00:27
and we do a deep dive into the viability and profitability of this business model. But before we begin, I want to thank Zipify, OneClick Upsell for sponsoring this episode. If you were on Shopify and you want to instantly increase your revenue by 10 to 15 % without doing much work, then you’ll want to try OneClick Upsell. It integrates seamlessly with your cart and you’ll see the gains almost immediately. And best of all, you only pay Zipify a commission when they actually generate you extra sales.

00:56
For more information, go to zipify.com. That’s z-i-p-i-f-y dot com. I also want to thank Link Whisper for sponsoring this episode. Now those of you who follow my blog over at mywifequitajob.com know that I’ve increased traffic 4x in the past year and I couldn’t have done it without Link Whisper, which is my favorite internal linking tool for SEO. Link Whisper allows you to easily add internal links to your blog so you can maximize your link equity on the pages that make you the most money.

01:25
Now if you have a blog, this tool is a must have. For more information, go to linkwhisper.com. That’s L-I-N-K-W-H-I-S-P-E-R.com. And then finally, I wanted to mention my other podcasts that I run with my partner Tony called the Profitable Audience Podcast. And not like this one where I interview other entrepreneurs, the Profitable Audience Podcast is just Tony and I riffing about online business. Go check out the Profitable Audience Podcast on your favorite podcast app. Now onto the show.

02:00
Welcome to the MyWifeQuitterJob podcast. Today I’ve got a special guest on the show, Saba Mahepour. Now Saba is the founder of one of the best dropshipping marketplaces in the world because their suppliers are primarily found in the US and Europe. And their claim to fame is that if you live in the US or the EU, your customers can get their products super fast compared to other services that can take a month or longer. And most of you guys who follow me now know that I’m not the biggest fan of dropshipping as a long-term business model.

02:30
which is actually one of the reasons why I’m so thrilled to have Saba on the show today. Now, clearly there’s a bunch of dropshippers who are successful, otherwise Spocket wouldn’t be where it is today. So what we’re going to do today is Saba and I are going to go into in depth on what it takes to be a successful dropshipper and highlight what some of his best customers are doing. And with that, welcome to the show Saba, how are doing today? I’m doing great Steve, thanks for having me on the show.

02:57
So Sabah, you told me you used to be pre-med. How did that turn into Spockit? Like what’s your background is medicine, but then you became a programmer and then you created Spockit. So what’s story there? Sure. I’ll tell you a little bit background about myself. So I moved to Canada in 2012. I had just studied medicine. I gave yourself British Columbia. Did my pre-med in 2015 while we’re setting my door. It was August 2015.

03:24
I was watching YouTube and I saw this 20, 30 seconds interview with this very young guy who was 17 years old and he built this out called Summary and he sold it to Yahoo for $30 million. So that was a trigger in my head that if a 17 years old guy can build such a massive business of software, I should be able to. So that night I started programming. So I learned how to program using YouTube and I bought a course at Udemy. So literally

03:54
Starting that, skipped all my classes, sat at my door and started programming 16, 17 hours a day. When I graduated in 2015, I started building many different apps while I was working, full-time jobs, and built probably 10, 11 different apps and they all failed. And I think Spocket was my number 11 or 12th try, which we launched it on the Shopify app store back in 2017. I’ve been trying to scale the company since then.

04:20
So I’m curious, so you self-taught yourself coding, like you didn’t take any classes or anything like that? I spent $20 to learn how to program. I watched a lot of YouTube videos. I bought a course for a team of 1499 from Udemy and I downloaded this script bought by Apple, which calls SWF, programming the SWF language. And yes, I taught myself how to program. Amazing. Amazing. And you coded the first version of Spockit from what I understand, right?

04:48
I did. The first two months when we launched the beta version on Shopify, I wrote a portion of it. I didn’t write all of it because I hired this co-op student from UBC that was helping me out to write the first version. yes, I wrote a portion of the code initially. I’m curious. So was this a bootstrap company or did you get funding for that first version? So I think we were eight months into.

05:15
building Spockit after we launched it on the App Store, which I think was June 2017. A couple months after we did our seed round with the Canadian VC. An year after we got into this program called Techstart. And after that we closed seed round. But we have not raised any money since. OK, nice, nice. So we’re kind of a trap because we haven’t gone through series A and B round of fundings, but not

05:45
the BlitzTrav, you know, some money. I just find it amazing that VCs will be willing to fund like someone just out of college, but I guess it happens all the time around here. For sure. Yeah. No, it happens a lot. Yeah. Yeah. All right. So most of my listeners are either store owners, people who want to start businesses, especially in e-commerce. And I mentioned before in the intro that I’m not a huge fan of drop shipping. So I thought it’d be interesting.

06:15
to just talk about how to get started and let’s just start with like how to pick the best products to sell. Like what are some gotchas? What are some best practices? Sure. I would say, uh, me without getting into the details and the data, because a lot of those confidential and I will not be keeping them confidential. Uh, to our success with dropshippers and merchant, uh, what a confidentiality matters. But in general, probably my first tip was that, uh, for dropshippers that to not start an Amazon store.

06:45
your stores should not have 2, 3, 4, 500 products. The successful dropshippers are the ones that focus on niche stores. You could have only 1, 2, 3, 5, 10 products and that should be enough. Usually if someone wants to buy just a general product, would go on Amazon or eBay. For a dropshipper, you would stand out when you focusing on a niche, as sourcing a very niche product to sell. So that’s probably the first thought on the dropshipping side.

07:14
In terms of data, obviously there’s a lot of products out there that help you out to analyze what’s selling, what’s the high selling products, are the training products, what are the winning products. We recently launched this solution within Swapy Dashboard, which is all winning products. Also within the next two, three months, we’re launching another section that we did on our dashboard, which basically to show you the trend of different types of products over time, within the past four or five years.

07:41
And then you see the trends, you decide what type of product and what categories you want to sell and what’s potential selling in the market. So let’s say I was a dropshipper. I actually wouldn’t want to see those features there because like you’re selling someone else’s product, right? And the fact that you’re highlighting what the trend, do you want to be selling trending products is what I’m trying to ask. Because that means a whole bunch of other people are going to be jumping on it, which will, you know, when you sell, when you’re selling something and a whole bunch of other people are selling.

08:10
that generally erodes prices, right? It does. So by the way, when we talk about the distinction that we’re adding within our dashboard in terms of training product, it’s not just the sales across Spockit, but we actually partner with multiple platforms and getting access to what’s being the sell of different products on marketplaces like Amazon, eBay, across the Shopify stores, there are over 2 million of them. So the analysis is not particular to a product or particular to a shop.

08:39
particularly to the powerful is across the market, e-commerce market. So, that high level would tell you that what type of categories you want to get into, what type of products you want to get into. To answer your question, let’s say it’s August and September, and usually August and September is back to school season. And those type of products would be very popular. So it’s good for you to see that what is the trend in August and September.

09:05
Maybe it’s not selling fashion product. Maybe it’s good to sell back to school products. So it’s not necessarily a thing. It’s good because you know what you need to be selling those particular quarters or months. Okay. You guys support Amazon, right? From what I remember. are very close to support Amazon. think the next four weeks, we’ll be launching our partnership with Amazon as well. Okay. So what’s funny is you said you don’t…

09:32
I don’t actually see how it works on Amazon because the margins are like the fees are so high on Amazon, right? So, yes. So maybe I can explain that. What if I step back and explain a little bit more about Spockit and what the offer, different top of the up where I said the offer, then I can explain on the marketplace side as well. when I started Spockit six years ago, I wanted to do dropshipping and I did not want to use platforms that

09:59
automate drop shipping using Aliexpress because the products are lower quality. to lot of thought leaders, there’s 50 % chance of failure in the shipping. And also the shipping time was like four weeks to eight weeks was too long. So that’s why Bill Spock in the first place for myself to automate my drop shipping while I get access to the local suppliers. So that’s it.

10:28
of Spockit that we create to meet local suppliers. Over 90 % of our base in USA, Europe. Now we have over one and a half million products. have over 3,000 suppliers that we matter the source within USA, Europe. We vet them. And another interesting requirement for the supplier to join Spockit is to offer us 25 to 50 % discount on the products. So when you start using Spockit, you automatically get a good margin on each of those products.

10:58
So to answer your question, if our merchants selling on different channels, do they have any margin? They already have margin on the products that are sourcing from stock. So that was the first section that we launched five, six years ago, which is just US and European suppliers. Over time, we found that a lot of merchants still want to drop ship from that express. what we learned over time is that we should not be biased towards the source of suppliers

11:27
and how other marketplace should be functioned, but we should provide what our customers and our merchants need. And it’s still a lot of people wanting to do AliExpress dropshipping. So we created another section and we built this cool tool called AdiScraper, which automates your entire AliExpress dropshipping that has over 60,000 active merchants using AdiScraper today. So later on, we found that a lot of our merchants that actually become successful,

11:55
They want to get out of drug shipping and they want to build their own brand. They want to do wide-level brands. So we partnered with this platform called Jubilee, which helps you out to build wide-level products. So if you want to build a wide-level cosmetic product, can literally do that within the dashboard, put your logo, put your brand on it, and we will basically warehouse it for you and ship it for you. And this is the extension of Spockit for very successful merchants that want to actually build their brand.

12:24
for a long-term e-commerce business that they want to continue to scale over time. Interesting. I actually didn’t know about that feature. So basically, it’s the same product, but you can put your own logo on it, essentially, right? Yes. It’s our partnership with this platform called Jupeleat. Their software solutions outside of Spockit. They have a different interface, but we’re still promoting them. I mean, our dashboard, with this Spockit dashboard, you would see the wide-level solution, which would

12:53
send you to the Jubilee product. So I’ll explain a bit further. So later on, we figure out that not all the merchants want to sell physical products. Maybe they want to sell digital products. And if you’ve seen the past two or three years, NFT has become very big. So we actually built another solution, which is helping our merchant to sell NFT within their Shopify store.

13:19
So the product is actually available on Shopify, App Store, and our TV Longitude, which they call it Dnfd, Dropship NFT. And within a few clicks, you can actually create NFT and sell it down their store. So we’re trying to evolve and trying to offer our merchant whatever they need, without being biased towards a source and the type of things that we think is right, right? And whatever you think, we’ll provide it for you. So your best customers still cater to a niche, right? Like I have a lot of people that come into me and say, Hey,

13:49
I have access to Spockit, so why don’t I sell 700,000 products? But you’re saying like for your best customers that you know of and you don’t have to reveal who they are. They all focus on a very specific subset of products. that accurate? Yes. Okay. Yes. So if you see our highest tiers, which is our unicorn tier, we cap the number of products that you can push from Spockit to 10,000. And we do get complaints from our merchants that

14:15
Why do you cap it to 10,000? I mean, for us, it’s very easy to increase that cap from 10,000 to 100,000. It just takes probably half an hour to put that in our code. Because based on our data, we know it’s not useful for you to spend your time pushing more than 10,000 products. Even 10,000 products is too many. But we actually try to help you out to save you time so you don’t go and spend days or weeks or months and importing 50,000 products. Because we had those cases.

14:43
And you have to answer your question. Yes. The best dropshipping stores are focusing on a niche. They’re not creating another Amazon store. Okay. So I have several friends who are successful in dropshipping and the way they are successful is one, either they’ve ranked in search somehow and drive traffic to their products that way, or two, they’ve created content and built an audience. Would you say that’s the typical route for your successful customers or how are they getting traffic?

15:13
I think it’s very different. Different merchants, different dropshipping, acquired customers in different base. Maybe I can tap into a few of them. Some of them really good marketers. They’re amazing at paid acquisition. We actually had this very successful merchant that was moving millions of dollars a sell. And maybe we started talking to them, we found that they had a marketing agents. And they started this dropshipping store on the site. There were solo details in how much money they spend and how much money they make. So the ROI was always positive.

15:43
And that’s how they were able to scale their dropshipping store. Whatever they’re making extra, they were spending it back into paid marketing and they were scaling the company. And at some point they actually built a brand around their store. So that’s one type of people that are extremely good at paid marketing. They’re sector of customer that you have, that they have a good social following. They have a, say Instagram account that has 10,000, 20,000, 50,000.

16:09
We have some merchant that their Instagram account are a few million followers. So for them it’s very, very easy actually, because they’re not spending any money to our customer. They they spit out a dropshipping store, quickly use Spockit to source on products and they go on their Instagram and they announce it to their customer that this is my store. It could be a bikini store, it could be a female fashion store, could be a cosmetic store. Those type of dropshippers usually become very successful early on.

16:36
because they don’t spend any money to acquire any customer. So they’re positive. The cash flow is from the beginning. Yeah. We have this case study on our blog. We had this dropshipper on our platform that started as fourth store. I she started with one store, was successful. She started another one. Then she started another one. Then she started another one. I believe she was moving $2 $2.5 million worth of sales every year and very, very profitable.

17:05
But also many of the successful dropshippers, they start, they, they expand to multiple different stores when the first one is successful. Yeah, that makes sense. Would you say the majority of your successful customers are on Shopify or their own platform, you know, their own website as opposed to, cause I know you guys support some marketplaces as well. So I’ve gone on almost 90 different e-commerce platforms, like all of the most popular e-commerce platforms are Shopify, Weights, e-commerce, Equid, Square, Squarespace.

17:35
Welcome to Moor. We’ve recently launched our partnership with eBay. And I think in four weeks, we should be launching our partnership with Amazon as well. I can’t talk about marketplaces they don’t and how they function. But I would say probably Shopify merchants, the dropshippers are, on average, probably the more successful ones because Shopify offers a wide range of tools and apps to help them out to become successful.

18:03
Of your most successful Shopify stores, are they doing all the other things that a traditional marketer would do like email, SMS, automated sequences and that sort of thing? Just trying to get an idea. Yeah, sure. So I don’t know the details of like what dropshippers do and every dropshipper file is different. Some of them do, some of them don’t. But I think things like email, SMS, push notification, sub, or…

18:29
And live in later stages after you acquire a customer, because if you don’t have any customer, you don’t have any email to turn an email to. So also the first step is to really think about how you would start acquiring customer and how you would be capturing that email, like either in checkout or we get a blog post or somehow have it in your website. But first you need to create an email list and list of customers that are interested in the products of yourself.

18:55
But then you can retarget that through, or remarketing through sending emails, notification, SMS, or retarget them using Google audience, or even Facebook network. When you say like the margins are, like you make sure that the supplier can provide adequate margins. And let’s say you said 40%, right? Like a 40 % margin. What is that off of? Is that off of MSRP?

19:25
And are these suppliers actually selling their own products on their own website or are they just strictly suppliers? So, uh, again, you have wide range of different suppliers. have suppliers that are just pure suppliers and they adjusted the warehousing and the shipping, uh, to suppliers that are from Etsy and they’re making things limited edition and they’re handmade. Uh, we also have a few wholesalers within our marketplace that is wholesalers sourced up from multiple different suppliers.

19:55
And their responsibility is just warehouse and ship it. So they’re not the producer. They’re just aggregating many different suppliers. So we have those type of suppliers too. So you get a wide range of different suppliers. To answer your question, when the onboard supplier, there’s different criteria requirements. There’s a checklist. I think we have almost 10 different requirements for onboarding every supplier. Onboarding this supplier is a

20:24
multi-week, sometimes multi-month process, just from starting the conversation to going through all the checklists, onboarding them. But one of them is that they need to offer us 25 to 50 % discount of the retail price. if they are, let’s say, drift selling their store for $50, we request that it goes 25 to 50 % discount of that $50. So our retailers, merchants, have a margin as soon as they start

20:54
I’m sourcing Port art from SmartKit. Are those suppliers that sell on their own website, are they allowed to give promotions and discounts on their own site? Yes, they could. But one thing that you have to consider is that there’s a difference between selling Port arts on marketplaces on Amazon. And again, that’s exactly what I said. I explained the marketplace situation later on.

21:19
There’s a difference between selling a product on Amazon or selling on your independent online store. So if you’re selling at Amazon, you’re selling the same product, when you’re listing it, when someone searches for that product, it’s basically a price competition, right? The customer would be able to see all these products and see who is cheaper, they got to purchase it from them. But that’s not the case if you have your independent online store. If you’re selling them Shopify, you make 200 store, 500 store, and it passes the store.

21:48
could be selling the same product and all of them have a good amount of sale. Because when you have your independent online store, you will be basically targeting different audience from different location, different age groups. So you’re not necessarily overlapping on the target as much. mean, US on its own has scary amount of 50 million people. If 500 stores are selling the same product, then each of them could be targeting many, many people only by the year-wise.

22:15
And that’s all concerning Europe and many other regions of the world. So we do have this balancer on our site that when merchants try to search for product or push product from our marketplace, we try to balance it out. if a has been pushed too many times, we try to not show it in the search as often than a product that has not been pushed. So we’re sort of balancing the number

22:43
that every product has been questioned, it’s been sold on different stores to reduce the amount of competition on different products. But that being said, we’re not too worried about it because these are like independent store and it could be targeting different audiences. Yeah. I mean, if you have your own audience, like you mentioned on social that it usually doesn’t matter. People probably aren’t price comparison or doing comparison shopping and that sort of thing because they’re just buying from their favorite influencer. I guess the same is with direct response ads as well.

23:10
I am curious though, so you could potentially be competing against your supplier though, in certain circumstances. just… Yeah. I want to say so. want to say so. think about it. I mean, maybe in like a very small cases, but in the most cases, usually suppliers and manufacturer are not good marketers. They’re not good sellers. They’re good at producing and their housing and shipping.

23:39
Basically, what we do when we discuss, when we have our negotiation conversation with suppliers, we tell them, what if you really focus on manufacturing and get really good at that and let hundreds of other merchants do the job of marketing and selling it for you? So basically dividing the responsibility on the both sides. So no, our suppliers are actually super happy because we’re actually bringing more stuff. They sell that they had to actually spend money to acquire those customers. Do you recommend

24:09
taking your own photography of the products and writing completely new descriptions or, or I’m just trying to get an idea of what most of your customers do. Do they just take the stock photos from the supplier and the descriptions? Well, what are your recommendations there? Yeah. So, uh, we actually have this feature on the Spock side, just sample orders. We were not great to consumer products. So we do not allow people to call it a web platform and purchase things.

24:36
Well, this is just for sample order and it comes from a merchant. So a merchant could be ordering sample orders and they could do their photography themselves. Some do. A good number of them actually do that, but not everyone does because that costs them some money. They want to do their photography on their end. I personally do not suggest it initially. I think it’s probably better to not have too much cost initially. Push those products to restore, do a bit of testing, see if that product sells, and then

25:06
order a few self orders, do the photography and build your store around those products. That makes sense. All right. So here’s a, here’s a different angle of a question. Do you recommend building the audience first and then starting the store or starting the store first and then trying to sell your products? This is a really, really good question. I think the way that I can answer that is how I end up scaling Spock it as a company. Okay. So.

25:37
I, as I mentioned, I built 10, 11 different products and they all failed. Between now and the reaction failure, because when I launched my first product, I learned how to code. When I built my second product, I learned how to run Facebook ads. My third product, I learned to hire my first co-op student. The fourth one, I learned how to apply for grants and get some more grants. So every single of those products that I built,

26:03
Maybe it failed at the end, it wasn’t actually a failure. I learned so much. So by the time when I landed on a successful idea, like Spocket, I knew how to hire, I knew how to raise money, I knew how to apply for grants and then all those steps that are required to build and selling a company. So to answer your question, I don’t think you should spend a year building your audience and not starting your online store to hopefully get to that number of audience and then start your store.

26:32
In my opinion, you should be doing it in parallel. Building your audience and at the same time, trying multiple times building a dropshipping store. mean, the cost is so low right now. Yeah, but you can’t pay with Shopify monthly cost is 25, $30. I think they’re increasing the prices to $40. Spark is $30. Your cost is less than $100 a month. That’s honestly like going out twice. Like it’s like having two dinner, two lunch outside.

27:01
It’s like eight coffees, nine coffees. The cost is just so low that I think it’s really worth experimenting, even if you know you’re going to fail first time, second time, third time. But every time you learn something new, learn the first time you learn how to use Shopify, how to set up your theme, how to set up your taxes, to use a platform like Spark Air, how to automate using different Chrome extensions. The third time you learn how to write Facebook apps, and every time it’s going to cost you less than $100.

27:29
By the time that you have the arguments, you exactly know what to do. You exactly know how to scale your e-commerce store. That’s my personal opinion. Again, everyone has their own way, but basically, it’s else-free. You know what’s funny about this is that where you and I live, one meal could easily be the monthly cost, but people don’t perceive it that way. They’re like, oh, I’m willing to spend that much money on a meal, but-

27:54
When it comes to like a cost of like Shopify, for some reason they bulk at 30 bucks. It kind of just doesn’t make sense to me. Honestly, many of my friends that they literally think that way and I’m trying to change their mindset. I’m like, we went out last night and paid a hundred dollars on cocktails. And how would you not, how would you don’t see that costly about when you want to start a business, you think a hundred dollars is costly. Exactly. Exactly. I am curious. So, uh,

28:23
How does Spockit make money? Is it primarily from the monthly fees or are there any other ways that you guys make money? So we started Spockit on a subscription business and over time we wanted to move to the GMB style and taking a cut or doing a mix of both like Shopify does that they charge a flat fee and also they take a cut. We wanted to introduce

28:50
and marching out of the cell. It’s been like two years I’ve watched in Jerusalem, but we always said, not yet, not yet, because we always want more marching to get on our customer site, on our merchant site. So they say in business. So if they say in business, got to stay longer in the business and we got to make more money on the flat to everybody. So we have not introduced any cut of the cell. Maybe we do that in the future. We definitely wanted to do it and the experimented it a little bit for a month or two.

29:20
And it was very successful for us as a company, but we thought it was probably not the right time yet. I’ve been getting some complaints from other merchants that, hey, what are you charging us fees and stuff? So we tried to not continue that yet. OK, so it’s just pretty much the flat monthly fee. At this point, it’s just a flat fee, yes. OK. And just logistically, from just a drive shipping standpoint,

29:48
Do the people get access to the supplier in case something goes wrong or do you guys kind of handle all the go-between between the supplier? So I think it’s good segue that I talked a bit about our customer support team that I’m sure. Yes. And honestly, the past, the last five years, probably been one of my top two priorities all the time. I still every single day check 10 to 15 tickets. I read them and they give

30:17
comments to our customer support team. have almost 35 people doing 24-7 customer support. We offer two minutes to respond to them. So, I mean, you can test it yourself, Steve, if you go on our website and you send a message to our customer support team, on average, you should be getting a response within two minutes. These are part of our KPIs that we track on a week-to-week basis. And I’ve been doing it for six years now. I would say I want Saba to respond within two minutes. Is that going to happen?

30:47
That’s totally not, can I hug? Yeah, obviously I’m like an awesome team that they’re doing a great job. mean, if you go look at our reviews on Shopify, look at our reviews on TrustBite, they’ll make different platforms. see like how much they’re talking. The reviews are definitely top-notch among all dropshipping platforms. There’s no question. Yeah, I would honestly give most of that to our customer support down top of it. If you have some sector of KPIs, what that is that?

31:15
It has to be two minutes to respond time, below two minutes to respond time. They must get over 95 % customer satisfaction, NPS, on a week to week basis. We understand that some customers are always not going to be happy with what we do, so we can’t really be 100%. But every agent that we have includes 75%. So we have some very strict and very high bar KPIs on the customer support side.

31:44
So to answer your question, we wanted to be in the middle. If there’s any communication our merchant wants to do with suppliers, we wanted to be in middle. And we were in the middle for four years. Like any communication from merchants was coming to our customer support team. We were reaching out to the supplier, getting information from them, and getting back to our customers. And we did that for multiple reasons. But one of them was that we as a company probably have higher authority.

32:13
to send this message to suppliers and get a faster response. Then let’s say our merchants reaching out to the suppliers, it takes days or weeks to get the response. So also when we are in the middle, when we reach out to the supplier, if they don’t respond to us, let’s say within 40 hours or 24 hours, we can remove that supplier. But if the communication is directly in our merchant and supplier, we don’t know, let’s say that communication is efficient. We don’t know if suppliers are responding to our merchant fast enough.

32:42
So we could not have the KPIs on our supplier end. That being said, seven, eight months ago, we launched a direct communication between our merchant and our suppliers on a limited number of suppliers, which we actually agreed to expand it to all of our suppliers by the end of this month. So at the of this month, if our merchants want to talk to any of the suppliers, they could do that directly. And if they want to talk to us and

33:10
We reach out to the supplier, they can do that as well. I mean, this is a segue to my next question, which was how are disputes resolved? let’s say I buy something from this one of your suppliers and I’m not happy with the quality, but the supplier doesn’t agree. Like, do you guys mediate or how does it get all worked out? We are, we are mitigating. are in the middle. If, if there’s any issue happens in terms of the product, know, where it is broken or it hasn’t reached into the customer.

33:39
or there’s any issue like our merchant would reach out to us. I mean, not 100 % of the orders reached successfully. Even not all the orders from Amazon have reached successfully. think Amazon’s success rate is around 98%. We’re really aiming to increase that bar and getting it as close to 98-99 % on a success rate, but there’s issues on the order processing for sure. And we’re there. Our customer support team is there.

34:07
24-7 to help out. We do reach out to the suppliers. We are in the middle of transactions. So if the situation is in a way that we think is fair, we will process a refund to the merchant on our end. And we will discuss the resolution of the supplier later on. because the transaction happens within our system, we could be processing those refund in case there’s an issue with the order. Right. Yeah, that makes sense. So

34:35
Under what circumstances would the seller reach out to the supplier directly? You mentioned you just introduced a new program with certain suppliers or like that. Do you encourage them to speak with the supplier directly or do you prefer that they go through you guys? Yeah. So honestly, the reason that we launched that, sort of beta and making it across all four suppliers by the end of this month was not really for…

35:04
situation like disputes. It was more a situation that, let’s say, a customer wanted this product to be a different color, or they wanted to ask questions about the inventory of products. So we’re like, it might be unnecessary for our merchant to reach out to us and say, many inventory of this product left? And they reach out to the supplier and the supplier let us know, and we get back to our merchants. Like, do you have the color of these t-shirt? And they come to us, and they reach out to the supplier, supplier get back to us, and we get a

35:32
communicated with our merchant. So for those smaller sort of question, if there’s any dispute, we still encourage them to reach out to us. Because we’re in a position to resolve their dispute much faster and in more efficient way. Inventory accounts are automatically updated though, right? It does. OK. It does. Yeah. Let me ask you this question then. Since there is communication now, is it possible for the seller to

36:01
interact directly with supplier outside of Spockit. So I mentioned one of the reasons that we didn’t have direct communication for four years, four and a half years. There was multiple reasons. Like we wanted to increase the quality of service, but at the same time, we were in marketplace and we didn’t want to encourage our merchants around us. At the end of the day, we are in marketplace and we have to protect our marketplace and all the work that we put in place in the past six years to build this marketplace. So we wanted to protect it.

36:30
We really believe at this point, the value out of spock is big enough that does not work for our merchant dropshippers or for our suppliers to go around us to save $30 a month. So our starter plan is $29. You’ve came that you basically getting access to millions of products. You get access to our partnership integration with both Alibaba and Aliexpress. You get access to wide level solution.

36:59
You get access to our NFT creation, you get access to our winning products, you get access to image search, you get access to real-time inventory update, you get access to 24-7 customer support, and many, many other features and solutions that we offer. If you really think all of these are worth $30 a month, and you’d to go around us and do all of these things manually by contacting the suppliers, sure, I mean, you can do that. We really think we’re at the stage that our value add is much higher.

37:28
than saving $30 a month. Also from the other side, our supplier side, for our supplier side to work with all of these merchants on a direct basis and processing these orders, getting these orders, the transactions, all of this thing, doing that with hundreds of retailers, manually, it’s pain in the agree. Yeah. Yeah. So a lot of our suppliers, even if a merchant want to work with them outside of it, they wouldn’t work with them on the dropshipping side.

37:57
Let me ask you this question. So one way I teach it is like, if you have no money, start out drop shipping, figure out what sells and then maybe carry inventory of that item to get higher margins. Is there that option in Spock? Let’s say you drop shipping something really successfully. Is there the option for me to buy like 500 units and get like a bigger margin on that product from one of the suppliers? Yes. So as I mentioned, our suppliers offer 25 to 50 % discount. So if you want to process a bulk,

38:26
order with them. could again, have thousands of suppliers like this is something that we can discuss with our merchant on a case by case, but they could even offer up to 50 % discount which is a wholesale price and you could warehouse it and ship it yourself. Some merchant want to do the packaging themselves because they want to have repackaging a certain way. So they put it all quarter. They put it in their housing, their house or the warehousing. They create the packaging themselves.

38:55
They create the experience that they want to for their customers. So you absolutely can do that. Yes. Is that something that requires talking, or is that already kind of built into the system? So right now, we do have a feature that you can process sample order at a discounted price. But I think we have a limit of 10 sample orders per product. And the reason that we added that limit is because we don’t want to become a direct consumer. absolutely.

39:23
because we basically are negotiating all this discount with our suppliers. We do that with the condition that business is going to be selling this product to the end consumer. So there’s a limited number of sample orders that someone can produce. Sorry, order. But if they want to order and want to doubt, yes, they need to reach out to our customer support and we put to facilitate that. Another question I have is we talked about AliExpress dropshipping earlier and you added it because some people want to drop ship from AliExpress.

39:53
Looking at your customer base, are your more successful customers drop shipping from your US and EU suppliers as opposed to people from China? Yes, as I mentioned, let me actually share some of the title stats. Okay. Then I’ll answer your question. So we add over, I think at the end of April, we crossed 150,000 active merchants across all the commerce platforms that we partner with.

40:22
And that has grown by almost $50,000 in the past eight months. So it’s been a really great year on the growth and having more dropshipper trusting us and using it as a solution. Out of that, since we launched our AdiScracker solution, which is automated AliExpress dropshipping, we have over $58,000 of active merchant using that solution as well. So that high level of the usage base, in terms of orders,

40:51
I think I was actually looking at our order stats a week or two weeks ago. Roughly around 68 to 70 % of our orders are processed in our USA, Europe marketplace than AliExpress. So I would say more than two-third of our orders are based on suppliers that are fast-shifting and high quality and lead on to vetting and verifying their suppliers. Okay. But you don’t vet the AliExpress suppliers, right? That’s probably a hard problem to solve.

41:23
We cannot really do that. And there are some measures on the Aliexpress side, like you would be able to see the rating of suppliers, the rating of port right. So we’ll let that to our merchant. If they want to use Aliexpress, they can use our Aliexpress solution. But then on the vetting side, it’s on their end. They have to decide if they want to work with the suppliers on Aliexpress or not. Yeah. So what I’m getting at is it’s a much better experience to use your vetted US and EU suppliers. Than the Aliexpress. 100%. 100%.

41:50
And even the support that we offer afterwards, we cannot really offer the support for Aliexpress. So if there is a dispute with a supplier within Aliexpress, because we did not vet them, we did not verify those are not verified suppliers, they cannot handle that. But within our marketplace, we can help with the resolutions and any sort of disputes. I just thought I’d ask you this question.

42:16
Do you know of any people who are doing AliExpress dropshipping successfully in the long term? So I know people that are doing great building AliExpress dropshipping and then making good amount of money, but in short period of time and then die afterward. I mean, they just sort of dies after a couple of months or maximum, I’d six to eight months. I think the final winning product, they go hard on marketing, failed acquisition mostly, they sell a lot.

42:44
some of them honestly sell a few million dollars in like two or three months. Really they’re making very good margin, very good amount of money. But very soon the competition grows and becomes so big that you can’t really compete as much. So they usually die and their store dies and they look for new products to sell. But the customers that sourcing local suppliers might not overnight like in like a month or two get to a million or two million dollar sales.

43:13
but they feel like more in all terms of sustainable businesses. Yeah. I am curious, and maybe you don’t even have this data, but how many of your customers who are the successful ones start out drop shipping and then move on to like the white label option that you mentioned and even going on to private label? Is that, is that like a stepping stone that you guys are seeing with your customers or do they primarily stick with drop shipping? So, uh, that’s a really good question. Uh, so you know, Shopify at launch Shopify plus, think as of 14. Yep.

43:42
And I listened to the interview with Toby and Harvey, the wide-diamond Shopify Plus. The reason wasn’t to get into enterprise e-commerce initially. The reason that they started Shopify Plus was that there’s so many people who are coming to Shopify, they become successful. But as soon as they become successful, they would have gone to use Magento or other platforms. So technically, the best merchants of Shopify, they were leaving them after they become very successful.

44:11
So that’s why Shopify started building Shopify Plus and you basically graduate to their Plus solution when you start selling auto-naughty like $100 million a year. Don’t quote me on that number. It’s like if you’re making like six to 10 million or something, it makes sense to upgrade or something like that. I can’t remember the exact number, but yeah. Yeah, so those are more like merchants that graduate to a Plus customer. So the same situation happened to us, like a drop-share pay was…

44:40
It’s for beginners, people that are entrepreneurs, people that want to start businesses. And the ones that become successful would graduate out of production and they want to their own brand. They want to warehouse their own product for a very long term, building the brand. And we weren’t part of that market. We weren’t part of, we weren’t a solution for them. So we’re part of this platform called Jubilee, which right now it’s purely focusing on cosmetic products. And we’re going to expand that to fashion products and other types of products too.

45:09
So if your dropshare store becomes successful and it’s helpful, you want to build your brand, we can help you out with that as well. you’re using sort of our system and our customer support, the same level of support, the same level of solution that we have, but now you build your own wide level brand. another very interesting stat that I might be just sharing too much, but I think this is very interesting stat that as soon as we started our partnership with Jubilee four months ago, they went.

45:37
from pretty much zero to over 12,000 active merchants using that solution now. So they’re scaling too, which on the Y label side and private label side, scaling is very beneficial because it significantly reduces the cost of shipping and warehousing. Yeah. Nice. OK, so it’s nice to know that you guys are going in that direction. It seems like there’s plenty of demand for that. And right now, there’s no extra charge for that. Is that correct?

46:04
Jubilee has its own sort of fees, which is like, honestly, very small. It’s like $19 a month. I think there’s a very small card of every cell, but that’s very small. It’s not many. But it’s not using usability. It’s the same. Like you use the Spocket app, you can import these white label products directly in your store. Right? It’s experience. It’s the same experience, but it’s a different solution. Got it. Okay. Okay.

46:34
Cool, Salva, I know you got to go. Where can people find more about your company if they have any questions and that sort of thing? Our website, spokken.co. We have our customer support team. guys see this purple bubble in there? The right bottom side of our website, our app, you can reach out to them. You should be getting a response in two minutes. If you don’t reach out to myself directly, my email is salva at spokken.co. Try our customer support. Again, if they don’t respond in 10 minutes.

47:04
They send me an email. But yeah, that’s how they can get more information. have our help center. I think pretty much have articles and content for every action within the dashboard and our solution that should help out as well. Yeah. mean, one thing just I’ve noticed, but by the way, if you guys are listening, Spongebob also has a free program where you can just kind of look at what’s being offered. And then the customer support is

47:33
is top notch compared to the other dropshipping marketplaces. I don’t do dropshipping, but I do see it as a good stepping stone for other things. And your answers actually confirm that with me today in the interview. So, Saba, thank you so much for coming on the show. I really appreciate your time. Thank you, I would just add one more point. Yes, sure. we end this conversation, last year, we actually launched our Academy. This is another section that added in our app that if…

48:01
There’s many courses over 50 quarters, most of them are for free. So if customers want to learn about SEO, they want to learn how to do marketing or how to start the dropshipping source set up in the Shopify store, there’s a course about it. That’s honestly the last thing I want to mention. Maybe if you just send me those links, I’ll link them up in the show notes. The Shopify facility. Yeah. All right. Well, thank you so much, Sala. Thanks, Sastif. Appreciate it.

48:27
hope you enjoyed that episode. Now if you have any questions about dropshipping, feel free to email me over at steve at mywifecluderjob.com. And I hope this episode helped to clear up any questions that you may have had. For more information, go to mywifecluderjob.com slash episode 462. And once again, I want to thank Link Whisper for sponsoring this episode. Now if search engine optimization is important to you and you run a blog, make sure you check out Link Whisper over at linkwhisper.com.

48:54
I also want to thank Zipify and OneClick Upsell for sponsoring this episode. Seriously, adding this one tool will instantly increase your Shopify revenue by 10 to 15 % with doing very little work. Go check it out at zipify.com. And if you are interested in starting your own e-commerce store, head on over to mywifequitterjob.com and sign up for my free six-day mini course. Just enter your email and I’ll send you the course right away. Thanks for listening.

00:29
And today we’re going to learn how and why they are so successful. But before we begin, I want to let you know that tickets for the 2023 Seller Summit are almost sold out over at sellersummit.com. We are literally down to like the last three or four tickets. It is the conference that I hold every year that specifically targets e-commerce entrepreneurs selling physical products online. And you all know me well enough by now to know that my event has zero fluff. Every speaker I invite is deep in the trenches of their e-commerce business.

00:56
and not high level guys who are overseeing their companies at 50,000 feet. Every year we cut off ticket sales at around 200 people and we all eat together and everyone parties together every single night. I personally love smaller events and tickets always sell out. If you are an e-commerce entrepreneur making over 250k or $1 million per year, we also offer a special mastermind experience where we break up into small groups, lock ourselves in a room and help each other with our businesses.

01:22
The Seller Summit is going to be held in Fort Lauderdale, Florida from May 23rd to May 25th. That’s S-E-L-L-E-R-S-S-U-M-M-I-T.com. I also want to thank Spockit for sponsoring this episode. Now, most of you who have followed me for a long time know that I’m not a big fan of dropshipping, especially from AliExpress or China. But I do know that many of you listening don’t have a large budget to start an e-commerce business and dropshipping is a great way to get started. If you want to dropship,

01:49
from US or European suppliers, I like Spocket, and here’s why. Spocket integrates with all the top e-commerce platforms, which makes adding products and order fulfillment seamless. They also offer branded invoices, which allow you to add your logo and store name to the invoice so it appears as though it is being shipped from your own warehouse. But the main value add is that 70 % of their suppliers are from the US and Europe. As a result, your shipping times are super fast, at between two and five days,

02:17
and the quality of the product is superior. You can try Spockit for free over at mywifequitterjob.com slash Spockit. That’s mywifequitterjob.com slash S-P-O-C-K-E-T. And then finally, I wanted to mention my other podcast that I run with my partner Tony. And unlike this one, where I interview successful entrepreneurs in e-commerce, the Profitable Audience podcast covers all things related to content creation and building an audience. No topic is off the table and we tell it like how it is in a raw and entertaining way.

02:47
So be sure to check out the profitable audience podcasts on your favorite podcast app. Now onto the show.

02:59
Welcome to the My Wife Could Her Job podcast. Today I’m really happy to have my friend Mike Barnhill on the show. Now, first off, I’m just gonna say that Mike is one of my favorite people in the world. He’s such a passionate guy and he’s provided me with a ton of support over the years from my event, The Seller Summit, and I appreciate him very much. Now, Mike and his brother, Patrick, started Specialist ID back in 2001, and this company has been in the Inc 500 for the past seven or eight years. I kinda lost count.

03:27
They make millions of dollars every year selling ID badges and holders. And what I really love about Mike is that he’s a family man. He runs his business with his brother and he’s got a great relationship with his kids. And in fact, he and his son jammed together on video where his son plays the drums. And let me just tell you, watching these videos makes me happy every time I watch them. Mike also belongs in a band called Hydrofighter. In any case, in this episode, we are going to talk about how Mike started Specialist ID.

03:56
and grew it into a multi-million dollar business. How’s it going, Mike? Good, Steve, man. Thank you for that intro. You’ve been one of my heroes over the years watching you with your kids and your family and giving your wife the opportunity to quit her day-to-day thing and come do something more important and be there for your family. It’s been a big inspiration to watch you. And I can’t wait for your book to come out at the Seller Summit, man. Yeah, man, I’m excited about that.

04:22
Awesome, I will write a little nice something for you in the book for sure. Please do. Mike, it’s been a long time coming and just welcome to the podcast. I just wanna say this upfront. Now, I know I kinda call you out as the lead singer of Hydrofighter all the time and I’m just gonna be straight up with you. When I first heard about Hydrofighter, I was like, oh, that’s cool, Mike’s got a band. And then I listened to you sing and I instantly became a fan. Oh, dude, thank you.

04:49
I it was the Cyndi Lauper cover. I that’s what did it. Anyway. I’m honored to hear that, man. Thank you. We’re not here to talk about Hydrofighter for all you guys listening. We’re here to talk about e-commerce. How did you and your brother decide to sell ID badges of all the things that you could possibly sell? It was an act of desperation. then it was some learning. was, you know, my dad had been homeless for years. He got off the streets in Nashville where he’d been playing music.

05:18
He came into some money because he had some back owed social security, disability, pension, things like that he’d never bothered to get. He ended up befriending an attorney. The attorney got him some money and my dad came into our lives after years being gone and said, hey guys, sorry I wasn’t there. Sorry I didn’t pay child support, but I want to give you this like kind of lump sum of about 20 grand. I called it the dream fund. My brother being a lot smarter than I decided that we should invest it in ourselves.

05:47
And we built a recording studio. Recording studios, we thought everyone’s going to come record in our studio. We’re going to make a ton of money. It didn’t work out that way. So we had this beautiful studio my dad had helped us build, and we had to keep the lights on. And so it basically started as selling pro audio gear and things we knew on eBay. my brother found a distributor. We could sell things on eBay, list their catalog, go pick up, bring things over, ship them out.

06:17
kind of worked, kept the lights on. So we started trying more and more things and ID badge holders. brother had had a previous relationship with, you know, an employer and the guy would sell us badge holders in bulk. And for some reason, these little retractable badge reels for 99 cents on eBay, 299 shipping, we’re selling like, we couldn’t have even forecast like how well they would sell. And they were just selling on, you know, on and on and on on repeat.

06:44
we were reading this book called Good to Great by Jim Collins. one of the things it suggests is that, know, do something that you can be the best in the world at. And we realized right then and there, we can’t be the best in the world at any of other stuff, but we could be the best in the world of badge holders. So we went all in on badge holders, went hardcore and tried to become the best badge holder company in the world. And I think we’re about there. Yeah, I mean.

07:09
I was actually doing, I was just doing some Google searches actually for badge holders just in preparation for this interview. There is a lot of competition out there. It’s actually quite saturated. And maybe things weren’t like that back in the day, but certainly now it’s a lot more saturated. How do you guys stand out? Yes, you’re absolutely right. There was nobody doing it online when we started doing it. And now it’s, you know, can go, you can own a factory overseas and you can.

07:37
you know, use some tools and you can sell them on Amazon and everywhere else. No problem. And so our, you know, really what it comes down to is what we’re good at is we, you know, we’ve known our customers for the last decade. That’s been a huge advantage. So we do, you know, we don’t just sell on Amazon, but we also have, you know, fortune 500 companies. work with, you know, with county government, federal government, everything in between. And we can sell from, from one on Amazon to 500,000 pieces, you know,

08:06
to a big company. And that’s been really good. And the other thing was actually at one of your conferences, this guy Jake gave me the book Blue Ocean Strategy. And just kind of realizing that the ocean’s always going to get saturated with competition. So we always need to be innovating. And one of the great things is we have customers that tell us what they need that doesn’t exist yet. And we’re able to find that, source that, and bring it into the market. And it’s kind of an advantage.

08:34
Is it fair to say that Amazon’s just a smaller fraction of your business? You know what’s crazy is Amazon has consistently remained about 70 % of our business. Really? We didn’t intend for it to grow into that much, but it’s about 65, 70 % of our business consistently. It just keeps growing. Interesting. Okay, I wouldn’t have thought that actually. Actually, I didn’t do a search on Amazon for ID badges, but are you guys ranking for those really hard terms?

09:02
Yeah, we’re still ranking pretty well, but I know there’s a lot of work to do. know, our catalog is so enormous, you know, and we have the kind of 80-20 thing where most of our sales do come from a small proportion of products. And we do need to, I guess, kind of what we’re kind of doing that this focus this year is to revisit all of the tools for keyword tracking and, you know, re-optimizing listings and things like that. yeah. Just curious, how many SKUs do you guys have? SKUs? It’s in the thousands.

09:31
It’s in thousands. Yeah. Okay. Yeah, that’s a lot of skews. Well, take me back to the beginning, because that’s where a lot of listeners find it most interesting. So you sold these on eBay, you’re selling like hotcakes. And what was the next step? Starting your own website? Or? The next step was, it was, yeah, it was pretty much going deeper into the product lines at first. So you know, we had some badge reels, and then we realized people wanted red badge reels, people wanted blue ones, pink ones, everything. So we started kind of adding products to eBay mostly.

10:01
And most of our sales were eBay for the first several years. We did end up adding a website, you know, to start trying to get bigger customers and the phone started ringing. And, uh, you know, we started answering phone calls and actually trying to, uh, you know, put out quotes and proposals and things like that. So we started getting some bigger customers that way. And then we started putting products on Amazon. We basically tried to become ubiquitous. We wanted to be everywhere, anywhere that there were people that needed badge holders. We wanted to be there with the best offerings.

10:29
We wanted to be the Nike of batch holders. So what’s funny about this is you started in the early 2000s and because you even started before I did and back in the day there weren’t that many options for websites. So you did eBay for a couple years that takes us to maybe what 2004, 2003, 2004. There’s nothing available for websites back then. So yeah, no, the original. So the business incorporated in 2002 in my brother’s dorm room and it was more of a consultant group at that time. It was not a consultant group.

10:59
He would go do installs for other companies. He was working in photo ID business, but he incorporated the name specialist ID and he got it. We really started our e-commerce journey late 2000, 2007, 2008, think 2009. So we could start around the same time. yeah. And we did our first Amazon around 2011 was when we started putting products on Amazon. Yeah. Okay. So you were on Amazon pretty early. 2011 I consider pretty early. Yeah, yeah.

11:28
Yeah, that was a hard slog to we were putting products on Amazon from some of our suppliers and then Amazon would actually kind of take the attribution they would own the listing and then all these new sellers would come on and we were like, wait a sec, we put this listing here. It’s like eBay, how come everyone’s jumping on these listings? Yeah, I didn’t understand what’s happening that is a yeah. So so you after did the website come first or did Amazon come first? The website came first and that was that came first. Yeah, yeah. And how did you promote?

11:58
How are you getting these phone calls? How are you getting like the early business on your website? A lot of it all honestly came through eBay, man. It came through ones and twos. What we did was back in the day, we’d put little coupon codes, you know, on our on every shipment that went out, you know, and every every shipment that went out was kind of a lead magnet. We might have to we wanted to get our foot in the door. And what usually happens in the big businesses, you know, the HR department is going to care about the badging. But but somebody’s badge real broke.

12:25
and they have to wait for somebody to approve something, to approve something, to approve something, to get their freaking badge reel that they need for work. And so what we really were was through eBay and things like that, a foot in the door, and everything came back to our website early on, and we were offering promo codes and come see our website and check out all the products, and that was from the beginning. What platform were you guys on back in the day? I think it was Volusion. Okay, yeah, I was about to say, because back in the day, Shopify, I don’t think, was popular.

12:55
Did you guys move over or are you still on? We did, yeah. We’re Shopify now. For a while we were transitioning from one to the other and it was a very expensive transition, but glad we’re there. It’s a good place to be in Shopify. Okay. And then you, okay, so you got a lot of sales from your own website driven from eBay through coupons and whatnot in the packaging that you were getting business from. Actually, what’s interesting about your business is most of the people who buy from you are probably businesses. Is that accurate?

13:26
It’s, you know, everybody that buys from us works for a business. So sometimes it’s the person that’s providing for the whole business. And sometimes it’s the person that just wants one that’s a little heavier duty or blocks RFID signal or is more hardcore. So we want to be there for everybody, man, from the guy that needs one thing to the purchasing manager who needs hundreds of thousands. then, So is it fair to say that when you get a customer, chances are they’re going to buy from you again, like if they enjoyed the experience?

13:54
Yeah, our reorder rates very high, even like on Amazon and stuff like that. do have like, think double, I was talking to one of the people over there, is about double the average reorder rate for a company in our industry. And yeah, we have a sales guy now, this guy Lars, he’s brilliant. And he’s like, man, you guys gave me the best leads ever. I just go through our phone list and I call the people that have ordered from us before and I see how they’re doing and they buy again. you know, customer service has been, we read Tony Shay’s book, Delivering Happiness at the beginning.

14:23
And that became like our culture. You we had to make every customer super happy, even if it meant losing money, if it meant, you know, overnighting products, like let’s make everybody so incredibly happy that even if they hated us yesterday, they love us today. That’s like our policy too. In fact, there was one time when a bride ordered too late and we freaking hand drove the handkerchiefs over to their wedding that day.

14:50
And I’m pretty sure she told all of her friends, you can never discount the word of mouth in any industry, I don’t think so. It’s true. you know, the beautiful byproduct of that is it gives you it allows you to get a good night’s sleep too. Because you know, when you’re going back and forth, are they screwing me? What should I have done? If you just do the best thing for the customer, you just realize, hey, I just did that. You don’t have to fight it anymore in your head that you’re getting screwed. You just go to sleep and you’re like, I don’t think about it anymore. I made somebody happy. Cost me some money. Big deal.

15:20
That’s awesome. So what I find interesting is that your business is very Amazon heavy and, and Amazon obviously owns a lot of ecommerce, but do get a lot of repeat business on Amazon as well? Yeah, yeah, that’s so Amazon is where we kind of have like, like I was talking to somebody, somebody over there about a month ago, and he was giving me a lot of data that I needed. And one of the pieces of data that was so interesting was in our industry, we have

15:49
I think it was a 16%. I’m horrible with numbers, but our reorder rate was about double the industry standard for office supplies. So even through Amazon, we get a lot of reorders. We’re trying to build out the brand leveraging Amazon’s eyeballs. And do you think it’s because people are aware of your website and aware of who you are and they’re like, okay, we trust these guys, but I prefer to shop on Amazon and that’s where I’m gonna get my IDs. I think it’s a bit of both.

16:17
There are people that are always gonna try to price shop or say, well, know, I these things on Amazon, but I want a million of them. You know, I can’t buy a million on Amazon. It’s too expensive. Like, can you get, cut us a deal? So we just, you we put our logo on everything. We have a beautiful logo. Now I’m so proud of it. We try to put it everywhere, have it always be seen. Just, we wanna have that imprint in everybody’s brain all the time. Doesn’t matter to me where they buy from. You we want them to buy wherever they wanna buy, but we wanna be there. Is the pricing on Amazon similar to your website? Is it the same or?

16:47
cheaper or? It’s honestly it’s just different. It’s different. If you’re buying things in bulk, it’s going to be cheaper on our website. lot of things we try to keep it about in line or would you know, they a lot of times they’ll have different skews because you know this this one comes in packaged packaged form with the sort of colors or it’s a bundle. Whereas on our website you can just pick five of this color 20 that color 10 of 10 that color so on. Okay. So does that imply then that you are packaging your

17:17
your IDs and kind of bulk specifically for Amazon? Absolutely. we do we have a lot of, you know, auto baggers. I’m not sure if you’ve heard of them. Probably have we have a ton of auto baggers in house. And we have a whole assembly team product. We call it packaging and branding. And they package all our products, put a barcode on it. It’s got a logo and ship it to FBA or whatever. Okay. And how do you kind of decide like what bundles to sell on Amazon?

17:44
Running your store is probably easier, right? But for Amazon, you actually have to decide what makes sense. Well, the beautiful thing is my brother’s great at e-commerce, he’s great at marketing, he’s great at leading teams. He takes care of all things website. And I’m just this goober dork who loves looking at patterns on Amazon. And I feel like Amazon is the place where I can leverage things like keyword optimization and product market fit and all that cool stuff.

18:10
auto completing keywords, like all these things where I’m able to, you know, product products that have demand but have no relevant, you know, listing. So I love to play in the Amazon space. And just, I think it’s actually really easy to find things on Amazon people looking for just by knowing the industry and knowing Amazon, it’s kind of like Scott Adams, who founder of Dilbert, says, don’t have to be the best in the world at things, just be really good at two different things, you know, and you can have some success there.

18:40
So do you, what do you guys source your products? Is it still from that same guy or you have your own? Oh no, no, we outgrew him. He sold his company and we didn’t, you know, we moved on to bigger, bigger pasture. So we, we source from all sorts of places. just, we’ve looked through all that. We’ve looked for all the best badge holder manufacturers that we could find across the globe. And if they’re to our standard, like a Nike, you know, or like a Nike kind of factory, we’ll work with them. If they’re not, we don’t, pass.

19:10
And so we have, we work in Taiwan, we work in China, we’re working with products now in Vietnam, we work with US manufacturers. you know, yeah, we’ll work with anybody who has a great badge holder. And then what do you guys do in-house? Because I know you have your own facility that’s pretty large in Florida. What are you doing in-house? Do do printing? Do you do any manufacturing there? So we do a lot of the printing like you’re talking about.

19:38
We specialize in these products called badge buddies, which in hospitals are a little tag that hangs behind a badge that just quickly identifies what the person’s role is. So they walk in and you see, oh, it’s an LPN, it’s a nurse, it’s a doctor, what have you. We also do lot of, you know, just assembling of two different products. One of the first things we ever did when we were developing new products for Amazon was, you know, like sticking badge, sticking key rings on badge reels. Cause at the time nobody had to ever put a key ring on a badge.

20:07
which to me was crazy. So I used to drive back and forth to the warehouse an hour a day and I would bring buckets of badge reels and key rings and in traffic I would sit there and I would assemble them, stick them in a different bucket. know, and so a lot of that we do, when we’re trying a new product and we don’t want to go all out, we do a lot of in-house manufacturing as well. we’ll bundle things, assemble things, put two pieces together, you know, and then if it is great, then we’ll have somebody else make it for us, but keeps our costs low for trying things out.

20:39
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21:07
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21:35
will teach you how to achieve financial freedom by starting a business that doesn’t require you to work yourself to death. Because you can in fact achieve financial success without being a stranger to your kids. You can make good money and have the freedom to enjoy it and you don’t have to work 80 hours a week and be a slave to your business just to make it all work. I will teach you how to start a business from the perspective of a parent who makes both business and family work. Go to mywifecoupterjob.com slash book and I’ll send you the bonuses

22:05
invitations to book parties that I’ll be throwing all over the country, and other special offers. That’s mywifecluderjob.com slash book. Now back to the show.

22:16
So walk me through the progression here. So you started out with this smaller outfit who was selling you. You started selling on eBay, you saw success, so you started selling in an online store. When did you start deciding to, you know, source from overseas? Like when did the operation get a little bit bigger? When you decided to move into a facility? Like the early stuff is what’s interesting to a lot of people. Yeah, yeah. The early stuff was, especially talking about like, like our first facility was the studio. It was that studio. We had this little, little, little garage there.

22:47
And that’s where we did everything. Um, and my son, when he was about three months old, we didn’t have any place to stick them. So he’d just come with me to work every day. So pretty much, I know I’d be in the back doing purchasing while he was doing tummy time. I’d have him in a stroll. Literally I’d have him in, I’d have him in the stroller talking about the early days. I have him in the stroller in a county lanyards and I’d go one, two, three, four, you know, teaching him counting while counting products to put in packages.

23:14
And then, you know, I’d be taking sales calls while he was, you know, on my shoulder. And sometimes he’d start crying or, whatever. And, you know, I’d say to the person trying to buy, buddy, I’ll be right back. I got to go change my son’s diaper or whatever it was. And, uh, got a lot of sales that way. But yeah, so I kind of went off on a tangent there, but you know, we started with this little garage by our studio. Next thing you know, the building behind us comes available. We move into that place to knock down some walls. Another place comes available, knock down some walls.

23:43
Eventually we ended up tearing down the studio and we just became we just were growing and growing and growing adding team members and things like that. What were your traffic sources back in the early days? Like were you running ads was I don’t even think social media was around back then. So what was it? It couldn’t have been just all eBay, right? No, no. So by that by that point, that was when I was all going down, that was all Amazon private label. So we started Amazon private label in 2014 by watching guys like Scott Volcker.

24:12
Yep. And, these other, these other people that were giving away a lot of information on the internet. And I’d be watching these videos going to this is like what I need because I’m selling other people’s products. Everybody else is beating me on price. I don’t want to play this game forever. I’m stressed. I’m losing my mind. I can’t sleep. Like I’m going to start private labeling this stuff. You know, it was basically taking products that already existed that we knew there was demand for giving them keyword optimization, giving them beautiful photography.

24:40
You know, maybe making them special, making them into a five pack or a 10 pack or something that had never been offered before. Uh, looking up the, you know, the long tail searches on Amazon and saying, well, why is there no product? There’s so many searches for this, you know, this product that doesn’t exist and just going hard in all those opportunities. And so we just, you know, we went hard into private label and that was what grew us into having 70 % of our revenue from Amazon. wasn’t intentional. It was just because that was where the opportunity was. And, um,

25:09
We just had to keep adding people as we grew. So given that it’s so competitive now, today, like if I were going to look for ID badges and let’s say I didn’t know you at all and I go on Google or Amazon, how do you stand out from someone who does not know you at all? Or is your business primarily, since you have such a strong customer base, you have this really nice base of repeat orders now that you can just build upon.

25:39
It’s honestly, it’s both, you know, I’ll always go back to the idea of the ubiquitous brand, you know, being everywhere that people are looking, looking, we do have a marketing team now that we work with, it’s really good for helping us with like Google search and things, or Google ads and things like that. We’ve not done much in a way of any of that stuff until the last year or two. even like email follow ups and stuff, we’ve never done funnels, we’ve never done follow ups, we had never done any of that stuff. We had not, we had,

26:09
minimal Google ads just because you had to. about a year, maybe a little bit longer ago, we did start outsourcing that stuff to a great company called Zen Media. And they’ve been fantastic. And so now we do have Klaviyo, you know, things, email follow ups, but we had done none of that. There’s so much opportunity stuff for our business because we hadn’t done any of that stuff. Yeah, crazy, right? Yeah, that is crazy. I think the beauty of your business is that once you have a business customer,

26:37
And I can speak from this because for our business, like we focus on our business customers because they buy in bulk and they buy often. It seems like most of your customers that we talked about earlier, they are a business or they work for a business. And once you find someone who’s reliable, like they’re not gonna switch. And I think that’s the beauty. That’s why I was asking you, I wonder if you really even need to advertise.

27:00
So Google works, do you guys do any Facebook advertising or social media or anything like that? We do a little bit now, yeah, we review that every month and we do a little bit. It’s, you know, our ROAS is not fantastic, but it does keep more eyeballs coming in. And like you said, like we try to treat every customer, especially business customers with, you know, with kid gloves, or not kid gloves, but know, with like white glove treatment. And we hope that they’ll keep coming back. And historically we’ve had just great repeat business from customers we’ve tried to make happy.

27:26
And then you mentioned that you were taking calls. that a party? Like, do you want people to call you? Is that part of your strategy? Because I know people I’ve interviewed on this podcast where they just turn off the phone so they don’t want to deal with it. Yeah, no, no, we do. We have two full time customer service reps here in the US and they’re fantastic, you know, and they really care. And that was, you know, very important to us from beginning. And they’ll pass off our, you know, people that might be potential bigger players to our sales, our sales guy. And he’s brilliant, too.

27:54
And these are all things that we’ve built kind of in the last couple of years, but we’ve had customer service forever, ever since my son was born and I couldn’t do customer service, we brought people that started hiring in the US. Actually, that was my next question. Are most of your employees in the US or are you outsourcing any to other countries? Yeah, most of our employees are in the US. Most of those US employees are in the office in the warehouse in Miami, Florida. A couple of us work remote.

28:23
two new hires, they’re both fantastic that are in the Philippines. But you know, our business is so old, it was kind of built before this whole. All these opportunities presented themselves. So we built ourselves as a business to business kind of thing that happened to sell online real well. But we didn’t build it with the intention of scaling the way that people do these days. very, very different mentality. I have to ask you this. I noticed that you guys hit the Inc 500 in 2021, which is pandemic time.

28:51
Yes. And during pandemic, I can’t imagine like people weren’t going in, people weren’t throwing events and that sort of thing. How did you guys manage to grow during that period? Let’s talk about that. I am happy to because we got lucky. And we had been in the business for so long. And we had had great relationships with suppliers that we were able to move on things that other people didn’t see very quickly. So we have these double ended land. So the first thing we did was we made we make these badge buddies I was talking about.

29:22
out of desperation, we started looking on Indeed and Monster for who was hiring. Hospitals are hiring. These travel nurses need all these badge things, these badge buddies. They’re having to buy them themselves to show up at a new hospital, right? They have these favorite colors. So we basically put out every single job title that was hiring. We started building custom badge buddies for those, putting them in the top colors.

29:51
putting them on all sites and then boom, boom, boom, boom, boom, started getting just tons of these badge buddy sales, making everything mostly in hot pink. was awesome. The next thing we do is outreach or were they, did they find you? weren’t doing okay. I putting it on Etsy, putting it on Amazon products that had not existed before, you know, just saying, what do we have? What can we make? What do people need? What can we make immediately? The next thing that happened was we have these double ended lanyards, right? They’re for events, they’re for things. They hold a mask for a mask lanyard.

30:21
unbelievably. So we had just designed like a napkin holder, like a double ended napkin holder to start programs on. And so we had photos and all this crap already. And the next thing you know, we’re like, wait a second, people are using these to hold masks. And we were the first to market with mask lanyards. we went boom, we bought up every double ended lanyard we could find that was currently in the US. And we, we marketed it and we sold it, we put it on Amazon.

30:46
The first day that we started selling them, think we sold like 20 sets of mask lanyards. Next thing you know, we had our biggest two months in history. And then we were making them for schools in different school colors. We were making them with a breakaway so that kids wouldn’t choke on them. We made them MRI and metal detector friendly so you could walk into your office. Like we just kept innovating, innovating, innovating, getting copied, getting copied, getting copied, innovating, innovating, innovating. And if you know anybody that wants to buy some mask lanyards right now, I’ll give you a good deal because…

31:15
We got way too many of them now. What’s hilarious is your story is similar to ours. No one was getting married. Our customers are airlines and hotels. No one was using any of those. And so we started turning our handkerchiefs into masks. And back in the day, the cloth masks were popular. And no one was selling the decorative ones. They were all like the surgical masks. And we had like a really good year because of those masks. We just said, hey, stop making hankies. Turn those into masks. Dude, brilliant.

31:45
Man, okay, so that’s how you guys managed to go. That was ingenious. That was ingenious. It wasn’t even genius. was a good idea that had already been thought of and we happened to have enough product knowledge and relationships with vendors. We were able to just move and then ask the next question, what do they need next? They need a breakaway for their kids. They need a shorter one for their kids. So I think what you guys did was genius because that was a bold move, very quick and…

32:13
I mean, didn’t cost us any money. In fact, my wife was even hand sewing them for a little bit just to test the market. And we started giving away hankies for masks and gave away the instructions. Oh, nice. That caused people to come in too. So these lanyards, so what was, you went on indeed.com and you were looking for who was hiring? That was the first thing. That was to build the badge buddies for the hospitals. we needed to know which hospitals were hiring, what jobs were they hiring for.

32:42
Cause we knew that these nurses were going to have to go to new places. Every, every hospital is either color coded and they’re kind of badge buddy thing, or nurses just pick their own favorite colors. And so we just started, we’ll say, well, let’s build all the important colors that we know are color coded and the blues and the reds and the greens. And then let’s build a hot pink because that’s the top seller on for most of our, our badge buddies and build that for every title. And so, you know, looking at all these jobs that were very specific to the hiring of the time. Um, right.

33:11
putting those out everywhere. And were those marketed as such, like badge buddies for like nurses or medical? Oh yeah, yeah. So we would find out like on Indeed or Monster like, okay, an LPN is also called a licensed practical nurse or a license. And you start looking up all the things on the, pretty much the form where they’re supposed to submit their resume. You’re looking for all the different words that we don’t know. What are the other things associated with this job? Okay.

33:41
I can’t even think of them right now, but we’re looking for all those words that were significant to them that we didn’t understand, we didn’t know, and then building that onto the listings and the marketing and everything. Yeah. totally makes sense. Totally makes sense. For your own website, I’m just kind of curious, like off Amazon stuff, do you guys create content for SEO or what are the things that you do specifically to drive traffic to your website? Man, I wish I knew more about that side of the business. You’re the Amazon side.

34:10
I don’t, yeah, yeah. Pretty much all third party channels are where I can have some expertise and I’d be making it up if I gave you an answer. hi. Well, let me ask you this. Are you guys still selling on eBay and Etsy? Yep. You are? Okay, so can we, can you just tell me what percentage of that is to your business? I imagine it’s pretty small, right? It’s definitely small. A lot of Etsy customers end up becoming great website customers because they’re crafters and makers and they’re buying supplies, they’re trying us out. They love it.

34:40
Some of our biggest customers today are the ones that we met on Etsy six years ago. know, we consider it, we don’t, I say as a percentage of sales, we’re looking at what’s Walmart, eBay and Etsy, maybe about 1 % each. Wow. Maybe up to 3%, but small. How can you, so how can you justify, cause I know we used to be on eBay, we actually stopped because eBay customers are kind of more of a pain, like they require more customer service. They always try to low-ball you for something also.

35:10
For such a small percentage for your revenue, I imagine you still have like a person dedicated to working on eBay at least, right? Or someone taking care of it. How do you justify those costs? Yeah, so for us, it doesn’t seem like there’s any sort of added costs that we’ve noticed. We have a customer service team. They’re handling as many things as they can handle every day anyway. To us, it’s all kind of a profitable lead magnet. And so when we created Amazon, our process is typically when we create an Amazon listing, we just create a, we just move it to eBay, we move it to-

35:39
to Etsy and we move it to Walmart and we strategize, know, it’s a couple of tweaks in the keywords in the title and that’s pretty much all that we’re changing. And then it’s all just, you know, sales coming in and some things that do crap on Amazon do really well for us on Walmart. So we never really know. So we just put it there, let it do its thing and then our customer service team handles the customers. What’s interesting about all this is Etsy I wouldn’t think would be a

36:08
a good place to sell your stuff. But you just mentioned that some of your best customers are from Etsy. So do you recommend that people sell on Etsy also if they already have like a really well established e-commerce store? I’ve loved Etsy because we’ve built our best customers, the most loyal customers, the most community oriented customers have all been on Etsy. And for us, it makes sense because what we do, what we sell is kind of craft supplies. What we realized…

36:36
But we learned from our Etsy customers as well. We learned that a lot of nurses have side hustles where they’re buying a badge reel and they’re decorating it with some bling and they’re selling it to their friends. And then they’re selling on Etsy too. And then when they get really good and really big, they’re go, you know, some of them, don’t even work in the hospital anymore as a nurse. They become a small business owner who is just an amazing crafter. So I would, in my personal opinion, I tell everybody, sell on Etsy because the percentages are pretty low.

37:06
They’re changing all the time. you meet good friends and you learn a lot. Some of our best product suggestions have come from Etsy customers who were like, hey, I know the vendor who makes this. I don’t wanna buy 10,000. Will you buy 10,000 and put them on your website and I’ll buy the first 500 from you? Let me say sure. And so a lot of our best ideas come from our best customers. So on Etsy, presumably you’re selling just like the blank holders, right?

37:36
Do they enforce the fact that it needs to be hand made? I guess you are the manufacturer. is that legal technically to sell? Yeah, yeah. So they don’t even require that you have it handmade anymore. And when we started going there, our loophole, and it wasn’t even really loophole, is if you supply the handmade industry, then you are welcome to sell as they had a whole supplies like catalog or not catalog. And so we just went in as a supplier for Etsy resellers.

38:06
Let’s switch gears a little bit and talk about Walmart. Do you think it’s been worth your time? Are you using WFM? We’re trying it. We’re always just kind of dabbling with Walmart. Okay, so right now you’re fulfilling yourself? Yeah, yeah, we have about five products I think that we’re trying Walmart Fulfill. But we’re not making any moves on it. We’re not making any aggressive moves. We’re just trying to be there. I see. Where do you see the future going in terms of

38:36
your sales, is it still all on Amazon, even though it’s getting more more competitive? We’re really doubling down on our website now. I think that’s what we’re trying to bring everything to the website, know, hiring these new things, you know, the marketing team that we were working with joined EOS. So we’re really trying to fix our website, learn everything we needed to do to have that be like just dominant. And then

39:03
You know, and having our sales guy and everything like that. We’re really trying to optimize for our website going forward. Okay. And if you guys seem to be selling everywhere, can you prioritize for me what your marketplaces are? Like if you just tell me right now? Yeah. Yeah. So Amazon. Okay. Website, definitely. Okay. Uh huh. And then it would probably go Etsy, to be honest. Really? Etsy. And then eBay and Walmart. I don’t know.

39:32
That’s a disparage either of those but we know I was just curious what your priorities are because everyone’s priorities are a little bit different like I I actually just had some Walmart guys on in the last episode and they were like yeah you can expect between five and twelve percent you know of a revenue lift by going to Walmart assuming you you put like what was funny about what they said is a lot of times what sells

39:56
poorly on Amazon will sell well on Walmart because it’s not nearly as competitive. Especially if it’s a more competitive product that’s kind of more mainstream is actually what they said. Seems like you’re saying the same thing. Yeah, I would agree with that, especially kind of the inexpensive things or bundle things that are so super saturated on Amazon. That’s where we sell more on Walmart than we do on Amazon even. One thing I’ve always been curious about also, you and your brother are tight.

40:25
What’s it like running a business with your brother or having it being a family-owned business? think it’s great. I love how smart he is. I love what a great leader he is. I think part of the success is that neither of us wants to the other down. We’ve always considered ourselves two ninjas with our backs facing each other. He sees that. He sees the enemies. He sees that. And I see the enemies over here. And what’s great for me is I love him. I’ve loved him since…

40:53
since he was born, you we shared a bedroom growing up, you know, we had parents that fought a lot. And so we were always kind of tight and we kind of had our thing. He’s so good at so many things that I’ll never be good at. And that’s great because I’m pretty damn good at some things that he’s not the best at. And we just have never had that competition. I remember the first time I saw him jump onto a soccer field and score a goal. was like, well, there you go. He’s the soccer player, not me.

41:19
And when he got a guitar for Christmas, I stole his guitar and I played it all the time. And he’s great at guitar too, but it’s cool. We let each other shine and I love watching him shine. Yeah. The reason why I ask is, you know, I work with my wife and whenever people ask me whether you should work with your spouse, I’m always a little hesitant. Maybe it’s different working with your brother, but with the spouse, it’s already stressful. Kids, everything.

41:47
and running a business together just adds another layer of stress where we were fighting all the time in the beginning. Now we have it down, but it can be tough. Yeah. It seems like you guys are really coming into something special. When I see the two of you together and I see what you’re doing through the business and with your kids, to me, as an observer, it just looks really special, man. It’s been cool to watch that. Cool. Last thing I want to talk to you about is

42:15
know, specialist ID is not your only thing. Talk to me about Hydra Fighter. So you’re in a band. How do you manage to balance all these things that are going on in your life? And tell me about the band. I’ve always been curious. Yeah, sure. So the my band is called Hydra Fighter. And it actually is based off of a book by what’s his name, Josh Kaufman. He’s a business writer, but he wrote this parable about the guy who fights Hydra and

42:41
I just love that story. The guy who fights Hydra is a guy who’s a blacksmith, who’s got a very comfortable life and everyone tells him to be a blacksmith, work hard, love your life. And he says, I get that I love that, but I really, there’s this Hydra out there that’s attacking our city. It’s always beckoning me to become the ultimate Hydra fighter. So he goes off and, you know, it’s just a parable about pursuing what means the most to you. And, you know, so seemed relevant.

43:08
for the music stuff. the music that I write is very, we call it sad bastard music. It’s the kind of music where if you’re watching a movie and somebody breaks up and drives away in the car, the songs that we write are the songs that are in that scene. And so I I love folk music, I love acoustic music, and I got a buddy here, we play together, and my brother produces our songs. so, yeah, it’s something I always love doing.

43:35
we’re finally in place in the business where I can actually resume that pursuit of just playing because I love to play. And this is my home studio and you know, I’ve always been a songwriter. It’s in me. And so just I’m doing it. And it’s what your original business was in a way, right? With the studio. Yeah, the whole plan originally was that we were going to build the studio. And the funny thing is we worked so hard for all these years and now my brother and I both have home studios. I record here. I sent it to him in Miami. He’s brilliant at mixing and engineering and he does that.

44:05
And then we come up with these songs that are just so cool. So it took us not being in the same state, not being in the same studio for us to actually find the time and the workflow to make music together again. So it’s been so cool. It’s funny how that happens. It’s like most of the friends that I see most often are ones that don’t live in the area. Cause when they come into town, we make sure we see them. Yeah, right. When they’re in the area, we’re just like, ah, we’ll see them whenever we can, but we never end up doing it. So love it. Mike.

44:35
It was a pleasure talking to you. If people have any questions about your business or need any IDs, where can they find you? Yeah, thanks, Steve. Well, they want to check out specialist ID calm that singular specialist ID ID card calm. And from right here, if you need any mass holders, they’re on they’re on clearance. They’re on clearance. Yeah, come pick them up. Bring the truck. Cool. My thanks for coming on, man. Appreciate it.

45:03
My pleasure, man. It’s good to see you. Thank you so much. We’ll see you at Seller Summit, bro. Summit and ECF. And ECF.

45:13
Hope you enjoy that episode. Now Mike is a very successful entrepreneur and there’s lots to learn from him and be sure to check out Hydrofighter on YouTube as well. For more information, go to mywifequitterjob.com slash episode 454. And once again, I want to remind you that my annual e-commerce conference will be held in Fort Lauderdale, Florida on May 23rd to May 25th of this year. I really want to hang out with you in person, so let’s meet up. Go to sellersummit.com. That’s S-E-L-L-E-R-S-S-U-M-M-I-T.com.

45:43
I also want to thank Spocket, which is the drop shipping supplier that I like for e-commerce. With a few clicks of a button, you can easily add products to your store and have pre-vetted suppliers ship your products to the end customer without worrying about storage or fulfillment. And the best part is that most suppliers are in the US and Europe for super fast shipping. For more information, go to mywifequitterjob.com slash Spocket. That’s mywifequitterjob.com slash S-P-O-C-K-E-T.

46:11
Now I talk about how to use these tools on my blog and if you are interested in starting your own eCommerce store, head on over to mywifecoderjob.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.

00:28
I want to let you know that tickets for the 2023 Seller Summit are almost sold out over at sellersummit.com. It is a conference that I hold every year that specifically targets e-commerce entrepreneurs selling physical products online. And you all know me well enough by now to know that my event has zero fluff. Every speaker I invite is deep in the trenches of their e-commerce business and not high-level guys who are overseeing their companies at 50,000 feet. Every year, we cut off ticket sales at around 200 people.

00:54
and everyone eats together and everyone parties together every single night. I personally love smaller events and tickets always sell out. If you’re an e-commerce entrepreneur making over $250k or $1 million per year, we also offer a special mastermind experience where we break up into small groups, lock ourselves in a room and help each other with our businesses. The Seller Summit is going to be held in Fort Lauderdale, Florida from May 23rd to May 25th. That’s S-E-L-L-E-R-S-S-U-M-M-I-T dot com.

01:22
I also want to thank Postscript for sponsoring this episode. Postscript is my SMS or text messaging provider that I use for e-comm and it’s crushing it for me. I never thought that people would want marketing text messages, but it works. In fact, my tiny SMS list is performing on par with my email list, which is easily 10x bigger. Postscript specializes in text message marketing for e-commerce and you can segment your audience just like email. It’s an inexpensive solution, converts like crazy, and you can try it for free over at postscript.io slash Steve.

01:52
That’s P-O-S-T-S-C-R-I-P-T.I-O slash Steve. And then finally, I wanted to mention my other podcasts that I run with my partner, Tony. And unlike this one, where I interview successful entrepreneurs in e-commerce, the Profitable Audience podcast covers all things related to content creation and building an audience. No topic is off the table and we tell it like how it is in a raw and entertaining way. So be sure to check out the Profitable Audience podcast on your favorite podcast app. Now onto the show.

02:27
Welcome to the My Wife Could Her Job podcast. Today I’m really happy to have Cole South on the show. Cole is someone who I met at Ecommerce Fuel and the Seller Summit in past years. He is a former poker player turned entrepreneur, which is something that I’m actually finding increasingly common over the years. There are a lot of poker players who actually go into business. Cole is an eight figure seller who runs two brands, Gold BJJ and Bird Rock Baby. He is also working on a software tool for Ecom as well.

02:54
Now, since I’ve always known Cole for his baby moccasin store over at Bird Rock Baby, this is a business we’re gonna focus on today. And I just have to say that selling any kind of shoes, especially kids shoes, I would say is tough. It’s capital intensive, you have to carry a bunch of styles and a bunch of different sizes. So in this interview, we’re gonna learn how Cole grew this business from the ground up. And with that, welcome to show, Cole. How you doing today, man? Thanks for having me on, Steve. Yeah. Hey, so I…

03:21
out of all the products that you could sell, why did you choose Baby Moccasins? It seems like shoes are competitive, saturated, there’s lots of brands that sell these. Yeah, totally. Well, when we started this e-commerce business, we didn’t really have any clue what we were doing, there wasn’t a ton of thought into it. Aside from that, we wanted to start the business around products my business partner and I were personally using. And at the time, he had two young kids, and his wife just wasn’t crazy about the shoe options. They were either 65 bucks and like,

03:48
you’d lose one with kid throwing out the window or losing at the playground, just kind of impractical to spend that much money on a pair of shoes that your kid’s gonna outgrow really fast. Or like six bucks from AliExpress, drop shipped in a plastic bag where you feel like, this even safe to put on my child? So that was the initial idea. Maybe we can do like a mid-market baby shoe, backed by an American company, safety tested to beyond all standards. That’s how we landed on baby shoes. Interesting. So you mentioned AliExpress and Wanna. Are these made in the US then?

04:18
Our shoes are all made in China. They’re all made in China, okay, okay, right. And so you just have tighter quality control and whatnot. Exactly. So did you do any testing on this? Because like I said, it’s competitive. Or maybe it wasn’t as competitive when you got started. But how did you know that these shoes were gonna move? Well, we could tell from all the typical Amazon and SEO tools that there was a lot of demand for this type of product, leather baby shoes, baby moccasins. And again, it was kind of just seeing that gap in the market.

04:48
a lot of these very cheap items were selling a ton of units. And then there were some brands with some expensive baby shoes selling a ton of units. And kind of just use a little bit of logic thinking that, there’s probably a space for a mid-market baby shoe in this category. So as a poker player, you probably calculated the expected value of launching this product. Yeah, mean, certainly a lot of skills translate well from poker to e-commerce. I think the biggest one is just like being okay with.

05:14
risk and comfortable losing. If it didn’t work out, it’s not like we had mortgage or houses for this business. How much did you invest actually to start it? Man, I want to say we opened the LLC. My business partner and I, and I putting in five or 10 grand. Of course, as the business grew, e-commerce is a super capital intensive business. And so I loaned the business some more money to finance inventory. And then eventually as we became more established, we started getting other.

05:41
financing options through Amazon or Chase. I am curious, when you first launch, like, do you have to launch with multiple styles, multiple sizes, or did you just launch with one style? I believe we launched with four colors in four sizes, something like 16 skews. Okay. And then how do you actually, this is something I’ve always wondered about anything related to sizing. Like, how do you know what to order or how much to order in what? Yeah, that’s tricky. And I feel like, especially on your first order, it’s so hard to tell. And there’ll be some

06:10
some specific colors where the baby size just crushes in that color. But a different color, people are only buying that for two year olds. So it’s hard to kind of translate that from style to style. So our approach has been just order a ton on the first order so you don’t run out of stock because the second you’re out of stock, all your forecasting goes haywire. And then try to use that cushion from that first order to place more accurate orders going forward. What do you consider a ton? How much was your initial order? Oh man, the initial order was probably

06:40
two brand of shoes. Of each style and size? No, total. Yeah. Oh, total. We started off really small. Yeah. I mean, we started our e-commerce business as a side project where my business partner and I both played poker for a living. We were pretty burnt out on it looking for something new. We like, let’s just start something to get some experience doing any sort of business outside of poker. And that’s how we land on e-commerce launching brands around products we personally use. Okay. And so you ordered 2000 pairs, I assume evenly split because you had no idea.

07:10
what was gonna sell. And then what was your first market, was your Shopify store your first or were you on Amazon at first? No, strictly Amazon. I’d say that first year sales was 99 % Amazon. Okay. And then I imagine you did all the keyword research and whatnot and did you do anything special to rank those? Yeah, so, you know, when we started the e-commerce business, was kind of like learning poker all over again. We just devoured every Amazon e-commerce podcast and blog we could find.

07:39
to try to learn how to market for e-commerce. And we definitely were lucky to kind of catch the wave of Amazon and e-commerce at the right time, where in 2016 we put this product up on Amazon. And I think on the first day we sold two or three units, you know, without ads or anything, turning on ads or anything. Yeah. Okay. And then over the course of that first year,

08:01
customers really liked the product and we just had enough organic traction that we’re like, okay, I think we’re onto something here. And then we quit poker and went into this full-time. Oh, I didn’t realize you were still doing poker at the time. Did you have your website up then or was it just strictly Amazon? I think we had a website up, like a very simple commerce website or something. But if we did more than five sales on the website the first year, I’d be surprised. Oh, okay. So it was literally all Amazon. And I am curious, are you guys in retail at all or?

08:31
Yeah, so we just broke like 500 wholesale stores. My wife runs the wholesale program. It’s all small independent mom and pop boutiques around the country. But yeah, it’s a cool part of the business. Very different from online marketing. To get those, did you literally just walk, go door to door to these mom and pop shops? We’ve tried a few different things. Some of it has been outbound where my wife just has stores she likes that she thinks would be a good fit and reaching out to them with a very personalized pitch.

09:00
and then trying to use those to find similar stores in other cities, something like that. We’ve also used wholesale platforms like Fair, which has been great for customer acquisition. And we’re starting to do a little bit more on the outbound side of things. But I also think there’s a lot of aspect of just getting your product out there. And people who own boutiques that sell baby products, they need products that parents like on the shelves that sell through. So they find our product and just inbound reach out to us and stock in their store. I’ve always been curious. what is your minimum order from one of these small mom pop shops?

09:31
I believe 250 bucks and they get a 50 % discount. Okay, so it’s not very much money at all. And then it’s a different beast, right? You have to keep track of them and then maybe remind them to reorder or do they keep track of all that stuff? We have not done an amazing job at the customer relationship management side of wholesale. Okay. But you know, we do at least have like a customer database for wholesale customers that we’re sending email campaigns to and trying to send out reminders when they haven’t ordered in a while.

09:58
I was just chatting with my buddy about this because sometimes you got to argue for where your stuff is displayed to. But I guess it doesn’t happen in boutiques. Maybe that’s more for the big box stores. Yeah, for us, it’s all, you know, they’re paying upfront for all the inventory or for all their orders. So it’s not like we’re financing an order in a big box store where we have some risk or if it doesn’t sell through, we’re taking the product back. We had a fitness brand as well that we sold to one of the large Amazon aggregators. And for that brand, we had our products in Best Buy.

10:28
And so we learned a little bit about big box retail. Best Buy was launching like a connected fitness section where they had to like pelotons and treadmills and they had one of our fitness products in there. you know, totally different model where we’re being paid on net 90. Yeah, 90. Crazy, right? Yeah. Just wild. Yeah. Can you walk me through just like the sourcing process? I know a couple of my buddies, they source shoes from like Mexico. Did you look in different geographies?

10:58
Yes, we have looked at Mexico as well. There is a big shoe industry in Mexico and it’s specifically something we’ve been thinking of as tensions between the US and China have kind of ramped up for the past couple of years. We want to make sure we’re not, you know, totally locked into manufacturing there. Although we do, have great relationship with our partner there. I think we first found our, all of our manufacturing partners on the baby side through Alibaba. Nice. Okay. Just got a ton of different samples and

11:27
worked out who we felt comfortable working with. And were you designing your own designs at that point? Or were you just kind of taking what they had? We always want to do something like a little bit different from what everybody else was doing. So we would try to take an existing design and add at least like three customizations to it. Give me an example of a customization. Oh, sizing is huge for baby shoes. So a lot of the existing brands I just had like totally off the wall size charts, whether it was like Chinese

11:55
sizing or just something totally custom. So something where like we, you know, use a traditional sizing chart and made the fit of the product like a way more standardized and better customer experience, lower return rate, that sort of thing. you give me an idea of like what the return rate is for shoes? Is it like apparel? Yeah, say probably like in the 15 to 20 % ish range. Okay, so less than apparel, but still pretty high. Basically.

12:24
Also, our products are being worn by people who can’t talk yet. So to some extent, they can’t complain too much about the Well, the parents are the loud ones, right? Yeah, I guess so. And minimum order quantities for shoes, I you can just get by getting like a couple thousand units, huh? Yeah, when we first started with our manufacturer, yeah, I think our initial order was, yeah, just, it might’ve even only been a few hundred units, might’ve been 500 units, something like that. Have you switched factories over the years?

12:53
No, we’ve worked with the same one the entire time for our main products and grown our business a ton with them and it’s been just an awesome relationship. Wow. Okay. So we’ve never been there either. As you’re selling these shoes, I’m just kind of curious what the margins or shoes are like. Are baby moccasins similar margins to just like people selling shoes? Or I’m just kind of curious what the margins are like. Yeah, you know, I don’t really think of it too much, like within the shoe category. I just think of it as like running a healthy e-commerce business in general. And specifically like, you know, we’re talking about wholesale. We’re like,

13:23
If you need to make your wholesale business make money, if you retail a pair of shoes for 30 bucks, the wholesale customer is paying 15. You really need a 50 % markup on that wholesale to be running a healthy business. in general, think to run a healthy e-commerce business, you need to have like a 4X markup on your cost of goods, kind of bare minimum.

13:44
you know, to make it work. I would say bare minimum. So I’m just kind of curious because you have a let’s say you have a return rate of 15%. You kind of have to factor that in as well. Presumably you can’t resell the returns, right? You know, it’s hit or miss. I’d say probably half of returns we can resell. Okay. And then prior to starting the recording, like you’re recording from your warehouse right now, right? And, and I had mentioned I just bought a warehouse.

14:12
And then I told you like, hey man, if I could go with the three pill, I definitely would. It seems like your products are pretty ideal. They’re small because they’re baby shoes, pretty light. I would imagine a three pill makes sense. Why are you, why did you invest in your own warehouse in California of all places? Uh, just like me, right? I mean, I could share my story, but I’m curious what, your reasons were for sure. mean, so the main one is just the sheer number of skews. think most three PLs do really well with a small and light product that is like,

14:40
supplement where you maybe you have a line with 10 SKUs, but for our baby moccasins, we have, you know, 50 different styles each offered in six sizes. The, you know, number of SKUs compared to the actual inventory of each SKU is kind of crazy. And we have tried to use several 3PLs. I just don’t think we were a great customer based on how many SKUs we had. And so it never really worked out well. I really just like running our own warehouse too. It gives me like a sense of control over the business. And for something like wholesale, it allows us to, you know,

15:09
get a wholesale order boxed up personally by our team, sent out to the customer quickly. I feel like that was a real big pain point using a 3PL, trying to do something like wholesale. See, for me, I like the control too, because I’ve just heard so many nightmare stories of 3PLs losing inventory. Our mutual friend, Mike Jackness, he actually had to fly to his 3PL and dig through all the stuff and find his inventory. Presumably stories like that are few and far between.

15:37
But I’ve never heard anyone like running a warehouse actually. And I know you’re in California. Do you have problems finding workers who are willing to do that sort of work at a reasonable cost? You know, I think part of it is just finding employees that do a really good job and then overpaying them so they stay and running a relatively lean team. I feel like one thing we’ve learned in our warehouse is the difference between an A player

16:06
and a C player is not like 2X, it’s that the A player is like working 10 times more efficiently and the B player or the C player is like literally pulling your business backwards. So try to like get a small squad of those A players, do everything you can to make sure that they’re super happy in their job and keep things running relatively leanly. How big is your warehouse? curious. 5,500 square feet. 5,500 square feet and how many people are in there? It’s like five of us.

16:34
on daily basis. Wow, and so you’re picking and packing, running an eight figure business with five people. That’s nuts. Okay. Yeah, you know, mean, Amazon is roughly 60 % of our sales. those orders are all fulfilled by FBA. So that’s just going out the door, direct to Amazon in bulk. And the other stuff, I feel like we’ve got good enough processes with the way things are laid out that if anything, we’re running a little bit below like our

17:02
bandwidth capacity just because we’ve learned that like, if everybody’s running nonstop and you feel like you’re always playing catch up in the warehouse, that’s when projects start piling up, people start getting grumpy. So we always try to like leave ourselves a little bit of a buffer on our bandwidth. I completely agree actually, because the holiday season comes around. You need a little bit of buffer like I go in to the warehouse and I’m like packing orders and answering phones over the holiday season. Because in the past, we used to try to hire like temporary people over those periods but

17:31
Training them and getting them up to speed was actually problematic. we kind of just suck it up now. Do you guys do anything special over the holidays? Nope, it’s just all hands on deck. Yeah, just like you’re saying. We’re all in here trying to get everything out the door and also accepting that like, look, over the week of Black Friday, orders might go out in three business days instead of one and like we’re selling apparel here. It’s not like life or death supplies that need to be get to the customer the next day.

17:58
Let’s talk about the D to C side of your business. And it’s interesting that you sell kids shoes and I was looking on your site and it’s still pretty much baby, right? So do you get a lot of repeat business? Yeah, we do. think we do. We try really hard to catch people at the beginning of their customer lifecycle with us, whether that’s marketing towards people who are expecting or have a newborn so we can get several purchases out of them in our sweet spot of ages zero to two. And then people who have one kid, you

18:27
relatively frequently have another. As a new parent myself, I’m always talking to other parents about baby products they like. I think there’s a big word of mouth aspect to the business. On the DDC side, what is your primary acquisition channel? So we were spending pretty aggressively on Facebook up until roughly six months ago. And then I feel like the iOS privacy changes just wrecked the profitability of everything. And we just had a phase in the business where we had

18:56
spent enough to kind of get the initial snowball rolling of customers to where we could really dial back marketing spend and try to run things a little bit more profitably with an eye on the bottom line as opposed to top line. Yeah, I mean, over the years, we’ve started focusing a lot more on our existing customers and our own marketing list.

19:16
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19:46
There’s going to be a workshop on search engine optimization for e-commerce store owners, which expires on April 6th. There’s going to be a workshop on chat GPT and how to use artificial intelligence to automate your business, which expires on April 13th. And I’m also giving out a workshop on how to structure your blog post to rank and search, which expires on April 20th. In addition to this, you also get access to my six week family first business challenge, access to my three day print on demand workshop,

20:15
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20:43
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21:06
I’m curious though, so now that Facebook isn’t as working as well, and it’s not an uncommon thing, like I’ve talked to many e-commerce business owners where when the iOS updates happen, like Facebook ads kind of went to crap, what are your new things that you’re trying to acquire new customers? Yeah, I’d say kind of our approach is do the 80-20 of a lot of different areas. You we do focus on SEO, Google ads, but we’re not like all in on like, okay, we got to figure out TikTok this quarter.

21:34
and we’re gonna spend all of our ad budget there. I really feel like at this point, the business is somewhat organically growing just through word of mouth, existing customer base spreading it. it feels like for a long time there, we were pushing the rock uphill and now it’s starting to roll downhill a little bit and this is kind of growing on its own a little bit. Plus the retail probably helps with that, right? I would imagine. Absolutely. Being in a lot of boutiques. Can you walk me through the retail side?

22:03
So are you allowed to run discounts on your website? Can you like undercut your retailers and price? how does all that work? So we try to focus on purely retail retailers with a physical brick and mortar store. Okay. Where, you know, want to sell the product on their website. We’re not going to tell them they can’t do that, but like we’re not working with e-commerce only businesses. Okay. So that’s been our approach where we don’t feel like we’re competing with them really, cause they’re, you know, focused on walk-in traffic to their store, buying the product. So do you have the freedom to sell things cheaper than

22:32
Like the brick and mortar price? Yeah, I mean, we run sales and we allow our brick and mortar customers to run sales too. We’re not super strict on, you know, map pricing for our products as long as they’re not going and like selling them on their website cheaper than us and bidding a bunch on like branded Google ad terms. Actually, that was my next question. So they have to obey a map price. Yeah, but you know, we’re not super strict about it again, most of the partners we’re working with are physical brick and mortar stores that don’t do a lot of online sales anyway.

23:02
So, A, how are we gonna enforce this? we gonna go around running? Yeah, you can’t really. That’s I was asking. Yeah. Yeah. And if they wanna sell the shoes for $20 instead of $30 in their own brick and mortar store and they’re still paying us $15 for them, go for it. Yeah, so presumably the wholesale price is 50 % of what you sell on your site, like retail. Exactly. 50 % of retail. probably these people aren’t internet savvy. They’re probably not running campaigns that are competing against you.

23:31
I would imagine Okay. On the so on the deed, and we do our best to screen for that too. And like, we make sure that like our, we can both get our ideal customers and we set those policies very upfront. Like the number one thing is just you cannot sell on Amazon. Right? was actually my next question. Yeah. Okay, because you they could like piggyback on your listings. Okay. Got it. But again, they’re not particularly, you know, Amazon savvy. Business owners, we are if somebody tries to piggyback on our Amazon listing, we notice it real fast. You know, we have a

24:01
you know, one very frank discussion with the person. And then if it’s an ongoing issue, you know, we’re brand registered, trademark sellers, we know ways to protect ourselves. Well, you just cut off their supply. mean, totally. That’d be the end of it. What about social? Is that a big part of your strategy? It is, but it’s something my business partner’s wife works on. She runs Instagram and email marketing. And it’s not something that I personally have my hands in too much. Well, I’m just trying to.

24:29
gather like what your primary, like what’s like the main driver of new business now? Just on the DTC side. Yeah, on the DTC side, I really think it’s just the business kind of growing based on word of mouth. Like we have all these individual channels like SEO and email marketing that are getting that existing base customers and some new customers going, but I wouldn’t say we have like one specific channel that’s driving a bunch of new customers. Can we talk about SEO real quick? are you going for

24:59
Content that attracts like moms and dads or you doing like product focus content or a mixture of both? Okay So we have like an article on how to size baby shoes Which is a problem that every you know new parent has and you know We rank number one in Google I think for how to size baby shoes and we also try to rate rank our collection pages So if you search baby moccasins in Google, we’re I believe we’re number one in that right now as well that’s been through combination of on-site optimization stuff as well as

25:28
PR has kind of been the biggest thing for us. hired a PR agency that got us a bunch of exposure, high authority backlinks. That’s interesting. Walk me through the PR because I’ve known a number of people, like I’ve never used a PR agency before, but I just get mixed reviews on that. is the main benefit for the backlinks or has some of the PR exposure directly led to a lot of sales? Yeah, great question. So I think it’s really

25:56
matters on what your approach to it is. If you are approaching PR as like, this is a performance marketing channel and I need to pay my PR agency three grand a month and they have to drive 5,500 a month in sales to make this work. Like it’s not going to be a good fit for you. But if you approach it as like brand and awareness marketing and like asset building of, Hey, you know, I’m going to run a six month PR campaign. I’m going get all these cool features that I can use as amazing social proof that, Hey, our product has been featured on motherly and all these popular outlets for new moms, pregnancy magazine. And I’m getting valuable backlinks from all the sites that are just

26:26
building our SEO authority, then I think it really makes sense. I do think there’s an aspect of it where any PR agency has their kind of core group of connections that are super valuable. And they kind of turn through those for the first like six, 12 months of a campaign. So don’t know if it makes sense to have permanently for small business, but I think like a three or six month PR blast is pretty underrated for an e-commerce business. I can imagine all it takes a couple of backlinks actually to really boost your domain authority.

26:56
You know that post you mentioned that you’re ranking number one for? How to size a shoes. Does that actually lead to sales? At least in my store I can tell you this like the articles that I have that target the customer I just try to get them on the email list and maybe they’ll convert the ones that convert directly to sales are like buying guides or reviews or comparison posts. I’m just curious how your content converts and what your strategy is. It does it doesn’t convert to sales like a

27:25
collection page ranked in search does. But we’ve been trying to do content that’s like pretty tightly wrapped up in the buying experience. Like how to size baby shoes is the next step in that is where am gonna buy the baby shoes? It’s not like seven tips for putting your newborn down for the night or something like that, you know? Where that’s a little more disconnected from like the shoe buying process. We’re not focused on stuff like that. And that article that you’re talking about, it like an advertorial? Like is there a like a link to your?

27:54
your shoes at the bottom or? Oh, of course. Yeah. But I mean, we try to make it like a valuable piece of content to like we have a printable size chart that obviously has our logo on it. And like, you know, our products are interspersed throughout the article. But even if you weren’t going to buy our, our product, it is a good guide on how to up issues. Let’s switch gears to Amazon. I know it’s gotten a lot more competitive over the years. And I’m presumably you have a lot of competitors now on Amazon. Right? Absolutely. Yeah.

28:22
How are you adjusting to the increased competition, the increased costs of FBA knockoffs, evil sellers and that sort of thing? Yeah, it’s certainly been a lot of that. We did a price increase this year. I think that was probably long overdue and that helped subsidize some of increased FBA costs, just increased costs that we’ve experienced across the board in our business. Advertising has gotten more expensive on Amazon. I’d say, you know, three years ago we were probably spending

28:52
six or 7 % of our total Amazon revenue on advertising, and that’s maybe doubled. Really? To 15, 10, 12%. 10, 10, 10, 12%. Something like that. Okay. Are you guys doing DSP or? No. No, just straight sponsored product ads and brand ads? Sponsored products, video and search, headline display, but no DSP. Okay. And then these days, presumably, can you walk me through your launch process when you have a new style? For sure.

29:22
So we really have not focused on launching many new products. We’ve been trying to continue to drive demand for our core product of Baby Mocsins where we have really strong product market fit. We have tried to launch other products like a diaper backpack, other types of baby shoes, and we just really haven’t had as much success with that. And I feel like the kind of standard way to grow an Amazon business is to launch a bunch of products once you have this formula figured out. I feel like for us, our penetration in the actual market of baby shoes is so small.

29:52
And we have this one product that just has really clear product market fit. People just love these baby shoes that I don’t think it makes a bunch, makes much sense for us to keep branching off instead of just to push this ball further and further, faster and faster. I love that policy actually. Cause a lot of people are, I mean, I think launching new products is actually the hardest way to grow the business. It’s much easier to focus on maybe increasing.

30:18
the average order value or increasing the number of times that someone buys. What are your goals with this business actually? Are you trying to grow it or are you kind of, I don’t want to say taking your foot off the pedal so to speak, but it sounds like it’s not like a VC backed company where you’re trying to grow at all costs. Totally, yeah. mean, so the first five years it was like, we need to double this business each year to get it to the point where, you know, it’s just like,

30:47
a relatively self-sustaining operation. But now that we are kind of at that point, yeah, we’re trying to do a modest 15 % a year growth sort of thing, actually be making money from this business rather than reinvesting it all into taxes and more inventory. So yeah, would say taking our foot off the pedal is a reasonable way to describe it. I also have two young kids and other hobbies and like, I want to make sure I’m living a lifestyle where I’m not totally burned out on this business and I actually enjoy running it.

31:14
And in terms of like your focus on Amazon versus DTC versus retail, how do you treat each of those? for me, I focus all my efforts on DTC. Amazon is just like a bonus. It seems like you’re split a little higher on Amazon. How do you view all those different marketplaces and traffic sources? Sure. So from year one, you know, when we were 100 % Amazon to now we’re at 60 % Amazon, like even just breaking off that 40 % of the business was a ton of work.

31:44
Um, but I feel like now that we’ve kind of gotten to that point, we run each part of the business relatively siloed where, know, have my Amazon Asana board where I, you know, pop in her ad campaigns, make sure Amazon inventories replenish that sort of stuff. Then I have like the DTC silo of things. And then my wife runs the wholesale side of things. So really try to run the three, uh, sales channels of the business somewhat independently. Um, so we have a little diversification. Nobody feels like they’re.

32:13
having to work on every aspect of the business, that sort of thing. So the reason why I’m asking that is like, do you ever use your email list to launch a new product in Amazon or drive people to Amazon or is it always to like your own online store? Nope, always to our own online store. Again, if it was one thing where like our strategy to grow the business was to launch a new product every week on Amazon, for sure we would be doing something like that. But that’s just not how we’re operating the business. Okay, cool. I like that. I like that.

32:39
You’re different from some of the other people that I talked to where they’re always just constantly trying to scale, scale, scale. It seems like you guys got a pretty good balance with the way you guys are running things. Let’s switch gears again. And with the fact that Amazon is a lot more competitive, I understand you guys have developed some in-house tools to help you with that. What are these tools and why does it give you an advantage? For sure. So yeah, I’m working on an e-commerce software tool called Synchronize.

33:08
And it allows e-commerce sellers to use their data from Amazon Seller Central, Shopify, Facebook ads, directly in Google Sheets. And the way this started off is from inventory management. We manage our inventory in a big Google Sheet. And every six months or so, we would try using some sort of hosted inventory management tool. And they just never were a great fit for our business. There’s so many different quirks of how each individual e-commerce businesses ran that I felt like they all box us in. And we would just end up right back in the Google Sheet.

33:36
So can you actually before you go on, I’m curious about this too. What are some of the problems you’ve had with standard off the shelf inventory software? Handling multiple sales channels and multiple warehouses. So, you know, we have FBA and our San Diego warehouse and we have Amazon, Shopify and wholesale sales channels. And there are some really good Amazon only inventory management tools and the other inventory management tools that try to take everything into account. It almost feels like

34:05
for the first two years, they got 10,000 support tickets with a bunch of different requests. And now the tool is just 800 check boxes on every page is impossible to like untangle to like actually get what you need for your business out of it. Okay. And so you’re, you’re managing all that stuff on a Google sheet, which seems a little bit on, I don’t know, I’ll let you go on. Okay. So you’re doing this on the sheet. I’m curious what this sheet looks like. Cause I know what our inventory looks like and we actually, my wife is an Excel.

34:34
Like she’s an expert in Excel. So she actually manages it in Excel. But to me like looking over her shoulder It looks like a disaster. So I’m curious how you guys do it. Yeah No, that’s the beautiful thing about a spreadsheet though because you can perfectly customize it for how you run your business Yeah, so I mean, I’m happy to send over a screenshot of her sheet An example if you want to put in the show notes But basically the way ours is set up is we have like one tab That’s the master inventory dashboard that you know has a list of all our products and tells us

35:02
when we need to reorder it, how much runway we have. And then a bunch of other tabs that are like our manage FBA inventory report and our Shopify sales from the past 30 days. All that sort of thing. We have an employee that every day goes into Amazon, exports the inventory reports, the sales reports, same thing from Shopify, uploads it into those data tabs that the main dashboard pulls from. Because if you’re forecasting inventory, it’s critical you’re working with up-to-date information.

35:31
But it’s such a manual process that no matter how careful you are, it’s only a matter of time until you’ve filtered for the wrong date range when you exported the report or uploaded it the wrong tab. And in our experience, these mistakes, they weren’t always immediately obvious. It’s not like it would totally break the spreadsheet. You would just be working on a reorder of something. You’re like, that number just doesn’t quite look right. And then you realize that, it’s ignored one sales channel for the past three weeks, and now you’ve drastically underordered.

35:59
And those mistakes are super expensive for an e-commerce business. So we started by hiring a developer to build an internal tool for our business to allow us to connect our Amazon and Shopify accounts. So instead of, you know, importing that Amazon manage FBA inventory report, we just have a custom function that’s equals Amazon inventory MySkew. And that’s a continuously refreshing value of the units available at FBA or equals Shopify sold units MySkew T30. And that’s like an always up to date.

36:29
value of the number of units sold over the past 30 days of that SKU. And this was super helpful for us to eliminate a lot of that manual work and make sure our inventory dashboard was always working with up-to-date data. like that. I actually had a similar problem in our company too where we do personalization and every morning someone had to cut and paste the personalization into another tool so it could be digitized and sent to the machine. And you’re right, inevitably someone cut and paste something wrong.

36:58
and then you have an unhappy customer. So I wrote something that automated that entire process. It sounds like it’s something similar to you on the inventory side, right? Totally. Yeah. So we’re scraping all these reports from Amazon and Shopify, putting them in a central database that we host and then allowing you to query them in very useful ways in your Google Sheets for something like inventory management, know, all sorts of other stuff to it. Cause we have like return reports or marketing reports to kind of keep an eye on all that sort of stuff. So any sort of dashboard that you’re already doing in a spreadsheet.

37:26
This is kind of supercharging it and removing the manual work of getting that data into it. So this spreadsheet is something that is shared among your team and it’s considered like the golden document of all the accurate inventory measurements in your company. Exactly. And I just feel like I’ve talked to so many other e-commerce store owners who are in the same boat where they tried these inventory management tools and they just end up back in Google Sheets. So we figured, you know, if this tool is useful for our business,

37:53
how hard it could it be to turn into something that other people can connect their Amazon and Shopify accounts to. Turns out that was way harder than I expected, but that’s what I’ve been working really hard on. conceptually, it sounds simple, right? But when you get into nitty gritty. Man. Let me ask you some more questions. So this sheet, how do you do inventory projections on, like, does this sheet have a bunch of formulas that help you project? Exactly. So, you know, the important numbers are the number of units I have available at our San Diego warehouse, the number of units I have available at FBA.

38:23
and the number of units I have in production. That’s on the inventory side, right? Then on the sales side, I need like my average daily sales from Amazon, Shopify, and wholesale for that SKU. I’m kind of using that in combination with the lead time for that product to make sure that I always have a bit of a cushion, you know, that I have an order in progress before I’m running out of stock. Does it take into account seasonality, like holiday season? Yes. Okay. We basically have an adjustment column where you can

38:52
in our sheet, adjust any one SKU sales velocity by a percentage of your choice. We go through and kind of look at previous year’s sales. We also look at like, has this SKU been out of stock? Because if it’s been out of stock, any sales projections I have based on like its trailing sales aren’t gonna make sense because it’s sold zero units since it’s been out of stock. So that’s something that we’ve got like some custom formulas for in our tool where we can say, hey, this SKU has been out of stock.

39:21
for 60 % of the last 30 days, you don’t wanna trust a sales velocity number based on trailing 30 day sales. Yeah, I guess the next level to this is to issue alerts, right, when all this stuff’s happening. Exactly, so that’s kind of the next step of this to have some actions where, if sell D2 drops below 100, create an Asana task saying reorder product and sell B2, that sort of thing. that’s kind the next step Yeah, cool, I like it. For anyone who’s listening who actually wants to sell

39:50
shoes or moccasins, like what were the hardest part of your business? Oh man, that’s a tough one. Cause I feel like running an e-commerce business, you’re, you’re juggling so many different balls in the air. for us, it hasn’t been like one specific area of the business that has been constant headaches. It’s more like we’re just playing whack-a-mole on a bunch of different things. Um, I think the hardest part of any business is just finding product market fit, like having something that people actually want and are really excited about. And if you can figure that out.

40:19
it makes marketing so much easier. makes inventory forecasting so much easier because you know, people are going to continue ordering it and that sort of thing. So if that’s the one thing I would stress on, it’s like focus less on the e-commerce hacks of, I can pump this product through some search, find, buy campaigns, number one on Amazon. And then I can use that to leverage an insert to pull people over at my website and then trick them to buy this. And it’s like, no, just like focus on the core aspect of a business, like having a product or service that people really love and want to pay for.

40:48
And that just makes everything so much easier. If you were to start all over again, would you do shoes with all the sizing requirements? I was going to ask you actually, what do you deal with? How do you deal with like all this excess inventory of sizes that you can’t sell and that sort of thing? Would you do it all over again? I well, I think part of like picking your business in general is like identifying where or how developed the market is. And it’s like when I played poker, I started poker at the start of the poker boom and like

41:16
rode that wave really well. And then that kind of started to die out. And when we started our e-commerce business in 2016, I think it was a really good time to start an e-commerce business. I don’t think I would necessarily try to start an e-commerce business selling shoes from scratch in 2022. So I think that’s kind of on the market cycle thing. the actual product, I do think there’s some aspect of complexity being a moat in your business. And if you’re selling garlic presses that anybody can find on AliExpress, you’re going to have a lot of

41:45
competitors right off the bat and something like baby shoes where the more complex the business is, the more value there is for the customer and that like, we have so many styles and sizes. It’s an amazing selection that like somebody else can’t just open up an Alibaba account, spend 10 grand and immediately be competing with us. I do think that’s a moat that’s becoming more more important as e-commerce gets more competitive.

42:07
I’m a firm believer in barriers to entry. You know what’s funny, I’ve been doing this for a long time and I teach a class, everyone always asks me, what’s the easiest way to get started? What’s the easiest way to do that? I mean, if it’s easy, then anyone can do it and you got tons of competition. Whereas if you just take a little bit of time and produce something that’s hard, like this is why we do embroidery. I can’t, I don’t know if you guys do custom embroidery on your stuff, but the machines break all the time. It’s a pain in butt to maintain the machines. And it’s actually my least favorite part of the business, but I do know that that’s actually

42:37
one of the main revenue drivers for our business too and our moats, so to speak. Totally, you have to have something that is your unique competitive advantage that’s hard to replicate. And on our jujitsu side of the business, we have a lot of jujitsu academies that buy our uniforms and stuff. And a lot of them want the uniforms to be embroidered with their academy pattern. So that’s a goal of ours to get done next year. Oh, you guys are going to do embroidery? I think so for the jujitsu side of things. Yeah, it’s just such a common request where

43:06
an academy wants to 150 uniforms, but they have to have the Academy logo on them. It makes sense. Cause you can charge a huge premium for those also, which is what we do. sure. And it’s just one more thing that is like, it’s very hard for an overseas seller without a presence in the U S to offer something like an embroidery turnaround, an embroidery program where they can turn around 150 yeas in a week to a Jitsu Academy. And then you’ve got your product in a ton of people’s hands right off the bat. Yeah, absolutely.

43:35
Well, hey, so Cole, you’ve got three main things going on, right? You got the BJJ store, you got Bird Rock Baby, and now you have this SaaS company. And I’m guilty of this too, like I got a lot of stuff going on too, but how do you split your time and your focus? And do you have this belief that if you work on too many things, you can’t focus on either one as well as you could? Totally, but at the same time, you gotta know who you are. like, I am.

44:03
someone that likes working on a lot of projects. And I feel like that kind of almost prevents me from getting burnt out on any specific one, where especially if I have a strong team working on that project, like our e-commerce business, we’ve got really solid people and processes in place. Or if I’m just getting burnt out on something, okay, maybe I’ll go spend a little more time on the SaaS tool for a little bit, or switch from brand to brand. So I get what you’re saying, but for me personally, I like working on multiple projects. So do I. It’s a curse though. I feel, I don’t know.

44:33
I go back and forth all the time like, hey, you know, if I had just focused on this one thing, could I have blown that up? But you’re right. Like I need constant stimulation and I do get bored of certain things and thank God I have other things to keep me occupied. So. Yeah, it’s kind of like think about what your goals are. Like if your number one goal in life is to like blow one thing up massively and build this massive business. Yeah, then for sure. Focus is probably the number one thing. I like kind of like the four burner theory that you talk about like.

45:01
you know, there’s some aspect of that in business too, where like, it’s not all about building the biggest business possible. Like that’s not my approach right now. Right. I want to work on things that I find interesting and feel like I’m not being totally burnt out in a pursuit of a goal that like isn’t really my ideal big picture. Cool. Cool. Where can people find you if they want to learn more about any of your brands or your new SaaS tool, inventory? Sure. You can find me on Twitter. My handle there is coal south.

45:30
And if you’re interested in trying out Synchronize, you can go to synchronize.com slash slash Steve and we’ll have a special offer for my wife, quit her job listeners. Sweet. Did you get the blue checkmark? Yeah. Yeah. It’d be interesting to see if that program is still still live by the time this podcast goes live. It sounds like it’s kind of haywire. I don’t see any value in it whatsoever. They don’t even verify you. Right. Anyone can get it. So.

45:58
Yeah, it seems like it’s been a rocky start for him. Cool. Hey, thanks for coming on, man. Appreciate it. Thanks, Steve.

46:08
Hope you enjoy that episode. Cole is a very successful entrepreneur and there’s lots to learn from his strategies and philosophies. For more information about this episode, go to mywifecoderjob.com slash episode 452. And once again, I want to remind you that my annual e-commerce conference will be held in Fort Lauderdale, Florida on May 23rd to May 25th of 2023. I really want to hang out with you guys in person, so let’s meet up. Go to sellersummit.com. That’s S-E-L-L-E-R-S-S-U-M-M-I-T.com.

46:38
I also want to thank Postscript, which is my SMS marketing platform of choice for e-commerce. With a few clicks of a button, you can easily segment and send targeted text messages to your client base. SMS is the next big own marketing platform and you can sign up for free over at postscript.io slash dv. That’s P-O-S-T-S-E-R-I-P-T dot I-O slash dv. Now I talk about how I use these tools on my blog and if you are interested in starting your own e-commerce store, head on over to mywifecoderjob.com and sign up for my free six day mini course.

47:07
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