I guess the whole point really is just kind of the idea of the overall interest and your gauge to see if you want to push forward with the idea?

Steve: Absolutely and it’s not rocket science and there’s nothing really new. I think that our spin on it is moving really, really fast with it and adding a level of rigor to it. So I literally write down what my goal is and that goal can change from product to product. But what I feel in my gut is going to make me feel like this is could be a good product, it could be three, it could be 5%. I write that down on a piece of paper, I stick it in an envelope; I stick it on my desk piled and all the other things that are piled up here. And then after the test, I open that envelope up and I try and be as intellectually honest as I possibly can about the product.

Steve: So, let’s say in the case of your Brush Hero project your click through rates were good, what is the next step?

Kevin: Then it’s more of a true minimum viable product test, and then it was a matter of importing 1,000 of them, getting a low level video crew out to do some content development for us. And now we’re trying to spend a decent amount of money you know small figures, we’re not talking five, eight figures, but we feel pretty good about it. And in that case we often move to Amazon relatively early. I do not believe in Amazon as a product discovery engine. It’s great as an emporium and finding products that exist and finding niches and products within niches, but as a brand new product it’s not a wonderful place to be.

However, being on Amazon early allows you to skip a lot of the infrastructure issues with getting a new product going. You can ship directly through Amazon multichannel fulfillment. So in a very lightweight environment you can slap up a Shopify store, you can ship some product to Amazon, you can connect your Shopify store via ShipStation or something else to Amazon and fulfill from there. Obviously now I have an infrastructure so it’s not as big a deal, but we use that same approach when we’re testing new markets.

So before we went to Europe with some of these products, we did the same thing. We shipped just 500 or 1,000 units over there, stood up a site in German, did some German based direct response advertising, it worked great, so now we’re going to do seven figures in Europe, well we did seven figures in Europe last year.

Steve: So you put these products up on Amazon, and for something like your product which is totally unique and people probably aren’t searching for it, how do you get some early exposure to that product on Amazon?

Kevin: So as I said Amazon is a tough nut to crack with products like this. We use aggressive launching strategies like the Amazon pros out there well as far as getting early sets of reviews. We try and get as many legitimate influencers as we can to review the product, to get the product in their hand. We try and demonstrate sales velocity to the Amazon algorithm to help that rank. We target specific keywords. In the case of the brush, it was things like wheel brush or detail brush are sort of the key keywords that we needed to rank for.

Steve: Are you doing this all through Facebook then or?

Kevin: Yes plus we’ve developed networks of influencers that we can pull from. I’m not going to do that, we try to stick away from incentivized type reviews, but certainly people who have a lot of influence out there we’ll do disclosed influencer type things to get a product in their hand and get in front of blog post. And I’m not necessarily shy about using some of the Amazon tactics to rank for specific keywords.

Steve: So regarding these influencers, provided that you weren’t in this niche before, were these relationships that you kind of developed during this whole process?

Steve: Yes definitely during it. I’m a big fan of YouTube influencers and I think it’s a big opportunity for all of us in the space. I don’t go for big fish, I go for moderately sized fish out there, the people who are enjoying whatever the subject matter is, they have maybe tens of thousands of followers, but they seem to be on the upslope. And investing in them early on sort of a portfolio basis so you’re investing in a lot of them can give you opportunities as they grow and their audience continues to increase.

Steve: So how did you find these influencers, do you use a service or do you just kind of go off on YouTube and look for them and just contact them directly?

Kevin: I have never had any luck with the services, many people do but I’ve tried Tomoson and I’ve tried Intellinfluence and some of the others that are floating around. At the end of the day I’ve had the best luck with just having folks from myself prospecting out there, looking for numbers, looking for quality, and then reaching out to them directly. It helps with this product that although our primary market is cars and motorcycles, I race mountain bikes, I race cyclo-cross and other things, so I’m not necessarily known in the community, but I can talk and talk. So I can connect with influencers or at least I started by connecting with influencers in that space since we have an affinity, so we can…

Steve: Yeah sure of course.

Kevin: That I’m part of the tribe and they’re eager to help me out, and I don’t have to pay them very much money. I give them brushes and soap and what they need, and it’s amazing the sort of work they do.

Steve: Can you just give me an idea of what the competition would be like for an influencer with like 20 or 30,000 subscribers?

Kevin: So in your world I imagine that there are a lot of other type influencers who can be some of the toughest people to deal with in my opinion. They’re going to be mercenaries. We pay very little. Sorry if any of you are listening guys, but product sponsoring a race like giving like prizes for winners type things maybe $500. We’ve done a whole variety of things. We also have affiliate agreements that are set up with most of these guys. They really don’t yield a ton of indirect sales, but they make them feel incentivized to get our brand name out there, and we just run a private affiliate program that way.

Steve: Okay. So while you’re doing these initial Amazon launches, do you have your own site up at the same time?

Kevin: Yes, yes.

Steve: And at what point do you focus some more energy on your own site and doing more direct response advertising for that?

Kevin: Well pretty early. Once we’ve demonstrated the concept and feel that it’s going to work, when you’re going from four figures in investment to five figures of investment, I want to capture that customer. We have a considerably higher average order value on our own environment than we do through Amazon and we have the ability to remarket to those customers.

One of the required elements of products that I’ll invest in is that it has some sort of a consumable element to it. So in the case of the brush it consumes the bristle, we have soaps etcetera, in our cooking lines there are some ices, there oils, there are other things that we can remarket to our customers once we form that relationship with them.

Steve: I guess what I’m trying to get at is you’re working with these influencers and you have these ad campaigns going, like at what point do you — like it’s hard to focus on both, right, like if you go to an influencer, you tell him to either pick it up at Amazon or you’re outside. I guess you could include both links, but do you try to focus more on one channel than the other with your campaigns?

Kevin: Generally we try as hard as we can to capture those customers. We’ve come to the realization internally though that we have an enormous bleeding over between our direct response advertising, Facebook, PPC, Pinterest. Anywhere our brand is being advertised, we have an enormous bleed off to Amazon. So we know that, we’ve internalized that and we’ve incorporated that into our success metrics and our advertising.

So it would be tough to look at our direct Facebook results on a CPA basis and see enormous successes, but if you step back and you look at the enterprise and recognize that there are whatever 40% of people who added to cart bleed off to Amazon, we can be comfortable with an enterprise level cost of sales.

Steve: Yes so what I was trying to get at is like you’re driving all of your ads to your own site and indirectly that kind of leads to more Amazon sales?

Kevin: Yes.

Steve: Okay got you, whereas you never run ads or campaigns that drive traffic directly to Amazon?

Kevin: I won’t to say never, there are a lot of circumstances that we do. If we’re employing ranking strategies we will. If we’re low on stock for instance in the holidays, we make a very deliberate move in the last couple of days to shift our advertising away from our sites to Amazon because Amazon is then responsible for fulfillment and customers will buy right up into the last minute.

Steve: Okay. And in terms of when you drive ads to Amazon, do you do anything to kind of track those people or do you just send them straight to like your store page on Amazon?

Kevin: There are a lot of different tactical ways of attempting to track those people, well the best known are the using associates’ links. We’ve had some success with that. It also gets a little bit hairy because it’s a gray area at best in the Amazon terms of service and we don’t really like to mess around with that if we can avoid it. So if we’re pushing traffic directly there, we will look at the Amazon conversion metrics. So we have a pretty good idea on a product basis what our conversion rate is the session percentage rate on Amazon and also the sort of traffic we get.

So if we can correlate and we push several thousand clicks from Facebook to a direct Amazon link, how is that showing up in session percentage and can you get to a result there? It’s sort of a low yield analysis, but directionally we feel we can get a decent idea but it’s a hairy way to optimize campaigns for sure.

Steve: Yeah so I mean basically you’d only do this if you’re launching or if you’re trying to rank for certain keywords, right, otherwise it makes more sense to divert the traffic to your own site where you can actually capture the customer?

Kevin: And it’s pretty fascinating. We have some tools and techniques that allow us to assess our brand impression on Amazon that are readily available. And we can watch that over time and see how many people are hitting Amazon and typing in one of our brand names. And if you correlate that with off Amazon spend, you can correlate the two. But also over time it’s fascinating to see the organic development of a brand this way. Of course when we launch a brand, we get no links or just a couple from whatever the advertising is. Now even in periods of no advertising, we’re seeing hundreds of people that are typing in our brand name every day.

Steve: How do you get that information? Are you just like buying ads on your own brand and getting statistics that way or?

Kevin: No, it’s sort of highly technical. I think I’m going to go to decline that.

Steve: I know. So Kevin you do really well on Amazon and your own site and you kind of expand it internationally, I’m just kind of curious why you decided to go into the whole retail space. I know you’re in Costco, maybe Home Depot, why the shift there?

Kevin: So we’re in Costco and we’re in negotiations with Wal-Mart right now for a full rollout as well. We were fortunate in that with a niche product like the brush hero, in the case of both Wal-Mart and Costco the buyers were actually here and did our product by friends of theirs who knew what they did and said, hey this is a really cool product, you should check it out. The next thing you know we get a call from these guys. That’s not usually the way it works of course, but so first there’s just an opportunity that’s presented to you. In the case of Costco, the way that their system works is fantastic if you can present a value to their customers.

Costco has an agreement with their members that they are willing to only mark up the physical products that they sell by 14.6%. So if you walk into Costco and you say, hey the street value of this bundle is $50 but we think we should give you an MSRP of $25 for it, Costco says, great that’s a huge value to our customers, we’re delighted. And then they have to pay you 21 or 20 or whatever that number is for the 86% of that that, that’s just the way that Costco works.

Steve: Well, hold on time out, so their margin is only 14.6% off of the price that you give them?

Kevin: Yeah. So that is the way that Costco works. They make almost all of their money on memberships.

Steve: Interesting, okay.

Kevin: So it’s a wonderful and this is all publicly available, you can check it out in their 10K. Their grocery [ph] business is different, but in the physical products it’s fantastic. So we’ll net, our gross revenue off of that $25 sale is $21 at Costco.

Steve: So how do you determine what the price is?

Kevin: So that’s a conversation with them. What’s most important to Costco is turnover and customer value, because in essence they make their money and this is all hearsay like what do I know about Costco’s mindset. But the way that it seems like they make their money is from their memberships and you see that in their financial reports. The way that they keep their membership numbers up is by offering excellent value to their members.

So again if you have a bundle that if it were priced down in your website or Amazon or wherever else at $50 and you can price it at 40 to 50% off that, Costco feels that that’s a really strong value for their members and they want to present it as an opportunity to their members. They’re not really looking for that 14.6%, that covers their overhead.

Steve: I just want to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you are interested in starting your own online store, I put together a comprehensive six-day mini course on how to get started in e-commerce that you should all check out. It contains both video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online.

Now this course is free and can be attained at mywifequitherjob.com/free. Just sign up right there on the front page via email and I’ll send you the course right away. Once again that’s mywifequitherjob.com/free, now back to the show.

That’s very interesting. Okay so that means you make a pretty good profit selling to Costco?

Kevin: Yeah I make an excellent profit selling to Costco. It’s been a very interesting thing. Costco is very particular of course. If you can picture their warehouses the way they work, their pallets are structured deliberately inefficiently. So our standard retail pallet that we would ship to a normal retailer has over 800 units on it. A pallet that we ship to Costco has 75, so it’s…

Steve: Why is that?

Kevin: Because they want to fill their warehouse and they want to show consumption. So if you pack wall to wall boxes of something into a crevice in Costco, they feel that it impacts the shopping experience. So they want to create a sense of scarcity. So if they’re only 75 units sitting there and half the pallet is already picked through, it encourages people to buy. And then the game is getting them more pallets as they need them.

Steve: So what are some of the terms, like some of the details of the terms of selling to Costco, like do they expect a certain amount of volume from you and what do you need to — like what capitals do you need to have in place, how many units do you need to ship them and that sort of thing?

Kevin: There are roughly 500 Costcos in the US plus another 250 internationally. Costco works — they have two different divisions. They have the US division and they have the international division, and they’re actually not really connected. So, if you want to sell internationally, you’ve got to sell to international people, and domestically you’ve got to sell to the domestic people. They want to see and it just depends entirely on the segment, they want to see X units that are being sold every week yielding Y dollars.

And their seasons are really short. So our product will land in Wal-Mart in March and it will be totally gone by the 4th of July so it’s a very, very short selling season. But the goal is to replenish that pallet several times. In our case they want to see two or three pallets per store move through during that period.

Steve: How do they know how well it’s going to sell in their store though?

Kevin: So we did a trial last year just a few stores, 16 stores, and there were a lot of learnings all the way around about how the product needed to be priced and positioned and packaging and everything else. Costco is not for the faint of heart, I will freely admit that. The packaging requirements are absurd.

Steve: Can you give some examples?

Kevin: Sure, so our 75 unit pallet, at the end of the day we’re almost spending more on the packaging, the pallet, the pallet design, the [inaudible 00:32:57] packs than we are in the product itself, it’s very expensive. And it’s very expensive that small runs, it gets better at tens of thousands of units. But your test is pretty much a break even proposition at best.

Steve: So they force you to use unique packaging?

Kevin: Oh yes, yeah so you have to picture those big cards that they have in there. And again those are deliberately inefficient and they’re very expensive. So I think my cards are two layers of 24 point card stock with blister in between and there or whatever 14 inches wide and 13 inches tall, and then they have to have a customized tray set that they’re inserted into, and then the trays have to interlock so that they can be dipped double stacked etcetera, etcetera.

Steve: Okay interesting. So given that Costco came to you, is that the typical way that it works or can you typically apply to Costco? I mean, I guess you aren’t familiar with the process outside of being approached, but do you know what that process looks like typically?

Kevin: Usually you would you would be working with some sort of a seller group who has access to Costco and understands their needs, and understands how the whole thing works. I’m friendly with a bunch of these groups and they’re actually working with us. One group in particular is working with us for outside of Wal-Mart and Costco while we run [inaudible 00:34:30].

But they know the buyer at Bed Bath and Beyond, and they know the buyer at Kroger or whoever it may be. They know when the buying season is, when they’re designing their [inaudible 00:34:43] and what the requirements are. They give you a call and say, hey jump on a plane, we’ve got a meeting with Kroger, and you talk through the product with them. And we’ve done a lot of that too but yeah.

Steve: How does the experience with Wal-Mart differ from Costco?

Kevin: We’ve had an excellent experience with Wal-Mart so far, and I say so far because we haven’t — we’re in negotiations trying to figure out the whole thing. It’s very clear that the devil is in the details, that they have no tolerance for lateness or operational shortcomings or product issues or anything else. And the level of bureaucracy is impressive. In fact we’re trying to hire a person right now to be our retail channel manager who can help us through that process. I may not be dispositionally suited for the level of detail that’s required in that particular relationship. But they’ve been good to work with, they really have.

Steve: But in terms of pure dollars, is the pricing structure similar to Costco? I would imagine it’s a lot different and your margins.

Kevin: It is a lot different. So I can’t emphasize this enough that when you start thinking about retail, you need to think about price integrity. Once you set a price that’s up there in the wild other than retail, that is going to be your price. You set it too low and you can be leaving a lot a lot of dollars on the table. You set it too high; you won’t have the turnover that’s necessary to make these retailers happy. So that’s been an ongoing negotiation with all of these guys.

I think intuitively for us, we feel that the direct consumer base price of our product is about $35, $34.99 which is sort of a strange number. I’ve always felt that once it gets going in retail it’s going to land around 29.99 but that’s pure margin, right? So we have to walk carefully when we’re thinking about that. But you’re exchanging margin for volume and it is substantial volume.

Steve: Okay, can you just give us an idea of what is it like, a couple of orders of magnitude?

Kevin: So Wal-Mart has 5,200 stores, I maybe making that number up but we’re talking about entering 3800 of them. The name of the game with Wal-Mart is definitely inventory turnover and small inventory numbers. So whereas Costco had 75 units a store, Wal-Mart may only be 46 units a store and they only expect to sell half a unit a week per store, because there are just so many, hundreds of thousands of skews that are in there, right?

Steve: Correct.

Kevin: So you have to be operationally prepared to be fulfilling small case levels to the Wal-Mart distribution system constantly.

Steve: What happens with unsold units? I guess that’s less of a problem with Wal-Mart than Costco, but do they have the right to return you all the unsold inventory?

Kevin: Everybody’s agreement is going to be different of course, but our agreements with Costco is a guaranteed sale, which means that if it doesn’t sell by the beginning of August they are welcome to ship what’s left back to us which is a substantial risk of course. We have figured out what are our breakeven point is, how many we need to sell and our comfort level with that. And at the end of the day, it doesn’t mean we can’t sell those products, magically a [inaudible 00:38:21] skew might appear on our page or be a special offer or something like that to get rid of that inventory.

But the cash exposure, we’re obviously building for this order right now. We will be paying for it in the next 30 days. We won’t get paid for 30 to 60 days. You need to be prepared for that, and these are these are large numbers. So we’re entering sort of a new age for ourselves where we’re talking with trade financial organizations for factoring and trying to set up large lines of credit etcetera revolving credit. We’ve always been bootstrapped and we’re proud of that, but the fact is that the working capital needs of a wholesale organization are quite a bit different from those of a DAC [ph] organization.

Steve: Yeah, I was just going to ask you the payment terms are sometimes on there are 60 days.

Kevin: Yeah, 30 to 60 days. I have heard stories of Wal-Mart that it can be 60 days post sale. So imagine that.

Steve: Oh man, that’s crazy.

Kevin: You build the product, you ship it to them, it sits on the shelf for how many weeks, and then you get paid 60 days after it’s sold. That’s not the case with us, we’re not…

Steve: Right okay, that’s all negotiable I’m sure.

Kevin: To be honest they understand that we’re a small organization, that we’re new to this, and they’re interested enough in the product that they’re holding their hand through. I like to joke that these buyers sort of seem like the kindly uncle who makes no bones about the fact that you know haul you out to the woodshed and shoot you if things go wrong. But I mean they’re open about it, they really are, and it’s appreciated. They’re not trying to hide anything, they’re just like we understand that this is a big operational burden on you, these are the things you must do. And if you fail in these it will be very bad, so don’t fail please.

Steve: So again let me ask you this, I mean your B2C business is doing really well, you’re in Wal-Mart, you’re in Costco. I was just kind of curious what your motivation was for going on Shark Tank. Was it just to be on TV; was it just to get to know the sharks?

Kevin: So the Shark Tank process is really long. We first applied early last year and the process went relatively quickly for us, but it still took months and months and months. And when it looked like we were actually going to get on, we looked at each other, my partner and I, and said, well what do we really want out of this, what are we really doing? And I think first off, they can smell people who are after publicity from miles and miles away. So you’re not ever going to get to meet the sharks if they don’t think that you’re going to be either super entertaining or willing to take a deal.

So we internalized that, we decided, okay, getting in bed with one of these guys could be really useful to us, the brand cache, the connections, flat out money. So we came up with a figure that we’d be willing to take and the amount of the company that we would be willing to give away and per my MO we wrote down on a piece of paper, and then if you watched the show we clearly ignored that.

Steve: Yeah, I did see the episode. I’m just curious, when you came up with that number, did you account for the fact that they would counter offer something significantly worse than your offer?

Kevin: I mean I honestly feel that our valuation is quite good given our net revenue and our trajectory, and especially where we’re heading in 2018. I think that their counteroffer was ridiculous, but you take that into account when you’re sitting there thinking about what Lori Greiner could possibly add to your business. I have no illusions about the fact that she would be personally involved in it. She won’t be, but she has an infrastructure and she has a machine that’s working with her as a statement, and that should accelerate things.

Steve: How do you factor those in your calculations, like how do you estimate how much business like a shark will bring you in your calculations?

Kevin: You’re giving me too much credit.

Steve: I’m just kind of curious what your process is. I mean it seems very wishy-washy to me.

Kevin: Yeah I’m pretty analytical of course, but in this case, gosh, you think about the value of seven or eight men and it’s on ABC at prime time and getting the brand out there. Even if it goes — well as long as it doesn’t go poorly from a product perspective, the brand is getting out there and people will see it. So there’s of course a marketing opportunity to it. In terms of capital, we asked for $500,000 and $500,000 I can tell you would be useful right now as far as our inventory financing is concerned.

The valuation was low but it wasn’t completely out of sight. So it’s hard to say right. In retrospect had I taken the deal, I think I would have felt like I gave away too much of the company, but yeah they’re super intense. It is filmed like live, it’s not actually aired live, but there aren’t cuts or anything, like you’re out there and you’re out there for a good hour and going back and forth with them and it’s intense.

Steve: I mean you were portrayed very well on the show unlike one of my buddies who got roasted. He is actually on the podcast, and he got roasted by Mr. Wonderful. But I’m just kind of curious like how did being on the show, just being on the show, how did it affect sales?

Kevin: It’s been good. We do have a hose mounted product right. And I’m looking out my window here in Utah and I have 18 inches of snow out here. So these are frozen right now, so the airing time January 21st was not ideal for us. It would have been really, really great had it been March or April right when people are starting to think about cleaning. We did screen captures of our simultaneous sessions and we got up into several thousand people all on the site every time it aired.

So it was on the East Coast and it airs Central or Mountain Time, then it airs on the Pacific. So you really get three airings in one night, and each time we had spikes of several thousand users. And we did well, we did well. It wasn’t like a complete home run, we’ve certainly had better days especially around the holidays, but it is a gift that keeps on giving particularly on Amazon. Our Amazon sales are excellent right now and we’re literally getting 700 to 1,000 individual brand searches a day on Amazon which is great.

So that’s converting well. And I think it will pay dividends when the products hit retail shelves. Brand building is one of the hardest things you can do, what is Brush Hero; nobody knows what Brush Hero is. But now seven million people have at least sort of experienced it. So as they brush through the aisles of Wal-Mart, they’ll have an idea of what it is, and that can only help.

Steve: Yeah absolutely. I was just kind of curious like whether the sales bump kind of just lingers or whether it was just spiked when the show airs for you.

Kevin: It definitely lingers. The way that people watch TV these days, it’s just different right. Every single day there are x number of thousands of people who DVRed [ph] and haven’t watched it yet, my own wife hasn’t seen it yet.

Steve: That’s okay; my wife doesn’t listen to my podcast either, so it’s all good.

Kevin: Oh so you’re on national TV yeah.

Steve: Yeah, so I mean so overall the Shark Tank experience even though you didn’t get a deal was very positive, and if you got the deal it sounds like you probably would have regretted the terms that were given on the show in some way?

Kevin: Certainly with my own terms, the final terms were ridiculous. The main terms that we made a tactical error and left the tank, I think we could’ve lived with those. Both my partner and I are experienced enough in the investment community that I think that in diligence we could have worked a good deal and we could have ensured that they would be heavily involved. I like to say that, who knows how it was laid off.

But all in all, absolutely a positive experience. I think most important for us was making the product look decent and it did. The fact that two of the sharks were willing to invest $500,000 validates the product. The fact that we ended up looking a little maybe slow is okay, that’s fine. We’re human and it humanizes the company a little bit. So yeah, I have nothing but positive feels.

Steve: I know. I thought you guys came across great actually. So, yeah for sure.

Kevin: I will say that that there are posts on the Shark Tank Facebook page, one of which has a picture of me and a quote below it that says, never leave the tank. And there are like 18,000 comments which of course are really warm and friendly, and supportive for us.

Steve: Yeah I’m going to have to post that episode right below on the show notes actually so people can actually know what we’re talking about here. Kevin, before we end this interview can you just tell people where they can find you, where to buy your product or look at the product?

Kevin: Sure I will, brushhero.com, Amazon, all well brushhero.co.UK.eu etcetera. Our second product is the elevated cook, so elevatedcook.com, that when just recently launched.

Steve: What is that product?

Kevin: That is an elevated chicken roasting rack. So it allows you to essentially rotisserie a chicken without a rotisserie. And that patent is held by one of the White House cooks. So the last four presidents have been fed off of my product.

Steve: That is really cool. So did you get to go to White House?

Kevin: No.

Steve: No it’s unfortunate.

Kevin: I don’t think the White House knows that I’m combining spices in their basement. I guess they do now, I’m kidding.

Steve: Oh hey Kevin, I really appreciate your time coming on the show, a really interesting story. Thanks a lot.

Kevin: Cool, thanks a lot Steve.

Steve: All right, take care.

Hope you enjoyed that episode. What I love about Kevin’s methods is that they seem really obvious and intuitive but most people don’t do it, and we should all be applying his strategies. For more information about this episode, go to mywifequitherjob.com/episode209.

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.

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 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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208: The State Of Small Business Ecommerce And How To Create A Thriving Community With Andrew Youderian

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208: The State Of Small Business Ecommerce And How To Create A Thriving Community With Andrew Youderian

Today I am honored to have Andrew Youderian with me on the podcast. Andrew has the distinct honor of being the very first guest on my podcast ever in episode number 2.

Back when this podcast had 0 listeners, he took a risk to come on and I really appreciate it. Andrew has created and sold 2 dropshipped ecommerce businesses. He is a well known figure in the ecommerce world through his blog and podcast at EcommerceFuel.com

And he runs the best small business ecommerce community that I’ve come across that specifically caters to 6,7 and 8 figure businesses.

Anyway, today we are going to talk about some interesting statistics regarding the ecommerce landscape based on the members in his community.

What You’ll Learn

  • Andrew’s motivations were for starting the Fuel forums.
  • Some interesting statistics from his state of the ecommerce merchant survey
  • How to build a fantastic community of ecommerce entrepreneurs and what it takes

Other Resources And Books

Sponsors

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

Transcript

You’re listening to the My Wife Quit Her Job Podcast, the place where bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not in business. And today I’m happy to have my good buddy Andrew Youderian back on the show. And since I last had him on, a lot has happened.

Andrew has sold all of his e-commerce businesses and is now focusing all of his time on his super successful forum over at Ecommercefuel.com. And today what we’re going to do is we’re going to find out the exact steps he used to create such an amazing community.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Always excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 30% of my revenues. Now, Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send out an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, piece of cake, and there is full revenue tracking on every single email.

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

Now 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 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 ecommerce.

Right now I’m using privy to display a cool wheel of fortune pop-up. Basically, a user gives their email for a chance to win valuable prices in our store and customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%. So bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve. Now onto the show.

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

Steve: Welcome to the My Wife Quit her Job Podcast. Today I’m honored to have Andrew Youderian with me on the podcast. And Andrew actually has the distinct honor of being the very first guest on my podcast ever in episode number two. Back when this podcast had zero listeners, he took a risk to come on and I really appreciate it, and it’s been three years since then. And maybe there’s a reason why I actually haven’t had him back on in three years.

But anyway Amazon – not Amazon, Andrew has created and sold two dropship e-commerce businesses, Right Channel Radios and Trolling Motors. He is a well known figure in the e-commerce world. There is a blog and his podcast at Ecommercefuel.com. And in my opinion, he runs the best small business e-commerce community that I’ve ever come across specifically catering to six, seven, and eight figure businesses.

And today what we’re going to do is, we’re going to talk about how Andrew created this incredible community, and some interesting statistics regarding the e-commerce landscape based on the members in his community. And with that, welcome to the show Andrew, how are you doing today man?

Andrew: I am doing well Steve, thanks for having me on. And I think it’s probably wise of you to only have me as the first guest when nobody was listening as opposed to 10, or 11 or 12 because it’s a safer bet for you, you didn’t scare off as much of your audience, and you’re probably the better for it today. I’m surprised you had me back on.

Steve: I think it jump started the podcast actually in the very beginning. So it got a slew of visitors sucked in from your community, and it just propelled it upwards from there.

Andrew: Well, it’s good to be on here man, thanks for the kind intro.

Steve: Yeah so I mean it’s been three years since I’ve last – well not really since I’ve checked in with you but since you’ve been on the podcast and the listeners have checked in with you. So what have you been cooking up, and do you ever plan on selling physical products again?

Andrew: Yes, you give me a hard time all the time which is really funny as do other people very justifiably so. Yeah I guess three layers of what’s happened in the last three years. The last three years, I have sold my last like you mentioned, that last physical products business the CB radio business. That was 18 months ago. I really doubled down on Ecommerce Fuel which is like you mentioned private community for kind of seven figure store owners.

And I still I have — there’s – I’ve got a small product, I manufactured and designed and sell on Amazon that there’s a very small amount of revenue that keeps me just a little bit [inaudible 00:05:06] sturdy into the game. But really trying to spend most of my time, 80% of my time on Ecommerce Fuel and just doing my best to connect to merchants over there, build a great community there rather than selling and that’s what I’m focused on. So, to answer your question, potentially yes in terms of the big physical products business like a massive one. I think my focus is going to be on the community for the foreseeable future.

Steve: Yeah that’s interesting because what are some of your motivations, so what were some of your motivations for starting the forum in the first place, and how have they kind of transitioned now that you’ve sold your businesses?

Andrew: Yeah the motivations I think were to twofold. One was I didn’t see anyone doing it. There was no to my knowledge — well actually you, I would say you were probably the — in terms of at least the blog and the content, I actually remember looking at your site before I got started at Ecommerce Fuel I think and this is really cool, but I wish there was more of it. So motivations on the community side, was to build a community of peers in the e-commerce space, because I didn’t see that out there.

And then also just thinking I felt like I had a – there was something I would enjoy doing. I thought maybe I could add value to people’s lives through it, and also potentially make it into a viable business. So I’ve always enjoyed getting people together, kind of community building at some scale. And so those were the two motivations kind of behind the genesis of it.

Steve: I’ve actually tried to start small communities in the past, and I must say that I’ve never been nearly as successful as you have. So I kind of wanted to know your secrets. Let’s go back to the beginning, like when you had zero members like how do you start a forum? And just for the listeners out there, Andrew actually charges a monthly fee to belong to the forum, and that makes it actually double as hard. So let’s start with the basics first, like how did you choose your platform? What do you use and why did you choose it?

Andrew: The platform isn’t super important. There’s a couple of key things you should have. Like anything a lot of times in some instances technology is probably far more important as like who’s in the community, the personal relationships, and kind of your strategy. But to answer your question, the platform we’re in one right now is called Vanilla Forums. It’s a hosted forum software. You can also get the open source version if you want to run it.

And the big, probably the biggest thing for me when picking forum software was that I cared that it had the mentioned features. So in some forums if you’re going in and in our forum at least you can do an ad to like Steve Chou. And you will be notified if I mention you in a discussion. And when you’re starting a community, to get the community to a point where it’s going to be able to be self-sustaining based on the kind of organic discussions and contributions from the membership. That takes a long time.

And so you have to have someone likely the founder who have [inaudible 00:07:48] to really drive that engagement discussion and activity for a long time. And so having the ability to take people in discussions that also notifies them and pulls them into the discussion was huge and that was the biggest feature I looked for.

Steve: Interesting, yeah because the forum software I use, I actually didn’t do enough research, and mine does not have that ability. And I guess that — is that — would you say that that actually drives a lot of discussion, the ability to tag other people?

Andrew: I would say it doesn’t drive a lot of discussion now. I think it’s a crucial element for any forum software, but I would say it’s probably two to three or four times as important early on, when you’re trying to really get some of those early discussions going. So yeah it’s — and I’d still say it still drives email notifications I would say even more in general probably drive a lot of the discussion and the engagement people coming back in.

Steve: And when you’re starting a community, it’s like a chicken and egg problem, right? So in the beginning when you have no one and especially for a community like yours where you actually screen out based on revenue, how do you convince someone who’s making a lot of money to join this forum when there’s nobody there in the beginning?

Andrew: Yeah so it’s tough because some of my strategy was you’re exactly right, you have a chicken and egg problem, and you can’t charge for something when there’s no value there I think. So most people try to say, hey to join my community it’s $100 a month, but it’s crickets that doesn’t last. That’s pretty sure fire recipe for disaster. So my plan was — and it really takes a while to ramp this up was I spent probably a year just blogging, starting to get to know people in the e-commerce space and this has been after probably four or five years of just running an e-commerce business, and building up connections and a network in the e-commerce world.

And so every time for that year when I was blogging, I’d come across someone that I thought was interesting, had meaningful experience that I really enjoyed talking to, and I thought would add value to a community. I would add a Gmail label to them saying I’ll try to remember in the community. And I did this for the whole year, so it took me probably a year to build up a kind of an initial group of 150ish maybe 175ish people that I wanted to see the community with.

And so that took 12 months, and then when I was ready to go over the course of 30 days, so okay here we go. And you really have one shot at this, right, you have one shot to build the momentum, because if you lose the momentum, it’s going to be really difficult to get to where — if you try to get it again with the same people which is can be challenging or you want to build a new seed list of people. And so for 30 days, every day I would bring five people into the community, tell them what we were doing, invite them personally.

And I think for those especially that initial group of people; you have to have some kind of personal relationship with them. And so bringing them in, I’d make introductions to everyone that came in with other people, every week starting probably at least three or four discussions where I would kick it off and then try to using that tag feature to bring five or six, or seven people in to try to get it going. So that was kind of how I got it going from nothing.

Steve: I mean how do you get people to post their content? Okay so for the people who have never been to these forums like there’s members there right full on like ten page essays on what they’re working on and what’s working and what not, like how do you get that, how do you encourage that?

Andrew: I think part of that is just the type of people that you invite in. Some people like to do this, some people don’t. Probably that’s by example, I’m less good at this now especially since I don’t have as much hard data too. I’ve kind of gone for more of an operator role to more of a kind of a community manager and try to set the direction and vision for the community and have a macro role as we’ll talk about later with some of the industry stats. But early on in the early days I tried to lead by example with that with some posts.

And so probably setting that culture and bringing in the right people. Part of it too is highlighting people and appreciating people. I think when somebody goes in and they have a post, and they spent a lot of time on it and nobody notices it, then that’s tough right there. So what is the reward for doing that? But if they do spend a lot of time on something and the person who’s running the organization really notices and reaches out to them and thanks them for it, that’s beneficial if they get a lot of likes.

Another big feature I wanted in my forum software was to have something that could have an upload or a like functionality. We have a like functionality just like Facebook. There’s you know just like Facebook like there’s something pretty cool about spending time on something and seeing a dozen, 15, 20 people who are your peers that you respect acknowledge the work that you’ve done. I think that’s pretty powerful, at least it is for me.

And so those are I think all those things kind of in concert help. If you had just one of them that wouldn’t do it, but I think the kind of the trifecta of it can be helpful in setting a culture and also kind of helping build credibility and trust for encouraging people to post those things.

Steve: So far a lot of the features that you’ve been mentioning in your forum are actually covered by Facebook groups. So I was just kind of curious, why the decision to take it off of Facebook?

Andrew: A few things one, it’s hard to customize Facebook. We’ve built out some custom functionality with our community that there’s no way we could do with Facebook, that’s one. The branding is a second thing. Third, I feel like it’s less of a community like maybe this is just a bias, it’s not fair. But I feel like there’s less of a – it’s less of an independent autonomous community.

I wanted it to be a place where this is the — this is e-commerce so this is where you come to connect with other established writers, not like, oh I’m also checking out pictures from my brother and my best friend’s wedding. Oh here’s some e-commerce stuff too, maybe I’ll jump in there. I want it to be a dedicated place for people to go. And also ownership too, I wanted to own it like Facebook.

Steve: Yeah.

Andrew: I mean you think about the credit that they — I don’t know if they’ve done this with private groups, but think about how much they’ve cannibalized the organic traffic you got from your organic fan listings. Like you got to pay through the wazoo [ph] now to reach people that initially they promised that you could always reach if they liked you.

Steve: Yeah they definitely nerved the reach of groups even as well.

Andrew: Oh they have.

Steve: Yeah they have, they have. So yeah I was just curious at the time though it seemed like Facebook would have been the easy way out since it had all these features. Let’s talk about — you mentioned culture a whole lot, and so I just wanted to kind of talk a little bit about how you screen your people to come in outside of the revenue requirements of course.

Andrew: Yes so whenever people apply, we do a full on review of their website. And the requirements right now are you have to be doing at least a quarter million dollars in annual sales or work for a business that — work full time for an e-commerce business. And occasionally we’ll let in very select service providers if we think they are a really good cultural fit for the community. But for an average store, we’ll go and we’ll look and it’s we’ve kind of got like an internal process for doing this, and can give away everything so people can game the system.

But you can look at — on both ends of the extreme let’s take a store that you land on. And you go to their trust pilot page and over the last 30 days they’ve had 400 reviews and their site is well laid out. They have lifetime reviews of let’s say like 5,000 reviews from people. You can read through those. Let’s say they’ve got domain authority on their domain of 40, they’ve got 15,000 Facebook fans. There’s a pretty good chance, I would be shocked if that store was not at least a quarter million in sales right. So that’s pretty easy, and especially if it comes from an application with somebody with the domain in their email address.

On the flip side of that, if you go to a site and it’s not designed very well graphically, it just looks really horrendous, it’s not laid out well, domain authority of 10, no engagement on Facebook or review sites, their product descriptions aren’t well done, there’s nothing that seems like they’ve grown, working toward or social signals or SEO signals. They could still be crushing it with paid traffic behind the scenes maybe on some pages we didn’t see, it’s a possibility. But in that case we’ll ask people for revenue proof if that’s the case. That’s kind of a sense of our process.

Steve: What about like Amazon folks since there’s less evidence I guess.

Andrew: Yeah so if you’re on Amazon a couple things, I mean we require everyone to be transparent on the Amazon front as well. That’s also a big part of the community is transparency, so everyone has to use their real name or real store. Some people don’t like that and that’s totally understandable, but that’s part of our membership and they’re not — if you want to be a member that’s what we require.

So in that case if we look at their merchant page because everyone has a merchant page to list their products, and we see let’s say they’ve got a dozen products and all of their products have over one hundred reviews, probably pretty safe bet they’re doing the volume that we think. And we actually require $50,000 per month if you’re just on Amazon versus you’re kind of 20ish if you’re not. But again same thing if it’s kind of weak sauce, then it’s hard not to mess the long term. But if it’s hard for us to tell at a glance that they’re doing at least what we think we require, then we’ll ask for a revenue snapshot from their Amazon.

Steve: What about personality fit, like do you actually interview these people and get an idea of whether they’re going to contribute personality wise?

Andrew: Yeah good question, so we don’t. We don’t interview ahead of time but we do look at we’re reading the little things in the application and if people are on kind of around the border and they have a real thin application, that’s something that we’ll at times we’ll say, I suppose not a good fit. More so than that though it’s when people come into the community. I have a very — I love discourse and good discussions and debate, and I hate people who are disrespectful and rude.

And so those are done on a regular basis. We’ve tossed out people who were just kind of a one strike warning, like this last month actually we had to reach out to someone saying, hey man, the way you interacted with this person here was totally out of line and just downright rude. If it happens again we’re going to throw you out. And we have a pretty strict no jerks policy and I — yeah I mean I don’t feel bad about tossing people out who are a good cultural fit after they’ve had one warning.

Steve: What happens to posts like semi-naked pictures of like a popular blogger or podcaster of EcomCrew for example? Will that get like a strike?

Andrew: Well it depends how good the Photoshop job is and who it is. So as long as they’re not totally – I agree, I know exactly who you’re referring to, you may be getting an e-mail from Laura. You’ve been on our watch list throughout Steve, so we may have to talk off record about some of your activity.

Steve: So you give people a strike if they’re disrespectful and if they do it again they’re out.

Andrew: Yeah and if they’re really bad. I mean if they come out and they’re just you know — it’s all I mean community management and moderation is something that is tricky. There’s a lot of judgment and judgment calls involved, and if somebody did something atrocious, we will throw him out without a single strike. But usually you try to — a lot of those people don’t — what I have found is people communicate in very different ways just like they would in person to person, same thing with written.

Some people are very careful about how they write and want to make sure they don’t come across as rude or mean or aggressive. Other people just don’t think about that, they don’t understand the way that they come across in their written word, and sometimes people are being malicious, they just don’t — it just doesn’t forever click in their brain that this could come across really poorly. And so yeah someone like that and it’s not in a malicious thing more than just a lack of being conscientious and that’s something we’ll definitely warn him about.

Steve: Yeah so since you have a pretty good community of e-commerce entrepreneurs, what’s interesting is when you have a whole bunch of those people together, then you can extract like kind of macro data about them, and I know you sent out this ridiculously long survey, or you send it out every single year, it takes me a good 30 minutes to fill it out.

Andrew: And you complain about…

Steve: No not that I complain about it or anything. It’s a very good survey, very thorough; it could be a little shorter. I’ve just put that out there.

Andrew: Steve knows I wouldn’t have all these great insights to share on your podcast.

Steve: That’s true, so let’s start sharing those insights. So I’ve got a couple questions first. I know you have a couple of insights that I’m probably not going to ask you about here, but I am actually curious about the percentage of people that are private labeling and what the state of drop shipping is right now.

Andrew: Yeah so this is a report we call The State of the Merchant Report, and if you want to check out the full thing, you can go check it out at Ecommercefuel.com/2018-report. And it’s where we survey — this year we had 450 respondents to it, and so we get data on all different facets of their business. About half, a little over half I think are ECF members, the other half are just people in the community that run stores.

And so you want in terms of private labeling what percentage of people are private label. So we broke it up in a kind of five business models. You’ve got pure drop shipping; you have a hybrid model where you’re maybe drop shipping and also reselling something. Proprietary manufacturing, you’re making your own product private labeling where you’re making something but it’s probably a contract on a contract basis and either someone else’s design or tweaking someone else’s design and then pure reselling.

And so to answer your question Steve, private labeling makes up about 22% of the overall mix. So not just shy of a quarter and drop shippers make up about 16% of the whole mix. So you asked about the state of drop shipping, and it’s interesting because the only reason I sold my business 18 months ago was just being worried about the macro environment, and how difficult it is to be a dropshipper in today’s age.

I think in e-commerce if you don’t [inaudible 00:21:19] I think most people know this, 2018 if you don’t have something proprietary and you’re trying to just win on distribution, Amazon is going to crush you there. But what I found is drop shipping actually has — there definitely if I had to pick the model I would least like to be in, it would be drop shipping given the margins…

Steve: What are the margins that in your survey for drop shipping just curious?

Andrew: Yeah so much for drop shipping, so drop shipping your gross margin on average for a drop shipper is 28% compared to manufacturing the high side which is 49%.

Steve: So is that gross margins or net margins?

Andrew: Gross margin.

Steve: Gross margin, okay got it.

Andrew: You look at the net margins; your net margin on average for a drop shipper is 14% versus manufacturing 20% and private label which is actually a bit higher at 21%. But yeah I mean but you still it’s probably the hardest business to be in, but when you look at it, I think last year when we did this 2017 survey, one of the metrics I tracked is the number of stores with flat or declining revenue. And I think it was 45, close to half of all drop shipping stores were either stagnated or declining, in this year that had shrunk to only 33% of stores.

So you had two thirds of them were growing, and the average growth for drop shippers this year was almost 33%. It did better than I thought, and one thing I was wondering about this is I wonder if Ali Express, drop shipping from China and Shopify being over low and doing a lot to promote that, I wonder — I don’t have any data on this, but I wonder how much of that kind of strength and up take in popularity impacted those drop shipping numbers.

Steve: Yeah that’s a good point. I was always curious whether people are actually making money with that. So just for the listeners out there who don’t know what I’m talking about, Shopify there’s this app called Overload which allows you to easily do drop shipping from Ali Express which is this marketplace in China where you can get products really cheap from the manufacturer and then send them direct to the consumer through Amazon. And I just can’t imagine that being a good long term business model.

Andrew: Yeah I think it would be something that could be fun to spin up and play with, but if you want a business that can be around five ten years, yeah absolutely, because barriers to entry are low. It’s there’s a lot of the problems you have to drop shipping traditionally, but with the increased problems of you’ve got longer wait times, you probably have even more quality control issues because you have less intermediaries between the factory and the Customer. Yeah I mean I think it’s…

Steve: Plus you can take a month for the product to even get there.

Andrew: Yeah you get to deal with — and you can set expectations for people I suppose when they buy, but yeah I think there are some — it would not be the model I would choose to try to build a business that is going to be around in a decade.

Steve: There’s nothing in your survey about whether people are doing that, right?

Andrew: No unfortunately not. I was trying to – I heard a lot of people complaining about the length of the survey, trying to be more concise.

Steve: So the next question I had and I don’t know if you have statistics on this is just kind of like we all talk about how Amazon has taken over the world. Is that what you’re seeing in your survey as well in terms of percentage revenue of Amazon versus your own e-commerce store?

Andrew: Yeah so you look at the some of the trends with Amazon, and so I’ll give you three here. So the number of stores that listed Amazon as their number one sales channel was 26% this year, and that was up from 20% last year. So the number of stores that Amazon is the number one place they move product that’s up almost a third. Number of stores selling on Amazon in any capacity is 55% of merchants.

And if you look at the — I think this is maybe the most telling number — if you look at the aggregate revenue, so if you look at all the revenue from all of the people who responded to the survey, it’s about a billion dollars in revenue. And if you look at the percent that came from Amazon, last year that was about 200 million, this year it was about 276 million. So up pretty starkly from the year before. And so Amazon is definitely of course — I mean this isn’t a surprise they’re growing and you can see in the numbers. So they’re definitely taking up a larger share of the…

Steve: It seems much lower than I would have expected actually. So that’s like a third of the people, so most of the people are making a third of their revenue off of Amazon it sounds like.

Andrew: Yes if you look at not even that. So Amazon well it would be the percent so you look so actually on aggregate basis probably about a little over a quarter of the revenues coming from Amazon.

Steve: Right like 27 yeah interesting. And then how many people are just – did you say 20% are just only Amazon?

Andrew: So if you look at the people that are let’s see, I don’t know if I actually have a number for the percentage that are actually…

Steve: It looks like the survey is going to get longer man. It’s just not comprehensive as I thought it was.

Andrew: To be fair, if you’re listening to this thinking like why in the world would anyone spend 20 minutes filling out a survey, we do every year give out a free international round trip ticket anywhere in the world. So that’s kind of the carrot that we use to daggle in front of people.

Steve: Has anyone been announced yet, because I didn’t get a notification that I had won.

Andrew: Yeah, I was looking forward for this podcast.

Steve: Okay.

Andrew: They’ll send you the notification so we can make it official. I don’t actually — I could get that, I could circle up with you up on the show notes. I don’t know the number of people that actually are you know what was your question, your question was how people that are predominately selling on Amazon?

Steve: Yeah or only selling on Amazon.

Andrew: Only selling on Amazon. So I don’t have that number right in front of me. I would guess just based on a long weekend spreadsheet data that is probably about 25% of people are pure play Amazon players, but that’s just a guess.

Steve: Okay and I’m also curious of the members in your forum who are making the most, how long have they been selling online period, like did they start out with their own stores, did they start on Amazon and transition over?

Andrew: Yeah. You mean just anecdotally?

Steve: Yeah anecdotally or what you know. I mean you talk to a lot of the members of your forum; I was just kind of curious.

Andrew: Yeah I would say I think it really varies. I don’t think there’s a hard and fast rule there for who kind of that — I think about people that are really killing it in the community. You have some people who don’t sell on Amazon, have a really high quality branded sites with a very cool product, high quality products, high quality branding and they’ve figured out a way to drive revenue off Amazon.

And you have people too that are doing incredibly well with but with you know with an Amazon channel, that they went on Amazon, they used that to kick start the brand and now they’re taking a lot of those proceeds and the spoils from the Amazon launch and using that to build their own brand site at their own independent website out. So I see people doing very well with multiple different approaches. I don’t think there’s necessarily a category or a mold you can fit people into.

Steve: So you mentioned growth numbers earlier, and I’m curious did revenue — like how did revenue go up with people’s own sites in general as opposed to Amazon sales?

Andrew: Yeah so if you look at the revenue growth for stores that kind of broke it out, if you’re not selling on Amazon — so the average growth rate, I can’t remember if I mentioned this for the entire group was about 37% year over year.

Steve: That’s crazy.

Andrew: It is crazy although if you look at e-commerce growth in general year over year, it’s roughly isn’t going to serve [ph] a couple of days ago roughly and like for 2017 in the low to mid 20s range, so call it 22, 23%. And that’s for everyone right, even enormous massive big box stores. So when you think about merchants that are on the smaller end of that which relatively speaking seven figures are still pretty small in the broad scheme of things in a global economy, you make sense that they’re up a little bit so 37% on average.

If you look at stores that do not sell on Amazon, they grew at a 30% rate. If you look at stores that are selling on Amazon in some capacity even if it’s just 10% of what their sales, they’re growing at a 41% rate. If you look at stores where Amazon is sixty plus percent of their revenue, so the majority of their primary channel, they’re growing at a 51% rate.

Steve: Wow, Amazon is just killing it.

Andrew: Yeah they really are. I mean they’re — and not to say it’s the only way you can grow, but on average the more Amazon you have the faster you’re growing.

Steve: What about the best source of traffic like if you’re running your own store, like what are most people using to get new sales?

Andrew: Yeah so I looked at top traffic sources for everyone, and so this isn’t the — when I say these percentages, this is not the average percent of traffic that comes from a certain source, but it’s the percentage of merchants that listed this traffic source as their number one traffic source. And it’s interesting because you look at merchants that pay for traffic and three quarters of stores actually pay for traffic, but only 30% of stores list traffic paid traffic as their top traffic source.

You look at even despite all of the myself included moaning and groaning and wailing on the fact that organic traffic is getting harder to get and Google is just pushing those organic results further down below ads, organic search represents over half like 51% of all the – excuse me 51% of merchants reported that organic search was still their number one channel.

And in terms of conversion rates out of this, from that kicking out dive into deeper, but if you look at the conversion rates for merchants, so again this is the conversion rates reported by merchants based on their number one channel, direct was 3.94%, email was 3.32%, paid traffic was 2.66, and organic was 2.40. So email and direct email and paid traffic were by far the best converting channels for people that had that as their number one.

Steve: Interesting, you just said paid traffic was only 2.6%?

Andrew: Yeah 2.66% yep.

Steve: I’m wondering then if most of those people are running Facebook ads then, because usually Google AdWords conversion rates tend to be higher, at least for my store. I mean I only have one data point.

Andrew: Yeah again those people, I didn’t differentiate to try to – on the…

Steve: Oh God, this survey is worthless man.

Andrew: I am going to send you and let’s see where the [overlapping 00:31:36]. And when you don’t fill it out I’m going to go on my podcast and totally call you to town for it.

Steve: So are there any other interesting statistics? I know you’ve got a whole spreadsheet probably in front of you right now, that we hadn’t covered.

Andrew: Yeah so a couple more that came up. I was actually surprised that I saw that gross margins have stayed pretty resilient over the last year. So last year Amazon of course as we’ve just talked about Steve, they’re blowing up, their fees are always increasing and they take their little cut. Paid traffic costs are up this last year by 15% or so.

Steve: Ouch okay.

Andrew: But when you look at the margins year over year, they stayed almost the same. I mean you look at let’s see — so if we look at the margins in general when I go to that part, so gross margin on average were 39.2% across the board. I think they were like 39.6 last year and net margin 17.4 this year; last year I think they were 17.7. So they’ve stayed stronger than I would have guessed, that’s one thing.

You look at the discrepancy on the margins between people who sell primarily through their own store versus selling primarily on Amazon, and that’s widening a little bit. Like if you’re selling primarily on Amazon, your gross margin is 36% and your net margin is 16.6%. If you’re selling primarily on your storefront, your gross margin is going to be 40.4%, so about 4% higher, and your net margin is going to be 17.7 so a percentage higher and that’s widening a little bit from last year. So that’s one interesting thing.

Steve: So before you go on, so PPC costs you said have increased 15% roughly. And so how are they making up for it on the margin side?

Andrew: And that’s a big question I had. You’re thinking like how are the margins not getting eaten away more when you have these increasing costs? And the one thing that I saw and I’m not sure to be honest with you but the one guess I had and this kind of ties in to the probably the most startling data point I saw from the entire survey was that conversion rates, I think conversion rates last year were 2.10% across the board. This year they jumped up to 2.62%, which is like a 20% plus for revenue, like that’s normal number but anyone who’s tried to increase your conversion rate by twenty plus percent like that’s hard to do for one person let alone for like an entire universe of 450 store owners.

So thinking through that I thought that maybe one of my hypothesis was maybe more people, just a ton more people are getting into manufacturing and other markets maybe where they have better margins and better conversion rates because conversion rates in manufacturing tend to be higher than some of the other reselling models. But I saw the conversion rates go up across the board, across all different types of models. And so my best guess is that just it’s been a really good year with the economy at least because it’s a pretty US centric survey and the people are willing to spend more. But I think that’s part of the offsetting of the increased cost.

Steve: Either that or people are getting more intelligent about retargeting and site design and that sort of thing which is incidentally things that you learn just from browsing the forums because people share all that stuff pretty openly which is pretty amazing.

Andrew: Yeah it’s a good point, I should use this to leverage.

Steve: Come on Andrew, I’m just marketing your forum here.

Andrew: For the community, I’m slacking here.

Steve: Well it is true like [inaudible 00:34:59] Mike Jackness for example; he’ll post like this five page essay on what he did to improve sales whether it be like Facebook Messenger or whatnot. And this is stuff inside that I’ll read and then I’ll go try and instantly I just started doing Facebook Messenger stuff about a month ago, and I have almost 1,000 people and I sent out my first blast the other day and I made about 50 cents per subscriber which I was impressed upon because I didn’t even know what I was doing, so stuff like that.

Andrew: Yeah and that’s a good place, I didn’t even think about in terms of because you’re yet to see the survey, so ECF, Ecommerce Fuel centric. That’s a good point, I didn’t even think about that. A couple more metrics and before you throw me off the podcast here Steve, this is kind of fun, your favorite billionaire, so you have to really guess this between Elon, Richard Branson, Mark Cuban and Jeff Bezos, who do you think people most wanted to have lunch with?

Steve: Elon Musk, that was my answer at least.

Andrew: Elon and who do you say number two was?

Steve: Probably Bezos.

Andrew: So Elon Musk you’re right. Number one with 30%, almost 30% of the votes was Elon. Richard Branson was number two, 24.8, Mark Cuban was number three with 23.1, and in an e-commerce survey Jeff Bezos came in dead last with 22.2%.

Steve: Wow okay. I guess it’s because the other guys seem more personal, like Richard Branson just seems like a really nice guy, right?

Andrew: He does I agree, and he’s also to be fair he’s not trying to kill a bunch of members businesses, that might have something to do with it too.

Steve: That’s true, that’s true. And Cuban is pretty nice too. I mean if you get on his good side it seems at least, based on Shark Tank.

Andrew: Yeah and this is before too the whole of the Falcon Heavy launch and all that kind of stuff, so it’d be interesting that we do the poll the today. One less thing on Amazon front then we can if you have any question Steve, but the last thing I want to mention was if you look at obviously Amazon is becoming a bigger part of most people’s businesses and growing like crazy and powering a lot of growth. But I also took a look at — one thing I ask every year is what’s the number one struggle in your business this year? And this year I noticed a 3x increase in the number of people mentioning Amazon when asked about the biggest problem or concern, or struggle in their business.

And originally I thought like hey maybe this is just a bunch of people who have their own sites that are getting crushed by Amazon, it’s killing their own off Amazon model, but that was only 20% of people. 80% of the people mentioning struggles, it was related to like compliance issues, Amazon getting more competitive, them being more overly reliant than they wanted to be on Amazon, some kind of variation of I’m having problems or worried about Amazon actually selling on, so I thought that was interesting.

Steve: And is it because people are getting banned or it’s because they’re getting maliciously attacked?

Andrew: It’s all over the place. So I kind of broke it down, people complaining about Terms of Service, policy compliance, things like that was about 70% just people complaining about Amazon getting more competitive in general, and that would also include people hijacking their listings, trademark issues was about 31%, and then over reliance on Amazon was also about 31%.

Steve: I just want to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you are interested in starting your own online store, I put together a comprehensive six-day mini course on how to get started in e-commerce that you should all check out. It contains both video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online.

Now this course is free and can be obtained at Mywifequitherjob.com/free. Just sign up right there on the front page via email, and I’ll send you the course right away. Once again that’s Mywifequitherjob.com/free, now back to the show.

Interesting, interesting. Yeah I noticed that too just with the members of my class as well. I mean a lot of these unscrupulous sellers are actually — it seems like they’re paying people to just maliciously leave negative reviews and just destroy your listing right off the bat, and that’s happening a lot more these days. I hope Amazon does something about that.

Andrew: Yeah I totally agree. I’ve been seeing more of that too and it’ll be a hard thing to — I guess it depends on circumstance, some could be pretty cut and dry who’s right or wrong, but yeah it probably requires a lot more human interaction on that and that’s Amazon is all for getting the humans out of the equation.

Steve: I want to switch gears a little bit, like Andrew you’re sitting on a boatload of cash from two e-commerce store sales, how are you investing it, what do you plan on doing with that boatload of cash?

Andrew: Thank you for wishing that.

Steve: By the way Andrew lives, his address is…

Andrew: So investing is interesting. To be — I mostly just kept it in cash. I have done a little bit; investing a little bit in a very little amount in crypto, most is for funding anything but that’s a tiny percentage. So that’s been fun to watch, it’s just kind of a fun kind of debt speculative bet. But for the most part 99% of it is still sitting in cash waiting for some good opportunities to come along. And I think actually it’s funny you mention this; we’ve had some private discussions about this in the past.

Next week I have multiple days blocked off to really thinking through how to put some — have more of a tangible plan, but yeah right now it’s been most in cash. And my hope is to be able to with some business stuff coming up in the future, I think we’re as entrepreneurs a lot of people listening plus some of the best return you can get on your money is to be able to employ that in your own business or in other businesses that you can control.

So that’s going to be part of that with some stuff we’re going to be doing in the future hiring some more people to help out with some things, buy some assets, things like that. And the other too is I think we’re in a huge asset bubble right now. And so we did a podcast about this at Ecommerce Fuel about trying to time the market, so I’m not planning on timing the market. But I was pretty excited to see the stock market take a nice little hit this last week. It’ll probably be a tiny [inaudible 00:41:16] before it runs to 50,000.

Steve: I guess the reason why I’m asking this question is do you plan on deploying this money on buying another business, and if so would it be an e-commerce or something else?

Andrew: Probably not e-commerce just because it’s really kind of it’s my commitment to try to double down on the Ecommerce Fuel community and brand an ecosystem. I think it’s hard to do a lot of things well at once. But I would invest more in — like one thing I’m going to be doing in the future is a job board and really trying to build out a more dynamic job board for e-commerce marketing and world class customer support position.

Steve: Andrew you spoiled my next line dude. I was going to say, you know what, it would be really nice if there was just a centralized place where I could find help with my e-commerce store. And that was supposed to lead into that but you just ruined it.

Andrew: Sorry, I do that all the time. I step all over your…

Steve: This way it doesn’t seem like you’re pitching yourself and I’m genuinely curious about it.

Andrew: Which dude I need all those cues, do I put personal too much in your docket?

Steve: All right, tell us about your job board Andrew.

Andrew: No I was just — that’s probably where I was going to potentially put some money. Yeah so those were one thing, where are you thinking about putting money right now?

Steve: Probably real estate as soon as things slow down a little bit. So one of the number one questions I get asked from readers and listeners is why not just start — like you teach a class, why not just start like an infinite number of e-commerce stores? And I have an e-commerce store, I’d like to diversify. And so that’s why I went to blogging, that’s why I went to podcasting, that’s why I started an event.

And what’s next on my list, maybe something in the software space because that’s something that I haven’t done yet, but it’s just taking me a long time to figure out what that piece of software is going to be. I haven’t — I’m really anxious to start typing and coding because that’s what I enjoy doing, but I haven’t found anything that I feel like is going to have long term potential versus my time, because doing anything in tech, there is support, there is a whole bunch of other costs involved that ecommerce actually doesn’t have, or info products doesn’t have.

Andrew: Yeah it’s hard to do a lot of things well, that’s the other thing too is it’s really — I am not even in the same ecosystem as Elon Musk, and I think you do a really good job of this. I don’t know how you do it so well, but for me I do better when I focus on fewer things, I think most people do. And so yeah it’s hard to do a lot of things. Real estate was only — you mentioned it and I like that too. I like — we flirt with the idea of that happens somewhere else as opposed to where we spend some time. And the thing is it’s stuff for us right now as I’d love to invest in some real estate too, but it’s do you worry about how expensive the markets are in real estate?

Steve: I mean I hear that there’s a lot of growth opportunities in the San Jose and Bristol [ph] area. I mean it’s just right for…

Andrew: [Overlapping 00:44:06] is a very nice place as well.

Steve: Yeah it’s just ripe for growth. So one thing I wanted to kind of end this is we both run events, and we both know that they aren’t like the best profit centers so to speak. And I was just kind of curious like how your event ties in with your community and why you run them.

Andrew: Yeah so coming from full circle here back to the community.

Steve: Yeah.

Andrew: The reason we do the events is not to make money, like we make that little bit of money off of it, but when you look at how much time and energy goes into it it’s we’re probably making two three dollars an hour, it’s terrible. It’s not a good money maker. We do it because — I do it because it’s the most effective way to build relationships and to build community. And for us that’s – for Ecommerce Fuel that’s the biggest thing we’re focused on trying to build a genuine tight knit value adding community for seven figure store owners.

And so that’s kind of the mentality I bring to it. I try to really use the event as a way to cement and strengthen the bonds between the community members than a lot of the other meeting online because I mean meeting in person it’s kind of cliché, but there’s nothing like it and you can’t replace it.

Steve: Yeah totally. So for my event at least the Sellers Summit, I don’t have like this really tight community of forum members. And so the way I try to build community that way is I guess getting my most loyal listeners and readers kind of all in one place so I can get to know them better, and the hope is that these people will come back over and over again, and every year our existing relationships will be strengthened.

Andrew: Yeah, have you seen it like have you seen a good percentage of people…

Steve: Yeah. I don’t have the exact statistics, but I think it was like thirty something percent. We also changed the event a little bit this year in that we are screening for revenue and we’re hoping to get a large percentage of people who actually sell full time as opposed to pure beginners.

Andrew: Yeah I know it’s a great event, I was able to come last year, I was there the first year you did it.

Steve: Tell everyone what you were doing during the event last year.

Andrew: I was in an interview within meet up in the Utah desert hanging out with a bunch of other people who have an obsession with having fun and playing and sleeping in 30 year old fans.

Steve: Yes, yes I don’t know e-commerce Sellers Summit camping out in a van with a bunch of fanatics.

Andrew: If I hadn’t committed to it and paid for it ahead of time, I wouldn’t have been there. And I will be there this year, I’m very much looking forward to it Steve.

Steve: Cool. Andrew, where can people find this job board, where can people find your forums, and where can people find information about your event?

Andrew: Yeah thanks. So Ecommercefuel.com is the best place just to check out everything. If you want or interested in learning more about the community or joining, you can head over there and just click at the join now button, and you can learn more about how that whole process works. The event is limited to community members only. So if you do want to be a part of that, just the first step would be joining the community.

And on the job board front, if you are — we’ve got a job board that we’re launching, and the real vision and focus behind it is to be able to help seven figure store owners get great marketing talent and world class customer support. So if you have a store and you’re looking for people, looking to find a place you can post jobs and get great talent, that’s going to be the focus.

And if you’re in the e-commerce world as well and you want to find out about opportunities with kind of really interesting, fun, cool e-commerce companies, and we’re also going to some internships as well. So if you’re kind of still just getting — if you’ve got a lot of hustle and grit and maybe some insider experience but not a ton of e-commerce professional experience but you want to maybe learn about some of those intern opportunities, we’ll have those over there as well. So, all those would be Ecommercefuel.com/jobs.

Steve: Is this job board for the general public?

Andrew: It will be yes.

Steve: Okay.

Andrew: Yeah we’re definitely going to make it a little more tied in and hopefully will be more of a service to the board members first and foremost, the community members, but yeah it will definitely be available to the general public.

Steve: Cool man. Well Andrew, thanks for coming on again after three years, and thanks for being my very first guest which jump started the entire podcast.

Andrew: Hey, thanks for taking on a limb and let me come back on knowing my personality and what I could potentially do to damage the brand. So thanks for having me, but it’s good to be on as always.

Steve: Yeah man, I think you’re due for a Photoshop job, so we’ll see what we could do about your podcast image for this episode.

Andrew: Thank you dude for a warning before.

Steve: All right dude, take care man.

Andrew: Hey thanks Steve.

Steve: Hope you enjoyed that episode. If any of you are selling online and making over $250,000 in yearly revenue, then I highly encourage that you sign up for Andrew’s forum over at Ecommercefuel.com. It will make a huge difference to your business. For more information about this episode, go to Mywifequitherjob.com/episode208.

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

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

Now I talk about how I use both of these tools in my blog, and if you’re interested in starting your own e-commerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send 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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207: How To Use Facebook Messenger Bots To Sell A Digital Course With Mary Kathryn Johnson

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How To Use Facebook Messenger Bots To Sell A Digital Course With Mary Kathryn Johnson

Today I’m thrilled to have Mary Kathryn Johnson on the show. Mary is someone who I met long ago when I was guest on her podcast Parent Entrepreneur Power. And we recently reconnected again at Social Media Marketing World.

It had been a while since we last spoke and when we started chatting, I discovered that she’s now a Facebook messenger bot consultant which really piqued my interest because that’s exactly what I’m studying right now.

Anyway, Mary has implemented high converting messenger bots for a lot of high profile clients and today we are going to pick her brain on how to implement a messenger bot for a digital products business.

What You’ll Learn

  • How Mary discovered Facebook Messenger bots
  • Her best Facebook messenger bot implementations for selling digital products
  • How Facebook messenger can be mixed in with email
  • The best way to get new messenger subscribers/li>
  • Some sample messenger autoresponder sequences

Other Resources And Books

Sponsors

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

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

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

Transcript

You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies they use to grow their businesses. Now today I’m happy to have my friend Mary Kathryn Johnson on the show. And a couple weeks ago I actually had Molly Pittman on the podcast to talk about Facebook Messenger bots to sell physical products online. But today, we’re going to discuss with Mary different ways people are using Facebook Messenger bots to sell digital products online.

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now Privy is an email list growth platform, and they manage all my email capture forms. And in fact I use Privy hand in hand with my email marketing provider.

Right now for example, 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%.

Bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve, and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ For 15% off. Once again that’s P-R-I-V-Y.com/Steve.

Now I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. Now always blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 30% of my revenues. Klaviyo is the only email platform 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 sent.

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

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

Steve: What was that?

Mary: I don’t know what was it?

Steve: Is that a piano in the background?

Mary: No.

Steve: No, okay all right.

Mary: There is one but nobody’s playing it. If somebody is, I’m in trouble.

Steve: Okay. Welcome to the My Wife Quit her Job Podcast. Today I’m thrilled to have Mary Kathryn Johnson on the show. And Mary is someone who I actually met long ago when I was a guest on her podcast Parent Entrepreneur Power. And we recently reconnected again at Social Media Marketing World, and it had been a while since we last spoke. And when we started chatting, I discovered that she is now a Facebook Messenger bot consultant.

She runs Messengerfunnels.com. And that really piqued my interest because that’s exactly what I’m studying right now. And Mary has actually implemented high converting Messenger bots for a lot of high profile clients. And today we’re going to do is we’re going to pick her brain on how to implement a Messenger bot for a digital products business. And with that, welcome to the show Mary, how are you doing today?

Mary: Hey there Steve. I am fantastic. I mean I woke up this morning, how could I be not good since I woke up and the sun is shining, so yeah I’m doing great.

Steve: It’s true, the weather is great where we live, we can’t complain.

Mary: My gosh, I cannot. It’s crisp in the morning and nice and warm, not too warm in the afternoon. So yeah life is good, how are you?

Steve: I’m good, I’m good. You know first off, I just want to say I love your name Mary Kathryn Johnson. It always makes me think of a movie star because they always say they have three words in their name.

Mary: Well I got to tell you, I can’t just be Mary Johnson. There’s a lot of Mary Johnsons in the world, and so I had to distinguish it a little bit, plus the domain Mary Johnson…

Steve: That’s true, impossible to get.

Mary: Yeah I had to just put my middle name in there, and channel my grandmother whom I’m named after, and yeah go on with life.

Steve: So Mary, give us the quick background story. Tell us how you actually got into Facebook Messenger bots.

Mary: Oh my goodness that is Andrew Warner’s fault, it is absolutely his fault. I’m on his list; I listen to his podcast periodically. And one day I open my email and there was a message in there, this was late January of 2017. And the message said how would you like 80% open rates and 60% click through rates unlike everyone else I went to, yeah dah.

Steve: I fell for that too man, yeah.

Mary: So I opened that message and it led to a invitation to a webinar. And of course like all wonderful humans that use the internet, I went ahead and registered for it with absolutely no intention of attending. I’m just one of those people that I’m just over webinars, and I’m just like I know your process, you’re going to give me an email, you invite me to the webinar, yes I’m intrigued, but you still invite me to the webinar and probably what I’ll do is I’ll be busy at the time and I’ll watch the replay. That was my absolute intention.

And somehow for some reason at the time the webinar was going to happen, it was on my calendar and it popped up and I was absolutely not doing anything else except whatever I was doing. I was not as intrigued as the webinar, so I jumped on. And I jumped on this webinar and he absolutely blew my mind. It was one of those experiences like the first very first online business that I did in 2003. I was totally consumed by this topic.

And he went through a very simple demonstration of how to create a Messenger bot on Chatfuel because at that time Chatfuel was free and easy and ManyChat was still kind of working things out. And so I jumped on during the webinar, got on to Chatfuel, checked it out, was just, oh my gosh, this is amazing and I kept telling him, it was a live webinar thankfully. And I kept asking him in the chat, how much would you charge for this if you were in a business, if you were actually doing this for clients?

And he evaded the question, oh it depends. And I hammered again, I said no, and he evaded the question again. And finally I’m like no; I really need to know how much would you charge for this because I had no clue. And I think he just grabbed a number out of the air just to shut me up to be honest, and it came out to about $1,000. And I went, okay. He was selling a course and I’m like, I got to do this but I’m not going to go into debt to do this course. I’ve done that before, I’m sure all of us have.

And I’m like, no, I’m not doing it. So I’m going to have to make this work. And he was actually charging $400 to get on the phone with him to see if you even qualified for the course. This was his first round of webinars. And I put down my money and I had two days before I was going to talk to him. So I went out into my network and I built a temporary and just a demo bot and went out to people, and just started talking to them about what they were doing. And this was launch season obviously is the end of January beginning February.

And so I just went talking to people and I got a couple people that said you know what, last year I was killing it. I was clashing it with my course, people were doing great. This year nobody clicks it, nobody wants to buy it. And I’m like, hey, you want to chat, maybe I can help. And that’s all I did. And as I started talking to them about what they were doing, their email open rates and click through rates were terrible.

So I said, there’s this new thing that I’m getting involved in and learning about, you want to see what it’s about? And they said yeah, and when I showed them I said, it’ll be $1,000 for me to create this for you, and they said do it. So I sold — pre-sold to people before I even knew how to do it and paid for the course, and the rest is history.

Steve: And I think you had David Siteman Garland as one your clients as well.

Mary: I do yes.

Steve: Who has a ton of digital products.

Mary: He is — yeah we built a — we call it the adventure, ad adventure because that’s really what it is. As people get into your products, they come in for one, you’ve got a lead magnet, you bring them in for one particular product and they start going through that funnel so to speak and that’s why the business is called Messenger funnels not Messenger bots, because the bot is just the delivery method Steve, it really is.

Well, I try not to be annoyed but I am when people say do you build bots, and I’m like well dude that’s like saying I build emails, right? It’s just the delivery method; it’s what you put into it. It’s the funnel, it’s the process, it’s the adventure, that’s what I build and I just happen to deliver it in a chat bot.

Steve: I might have to rerecord the introduction entirely.

Mary: No that’s totally cool because people are now getting to learn that whole words. So that’s totally cool, it’ll get their attention, then I’ll educate them.

Steve: So Mary what I was hoping to do today, and we had this I want to say hour and a half long conversation a couple of weeks ago on this, and it was recorded but it wasn’t like in podcast format. So what I was actually hoping to do today was also go into depth on how you’ve implemented Facebook Messenger funnels, not bots, funnels to sell digital products for some of your clients.

And we don’t have to talk about a specific client in person, but I just want like a holistic view on how you might get started. Let’s say you sell a digital product and you have a small following, let’s talk about the funnel, how to acquire subscribers and that sort of thing, and how they can be mixed with e-mail too.

Mary: Yes, yes, yes because it’s vital even though I don’t personally use e-mail really anymore for any kind of outreach or communication for my business. It’s still vital because the day of this recording, this is how Facebook works. So the day of this recording, Facebook just came out with — because of this breach of data that they had recently, they just came out with the statement that they are not allowing anyone to connect a new chat bot to their Facebook business page until Facebook has figured out this data thing.

So as of this recording, you cannot attach a chat bot right now to your business page. Now that obviously Facebook will lose money with that, so that’s not going to be going on very long. But my point of it is definitely integrate e-mail because Facebook’s goals and your goals might not exactly be aligned, okay? So I’ll just leave that out there and say definitely connect email, Facebook will go through changes and adapt to things because Messenger is still really — I mean it’s very not even infant stage, it’s still brand new.

This is still the Wild West. So keep your stats, keep your connections, but dive in to Messenger. And by the time you hear this, I’m sure that will be lifted and everything will be fine. I don’t anticipate that being more than a day or two to be honest with you.

Steve: I didn’t even hear about this, I had no idea.

Mary: It just happened a couple of hours ago as a matter of fact.

Steve: Okay, that’s why I haven’t heard, wow okay.

Mary: Yeah that’s how fast things — I got a message from Chatfuel that basically said, hey, just to let you know, don’t try and connect any business pages to Chatfuel because you won’t be able to. So anyway so with that in mind, the point of this is think big picture first just like any other sales of your digital products. You don’t start with how you get people to something you haven’t even created yet, right?

Steve: Right.

Mary: Okay so the first thing you do is start with the end in mind. So I’m going to talk about starting with an overview of this, start with the end in mind. What are you selling, what are you converting? Some people are converting to an appointment because they have a high ticket mastermind, some people are converting to the sale of their course, some people are converting to the sale of an e-book or physical book. But whatever it is you’re converting to, think about the conversion first, then you work backwards from there. Because if you if you don’t know where you’re going, you don’t know how to get there, right?

So you need to start with conversion and then you think of the adventure people need to go on to know, like, and trust you. These are all terms you already know, that to know, like, and trust you to be able to buy that thing. And so if you start with the end, you think about the adventure, then you can start thinking about how do I get people in, and what do people need, what is the hook, what is the lead magnet, what are those things that will get their attention because that’s the biggest commodity right now is attention.

So what’s going to get their attention to be able to come in and consume, and go on the adventure that I want for them. So that’s the big picture, does that make sense?

Steve: Yeah so let’s make some assumptions here that we’re selling a class and let’s say we have some of those lead magnets that are already in place on our e-mail sequence.

Mary: Perfect, absolutely perfect. So what you’re going to want to do is if you’ve already had this funnel created in e-mail, you’re ahead of the game. But you need to think very differently in terms of communication style when you take that copy and put it into Messenger, okay? So you need to think about, then the next thing we need to do is once we have that already laid out, so I’m thinking I see on a whiteboard this funnel, right, this adventure. And there’s connections, here is first email, then it connects to the second email etcetera, etcetera.

So you need to take that and do what I call a face tweet. So I used to be a Twitter gal. I would love the short done, I’m kind of gabby when I talk to people in person, but I’m a very much to the point.

Steve: No, I didn’t really notice that.

Mary: So I’m a face to — I was a Twitter person and I really didn’t do a lot of Facebook because it was just too chatty and surface stuff for me, and I don’t talk about my luncheon, what my kids did that day online at least. If you’re talking to me face to face, yeah I’m going to tell you all about my business. But so when Facebook, the Messenger came in, it just was perfect for me because it’s like telling a story like the Facebook type thing but with Twitter bluntness, okay?

So that’s why I call it face tweet. So you want to look at that e-mail and now you want to reverse engineer that e-mail that you just wrote. And it’s a wonderful long story email, it’s got people, it’s hooking people in if they read it, problem is they don’t read it anymore. So it’s all that long form story. Now I need you to reverse engineer that and go back to your outline form, and take that big not beautiful long story and turn it into an outline and highlight only the most important parts. So you’ve got to get to that story much faster with much less copy.

So take that e-mail, face tweet it, tear it down. And that’s the start of the copy you put into Messenger.

Steve: You know what’s funny is like I have these emails that are like 1,000 words or more, and you’re telling me that I have to condense it down to like a couple of hundred characters, right?

Mary: Oh yeah less okay. So here’s the way, so yes here’s the way Messenger works. You start — what I do is that another reason that I think I give it a face tweet is I usually have each message in my sequence of messages. So you’re going to take that e-mail and you’re going to break it into maybe at the most like seven messages, okay?

Steve: Right.

Mary: And each message is like one 160 characters. So Twitter was 140, okay I give you a few more, 160 let’s say. And what you want to do is you don’t want to just tell like we do in the email. We’ll start in the — think of it as email is passive, you’re telling a story like you’re reading a book. The author isn’t engaging with you. The author is not asking you to engage back and share your opinions, but in Messenger that’s exactly what you’re doing. So you need to not tell a story, you need to engage people.

And really number one, if you hear nothing else, this is Facebook besides advertising. This is Facebook’s main purpose. They want people to engage. So if you keep that in mind, Facebook will love you and you will love Facebook. You need to engage people. So if you have an email, let’s say you’re going to tell a story about this time that you — okay let me just speak from experience and I can make something up. So I fell and broke both my legs when I was eight months pregnant.

And so I go through that story with people and I talk about yeah this is what happened and that’s what happened. So instead of doing that I would say something like, have you ever heard of someone at eight months pregnant falling and breaking both their legs, so that they have to deliver the baby with a cast on each leg up to the knee? Do you believe that, right? And so I’d say do you believe that, and I put a button, oh my gosh, no way. Or yeah that’s me. I mean I would put those two buttons after I put that question, does that makes sense?

Steve: Yeah. So do both buttons lead to the same reply?

Mary: Not necessarily. So that depends on your adventure. So I have a client Allison Prince and we go through a whole process for her, and she has an online course, a digital course and it’s sold through an evergreen webinar. And so she might ask, did you know that my two daughters sold $100,000 in products in the first nine months of me helping them start their e-commerce store? Do you want to find out how I did it? And then one of the buttons is heck yeah, and the other one is no, I’d rather stay stuck.

Well the one that says no, I’d rather stay stuck goes to another message that says, are you kidding me, you’re probably the first person to actually click this button, right? And then it goes to no worries, that’s totally cool, I’ll be here if you need me. And it stops. We’re not going to keep trying to sell them, we’re not going to — if they say, if they want to stay stuck that’s cool. Then we come back later and follow up and that kind of thing a couple of days later. But the one that says heck yeah, well then that goes into the funnel. And each of those buttons you’re going to tag so that you can segment your audience.

Steve: I see. And so in this case you’re tagging just based on interest, right? So in this example that you just gave, if someone click yes, you will just immediately tag them for interested in e-commerce for example?

Mary: That’s right.

Steve: Correct okay.

Mary: And then the next one is, okay great, now we need to know are you a newbie at this or do you already have a store and you need to know how to grow it? So that’s very important tagging, right? I’m a newbie or I already have a store. You’re going to give different information to those two people.

Steve: That’s correct. Okay so these are questions that you ask right off the bat on the front of the funnel?

Mary: Well it could be. So it depends on what your lead magnet is, right? So that’s in the middle of her funnel, that’s actually toward the end when we’re going to invite them to the Evergreen webinar. So that’s around the middle to the last half. The beginning part of the funnel is all lead magnet stuff. So a lead magnet, it might be, she might have one of her lead magnets be the 15 biggest business mistakes I’ve made and how to avoid them yourself.

So, they come in and they want to find out the business mistakes, and how to avoid them, and that’s the beginning in the funnel. Then we offer them another lead magnet to be honest because again Facebook engagement. The standard web in our funnel doesn’t work in Facebook as well, so in Messenger anyway. So you don’t go to a Facebook ad and then you hook them in with your lead magnet, they come in with your lead magnet and then immediately you say, hey, come to my webinar, and then immediately it’s buy my course.

That process doesn’t work as well. It works pretty okay but nowhere near as well as getting engaged with people. So instead of that Facebook ad to the lead magnet, the beginning of the funnel for her is and for most of my evergreen webinar clients is a Facebook live on their business Facebook page.

Steve: Okay.

Mary: They do a Facebook Live and I’ll take that exact same lead magnet. The lead magnet hasn’t changed, but she’s doing a Facebook Live saying, hey, do you want to know — I got to talk to you about my big business mistakes because we all make them, and I’m not going to sit here and try to tell you that I’m this perfect person who’ve never made mistakes. Are you kidding? She says I hired a CEO from one of my last companies who totally ran my business into the ground because I didn’t trust my gut and do what I knew needed to be done. I followed what I thought this person that I hired who was supposed to know everything that we were supposed to do, and the business failed.

So she talks about that little bit more and then gets people to engage and say, hey, you know what, tell me tell me what your biggest business mistake was, comment on this post, and when you do I’m going to give you my 15 biggest business mistakes in Messenger and how to avoid them.

Steve: I see, and this is happening during the live or is this just a piece of content. Okay during the live, I see.

Mary: The live yes and so then that’s a post. In Messenger, you have a comment, a Facebook comment tool that allows you to take one of your posts and anyone who comments on that post they can then become a subscriber. But again I caution you, don’t just use this as click bait, this has to be engaging. You can’t just tell people, hey, comment buy and I will give you stuff. It’s got to be actual engagement, you have to ask in the Facebook Live, ask open ended questions, what would you do, what have you done to get people engaging with you in the comments?

Then tell them very clearly and explicitly, when you comment I will give you my thing in Messenger. I will deliver it to you in Messenger. If you do that, Facebook will love you. If you try and click bait and just get them to click so you can get a subscriber, Facebook will shut you down. And they will have no problem shutting you down first and asking questions later.

Steve: In terms of advertising the live, do you just go live or do you actually send out a message ahead of time?

Mary: Either way depending on your own Facebook page and how much engagement you already get.

Steve: I see.

Mary: So a lot of my clients have a business page but the majority of their engagement is in groups. Again at the time of this recording, we can’t attach a bot to a group; we can only attach it to a business page. So what we have to do then is start building up the engagement on their business page first. So we just start doing Facebook lives, we just start posting more, we just start engaging with people, we invite people in to go to comment on this post so that we get people used to engaging on the business page now.

Once you do that, then you can start going live and again start getting them to engage in the lives, and then you start once you start getting enough engagement and that is really up to you as to what your business is, and it doesn’t have to be a lot. So just like with Alison and I do have permission to share some of her stats, so I’m not talking out of class here. Just with hers, she just passed the 3,000 mark, so she just has 3,000 subscribers in her Messenger bot. And last week, we sold 44 of her online course.

Steve: Crazy.

Mary: And that’s with 3,000 people.

Steve: On her business page, it’s like if you’re starting from scratch do you recommend — would you recommend building up the Facebook page first before you start doing these lives, or do you just do them all from the start?

Mary: Just started engaging with people, just starting all the normal ways that you try and get people to your page or your group, do all the normal ways that we already know to try to get people into your page or group and not being scammy, not being like click baity. But a lot of the groups that you might belong to have a follow Friday kind of thing or a promotion day or something like that, definitely putting your page into those, you can go ahead and do an ad, just a click add that specifically gets people to like your page and shows them hey, make sure you make notifications so that you see this first, and give them some value, you know that’s what it’s all about.

Steve: Sure but the audience might not know, so I’m glad you’re actually saying all this stuff out loud.

Mary: It’s value, it really is all. So Allison and all my clients don’t like in like dynamo stuff or boss moms. They don’t just try to get people to like their page, they give lots of stuff, lots of free stuff that are higher level than their course gets. Your course is usually deep down really teaching high quality stuff will start with the higher level. So like with Allison, if it’s the business mistakes, one of them might be the top six apps I use in my business every day.

So everything is related to e-commerce business, and the things that you have in your life as an entrepreneur. That shows value of that she knows what she’s talking about in building a business. Then she gets deeper into the funnel to give more value and then brings them to the course, does that make sense?

Steve: Yeah it does. And do you recommend using like auto posting services then onto your page?

Mary: Yeah there’s no problem. All of us do whether it’s MeetEdgar, or RecurPost or Buffer or Hootsuite, any of those kinds of things. But I wouldn’t have that as the only posting you do. I would definitely have that as providing value. And I usually personally use that when I’m especially in the bot world I have a Google alert.

And so I look at that Google alert and especially with Messenger bots or chat bots or any of those keywords. I get an alert every day from Google about the top pieces of news or the top information with those keywords. And I go through that and I stack that and my assistant then schedules it out in Buffer or RecurPost depending on if it’s evergreen or if it’s just timely.

Steve: The reason why I asked that question is because when you auto post things, those posts tend to get less engagement than for example a live, right?

Mary: That’s true but it also then just still at least has data, still has stuff on your page that people can still engage with. So if you sprinkle it, I don’t post five times a day in auto posting in Facebook. I might post five times a day on Twitter, auto posting but not on Facebook. So I might only have one or two auto posts and the rest are my own.

Steve: I see and then you mix in a live maybe like once a week or?

Mary: Yeah, once a week or more often if you are needing engagement, if you’re needing to build that page up. People respond to images, gifts, and videos more than they respond to text posts on Facebook.

Steve: Okay yeah, that makes sense. And then once you — so let’s say you’ve done a couple of lives and you’ve built up your subscriber list, what are some of the next steps to conversion?

Mary: Okay. So again as long as you have the funnel in Messenger built and you know the adventure, so you’ve asked engaging questions, you’ve built that out, you’ve tagged all the buttons, you’ve figured out what kind of adventure people need to get to go to the conversion, and again all of these surveys, quizzes, all of it you can do in Messenger. You don’t need outside software.

You can even if you’re an e-commerce business which I know we’re talking about digital products, but I got to say this because this is the direction that Facebook is going. Even if you have and e-commerce product, you can actually even sell it in Messenger. So that’s the direction Facebook is wanting to go. But now once you get through the adventure, you can then go out to a landing page or a sales page on ClickFunnels, or Leadpages or Infusionsoft, wherever it is you have the rest of your sales funnel when they actually buy.

Steve: Can we talk about that for a little bit? Do you have any experience with just selling directly on Messenger with any of your clients?

Mary: Yes I do. I have a couple of clients especially in e-commerce. I don’t use ManyChat, at least not — again I have to keep expressing this, and I’m sorry because this is changing so fast. I have to say as of the time of this recording because if you hear this a year from now, it probably will be totally different. But right now I have my e-commerce clients on Chatfuel, and the reason is because — and we’re talking ManyChat and Chatfuel, for the people you don’t know this ManyChat and Chatfuel are programs to build these bots in Messenger just like Leadpages and ClickFunnels and all those other Infusionsoft are programs where you can build sales funnels and landing pages.

So Chatfuel is where I have my e-commerce clients because they have developer tools that are very sophisticated. And what we do is so exciting. What we do is instead of — so most people are on the phone, right? They’re on their phone, they got the Messenger app, they’re going, and they’re checking things out. And we get them into the funnel in Chatfuel and in Messenger, and they’re starting to — let’s say one of them I was working on right before I came onto this call with you has a business selling skincare products.

And so she sells skincare products to aestheticians specifically, you have to be a licensed aesthetician. So you come into the bot and they say, we ask them, we qualify them with okay, what kind of business do you have? Do you just wax at home, do you have a solopreneur with your own shop, or do you have a full fledged salon? So they choose one of those and we tag them there. And then we ask them, okay, what kinds of products are you interested in? So she has her own product lines, and then she also resells some others.

And so then they choose which product. And then when they choose that product, instead of having the bot just give a link to that page on their site and then the bot will make the browser open and then make them go outside of Messenger to your browser on their phone to see that page, instead of doing that we can actually use what’s called a web view. And we can call that website into Messenger so that they’re on their phone, they say yes I wax at home and I want the brow code, this is a new product that she’s got brow code. So I want brow code.

And so when they click that button brow code, what happens is Chatfuel goes out to her website and calls in the actual site with the shopping cart, all the features, all the menus, everything into Messenger. So the consumer or the aesthetician never has to leave Messenger. They purchase right inside Messenger even though they’re using the shopping cart, the merchant account, all of that from the website, but it’s actually conducted in Messenger.

Steve: So I know you showed this to me at SMMW, but to me when you showed this to me, it seemed like it was just a browser within ManyChat, kind of like how like if you have an Android phone and you click on a link in Gmail, it’s actually opening that site within Gmail. Is that the same concept?

Mary: Same concept.

Steve: Okay same concept okay.

Mary: But the difference is again Facebook doesn’t want you to leave Facebook. So it helps Facebook along by calling that into Facebook rather than sending you out to Safari or whatever other browser you have on your phone.

Steve: I’m just wondering like if that aspect actually has an effect on conversions.

Mary: Negatively or positively?

Steve: Either, it seems to me that it would be neutral, right, because it looks like the same site.

Mary: It looks exactly the same site. The difference is it’s probably going to load a lot faster because there are less steps first off, because it’s actually calling it into Messenger rather than waiting for that browser to open on your phone, you see what I’m saying?

Steve: Sure.

Mary: Instead of linking it and having a browser open and then you’ve got to call the website, so no matter what is going to be faster. So if nothing else, that will increase conversions I would assume just because it’s faster. And then secondly, it’s in the native app. You’re not having to go anywhere or see anything differently. You are never leaving. Now let me say this, the reason we’re doing it that way is because the native payment system which is active right now, you could actually code your bot with all of that information to actually purchase inside Messenger instead of calling in your website. And it goes and purchases through either Stripe or PayPal.

So you could do that, but she’s got umpteen products. We’re not going to code all of that and create a brand new store in Messenger. When that becomes easier, of course we’ll do that.

Steve: Have you seen people using the native payment method for a digital product?

Mary: You can’t.

Steve: Oh you can’t.

Mary: As right now, as of this recording you can’t sell through the native payments digital products, you can only sell physical products.

Steve: Okay but I suspect that’s something that’s…

Mary: It’s coming.

Steve: Definitely on everyone’s roadmap.

Mary: Yeah it’s coming.

Steve: So let’s go back to the funnel again, and maybe we can talk a little bit about how you develop that story. So you have the subscriber and you’re selling additional product, like how can you give us some examples of how you’re kind of nurturing that person along your story, and how you actually finally end up converting that person to a big ticket sale.

Mary: Yes okay. So the big ticket just to get an idea let’s say Alison’s product or one of the other products that I might be working on, it could be anywhere from 997 to say $2,000 to $10,000. I met a client that’s in the real estate market and she helps women and also men, but the majority of her market is women, become real estate investors without the need of a real estate license. So it could be anywhere from 997 to up to five or $10,000.

And again the nurturing process is just like you do an e-mail in the sense of the marketing concepts, obviously the communication is different. But I start with the big picture and I always start with mind maps. I have to see it, it needs to be in pictures, I’m one of those picture book kind of girls. I tried to read Lord of the Rings and I got through it, but it was one of the hardest experiences. And someone saw the sun and this and that, I’m like dude, just give me the story.

So yeah so I see in pictures in that respect. So I start with this and I build little boxes and I build myself a little adventure and I put in the actual copy so I can see it and make sure that one of them isn’t more advanced than the other and it doesn’t lead very quick clearly. So I start with a mind map and you need to start simply and higher level, and then you get deeper and deeper and deeper as they come on the adventure with you. So it’s just like a book in that respect. You start with the concept of where you’re going and then you lead people deeper into the story.

So again I would take one of your e-mails and you start in your email, you don’t start in the middle of the dense stuff that you’re trying to teach people. You start with a higher level version, right, yeah. And so you do the exact same thing only in again 160 characters. And Steve if you like, I have a little just a easy little PDF with a fillable box and that’s really all it is that you can use that is specifically 160 characters and it makes you stay small, it makes you stay less wordy, it makes you really weed out your words. And again Twitter does, you should do that more, but does that as well.

So you just start with one of those outlines and start creating engaging messages. Now not every message has to be a question with a button. You can combine say two or three of those messages with what we call typing delays in between. And that’s fine but I wouldn’t go more than say three, and actually ManyChat doesn’t let you do I think more than five in one message without making the user do something.

Steve: What is the purpose of using the messaging delay because at that point it seems like you’re pretending to be an actual human when you’re not, right?

Mary: Well you could look at it that way and yes definitely a lot of people use it that way, but it’s also to let people catch up. When you’re giving a message, you can’t necessarily — I have not been able to get every single message, only 160 characters before I have to ask the user to do something. And also you don’t want them to always — we’re not trying to train them like dogs, right? So we don’t want to make them click buttons constantly.

So we do want to deliver a certain amount of information and it’s okay to do that where you deliver a piece of content and let them read it, because okay, here’s the deal, are you going to be more inclined to read a short message and see the typing delay underneath and then wait for the next one and then read that, or would it be better for me to put all of that copy into one long message where they have to actually scroll back up to start reading it.

Steve: Okay I see your point.

Mary: That makes sense?

Steve: Yeah. I suppose if you’re delivering a huge piece of content, you’d probably want to direct them to a web page or some sort of PDF right, or a video even?

Mary: What do you mean by that, a huge piece of content?

Steve: I was just thinking like one of my emails could be like 2,000 words, and so instead of like walking them through this journey through all that content, just send them to a video or send them to a PDF download?

Mary: And with both of those depending on how long they are, you don’t have to send them anywhere, you can deliver it straight in Messenger. So you say — that’s especially lead magnets, we don’t have to go outside of Messenger to deliver those PDS. We just put that right inside Messenger, and people click it and open it right there.

Steve: Okay sorry that’s what I meant sorry.

Mary: Yeah and then the videos, again it depends on how long. I wouldn’t put a 30 minute video in Messenger, but I’ve heard upwards of ten minutes, people had no problem. The difficulty and that’s another place you can use that typing delay, the difficulty is the load time. So if you have a video of only say 30 seconds or a minute that explains the concept, you can actually talk much faster than people have to read that type. And so you could do — I don’t know about 2,000 words, but you could do more in a video at 30 seconds or a minute than you could in typing and it would be much more engaging.

So yeah you could still deliver that content in a video rather than having to type it all out with buttons and all that stuff. But again find out which content is most important that you need to know about your consumer, and make sure you put that in buttons so that you can tag them.

Steve: What are just some general best practices, because a lot of people are going to be used to e-mail since it’s been around for so much longer? What are some just best practices when you’re moving over to Messenger or just even in general creating a Messenger bot?

Mary: Yes. So the first thing I would say is the normal marketing best practices apply. So you’re not going to want to use click bait, you’re not going to want to just buy a lead, you’re not going to want to just take someone and get their email address and then never do anything with it or sell it to somebody else. So those kinds of things I’m sure everyone listening to this since they’re listening to your podcast knows that they’re going to use marketing best practices.

Beyond that in bots, really the first thing I’m going to say is I don’t want — I know you don’t market or want to get too technical, but what you should do is familiarize yourself with Facebook’s Terms of Service. I would do that myself instead of relying on someone else. I haven’t gotten any of my clients’ pages shut down that’s for sure, and I’ve got quite a few of them, so I’m very proud of that fact. But that doesn’t mean everyone is paying attention to the terms of service.

For instance, here’s one little term of service that I see almost no one complying with. And that is we have what’s called a check box that we can put on buttons on a website to look for lead generation. And that checkbox basically checks you off as Facebook. If you’re logged into Facebook it says, is this you? I’m sure you’ve all seen it, and it has your little picture there and it says is this you and there’s a checkbox saying, yes this is me. Well that checkbox on the buttons according to Facebook’s Terms of Service again at the time of this recording, I know I feel like a darn here, but according to Facebook, that checkbox should be above any button you apply it to, but almost everyone is putting it below the button.

Steve: I hate to bring this to you Mary, but I’m actually following this terms of service.

Mary: I love you. So I haven’t seen yours yet, that’s fantastic.

Steve: I didn’t know about that rule by the way, just to be clear.

Mary: Good for you, thank you for that because that is everyone else is putting it below and putting it very small, and I mean it’s really Facebook is a stickler and you want to follow it. So, fantastic, good for you Steve.

Steve: Well the only reason why I’m doing that just to be clear though is because right now you can’t have that checkbox clicked unless you are grandfathered in. And so in order to get someone to actually physically check that now, they have to see the offer before they click on the button, so that’s why I put it up top.

Mary: Perfect, good for you. So you’re actually following marketing best practices, you want people to be aware of what they’re doing and not just trying to trick them into doing it. And so just little things like that. Now I don’t know if Facebook is going to shut down everybody who’s putting that below the button and all that kind of stuff, but I’m sure it’s on their algorithm that it will be a mark against you, right? And there are many other marks that you can get so I don’t know how many Facebook adds up before they say that’s it, you’re done.

So the more you can follow and of course Facebook doesn’t accept your excuse that well I didn’t know. So we need to be aware. So number one, Facebook Terms of Service. Number two, this is not about you, this is about the person taking your adventure, and stay in their frame of mind and think if I were coming in here, what would I want to do, how would I want to be treated, what kinds of questions would I want to be asked? Not just for the sake of getting my data, but for the sake of really educating me and getting me to the end result that is going to better my life.

And beyond that the number one thing I would say is it is not about numbers. So your numbers here are not necessary. I actually invite people to reject me, Steve I really do. That’s that one thing when I made that decision back in January of 2017; I invite people to reject me because those people aren’t going to have fun on my adventure. So I don’t want them here.

I would rather have them taking an adventure with someone else. I want people who are just as hot about this and excited about this as I am and following these best practices just like I am, and then we’re going to have a blast together. I don’t want to just take people who are lukewarm and hope I can sell them at the end.

Steve: Does that imply you always ask for the unsubscribe at the beginning of any interaction?

Mary: Yes I do, yes I specifically say at the bottom of the growth tools which in ManyChat are the lead magnets, are the entrances. I specifically say in there, PS, just simply reply stop if you want to be removed from my list, and then I add my own personality in there and then I say, and I’ll cry for you and I’ll miss you but I understand. So something personal beyond just reply with stop, you’ll be unsubscribed. I usually add because it’s Facebook, we’ve got to be personal. That’s what people do, this isn’t just business to sell, you have to show some of your personality to a certain extent.

So I don’t know, did I give you enough of the marketing, the best practices, follow terms of service, marketing best practices by themselves, engage people on the adventure for them not for you, and don’t be too wordy, use emojis, oh my goodness you’ve got to use emojis, people love emojis, images, and gifts. Start every conversation, when you’re going to push out a message start it off with an image or a gift not just text, because that pops up on their phone and it says Steve sent you an image, or Steve sent you a gift. They’re going to open that faster than Steve sent you a message.

Steve: These are great tips. Mary by the way, have you heard of anyone getting banned on Messenger just yet?

Mary: Yes.

Steve: Oh you have okay. So they are actively policing the promotional messages and that sort of thing?

Mary: They are. Since the algorithm change in January of 2018 which people thought was Armageddon, I’ve had none of and no issues at all with my clients because our number one purpose is engagement. It’s not just selling, it’s engagement. And since then I’ve heard of many more people getting shut down.

Steve: This is all great Mary, and we’ve been chatting for quite a while. I do want to give you the opportunity to tell people about your services, where they can find you and contact you.

Mary: Oh that would be wonderful, thank you. Messengerfunnels.com is the website, Facebook especially Messenger Funnels, but I also have a private group that I use to answer a couple of questions where we are active in there and we’re talking a lot about we call it Messenger hackers, we call ourselves Messenger hackers. And what we do is we go out and see bots and hack them, and say I really loved when this person did this, or I really loved when this person did this, and I probably wouldn’t have done that. I mean we’re nice, we’re not going to tear people to pieces because obviously do unto others kind of thing.

So I’d rather not have them tear me to pieces if I do something wrong or something that may not work for others. But so Messenger funnels, Messenger hackers, they can email me directly if they want any information or message me on Messenger. But my email is mkj@messengerfunnels.com. And I’d love to help in any way I can, either myself or my team because really Steve my number one goal and my number one passion with this, the reason again I call it Messenger funnels and not Messenger bots is because I want to make sure that this does not become the next e-mail, right?

Steve: Yeah I think the chances of that happening are less because you have to opt in, like I can’t just willy-nilly message you, and I can opt out at any time.

Mary: Right but people don’t know that yet.

Steve: It’s true.

Mary: A lot of people are getting, they’re opting into things, and they don’t even realize they’ve opted in. They just clicked a button and it’s so much easier to opt-in in Messenger because you don’t have to enter your name and e-mail address.

Steve: That’s true.

Mary: And we didn’t even talk about sending emails out and connecting this stuff. I mean that’s a whole other world you can — and like with Alison bot and Whitney the real estate and all the all these other people and my own bot included, you can take people and ask, you have to ask them for their email address, Facebook won’t just give it to you. And then you can use Zapier or other types of interactions to send that information to a Google sheet to send it to a CRM, to Salesforce, to anywhere you want to send it.

You can link it in with even WebinarJam or GoToWebinar so that people are automatically registered, so you don’t even have to ask them to fill in a new form. You just ask them in Messenger for their e-mail and the bot can register them for you. So there’s lots of those kinds of details that we obviously don’t have time to get into. But that’s my number one purpose is to keep this best practice and to make sure that people actually look at this as a very valuable tool not a scammy, spammy, oh my gosh, I don’t want to do that anymore.

Steve: I don’t know if you listeners out there can tell, but Mary is very passionate about this topic, and she has tutorials and she has the Facebook group. So if you’re interested in all the stuff that we’re talking about, make sure you go check it out, and I will link up all these resources in the show notes. But Mary, thanks a lot for coming on, I really appreciate your time.

Mary: Thank you for the invitation Steve. I’m so glad we were able to reconnect, and I just look forward to many more connections and spreading the word about this amazing tool.

Steve: And hopefully that encourages you to hit more conferences Mary.

Mary: Yeah I know. I will be going to the second one now. I just got back from Funnel Hacking Live, so my second one this year. It’s only March, so who knows what the rest of the world is going to be.

Steve: Cool Mary. It was great chatting, take care.

Mary: Thanks.

Steve: Hope you enjoyed that episode. Mary really knows her stuff, and she has real hands on knowledge on how to implement these Messenger funnels to maximize sales of digital products such as online courses. For more information about this episode, go to mywifequitherjob.com/episode207.

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.

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. And 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 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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206: The Right Way To Run Facebook Retargeting Ads With Reza Khadjavi Of Shoelace

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The Right Way To Run Facebook Retargeting Ads With Reza Khadjavi Of Shoelace

Today I’m thrilled to have Reza Khadjavi on the show. Reza is the founder of Shoelace which is a company that boosts your sales with automated retargeting journeys. We’ll get into exactly what that means in a moment.

But Reza is a master of running retargeting ads in the context of ecommerce and selling physical products online so today we’re going to pick his brain. Enjoy the episode!

What You’ll Learn

  • Why Reza founded Shoelace
  • The main difference between sequential and behavorial retargeting
  • Some good metrics to gauge yourself against other sellers
  • Guidelines on ROAS, CTR vs AOV
  • The best converting types of ads
  • Some good guidelines for running dynamic product ads
  • What to set as your budget depending on audience size

Other Resources And Books

Sponsors

Payability.com – A financing company that provides high growth Amazon sellers with daily payments. With Payability, you can say goodbye to cash flow issues and stockouts and hello to scalability and profits. Click here and receive a $200 credit upon signup.
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Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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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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Sellers Summit

Transcript

Steve: You’re listening to the My Wife Quit Her Job podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not in business. Now today I’m happy to have Reza Khadjavi. And Reza is the brains behind Shoelace, one of the leading Shopify apps that automatically handles your Facebook retargeting ads. And in this episode, we’re going to discuss the intricacies of running great retargeting.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Always excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 30% of my revenues. Now, Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send out an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, piece of cake, and there is full revenue tracking on every single email.

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

Now I also want to give a shout out to Privy who is also a sponsor. 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%. Now bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.COM/Steve. Now onto the show.

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

Steve: Welcome to the My Wife Quit her Job Podcast. Today I’m thrilled to have Reza Khadjavi on the show. Now Reza is the founder of Shoelace which is a company that boosts your sales with automated retargeting journeys. Now we will get into exactly what that means in a moment. But I actually met with Reza’s team over at the Ecommerce Fuel conference, and I heard great things about this company from my buddy Mike Jackness and other attendees at the conference.

And in fact Reza is a speaker at my conference the Sellers Summit this year. Anyways Reza is a master of running retargeting ads in the context of e-commerce and selling physical products online. So today what we’re going to do is we’re going to pick his brain. And with that, welcome to the show Reza, how are you doing today man?

Reza: I’m doing great, excited to be here, thanks so much for having me on.

Steve: Yeah so give us the quick background story, tell us kind of how you got started with Facebook ads and specifically retargeting?

Reza: Sure. So I can kind of give you a step back of how we started the company. So we were with three co-founders of Shoelace. Right now our team is about 23 people. We started a little under three years ago where the three co-founders we were working together at a startup in Toronto, and we had joined that company pretty early on and started to work very closely together.

And at some point along that working experience, we realized that one day the three of us wanted to leave and start a company together. We didn’t know what we were going to do or what we’re going to build and have a specific idea in mind, but just the three of us we felt were the right ingredients of a founding team.

Steve: So why retargeting?

Reza: Right so when we quit we didn’t have a specific idea, but there was a theme that we were very interested in and the theme was we looked at a lot of people who were creating software products, and generally the way it goes is the way to get value out of a software product is that you kind of need to have a strategy in mind. You need to learn how to use the software tool. You need to go into the software tool, do some work. And then it’s through that process where you extract value out of that software product.

One of the ideas that we were exploring was this idea that we wanted to help businesses who shared a similar audience cross promote each other. So let’s say you have somebody who sells like women shoes, and then you have another brand that sells women purses for example. What if you can have these two businesses cross promote each other and send traffic to one another? And one of the ways that we thought that we could do this kind and we kind of just assumed that everyone is doing retargeting, everyone is doing it well and that there’s no particular opportunity there.

But what if we can do this advanced clever method of retargeting where when somebody buys a product from business as A, they’ll start to see retargeting ads for business B and vice versa. So I was like an idea that we were exploring. We talked to a bunch of merchants and started to get feedback and people were overolling telling us that’s something really cool idea. I’d love to try that when you have your beta program ready and you have a few partners for me.

But in the meantime like this retargeting thing, I’ve got to have something set up and I don’t know that I’ve done it as well as I should have and I’ve not given it as much attention and I know I probably should. It’s pretty smartly, can you help me figure it out and meet me.

Steve: Just for the benefit of the listeners, who might not be that familiar with just retargeting in general, let’s just start from the basics. So what are the different — so first of all what is retargeting, and then what are the different types of retargeting that you can run?

Reza: Sure, so yeah I mean in a nutshell retargeting is this idea that if you have an online store or any kind of online business and you look at the conversion rate of that traffic, for the most part something like 98% of visitors to a website will leave without buying anything or doing the conversion action whatever that may be. And then some of those people may have left an e-mail address and you have a way to contact those people and kind of send them follow ups to encourage them to come back and complete the purchase.

But for the majority of people that may have visited the website and left without buying anything, the only other way to get in front of those people or one of the only other ways is to do retargeting which is the idea of showing advertising on Facebook, Instagram, or throughout the web to people who have left a website without buying anything. So it’s not concerned with trying to drive brand new traffic to the store, it’s this idea of being you already have an existing set of traffic that has been to your site or engaged with your content and can you show high retargeted ads to do those people to encourage them to come back and complete that action.

So that’s retargeting in a nutshell. You take everybody who’s been on your site no matter what they did, no matter what pages they visited, no matter how long they were on the page, and you show all of those visitors the same retargeting ad for a number of days after they leave. So it’s kind of in our opinion not the best way to do things, but if you have a really small audience, you don’t have a ton of traffic; it’s not a horrible way to start. At least you are getting in front of those people to encourage them to come back.

But then the next level of retargeting we like to think about is this idea of behavioral retargeting. So take the actions and the behavior the visitors did while they were on your site and then segment those people to show retargeted ads based on what they did. So if you look at an e-commerce store and you think about the customer journey funnel, somebody may land on your home page and then they might look at a collection, then they might look at a product and they might add a product to cart, and then if you’re lucky then they might buy something from your store, and then eventually come back and buy from you again.

So that kind of funnel drips down and not everybody that visits your home page obviously is going to make it all the way down to buy. And so for behavior retargeting, we think that it’s a really cool idea to take various parts of this funnel. So take people that left on the home page for example and didn’t even look at a product or didn’t add to cart and segment those people into a unique audience, and take people that have added an item in the cart and who are much lower along in the funnel, take those people and group them into an audience and show them the retargeting ad.

So to take the various parts of that funnel and create an audience segment based on the behavior the visitors did on the site and show them a highly personalized ad. So for example, if somebody leaves the site after just having viewed the home page and your ad copy is like aggressive sales copy that says like come back and buy now, it’s like it might not resonate with somebody who didn’t even look at a product. Whereas somebody who went as far down in the funnel as adding an item in cart, they might resonate well more with an aggressive like discount offer to join cart and to come back.

And so the idea is to speak to people based on which stage of the funnel they left and we think about that as behavior retargeting. And the third part which we think is really sequential retargeting where if you imagine that you’ve segmented your audience in the behavioral funnel and you’re showing somebody who left the homepage a retargeting ad, that’s pretty good. But if you show that person the same retargeting at over and over again for months after they leave, at some point they’re going to get banner blindness and ad fatigue, and they’re just going to start to become annoyed with your brand frankly.

Especially in the context of social advertising, we like to remind people that just think about your own native experience browsing through Instagram or Facebook the moment you see a piece of content that you saw an hour ago or the day before just like instantly scrolling past that piece of content. And so the same is true with advertising, and if you watch advertising in places that people are hanging out like on social media, then the idea of having that content of all those people are being exposed to your ads we think is really powerful.

So sequential retargeting is this idea that as people leave your site, they’ll see a sequence of ad experiences. And that doesn’t necessarily mean that they need to go through a specific sequence. We’re doing a lot of research right now to understand what was the best way to execute sequential retargeting. And the idea is instead of showing the same ad over and over again, they should be exposed to overwrite the same example if somebody has left off of the home page and that’s the only action they took.

Maybe it makes sense to show them a block content and something that adds value and kind of builds a brand relationship and gets the visitor to learn about the brand a little bit more. And then maybe a day after or a couple of days after they can see a carousel ad of some of the best selling products to encourage them to come back and look at, or maybe on a different day they could see a video that your brand has made. It’s a really interesting video that exposes your brand. I think there’s — I forget the number but there’s a stat that a consumer needs X amount of touch points.

Steve: It’s like eight touch points I believe.

Reza: Right and so using those different touch points to kind of tell your brand story in a variety of different angles I think is really important. So those are the three different ways if you think about retargeting. Even it doesn’t have to stop with people who haven’t bought from you. So you take your audience of customers that have bought from your brand and you repeat, you have an aim that you can kind of drive repeat purchase. You can have a retargeting ad that is specific to people that have bought and show them for example your rivals and things like that.

So I think that there’s a lot to retargeting than just kind of setting up one dynamic product ad and letting it run which is what most people do, which again is better than nothing. But especially when you’re getting into kind of like high volume traffic, there’s a lot of interesting ways that you can slice the audiences and get highly targeted.

Steve: Let me ask you this before we go on to sequential dynamic product ads because they’re showing different images in the carousel, does that somewhat mitigate ad fatigue in your opinion?

Reza: Yeah, I think that it does. I think for the most part they do show a variety of different carousel ads. But when you think about the experience, it’s still very like just product focus and it kind of depends on the type of e-commerce store. If you have some for example general stores that are very, very product oriented and there isn’t much emphasis on the brand, and the reason to buy from the store is kind of a relationship with the brand and it’s very much like a very trendy product or gadget, or something like that. And I think in those cases, they tend to work really well.

But for example if you are building a brand and one of the reasons why somebody would shop from your brand is what you stand for and the messaging of your brand and the story of your brand, I think there’s a lot of cases where those are some of the selling points that the brands are using to compete with kind of big box stores. And again those cases while it does mitigates some version of being fatigued with advertising, it doesn’t do a particularly great job at building a relationship and telling a brand story, which again depending on the type of store and the nature of the business can be very important.

Steve: That makes sense. So can we kind of talk about specific use cases and kind of what Shoelace does behind the scenes. So first off it probably creates a bunch of different audiences, right?

Reza: Right.

Steve: So what are some of these main audiences that it creates, and how do you use them?

Reza: So behind the scenes what we’re doing is creating a product catalog, creating a bunch of different audiences. And these audiences are based on a number of things. They are based on the behavior of the people that were on the sites, the people who just viewed the products, the people who added to cart, the people who purchased, the people who just looked at a home page. And then we create audiences that are based on the number of days since that person has been on your site and having done that action.

So we’ll create like one day, two day, three day, five day, seven day, 30 day audiences in a variety of these behaviors and these are used over time. They are all used on day one but they’re kind of used so that we can track the audience size of some of those small segments which kind of unlock the ability for us to create a very specific campaign. So as an example, when we create a variety of these campaigns, and then one of the campaign suggestions that we’ll send to someone is let’s say a multi-stage retargeting journey that targets people who have looked at [inaudible 00:14:50].

And then in that case the audience may not have been big enough for us to create a specific journey. By the way, we refer to as kind of sequential retargeting which we call those journeys in our product. And so somebody’s audience of people who added to cart over let’s say the last seven days, if that audience size isn’t at least something like 500 or 1,000 people, then the audience is way too small for us to create a journey specific to people that added to cart.

But we have those audiences created so we’re monitoring the increase of that traffic, and as soon as it does become that minimum audience threshold in order for it to make sense to start adding more complexity to the retargeting, then they’ll receive a notification from us with an additional campaign created and in a preview set. I think the idea is that as audiences grow and as the traffic to an ecommerce store increases, the complexity of how to segment the retargeting audiences and what to do there starts to change. And so one of the places that we add value is to monitor the increase in that traffic and make those suggestions accordingly.

Steve: I think the best way to help the audience understand this is to actually walk through a specific example of a company that uses you guys. And if we can talk about the different retargeting ads along this journey, that would be great. So I don’t know if you have a company in mind that we can talk about?

Reza: Let me let me pull something up and then and walk you through it specifically. So, one example of a customer that is using us is a company called Wee Squeak. So Wee Squeak is pretty a successful Shopify brand. They sell shoes for kids, and so I’ve heard from a lot of people that tends to be a very difficult niche, but they’re doing pretty well. And on their retargeting journey, here is what it looks like. So on the first day after somebody leaves the website, they’ll see a combination of two different ads.

Steve: This is they haven’t added anything to the cart or anything, just a home page abandon?

Reza: Right so these are people who have viewed at least one product.

Steve: Okay got it.

Reza: So viewed a product journey and so on day one they will be exposed to two different ads. And these ads are targeting that audience at the same time, so they may see one, they may see the other, and they will likely see both. So what happens to our campaign, the product, those always when you include them are often in the journey. And another one is a lifestyle ad where we’re pulling a carousel of lifestyle images from their Instagram feed that are tagged with a product.

And so in the carousel, instead of it being very product specific with a white background and just like clear product shot, it’s a carousel lifestyle images that are a lot more engaging and interesting. And so in the first day those are two ads that they will be exposed to.

Steve: What does the landing page look like for the lifestyle images?

Reza: So the lifestyle images if they’re using — so we have an integration with an app called Foursixty. Foursixty creates these shoppable Instagram galleries that allows you to tag your products and have a shoppable experience on your web page that when you put the destination, you see the lifestyle image but then you also see on the side of it the products that are contained in them and you can shop that experience.

So if we’re doing this with Foursixty integration, the landing page that we take them to is that shoppable experience by Foursixty that would show the lifestyle and niche that they clicked on, but then also has a buy experience that they can do on site [overlapping 00:18:30] will be directly to the product page. And in this case…

Steve: Real quick before we move on, that tend to work better than just a standard dynamic product ads like the lifestyle images?

Reza: Yeah so we still have a lot of work to do in terms of putting together all the data from being able to give a definitive answer of like which one of these is working really well. It’s very hard to say at the scale that we’re working on running kind of millions of dollars with retargeting per month. It varies a lot from customer to customer, and so we don’t have a kind of canned answer of like this is better in all cases. In some cases some things work better and other things, other things work better, and we’re doing a lot of work to try to figure out those answers.

But they are going to be mostly around in this kind of a vertical, these tend to work better, in that kind of vertical, this kind tends to work better, in this kind of an average order value this tends to work better. But from just thinking about for example if you have an audience that is in Instagram a lot, and if Instagram is a platform that they’re directly typing to, then that lifestyle resonates a lot more with them [inaudible 00:19:45] and tends to work a lot better from a click through rate perspective. But yeah it’s hard to give a specific answer. Generally I think it varies a lot for people and who their audiences are and what type of store they run.

Steve: That makes sense, that’s why you run both?

Reza: Right. And then for this person, then the next stage of ads would be an ad that links to a place of a page on their website that is a sizing chart. And so it’s not easy to…

Steve: Is this on the first day or is this on a subsequent day?

Reza: This would be on a subsequent day. And so we also play with these stages as well. They aren’t necessarily running day one, day two, sometimes they are — that first stages is running for like two or three days and the next stage is running for two or three days after that. So that’s an area we’re doing a lot of testing too to understand what is the best kind of staging experience for these kinds of ads.

Our goal is to show variety of ads. The specific mechanism by which to make that happen we’re still exploring a lot to understand what the best way it is to do it, and we run a lot of those experiments up against to show and provide. And so the next day’s case would be the second day. One of the ads is to make it to the sizing chart to help our visitor to make a decision about what size might be the right size for their child, and so it links that page.

Steve: So the landing page is like it links directly to a content page, it shows them how to size something?

Reza: Correct yeah.

Steve: Got it.

Reza: So this brand will have a sizing chart on their page and it links directly there. And so it’s not like an aggressive buy now type of ad, it’s more like maybe one of the objections to making a purchase. So like how do I know what size works for my child like on that landing page. There’s probably some content around if it doesn’t fit you can return it, and kind of showcasing that return policy.

And then another ad in that stage as well is a video ad. It’s just like a cute little fun video that they’ve made for their brand that has a little toddler kind of wobbling and walking, and wearing one of the Wee Squeak shoes. And it’s just kind of a fun interesting video that it’s kind of hard not to enjoy watching it’s brand and it starts to resonate with customers like what Wee Squeak is about, like there’s a sense of humor and stuff like that.

Steve: Can I ask you a question before we go on?

Reza: Sure.

Steve: Are all these ads leading to conversions, like when you calculate the return on ad spend, are you just aggregating all these together?

Reza: Right yeah. So that’s how we like to look at it these. We look at the total conversion from the entire journey and not necessarily like is that specific video ad driving immediate conversions for example. I think and so yeah we tend to look at it holistically, but then also do look at which of these ads are doing well from things like click through and engagements and stuff like that.

Steve: So what are some of your guidelines? For example that sizing ad what would be like a good click through rate, and what would be a good watch through rate for the video?

Reza: Yeah. I think in this case the video is very short. I think it’s something like, it might be something like ten or eleven seconds. So I mean in this case we’d like to see a really high watch through rate, something like 90% is have maybe a majority of people watching most of the video is what would be expected here. And then in terms of click through, I don’t have a specific…

Steve: I’m just curious if you have any guidelines, or like how do you know if it’s just like a total dud for example?

Reza: Right. I think Facebook’s relevance score helps but also sometimes that’s misleading. So relevance score, if it’s like seven, eight, or nine, that’s generally a really great sign. And I think from a click through rate perspective, I think you generally want to see something around like a full percentage or more. If there’s a click through rate that it’s like really close to zero, that’s bad and if you have two, three, four percent click through rate, that’s wonderful.

And I think in this case because the audience is relevant, it is not cold traffic, you do want to see some pretty good metrics there. So if you compare it to your kind of cold audience maybe dud, the result should be a little bit better. For example in terms of click through rates, so that’s a good way to compare for example if you’re running cold audience then you’ll never – cold traffic to people who have never heard about your brand before and you have somebody who [inaudible 00:24:27] then maybe you want to see your retargeting do a little bit better than that because [inaudible 00:24:36] isn’t good.

But the overall success I think is based on a couple of things like we’re introducing some things into your own product to be able to show us a lot better. But for example if and we talked earlier about showing retargeting ads to various stages of the funnel. If you have a retargeting journey targeting people that have left off the homepage, then the immediate success metric isn’t necessarily how many of those people came back to buy a product. It will be more about how many of those people were able to move to the next stage of the funnel which would have been to look at a product.

And the calculation of like true ROI there is going to be a lot more holistic to think about overall what is like lifetime value of a customer through these various touch points, how much are they all totaling up together to have some rough idea of what is my retargeting cost for a net new customer. But then it’s kind of a lot more complicated than just looking at a success of a specific campaign.

They should all be measured in the exact same way. I think the overall measurement is performance, is conversion, is sales, but to kind of look at every single ad, you look at every single ad set with the goal of like each one is going to drive immediate return on not spend, that I think is probably not the best way to look at it.

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So far we have DPA and lifestyle images on day one. Day two it sounds like it’s more of a content play, what do the other days look like in the funnel?

Reza: So in the last couple of days, then we have a bestseller carousel, so this is a carousel of specifically products that are doing the best in that month. So, some of the products that are just doing really well and selling well. So those it’s a carousel but it’s not a dynamic product one that is set to a carousel. It’s our system taking the winning products of that month and plugging it into a carousel app to showcase more curated list of things that are doing well.

The ad copy will be calling that out and saying like here are some of our bestsellers this month, check out what the people are buying. And then on the final day, we’ll go back to a dynamic product ad and have it be pretty kind of product specific based on their visiting behavior. And that’s the example of this person’s funnel.

Steve: So this is a four day funnel then?

Reza: Yeah, so this is a four stage funnel. It lasts for – this funnel lasts for about seven days. So the kind of third stage and fourth stage, each run for a couple of days longer. And then that’s also a really big area of experimentation that that we try to run different things to understand based on the type of your store what should the right duration of a retargeting funnel be. So for example the easiest example I like to refer to is like if you have a store that sells like t-shirts or fidget spinners or something that is more of like let’s call it an impulsive purchase that doesn’t have a really high average order value.

In that case people aren’t necessarily thinking long and hard about making a purchase of that product. It’s more just like if they find it interesting, they might buy, if not they’ll kind of move on pretty quickly. But if you are for example selling jewelry or something luxury and the average order value on those items are in the mid hundreds, then that that is probably a bit more of a considered purchase and would take some time for people to make a decision. They might be looking at the competitors and so on.

And so in some cases the answer of like how long should a retargeting ad, a retargeting journey run for varies from person to person and it is among the things that we’re researching pretty intensively to try to find out answers to those things that are big hit into our products so that people don’t have to necessarily individually go and try to find these things and we can do it for them and also use the collected data that we have from all of our customers to try to make better decisions or obvious things. But that’s a good example of like how length of a retargeting journey not necessarily being the same for everyone.

Steve: I’m just curious like how this would perform versus just a straight DPA ad. Did that company use just straight DPA before?

Reza: Yeah so in this specific case, we have a case study that just kind of based on her experience and looking at the results that she had gotten previously that this retargeting journey outperformed her DPAs. It doesn’t always happen that way and I think that again among the things that — one of the things that I like to say a lot to people and we talk about in Shoelace is that we’re on — our mission is to first of all understand what it means to be the world’s best retargeting expert and then turn that into software.

And the answer is generally not so black and white. I think there’s a lot of things to research, a lot of things to understand and we’re doing a lot of that to try to figure out in what case is something like this better than just a straight up DPA. And if a DPA is a lot better, are we talking about success metrics in exactly like in understood way. And if you think about for example, some people will look at performance — I think like one of our biggest challenges in trying to figure out what is better than something else is to get on the same page about how do we define success.

If somebody for example is purely interested in multiples of ROI and that is the only thing they care about for example, then it’s like, okay, maybe we can just narrow the ads down to people that have added to cart? And the ROI multiple on those ads are going to be phenomenal because these are like a really hot audience, these are people who have shown a lot of interest, but it’s not a scale to provide really huge sales just because that audience size is pretty limited.

And so instead of going up and plan this game, we’ll say — and because of trade off which will return a revenue generated, like sales lived through these activities and people have different levels of preference. Some people have their on levels with data, are happy with what’s called like anything above 3X, I’m willing to spend just the minimum amount of money to get returns at that multiple whereas other people have different preferences. So it’s kind of like it’s really important to get on the same page about how do we define success, and then think about how some of these different ways of doing things can compare against each other based on that metric.

Steve: Yeah I guess I’m just curious. So first of all for the audience, DPA stands for Facebook Dynamic Product Ads, and that’s basically where you’re shown an ad based on what someone actually looked at, at your store just in case we’re using acronyms that people don’t understand.

Reza: Sure.

Steve: I’m just curious, so in terms of scaling, like if you just had like a top of funnel plus DPA, I was just kind of curious again your experience at least whether these journeys end up as a whole as a collective out performing these just straight dynamic product ads?

Reza: So I think if you are just trying to get return multiple or is it that maybe in spending a certain amount just showing the same ad will have a return of multiple. But then if you increase your budget to that same audience, there starts to be kind of diminishing returns on that one ad. It’s a difficult thing to answer and I don’t want to kind of mislead your audience to just be like these are better than that.

I think our approach has been just kind of thinking about this from first principles to say in our experience, it is a more pleasant experience to not be seeing just the same kind of rotating product ad and to see a variety of different things. And starting from that kind of first principle, we’re doing a lot of research to figure out in what case is that true and what case is that not true, and how do we take those learnings and continue to make our product experience better. But we’ll have a lot more to share on this as we kind of release a lot of our research on the topic and I’ll be sure to forward that off to you so you can share with the listeners who are very interested in the kind of the nitty-gritty of the data around this.

Steve: Along those lines then what are some of your frequency caps then on your ads that you like to keep below?

Reza: Yeah, so frequency is also an interesting topic I think for people who for example let’s call it for retargeting. If you just kind of run with all of the default placements and you look at your placements being like Facebook mobile, Facebook desktop, Instagram, right hand placement, audience network, etcetera. And you just have to leave all of those things on and then you look at the frequency number based on that. You might find for example that the frequency number could be really high.

Let’s call high being anything over 10 starting to become potential concern to ad and you dig in and get a lot of [inaudible 00:35:32] placement which in itself is questionable whether it’s a valuable placement or not. But for example if a lot of the frequency comes from the right hand side, then it might not be as concerning as a really high frequency that is just coming from desktop or newsfeed mobile because people aren’t really paying that much attention to the right hand side. It’s not as kind of a disruptive experience as you might see if you got.

And so I just wanted to add that as like additional thing to think about when thinking about frequency, but we usually I think like to see mid to high single digits is probably a good range for frequency on retargeting. So anywhere from like five to nine is probably a good ratio to look for.

Steve: And so by obviously introducing more variety in your ads, you’re much better able to fall below this cap right, because people are seeing a variety of your ads?

Reza: Right. And so the frequency per each one I think for us we’d like it to be even lower. I think the idea is collectively on if we’re running four, five, or six different [inaudible 00:36:44] the idea is for each of those to be seen [inaudible 00:36:50] so there’s like some good variety.

Steve: Okay and I did want to touch a little bit about kind of what return that you can expect to get kind of depending on what your average order size is, your average order value. Do you have any guidelines along those lines?

Reza: Yeah, so we’ve seen a very good correlation between kind of return on ad spend and average order value, which makes a lot of sense, right? I think when looking at the return on ad spend, the biggest kind of variable there, the two big ones are how much was spent and how much was made. And the idea of how much was made; it has a lot to do with what the average order value was in each of those purchases.

So if you make ten sales for example, and each sale is worth $20 and in another scenario you make ten sales and each sale is worth $150, almost like the same number of sales can have a really big difference on the actual ROI. So in Facebook ads and retargeting, it’s also no different here. [inaudible 00:38:01] the higher correlation, the threshold is where below a certain number it starts to become pretty difficult to see good returns.

It’s like under $30 for example; an average order value of less than $30 starts to become pretty tough to see great ROI on. And the lower the average order value, the more important it is the quality of the traffic, which is another variable there. If you’re driving high quality traffic even though the average order values are low, the quality of that traffic is really good, then enough of them will convert to make math work.

But the place in that quadrant that you don’t want to be in is have really low quality traffic and really low average order value. That’s going to be a nightmare to try to get good returns on. Where you want to be is pretty good conversion rates, high quality traffic, and pretty high average order value. So anywhere in the kind of 60, 70, 80, 100 dollar average order value or higher starts to become a lot easier to see a good return on ad spend.

Steve: Okay, so just to kind of summarize then, if your average order value is below 30 from what it sounds like, you should try to do things in your shop to kind of boost that value up to make just Facebook advertising easier in terms of getting better ROI?

Reza: Right or spend a lot more time thinking about like what is the source of the traffic here? Are you driving traffic that isn’t the right kind, and if that’s the case like we try to only going to advertise to traffic that’s already been to your site, and if traffic was not good traffic to begin with, then it’s just like pouring more money away to advertise to not great quality traffic. And so there’s a lot to be said about just auditing the quality of the traffic that is coming to the store to begin with before even trying to optimize the retargeting campaigns, because those two are very, very closely connected.

Steve: But along those lines, if you’re just targeting people who have added to cart for example, that’s generally going to be high quality traffic?

Reza: That will be yes, but generally people — if people have trouble getting high return ad spend on an add to cart audience, something is wrong there. Generally with such a small audience, so the cost of advertising them is not very high, and it’s as you said highly engaged, good quality traffic to add that too. So [inaudible 00:40:29] turn out and which is generally a pretty good starting point as well. If someone is just trying to figure out what kind of retargeting to do, that’s a good place to start is to just kind of retarget to people who added to cart and start getting an understanding of how is that performing, and it kind of becomes a baseline to start comparing as you move higher up 70 higher up in the funnel.

Steve: Yeah and if people are having problems converting on those ads, then chances are there is something wrong with the site, right, or something is wrong with the messaging and that sort of thing?

Reza: Right yeah.

Steve: Reza, we’ve been chatting for quite a while. Where can people find more about your company, and where can people get ahold of you?

Reza: Sure yeah. So our website is Shoelace.com, so people can find us there and learn more about the product there or also available on Shopify app store. If you search Shoelace there, I’m always happy to connect with people who have questions about this sort of thing. My email is Reza@shoelace.com. I think one of my favorite topics is just around like performance and how to compare one thing over another. I hope that the answer is that weren’t trying to avoid the question. It’s just more about it’s complicated and we want to try to be very clear about our messaging.

[inaudible 00:41:48] just about that and has some inputs or opinions about how they think about measuring performance or how they would look it if they were comparing the performance of one thing over another thing. And I’ve always loved to hear from people on that regardless of anybody who is listening and wants to shoot some thoughts on that topic. I’d love to hear from you and also in the other topic as well.

Steve: I’ll be honest with you Reza, if you gave me definitive answers, I would have been worried because this is such a broad type – I mean it totally depends on what you sell, the type of product, whether it’s an impulse buy or just come like a long term seller. There’s just too many variables here. So I was just kind of curious. I think you gave good guidelines without giving definitive answers which you can never really give in this case.

Reza: I’m glad.

Steve: So thanks a lot for coming on the show Reza, I really appreciate it and I’m looking forward to seeing you at the summit.

Reza: Yeah, I’m looking forward to as well, thanks Steve.

Steve: Hope you enjoyed that episode. I apologize for the audio quality, but I believe we were recording actually during a blizzard in Canada. In any case, I’ve actually been running straight dynamic product ads with my store, and I actually learned a ton about sequential retargeting from Reza. For more information about this episode, go to my wifequiteherjob.com/episode206.

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

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

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

Now I talk about how I use all these tools in my blog and if you’re interested in starting your own e-commerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send 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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205: How To Use Facebook Messenger Chatbots To Sell Physical Products Online With Molly Pittman

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How To Use Facebook Messenger Chatbots To Sell Physical Products Online With Molly Pittman

Today I’m thrilled to have Molly Pittman on the show. Molly is someone who I met at both Traffic and Conversions and Social Media Marketing World and she’s a digital marketing expert and educator.

Over the years, Molly has personally spent over 8 million dollars on paid traffic while achieving a positive ROI. And right now, she is one of the foremost experts on Facebook Messenger chat bots which is the topic of today’s episode!

What You’ll Learn

  • The best way to get new messenger subscribers
  • The best chatbot implementations she has seen
  • How to send broadcasts without violating Facebook’s rules.
  • The best use for auto responders to sell physical products
  • How to gather both email and messenger subscribers

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Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. Now today I’m happy to have my friend Molly Pittman on the show.

Molly is the former VP of Marketing for Digital Marketer and she is one of the foremost experts on Facebook chat bots and Messenger marketing. And that is exactly the topic that we’re going to be delving into today. And I just want to give you a warning that the audio is a little bit choppy in the first five minutes or so but it gets much better later on into the episode.

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now Privy is an email list growth platform, and they manage all my email capture forms. And I use Privy hand in hand with my email marketing provider.

Right now I’m actually 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 a sponsor of the show. Always blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 30% of my revenues. Now you’re probably wondering why Klaviyo and not another provider. 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 sent.

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

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

Steve: Welcome to the My Wife Quit her Job Podcast. Today I’m thrilled to have Molly Pittman on the show. Now Molly is someone who I met at both Traffic and Conversions and Social Media Marketing World, and she’s a digital marketing expert and educator. She was the VP of Marketing for Digital Marketer for many years until she recently stepped down to start her own consulting agency.

And over the years Molly has personally spent over eight million dollars on pay traffic while achieving a positive ROI. And right now she is one of the foremost experts on Facebook Messenger chat bots, and she is known as Molly the chat bot Pittman. I don’t know about you but I just love her infectious laugh as well. And with that, welcome to the show Molly, how are you doing today?

Molly: Hey, thank you so much for having me on Steve, I like that name Molly the chat bot Pittman, I’m going to tell people about that. Yeah thanks for having me on, I’m excited to talk.

Steve: Yeah so just for the listeners out there, Molly and I actually don’t know each other that well, so I just kind of threw that chat bot Pittman out there and fortunately she has a good sense of humor.

Molly: I love it. I was like girl that will work. I sound like some sort of cartoon or something or a wrestler.

Steve: Actually [inaudible 00:03:45] comes to Mind. I don’t know if I’ve just aged myself, but yeah.

Molly: Yeah I don’t know who that is, but I’m imagining I’m like wrestling and here come the robot and [inaudible 00:03:58].

Steve: So I felt certain that the majority of my listeners know who you are, but just in case, can you give us a quick background story. Tell us how you got started with Facebook chat bots, how you ended up at the Digital Marketer and that sort of thing.

Molly: So I moved to Austin, Texas without a job, I was ready for a career change. And I saw a post on Craigslist for a marketing internship. So I had nothing to lose, took that internship, and that was at Digital Marketer. So two and a half years later, I’d be given the VP of marketing after I started learning Facebook ads, email marketing. I stepped into that role and then as you said Steve I recently left the company to start my own agency, but I’m still a faculty member in Digital Marketer, and I have a podcast with them called Perpetual Traffic and I create courses to help educate users.

But I got started with bot back in late 2015. So it was actually I think November 16th Facebook list Messenger ads, and so I’ve always been really into Facebook ads. So of course I was very interested, okay, we can run an ad inside of Facebook Messenger, let’s see what this is about. And when I started playing around with it, I realized that I really couldn’t run Messenger ads without building some sort of bot.

So that’s when I became familiar with ManyChat which is the bot building tool that I use, and I started learning as much as I could about this new marketing channel, and it’s only gone from there only a year and a half later.

Steve: Just curious, when you’ve been implementing ManyChat or chat bots, have those been for both ecommerce businesses as well as like digital product businesses?

Molly: Yeah, I work with an array of business and luckily ManyChat is one of my clients so I get access to a lot of the data and the happenings inside of their thousand Facebook pages that are now connected to the tool. So I also have a client in the nutrition space based on health plans. I’m also good friends with Ezra Firestone, so I actually went up to his house in New York, and we shot some videos on chat box for Messenger. So I have experience but also I’ve just been around it and seen what’s working for people trying to sell physical products which are bought.

Steve: So Molly what I was hoping to do today was to go in depth on kind of the best way to implement a chat bot just for e-commerce store that sells physical products online just based on your experience, what’s working and what’s not. And my first question actually along these lines are when you’re going for a chat bot Messenger like how can these tactics be kind of mixed in with e-mail? Do you have to choose whether you want an email or Messenger subscriber, or do you try to get both?

Molly: So both are still valuable, right? Email is a huge revenue driver for businesses. So any time that you can have a prospect across multiple platforms, you’re in better shape. So you can’t really — it’s interesting, Messenger and email work very similar in terms of functionality. You’re building this list, you can send broadcasts, you can set autoresponders, but in application they are very different because the messaging is very deferent, right?

Think about how you use email, you usually send longer emails, you might not respond to emails for a few days. With Messenger it’s these short quick back and forth messages almost instantaneous. So, the two are similar but also very different. So any time that you can use e-mail to drive Messenger subscribers and the other way around, you’re better off. So for example, I’ve seen Ezra Firestone for example, he sends a coupon code to his e-mail list for his skin care line, and he said, to redeem this coupon to get the code, click here and get this code inside of Messenger.

So he sent that e-mail as a way to run a flash sale, but he also moved these email subscribers over to Messenger, and was able to deploy this flash sale but also ensure that they run both purposes. The same thing works the other way around. When you’re engaging with someone in Messenger, you can ask them for other contact information.

And a few weeks ago Facebook actually rolled out a feature for when you anchor some bot to email address as a brand, a quick reply button shows up above their keyboard with their email address that they use to log into Facebook. They can one click that button and now the brand has the e-mail address and it’s not just an email address, you know that’s probably a good email, right? It’s the one that they use to login to Facebook.

So then you could use a tool like Zapier or ManyChat just released [inaudible 00:09:03]. If you want to integrate your CRM to ManyChat then you can push that data back over there too. So both is great and they can be used together, but also never confuse them. I’ve seen a lot of people trying to use Messenger just like they use e-mail and it just doesn’t work, because the messaging is so different. So I just always like to emphasize that when we talk about email and bots.

Steve: Sure. I guess the question to kind of clarify is if I’m going for a particular subscriber on my list, let’s have a pop up form on my site, would you be going for an email sign up at this point or a Messenger subscriber first initially because you can’t ask for both right away, right?

Molly: Sorry Steve, could you say that one more time?

Steve: So let’s say I have a site and I have a pop up form on my store, would you recommend I go for email subscriber and then try to move them over to Messenger, or would you recommend that I try to get a Messenger subscriber and then move them over to email, because it’s really hard ask for both in one sitting, right?

Molly: Totally. I would use Messenger first because it is so much easier and frictionless for the end user. So think about it, inside a ManyChat there are things called overlay widgets. So you can trigger a pop up or have a hello bar at the top of your store, you could embed a button, you can embed a box, and when they interact with any of these widgets it opens in Facebook Messenger.

So say you have a coupon code, and you use a pop up and you say, click here to get the coupon code in Messenger. Well they click the button on your pop up, it opens in Messenger, they click yes I want this, now they’re a Messenger subscriber, and they have the coupon code. You could also ask them for their email address if you want. And then again just one click and they can give you their e-mail address. They never have to type anything, right?

Steve: Yes.

Molly: They literally clicked three buttons. So with e-mail, you would have to ask for their e-mail address, you probably ask for their first name, last name, which you don’t have to do inside a Messenger because Facebook already knows that. So I would lead with Messenger because it’s easiest for the end user, and that’s the theme of bots and Messenger. This isn’t a shiny object; oh look at this new tool.

This works because it’s where the people are, but it really works because it’s so easy for the consumers; three clicks versus trying to fill out these form fields that people are tired of filling out especially because most of them are still for some reason not mobile optimized. It’s like this is easier for the end user so you’re getting a better result. So I would always lead with Messenger because you can still ask for the e-mail, but you’re going to get more interactions because it’s just so much easier for them.

Steve: I guess part of the reason why I’m squeamish is that Facebook controls Messenger and at some point they might just like nerf the reach of Messenger or they might start charging for it. Do you have any insight into what you think will happen going forward?

Molly: That’s such a good question. I have a little bit of insight. I don’t think that Facebook will ever charge to use Messenger in terms of the way that we think about it with ads, right? I think that the rules will change. I think what Facebook does a really good job of, Facebook does what is best for their end user, and their end user are the billions of people who have Facebook profiles.

And as marketers I think – at Social Media Marketing World, the keynote session day two I was on a panel talking about chat bots, and we opened up for Q&A. And the first question was a man who asked because there was a lady from Facebook Messenger on the panel, and he asked, how can we trust Facebook after all of the recent changes and how it affects businesses? And she gave a really sweet answer that was…

Steve: It was a very pissy answer yes.

Molly: It was a very pissy answer but then I said, hey guys listen; I totally understand your frustration. You’re using a platform and it changes, and it affects your business, so it’s really frustrating, but as marketers we really need to readjust our entitlement or expectation of these platforms. These platforms have to do what’s best for their end user just like I hope every business owner out there does what’s best for their end user.

And they need to make a change like decreasing the amount of organic reach that Facebook pages are getting because it’s not healthy for consumers, which is what they found through studies. It was literally not healthy for our society. They may need to do that and we need to adjust. And so, I think the same — sorry if I’m a little off. That part of how I feel here, I think that Facebook, they will continue to adjust.

I had the pleasure to meet with some people from their team in San Diego and then they came to Austin for South by Southwest and really the theme that I’m getting is that they still don’t quite know either, right? Like they opened this up in 2016 to advertisers, and they are going to create rules and best practices and pricing models and ad types based off of what they think is best for the end user.

And I think that’s why they have things like the 24 hour rule, right? You can only be directly promotional within 24 hours. I love that, I don’t want Messenger to turn into email. Emails lasted a long time and e-mail is not dead, but darn, my inbox is flooded and that’s because there’s not one person ruling the rules of e-mail.

So long story short, I don’t know where it will go. I know that Facebook will continue to reward the people that follow the rules, and I think the key here is that we’re moving into a different time where what’s happening on Messenger really is what consumers are expecting, give a little value first. I heard someone — someone came up to me, and they’re like Molly, I’m not going to use this because you can’t be promotional after 24 hours. And I’m like, wow, that’s so small minded. This is a new channel that we get to use as marketers and we have to be willing to change what we’re doing a little bit to play nice.

So I think there is a fear factor in terms of this is on Facebook’s platform and it could go away at any moment, but I think my thought process is why would you miss an opportunity like this in fear of losing it, right? And I understand why. I do understand that fear, but what are the other options right now? Like email opening click through rates are decreasing, Facebook ads are still effective, but we’re starting to see Facebook run out of inventory. If you’re a really good marketer, Facebook ads will still work. Google is there, YouTube is there. There are these different platforms, but in terms of the opportunity, it much outweighs the fact that we’re building this on someone else’s platform.

Steve: So I ask you those questions because I was pretty biased. I’ve recently been playing with these for like the last four or five months and the performance of these chat bots have just been amazing for me especially with the ads, the Messenger ads.

Molly: They are.

Steve: I’m getting maybe like a 6x ROI per subscriber compared to email, and in then the open rates are just ridiculous and the click through rates are as well.

Molly: That’s awesome, what are you doing Steve, would you mind to share?

Steve: Yeah absolutely. So I have this free plus shipping flow right now, so I set an ad giving away a free handkerchief, this is what we sell, and then that actually takes them over to a landing page. So they opt-in as a Messenger subscriber, then I take them to a landing page where I really describe the offer very well and then I ask for an e-mail there, and then I have an up sell and a down sell. And ideally I get a Messenger subscriber, an email subscriber, and a purchase.

Molly: That’s awesome. And see Steve I love what you’re doing because I think what a lot of people are doing right now, they see bots, they see Messenger marketing and they’re like, oh this is intimidating, all right? Like I have to build this little bot, people think about bots and they think about bots that have been programmed to answer any question you might ask. Tommy Hilfiger has those types of bots, like cute brands.

And that’s not really what we’re talking about here. We’re talking about taking something like what you just said Steve, that’s a funnel that was already working for you. You’re just using Messenger as an entry point, right?

Steve: Absolutely.

Molly: You can take that a step further and remove those web pages all together, promise the free handkerchief. They click on the ad that opens in Messenger, you say, okay great, what’s your e-mail address? I want to send you some other cool updates and information. You get that e-mail which is so much easier than sending them to a landing page, and then you could say, great, now about this free handkerchief, here’s some bullet points.

You definitely probably wouldn’t want to have as much information as you do on the landing page, maybe you have a little video or an image of the handkerchief. And it’s you know ask, are you interested in purchasing, or are you interested in taking you know what’s up on this offer or whatever the language is. And then if they click yes, you could send them to the order form or and the next week or so ManyChat’s launching payments across all accounts.

So first it will be Stripe. But this is the ability if they click yes to literally pop up a credit card like box for them to input their credit card information and process that payment inside of Messenger. When that first launches, it’s not going to be what everyone wants to use because you can’t do up sells and down sells, but it shows you this is what’s coming. But for now you could also have another button that says, learn more so they could click learn more, and go over to the landing page if they do want more information.

So you did the first step which is, here is something that already works in my business, let me just use Messenger as the entry point because Messenger is frictionless for the end user. And it’s cheaper to run those ads because Facebook’s like, oh you want to send traffic inside our ecosystem and not off to a URL, awesome. But I love what you did because you just took something that was working and used Messenger. It wasn’t about building this bot, and I think that’s the frame of mind everyone needs to be in to get started with this, this year.

Steve: I mean I will say one other thing that I did with my site was I introduced a live chat widget. So basically it’s actually reduced our customer support load because we put the most frequently asked questions on there, and every time someone clicks on a button or interacts, we instantly get a Messenger subscriber as well, so this is fantastic for us.

Molly: Yeah, especially for people selling physical products because you guys know the top five questions somebody is going to ask. So using that live chat plug in, you get the subscribers. Something else I’ve seen people do that was really smart, if you engage with the live chat they say, hey Molly, thanks so much for engaging, let us know if you have any questions.

They could have also said, here are frequently asked questions, if you want to browse through. But then they gave me a coupon code, and it was like, hey thanks for visiting our site, use this coupon code for five dollars off. And so I thought that was a cool way to add a conversion element to that live chat plug-in.

Steve: Yeah absolutely. So in your experience, what are some of the best implementations and uses for chat bots that you’ve seen for a physical products store?

Molly: Yeah great question. So I think the first is similar to what you are doing, promising a coupon or some sort of free plus shipping offer either in an email and then using the Ref URL growth tool to create a unique link that inside a ManyChat when they click it opens in Messenger, or running ads. So promising them something, whatever that top of the funnel offer is that you use in your business and then delivering it through Messenger, sending them off to a landing page or a sales page when you need to do so.

Steve: So on ads real quick Molly, I just want to ask you this question since you have a lot of Facebook ads experience. When you’re targeting a Messenger subscriber with your ads versus a conversion element, how does the relative performance work? I’ve been experimenting with it myself, but I haven’t quite figured out what works better just yet.

Molly: So I’m still seeing using general conversion campaigns optimizing for that low dollar purchase to have a lower CPA than using Messenger. And that’s just because people are still getting familiar with Messenger. People still think when they click on an ad and it opens in Messenger, some people think it’s a bug. So remember that we still need about six months for consumers to catch up, but that doesn’t mean you should wait as the business owner because don’t forget you’re building that subscriber list, right?

So you’re getting this lead, it’s not just about the purchase, it’s also the lead. So when I’m running ads for Messenger, I’m seeing the cost for the click or the conversation is cheaper than sending them over to a landing page, but I’m still seeing the CPA a bit lower going direct to a landing page than Messenger. But when I run Messenger ads, I either use the traffic objective or the Messenger’s objective, and then you just select the destination as Messenger and Facebook knows instead of sending this to a site, we’re just going to open this inside of Facebook Messenger.

Steve: Yeah I mean I’ve been trying to – the CPAs are better for me if I don’t use Messenger, but then I’ll send like a broadcast via Messenger and it’ll make up all that money.

Molly: Exactly, exactly and that’s what the client, the nutritional client I was telling you about, the CPA is higher going through Messenger, but then once a week we send a broadcast that’s content and if they engage with the content, we tell them about a sale we’re having. And then every other week we send a sponsored message which you can pay Facebook about $30 CPM to send a sponsored message that can be directly promotional to all of your subscribers. And that’s because you’re paying Facebook.

So we send about one of those every other week. So between those content broadcasts and the sponsored messages, we’re seeing what you’re seeing. We’re able to make up the money because we can leverage, we can continue this conversation. And then don’t forget the follow up sequences. So if someone engages with you on an ad, it opens in Messenger where you can set up a follow up sequence.

For the nutritional company I have one that follows up for six days. The one that goes out on the 5th day has a 92% open rate, that’s insane. So people are still engaging after that first interaction.

Steve: Can we talk about that autoresponder sequence? You mentioned they’re messaging someone every single day for six straight days.

Molly: No so the responder, the actual sequence is over seven days. And we’re sending a message about every other day, but it’s all themed, it’s mostly content. So this is a nutritional company, so we’re talking about people’s health, and I can’t get super specific into what the ad is. So we’re using comment to Messenger to ask a polarizing question in the market, something that they would debate.

So for example, for copywriters that would be something like should you use the Oxford comma or not, comment a little with your thoughts and we’ll let you know what we think. So we’re using the comment to message as a way to just drum up conversation and build Messenger subscribers. They don’t even see an offer until the next message. So they comment below, this is about food, and which types of food you should eat.

They comment below with their thoughts, now this post has thousands of comments, the relevant score is super cheap. For this particular ad, I’m optimizing for engagement because that’s what we want, and then every person that comments it opens in Messenger. So we open up in Messenger and we say, thanks so much for your comment, here’s the correct answer, and there’s a video with one of the health coaches, so they’re starting to build a relationship with him.

And the video gives the correct answer, and then the correct answer leads into a free plus shipping offer for a product that leads seamlessly into this conversation we’re already having with them. And so, hey do you want this for free, yes, they click and they go over to buy the free plus shipping offer. Then for a week, so the first three days we do follow up every day, but it’s with more content, recipes, here’s a video with more content.

And anyone that engages with those, we then say, hey, don’t forget you can get this for free. And people love it. They’re like, oh this — they’re following up with content, I’m in the kitchen with them, this is so cool. And then we go every other day for two more messages. And the goals of those, there’s one that’s more scarcity like, hey, this free plus shipping offer is going away. And that one only goes to people who have engaged in the last 24 hours, and then two days later the last thing we ask is just a question for segmenting.

So like the three big buckets of products they sell, we just ask a question that allows those people to self select based off of their health goals for the year so that we can tag them and send them more relevant information later. But it’s a weeklong sequence, but it’s not buy, buy, buy. It’s statements that leads into the offer, but it’s really fun for the end user and that’s what this takes outside of when you want to take this past coupons or funnel style actions, it does take a little bit of creativity and knowing the conversation your market wants to have. And that’s what’s really fun to me.

Steve: It seems like the way you just described would work a lot better than what I’m currently doing now, because when you shove some sort of offer in someone’s face, sometimes that leaves a bad taste in their mouth, but it sounds like if you ask them an open ended question, get them on Messenger, that would lead to much higher conversions. Is that what your experience has been?

Molly: So it’s — I mean I don’t know if I would say much higher conversions, but it’s a longer term relationship. This client decided, Molly we want this CPA but we also want to be one of the first people on Messenger. We want to build Messenger as an asset in our business just like we have e-mail. So they’re committed to a long term relationship. So it’s also just a different way of looking at it. I think that’s the way everyone should be looking at it, but not everyone has the resources to do that too.

But yes any way you can make this more conversational, it’s going to work better short term and long term because that’s what this is, it’s a conversational platform. So giving them value even if you were running an ad to some sort of lead magnet like I saw a yoga company, this was awesome. They had a seven day free challenge where you learned a new yoga move every day. So they ran an ad and it was a click to Messenger ad, hey sign up for this seven day challenge in Messenger.

So you click, you quickly sign up, they ask for your email address, they got everything you needed. And then they said, okay, here’s day one, and they delivered the actual video there in Messenger. You could also click off to a web page if you wanted to do that. And then every day for seven days, you’re getting a video in your inbox, hey, it’s day two. And sometimes it would say, hey, are you interested in the yoga mat that you just saw Sarah using in that video? Yes or no.

And then at the end, they were able to do a larger pitch for a bundle of their products like a starter pack. But what they did that was brilliant is they gave value first, here’s a seven day yoga challenge. You know people are going to consume it because Messenger open rates are so high, you’re in their Facebook inbox, but they’re weaving their product into this value. And that’s the type of stuff that I’ve seen work really well. Now they’ve built a long term relationship, they haven’t pissed these people off because they’ve given them value, but they’re also able to sell their product, right?

Steve: Yeah, I mean this is just like the email funnels that I use for my digital class and email funnels that I use for my store. It’s just a matter of I guess translated them over to Messenger.

Molly: Yeah and Steve if you’re interested, go to Course.ManyChat.com, Course.M-A-N-Y-C-H-A-T.com. And I think you would like this free course that myself, and Dan from ManyChat just released, because what I did is I made 15 blueprints. And the goal was to take things like you just said, funnels that you already use, webinar funnels, many class funnels, lead magnet funnels, coupon funnels, and say, okay, you probably have these because you’re a marketer, here’s how you translate them into Messenger.

So I think you would find a lot of value in modules four and five are just those blueprints. But yeah it’s key to say because I think the trouble people are having is Messenger is cool, what do I do? I don’t want to invest a bunch of resources and this not work. So taking funnels and selling systems that are already working in your business and translating them to Messenger, and a lot of times that’s just realizing that instead of an entire sales page, you can say something like, hey, are you interested in this yoga mat? A lot of it is just the messaging, changing that really in my opinion.

Steve: And making it a lot shorter and more concise, right.

Molly: Exactly. And thinking about Messenger is a lot of questions, and giving them options, and buttons and choose your own adventure. So traditionally, that health and fitness company would have said, hey, we have this free container of this health supplement, do you want it free plus shipping? But yeah I had to back it up a little bit and say, what’s a cool question we can ask to engage these people, how can we ask them about their health goals? We had to flip the script a little bit.

Steve: Yeah, I mean actually what you just said has made me rethink the offer, because ultimately I want the Messenger subscriber. I’ve already seen the power, and so when I said conversions earlier, I actually meant a conversion in terms of getting a Messenger subscriber not a sale.

Molly: Oh heck yes, Messenger subscribers are cheap. Like that client I was telling you about, we’re getting Messenger subscribers for like a dollar. Even Kajabi, the [inaudible 00:33:20] they are one of my clients and we were talking email leads, a lead to them as an email lead. And they had a traditional lead magnet funnel for this report that they give away. And normally when they run a conversion campaign for Facebook ads, their cost for lead is about five to seven dollars which is great for them.

We took that same funnel, same ad, just changed some of the copy to, hey, make sure when you are running an ad to Messenger that you set the expectation that they’re going to get this in Messenger. That will help with the congruency. So we just changed a little bit of the text, you’ll download this inside of Facebook Messenger. Their cost per lead which I mean email lead, they were still asking for the e-mail went down to a dollar seventy five because it was way easier, no telling how cheap the Messenger subscriber was.

Steve: Oh yeah, yeah totally.

Molly: So yeah sorry to change…

Steve: What you’re talking about here is like the one click email?

Molly: Exactly.

Steve: Okay, got it got it. One thing I did want to ask you about the comment growth tool, I know Facebook has been cracking down on like fake engagement. So when you run one of those ads, you don’t necessarily want to tell them what to comment anymore, right?

Molly: Yeah, so when that first came out, I mean I taught people the first thing that I did was comment yes below to get this lead magnet. But yeah Facebook doesn’t want that anymore. They don’t want people to scroll through their news feeds and just see thousands of comments that say yes. They want meaningful conversation. So basically what they told us is we just don’t want people asking someone to comment one word or one sentence to get something. So ask a real question that starts a conversation.

So that’s really it. You can still say, ask your question and say, what do you think, leave a comment below and we’ll let you know what we think and we’ll send you this free thing. That’s okay to do. They just want people to actually comment with real answers.

Steve: I see so you should set up your growth tool to not detect any keywords, just to automatically set them up?

Molly: Exactly, so I’ve seen a lot of people doing — basically they just ask a question in their market that people debate about. And it’s something that also leads to whatever their offer is. So it just takes a little creativity, but those are super powerful because you’re paying Facebook for the engagement. If you ask a good question that people want to weigh in on, that will be really inexpensive. And then the relevance score is super high because all of these comments are here.

Steve: So current talk a little bit about Facebook ads. So do you suggest doing a traffic ad and use the comment growth tool, or would you recommend a Messenger ad? What’s worked better for you in terms of variety?

Molly: Yeah, it really depends on what you’re doing. So if you’re using the comment growth tool, I recommend using the engagement objective because that’s really what you want. Anyone that engages comments on that post, it’s going to open in Messenger, and then as soon as they engage with you they’re a subscriber. So for comment growth tool, use engagement. When you’re running click to Messenger ads that when they click it opens in Messenger, sometimes I use the traffic objective and then just change the destination to Messenger, and sometimes I use the Messenger’s objective.

Honestly I’ve seen the traffic objective to be a bit cheaper. But I’ve tested both and you can use either of those to run a click to Messenger ads. So every lead just depends on what you’re doing. If you’re trying to say, hey, here’s this coupon code, click below to get it in Messenger, you would run a click to Messenger ad and use the traffic or Messenger’s objective. If you want to ask what’s your favorite yoga pose and why, let us know below and we’ll send you a free seven day challenge, then that would be an engagement objective in the comment to message growth tool.

Steve: What is the distinction between click to Messenger versus traffic to Messenger?

Molly: So click to Messenger is basically just what Facebook calls that ad type. So that ad type exists in multiple objectives. The objectives are the first thing that Facebook asks, what’s your objectives? So whether you choose traffic messages, you could even choose conversion, I absolutely would not recommend that until the Facebook pixel is somehow integrated inside a Messenger. But the click to Messenger is just what they’re calling the ad that you see in your news feed that when you click on it opens in Messenger. So you can set those up through the traffic objective, Messenger’s objective or conversion objective.

Steve: So the click to Messenger, does that imply that Facebook is showing your ad to people who are more likely to click to get a Messenger response?

Molly: So it’s more of an ad type. I would say that they probably know that and so they know, okay, we selected traffic, we want the destination to be Messenger. Well they’re going to show the ad to people who are most likely to click on ads. I’m not sure if the algorithm is smart enough yet to know who clicks on Messenger ads. It probably is. So I would say that’s the case.

Steve: So in your experience, if the goal is to get Messenger subscriber, has it been cheaper for you to run these engagement and use the comment growth tool, or quick to Messenger type of ads for a response?

Molly: Yeah, good question. It really depends on the offer, but I would say if you’re going, you kind of need to decide like is your goal for this particular sequence going to be a CPA, Messenger subscriber or both. If the question that you ask in comment to message is super engaging, that’s the way to go, but the question has to be really good. Or if the offer is really good for the click to Messenger ad, like your free plus shipping offer, I would probably click on that. But if someone said, click here in Messenger to talk to my bot, I probably wouldn’t.

So it’s really all about the offer. I wouldn’t get — I don’t like to say one strategy is better than the other. It depends on your offer, but I think the comment to Messenger is going to give you cheaper subscribers unless that click to Messenger offer is just super enticing.

Steve: Right okay.

Molly: And a huge mistake real quick Steve, I see people using video in click to Messenger ads. Don’t do that because when you click on a video it just pauses or opens that video. And so the only part of the ad that they can click on to open Messenger is your headline or the button down at the bottom. So you’re losing out on a lot of clicks. So when you’re running those ads, use an image or a carousel so that anyone that clicks on that image opens in Messenger too.

Steve: It’s funny that was my next question actually, because I experimented with a video versus a static image and I found that the clicks for the static image were a lot cheaper and the Messenger subscribers were a lot cheaper. But the CPA for the video was a lot better because it did a much better job of describing the value proposition of our products.

Molly: Interesting. So if you’re going for CPA, video could be good because it gives that extra info, but if you’re looking at Messenger subscribers, I’ve just seen people be like, Molly, why is the cost of video much higher here? And I’m like, oh it’s the video, you are losing those clicks.

Steve: Yes I guess it’s like a trade off in that case because I’m trying to describe my offer, and I just have to be able to describe it much better in a video as opposed to a static image. And so I just found that more people are giving me the email going through the offer with the video.

Molly: And that’s why Steve like with any of this, anything in marketing or business really, people ask me Molly, what is better, what should I do? And I always say, what is your goal, what is the one thing? Like with a marketing campaign, you kind of have to pick one thing you want to do. I want to sell this product and then my secondary thing is Messenger subscribers. Or my first thing is Messenger subscribers; my secondary thing is the CPA. So once you decide that success metric I call it, then you can pick the strategy that best fits what you’re needing.

Steve: Yeah I mean there’s no right or wrong answer. And the questions I’ve been asking you, I’ve just been kind of framing them based on like the clients and what you’ve seen.

Molly: Yeah I love it. This is a great conversation.

Steve: So how much longer do you think chat bots and Messenger bots have until everyone kind of just hops on the bandwagon and it turns into like email?

Molly: I mean the good thing is that it can turn into email. That’s what I love about this and that’s why I am a proponent of this platform because there will always be people that can get around the system and things like that, like I will address that. But this platform in my opinion is good for humans, and the reason is because it is conversational and because Facebook is not going to let it become e-mail.

So you’re going to see more people use this, but the ones that have success with it are the creative people that are willing to step out of the box and write conversationally and come up with the strategies that we just talked about. The people that aren’t are going to say Messenger doesn’t work or they’re not going to get good results, and they’re going to retreat.

So you can’t be — because of the rules Facebook has put into place, you can’t be that person. You literally have to give value first. And if you don’t know how to do that, you’re not going to be able to use the platform well. So I think you’re going to see more people use the platform. You’re definitely going to see more messages from brands in your inbox, but it’s going to be maintained and controlled in a very different way than e-mail has been, because one person owns it, and that’s Facebook.

And if people start to get angry about the messages in their inbox, they’re going to make the rules more restrictive. And I think I love this because I think good marketers will win on this platform, and people that actually take time to get to know their audience, know the pain point of their audience, know the progress that their audience is trying to make and then they provide that experience inside a Messenger.

Steve: I guess the one difference is that no one can send me a message unless I specifically subscribe, whereas anyone can send me email today, right?

Molly: Exactly, that and Facebook is actively hiring people by the hundreds to be Messenger moderators they’re calling them. So this is kind of like policy for Messenger. And right now if your bot or your Facebook page gets marked as spam a few times, someone is actually going to go manually review that, and they’re going to see are they sending promotional messages outside of the 24 hour window? And if you are, you’re probably going to get a block for a few days.

So that is what Facebook is doing well with Messenger. Instead of just banning accounts, they’re putting people in timeout. So that’s really good because they understand that people still need to understand the rules better and things like that. But Facebook is going to patrol this, like don’t think that they’re going to let what I think is their best asset, Messenger has more active monthly users than the actual Facebook platform, they’re not going to let this get overrun.

And if people think that, look at the announcements Zack made earlier this year. So they have people policing this, and I don’t know what the rules will look like in a year, but I know that they’re going to let businesses use this platform because that’s their huge initiative and that’s where this is going. But they’re going to change the rules to make sure that this doesn’t turn into email. And like you said, no one can just message you on Facebook; no Facebook page can just message you on Facebook. So this is all up to the user, it’s all up to the user and Facebook patrolling this promotional policy.

Steve: So in order to send them a promotional message, what are some creative methods that you’ve got to just get them to interact so you can send them a promotional message? And are there any grey areas there, so for example can I say something like, hey, we just got a bunch of new products in our store and we’re having a small sale, would you like to hear about it? Yes, no, unsubscribe, is that like a violation?

Molly: So it’s still a gray area, they haven’t come out and really said what is promotional or not. I gather that it’s pretty much going to a sales page. So I would try not to do the, hey, we have new products available, are you interested? Anything other than that, talk about anything other than the product. So a lot of what I do is I’ll give them a question.

So, say I was selling a water bottle, we could say like when is the last time you cleaned your water bottle, or when is the last time you purchased a water bottle? These aren’t great, but like how many days out of the week do you use a water bottle, and provide some button answers which is great because then you learn more about these people. So you don’t ask domain questions, just ask them, ask questions so it’s like, wow, we really want to talk to the people that use a water bottle every day.

So ask a question like that that engages them, and then it’s like awesome, we just released this new water bottle, you can grab it here, or lead with content. So I wouldn’t lead with like, hey, we have a sale going on, or we have new products available, are you interested? I would lead with something just a tad a step forward than that like just something a little broader than that if that makes sense.

Steve: Okay so a little more subtle like the examples you just gave, or just simply say, I have this piece of content, would you like to take a look or something like that.

Molly: Yeah I have this free piece of content. You could even say, hey I have this new piece of content and link to it. And anyone that clicks that button you can say, awesome, thanks for checking out that that piece of content, what do you think, are you interested in this product? So I mean most of what I do is just giving an audio message, a question, but something that also leads seamlessly into the whatever we’re trying to sell in that moment.

Steve: Okay, yeah so you’re basically just trying to get them to respond to at all or in any way shape or form and then you can lead on to other conversations that lead to more promotional messages. Hey Molly, we’ve already been chatting believe it or not about chat bots for 47 minutes and I want to be respectful of your time. Thank you so much for coming on the show, and where can people find you and what good resources can you recommend if people want to learn more about you and your chat bots?

Molly: Yeah thanks so much for having me Steve. So I have a consulting agency at Digitalstrategybootcamps.com. It’s kind of a long URL. There’s a wait list out there now, but we’re launching a site next month. And then of course ManyChat, M-A-N-Y-C-H-A-T.com, course.ManyChat.com, there’s over ten hours of video and blueprints that will teach you all of the details of what we just talked about for free.

So those resources and then the Perpetual Traffic Podcast. You can find it at Digitalmarketer.com/podcast. We’re inside of iTunes, but we talk a lot about traffic, and chat bots, and digital marketing on that podcast. So, any of those would be great.

Steve: Awesome. I will link all those up in the show note resources. And thanks a lot Molly once again for coming on.

Molly: Yeah thanks so much Steve, I had a blast.

Steve: Take care.

Hope you enjoyed that episode. Molly really knows her stuff and I love how generous she is with information and her willingness to help. For more information about this episode, go to mywifequitherjob.com/episode205.

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.

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

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

Now, I talk about how I use 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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204: The Best Way To Launch A Successful Product On Amazon Today With Casey Gauss

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

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

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

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

What You’ll Learn

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

Other Resources And Books

Sponsors

Payability.com – A financing company that provides high growth Amazon sellers with daily payments. With Payability, you can say goodbye to cash flow issues and stockouts and hello to scalability and profits. Click here and receive a $200 credit upon signup.
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Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
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Transcript

Steve: You’re listening to the My Wife Quit Her Job podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not in business. Now today I’m happy to have Casey Gauss on the show. And Casey is the brain behind Viral Launch a tool that helps you research products to sell as well as launch them on Amazon. And as Amazon becomes more competitive Casey and I discuss what’s working today.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Always excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 30% of my revenues as of last month. Now, Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send out an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, piece of cake, and there is full revenue tracking on every single email.

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

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

Right now I’m using privy to display a cool wheel of fortune pop-up. Basically, a user gives their email for a chance to win valuable prices in our store. Customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%. Bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.COM/Steve. Now onto the show.

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

Steve: Welcome to the My Wife Quit her Job Podcast. Today I’m thrilled to have Casey Gauss on the show. Now Casey is the founder of Viral Launch which is both a software company and an Amazon product launch service. They have two main software tools called Market Intelligence and Product Discovery which help you find profitable products to sell on Amazon. And their launch service has actually catapulted many clients onto the front page of Amazon search.

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

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

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

Casey: Exactly.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Casey: Right exactly.

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

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

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

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

Casey: Yeah exactly.

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

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

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

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

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

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

Steve: Interesting okay.

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

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

Casey: Yeah.

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

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

Steve: Does enhanced brand content a big deal?

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

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

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

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

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

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

Casey: Insanely low yeah.

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

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

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

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

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

Casey: Yeah in terms of review quantity.

Steve: Interesting, okay sure.

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

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

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

Casey: We have some special data.

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

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

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

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

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

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

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

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

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

Steve: Are these pure giveaways or drastically discounted items?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Steve: Sure:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Casey: Same man, I’m pumped.

Steve: All right dude, take care.

Casey: Thanks, you too.

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

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

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

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

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

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

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

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

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

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

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

What You’ll Learn

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

Other Resources And Books

Sponsors

Payability.com – A financing company that provides high growth Amazon sellers with daily payments. With Payability, you can say goodbye to cash flow issues and stockouts and hello to scalability and profits. Click here and receive a $200 credit upon signup.
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Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
Klaviyo

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

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

Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. And today I’m happy to have my buddy James Clear on the show. And James is actually one of the most successful writers that I know personally and his site gets millions of visits per month. And today what we’re going to do is we’re going to talk about his strategies for building traffic.

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now Privy is an email list growth platform, and they actually manage all my email capture forms. And in fact I use Privy hand in hand with my email marketing provider.

Now, there are a bunch of companies out there that will manage your email capture forms, bit I use Privy because they specialize in e-commerce. Right now I’m using Privy to display a cool wheel of fortune pop-up. Basically a user gives their email for a chance to win valuable prizes in our store. Customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%.

So bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. Head on over to Privy.com/Steve, and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ For 15% off. Once again that’s P-R-I-V-Y.com/Steve.

I also want to give a quick shout out to Klaviyo who is a sponsor of the show. And I’m blessed to have Klaviyo as a sponsor because they are the email marketing provider that I personally use for my ecommerce store, and I depend on them for over 30% of my revenues as of last month. You’re probably wondering why Klaviyo and not another provider. Well, Klaviyo is the only email platform out there that is specifically built for ecommerce.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they bought, piece of cake, and there is full revenue tracking on every single email.

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

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

Steve: Welcome to the My Wife Quit her Job Podcast. Today I’m thrilled to have my buddy James Clear on the show. Now James is someone who I met at a mancation which was started by Billy Murphy. And I’ve actually known about James for a very long time now, and he’s one of the most successful writers that I know. James focuses on uncovering the habits and routines of entrepreneurs, artists, athletes, and high powered individuals and then shares them in an easily digestible and actionable article.

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

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

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

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

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

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

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

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

Steve: Your business being Jamesclear.com?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Steve: What was it about first of all?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Steve: Wow okay.

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

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

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

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

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

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

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

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

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

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

Steve: Okay that was my next question yeah okay.

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

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

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

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

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

Steve: Oh okay got it, got it.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

James: We use Drip.

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

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

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

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

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

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

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

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

Steve: That’s interesting.

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

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

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

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

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

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

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

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

Steve: Interesting, okay.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What You’ll Learn

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

Other Resources And Books

Sponsors

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

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

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

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

Transcript

Steve: You’re listening to the My Wife Quit Her Job podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not in business. Now today I’m happy to have Nate McCallister on the show. And Nate is one of my go to guys when it comes to retail and online arbitrage. And as Amazon becomes more competitive, we’re going to talk about the current state of arbitrage, and what it takes to succeed.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Always excited to talk about Klaviyo because they are the email marketing platform that I use for my ecommerce store, and I depend on them for over 25% of my revenues. Now, Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send out an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they bought, piece of cake, and there is full revenue tracking on every single email that goes out.

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

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

Right now I’m using privy to display a cool wheel of fortune pop-up. Basically, a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this, and when I implemented this form, email signups increased by 131%. Now bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.COM/Steve. Now onto the show.

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

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

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

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

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

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

Steve: But I’m pretty sure…

Nate: That was a great conference.

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

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

Steve: Yeah.

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

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

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

Steve: It’s okay dude.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Steve: I see, okay.

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

Steve: I see.

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

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

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

Steve: That dings your account yeah.

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

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

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

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

Steve: You have to move around brands.

Nate: Every year right.

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

Nate: Say it again.

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

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

Steve: Okay sure.

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

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

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

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

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

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

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

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

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

Steve: Okay sure.

Nate: My imagery is terrible.

Steve: That’s okay.

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

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

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

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

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

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

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

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

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

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

Steve: That’s crazy.

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

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

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Sign up now and put your earnings to work today. Go to Go.payability.com/Steve to get started, and receive a $200 credit upon sign up. Once again that’s Go.payability.com/Steve, and get a $200 credit upon sign up. Now back to the show.

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

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

Steve: Yeah do it, go for it yeah.

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

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

Steve: That’s crazy okay.

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

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

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

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

Steve: Sure, sure.

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

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

Nate: It’s not like that.

Steve: Okay, okay.

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

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

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

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

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

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

Steve: Sure.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Steve: Sure.

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

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

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

Steve: I see okay.

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

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

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

Steve: Yeah sure.

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

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

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

Steve: Why is that?

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

Steve: Sure, yeah, yeah.

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

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

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

Steve: Sure, sure, sure.

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

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

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

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

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

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

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

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

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

Nate: No.

Steve: No okay.

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

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

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

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

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

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

Steve: Sure.

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

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

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

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

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

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

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

Nate: All right buddy.

Steve: All right man, take care.

Nate: All right.

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

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

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

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

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

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

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

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

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

What You’ll Learn

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

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

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. And today I’m happy to have Steve Weiss of Mutesix.com with me on the show. And we’re going to talk about Steve’s strategies for running Facebook ads to promote physical products online.

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now what does Privy do? Privy is an email list growth platform, and they manage all of my email capture forms. And I use Privy hand in hand with my email marketing provider. Right now I’m using Privy to display a cool wheel of fortune pop-up. Basically a user gives their email for a chance to win valuable prizes in our store. Customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%.

There’s other things that you can do too. So for example, let’s say you offer free shipping for orders over $100, well you can tell Privy to flash a pop-up when the customer has $90 in their cart to urge them to insert one more item. Bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. Head on over to Privy.com/Steve, and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ For 15% off. Once again that’s P-R-I-V-Y.com/Steve.

I also want to give a quick shout out to Klaviyo who is a sponsor of the show. Always blessed to have Klaviyo as a sponsor because they are the email marketing provider that I use for my ecommerce store, and I depend on them for over 25% of my revenues. Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is so powerful.

They can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, piece of cake, and there is full revenue tracking on every single email sent.

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

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

Steve: Welcome to the My Wife Quit her Job Podcast. Today I’m to have Steve Weiss on the show. Now Steve is actually someone who I randomly met via email I believe, and after chatting with him about Facebook ads and actually having him help me with some of my campaigns, I actually invited him to speak in my conference, the Sellers Summit.

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

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

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

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

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

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

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

Steve: Yeah I remember that.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Steve: How long was this video?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Weiss: Yeah, it’s very short.

Steve: Oh, it’s very short?

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

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

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

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

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

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

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

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

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

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

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

Steve: Conversion rate of click through rate?

Weiss: Our conversion rate on the website.

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

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

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

Weiss: Yes, starting with purchases…

Steve: Purchases okay.

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

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

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

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

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

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

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

Weiss: 30%.

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

Weiss: Multi skewed.

Steve: Multi skewed.

Weiss: It’s just about 12 different skews.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Weiss: What do you mean?

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

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

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

Weiss: Correct.

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

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

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

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

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

Weiss: Correct yeah.

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

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

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

Weiss: Correct.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Steve: Interesting, okay.

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

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

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

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

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

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

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

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

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

Steve: Exactly yeah.

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

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

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

Steve: No, I have not.

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

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

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

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

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

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

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

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

Steve: Hey thanks man.

Weiss: All right, take care.

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

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

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

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

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

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

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

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

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

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

What You’ll Learn

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

Other Resources And Books

Sponsors

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

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

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

Steve: You’re listening to the My Wife Quit Her Job podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not in business. Now today is episode 200, yay. And every hundred episodes or so, I manage to wrangle my wife to overcome her introverted self and actually join me on the show. And in this episode, she’s going to be grilling me about business, philosophy, productivity, and life.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Always excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 20% of my revenues. Now, Klaviyo is the only email platform out there that is specifically built for ecommerce, and here is why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send out an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they bought, piece of cake, and there is full revenue tracking on every single email.

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

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

Right now I’m using privy to display a cool wheel of fortune pop-up. Basically, a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this, and when I implemented this form, email signups increased by 131%. So bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.COM/Steve. Now onto the show.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Jennifer: Sure.

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

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

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

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

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

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

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

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

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

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

Jennifer: To manage stress?

Steve: Yeah.

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

Steve: Like a material possession?

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

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

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

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

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

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

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

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

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

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

Jennifer: Yeah a guy selling handkerchiefs.

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

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

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

Jennifer: You had to start over.

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

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

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

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

Jennifer: Sure.

Steve: Well one…

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Steve: I mean I enjoy our vacations.

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

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

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

Steve: What else do you read besides romance novels?

Jennifer: Suspense.

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

Jennifer: Fiction, yeah definitely fiction.

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

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

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

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

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

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

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

Jennifer: I think it’s ego, right?

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

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

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

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

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

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

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

Steve: Sure.

Jennifer: And also we get some really nice testimonials.

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

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

Steve: Yeah. So at Sellers Summit we…

Jennifer: Maybe you should explain what a mastermind is.

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

Jennifer: I know but…

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

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

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

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

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

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

Jennifer: And which conferences do you go to?

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

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

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

Jennifer: We end to fight.

Steve: Yeah. All right, take care.

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

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

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

And finally, Klaviyo is my email marketing platform of choice for e-commerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, all these sequences that will make you money on autopilot. So head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, once again, that’s mywifequitherjob.com/K-L-A-V-I-Y-O. I talk about how I use these tools in my blog and if you’re interested in starting your own e-commerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send the course right away. Thanks for listening.

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

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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!

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

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

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

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

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

What You’ll Learn

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

Other Resources And Books

Sponsors

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

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

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

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

Transcript

You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners, and dig deep into what strategies they use to grow their businesses. Now today I’m happy to have Nathan Resnick of Sourcify with me on the show, and we’re going to talk about the ins and outs of products sourcing from China.

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

There are a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in e-commerce. Right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prizes in our store. And customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%.

There are other things that you can do too. For example, let’s say you offer free shipping for orders over $100, well you can tell Privy to flash a pop up when the customer has $90 in their shopping cart to urge them to insert one more item. Bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve, and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ For 15% off. Once again that’s P-R-I-V-Y.com/Steve.

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

They can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, piece of cake, and there is full revenue tracking on every single email.

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

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

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

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

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

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

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

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

Steve: Sure.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Steve: Sure, yeah.

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

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

And then the sourcing agents, and export agents and even trading companies, those three categories of companies are basically just taking their margin on top of the actual unit cost that a factory gives them. And the value add that they provide is kind of being a liaison and having those English speaking sales reps.

Steve: So let’s say you wanted to make like your own mold or something and you went to a trading company, will then the trading company do all of the go between, between the design and the factory?

Nathan: They would act as a liaison. So I mean there are plenty of factories that don’t have English speaking sales reps. And so that’s where a trading company could come in to help and all that kind of that process to actually get that mold created and then go through that whole design phase.

Steve: What is your opinion on like going to like the trade shows then like the Canton Fair or Global Sources?

Nathan: Oh it’s valuable. I mean the value that you get from most trade shows is meeting these people face to face and like at these booths, I mean it’s much easier to tell if they are actual factory or trading company once you kind of dive into a conversation, or you just tell from the products that are in their booths. And in Asia business revolves around relationships, it’s very important to make that face to face relationship. And if you start doing business with a factory and you start reordering, if you actually make that trip over and go to their facility, they’ll even deepen that relationship.

I mean it’s crazy because when we’re doing factory tours, most tours are going to last two to three hours, and that’s just because it’s a whole process. It’s all about you know in China the term is [inaudible 00:12:17] and it’s just about bringing that synergy together from a business relationship standpoint in terms of look, like we don’t want the business to be transactional, how it is a lot of times in the Western world, we want to dive into the relationship of actually conducting a long term business and finding synergies across the board and hoping we can grow together.

And that’s even more important if you’re working with smaller middle tier factories. And even the big factories they understand like if it’s a small company that devotes time with them and puts in an effort to build a relationship, they could be more willing to work at lower not use lower minimum order quantities.

Steve: I know that most of my factories that I use for our store, they actually aren’t found on Alibaba, and is the reason for that that because there’s just too much riffraff on Alibaba and Global Sources?

Nathan: So here is the thing that a lot of people don’t actually understand and they don’t even think about is think about the lead flow from a factory standpoint. Right now for most factories and their clients there’s too many lead flows, and that’s open databases like Alibaba and Global Sources or trade shows. Both lead sources provide pretty low quality leads.

If you look at Alibaba and analyze the lead flow that they provide for factories, let’s say you get 50 inbound requests from Alibaba as a factory each month, less than 1% of those inbound requests will actually convert into a production run. And the reason being is people just go on there a lot of times and spam different factories and say, hey, I’m interested in purchasing this and just kind of message the same thing across the board to a lot of different factories, and that’s the process that those open databases just require you to have.

So from a factory’s standpoint, they spend so much time and money qualifying leads. And that’s a whole dynamic, and a lot of times people say, you know what, didn’t the factory respond. Well it’s probably because they got ten other messages that day that all sounded similar and they weren’t sure if you were legit or not. I mean that’s the whole dynamic behind a factory lead flow. On the trade show side to, it’s nice to meet someone face to face, but at the end the day everyone has this little notebooks where they staple your business card in and write down a few notes on you.

And a lot of times at trade shows they’re usually pretty good at following up, but the dynamic there is it still depends on the presentation that you have with the factory especially when you’re on their booth. I mean after a long day at a major trade show like the Canton Fair, if it’s towards the end of the day and you’re a bit sluggish, I mean if you aren’t excited about producing these products, how do you think a sales rep that’s not getting paid that well is going to feel.

Steve: So based on what you just said, how would you stand out if you were to send an email to someone on Alibaba, like how would you let them know that you’re serious?

Nathan: That’s a great question. I think first and foremost you have to show buyers intent, and to do that you want to ask a few main questions and tell them about yourself like if you have a online store, I mean what’s your real risk in let’s say it’s like IP protected product of them necessarily copying it. I mean if you can actually showcase like, look, this is what we’ve done. This is our store, this is the growth we’ve had, these are the products we need to produce, your response rate is going to be much higher because they can actually see your assets and that’s the whole dynamic.

Or even if you have like easily searchable online presence, like send them your LinkedIn, or I won’t say Facebook, you can’t use Facebook over there, but LinkedIn is definitely doable. And so showcase to them that you’re actually looking to buy. And then don’t necessarily bombard them with questions right off the bat. I mean obviously you want to ask them a few key questions like, who they potentially produce for, what are their main markets, maybe about their MOQs. But don’t just bombard them with questions right off the bat because for them to reply back a decent answer, it’s obvious it’s going to take them quite some time.

And even on their end a lot of times the English level of these sales reps varies quite a bit pretty dramatically. But I think the whole dynamic there is like make it straightforward, easy to comprehend and make it your miracle words 1, 2, 3, 4, 5 type of order of questions.

Steve: I know you run Sourcify and presumably you have this huge database of vetted suppliers, right? But you’ve only run an e-commerce store selling watches and quirks and so I’m just kind of curious how you actually vet a factory unless you actually use them, right?

Nathan: Right exactly. So our dynamic to the factories basically stems from through connections, through the industry, trade shows and then verifying business license and certificates. So we work directly with like some bureaus or provinces to actually see their business licenses and then we basically go through like ISO certificates and RAP certificates to see what they’re qualified to produce from what certificates they have.

And obviously the best way to validate and verify a factory is working with them a few times and then confirming that they have quality over time and the communication holds up over time. And that’s something that we’re growing with. As we grow the factory relationships that we have become stronger and stronger.

Steve: So what are some questions that you ask to vet a factory, or what are some things that you’re looking for?

Nathan: Totally, I mean number one would be past clients, main market, main product categories, business licenses, certificates like ISO is a pretty standard one. And then also just we usually ask for a few different touch points at the factory. So number one you never just want to have one mode of communication, you want to be able to communicate with them on everything from email, WeChat, Skype, WhatsApp. WhatsApp actually just got – was banned.

Steve: Yeah they just got banned yeah.

Nathan: Yeah exactly, so heads up on that. If you use WhatsApp, try to switch over to WeChat. And then in terms of the actual process like most people that you deal with through like a request on Alibaba is going to be a sales rep. So try to get more to a managerial person at the factory and sometimes even the boss, because when we tell factory bosses what we’re doing at Sourcify, they get excited as well because number one, it’s free high quality lead flow for them, and number two it helps to streamline that process of a lot of the back and forth that happens when you go through a platform like Alibaba or even a trade show.

If you’re managing your product, your production process over e-mail or over WeChat, there’s a lot of back and forth and to be honest we do have quite a few entrepreneurs that aren’t really that organized. And so having some sort of project management tool on both sides of the table to help actually track that process is beneficial on both sides of the table.

Steve: I guess let me ask this in a different way, what are some red flags when you’re dealing with a factory?

Nathan: Right I mean red flags would be obviously lacking communication, I mean language barriers is always going to be there, but if the language barrier is too deep, it’s not a factory we’re going to want to deal with just because the communication with our clients isn’t going to work out. And then just background checks like business licenses like sometimes if they’re really just registered as a trading company or if they’re producing across product categories.

It’s a balance. I mean to be honest most of the like I’d say around 85, 90% of the companies that you find on some of these online databases aren’t really actual factories, and sometimes going through a trading company if you’re producing at lower MOQs is worthwhile because then you can produce at these lower order quantities, and for a trading company you might not necessarily be the smallest fish in their pond. But it’s always a dynamic and I think that really at the end of the day it’s going to come down to the relationship that you’re able to establish between your company and the factory or your manufacturing partner.

Steve: So based on what you said, would you recommend like using a tool like Panjiva or Import Genius and find out who your competitors are getting their stuff from if it’s good quality?

Nathan: Yeah you could, I mean those are great tools. A lot of times those are produced for — a lot of people use them more at scale. If you really, really want to find out, it could be a good option, but at the same time you just have to be careful in terms of like who they’re actually importing through, or sometimes if they’re working through like an importation agent, the factory name might not necessarily be read on the label.

Steve: Okay and in terms of just like maybe Sourcify, are you finding suppliers outside of China, or are most of the suppliers still within China?

Nathan: I mean the trend really this is something that I think is really shifting more and more. Bigger companies are moving outside of China. It’s just a matter of fact that the labor costs in countries like India and Pakistan are cheaper. I mean the average factory worker in China is going to make about 400 to 600 a month whereas in Pakistan sometimes it’s like around 200, even as low as 180 a month. It sounds crazy, but that’s the going rate of labor over there and it’s just the dynamic of the world economy out here.

And so I think really in terms of addressing your question, we work with factories everywhere from Thailand, India, Pakistan, Mexico. We work with like the Economic Development Council down there to work with – we work with about 40 factories down there. And it’s a dynamic in each country. I mean the main differences that I see between countries like India and Pakistan compared to China is that China, most of the factories are a lot more systemized, whereas in India and Pakistan a lot of it is very labor driven in terms of like they don’t necessarily have much automation behind their products.

So if you need to produce 100,000 shirts with the same stitch, you’re probably going to have a higher likelihood of keeping that quality up going through a factory that has some automation in China compared to a factory in India that is using a lot of manual labor.

Steve: Okay, and then what is like an easy way to find those factories that are in other countries? Do they go to the fair or are they on Alibaba?

Nathan: So they do have some at the fair. They do have international sections at different trade shows like the Canton Fair or even sourcing direct at AFC market, we’d get a few international factories. But there are a few on Alibaba. There isn’t really — it’s surprising there really isn’t a main go to online database for these different countries like Alibaba set up. And so really the dynamic like at least for what would at Sourcify, that dynamic between us and a lot of those factories in those countries is we basically hire like a freelance factory manager to manage those relationships and build those relationships.

Right now we have a freelancer in India and a freelancer in Pakistan that’s helping us dive into those markets because the barriers are still really big to those countries. But from what we’ve seen actually, the MOQs and costs in some of these countries like Pakistan, we’ve been doing some athletic apparel there is actually cheaper than China.

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So let’s switch gears a little bit, and I want to talk about your Conor McGregor suit story because it’s really interesting and it really caught my eye as soon I saw it. And from what I read, you got your first sample of the suit among other things like a wallet and some other things within ten days, is that right?

Nathan: Yeah that’s correct.

Steve: Okay, so tell me how that’s possible, and then just kind of walk me through your process.

Nathan: Totally yeah, that was honestly probably the most fun project we’ve done this year. And basically the way it went down for anyone that hasn’t seen or heard about the Conor McGregor suits, you wore a pinstriped suit that had FU letters going down on all sides of it. And my team saw that the night he wore to the press conference, the next morning it was all over social media, all over the biggest media outlets. And we said wow, let’s manufacture this, let’s showcase our ability to manufacture this faster than anyone else because even the original clothing supplier was saying it’s going to take them 16 to 20 weeks to actually produce those suits.

And so what we did was we already had this suit factory set up and we’ve produced suits before. Hit up three or four of the suit factories we work with and said, hey, we’re going to start as fast as possible, here’s the first of the sew.

Steve: How did you find those original suit factories in the first place?

Nathan: That was just through our own network at Sourcify. So that’s kind of showcasing just the ability to move fast in terms of, look if we went through online database it would be a lot of back and forth to win potential factories we wanted to work with. So we already had the factory relationships lined up, and so it was just a matter of hitting them up and saying, look, we want to manufacture this, let’s get a sample as fast we can. And so we did wallets, ties and the suit. The wallet and ties actually came in six days, like printed ties these ties are incredible, and they’re actually pretty nice, and the FU knocking down the front and what not.

Steve: So can we talk about the process on the suit, like the suit I imagine, do you need a pattern, or did you just take one of their off the shelf suits?

Nathan: Totally, so it’s always — whenever you go to produce a product, you learn so much about the product. And so with suits there’s so many different variations. The fabric and all this was done remotely like literally in a day. Our factory sent over fabric options like just through WeChat and email. We picked a fabric that looks similar to the suit that Conor wore.

Steve: But you didn’t have Conor’s suit in your hand either, right?

Nathan: Right, of course, and it was all through just online looking at images and saying, look, does this fabric look the same. And it’s not something you can do with all products; obviously sometimes you want to have the fabric in hand. Like with athletic apparel for example there’s a lot of fabric weights that you can deal with or even just in apparel in general. But with suits and the lettering, the lettering was actually the hardest part, because we had to space out each and every letter.

And so what ended up happening was like we just printed different spacing on a piece of paper and said, hey, like does this look like pretty good spacing, what size are these letters? And it’s literally spaced out to the exact millimeter, and so the spacing has to be spot on. And with actually suit production especially when printing on fabric, the factories first send it to the printing factory that print on the fabric, they then go ahead and have to cut and sew the sample to our specifications.

I actually got the suit spec’d out to fit me, so I wore on a fight night which was pretty fun. But it was a whole dynamic and that’s the whole process you have to go through. But literally if you have trust in the factories you work with, like that first day or I guess it was night because here in San Diego our night time is day time in China. We paid for the samples and the samples — I think I wrote an article the samples were like I want to say around $100 or so including shipping. And we paid for all that before we even had all the specs ready because we knew that we could trust these factories, and we knew that we needed to do this fast.

And so ten days later, the suit and ties and wallets all showed up, did a little photo shoot, and we launched FUsuits.com, and that went pretty viral. I mean to get that going viral, we partnered up with a digital marketing agency, and I can dive in the story more if…

Steve: Actually, I’m curious about the back and forth to get the suits made. Can you just kind of describe what you did? Did you send them a photo of the suit in the beginning?

Nathan: Yeah literally. So photos of the suit and then they said, well, what’s the fabric, what’s the spacing of the letters, and then we were like what’s the trim, what’s the cut, all those certain details.

Steve: But did you know all those terms, did you know all the terminology?

Nathan: So what I literally did was I went to a custom tailor here in San Diego. I said, hey, I need every little measurement you can spec out and measure me. And I did that, that same day, the day after we saw the press conference. I went to a suit tailor here in San Diego, got measured, sent those measurements to the factories we were working with in China. They confirmed the measurements, and then next step was spacing out the letters and picking the fabric color.

Steve: Okay so they already have like a suit design in mind, right?

Nathan: Right.

Steve: Okay. And so it was just a standard suit it sounds like, and then you just had to pick the fabric and then the design that went on the suit, right?

Nathan: Yeah I mean so here’s the thing just briefly touching about the relationship that you can have with these factories. A lot of people especially if you’re dealing with a factory that handles this product a lot, they know the specific Asians that they need to produce your product. Like if you’re going to produce backpacks or whatever maybe, they know all the material options, they’ll know what design items you may want on your backpack, what kind of zippers you might want to have. They’ll ask you.

If they’re a good factory, they’ll ask you those questions. They’ll ask you like, hey, what about this type of zipper, or this pocket you forgot about. If they’re really thinking about the customers they’ll ask you that. And so we’re fortunate enough to work with factories that ask those questions, that want to develop great products as well.

Steve: Okay, can you describe some of the choices that you had to make, or the tradeoffs? Like was cost — cost was obviously a factor, right?

Nathan: Honestly the margins on these suits were great. Like literary I think our unit costs on these would have been about $30 or so or $40 per suit, and we were retailing the full suit for about 400 and that was — I mean the original tailor was selling them for like six or $7,000. And then the color he was doing at I mean it was wool fabric, we had a back with a double open, we had two pockets on the sleeve, two buttons. Literally whenever you produce a product, you learn so much about different options that you can incorporate into the product.

Steve: So you got your sample back. Was the sample fine when you got it or?

Nathan: So what we always recommend is usually if you need to move fast, you’re going to want to buy samples from two to three factories. So we bought two different samples. One of the suits, the lettering was a bit too — the letters were just too big was what, they didn’t space it correctly, and we wanted to test that. That was something we said, hey, let’s send one space into one factory, another space into another.

So one of the samples came in, the spacing was too big, the other one was right on point. I mean I’ll share a photo with you of the suit I wore out on the fight night and it was incredible.

Steve: Okay so you got one sample that was good like just right off the bat, right?

Nathan: Mm-hmm.

Steve: And presumably it fit you and all that. What were some of the logistics that — so you paid $100 per sample?

Nathan: Yeah.

Steve: Okay. So what are the logistics then in terms of getting orders? Did you have to preorder a bunch of suits or did you take orders first and then produce them?

Nathan: So that was the biggest dynamic. Once we got the suit in I was fortunate enough to be connected to a few different photographers here in San Diego. I said, hey, I really need these products shot like right now today like you’re going to do those shoots tonight or whatnot, made it happen, got products images up. And that was the biggest dynamic is we launched the site promising people to fulfill the orders before the fight. And so it was a race against time, if you wanted to fulfill these orders we had to do it fast.

The dynamic of what ended up happening is that first week at sales when launched fusuits.com, did $23,000 in sales. And that was primarily — I mean we had a digital marketing partner that was setting up the site and handling the assets and was going to run ads, but we landed on high [inaudible 00:33:09] to slay like a lot of big media outlets driving a lot of good traffic to our site. And that’s what primarily drove a lot of those sales. But as we grew, the marketing guys made a slip up and image of Connor McGregor and he’s got a great legal team to operate that way.

But we used the image of Conor McGregor and the name [inaudible 00:33:33] is and they claimed rights to that and basically sent us a cease and desist letter within a week of our e-commerce store being up.

Steve: How many suits is $23,000?

Nathan: 400 divided by 23,000.

Nathan: Okay, so it wasn’t a ton of suits, but I mean that’s the thing about selling a higher price ticket item is you don’t necessary have to sell a ton of units to make a lot of money.

Steve: So did you collect the money first and then produce them?

Nathan: So what happened is the cease and desist. We didn’t even go on to production, we just had the sample, and then we had the cease and desist. It was like look, if you ship we’re probably going to sue you guys, or you can just refund them and take down the site. So that’s what ended up happening, but even then we had the production lined up. We’re fortunate enough right now to have the cash flow to do kind of case studies like just to showcase our speed of manufacturing.

And we’ve done other case studies like we are – I don’t know if you’ve seen the [dad bought bags] [ph] that have been going viral. We were working with the original creator of that, but so many people knocked that off now that his market share has decreased dramatically because he didn’t pull the trigger fast enough. But it’s really a lot of times if you’re looking to capture viral trends, you have to move fast. And if you’re going through open database or you’re spending time trying to find a factory to work with or don’t have trust in your manufacturing partner, your ability to move fast just isn’t there.

Steve: So after you got your first sample, that factory was basically ready to go with production?

Nathan: Yeah, we would have had — I mean we could have had 500 suits done in two weeks basically which is it’s not a ton, but 500 times $400, I mean I don’t know how much money that is in sales, but it’s now decent money for two weeks.

Steve: So would you have gotten inspection then also or did you trust this factory enough, I’m just trying to get an idea?

Nathan: Yeah that’s the thing, when we work with factories because we’re sending them in the flow, we put pressure on them and say, look, if communication drops off, if the quality drops off, we’re going to cut off — we’re going to cut you off from our list of factories that we work with pretty much. And so that’s the whole dynamic there is we put a lot of pressure into our relationship.

And I don’t know if pressure is the right word, but we try to rule our relationship around this dynamic that we create by sending them lead flow, and that’s the whole dynamic. We’ve had — I’ll be honest we’ve had — we only had one factory that we really had to cut out and that’s because the communication was too iffy and the sample that they had produced for a client was tablecloth actually, some really cool tablecloth, but the communication was just wasn’t there and that’s huge. If you want to connect with your factory like obviously they have to respond back especially if you’re trying to go on a production run.

Steve: It’s actually a shame that you never shipped because I had a whole slew of other questions, like suits have sizing issues, right?

Nathan: Yeah.

Steve: And I was kind of curious how you were going to handle the custom sizing involved in selling suits of guys of different sizes.

Nathan: That was the hardest part of the biggest question is like how do we actually size this out. And what we were going to do is just group it into small, medium, large, extra large and kind of just shipped that. I mean it wasn’t necessarily like a long term e-commerce play.

Steve: Yeah of course.

Nathan: It was a short term catching a viral trend. And so we weren’t necessarily — we weren’t thinking too much about the long-term customer relationship that we have with the e-commerce store. It was a bit of like just kind of comparing it to a drop shipping model where you have so many like turn and burn entrepreneurs that will drop ship products that take three weeks for the products to arrive to a customer, and they don’t have any long-term relationship with those customers. It was more of that model, but I think really the scalability for any e-commerce store is in branding, in private labeling and creating custom products.

Steve: So your plan was to get the orders ahead of time, so you knew what sizes that you needed and then place the order and then have the factory make it?

Nathan: Exactly, exactly and we didn’t even — we kept all the money in Stripe, I think is what we’re using. Because that was another thing too, we decided not to use Shopify, we used Woo Commerce because Shopify sometimes if they see stores that are infringing on others IP wishes like a potential risk that obviously came to play in this case study, Shopify will take down a store if it’s infringing on IP, whereas Woo Commerce usually just lets it fly.

Steve: Okay. I had a question because I get this question a lot in terms of dealing with plastic products. In your experience when designing plastic products, how much does it cost, and what’s kind of like your process? Do you need like a CAD designer, or what are the resources you need?

Nathan: Yeah I mean classic products can mean a lot, like this pretty general kind of product category, but I would say usually first dynamic is trying to find a factory that’s produced something similar to what you are looking to make. And that’s the whole process. If you’re looking through like an open database, obviously you have to spend some time searching through those different manufacturing partners.

But if you’re trying to create a custom product and really go through that route of making your own mold, most of the time you’re going to want your own CADs done, and honesty can get CADs done through like the outsourcers and freelancers abroad for a pretty effective rate. And then molds like it obviously depends on the product, but I mean you can buy molds for the low like just a few thousand dollars or even less than that now. I mean especially if you can find a factory where you just need to modify a mold, then that’s really not that much work; it doesn’t have to be that expensive.

Steve: Where did you find your CAD people in general, like what service did you use?

Nathan: I used Upwork, it used to be Elance, and that was my first time. That was like seven years ago when I was trying to bring this product to life. And I mean when I started out I didn’t even know what a CAD was. Luckily my dad is an engineer so he kind of explained what it was to me, and I just went through the process. And literally what I did like this is what I think you can do especially if you don’t have like a designer or product background. I say, look, see what products you like on the market, and then take different aspects of those products and apply it to a certain product to make it better.

And that I think is really – everyone is always trying to improve on different products, and you don’t necessarily need to create completely custom products. You can apply something that’s working on a different product to a new dynamic. Like for example with our watch straps that we invented, there was already those belt buckles that had a zip tie function. And some people say well you just took that zip tie function on the belt and put it on a watch strap, and you see a lot of brands that are doing that nowadays where they take aesthetic or a function that works on a product and apply it somewhere else.

Steve: And I guess the same goes with like clothing and textiles as well, right? You don’t have to actually have a pattern design per se, you can probably just take something that already exists and then a manufacturer maybe modify in some way, like get a pocket or a seam or something like that?

Nathan: Yeah totally and especially even with the rise of like more organic or sustainable products like bamboo or coal, all those different materials or wood, you see so many different brands that are sprouting out in all sorts of product categories because they see this trend towards sustainable products that are potentially selling better. And so they say, hey, if someone is creating wooden watches, why don’t I create wooden speakers, wooden hats and like we’ll have brands and stuff like that.

So it’s a whole dynamic, and I think that it opens a door for some entrepreneurs. But at the end of the day with the brand, I think it’s really the aesthetic that you create and especially on the marketing side there’s so much going on and in the digital marketing world right now that I mean I think you really need to start by honing in on a channel, optimizing that one channel and then figuring out other ways you want to grow.

You see some entrepreneurs that start off saying, oh I want to sell across channels on Amazon, Shopify, eBay, all these different channels, and like they don’t even know how to scale at one channel and they already started trying to scale five. It’s like look, first crush one channel, grow on that channel and then start expanding, then start figuring out other ways to grow.

And I think that’s partially because you have so many resources available where you can now sell effectively across channels, but also at the end of the day it’s partially the kind of maybe short sighted nature of some e-commerce entrepreneurs who really think they can really dive deep instead of — or I guess take a wider approach instead of diving deep on one platform.

Steve: I’m just curious, how do you prevent your manufacturers from selling your design to other people, or kind of violating copyright?

Nathan: Totally, I mean the IP question is always in play and we get that a lot especially with more customer private label products. I’d say first and foremost it goes back to the relationship that we have with these factories. We put contracts in place, but to be honest contracts number one are you going to really have the money to go fight a contract in China and is it even going to be worth it? And number two it’s just a lot of time that can be worth your time to go through that legal battle.

Ad so it’s all about the relationship on that end. And at the same time too like with branding, if you’re creating a new line of a consumer product good like let’s say socks or hats or whatever product it may be, at the end the day what’s going to sell your product is the brand. I mean like obviously you want to create a high quality product, but at the end of the day until someone actually touches and feels your product, they’re going to be sold especially online through the brand that you create.

Steve: Okay, I mean even if you design something completely unique, there’s really in theory nothing stopping a manufacturer from modifying a slight bit and selling to someone else, right?

Nathan: Yeah I mean I’ll touch on — I was looking into the story of the TRX straps, the workouts straps that are just like ropes, that I mean that founder literally spent I think I was listening to a podcast where he said he spent like five plus, five million dollars basically fighting a legal battle, and he wasn’t even fighting it necessarily with the direct factories overseas, he was fighting it with a trading company that was selling his products as a knock off brand on Amazon.

And what the lawsuit ended up happening is he worn it, but all that meant was that there was people’s products got taken off Amazon, and so he could now take over that online channel which is obviously huge and a big win. But at the end of the day I mean it’s always going to be a balance trading, you need products and there’s some stuff you can do with the Customs and Border Protection in terms of having them help you protect the IP around products that are being imported that are infringing on your trademark. But at the end of the day I mean sometimes you can work through these e-commerce platforms and have those stores taken down which is a more effective route.

Steve: Are you seeing more and more like trading companies and manufacturers selling directly on Amazon these days?

Nathan: One hundred percent, I mean that’s one of the biggest dynamics that I see in Asia right now is factories, they’re anxious to see what a product that they’re producing is being sold for online now, that’s a pretty simple Google search or buy new search in their case. And so they’re realizing that they aren’t making most of the margin, obviously the brand or company that is selling is making most of margin. And so if they’re able to sell direct, they are obviously making a lot more money.

But the hard part with that is number one; to be honest most factories in Asia are just bad at producing brands and in making cool products. And number two they just don’t understand the logistics of importing, and sometimes just don’t want to invest in it, just not their bread and butter.

Steve: So it just makes basically the bread even more important, because these Chinese factories are just throwing up their generic products on there?

Nathan: Right without a doubt. I mean that’s the thing, like you see what happened with recently there was fidget spinners, I mean it got crazy competitive and was just because everyone was producing those and trying to sell those. And it’s just the whole dynamic behind I think the manufacturing landscape right now is if you really want to create long-term protection around your product, you’re going to be selling the brand. I mean you can have IP around your product, but if you don’t have the money to protect that IP it’s not that valuable.

Steve: Right. All Nathan, we’ve been chatting for quite a while, I did want to get an opportunity to talk about Sourcify a bit. So tell us about your service, and what’s your secret source?

Nathan: Totally, so what we do is basic connect a company to the right factory and walk them through production process. This makes it easy for anyone to bring a product to life and cut manufacturing costs. I’d say our secret sauce is the ability to produce faster than anyone else, and more effectively. And the way it works is someone just submits a product spec on a website, that product’s specs get sent out to factories that we’ve pre-vetted.

Steve: How complicated does the product spec need to be?

Nathan: It depends on the product. For I guess simpler products like jackets or shoes like a tech pack or something similar works, or you can literally just send images of similar products and say, hey, I just want to put my brand on a product that looks like that. I mean we’ll literally just send it out to factories that we pre-vetted that produce those pretty much same products. So it can be simple in that regard.

Obviously if it’s a product that involves a mold, you’re going to need a CAD or at least have some understanding of the technicalities of that mold. And from there, we send out the products specs to factors we’ve pre-vetted, those factories send back price quotes, you get shown those price quotes. You can communicate with — usually we send in like three to five price quotes that we showcase to you. You can see those price quotes, choose a factory to work with, get a sample made, go through a production run.

And what’s really cool about our platform actually, by the end of this month it will be able to handle the payments between a company and a factory, and we send wire transfers through block chain. So we beat the bank straight and send a wire transfer in six hours compared to two to three days. So it’s all encompassing in terms of the importation of the products, we help you understand the compliance standards of your product and then also work with 3PLs and freight forwarders to optimize that whole side of the logistics.

Steve: So it’s like a one stop shop essentially?

Nathan: Exactly, I mean our goal is to just make it easy to bring a product to life. I mean the struggle that I went through seven years to bring my first product to life was ridiculous. And after bringing so many products to life and realizing what was out there, I figured there must be a better way, and that’s really why I started Sourcify.

Steve: How do you guys get paid, is it a monthly fee or an upfront fee or do you take like a cut of what the cost is?

Nathan: Yeah so right now it costs — we’re switching revenue models actually like literally next week, but basically what it’s going to be is it’s going to charge 1.99 to submit a project, and then we take a commission, it’s a processing fee basically between you and the company when you pay the factory to go into production.

Steve: And then once there’s already business done with that factory, do you guys kind of step out of the way at that point?

Nathan: I mean it can be all between you and the factory. Our payment processing research will always be there and we plug into different messaging platforms like WeChat as well to kind of streamline and optimize communication.

Steve: And when you say vet the factory, it means you’ve checked all the certifications and that sort of thing, right?

Nathan: Exactly.

Steve: Okay, well Nathan it sounds like a really interesting service. I appreciate you coming on the show, and telling your story about the Conor McGregor suit which was really random and answering all these various product sourcing questions regarding factories in China.

Nathan: Totally my pleasure, thank you so much for having me.

Steve: Yeah man, thanks for coming on.

Hope you enjoyed that episode. Nathan is a hustler and he’s now my go to guy when it comes to product sourcing from Asia, and in fact he’s going to be speaking at my conference in May. For more information about this episode, go to mywifequitherjob.com/episode199.

And once again I want to thank Klaviyo for sponsoring this episode. Klaviyo is my email marketing platform of choice for ecommerce merchants, and you can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all these sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

I also want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. I like Privy because it’s so powerful and you can basically trigger custom pop ups for any primer that is closely tied to your e-commerce store. If you want to give it a try, it is free. So head on over to P-R-I-V-Y.com/Steve, once again that’s P-R-I-V-Y.com/Steve.

And finally I want to thank Payability. If you’re looking to take back control of your cash flow and scale your Amazon business fast, then sign up for Payability, and say goodbye to cash flow issues and stock outs. With daily payments, you can speed up your supply chain, buy inventory at optimal times, and stay in the buy box. The more control you have over your cash flow, the more buying power you will have. Visit Go.payability.com/Steve to get started, and cash in on a $200 credit just signing up. Once again that’s Go.payability.com/Steve.

Now, I talk about how I use all these tools on my blog, and if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email, and I’ll send you the course right away, thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.mywifequitherjob.com.

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198: The Software Tools I Use To Run My 7 Figure Blog With Steve Chou

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198: The Software Tools I Use To Run My 7 Figure Blog

Most people are amazed that I can run a 7 figure blog without having any employees and only working 20 hours per week. The truth is that I rely heavily on software and automation to accomplish most of my tasks.

So today, I’m going to go over every single piece of software I’m currently using to run MyWifeQuitHerjob.com.

In addition, I’ll talk about the pros and cons between the different options.

What You’ll Learn

  • Which tools I use for hosting
  • Which tools I use for marketing
  • Which tools I use for email
  • Which tools I use for social media marketing

Other Resources And Books

Sponsors

Payability.com – A financing company that provides high growth Amazon sellers with daily payments. With Payability, you can say goodbye to cash flow issues and stockouts and hello to scalability and profits. Click here and receive a $200 credit upon signup.
Payability Right now, Payability is giving away $1000 in gift cards to three lucky Amazon sellers. Click here to enter The Ultimate Amazon Reseller Giveaway today. Rules apply. Giveaway ends on February 28, 2018.

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
Klaviyo

Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
Privy

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners, and delve deeply into what strategies are working and what strategies are not. Now today I’m going to be doing another solo episode, but this time I’m going to talk about all the tools that I use to run my seven figure blog and my personal experiences with many different software tools.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Always excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 20% of my revenues. Now, Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, piece of cake, and there is full revenue tracking on every single email.

Now Klaviyo is the most powerful email platform that I’ve ever used and you can try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again that’s, mywifequitherjob.com/K-L-A-V-I-Y-O.

Now I also want to thank Payability for being a sponsor of the show. If you run a successful e-commerce business like I do, you probably know that the worst thing that can happen to you is to run out of stock. Now my wife and I regularly import container loads of merchandise from China, and having the cash flow to do so is very important.

Right now Amazon pays you every couple of weeks, but imagine what you could do if you got paid on a daily basis. My friends over at Payability make that possible for thousands of Amazon sellers. Right now high growth Amazon sellers are using the extra cash flow from Payability to buy more inventory, stay in the buy box, and keep up with demand.

Here is how it works. Every single business day, Payability gives sellers 80% of their Amazon earnings from the prior day for a 2% flat fee on gross sales. The remaining 20% is reserved to cover returns and charge backs, and is released to you on Amazon’s regular 14 day schedule. Your money isn’t doing anything for you if it’s sitting with Amazon, so why not get it faster.

Sign up now and put your earnings to work today. Go to Go.payability.com/Steve to get started, and receive a $200 credit on sign up. Once again that’s Go.payability.com/Steve and get a free $200 credit upon sign up. Now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit her Job Podcast. In a previous episode, I discussed all the tools that I used to run my seven figure e-commerce store at bumblebeeLinens.com. So today I’m going to do another solo episode to talk about the tools that I use to run my other seven figure business, my blog at Mywifequitherjob.com.

And to be clear, when I talk about my blog, I’m lumping a bunch of things together which include my online training course at profitableonlinestore.com as well as my podcast, because they’re all under the same LLC. And what is cool about Mywifequitherjob.com is that it’s mostly a one man show. I basically have one person on my team that edits my podcasts, but that’s it, and I spend roughly 15 to 20 per week to run it.

And in fact that’s what I really love about blogging. Blogging scales incredibly well and there are practically no costs of goods. Now of course it did take me eight years to get to this point, but now I’m finally able to enjoy the fruits of my blogging labor. In any case without further ado, here are the tools that I use to run Mywifequitherjob.com.

So the first question I always get asked is what platform I’m on and where I host my blog. Now I’m on WordPress which is pretty much a no brainer today. WordPress is a CMS that pretty much powers over 30% of the web, very feature rich, it’s got a huge developer community making plug-ins, and all those things put together make it a no brainer as your CMS platform.

Now in terms of hosting, I’ve actually chosen to self-host my blog on a web host called Storm on Demand. Now it’s the same host that I use for my online store. I’m paying about $100 a month to host five websites which is super cheap. And the up times have been fantastic. I actually pay a little bit extra for a fully managed service over at Storm, which means that they handle all the server issues for me when there’s any sort of trouble.

So let’s say I need a new PHP package installed, I can just send them an email and they’ll go ahead and do it. If there’s problems with the server or something has gone down, all I have to do is send them an email and they’ll fix it. I’ve actually had to use their service usually like once per year or so like when something goes wrong, but for the most part it’s been really smooth.

Now most of the bloggers that I know who are doing seven figures are actually on a service call WP Engine which is a fully hosted WordPress platform. And the reason why I don’t use WP Engine is because it’s a lot more expensive. I think right now, I’m paying 100 bucks a month for Storm. If I run WP Engine I’d be paying over $250 per month. But what’s nice about WP Engine is that they handle everything for you. So overall, if you don’t want to deal with anything technical about your blog, go with WP Engine, otherwise host it yourself on a host like Storm on Demand.

Now the second most often question I get asked is about my email marketing, and so first off I use a service called Drip. And e-mail is actually responsible for over 90% of the revenue from mywifequitherjob.com. So I thought I’d spend a little extra time just talking about email in general, because almost every week someone emails me asking me what I think about MailChimp versus AWeber versus ConvertKit versus Drip versus Klaviyo.

Now I’ve actually used or I’m using these services and I’ve used them for the past nine years, so I just want to give you a quick rundown of the differences in the context of email marketing for blogging only. And so let’s talk about MailChimp first. MailChimp is actually the email marketing service that most people start with because it is free for up to 2,000 subscribers. Now I want to preface this by saying that I have had just horrible experiences with MailChimp in the past, and I will never ever, ever use them or recommend them for anyone for anything mission critical.

Usually I try not to be negative about services, but this particular service just burned me twice during a critical period of my business career, and I thought I’d just tell you what happened. I remember for mywifequitherjob.com, I remember I was about to do a launch of a product, and then out of the blue they just decided to ban me. And they banned me out of the blue. I sent them e-mail for support to see what was going on because they didn’t even give me a reason. And they emailed me back 48 hours later telling me that the decision was final.

And so all of a sudden, I had this launch to do, and I had to scramble to switch providers and get everything together in a hurry because it just happened without any warning all the sudden. Now I was actually using MailChimp for Bumblebee Linens as well. And I remember during the holiday season once again I got banned out of the blue. I wasn’t sending any spam; these are all content that I was basically sending out.

We got banned during the holiday season, and once again we had to scramble to find another email provider over the holidays and we probably missed out on over maybe a week of sales while I was doing this transition, so we lost lots of money. Both of these bans from MailChimp happened at a very bad time. And here’s what I don’t like about them. They don’t offer you any support except for e-mail, you can’t get anyone on the phone, and it can take up to 48 hours before you even get a response.

And we got banned both those times, the decision was final and I was forced to find a new provider ASAP without any warning whatsoever. And just recently, a couple of weeks ago, one of the students in my class using MailChimp just got banned as well just before the holiday season. So MailChimp is great if you want something that’s free for up to 2,000 subscribers. But if you want to use e-mail marketing for anything mission critical, I would advise that you stick with another solution. This is just based on my experiences; your mileage is going to vary.

Now when I got banned from MailChimp, both times I went over to AWeber. AWeber is actually a provider that I use for over six years. I was very happy with them and I still recommend them to this day. Back when I started blogging in 2009, AWeber was actually the de facto standard. The only reason I started out with MailChimp is because it was free. Unfortunately in the past seven years with AWeber, they’ve been really slow to adopt new features. And overall they’ve kind of fallen behind over the years.

Now that being said, whenever I rate any sort of email marketing provider, the first thing I look at is deliverability. And AWeber has fantastic email deliverability. I run all of my email provider prospects through a tool called Glock Apps. Now if you’ve never heard of Glock Apps, Glock Apps is a tool that tells you what frequency your emails make it to the inbox and not to spam or the promotions folder.

So here’s how it works. Glock Apps gives you a series of email addresses that will be under like Gmail, Yahoo, Hotmail, the whole bunch of email providers. And then what you do, you send a broadcast to this list and then Glock Apps tells you what frequency of your e-mails actually make it into the inbox, and then they provide you suggestions on what to do in order to get into the inbox. So I basically run this test on every single email provider that I’m looking at trying, and based on the deliverability I make a decision. So that’s just one thing I factor in when deciding what to do.

Once again AWeber has awesome deliverability, and I actually never would have switched if I didn’t start running webinars and I needed some additional features. Basically what I wanted from AWeber was the ability for someone to click on a link within an e-mail and instantly be tagged and segmented for a webinar. But unfortunately AWeber didn’t offer that.

When I told them that I was thinking about switching, they basically promised me this feature within three months, and so I waited, and waited, and waited. And there are of course delays in the implementation and that sort of thing, and I really couldn’t wait, so I decided to switch over to ConvertKit. Now at the time, ConvertKit was actually slightly cheaper than AWeber, and they had this click to tag functionality, so I just decided to make the switch.

Now making the switch is actually a major pain in the butt, and so I really needed this feature and that’s why I decided to switch. And when I did make the switch to ConvertKit, I actually fell in love with their service as soon as I started using them. They have a very intuitive user interface. They have really easy to use tagging features that allow you to easily segment your list, and overall I think I was with them for almost two years. I was extremely happy with them, and then I started getting mass spam attacks to my list.

Basically what was happening was like hundreds of these bots were just filling out the forms on my website, and basically these were just — they weren’t humans so they were of no monetary value for me. And they were filling up my subscriber list, and I was paying for these subscribers. And at that point I remember going to double opt-in, but these bots were so smart that they actually have another bot waiting to actually click on the double opt-in link that most email providers provide. And as a result I was getting hundreds of these per day signing up for my email list.

And the major downside of ConvertKit for me was that I could not easily pull my list and detect these fake subscribers. The main problem for ConvertKit for me was they don’t give you an easy way to remove crappy subscribers from your list. They basically offer one segment that’s built in. It’s called cold subscribers. They can use to see if no one has opened or clicked an email within a certain period, but that is it. It’s unclear what that time segment is, and you can’t really do anything special in terms of locating these spammy subscribers.

So basically what happened was I was getting lots of spam subscribers, on the order of hundreds per day. There was no easy way for me to detect these people in ConvertKit, and as a result I was just paying all sorts of money for crappy subscribers. Now over time as I became a more advanced blogger and I needed more features, I also found that there are certain things about ConvertKit that I couldn’t do that I wanted to do as well.

So for example, let’s say if you want to create a segment based on people who’ve opened a particular email or visited a particular web page on your blog, or clicked on a link that was not tagged within an e-mail, well you can’t create a segment with ConvertKit that way. And the downside, the one downside of ConvertKit that I found was that you can only segment subscribers if you have everything nicely tagged and set up ahead of time. Like you can’t get a bunch of describers and then decide to segment them after the fact.

So for example, let’s say I want to send an email to people who have opened all of my emails in the last month, you can’t really do that in ConvertKit. You can’t send an email to everyone who has looked at a certain web page, there is no real way to determine how engaged a particular subscriber is on your list even if they are explicitly tagged. And you might think that some of this functionality isn’t that big of a deal, but let’s say you’re doing a launch and you want to get an idea of how good your product is to your most active subscribers.

So what I would do in this case is I would compile all the list of my best people and try to solicit their opinion from my most loyal fans. You can’t really do this in ConvertKit. There’s also a lack of many email personalization features. So let’s say I want to include a short blurb at the end of all my emails to remind subscribers when and where they signed up to reduce kind of this marked as spam complaints, you can’t really do that easily with ConvertKit.

But overall I was actually pretty happy with ConvertKit until I got these spam attacks. I was willing to live with some of these lack of features. But just over time at the rate of getting 100 spam subscribers a day, I just couldn’t really justify paying for all that money to ConvertKit when most of my subscribers were bad ones.

I just want to let you know that tickets for the 2018 Sellers Summit are on sale at sellerssummit.com. Now what is the Sellers Summit? It is the conference that I hold every year that specifically targets e-commerce entrepreneurs selling physical products online. And unlike other events that focus on inspirational stories and high level BS, mine is a curriculum based conference where you will leave with practical and actionable strategies specifically for an e-commerce business.

And in fact every speaker that I invite is deep in the trenches of their ecommerce business, entrepreneurs who are importing large quantities of physical goods, and not some high level guys who are overseeing their companies at 50,000 feet. The other thing I can assure you is that the Sellers Summit will be small and intimate. Last year we cut off ticket sales at around 100 people, so tickets will sell out quickly.

If you are an e-commerce entrepreneur making more than $250,000 or one million dollars per year, we are also offering an exclusive mastermind experience with other top sellers. Now the Sellers Summit is going to be held in Fort Lauderdale Florida from May 3rd to May 5th. And as I mentioned earlier, we’re almost sold out already, and I actually will be raising the ticket price from here on out every two weeks. That’s right; the ticket cost is going to go up every two weeks until the event. For more information, go to sellerssummit.com. Once again that’s sellerssummit.com, or just Google it, now back to the show.

So I decided to look around, to look at other email providers that could solve my problem, and ultimately Drip is actually the platform that I settled on. Basically in a nutshell they have all the great features of AWeber and ConvertKit put together. Drip allows you to track the actions of every single subscriber, and what’s cool about Drip is they assign everyone a lead score. Basically this lead score is a numerical value given to a person based on their activity.

So basically points are added based on every time someone opens an email, every time someone clicks a link, every time someone visits your website, every time someone downloads a lead magnet, and points are subtracted at a steady rate based on how long a user is inactive. As a result this lead score can tell you how active a particular subscriber is. And that’s just extremely powerful because you can easily segment who your best customers are and who your worst ones are.

So let’s say I want to run a quick test to my active readers, really easy. Let’s say I want to offer a special discount to my most loyal fans, that’s really easy to do on Drip, and that’s something that you can’t do on ConvertKit or AWeber. This lead score feature is also especially useful at screening out spam email subscribers. Because Drip allows me to track all of their activity, I can pretty much easily detect a spam subscriber based on certain rules that I’ve set up in Drip.

Now I don’t want to go into too much detail about the exact rules that I’ve set up, but let’s just say it’s really easy to spot a real human from a robot when you’re using Drip because they give you access to all these primers that are not available in other providers. So I’m using Drip for the blog, and one of the number one questions I got was, hey Steve isn’t Klaviyo a sponsor of your show, how come you’re not using Klaviyo for your blog?

And I just thought I’d clarify this. I use Klaviyo for my e-commerce store, and I use Drip for my blog. Now why do I use a different service for email versus e-commerce. Well quite frankly I probably could use Klaviyo for the blog, but it’s significantly more expensive per subscriber than Drip, approximately three X. Now Klaviyo is actually great for tracking all of your sales and all of your customers. But outside of your sales and your customers, they actually have pretty lousy segmentation for anything else other than sales.

So for example, with Klaviyo I cannot segment my list based on what a customer has clicked or what content was browsed. Klaviyo was designed for sales. So I can easily segment based on what someone actually purchased, but I can’t really easily do it based on content or click within an email. So as a result Klaviyo would be pretty useless for me in terms of my webinars. It also would be pretty useless for me in determining who my best email customers and in terms of their open rate or their click rate.

And so that’s why I use you know two separate e-mail services for my two separate businesses. If there were a one size fit all solution, by all means I would probably go with it. But for now in the meantime I’m using Klaviyo for ecommerce and Drip for my blog. Now since I run a WordPress blog, there are a number of plug-ins I use to manage the blog. And in general, my philosophy is to use as few plug-ins as possible because for every single plug-in that you add to your blog, it actually slows down your site.

So I try to be minimalistic. So I’m just kind of go over the ones that I absolutely use for my blog. The first plug-in is called All in One SEO Pack. And basically it’s one of two of the best SEO plug-ins for WordPress. It basically allows you to change all the title and all your meta tags for all of your posts. It creates a site map for you; it does the OG markup for you for Facebook which is pretty important. It’ll also do the markup for you for Google as well.

So there’s basically two plug-ins. There’s Yoast and All in One SEO Pack. I think I just started out using All in One SEO nine years ago, and I just stuck with it. But as far as I know both plug-ins are really good and they both do the same thing. For the podcast I use a plug-in called Blubrry PowerPress to manage my podcast feed that goes to iTunes and a bunch of other services. I don’t actually have too much experience with trying out all the different podcast plug-ins, but Blubrry has worked really well for me over the years, and so I’ve just stuck with them.

To host the actual audio files, I use a service called Libsyn. Libsyn is probably the oldest hosting service for podcast, and once again once I stuck with them I didn’t look elsewhere really. But what’s really nice about Libsyn is you pay a flat rate to host a certain number of podcasts per month, and then you pretty much get unlimited downloads. If you were to host your podcast on a service like Amazon S3, if your podcast were ever to blow up and get really popular, then the cost would get really high. But with Libsyn you basically pay one flat monthly fee no matter how popular the podcast actually gets.

The next plug-in I use is a plug-in called Cookies for Comments. And once upon a time I was getting mass comment spam, and the built in plug-in for WordPress Akismet wasn’t doing it for me. And what Cookies for Comments does is it places a cookie on the person’s site, and it also requires the reader to have JavaScript enabled on their browser. Now most bots that do common spam, they can’t handle cookies and they can’t handle JavaScript. And so that’s why Cookies for Comments basically eliminated 90% of my comment spam on my blog.

To make my blog run extra fast, I use a plug-in called WP Super Cache. Basically what it does is it takes all of your blog posts and creates static HTML files for your posts. So as a result when someone comes onto your site, they are served the static file instead of having to run the database and run the PHP element of your web server. It makes your site zippy and it allows you to get a lot more traffic before your server goes down.

The next plug-in I use is called “Scroll Triggered Box.” It’s basically an email form that slides in from the side. If someone has scrolled all the way to the end of one of my posts, you’ll see this little email box kind of scrolling from the side and entice someone to sign up for my email list. Once someone has finished reading a particular post on my blog, I usually list a set of random and similar posts to encourage other people to click on different articles on the site. In case someone wants to comment on the blog, I have this feature called subscribe to comments, which basically sends them an email whenever someone has responded to their comment on the blog post.

Now I also run a membership site for my course which is over at Profitable Online Store Course. And the plug-in that I use to manage my membership site is called s2Member. Now at the time, I evaluated a bunch of different membership plug-ins like WishList, s2, I think I looked at Zippy Courses at the time. And overall, I chose s2Member because it was the most lightweight plug-in out there, and it was free. And basically — so the way s2Member works is it’s free for the base features, but if you want to add a payment processor, they’ll charge you extra to get all these extra little features.

But since I know how to code, I basically took the base s2Member and then coded up all the different payment platforms that I needed. And so ultimately I had this platform where it was completely free and I could host as many members as I wanted without any cost. Now if you’re going to start a course today, there’s a number of fully hosted platforms out there that will take a percentage of your sales and or charge you a monthly fee. But I’m really averse to paying anything on a monthly basis, so that’s why s2Member was good for me. It’s free, there’s no monthly fee, and it’s really feature rich and it’s lightweight and will not bog your site down.

To manage my payment plans for my payments, I use a payment processor called Stripe. It is free. It’s a little bit expensive in terms of the percentage that they take, but it is free and the API is fantastic which allows you to integrate it easily with any sort of payment or membership site that you want. Every single month I run webinars, and everyone always asks me which webinar platform that I use.

Right now I’m actually not using any webinar platform. The tools that I use for webinars are actually free. I basically use YouTube Live and Chatwing. It costs me zero dollars on a monthly basis. Remember when I mentioned I’m averse to paying anything on a monthly basis, well my webinar platform is free, and I manage to make between 30 and $70,000 per webinar on this free platform and it’s worked out great for me.

To edit my podcasts, I use a tool called Audacity. All the tools that I use to run my podcast can be found in a really comprehensive video tutorial that I put together over at mywifequitherjob.com. I’ll actually list this in the show notes, but the reason why this tutorial was actually so good was originally I was going to sell it for $99, but ultimately I decided that podcasting really had nothing to do with the things that I blog about on the site, so I decided to just give it away for free. Once again this podcast tutorial will be listed in the show notes. I highly advise if you want to start a podcast, go read this post. It’s got videos and everything. Once again I was originally going to sell it, but decided to give it away for free, check it out.

Anyways, those are all the tools that I used to run a seven figure blog. And as I’m looking over this list right now, the only thing that I actually pay for is my email marketing and my podcast hosting and my web hosting. Everything else that I use or do with the blog is actually free, and anything that I sell has a zero cost of goods which makes blogging infinitely scalable. Anyways, I hope you found this helpful. And leave a comment in the show notes if you have any other questions on tools that I use.

Hope you enjoyed that episode. Well I wish there was a single comprehensive piece of software that could do it all, unfortunately there is no such thing. And the software game is constantly changing and you basically have to adapt to keep up. For more information about this episode, go to mywifequitherjob.com/episode198.

And I want to thank Payability for sponsoring this episode. If you’re looking to take back control of your cash flow and scale your Amazon business fast, then sign up for Payability, and say goodbye to cash flow issues and stock outs. With daily payments, you can speed up your supply chain, buy inventory at optimal times, and stay in the buy box. The more control you have over your cash flow, the more buying power you will have. Visit Go.payability.com/Steve to get started, and cash in on a $200 credit just for being a My Wife Quit Her Job listener. Once again that’s Go.payability.com/Steve.

And finally, Klaviyo is my email marketing platform of choice for ecommerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all these sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

Now, I talk about how I use these tools on my blog, and if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email, and I’ll send you the course right away, thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.mywifequitherjob.com.

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197: A Better Way To Launch Products On Amazon With Scott Voelker

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197: A Better Way To Launch Products On Amazon With Scott Voelker

Today I’m happy to have Scott Voelker of The Amazing Seller back on the show. Last time I had him on was back in episode 89. And since then, we’ve become good friends, hung out at multiple conferences together including Fincon where we were both on a panel together.

Anyway because it’s been so long, I invited Scott back to talk about some of his updated Amazon strategies and to see what he’s been up to. Enjoy the episode!

What You’ll Learn

  • Scott’s new criteria for selecting a product to sell
  • His new process for finding profitable niches
  • How to build a list of interested buyers
  • How to create a giveaway

Other Resources And Books

Sponsors

Payability.com – A financing company that provides high growth Amazon sellers with daily payments. With Payability, you can say goodbye to cash flow issues and stockouts and hello to scalability and profits. Click here and receive a $200 credit upon signup.
Payability Right now, Payability is giving away $1000 in gift cards to three lucky Amazon sellers. Click here to enter The Ultimate Amazon Reseller Giveaway today. Rules apply. Giveaway ends on February 28, 2018.

Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
Klaviyo

Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
Privy

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners, and delve deeply into what strategies are working and what strategies are not with their businesses. Now after a multi-year hiatus, I am happy to have the great Scott Voelker back on the podcast to talk about what’s changed on Amazon and how his strategies have evolved in the past couple of years.

But before we begin I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool I use to build my email list for both my blog and my online store. Now Privy is an email list growth platform, and they manage all of my email capture forms. And in fact I use Privy hand in hand with my email marketing provider.

There are a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in e-commerce. Right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prizes in our store. And customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%.

There are other cool things that you can do too. So for example, let’s say you offer free shipping for orders over $100, well you can tell Privy to flash a pop up when the customer has $90 in their shopping cart to urge them to insert one more item. Bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve, and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ For 15% off. Once again that’s P-R-I-V-Y.com/Steve.

Now I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. I’m always blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 20% of my revenues. Now, Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, piece of cake, and there is full revenue tracking on every single email sent.

Klaviyo is the most powerful email platform that I’ve ever used and you can try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again that’s, mywifequitherjob.com/K-L-A-V-I-Y-O, now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit her Job Podcast. Today I’m happy to have Scott Volker of The Amazing Seller back on the show. Last time I had him on was way back in episode 89, and since then we’ve become good friends. We’ve hung out at multiple conferences together including my conference, the Sellers Summit. And recently we hung out at FinCon where we were both on a panel together.

Anyway because it’s been so long, I think it’s been like two years, I invited Scott back to talk about some of his updated Amazon strategies, and basically just to see what he’s been up to. And with that, welcome to the show Scott, how are you doing today man?

Scott: I am doing great. I can’t believe it’s been two years really.

Steve: I can’t believe I’ve been podcasting for like three years now to be honest with you.

Scott: That’s insane, truly insane.

Steve: Time flies.

Scott: Yeah it really, really does. I mean I’m excited to be back, excited to share what we’ve been up to, and yeah I mean just some things have changed, but some things are pretty much the same. But we’re growing and we’re having fun doing it, and yeah excited to be back on.

Steve: Yeah so it’s been a couple years, and I know some stuff has changed. I’m just kind of curious like so last time I think we talked about a completely different set of products. Are those original products that you sold on Amazon, like when you first got started are those still going strong?

Scott: Well they’re not going strong, but there’s a reason for that. I kind of let them go in a sense. They were kind of like my beginning products that kind of got me started. Now with that being said, there are some months that we’re still doing about 10,000 in revenue on those, and I’m literally Steve I’m not touching it. And I think I’m only spending like 20 bucks a day on pay per click. So they’re kind of like set and forget, and I take whatever I get and it’s a decent little chunk to not really be doing anything.

But one of the reasons I kind of backed off on that, number one was the starting point. It kind of got me into the game, it kind of got me like, oh my gosh, like I should probably pay attention to this thing. And I did but then I started to see like if I was going to build this thing out or build a brand, I would do it differently. I wouldn’t do exactly what I did in the beginning. I’d go after products that were different, I would build a brand, I wouldn’t just go out there in just find a product or a widget that was selling in a sense.

So with that being said, it’s kind of my fault. I think I could have grown that into something bigger, but now I’ve taken my energy and focused on different projects.

Steve: I see, so you didn’t feel like you could create a real brand around that product, so that’s why you put on the back burner?

Scott: Yeah exactly yeah. It was kind of like — and it’s one of those things that now it’s gotten saturated. And even though it’s gotten saturated because I got in early, I’m still ranking okay, I’m still getting sales organically, but again literally if I spend — oh gosh, if I log in and check my stuff once a week it would be a lot.

Steve: Okay. Well so given what you just said Scott, how has your criteria changed then for selecting a product to sell?

Scott: Well okay, here is the deal, it’s not even so much the criteria has changed as far as like the numbers go, but as far as where I look for products or what I think would make a good, not even product but a good brand. We talk a lot about like the open brand concept, and I’ve got a partner that I work with on that side of things where we’re able to test products relatively quick. If we find something, instead of trying to fit it into a brand, you can kind of just go, okay let’s just launch it under the open brand. It’s kind of like retail arbitrage for privately label.

Steve: Sure right.

Scott: And we’ve done that, and we’ve actually got one product right now, it’s really, really crazy on how that all happened. And we sourced it locally at first, and then we now are going to China after we validated it numerous times. My partner kind of was dragging their feet a little bit on that, but that’s one product that it may be a trend. So it’s one of those things too that if you see something trending you might be able to jump in, but there’s not really a brand behind an open brand with that.

So with product criteria, the stuff that I look at now more so than anything is really brand, and I string some products together. And I don’t know if you’ve seen this, this maybe breaking news I don’t know I’m going to let you know this right now. But yesterday we logged in, myself and Chris Schaefer, which are partners in this new brand that we’re working on, and we noticed that they rolled out a new feature in Amazon with their coupons. And basically now we can create coupons that target our past customers or ASINS, and we can let that coupon show up to that person almost like they were pixelled in a sense. Have you seen this yet?

Steve: No I have not; it is news to me, interesting.

Scott: Yeah and depending on your account, maybe how old it is or whatever, but if you go to the advertising tab and you’ll normally see campaign manager, enhanced brand content, early reviewer program, lighting deals, coupons, promotions, if you go to coupons, I think that’s where it would be, yeah creating new coupon. That’s where it would be there, and if you want to create a coupon, but then if you go under there and you see promotions, you can go under there and then you can go ahead and create your promotion. So the coupon thing is new. The promotions has always been there.

Steve: So basically you’re only giving coupons to your past customers essentially?

Scott: Well you can select that, you can select the criteria. It could be past customers, it could be an ASIN. So if you have one of your ASINs on your products and you want someone bought this but then you wanted to see something else, you can put that up alongside them. And I think they’re charging like 60 cents a transaction, then whatever else the percentage of this after use. You can either use percentage off, or a dollar amount off.

Steve: Okay.

Scott: Pretty cool man.

Steve: Yeah.

Scott: So yeah we’re actually playing around with that right now to just kind of see exactly what it’s doing. I think we already gotten some sales from it. We just started it like literally like less than eight hours ago. So yes so anyway…

Steve: Let me ask you this real quick. So you mentioned that now you’re focusing more on brand, do you still think the open brand concept is sustainable in the long run?

Scott: That’s a great question. Sustainable, it’s kind of like retail arbitrage, that’s the way I look at it. It’s kind of like it’s a little different because you can keep reordering. But I guess the question is, are the products, products that are trending, are they products that are I guess seasonal like those are the things that I would say? And again it’s like unless you’re just going to be like you’re just going to focus on like electronics, like you’re going to be the electronics dealer or something like that.

It’s hard to say sustainable if you’re looking at like just random products. So to me it would be probably harder to sell a business that’s random products versus like one that is specifically focused towards a market.

Steve: Okay right.

Scott: So I don’t know about sustainable. I would say for people that are like, they’re like, oh my gosh, I don’t know what product to pick. If you want to test products or market, it’s a great way to test markets. I think there’s like five different markets that are in the open brand that we’re working in, and they’re just different markets, right? So you can test sport and outdoors, you can test cooking, you can test fishing, you can test like all these different ones and then you can see which ones maybe has some legs, and then you can take it to the next level if you want to.

So it’s a way for you to test. I don’t know if it’s sustainable, maybe it could be. I wouldn’t want to make that my in thing.

Steve: So is your process now then to just kind of launch a private label product first, see if it has legs and then consider whether you can create a brand on it, or do you consider all the brand stuff right away?

Scott: Well I do consider the brand stuff, but I always start with that. It was funny, I was having this conversation with a friend of mine and I said years ago we would build the website, we would do our product research, we would say we think that this thing is going to work. Now what I like to do is go to Amazon, let them tell me if there’s products selling in that market. Can I create a better product; can I validate it before I actually put all the work into building all of the stuff that it takes to build the brand?

So for me it’s kind of like Shark Tank, right? The sharks on there, they always come down, they go okay like what are your sales? Until you have sales, you’re not proving the concept. You haven’t proven or validated that the market is going to buy your product. So I like to go the other route, do a small test order, put it in, and then from there we can kind of grow with that. So yeah that is kind of the mindset and kind of the process that we take.

Steve: Okay, so let’s talk about that. So we place a small order, then what is your product launch process now today?

Scott: Yeah that’s a great question. So what we basically do is generally we will do a test order of anywhere between 300 and 500 units. Now some people say, Scott how do you do that, like they all want me to do 1,000 units. And we ask, we just keep asking and will negotiate, or will move on to a different supplier. We’ve found that generally you can find at least 500 that you can test, 500 unit run.

You’re going to spend a little more, but that’s okay because we’re just testing and we’re kind of reducing the amount of risk if we were to buy 1,000 units so that’s fine. So what we’ll do is we do our product research. Normally how we do it, we want to look at the sales of current competitors and see what they’re doing. We’ll look at the reviews, see what we can do better, we’ll look at the listing optimization, see how we can do a better job there, better pictures, better title, better optimization, all the way around.

And then what we’ll do is we build our own email list. So we instead of like before you could go to a service that would do a launch for you. And I wasn’t big on those before, I never did massive ones, some people were doing like hundreds or thousands of units and just giving away their products. We’ve never been about that. I’ve generally been about 100 units is what my budget is for my promotion, because I’m going after products also Steve that are not selling hundreds of units a day. I’m going after like can I find a product that can sell ten units a day, $10 profit each, make $100 profit per day. Like can I find that product, low competition, less than 200 reviews, that’s what I’m looking at.

So if I can spike the algorithm, if I can get ten sales a day through an email list or some type of promotion that I can run, in my case I like building email lists because I have an asset now, and then I can spike sales, then I can start to rank organically, then I can start to get in to Amazon’s traffic.

Steve: Right so you’re basically trying to stay under the radar of like the big guys where most of the evil stuff happens essentially?

Scott: Pretty much yeah. I mean again it’s like when you get into gray hat and black hat, it’s always well how can I be the other guy that’s trying to get one 100 sales a day. Number one, if you’re going after products that are selling 100 units a day, in order to rank you’ve got to sell 100 units a day, like bottom line.

So then you get into how do I give away — and I’ve heard some stories where some people will — they’ll take 100 grand and go in because we’re going to dominate that market, they’re going to try to take over it. They’ll take 100 grand and just use that as money to give away their products, so this way here they will just get ranked. And then once they secure their spot, then the organic sales will take over. That’s just not my cup of tea.

Steve: Right okay.

Scott: I don’t want that. And I’m not looking to just building it on Amazon either like that’s where we start, and that’s kind of where we kind of — because we can we can kind of like get started quicker in a sense where we don’t have to build out the website, we don’t have to do the merchant account, we don’t have to do refunds, all that stuff, fulfillment, we can do that.

So to me it’s the way to get started, but I’m always thinking, okay and like I was talking to you just before we got on here, like okay our next move is like we’re going to build a little mini funnel, we’re going to do a free plus shipping offer, we’re going to go through ClickFunnels, we are going to do all the stuff, that’s like what we’re working on now. But it’s been seven months in this new brand that we haven’t done that yet. We’re moving in that direction.

Steve: Okay let’s talk about your email list then, your launch email list, how to do you build that up?

Scott: Yeah we’re building it with your good friend and my good friend Mike Jackness which does the same thing and he did it in his brand is giveaways. We’re doing a 30 day giveaway. A lot of people will do shorter ones; I don’t like the shorter ones. We’re doing a 30 day one, and generally will give away a prize that’s worth about $200 to $250 in value, and it’s a physical product. And now because we have about eight or nine skews, we’re able to include those skews in the bundle as the giveaway, so now they’re kind of aware of our brand. But then we’ll wrap it around something major.

I kind of use a fishing analogy where if I’m going after the bass fishing market, I’m going to go find the best bass fishing lures and the tackle box and the vest, and I want to make that my bundle, and then hopefully my tackle box will be in there too. And then I will do that for 30 days. I’ll drive Facebook ads to a landing page or Instagram influencers. And then I will drive them through a contest, and then I will follow up with them through email. I’ll announce the winner and then on the back end will say to all the people that didn’t win, hey sorry you didn’t win, but we’ve got a 25% off coupon on our tackle box until midnight.

Steve: Can you describe how you figure out the product for the giveaway? It’s not your own product in the beginning?

Scott: In the beginning it’s not. I get a lot people say; well should I not wait to have my own product? The answer is no, like just that’s going to be your launch list. So we did it before we even had our product. We had a product ordered but we didn’t have it yet. So we just found something that was going to be related. The one mistake I see people making is they’re just going to like I know everyone wants an iPad. So I’m going to do an iPad. Well that’s not your market unless you’re selling iPad accessories.

So to me it’s got to be really dialed in even in the fishing space. If you’re going to sell something that’s tailored towards bass fishing, you want something that’s tailored towards bass fisherman. It’s got to be that targeted, because we don’t just want people that are free seekers, we want people that are in that market because people will say, well why wouldn’t I just go to someone that has a list for people who want to get deals?

That’s the problem, they’re just raising their hand because they want to get deals or get deals just like I mean back in the day, we’re talking like eight, nine months ago with Amazon review groups or people that were building these were these groups. These were just email lists of people that were raising their hand that wanted to get basically free product from Amazon. Well those people aren’t necessarily my target market.

So what I want to do is get something that I know is going to get them to raise their hand, and then from there we can go ahead and then start following up with either content, or other offers and stuff like that. So a good offer is key though, and you’re right, you can’t just give away your $29 tackle box. That’s not enough. You need something’s going to get some buzz, you can have a bundle. And we’ve had really good results since we’ve been doing those, and we’ve done it in a couple of different markets.

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I’m just curious, so that list that you get, like what is the quality of that list like?

Scott: You’re going to love this. In the very beginning when it’s fresh, it’s generally between 50 and 60% open rates. Okay so not too bad. So then people would say, well, wait a minute here, you got 1,000 emails, and you get a 50% open rate, that’s only 500. Okay so now it cost me fifteen cents to acquire an email by the way, so — oh it cost me 30 cents to acquire an email. And those are people that are opening my emails so that means that they’re interested.

And so what we’ll do is we will — like right now, I think we sent out an email yesterday to about 16,000, and I think that one right now and it hasn’t even been a full 24 hours, you know how that goes over time and it’ll get a little bit better, I think we’re over 25% right now. That’s above standard.

Steve: And so in terms of – so that’s the open rate, but in terms of like the people that actually buy, what percentage would you say that list in your last campaign?

Scott: Yeah in the last campaign, and it’s kind of hard to say because I’ll be honest, here is the other cool thing that happens. You get one person or two people that take your promotion that you’re doing and they share it to a Facebook group, and then it blows up, we just had that happen. We sold over 190 units from one email. So did that come directly from the email list? Not necessarily, but it came from someone that was on the list that shared in a group.

But I would say it depends on the offer again too Steve. I think you know that.

Steve: Sure.

Scott: You could send out that to everyone and it might not be the right product. We have right now nine skews. So we’re going to actually be able to kind of tell you a little bit more of that probably in the future because we’re going to run kind of like Mike has done. We’re going to do like ten days to Christmas sale, and we’re going to do like a little email campaign where we’re going to kind of give people different offers. But I would probably say it’s — I’d be kind of lying to say I knew exactly. But I would say, for the most part I would say probably half a percent to a percent.

Steve: It’s hard to track that right because you are not allowed to use affiliate links in emails either, right?

Scott: Yeah you’re not really supposed to. The only thing that we can do is we can track the coupon codes that we’ve given out.

Steve: Right.

Scott: And look at that and actually the one that we just did, we’re starting to get data, but also Amazon is kind of delayed on the data. But the way I look at this, the way I look at it is like this too and I know you’re a numbers guy. You like the numbers. Here’s the way I look at it though. I look at it like this. I got an email list and I paid $1,000 for it, all right. And I launched this product and I sold 250 units in three days. I got ranked on Amazon, I’m starting to get organic sales, I’m not even using sponsored product ad yet.

So that 250 sales that came from that email that I sent out because it was a discount, is that worth 1,000 bucks? To me it is because I’m not even looking at that. I’m looking at now I’ve got potential to take that list and send them another offer, or send them a piece of content that gets shared into a group that I get 60,000 views on a video we just shared. All of those things come back to me.

So I don’t necessarily look at it like, okay I sent an email, I got a 1% conversion, I got a half percent conversion. I don’t look at that. I look at more of like the long term of that. And you know as well as I do, I can take that list now which we’ve done, and I’ll upload it to Facebook, and now I’ll create a retargeting or I’ll also create a look alike audience from that email list. So that’s a little bit more of a higher level I guess thinking, and that’s how we do it. So the email list is built not just to sell a product.

Steve: Can we talk about like the emails that you actually send for a little bit?

Scott: Yeah absolutely. I mean our first email obviously if you sign up for a contest, the first one is going to like thanks for entering. And then from there we’ll give them another — there’s a link that’s in — we actually — actually Chris Guthrie, a good friend of ours, him and I partnered up on a piece of software that we created called Giveaway Boost, which we created for doing this. And there’s been a few other ones out there. We just wanted to have ours more tailored towards e-commerce which is more features.

So we actually built that in. So what it will do is it will give them their own tracking code. So they can share that tracking code and will incentivize them by if you share this with people you know or think that you would like this, and you get three entries, you’ll get an extra entry. So we incentivize in that way. So in that first email, that’s what it’s thanking them. It’s letting them know what they just did, and that they’re confirmed. And oh by the way, here’s your special link that will get you additional entries.

And then we’ll follow up probably in about three days with some just regular content. So it’s basically like, hey, we just wanted to drop in here; I know that you probably want to catch more bass this weekend. So here’s a couple of tips that we’ve been using and they work really well. And oh by the way, here’s your special link again to share the contest, whatever. So it’s kind of like that hybrid approach.

So stuff like that, and then once the contest is over, we’ll announce the winner. So the headline is usually like the winner is, and then from there, and that will be a huge open rate. And then from there we will announce the winner publicly because we want to let them know that we’re actually fulfilling the prize, and we’ll also if we can get a picture with that winner. And then from there it will say, but you’re still a winner because we are going to give you a 25% off discount through this weekend just for entering the contest, we want to thank you. And oh by the way here’s another cool YouTube video that we shot about this other thing.

So it’s really a way for us to connect with them without just pushing a sale, but then we also — and one thing I would say and you know this, and hopefully your audience knows it or they’ll not know it now is the one thing we’ve done is we’ve always added some form of deadline to our offer. So if there is a 25% off coupon, and it goes live on Friday afternoon, it will end on Sunday night. And that will give us the opportunity to email three times, once to let them know about it. The second time to let them know that there’s still a bit more time, and then the third one is its end. It always spikes the sales. The last day is usually the most sales that we’ll get from that email.

Steve: Right. So I’m just curious then, so how does this giveaway strategy fall into some of your other email gathering strategies? You mentioned a free plus shipping offer in the beginning, how do you arrange all these different offers together?

Scott: Yeah well, the free plus shipping is something that’s just getting underway right now. So I can’t really give you that, but it’s like our next move. Right now the whole building of the email list has really been, two ways really. One has been from the contest, and that’s been the number one way. The second way is kind of like giving away like a free PDF the seven lures you must have in your tackle box kind of thing. And that gets a trickle of emails in. And then the third way will be free plus shipping, and those will be like warmer leads in a sense.

So I can’t really tell you on that one, but we’ll be setting these up just like you would. We’re going to segment, we’ll have a contest list, more or less a customer list, and then you’ll have a warm list that came from a free plus shipping offer. And the free plus shipping offer will be interesting because we’re going to be doing it where you get the free plus shipping, and then really on the back end it’s not even to be like the next product maybe, it might just be more of what they just got for free.

Steve: Sure of course.

Scott: But then maybe test it down sell up sell, all that fun happy stuff.

Steve: So just curious, what are some tips on giveaways? So your price you recommend 250 to 300 bucks?

Scott: I’d say yeah, I’d say the more the better just because it gets more hype, right? It’s like a bigger deal. So I would say the offer is key, your targeting is key too. You can’t just throw that up and think everyone is going to see it and like it and share it with someone that they know is into fishing. You have to really do that targeting, and it’s going to take a little bit of work. We have done Instagram, we found influencers. We didn’t even run ads; we just basically reached out to influencers.

In this new brand though, we have not really had success with influencers on Instagram, and I think more so because we haven’t really spent too much time. We tried like three or four, and then we just kind of said, you know what Facebook ads are kind of easier right now, so we’re going to stick there. But we did one. We actually did an open case study. I did it for — my son’s into sneakers. I did the whole Jordan and all that stuff. So we did a public case study for one of our live events showing how we built the email list and stuff in the sneaker head market.

And that offer was all driven through or actually shared through Instagram. I found on Instagram a couple. I found like three different Instagram pages that had — one had 300,000, one had like 500,000, one had a million, and I think the most I spent was like $125 for a post. And those converted really well in that space as far as email capture, which is kind of crazy because in Instagram you have to go to the bio link and you have to — then you’re warned that you’re leaving Instagram.

We spent like I think 125 bucks on that one run for that one page, and we got like over 500, 600 emails in than four hours.

Steve: In terms of writing your Facebook ads for these promotions, so let’s use your fishing example, what are some targeting aspects of Facebook that you would use?

Scott: Well, I think first off you’ve got to find out where your audience is hanging out. And I mean an easy way to do that obviously is to just kind of go to Facebook, it’s a search engine, and just start to search for groups, and search for pages. And then from there sometimes you can target some of the — not the groups but the pages, or it can at least get you started. So if you’re starting from scratch, that’s where you’re going to kind of have to start doing some of your own testing.

So you’re going to go in, you’re going to look at the target, the different interests that you’re going into like fishing or it might be bass fishing or whatever, right, like those interests. And then in the beginning, I mean you’re kind of like you’re guessing as far as like demographics until you start getting some of that data and then you can start to really hone that in. The advantage of having even a small tiny 250 email list of people that you know raised their hand already, and then taking them and uploading them into Facebook and using them as your lookalike, that really can speed up the process because then it almost goes out and finds those people for you.

But beginning I would say it’s going to be testing. And for us it was kind of like you’re kind of shooting kind of blindly, but you’re just guessing. And then you start to look at the data and you’re like, okay wait a minute here, guys that are 18 to 24 are clicking, but they’re not converting. So let’s just pause those guys, let’s only target the guys that are older than that. And you just start refining that through your different tests. But I would say just go there and find groups, and there’s going to be tons of them that you can look at groups and Facebook pages, and then just start seeing from there what kind of people are hanging out in that market, and then start to use that as some of your insights.

Steve: I guess what I’m trying to get at is like what is your exact process, like how many ads do you run, how many different ad sets, how much money do you put on each ad set at the beginning, what is like a target click through rate or a conversion rate, how many people do you — how much do you expect to pay per lead, that sort of thing?

Scott: Well I’m going to kind of go over to being that’s not my expertise Steve, so I’m not going to give you that.

Steve: All right.

Scott: Chris Schaefer, my partner is that. He’s the guy that loves those numbers like you; you guys would have a great conversation over those Facebook ads. But I could give you the basic stuff. So when we were starting that stuff, we allocate 20 bucks a day, and that’s like our testing money. Generally, I mean in the beginning we were shooting for a dollar per email, like that’s what we were shooting for. We’ve since got that from where it was, it was I think we got it to 50 cents, and then we got it to 30 cents, and then recently, our most recent one was 15 cents.

But again that is from him looking at the numbers after day one, and then tweaking, turning off this and putting this. Now the one thing I would say, a little tip here and I know this is the case because we kind of go over this stuff, if you have a — again testing, it all comes out on testing. If you take a static image, just an image that’s just not going to be any movement, no gift, no nothing, that may not convert as well as a video or just a gift.

And what I mean by gift is like what we did is we took, I think it was five pictures in our contest, and all we did was create an animation of it. And we put it up and acted as a video, and our conversions were better and our click through rate was better, and our cost per email was better just from that one thing. And that was just Chris saying, I’m going to give this thing a test and see what happens. And he did it, and it was like that’s what we use now in every single ad set.

So yeah I mean to give you like all of that, all of those numbers. I can’t give you that. All I can tell you is we’re spending between $20 and $30 a day; our email cost is about 15 cents give or take per email. That’s per email, that’s not click that’s per email. And then from there as far as different ad sets, I think we’re using right now four, you