00:28
We are also offering an exclusive mastermind experience with other top sellers. The Seller Summit is going to be held in Fort Lauderdale, Florida from May 4th to May 6th, 2022. And for more information, go to sellersummit.com. Once again, that’s sellersummit.com or just Google it. Welcome everyone. You were listening to the My Wife, Quitter, Job podcast, the place where I bring on successful bootstrap business owners and dig deep into what strategies they use to grow their businesses. Now today I have an extra special guest back on the show, Bernie Thompson.

00:57
and Bernie runs an eight figure e-commerce store called Plugable and he relies on Amazon as his primary selling channel in possibly one of the most competitive niches, electronics. So in this episode, we discuss some of the challenges of selling on Amazon in the current landscape. Now I just want to apologize ahead of time for the audio quality in this interview. Now I considered not publishing this episode, but the quality of the interview content was so good that I decided to publish it anyway. But before we begin, I want to thank Klavia for sponsoring this episode.

01:27
Always excited to talk about Klaviyo because they’re the email marketing platform that I personally use for my e-commerce store and it depended on them for over 30 % of my revenue. Now you’re probably wondering why Klaviyo and not another provider. Well Klaviyo is the only email platform out there that is specifically built for e-commerce stores and here’s why it’s so powerful. Klaviyo can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send out an email to everyone who purchased a red handkerchief in the last week. Easy. Let’s say I want to set up a special autoresponder sequence

01:56
to my customers depending on what they bought, piece of cake, and there’s full revenue tracking on every email sent. Klaviyo is the most powerful email platform that I’ve ever used, and you can try them for free over at klaviyo.com slash my wife. That’s K-L-A-V-I-Y-O dot com slash my wife. I also want to thank Postscript for sponsoring this episode. Now, if you run an e-commerce business of any kind, you know how important it is to own your customer contact list. And this is why I’m focusing a significant amount of my efforts on SMS marketing.

02:23
SMS, or text message marketing, is already a top five revenue source from my ecommerce store, and I couldn’t have done it without Postscript, which is my text message provider. And why did I choose Postscript? It’s because they specialize in ecommerce stores, and ecommerce is their primary focus. Not only is it easy to use, but you can quickly segment your audience based on your exact sales data and implement automated flows like an abandoned cart at the push of a button. Not only that, but it’s price well too, and SMS is the perfect way to engage with your customers.

02:51
So head on over to postcook.io slash Steve and try it for free. That’s P-O-S-T-S-E-R-I-P-T dot I-O slash Steve. And then finally, I wanted to mention a new podcast that I recently released 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.

03:21
Now on to the show.

03:28
Welcome to the My Wife, Quitter, Job podcast. Today, I’m lucky to have Bernie Thompson back on the show. Now, Bernie is someone who I’ve had on multiple times. The last time was back in episode 230. And in case you’ve forgotten, Bernie runs an eight figure business called Plugable, which is a company that sells USB and Bluetooth devices online all over the world. In addition, he’s built his own tools in-house to manage his Amazon business. And one that he sells is called PPC Ninja.

03:55
Anyway, the reason why I have Bernie on the show today is because he runs such a large Amazon business in an extremely competitive area. And as a result, he’s the perfect person to talk to about the current Amazon landscape. And with that, welcome back on the show, Bernie. How are you doing today? Hey, great, Steve. Thanks so much. I’m glad to be back. It’s been a while. We haven’t had a chance to see each other in person, of course, since the since the pandemic. I hope to see you. I really seen anyone in person in a while, so.

04:24
It’s not just you. So just in case the listeners don’t remember your business, just give a very quick recap of what you sell, how many SKUs you have, and kind of give us an idea of how often you launch new products. Yeah, so Plugable was launched in 2009. I’m a guy who used to work at IBM and Microsoft and so kind of come from this technology background and really wanted to build an electronics company, a better device company. But then

04:52
You know, the time I did that in 2009, you know, doing that and kind of being Amazon focused about that was our choice. And actually it turns out to be a good choice because we’ve had kind of a 10 year rising tide on Amazon and difficult area to get into electronics. You know, I think if I had started this business, even a few years on either side of that, you know, I probably would have failed. But interesting. Why do you say that?

05:22
Well, because if I’d started it a bit earlier, I would have had to build out a lot more infrastructure in terms of logistics and had to get into traditional electronics distribution faster. And I think I would have hit walls there and just would have had trouble scaling the business. And so, you know, would have probably gone through a period of failure. Maybe I could have kind of waited that out or survived that, but probably would have gone through a period of failure.

05:51
It would have likely, given my resources, have meant I would have had to stop. So that’s like five years earlier. Then five years later, so Plumble has never done black hat stuff. We’ve never purchased reviews or, you know, we try to follow the rules on Amazon. So if I had started five years later, that was right in the middle of the Amazon gold rush, you know, 2014 or whatever. I would have just gotten.

06:19
run over by everybody. Because we did actually, we’ve grown every year since we started in 2009, but a lot of those year, those gold rush years, we actually did not grow that fast because we were basically getting black hatted off the platform. But because we started when we did, we had quite a lot of brand momentum and we were able to kind of survive that. But if I had started right in the middle of that, I think I just would have gotten run over. Right. Actually, can we just comment on black hat real quick? Do you feel like it’s

06:49
much more under control these days? Yes and no. think, you know, compared to 2014, 2015, you know, the activity that that’s occurring, you know, is much more muted. It’s much more subtle. It’s much more sophisticated, you know, but because Amazon operates at this massive scale, mean, Amazon’s intent is to create the most competitive platform, you know, on the planet in order to drive down prices in order to, you know, make

07:17
Amazon the place that everybody goes to buy everything and you know that that competitive competitiveness does drive down prices. But it does mean that even the smallest advantage will determine you know market success or failure and you know so all of these techniques you know to to drive up rank and stuff you know there’s they’re still super effective I mean.

07:40
These last two or three years in our area, electronics, has just seen a flood of what we call five-character Chinese brands. They pick basically random five characters, get a US trademark on it, get into the brand registry program. the US trademark office is literally overwhelmed with applications from Chinese companies for trademarks. And I was just reading an article on it and they didn’t mention Amazon. didn’t know why it was, they were speculating about why was this happening.

08:10
it’s easy. Amazon is the one channel for physical goods in the United States that’s dominant. And if you’re going to have an Amazon strategy, you should do Amazon brand registry. And everybody in China knows that. a lot of these brands, have nothing to lose. mean, if they get caught, they get kicked off the platform, they can just come back in another form. Now we’ve had some interesting things happen the last few months where some very large brands have

08:39
have gotten kicked off the platform for activity they’ve been doing for years. And that may provide a little bit of a deterrence effect. Although ultimately, I think because the Chinese companies are fairly unreachable and fairly untraceable even for Amazon, I think the deterrence will be a little limited. But a lot has gotten better. mean, just to pick one of quite a few things that have gotten better, Amazon’s actually shifted to become a pay to play platform.

09:07
If you do any search on Amazon right now, most of kind of top of the fold are ads. guess what? That’s actually kind of good for WhiteHats because at least it’s a level playing field. You know, I can buy ads and I can get that position. Whereas, you know, about four or five years ago with everybody gaming organic, you know, and we weren’t, you we were often, you know, other than our older, more successful products, our newer products were

09:37
getting pushed way down the organic search results, nobody would ever find them. And we had really no way to surface them unless we were also willing to do Black Hat. But now, you can always surface things with ads. So it’s a pay to play platform, but it’s less susceptible to Black Hat. Now, I’ll caveat that with one thing, which is Amazon is completely non-transparent about how much click fraud happens on the Amazon platform.

10:06
And I can guarantee that there’s competitors out there that are extremely motivated to do what in computer security, we might call a denial of money attack. have click farms and be clicking on competitors’ ads and spending their money. And we have no idea how rampant click fraud is on Amazon, but I would suspect it’s quite rampant.

10:32
I think with any PPC platform, it’s always been a huge problem. Actually, that’s why I stopped almost all the PPC platforms except for Google and Facebook, actually. I used to use a whole bunch of these shopping cart platforms. And then one day, I think I spent like 500 bucks in a day on this one item and that was unheard of. And I looked at the logs and it was just obviously a bot. I tried to appeal that and they refused to give me my money back. And they’re out of business today, of course.

11:01
but yeah, I’m sure there’s just rampant fraud going on. When you say sophisticated black hat, can you just elaborate a little bit on that? I’m just kind of curious. Yeah, it’s not sophisticated in the sense that it’s not able to be understood or it’s deep dark secrets or anything. just, it used to be so blatant. I mean, you would have a lot of these brands who were kind of

11:31
giving refunds out in the open for five, you know, very directly for five-star reviews kind of thing. So now it’s, if you are looking in the seller forums, you you see lots of discussion of rebates for launches, but everybody is kind of aware that a lot of the services that offer that have been taken down at various times and

11:59
Sellers who and brands that use those services have gotten taken down at times. And so, you know, like I think a lot of the, you know, the bigger Chinese brands, for example, and probably some of the U S brands, you know, they, for example, one type of sophistication is, you know, the kind of services that are third party services that are offered for rebates, they bring those in-house, you know, where they can control the lists, they control the information.

12:28
And actually the big round of, you know, MPOW and Aki and stuff getting suspended in China, really the origin of that was they had been using some kind of third party service. think it was a Chinese run service. I’m not sure. But, you know, and they had a, they had a breach and all the data got dumped. And so it became extremely apparent what was happening and who was doing it. and, um, rumor was FTC got involved.

12:58
In any case, Amazon was kind of forced to act when Amazon actually historically has been kind of slow to act or perhaps wanting the price benefits they get from these Chinese brands more than they wanted to police their behavior. Yeah. Yeah. And so they were forced to act. so I think the bigger brands who are still doing

13:27
these sort of black hat and gray hat activities, you know, they see this happening and they realize, well, okay, we really need to control what we’re doing. We’re going to kind of bring this in-house into loyalty programs and things like that. Okay. That makes sense. So it’s less overt basically is what you’re saying. Yeah, that’s right. So how has launching new products for Plugable changed? Let’s just talk about even since COVID. Well, okay.

13:53
Well, since COVID, think the biggest story is we’re in electronics and it’s hard to get product. So that’s the big story there. And we can talk about that as a whole separate thing. But yeah, I mean, you as far as launching products in general, yeah, I mean, we’ve just become more more dependent on our skill at using Amazon advertising and being willing to, you know, really sink money into advertising in the early months of a product launch, but have to be, you know, very sharp about how we do that so that

14:24
because there’s really an opportunity there to completely blow everything with advertising because you’re basically, fighting an uphill battle those early weeks and months until you’re able to get the number of reviews up. But on number of reviews, we fought for years with Amazon in terms of kind of selling the idea to executives and things at Amazon to bring Vine over to 3P. And that’s there now.

14:51
And that’s one of the reasons why you really need to get brand registered if you’re going to launch a brand on Amazon is to get access to the Vine program, which allows you to give away in an Amazon endorsed way, you know, up to I think it’s 30 products and get, you know, reviews from the Vine network where, you know, Amazon is choosing the people and there isn’t, you know,

15:18
a brand controlled gamesmanship to it. And so, you know, and it’s an Amazon run and endorsed program. And so that’s, that’s what we use to kind of get over that credibility hurdle at launch. Of course, you know, when you’re, for example, you know, advertising a product and it’s sitting there at zero reviews, you’re going to pay way more, you know, for those sales, you’re going to have a much lower conversion rate. so Vine kind of helps get you over the hump there.

15:46
And then, then it’s just, you know, we’ve always been a kind of a content marketing heavy company and a PR heavy company. And so, you know, between the advertising and then a lot of, a sense, traditional marketing, but maybe non-traditional in the sense that we’re very content focused. You know, that’s basically how we do it. Can we talk about the content marketing? So what specific content do you put out?

16:11
You know, there’s a lot to talk about with most products and certainly with our products. know, electronics, everybody buys a lot of electronics, right? But everybody has that fear that they’re going to buy the wrong thing. And everybody looks at that piece of electronics and goes, is that really going to do what I’m hoping it’ll do? you know, so we have a lot of stories to tell about, you know, why did we do this new dock?

16:38
what, you know, which laptops does it work with and what quirks do I need to worry about? And, you know, will it, you know, give me two monitors? Will it give me three monitors in every case on Windows and on Mac? You know, there’s, there’s, it’s really just product education, but you know, if you, if you take a content marketing mindset, it’s a, it’s a whole bunch of interesting stories, you know, and those stories, you know, have different audiences for them. You know, we do content, video, you know, that’s really,

17:07
that we’re targeting explicitly at Mac owners, of course. And then we’ll do other content that’s targeted explicitly at Chromebook owners. And so there’s really an endless amount of stories to tell. And so we just kind of prioritize our audiences and prioritize our stories by how interesting or exciting they are. And sometimes what’s interesting and exciting is our products, but sometimes what’s interesting and exciting is just the other company.

17:35
products. Apple’s just launched a new MacBook. What works with it? That’s a great opportunity to talk about your products. So outside, think products outside of the sort of kind of compatibility area, it’s still the same thing though. It really starts with who’s your target customer and why would they buy the product? And if you’re lucky enough to have the kind of product that gets people excited, really

18:04
you know, have a chance to speak to that and really, you know, illuminate in either text or video form. And of course, video is becoming more more important. You know, why, you know, all the things about your product that are exciting, that are things that in chair. Are blogging or YouTube? Like what channels are your content being published on? Yeah, it’s both. So we, and email. So, and actually we talked.

18:30
Steve, that was one of your pieces of advice for us. I don’t know if you were one of ones. long time ago, yeah, because you weren’t doing email, I remember. Yeah, we had like a 50,000 email list and we weren’t really using it because we didn’t want to bother people, basically. Yeah. And you were like, Bernie, you’re insane. So I’m less insane now. That’s great. I mean, I can understand your mentality because we’re both engineers. So yeah, that’s just something I guess you had to get over.

18:59
So do you use this email list now to launch products? Yes. Yeah. So we’ve actually done what we should have done. Thank you so much for kicking my butt, and getting me going on that. It took a long time though. That was probably two or three, maybe three years ago you scolded me about that. it took me a year or two to get going.

19:21
Yeah, we use active campaign. We really try to highly segment our audiences. As I was saying, really, we have many different audiences for our products and we want to get as specific as we can afford to because, yeah, that same motivation that I had not to bother people. Well, okay, if I can really kind of segment my audiences down to where I know, for example, that this is a Mac user, if I actually deliver

19:50
Mac specific content to a Mac user, they’re going to appreciate that generally. You know, and so it’s really all about segmenting, targeting, and thinking of us almost as, you know, kind of journalists for these specific audiences, you know, and giving them the content they want to hear. And so, yeah, that’s the strategy we have. I’ve got a full, you know, so Plugable, you know, we’re…

20:17
We’re fortunate to be at the scale where I have a full-time videographer. I have a full-time content writer, you know, and I’ve got a whole team of other, you know, kind of generalists and people around them. And so, because this does take a lot of work to do this, like actually that thing with ActiveCampaign and, you know, really doing that segmenting and really having those targeted, you know, targeted content to each of those segments, gosh, it’s a lot of work.

20:42
If I was just having to do it on my own, that’s part of the reason I didn’t is because of the amount of work involved. But there’s an answer to that, which is you just loosen up a little bit and you allow yourself to not segment so tightly and have fewer, more broad categories. If you can just do even a little bit of segmentation at a high level, that’ll really improve your open rate and…

21:09
you know, conversion to sale rate on emails. So, and then as you grow, can, you know, maybe afford to grow your effort and get your segmenting to be even more targeted. So I’m curious. So last time we talked, you were only on Amazon, Walmart and Newegg. Is that still the case? So for the online platforms, yeah, I mean, we’re forgetting some, but you know, like we were on Google. We actually dropped out of Google temporarily.

21:35
Is this Google shopping? Yeah, Google shopping or actually buy on Google, I think is what they call it now after a fifth or sixth rebranding. But we also distribute through the largest electronics distributors in the US. yeah, it’s not, and that’s been true for a long time. I mean, that’s been five or six years. So, you know, our product is pretty widely available and through those electronics distributors, you know, you’ll find our product all over the

22:04
I mean, pretty much anything detail, you’ll find us and if you’re a corporate buyer or government buyer, you’ll find us. Now, all that said, Amazon still dominates our sales because Amazon has pretty darn near monopoly market share in electronics right now in the United States. The reason why I asked that question was, how did you build this 50,000 email list? the email list, right, yeah, exactly. Well, so some of it comes from customers who have

22:34
signed up for things. We are constantly providing opportunities on the website for customers to sign up to be informed about things. Some of it is that. Some of it is we have… give me an example of sign up for things like, do you give away lead magnets or cool stuff? Funny enough, our best thing is when we’re out of stock of stuff.

22:59
So we’ll have a hot product that we’re out of stock of and we’ll have a, you know, sign up for our newsletter to get notified when we’re back in stock. Funny enough that that little practical thing is, you know, perhaps our best channel. That is a great, you know what? I’m not doing that right now. I’m going to start doing that. Yeah. No, it really, it’s, it’s super effective. Okay. So you’re gathering emails just from people coming to your site, maybe through content of some sort.

23:27
Because I noticed when I was on Plugable just like five minutes ago, all of your links actually go to specific marketplaces, right? You don’t actually take transactions on your site itself. Correct, that’s right. And if you want, can talk about why we don’t, which comes down to a US sales tax reason. Really? Can you elaborate? Yeah. So unfortunately, shops and carts you run yourself right now, all of the…

23:55
Tax regulations here in the US are kind of screwed up for that. So on one hand, have Amazon has taught consumers to expect a one or two day delivery or fast delivery, at least in a lot of segments of products. Well, the only way to deliver that fast delivery is to get the product close to the customer. It’s to use a warehouse network of some kind. mean, obviously, FBA, Amazon’s own warehouse network is the one that…

24:22
that is kind of the leader on this and Amazon has warehouses in something like 40 states. But there’s lots of other really good fulfillment networks that have cropped up and are cropping up. I the other one that we use is Deliver, which we really like. I don’t know how many states they’re in. think it’s, I could look in a spreadsheet, but basically eight or 10 states, like that. Well, every one of those states,

24:50
As soon as you’re using a fulfillment network that has warehouses in that state, that state expects your business to be registered in the state, collecting and filing and collecting, collecting remitting sales taxes, which requires filing, you know, and this, in that registration and filing burden and kind of understanding all the tax regulations of that state, that’s really complicated. get all these service providers that say, Oh, it’s easy. We’ll handle it with software. They, they’re only covering part of the problem.

25:19
It’s not your time that they’re spent. They can’t stop your time from getting spent on all that paperwork. They can do kind of maybe the actual transaction side of it, kind of gathering the transactions and doing the calculations. your signature’s on the line, you’re writing the checks. So anyways, yeah. And so the trouble is that we get caught where we need to use these fulfillment networks. But then if we do,

25:48
you know, we’re expected to collect and remit sales tax and potentially causes income tax nexus too. And if you’re only using marketplaces, this is taken care of for you. So in the last few years, almost all of these states have passed what’s called marketplace facilitator laws that make the big marketplaces like Amazon, Walmart, eBay, put them on the hook to collect and remit.

26:16
the taxes, is great. So it’s taken off the small businesses plate. However, Shopify is not a marketplace and the same with WooCommerce or any other cart systems. So you’re still on the hook. So basically if you use FBA and you’re not tax registered in 40 States, you can’t really be using Shopify without getting yourself into state tax trouble. someone of your scale, at least.

26:45
Well, you know, it eventually catches up with you because, what will happen is even if you’re smaller, you know, like right now we’ve got this great environment to sell your e-commerce business. You know, there’s an asset bubble in my view, but in any case, it’s really attracted a lot of big funds, you know, that are buying e-commerce companies. Well, when you go to do that transaction, this will all come to roost. They’re going to take all of that tax

27:14
know, that accumulated tax liability in the eyes of these states, and they’re going to take it out of your transaction value at that time, because they’re going to want to clear the decks of any tax risk. Sure. Okay. And so, you know, it really can screw up transactions, and it really can take a gigantic bite out of transactions at that time. You know, if you’re going to hold your business forever, and your business doesn’t grow, you’re probably okay. You know, but even if you hold it and your business grows, it just becomes this

27:44
of unsolved problem that’s always hanging out there. And the states are terrible. They’re just terrible. They don’t let you get out of the problem because if you try to go, you know, just kind of register with the states on a go-forward basis, just say, ah, okay, well, I’ve gotten big enough. It’s actually a meaningful amount of tax I’d be paying the states. Let me register now. The states all want to go back in time and strip and make…

28:10
In theory, sales tax is a tax on the consumer that the business is just on the hook to collect and remit. But actually what the states do is if they feel like you should have been collecting the whole time and you’re not, they’ll go back in time and make you pay this tax that’s supposed to be a consumer tax out of your pocket. And so they put you in a perfect trap where you just can’t get out of it. You can’t afford to do the paperwork when you’re small, but then as you grow, it becomes a problem that grows with you.

28:40
Yeah, so I do think, although it’s a terrible dilemma, it actually is an important dilemma to at least have your kind of eyes open about.

28:52
If you sell on Amazon or run any online business for that matter, the most important aspect of your long-term success will be your brand. And this is why I work with Steven Weigler and his team from Emerge Council to protect my brand over at Bumblebee Linens. Now what’s unique about Emerge Council is that Steve focuses his legal practice on e-commerce and provides strategic and legal representation to entrepreneurs to protect their IP. So for example, if you’ve ever been ripped off or knocked off on Amazon, then Steve can help you fight back and protect yourself.

29:21
Now, first and foremost, protecting your IP starts with a solid trademark and Emerge Council provides attorney-advised strategic trademark prosecution, both in the United States and abroad for a very low price. And furthermore, the students in my course have used Steve for copyrighting their designs, policing against counterfeits and knockoffs, agreements with co-founders and employees, website and social media policies, privacy policies, vendor agreements, brand registry, you name it. So if you need IP protection services, go to EmergeCouncil.com and get a free consult.

29:50
And if you tell Steve that I sent you, you’ll get a hundred dollar discount. That’s E-M-E-R-G-E-C-O-U-N-S-E-L dot com. Now back to the show. We’re actually undergoing a sales tax audit right now, in fact, for California. is one of the worst ones. It is. Yeah, we are. We’re registered in California. We’re registered in a bunch of states, even though, mean, if we get to 40 states, you know, then we can turn on Shopify.

30:21
I mean, there’s 45 states with sales tax, 40 right now with Amazon warehouses. Yeah, and my feedback to shop, I don’t have any high level contacts at Shopify, but my feedback to Shopify is you got to become a marketplace facilitator because basically, Shopify is a huge phenomena, really kind of running away with the independent store market. But basically that whole gigantic ecosystem is not tax compliant.

30:50
I haven’t heard news about their app recently, but that’s kind of what that app was supposed to do, right? Turn it into a marketplace. Right. Of all the vendors. Yeah. And a lot of people in the Shopify community are here about them turning into a marketplace. They’re kind of opposed to it. You know, they don’t want Shopify to become another Amazon, but I think that’s a different issue. know, Shopify can continue to be a platform that

31:20
really supports these independent stores and doesn’t do what Amazon has done in terms of diluting brand value and having the marketplace have all the brand attached. They don’t need to go down that road. They just need to go down the road of solving these really gnarly state tax issues on behalf of these millions of small companies. Actually, that’d be a huge value add. Like if Shopify handled all the sales tax for you.

31:49
A lot of people would sign up for them over any other platform if they’re handling it. Absolutely. Absolutely. And we would be there instantly. Because actually, I don’t know if you know this, Steve, you said you went to a pluggable site. Believe it or not, we’re running on Shopify. Oh, I didn’t know that. We just don’t have the cart turned on. Interesting. The other thing I noticed was there’s no pop ups. Maybe that’ll be like every three years is an email tip that goes.

32:16
You’re probably going to pop-ups too, right? Because that disturbs the customer experience. Yeah, that’s right. That is my instinct. you did a good job scolding me three years ago, Steve. Do want to scold me on that one? Well, just try it and see how much more email subs that you get, which you can use to launch future Amazon products and that sort of thing. OK, cool. Just try it for a month and see what happens.

32:43
That’s good advice. And then you can even ask your customers if they were disturbed by the pop-up. Okay. They won’t answer me if I ask them that. Well, you can use a poll actually, like on PickFu or something and ask them if the pop-up bothers them. These are just random that you’re surveying. We love PickFu. We use PickFu all the time. Okay. So I wanted to talk a little bit about like the shipping container shortage right now and how that’s affected you and how you’re getting around it really.

33:10
Yeah, I mean, it’s crazy. We used to be able to count on about five weeks from factory door to Amazon, maybe six if we got a backless exam, an x-ray exam. And you basically have to add eight to 10 weeks to that right now. I mean, it is just insane. We’re losing two to four weeks scheduling the container on the origin side. We’re losing time on the water.

33:38
And then once the ships reach the US West Coast, they’re, you know, especially port of LA, they’re sitting there anchored for X amount of time. And then the goods, you know, reach the port and all of the equipment, you know, the chassis, the truckers, you know, everything’s constrained. So yeah, it’s crazy right now. you know, time is money, you know, all of that time that those goods are spending.

34:08
You know, on the water, stuck on ships, stuck at port, you know, that is impact on our cashflow. Okay. And yeah. And then you layer on top of it for electronics products, you have this much worse issue happening simultaneously, which is this chip shortage. And it is, it is just crazy. mean, yeah, I’ve only said only been at pluggable for 10 years, but I’ve been in the electronics industry for about 30 years and I’ve never ever seen anything like this.

34:38
Has the Amazon inventory rules, like the latest ones, have that affected your business as well? Huge. mean, it’s crazy that Amazon’s inventory rules are hitting at the same time as this massive supply chain disruption. Amazon counts the time goods are, as soon as you generate a label, it starts counting against your inbound inventory. So Amazon has gone through a series of kind

35:06
extremely disruptive and onerous inbound limits to FBA and totally changed what kind and what method they’ve used several times. And so right now they’re at a total number of units per account and it’s broken down a little bit by type of units. But yeah, if you’ve got units that you label at the factory, that whole extra two months or so that it’s in transit from the factory would count against you. And so

35:35
So what that means is that you pretty much need to not label things at the factory. You need to have an in-country 3PL that will do the Amazon labels at the last possible moment. So for us, that’s easy in the US because we actually have our own warehouse here in addition to 3PLs. Oh, okay. That’s the piece I was missing. I actually didn’t know that you had your own warehouse. Yeah. Yeah. Okay. Okay. Was that always the case? It’s been the case for six years. Oh, okay.

36:04
Okay. All right. Okay. Yep. So, but we don’t in Canada, in the UK, in Europe, in Australia, in Singapore, in Japan. You know, and so, so, you know, we are hitting the, you know, these exact problems that other people are hitting in the US, we’re hitting them in the other geographies, you know, and Amazon is bouncing around those limits, we’ll ship in.

36:27
We’ll have the ability to ship in a thousand units. We’ll ship in the thousand and then they drop our limits by 2000. And so now we’re, you know, we’re 2000 over and our best sellers go out of stock and our slowest sellers clog up all our spots. You you almost wonder if it’s a systemic strategy on Amazon’s part to get brands like us to do heavy discounting, to move through.

36:55
are lower selling items. Because if you have a thousand brands who are all discounting their low selling items, that means almost every type of product is always going to have, you know, kind of desperate fire sale discounting happening at all times. know, so does that imply then right now the inventory goes to the US and then you ship it to those?

37:17
In most cases, yeah, we have some overseas 3PLs that we’re trying to ramp up. But yeah, it puts us at a gigantic disadvantage to the Chinese brands. Brands that are able to hold goods at the factory in China and then trickle them out around the world are at a massive advantage to brands that can’t. And pretty much unless you have a corporation in China, you can’t do that because the tax laws and some of the other regulations

37:47
really force the factories to get the items exported so that they can recover bats, they paid on the bomb and other things. so, yeah, it’s a real… China’s pretty much the only game in town for electronics, right? Pretty much. mean, so we’ve been really aggressive on getting out of China. So actually, we had a goal last year to get more than 50 % of our products by revenue.

38:15
manufactured outside of China and we hit that. Really? We did. Now we’ve walked into a whole bunch of trouble because actually as bad as the shipping disruption is from China, it’s worse everywhere else because you’ve got this massive shortage of both ship schedules and containers themselves. And the one route that everybody can fill the container every time on is the China route.

38:43
Basically, all the shipping companies, they’re trying to get their containers bouncing as fast as they can between the China and the US because that’s the biggest route. So when we’re trying to ship stuff out of Thailand or Vietnam or Taiwan, it’s actually harder to get those containers scheduled. And so we’re out about two more weeks versus when we ship stuff from China.

39:13
Yeah, I for us, I think we’ve been delayed four to six weeks from our shipments, but it doesn’t affect us as much since again, we have our own warehouse here also. So it’s like a little buffer that just kind of tides things over. Curious, last time we had talked, we talked about Amazon creating their own private label brands of your electronics. Is that continuing to happen? And what have you been doing about that? Yeah, it’s, you know, I think

39:42
The case that we talked about was kind of the big one for us because they took our top seller and very directly targeted us. It hasn’t happened quite so explicitly since that case. They’re still launching new products. They’re still in our space. They’re still not our biggest worry. Our biggest worry by far is our own factories and all the brands they’re launching on Amazon, which Amazon has encouraged Chinese factories to launch their own brands. And that’s a much bigger issue for us than Amazon basics.

40:12
But you know, Amazon basics is still, you know, are you going to your own factories or copying your designs? No, it’s it’s the you know, I mean, you know how things work in electronics. Yeah, Steve, you know, you’ve got the IC vendors who are the ones who really are making the big investments. You know, they’re making the multimillion dollar investments in these new chips. And then they’ll produce reference designs. And then the factories.

40:39
and the brands will look at those reference designs and tweak this, tweak that. But really, usually you’re not doing a ground up PCB relay out unless you really, really have to. I mean, you’re pretty much working from the reference designs. So the whole industry works that way. Yeah, so it’s not that the factories are copying our products. It’s that the factories are doing a set of

41:06
very related products, usually based on reference designs for all the brands they serve. And including now in the last three to five years, especially their own brands that are either explicitly associated with the factory and everybody knows it, or are kind of quietly owned on the side by the same guy who owns the factory or whatever.

41:32
and they have the advantage too. I guess the differentiating factor is firmware and software, right? Yeah, it’s firmware, software, choices, documentation. Our motto is better products, better information, better support. And so we know that we can’t get some massive advantage in any one area. So we just try to be better in dozens of little ways across all three of those products, better information.

42:01
Right. mean, marketing also becomes a huge play and then the content stuff and getting, I guess, influencers to use your stuff. Yeah. But the Chinese brands, they know how to do marketing. We’ve got in our space, this company that has just become a model that other Chinese brands have followed, which is Anchor. They’ve just done a great job really nailing Western marketing.

42:30
and then the other Chinese brands, hundreds of them, are kind fast followers of Anchor and then they innovate in their own ways. So is Anchor one of the brands that got banned? can’t remember. No, they’re not. not. know, Steven Yang and I know each other going way back. I kind of spilled the beans on our model when he was doing Laptop Mate before he created Anchor. And we’ve been kind of friends and competitors the whole time.

42:59
Stephen’s a really good guy and while Anchor has done some of the things we’re talking about, they’ve always done it with the customer in mind. They’ve never been, I would say, the way I would characterize it is they’ve never been black hat. They’ve always been, if they did anything, it was kind of gray hat. I would, in a sense, say the same thing to ourselves because earlier on, were, well, we never paid for reviews, we gave out, did we even give out free?

43:28
product for reviews years ago. Anyways, I know, you’re white hat, Bernie. I think you’re the whitest white hat person I know. Right. Yeah. Cause we were always, you know, we’re always thinking that way. Right. I mean, because in the end we were always trying the whole, the whole founding principle of the company is we wanted to be a better device company. Yeah. Kind of did right by consumers. So, you know, that’s always been, you know, that customer focus has been the thing that we, we, we have no reason to exist other than that.

43:58
Yeah. Because it really everybody, everybody else can do other things better. You know, it’s only and so it’s so the good thing is, is 10 or 11 years on, we actually have a huge amount of brand identity and brand loyalty. And it’s taken, you know, it’s it’s it’s almost like this insane patience that’s required to build that, you know, but you know, but I’m really proud that we have. I wanted to kind of circle back.

44:26
to our launch strategy, because I know you have a tool and I know you rely on white hat techniques like PPC and as it gets more competitive and you’re saying it’s pay to play now, so that means everyone’s paying to play. I know you have a tool PPC Ninja that I’m sure you use your own dog food, right? eat your own dog and use PPC Ninja. What are some of the things that you do to differentiate yourself from the competition that’s running PPC?

44:54
So PPC Ninja is both, we ingest all of your Amazon advertising reports, normalize all the data, connect all the data, and allow you to basically pivot and look at that data all kinds of different ways that’s completely connected and also kind of goes back in time. You’re not limited by just like doing a pivot table in Excel on one report for one limited period of time. It’s all reports, all data, all time.

45:23
And so, and then on top of that kind of viewing and pivoting, bids are really kind of time consuming to do, especially if you do it manually, we have bid automation. So we’re, and we do it in a really interesting, sophisticated way, especially when you launch a product, you you really don’t know what is the most effective bid level to be at.

45:47
And one of the things we have is, that’s kind of cool, is we’ve got these bid charts. Like in any keyword or campaign, you can just click and get a chart of any of the metrics of that keyword back in time, including the bid. And so you can kind of see the bid going up or down as we might have changed it at certain points. And then what that did to the sales numbers, to the impression numbers, to the conversion rate.

46:15
any of the other ad metrics. And so we really get to see some really interesting effects. Like one of the things we talk about a lot is, there’s a lot of kind of cliffs and then also on the downside end, I guess you call it on the upside, I what the correct term is for a cliff on the upside, plateaus call it, where- You’re talking about diminishing returns, right?

46:39
Well, you that you might be 90 cents and yet at the 90 cent level, you’re getting a really high percent of the total number of impressions. And then, but, maybe your ACOS isn’t quite to your metrics. so you drop your bid from 90 cents to 85 cents. What can happen with Amazon advertising is your impressions can fall off a cliff. You know, you, you, dropped to 85. Yeah. Your ACOS drops as you intended, but your impressions.

47:08
go to like one tenth the number of, even though you only dropped five cents, know, a little under 5%, your impressions drop manyfold. And it’s just because what ends up happening is even though it’s a second price auction for the bids, and even though there’s quite a bit of kind of rotation going on in the Amazon algorithms, still you might’ve fallen below a pack of competitors who are all advertising on that.

47:35
same keyword in that 85 cent to 90 cent range. And so your impressions drop off entirely. so basically, first of all, you’ve got to be able to see things like that happening. And so our tool lets you see that really easy. Right in the UI, just click and you’ve got these super nice charts. Our bid automation works in a really cool way. So one of the problems when you launch a product is you’re trying to find kind of that appropriate bid level.

48:05
but there’s not a lot of data there, not a lot of history, of course, because you’ve just launched. And so you want to make decisions at kind of the earliest responsible moment. So our algorithm, when this tool was a part of another tool and then basically up until last year, was to just use fixed periods of time. We would look back two weeks and make the recommendations based on that.

48:31
And so the way the recommendations work is every day you have recommendations popping up to adjust your bids up or down on potentially hundreds of keywords. Very easy to just kind of select all and accept all of them or look through the list, select all and then maybe look through the list and remove a few. So, you you would get those recommendations based on that two week data. So our algorithm now though is to have it be based on data sufficiency.

49:01
So as soon as you have enough impressions, clicks and sales where it’s considered sufficient to make a judgment on the effectiveness of that, basically coming down to the ACOS of that, then we’ll make a bid recommendation. So if you have a keyword that in one day will generate a few hundred impressions, 50 clicks and then two sales,

49:29
that will meet the sufficiency requirement and we’ll make a bid recommendation that day to, know, if sales are occurring at a kind of an effective ACOS to increase your bid and kind of get more impressions, more sales. Whereas if you have a slower running keyword, it might take you four weeks to generate that amount of sufficiency. So you will not get, you know, that bid recommendation on day one or day two and have it be based on kind of, you know, incomplete or erroneous data.

49:59
you’ll get it at that four week mark. So basically your fast moving keywords, we very quickly allow you to kind of optimize those bids within days or a week or two of launching your product. And then your long tail slower moving keywords, those will take longer, it’ll be stretched out kind of appropriately as the data comes in. And it basically allows us to launch products and really dial in the ads.

50:28
way quicker than a lot of other tools that use just timeframe based bid recommendations. So is it based on impressions and clicks as opposed to just time essentially? Correct. That’s right. Impressions, clicks and sales. Right. Okay. Cool. You know, I actually have all the tools, like all the competing tools in my disposal. I haven’t actually tried yours yet. You should. Yeah. Maybe I will fire it up. I just don’t like spreading out my API credentials to like every tool in the planet.

50:56
Right. I’ve done that. I guess it’s not a big deal. Well, you we don’t we specifically don’t ask for MWS credentials. So it is it’s just purely add credentials. OK. OK. And we do that again because we don’t want to, you know, create that risk or that fuzziness of why do these guys want our MWS credentials? What are they going to do with those? Those are so powerful. So, yeah, so we are at API only. So it’s a lot easier. OK, yeah.

51:24
I do notice, and I’m curious, maybe I will try your tool after this interview, I do notice that a lot of the analytics is not, it doesn’t show me everything I need to know and the bid suggestions are often like a big black box, which I would imagine for the regular user that’s fine. Or most people just want to pay someone to just do it all, I guess. Right, yeah, and we’re also an agency where they can just have us in.

51:51
Yeah, so PPCNinja is, we’ve got the software product, but then we also have an agency because, I mean, so many people do want the thing just taken care of, but the software allows us to do the agency side of it really efficiently. Okay. Well, cool. Bernie, where can people find you if they have any questions about the tool or your business?

52:14
Yeah, just go to ppcninja.com and we have a 14 day free trial on the software. then, you know, what I really recommend actually for, for a lot of your audience, Steve, is we’ve got a free four week mastermind. So it’s an hour a week, each of four weeks. We typically have a few dozen people that attend each session that we run. And I think there’s a, there’s a signup right on ppcninja.com for that. And it’s

52:42
taught by Ritu Java, who is our CEO and she’s… Yeah. Yeah. Yeah, Steve, you know Ritu. I love Ritu. I love her. Ritu is awesome. And people just love this mastermind and it is free, which is kind of crazy, but it’s basically our main inbound funnel. And the feedback that we get off of that mastermind is so positive. Ritu kind of goes over all the basics of how to succeed with Amazon advertising and…

53:10
Ritu and her team are the ones who manage my budget for Plugable, is several basically on Amazon about 1.5 million a year in spend. In total, we manage several tens of millions of ad generated sales on Amazon. So Ritu really knows what she’s doing and it’s actually a really, really fun and effective teacher.

53:34
So it’s a different kind of mastermind that lots of interaction with people and we get people from around the world, but also a lot of great content. So really encourage people to try that out. Cool. And it’s priced right too. Yeah, that’s right. Yeah, can’t beat that price. Hey, well, Bernie, thanks a lot. I mean, it’s great catching up with you after all these years and hopefully we can hang out in person again. Yeah, I definitely hope so. It’s a new world, but hopefully it’s a new good world. All right, take care. Okay. Thanks, Steve. Bye.

54:05
Hope you enjoy that episode. Now I sincerely believe that selling on Amazon and more so selling on your own website is still a great opportunity and the current challenges we are facing with inventory are being felt by everyone worldwide right now. But there’s a ton of demand and e-commerce is the future. For more information about this episode, go to mywifequitterjob.com slash episode 375. And once again, I 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.

54:35
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-R-I-P-T dot I-O slash dv. I also want to thank Klaviyo, which is my email marketing platform of choice for ecommerce merchants. You can easily put together automated flows, an abandoned cart sequence, a post purchase flow, a win back campaign, basically all these sequences that will make you money on autopilot. So head on over to mywifecoderjob.com slash K-L-A-V-I-Y-O.

55:02
Once again, that’s mywifecoderjob.com slash K-L-A-V-I-Y-O. Now I talk about how I 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.

00:29
So in this episode, we’re gonna learn how it is done. But before I begin, I wanna thank Postscript for sponsoring this episode. Postscript is my SMS or text messaging provider that eyes for e-commerce, and it is 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. Anyway, 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,

00:57
and you can try it for free over at postscript.io slash Steve. That’s P-O-S-T-S-E-R-I-P-T dot I-O slash Steve. I also want to thank Klaviyo who is also a sponsor of the show. Now are you working around the clock to build the business you’ve always imagined and do you want to communicate with your fast growing list of customers in a personalized way but in a way that gives you time to work on the rest of your business? And do you ever wonder how the companies you admire, the ones that redefine their categories do it? Companies like Living Proof and Chubbies. Well they do it by building relationships with their customers from the very beginning

01:27
while also evolving in real time as their customers’ needs change. These companies connect quickly with their customers, collect their info, and start creating personalized experiences and offers that inspire rapid purchase, often within minutes of uploading their customer data. Now, Klaviyo empowers you to own the most important thing for any business, the relationship between you and your customers and the experiences you deliver from the first email to the last promotion. To learn more about how Klaviyo can help you with your own growth, visit klaviyo.com slash mywife.

01:57
That’s KLAVIO.com slash my wife. And then finally, I wanted to mention my other podcast that I released with my partner Tony. And unlike this one where I interviewed 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 on to the show.

02:30
Welcome to the My Wife Quarter Job podcast. Today I’ve got my buddy, Ernest Epps on the show and Ernest is someone who I recently met on a panel for the Small Biz Aid virtual event where we discussed how to compete with Amazon. He’s the founder of high ticket ecomsecrets.com and ErnestEpps.com where he teaches high ticket dropshipping. Now the term dropshipping gets thrown around a lot and it actually has a negative connotation sometimes in the ecom world, but Ernest specifically focuses on higher ticket items for dropshipping.

03:00
And similar to me, he’s not a believer in dropshipping from China, Amazon dropshipping, or any of the get rich quick schemes that you see on the internet. And in this episode, you will learn what it takes to get started with high ticket dropshipping and how Ernest got started with this e-commerce business model. So Ernest, how are doing today, I am spectacular. So Ernest, before we start, give me the quick background story on how you got started with dropshipping, specifically high ticket dropshipping.

03:28
Yeah, so what ended up happening, I was climbing the corporate ladder like I think a lot of us do in our career. And, really, I went that direction because that was the process my mom kind of instilled, right, which was, you know, the traditional go to school, graduate, then go back to school and get a degree and then pray that you get a good job and work there for the next 40 plus years. I like to call that the work until you die program.

03:58
Right. So I I was brought up the same way. Yeah. Oh, OK. Gotcha. Yeah. So I mean, that was traditionally like the trajectory that was kind of going. And then, you know, I was working at a marketing firm and I was a sales district sales manager for them. And I was overseeing seventy seven locations from South Carolina to Massachusetts on a project that we were working on for a multibillion dollar company. And I was helping them crush it. And all of a sudden, the company was going through a restructure.

04:26
And I happened to be restructured out of the restructure. And that personally for me broke my soul. And I say that because I mean, it really hurt me something deep. mean, I cried like a baby. I had never done that before. Right. Yeah. And it was because it was my dream job. Right. Like it was my dream job of

04:48
you know, where I wanted to be. And anyone at that time, they would ask me, I’m like, man, I’m going to work here. I’m going to work here till I die. Like, this is it. I’m to become the CEO of this company. Like that was my game plan. And I just lost it just in an instance. Right. And so that made me aggressively start looking to do something else. And to the point you kind of made early on, I started researching dropshipping. Right. And, know, I seen that, oh my gosh, there’s so many different ways to do this.

05:14
And so that kind of made me really nervous, uh, kind of getting started. And so what I did was I bought a lot of different programs, right? And I learned about the different models of dropshipping. So drop shipping direct from China, retail arbitrage, Amazon, FBA, uh, white label and private label. And I was just like, man, you know, there’s a lot of different ways to kind of do this. But what I wanted to make sure is that whatever it was that I built,

05:40
was gonna put me in a position to be able to have a long-term sustainable success. And what I saw specifically, let’s say for example, the drop shipping direct from China was that your fulfillment times were super long, right? So in terms of products getting to customers, have no control over, there’s no quality control. There’s no enforcement of quality control. If you have to do a return, there’s no way, like no customer is gonna ship their product to China, right? So it was just like, I don’t want this anymore. Send it back to China. Like, what are you talking about?

06:10
So I was just like, man, there’s got to be a smarter way to do this. So what I started doing was really looking at the behaviors of some of like the top retailers online, right? So for example, like the Walmart’s, the Home Depot’s, the Amazon’s, the Wayfair and Wayfair in particularly. And what I discovered was they built relationships directly with manufacturers like you traditionally do in like retail. And they set up accounts with them. And now because the concept of drop shipping is a lot

06:40
simpler in a fulfillment process. Cause if you research the nature of dropshipping, all it is is a fulfillment method, right? Most people can, most people don’t do enough due diligence and understand what the heck it is that they’re doing. All dropshipping is, a fulfillment method that elaborates on how a product gets direct to the consumer, right? So rather than have an inventory and overhead, if you establish a relationship with the supplier, you can actually request a dropship account. So for example, with selling like electric fireplaces,

07:08
There’s a lot of brands that are here specifically in the U S domestically where you can actually give them a call. And as long as you’re an already established business, like with the website, a business entity, things of that nature, they’re really open and receptive to helping you open up an account with them to be able to, uh, to drop ship. Right. So I was just like, that sounds a lot more simpler than, you know, this all overseas China stuff. So.

07:34
That’s basically what I started to discover. And the reason why I got attracted to dropshipping, right? Because again, there’s a lot of different things that you can do from a business perspective, like real estate, stock market. You know, at this time, crypto is blowing up like crazy. You know, so there’s a lot of different models. But for me, the thing that there was, there was one thing in particular that made me specifically look at making money on the Internet and making dropshipping my vehicle was that I heard a quote from Warren Buffett where he says, if you don’t learn how to make money while you sleep,

08:03
you’re going to work until you die. Yep. I love that quote actually. Right. And so I was like, all right, Warren, how do I get this sleeping money? Right. So, and so when I started looking at the different vehicles, right. In the process, again, specifically like online, the thing that made it attractive was that there wasn’t a high inventory, right. Or there wasn’t a high overhead. And so I was just like, Oh, that’s really attractive because

08:29
You know, now there are ways in real estate per se to like, you know, be able to have success, but I didn’t understand any of those concepts. They scared the crap out of me. Uh, cause I didn’t have a lot of money to get the ball rolling. Um, after I had lost my corporate job. So I was like, I gotta find a vehicle that could like, I could be able to have really great leverage and could put me in a position to make money while I sleep. Like, so when I started to do the due diligence, I saw specifically, for example, in the state of Virginia is $12 and 50 cent to register a DBA. Right.

08:57
And I was like, Ooh, that’s only $12 to start a business. Okay. That’s that. like that. I was like, okay, how do I build this website? And everyone’s talking about Shopify. And I was like, Oh man, that’s probably thousands of dollars. And it would have been back in 1990, but you know, we’re in the, you know, late 2000s now or mid 2000s, mid early 2000s. And was like $29. I was like, Holy smokes, $29 a month. All right, cool. So I’m at $12, 29. And then at the time Shopify was doing a promo with Google. If you spend 25 to get you a hundred.

09:25
So was like, oh yeah, so I money for advertising. So basically all in to get started, I’m at, oh, you got to get a domain name too. So that was like 10 bucks. So I’m like, I’m less than a hundred dollars to like launch a real business, right? And I was like, I like that, right? Along with the fact of like the relationships with the manufacturers, not having to purchase the inventory until you actually got a sale. And I was like, that seems like something I could really be in a good position to build some long-term success with.

09:55
Yep. So very low budget. Exactly. Very low feasible budget. mean, literally just if you have 300 to a thousand dollars, like you can start a legitimate drop shipping business and do it the right way and not have to break the bank. So Ernest, would you mind sharing your shop? Actually, I couldn’t find it on your website. And what do you sell? Yeah. So one of the main stores I’ve been running for the last seven years is a is wine stores. So

10:22
That particular site is good wine coolers.com. And so if you go to that, like you’ll see, I got over 5,000 products on it. And the funny thing is most people they’re like, Oh, you know, Ernest, your website isn’t that sexy. My response is, you’re absolutely right. But where the site wins and excels is obviously a really good done advertising in terms of getting in front of the right prospects at the right time. And then also

10:48
My specific product pages are optimized and that’s where they win. It’s because I have very unique offers that I’m able to provide to the marketplace that helps separate me from the competition. So when someone is looking for that 300 bottle dual zone wine cooler and I come up and they start kind of researching and figuring out, okay, if I’m going to go ahead and get this, let me see what other businesses and stuff are out there that I could possibly buy from. They come across for me and they see, man, I get free shipping. Oh my gosh, I get free white glove service.

11:18
And they’re going to give me a free set of wine glasses. I mean, nobody in the entire internet is doing that right now. Right. So I might not be familiar with this company, but I do see a couple of things. I do see that they offer me a money back guarantee in terms of our price matching. I do see that they are registered with the better business bureau. I do see that they have a plus rating with them. And I do see that they have over a hundred plus verified reviews. It’s like they’re pretty legit. So I could see myself spending some money with them.

11:48
And basically, that’s how I’m able to really excel with that specific business. is considered high ticket drop shipping? Yeah, so really, the concept high ticket drop shipping is essentially just focusing on finding, sourcing, and selling products that have a higher price point. So normally online, would be considered low ticket would be between $20 to maybe like

12:14
$100 mid ticket is between like 100 to $200 per transaction. Um, and then high ticket is basically items that have an average order value of, uh, $200 and up for a single item. So that’s what, uh, there’s a high ticket e-comm. So in terms of high ticket drop shipping, what are your typical margins? Yeah. So typically on average, it’s the same, uh, that you would see across the board in drop shipping. Right. So

12:40
Normally after acquisition costs, advertising, you’re usually seeing about 20 to 30 % on average. that’s just starting off. So for example, I have a supplier that I work with by the name of Zline. And with them, I have 25 % margin after everything, right? Nice. That’s shipping, the product. And normally like my acquisition costs for their products is between like 20 to $40 to get someone to convert. So yeah, it has an AOV of $700 for those particular units.

13:10
Oh, wow. Cool. So that’s really high ticket then. Yeah. Yeah. It’s pretty decent. So what does the product research look like? Like, let’s say I’m just getting started with this and I have no idea what I want to sell. How do you find like a good what makes a good drop ship product? Yeah. So really, I like to start at the fundamentals of number one, making sure there’s enough demand for the audience it is that you want to serve. Right. Okay. So for example, like if you were to do research on like electric fireplaces right now,

13:39
you would see on average, there’s about 200,000 people a month looking for their products. Right. And you’re using what, like a keyword tool? Exactly. We’re using a keyword tool. So my favorite public tool to be able to use it only costs like 10 bucks. Uh, it’s called a keywords everywhere. Right. So with that tool, you’re now able to get that data. Like I just mentioned in terms of like search volume. Uh, cause the biggest challenge is where I think a lot of people

14:05
mess up on building their econ business, whether it’s like drop shipping or just selling any type of physical product, as they don’t do enough research, which I’m glad it is that you brought up. Because if you do enough, if you do enough good due diligence on the front end, like by the time you get to like, you know, developing your offers, uploading your products, inputting your pricing, coming up with a unique selling proposition, you know, you will have discovered that stuff on the front end, right?

14:33
And so that’s, that’s one of my favorite tools. And then another tool is a Google trends, which will show you basically like the seasonality of a particular brand. Right. And that’s super important because you don’t want to be, you know, going into a particular, uh, you know, niche and market where, know, you’re heading into like either like the downward, uh, part of the trend or you’re already starting off at the lowest frequency of the trend. Right.

14:58
Um, so, you know, you want to be able to be in a good position. And the biggest, always tell people is that you don’t have to guess, especially when running an online business, because we have these tools that are out there that’ll give us this sort of insight. Right. And then, uh, the other thing is just going on the specific shopping network on Google, which is, uh, when you go to look for any type of physical products. So again, you type in electric fireplace, uh, you click on the shopping tab and then that specifically is its own channel with the inside of Google. Right. So that’s called the shopping network.

15:28
And you you started to do due diligence on, you know, seeing what products and stuff are already actively listed and what you’ll start to be able to see is on basically what’s going to happen is when you put in the generic keywords. So, so again, electric fireplaces, Google on the left-hand side will actually show you specifically how much money people are spending on average. They will categorize the, price points for that particular market. Right? So if you’re someone again, it says, Hey, I want to make sure that I’m selling products to have an

15:55
average order value, potentially $500 and up. So when you put in the particular product and you looked on the left-hand column, Google normally itemizes that into three to four different price points, right? And typically the second and third price structure that they have is normally what people are spending on average, right? And then you could validate that by just looking specifically on the shopping network. And usually I go through like the first three to five pages.

16:22
Because obviously Google is going to show the most relevant things that are selling when you’re putting in like a top of funnel type of keyword for that particular niche and market. So you can see, again, just a quick glance of like, okay, I see that Google is saying most people spend in between $400 to $800. Let me validate that through the actual search results. And so just go through, and you could be able to take a strong educated guess based off of that data that you just got. in terms of, so you mentioned a couple of things there.

16:50
electric fireplaces gets 200,000 searches per month. How do you know whether it’s too competitive to sell that item though? Like the demand is there clearly. Exactly. So I totally negate any type of like organic search results, right? So specifically my focus on my ability to be able to create success with that is seeing how many people on average are maximizing the shopping network, right? Because. shopping.

17:18
Exactly. So Google shopping, that’s exactly. So I’m going to stick there to love to measure the level of competitiveness, uh, because specifically that’s where you’re going to be able to get the greatest return on ad spend when it’s time to start advertising. Like, uh, just comparing apples to apples with like Facebook and Google. Cause those are the two primary places most people start like Facebook you would see typically on average, once you got pretty good, uh, three X return on ad spend. Now you can see a lot higher.

17:44
But again, starting off for the, for the new people, like if you can get a three X, like you’re doing pretty solid, right? Yep. On the shopping network, you’re able to see a five to 10 X return on ad spend with your money that you’re spending on the shopping network. Right. Yep. And that’s starting off again, basic brand new. You don’t know a ton of stuff. And also the thing that I love about Google is that you don’t have to know.

18:05
all the other fancier things in terms of marketing. So you don’t have to know how to write copy. You don’t have to know how to put together different creatives, call to actions in your ads. Google actually does all the creatives for you when your products get indexed in what’s called Merchant Center. And so they control the rotation and call to actions and things of that nature for your products as people are looking on the different assets that Google owns like YouTube, now even Gmail, where your products, when you’re running shopping ads can actually show up in people’s inboxes.

18:35
which is really cool too. So Google like tracks all that. And then obviously their goal is to, put you in front of their process, your prospects, you know, when they’re in the process of searching for your particular products, because you know, when they earn that click and get that click, you know, they get paid. So, you know, that’s, that’s what, so that’s why I started on the shopping network. So as long as there’s not more than 20 people on average, so you can determine that average by looking at the different listings. So when you go to the shopping network,

19:04
you’ll see all the different products kind of itemized. Right. And what Google does is when it has more than one person selling that particular product or brand, it will actually tell you how many stores are selling that. So specifically, I want to go into a market where there’s not more than 20 people on average already currently selling those products, because on the, on the back end, again, once you get to the advertising perspective, it’s going to be much easier to get into the rotation on the shopping network with everyone else.

19:31
when there’s not 40, 50 suppliers. So for example, our stores. So for example, if you were to put in juicers, right? And you go to the shopping network, you’ll see there’s 50 to 100 stores on some of those different listings. And on average, it’s about, I want to say between 50 to 80 stores that are selling juicers on the internet. So something like that is just like, whoa, that’s a lot of competition, which as we know, even if there is a lot of competition, that’s actually a good thing, right?

19:59
But for the new person, what I know is that from an acquisition cost to be able to get that like five to 10 X raw ads, it’s gonna be much simpler going into a niche that has less competition, because then you don’t have to work as hard and it doesn’t cost as much to acquire a customer. So even with just 20 people, presumably you guys are all selling the exact same item, right? Yep. And when it’s just a picture and a price, does it just kind of boil down to price at that point with Google shopping ads?

20:26
So it boils down to a couple of different things. So once you actually get into running the ads on the shopping network, know, price is obviously one of the things that you’re looking for, but also Google is also going to look at the relevancy of like your product title, description, the skew number, barcode, things that nature that you send into merchant center to determine how relevant you are to that particular prospect. And then they’re going to start measuring some of the other data from example, like your CTR.

20:55
to see like, if we put you in front of X amount of prospects, what’s the likelihood that you’re going to earn a click? So the better that CTR is for your ads, the more Google has a higher likelihood to put you into that better rotation. So it’s not like Amazon in a sense where Amazon like, you know, 80 % of getting the buy box is like the price, right? And then you got all these other little things. And so, you know, price is obviously going to be one of them, but they’re looking at all the other keywords, relevancy, and then tracking your data in terms of customer

21:25
customer experience once they get to your site. So they’re going to be looking at your bounce rate, how many pages of view per session are people actually adding the cart and ultimately are people converting. So when you start to have good customer experience in the backend of like running your ads, you don’t necessarily have to even spend a whole lot more to order in order to even rank well. It’ll just put you in a better, higher rotation. And then the other aspect with everyone listing products specifically, again, you go and you see 20 people listed is that.

21:52
Google gives the ability to do two things. One is to actually add reviews for your product. Most people don’t even know that you can do. And it’s actually kind of funny because a lot of like billion dollar brands out here like Walmart, they don’t even have their reviews on the shopping network for their products on their store. Okay. Yeah. Crazy, right? Yeah. So you can actually get your reviews from your store to actually show up on the shopping network. So again,

22:17
for those customers that we know that are doing real due diligence, they’re about to spend $1,500, $2,000 for a product, they’re gonna be looking at reviews on the shopping network before they put their credit card into your website. So if you have reviews there, and let’s say it’s 10 reviews and you’ve got six out of the 10, I mean, it’s like, wow, like, you know, I’m in California, this company here is registered in Virginia, but they seem pretty legit. I think I might wanna go with them, right? And then the other thing that you can do is you can actually run promotions on the shopping network, which once again,

22:45
Most people don’t know that you can do, which is a feature that you can unlock inside of your merchant center account. So now your promotions that you have also are something that’s going to help you stand out. Even if everyone has the same exact price or roughly like right around the same exact price, this will give you that extra competitive edge.

23:03
If you sell on Amazon or run any online business for that matter, the most important aspect of your long-term success will be your brand. And this is why I work with Steven Weigler and his team from Emerge Council to protect my brand over at Bumblebee Linens. Now what’s unique about Emerge Council is that Steve focuses his legal practice on e-commerce and provides strategic and legal representation to entrepreneurs to protect their IP. So for example, if you’ve ever been ripped off or knocked off on Amazon, then Steve can help you fight back and protect yourself.

23:32
Now, first and foremost, protecting our IP starts with a solid trademark and Emerge Council provides attorney-advised strategic trademark prosecution, both in the United States and abroad for a very low price. And furthermore, the students in my course have used Steve for copyrighting their designs, policing against counterfeits and knockoffs, agreements with co-founders and employees, website and social media policies, privacy policies, vendor agreements, brand registry, you name it. So if you need IP protection services, go to EmergeCouncil.com and get a free consult.

24:01
And if you tell Steve that I sent you, you’ll get a hundred dollar discount. That’s E-M-E-R-G-E-C-O-U-N-S-E-L.com. Now back to the show. I guess what you’re saying basically is a lot of these people that are bigger players, they probably don’t pay attention to these PLA ads as much. And if you focus on them and you’re niche focused, you do a better job than the big players. So the next question I have is what about Amazon? Amazon actually buys a bunch of PLAs also.

24:28
Right. And I’m pretty sure they’re doing the reviews and that sort of thing. So how do you compete with Amazon since it’s probably the same item, right? So what’s so funny, and this is going to blow you guys as minds is that Amazon does not focus on listing their high ticket products on the shopping network. Interesting. Okay. And personally, I’ve come to the conclusion that it’s actually crazy because you’re the first person

24:54
I think in an interview or speaking setting that’s ever asked me about that, and I’ve been speaking for a couple of years now. So kudos to you for asking that. So there in my, in my opinion, they know they’re obviously target customer. Right. And so in my assumption in this is because again, you go look at those electric fireplaces right now, you can go see like, for example, the Amante brand is listed on Amazon. Amazon’s even doing some, you know, FBA with those, with that particular brand.

25:24
But if you go to the shopping network, Amazon’s not listed for those. They’re not selling the 60 inch, $2,000 electric fireplace on the product listing ads. They’re strategically focused on the lower ticket products. So what I’ve seen is that products between, again, that low, low ticket, mid ticket item. So anything like less than $200, that’s where they’re actually maximizing the product listing ads. everything that’s like, really once you start getting into 500 to a thousand plus.

25:53
they’re not running shopping ads. That is really interesting because the higher your ticket item, the easier advertising gets. So it should actually be the opposite. You would think so. Okay, so just some other questions. There’s people that are selling on Amazon. They’re giving Amazon 15%, right? So are those people stocking the items or are they drop shipping? So you could actually see with the people on Amazon if they’re

26:21
drop shipping the product or if they’re doing, you know, or if they’re, you know, particularly leveraging Amazon to do the fulfillment for that. So really is just when you go to Amazon and you see that particular listing, it’ll say either like, you know, shipping from Amazon or shipping from that particular brand, right? So it’s shipping from the brand, that’s merchant fulfilled, which means that they’re actually drop shipping the product direct to consumer versus Amazon actually fulfilling the product. So yeah, that’s just a real simple way to determine that. Okay.

26:51
So you mentioned competing against no more than 20 other people. How do you even stand out among the 20 people? Yeah, so that’s where again, on the shopping network specifically, you can put your own unique promotions. So outside of being able to be competitive on price. So for example, there’s a brand I work with called VinoTemp and I probably shouldn’t say this, but I’m gonna say it anyways. Hopefully the CEO, India, she’s not listening. But sometimes I violate the map policy just a little bit.

27:21
uh, in order to have like lower pricing, cause I already know I have like the margin to do so. Uh, so if I know I got like, you know, 30, 40 % margin to kind of work with, I’ll, know, with the suppliers, some with mad policy, but mostly the ones that don’t have mad policy, I’ll see how aggressive I can be with the pricing. Cause again, that is a huge emphasis. And so number one, obviously like your pricing, a lot of people want to go with the person that’s the lowest, but not all in all cases, not in all cases where they always go with the lowest person. But you know, you want to try to get to be as aggressive as you can with the pricing.

27:51
while still being able to make a profit. But really the other unique way, especially for suppliers that have a map policy. So one of that I say is like Z-Line, you can’t violate their map policy. Another company, Blaze, they are on top of it. Like they are not messing around. So with them, again, everyone’s going to be selling at the same price. And also if you guys don’t know what MAP stands for, it stands for minimum advertised price. So what’s really unique about domestic suppliers here in the US,

28:18
is that a lot of brands have this policy. So what this does is it does a couple of things, right? So number one, it protects their integrity of the pricing of their brand in the marketplace. So for big companies like Amazon and Walmart that can afford to lose money on a sale, it makes it to where they can’t, right? It also helps you significantly because now when someone sees the product at Amazon and Walmart, you have the same exact price that you’re selling the product at.

28:46
So again, with MAP, it just means the lowest price that you can list a product that doesn’t mean that you can’t list it higher. And so oftentimes when the first thing people are like, man, how do I compete with the prices on Amazon? Well, you just go and work with MAP suppliers and now everyone has to sell the product at that price no matter what. And if Amazon violates, you can actually personally report them to the company because you will have a dedicated account manager. You could snitch on them if you want to.

29:15
Yep. So just a little couple of extra gems with the whole map thing. you know, really, again, with the shopping network, it’s the ability to, again, be aggressive on your pricing, but then also maximize the promotional area where you can do like free shipping. You could give like a 5 % off coupon, something of that nature. I can’t remember how many characters off the top of my head that you can utilize, but that’s where you separate yourself from everyone else too. Cause again, when you go to the shopping network right now, I mean, there’s a lot of brands. know, for example, Home Depot,

29:42
they don’t even run promotions oftentimes on their products that they’re listing on the shopping network. Yeah, no, I can totally see that because they have so many products that they have to worry about. Exactly. What about once they land on your site, how do you convert them? I mean, there’s a bunch of different places that are all selling for the same price. What are your value props for your shop? Yep, so earlier on, I kind of mentioned one unique one with like the 300 bottle dual zone wine cooler.

30:09
So what I like to do, especially on the items that I know that are going to ship LTL, which stands for less than truckloads. So that just means that, you know, a big truck is going to need to come pick it up because it’s pretty heavy or it’s like really weird and obscure. for example, like a paddleboard, it’s like not that wide in terms of like, you know, the width of it, but it’s super long. Right. So something like that would have to go on a, on a freight truck. Right. So if it’s something that goes LTL, what I would like to, what I would do is focus on my

30:38
best viewed products are currently already selling products and look at what type of additional shipping service could I add onto that to create a nice customer experience if they decided to buy from me. So there’s a couple extra tiers of shipping specifically for LTO. You have what’s called curbside delivery, which most people are familiar with. They come drop it off at the curve, keep it moving, right? The next one is a door to door where they’ll actually deliver it to the entry port or whatever door. So garage door, front door, something like that.

31:07
Then you have inside delivery where they’ll actually take it into a room of choice. That’s also another verbiage of it where they’ll bring the product into the home, know, drop it off in whatever room it is. But then like you’re stuck with like, you know, setting it up, unpackaging, all that good stuff. And then you have what I like to call the Ferrari experience of shipping, which is known as a white glove service. Okay. And most, again, consumers that are in the market looking for, you know,

31:35
a product of, you know, big stature, that’s something that’s commonly known as white glove service. So your ability to potentially either weave it into, you know, having to come out of your margin and offering that for free or, you know, being able to offer just a really aggressive pricing on that. Because remember, you’re working direct with either your carrier or the manufacturer. So you’re going to have way lower rates than like the retail. So I can beat any major retailer, whether it’s Home Depot, Walmart.

32:03
overstock, Wayfair, I’m going to beat them like crazy on offering white glove service because I have really good wholesale rates on that. my goal is again, it’s to weave into one or more of these services that I offer, especially for my top view to top selling products to create that unique experience. So if someone sees that I have it, and again, they go to Walmart, they go to Amazon. And the beautiful thing is that we’re small businesses and I want you guys to really remember that.

32:31
Like that’s where the leverage comes in. We can do stuff that corporate is not going to do. Again, I’ve, I’ve worked with like Walmart, like I worked with Walmart corporate, right? If you want to do something unique for a customer, you got to talk to the store manager, district manager, regional manager. They got to run it up to the VP. Like it’s a whole week to get a yes or no. Right. Where when you’re a small business, it stops with you, right? It’s yes or no from you. So if I say, Hey, you know, I want to.

33:01
provide you with a white glove service on this 300 bottle, $2,500 unit, I can do so at the flick of a switch. Yeah. So those are the, that’s one of the unique things. And then also I have a concept of the value of gift giving, right? So there’s a really unique thing that happens when obviously you give people stuff for free, especially a physical

33:27
a tangible, uh, you know, element that they can hold in their hand, right. Along with being able to give something, someone about something of value. So I have a promo on that particular store where if you spend anything over $400, you get a free set of wine glasses. Right. Nice. So now that can’t be combined or used with other promotions, but again, it’s another thing that helps separate me from everyone else. And the wine glasses I give away are super nice, high-end, uh, glasses that actually have a 10 year warranty on them. So.

33:57
It’s like, wow. Like again, Amazon’s not doing that. Walmart’s not doing that. They’re not going to get, that from anywhere else. And so I, I stack multiple type of incentives that I know are still going to be within the scope of my margins and profitability and do that in order to again, give myself that competitive edge. Cause personally for me, my goal actually on the shopping network is never to really be number one, unless I can get there just through like a natural rotation.

34:26
Because the number one spot we all know anyone has done advertising and marketing is expensive, right? That’s the most expensive click is to get to be number one. So my goal is only to be in the top 10. Like I just want to be in the top 10 listings on the shopping network because I want to gain those people that are already ready to make a decision and they’re just going through and trying to find those different businesses that they feel are going to give them the best deal. And so by the time they land on my site, it’s like,

34:55
Holy smokes, like this is amazing. best. Yeah. got this off of basically exactly. I’m, all for driven. So let me ask you this. So with high ticket items, it seems like you need to have like a phone line, right? Oh, absolutely. I think really with any business on the internet, the funny thing is like everyone, again, we want to make the money while we sleep and things of that nature, but having a phone number on your specific website, your funnel,

35:25
anything that is that you’re selling online will give consumers such a huge peace of mind because no, just think about yourself as a consumer. No one wants to spend money, especially with someone that they’ve never bought anything from and not know how to get in contact with. No, absolutely. But I think in your case though, you almost need people who are experts at your items, right? Which are more expensive because there’s gonna be a lot of questions I would imagine. It’s so funny because again, you think that

35:55
but it really, you really don’t. Okay. All right. Really the, the customer service people. So again, when I train people to do customer service for me, again, we’re focused on making sure that we can answer the questions and closing the sale, right? This hell is super important. But most importantly though is just taking the time to just really answer the question. in most instances, again, cause we’re getting a lot of people

36:20
that from a business perspective that are coming through that know what they want already. So remember like the intention, specifically with the shopping network, Google’s only gonna display you for one or two reasons. Either A, someone’s looking for exactly what you sell or B, they’re looking for something extremely similar. So from a education perspective, they’re probably, they’re already somewhat familiarized with the products already, right? And so when someone calls in, usually it’s just a couple basic questions. And oftentimes it’s stuff that’s already on the landing page.

36:50
Like, is it, see that this electric fireplace is freestanding. Is it also built in? And, you know, just scroll through the product description and say, absolutely. Yep. There is it right here. Right. So, um, a lot of the times I want to say there’s a strong 90 % of the time where your question can be answered based off the landing page. And then there’s that 10 % of like, well, what’s the voltage? I’m like, man, what’s the voltage? Like, what is he talking about?

37:15
So, so how we educate or how I’ve educated my customer service people is the response is that’s a great question. What I’m gonna do is I’m gonna actually get ready to call my warehouse supervisor and have him answer that for me directly. That way I can make sure I’m giving you the exact information that that you need. Is there any other questions before I give them a call or just place you on a brief hold? Nice. Okay.

37:41
And yeah, most man consumers love, they love stuff like that, right? That you’re gonna take out your time to really make sure that you’re getting a direct answer. And we say warehouse supervisor, in essence, it’s just your account manager at the supplier. Yeah. One thing I also want to touch on is how do you find a supplier? Like if you’re brand new, how can you get like a name brand to drop ship for you? Yep. So really I touched based on this real briefly, but to elaborate on it.

38:10
Um, you know, we’re looking to contact the manufacturer first and foremost, they’re going to want to make sure again, that you are a real business because you’re going to have to fill out paperwork is going to have to go over to the accounting team, most likely to set up your account and put you on file, assign you an account number, things of that nature. So when you’ve decided on that particular niche of market that you want to go to, now what you want to do is you want to brand yourself around that particular market, right? So if I’m selling electric fireplaces, I’m now going to establish an entity.

38:38
Called like electric fireplaces, USA calm, right? So that’s going to be the entity that I’m gonna set up I’m gonna get an EIN number for that. I’m gonna get the business domain Obviously, I’m gonna get a business email and I’m gonna get a dedicated business phone number business email You guys can get from like Google workspace. It’s like five dollars Which is formerly known as Google G suite So but it’s now Google workspace then also for your domain name you can get from like namecheap They also give you free who is protection

39:06
And then for your business phone number, you guys can check out Grasshopper. But there’s tons of business, you know, VoIP numbers that you can get. That’s a dedicated number specifically for that business. Right. So now once you got that stuff taken care of, it’s going to be building out what I like to refer to as a demo store. Right. So basically you’re going to get your logo done. You’re going to build out just a couple of simple collections. Right. So, I mean, about us pays contact us page and just whatever the main two categories is for that particular.

39:35
market that you’re going into. So because we’ve been talking about let your fireplaces, it’ll be, you know, freestanding and built in. Right. So those are your two primary collections. And then you’re just going to upload a few just sample products on there. It doesn’t have to be a whole lot. I mean, like really 10. So when you do have that conversation with your, uh, with the new manufacturer that you’re reaching out to, you can let them know like, Hey, uh, we’re, know, just now entering into this marketplace and you know, we’ve put together a demo store so you can get a good look and feel of how your products are going to look when we decide to work together.

40:05
And that’s how the conversation piece will go. Now, if we kind of backtrack a little bit before that, which I think was your original question is how do you find the suppliers? This just comes through competitive research, right? So is going out and identifying who is already selling these products specifically online and not big box stores, right? So we don’t want to use them as our examples. So not the Walmarts, the Home Depots, the Amazons. We want to go and find other ideally niche specific websites

40:34
that already have those products, right? So for example, there’s a website called Home Square, right? So if you go to Home Square and start to do some research on the website, like seeing, hey, do they have a physical location? Do they mention, hey, come to our warehouse or showroom? Or do they just mention that they’re an online store, right? And so doing your due diligence on that specific site, you’ll see that they’re just an online store.

41:00
So now what that tells you is that any brand that they have listed on their website, guess what? Their drop ship indirect to consumer, because if they don’t have any physical location where someone could pick up their product in person and any business that has a physical location, they’re going to brag about it and they’ll say, Hey, come to our store. And indirectly in my mind, it’s just like, yeah, cause you got all that overhead. Right. But those of us that are just selling online, we, we, you can’t say that. Right. Right.

41:28
So that’s how you can identify who’s already got relationships with brands that are already going to drop ship for you. So there’s a website called electric fireplaces direct. So if you go to their site, you can actually click on their brand section and they actually have all their brands listed. All the work is already done for you. So now, know, like, man, so all these brands that are here, the Amante, Duraframe, Dimplex, all those different brands. If you decide to go into that particular market and niche that you have a high likelihood to get approved with them.

41:58
if you reached out to them to set up a drop ship account. So do you end up buying any of the items that you drop ship? So for me, yes. Man, you ask all the good questions, man. I can’t keep any secrets from you. So I actually do have a warehouse in Virginia. That’s actually where we’re, you know, doing this interview at. And so when I noticed that there’s some. So two things, right. So we just are on the tail end of the covid season with the whole global pandemic. So what I did

42:26
because again, we all have these direct relationships with the manufacturer. So in order to really take control of certain products that we’re selling really hot, I would notice that the inventory quantities are my best selling products. I would buy them in bulk and put them here in the warehouse. And now no one in the entire country could access them except for me. I see. So you bought out all the inventory. Exactly.

42:51
So, but I only focused on, again, my top selling products or products that I knew that was moving at a high volume because with the whole global pandemic, was short staffed, just manufacturing was severely backed up, so forth and so on. So I did that to give myself a competitive edge. And then also sometimes your suppliers and manufacturers, they’ll be, for whatever reason, wanting to move additional SKUs in their product lines. So they’ll say, hey,

43:16
We’re going to discount all the, you know, freestanding electric fireplaces this month. Here’s an extra, you know, 20 % off, but we’re only going to do it if you buy 10 at a time. Right. Right. So in order to maximize things at that capacity, that’s also why I got the warehouse space. So do you ever take your own photos or do you use the stock photos that they give you?

43:38
No, I get all the photos and stuff specifically from the manufacturer. And then oftentimes, again, once you really start establishing like a good relationship, if there’s something unique that you want to have done with the particular product, like, you know, for example, Rich at VinoTemp, he’s the sales manager, you know, I could ask him, hey, Rich, you know, we’re getting a lot of inquiries on this product. Is there a way for us to be able to get photos of it in the warehouse before it gets packaged up just to have some unique things that we can

44:07
ask all for the people as they’re asking these different questions. And again, as long as that relationship is pretty good, which once you start, you know, establishing yourself and stuff, you can ask for certain little things like that. So did 99 % of the time I’m not. And then also another unique thing that you can do is ask the manufacturer from when they do like their trade shows and things of that nature, to send you photos in from their trade show. So, Yeah. What about returns? I would imagine it’s kind of a pain for these high ticket items, right?

44:36
Woo, man. This is one of my favorite subjects about Hightly Beauty Comm, right? So because we work direct with the manufacturer, right? Same thing. Like, again, if you were to get a product from like, you you ordered something from, let’s just say Best Buy, right? You don’t like it. Now, in most instances, they’re usually bringing it back to their warehouse. But when you have the dropship account set up with your manufacturer, they will actually already have it prearranged for returns to go back to their warehouse.

45:03
Nice. So let’s say, for example, is buyer’s remorse, right? Like, oh, you know, I don’t really like this product that changed my mind. Now your policy needs to be clear and really direct in terms of how that’ll be handled. But in most instances and again, it’s the same way from most retailers with, you know, the one different thing is like, you Amazon. the customer will have to pay to return it. Right. They got to get a shipping label in order to get a ship back or contact the carrier in order to get a ship back. Right.

45:31
Especially for anything that’s LTL, like that is more so like a universal policy with like LTL. Most, even with Amazon, they don’t cover the shipping a lot of times with LTL products, if it’s coming direct from Amazon. Like if it’s buyer’s remorse specifically. So, and then with small parcel, small parcel is really easy. Like in most instances, your supplier will even give you a shipping label because it doesn’t cost that much in order to get the product returned. But that’s what buyer’s remorse. Now let’s say for example, the product shows up defective. There’s

45:59
You know, again, you’re selling like a wine storage unit and the glass is broken. As long as the customer just takes the photos of it and you send that into your supplier, again, as soon as the product comes in, they’ll replace the product for you without any hassle. Right. And that’s the other beauty why I tell people to establish domestic relationships with suppliers. So that way you can have all these other things in place and even with like the warranty of a product. Right. So what if the product dies out or the compressor

46:29
you know, malfunctions in nine months down the road. Again, with domestic relationships with manufacturers, they have warranty policies in place for peace of mind for consumers. So all you would do is in this instance, you would just give them their order details and information from which you sent into the supplier and say, hey, when you call them, have them look up this particular order number. So when you send in your orders to your supplier, they’re going to refer to those as purchase orders. So whatever that number was that you assigned from

46:58
your brand for that particular customer. You could just tell them to call up and then they’ll look up the information in their system and then they’ll be able to handle any warranty defects, returns, so forth and so on. Yeah. And then is your website electronically linked to their websites too? So the inventory tracking is accurate or is that necessary? Personally, I don’t have what’s more commonly known as EDI.

47:21
right? The electronic, you know, communication between their systems and ours. And the reason is, is because some suppliers is really hit miss, right? So like some of them are set up to be effective and efficient with having some system of that caliber. And oftentimes, more often than not, they usually don’t. So, but the beauty of it is you can actually get inventory reports from your actual supplier on a regular frequency. So some of your suppliers, it’ll be like,

47:49
Once a month, some might be once a week, some might be every couple of days. So for example, there’s a supplier I work with called SPT. So they’re in California. They send theirs once a week. Our relationship with VinoTemp, they send them once a month. Zline, we have a portal so we can log into our portal and at any point in time we can export all the inventory. then, man, I’m trying to think of the app off the top of my head. I can’t remember it. I might have to log into Shopify to tell you guys. But there’s an app that you can actually take whatever

48:19
the spreadsheet is from your supplier and you can upload it to your store and it’ll modify all the inventory for that particular brand. Nice. Yep. And I’m going look that app up while we’re chatting here so I can give it to you guys. Cause it’s super helpful. You know, obviously cause like my wine store store, got over 5,000 products in that store. So as you can imagine, it’d be really challenging managing all that inventory. I think like they have to format the spreadsheet in the right way, right? There’s actually a number of plugins that do that. think.

48:48
Exactly. My favorite one is one called Stocksync. There we go. Stocksync. Nice. Yeah. So Stocksync. And yes, to your point. And that’s what’s really great about Stocksync because you literally just tell it what columns because again, every supplier is going to be different. Like, know, column A for one supplier might be pricing and then for another supplier, it might be the skew number. Right. Right. So you just tell Stocksync which column reads what for each brand and then you can create

49:14
basically like a little collection of each individual brand on how to read that. And then when you populate it, automatically identifies everything you need to.

49:23
Ernest, this is amazing. You gave a pretty good overview of high ticket drop shipping. If anyone’s interested in this business model, where can they find you? They could just go to my personal site, which is ErnestEpps.com. So it’s E-A-R-N-E-S-T-E-P-P-S.com. I also have a free Facebook group which is Ecom Drop Shipping for Entrepreneurs. And my first and last name Ernest Epps is, it’s the same on every major channel, LinkedIn, Twitter, Facebook, IG, all that good stuff. Cool, man. Well, hey, I really appreciate you coming on the show.

49:53
Absolutely, man. And also before we end really quick, too, I wanted to tell you that I actually studied you guys in the beginning of my journey. You know, I went to like, you know, my wife could have job.com and I studied a lot of you guys as content and material that you’ve been putting out for years, you know, before I actually like, you know, started to really get some success for myself. So thank you so much. And it’s been a huge honor to even be on here because I would have never thought like reading articles.

50:20
and just picking up tips on marketing and strategies one day, I’d be literally talking to like the founders. So this is really awesome. Dude, thank you so much, man. That really means a lot.

50:33
Hope you enjoyed that episode and I did want to say a couple of words about dropshipping. The most successful dropshippers that I know with long-term businesses generally dropship more expensive items online and because the margins are lower it is the best way to make it work. For more information about this episode go to mywifecoderjob.com slash episode 374. And once again I want to thank Klaviyo which is my email marketing platform of choice for e-commerce merchants. You can easily put together automated flows like an abandoned card sequence, a post purchase flow, a win back campaign.

51:01
Basically all these sequences that will make you money on autopilot. So head on over to mywifecoderjob.com slash KLAVIYO. Once again, that’s mywifecoderjob.com slash KLAVIYO. 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 Steve.

51:28
That’s P-O-S-T-S-E-R-I-P-T dot I-O slash Steve. Now I talk about how I use these tools in 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 it’ll send you the course right away. Thanks for listening.

00:29
We are also offering an exclusive mastermind experience with other top sellers. Now the Seller Summit is going to be held in Fort Lauderdale, Florida from May 4th to May 6th, 2022. And for more information, go to sellersummit.com. Once again, that’s sellersummit.com or just Google it. All right, welcome everyone. You are listening to the My Wife, Quartermaster podcast, the place where you bring on successful bootstrap business owners and dig deep into what strategies they use to grow their businesses. And today I have an extra special guest on the show, Dr. Robert

00:58
Chaldini. Now Dr. Chaldini’s book, The Psychology of Persuasion, literally changed my life and I’m thrilled to announce that he’s released a brand new edition featuring 200 more pages and a completely new persuasion principle. But in this episode, we’ll cover how to use persuasion to grow your ecommerce brand. But before I begin, I want to thank Klaviyo for sponsoring this episode. Always excited to talk about Klaviyo because they’re the email marketing platform that I personally use for my ecommerce store and it depends on them for over 30 % of my revenue.

01:27
Now you’re probably wondering why Klaviyo and not another provider. Well Klaviyo is the only email platform out there that is specifically built for e-commerce stores and here’s why it’s so powerful. Klaviyo can track every single customer who’s shopped in your store and exactly what they bought. So let’s say I want to send out an email to everyone who purchased a red handkerchief in the last week. Easy. Let’s say I want to set up a special autoresponder sequence to my customers depending on what they bought, piece of cake, and there’s full revenue tracking on every single email sent. Klaviyo is the most powerful email platform that I’ve ever used.

01:56
and you can try them for free over at claviyo.com slash my wife. That’s K-L-A-V-I-Y-O dot com slash my wife. I also want to thank Postscript for sponsoring this episode. Now, if you run an e-commerce business of any kind, you know how important it is to own your own customer contact list, and this is why I’m focusing a significant amount of my efforts on SMS marketing. SMS, or text message marketing, is already a top five revenue source for my e-commerce store, and I couldn’t have done it without Postscript, which is my text message provider.

02:24
Now, why did I choose Postscript? It’s because they specialize in e-commerce stores and e-commerce is their primary focus. Not only is it easy to use, but you can quickly segment your audience based on your exact sales data and implement automated flows like an abandoned cart at the push of a button. Not only that, but it’s price well too and SMS is the perfect way to engage with your customers. So head on over to postscript.io slash Steve and try it for free. That’s P-O-S-T-S-E-R-I-P-T dot I-O slash Steve.

02:51
And then finally, I wanted to mention a new podcast that I recently released with my partner Tony. And unlike this podcast where I interviewed 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.

03:18
Welcome to the My Wife, Quitter, Job podcast. Today I’m thrilled to have Robert Cialdini on the show. Now, Dr. Robert Cialdini is known globally as the foundational expert in the science of influence and how to apply it ethically in business. And he’s literally known as the Godfather of influence. So in the event that you don’t immediately recognize his name, Dr. Cialdini is the author of Influence and the Psychology of Persuasion, which is my favorite business book of all time. And I’m not even exaggerating here.

03:48
It is literally the book that changed everything for me. So for 17 years, I was an electrical engineer who sat behind a computer all day designing hardware. And when I was thrust into the world of online business in 2007, because my wife wanted to quit her job to take care of her kids, I had no idea how to sell, market or influence anyone, especially my wife of whom I still have limited influence today. But after reading influence and the psychology of persuasion, I incorporated the strategies in the book to create two seven figure businesses.

04:16
So if you’ve never read this book, it is literally my number one recommended read. And in today’s interview, we’re gonna talk about influence and persuasion in the context of selling physical products online. And with that, welcome to the show. Bob, how are you doing today? I’m doing well and I’m glad to be with you, Steve. So Bob, I know you’re a professor. Do you still teach classes today? Because if you are, I would actually consider going back to college to take one of your classes.

04:43
No, I have retired officially from my university positions. I still have an office, I still do research, and I still go in to write every day. But I don’t teach in the university hierarchy. We do have seminars that my organization, Influence at Work, provides, and I provide instruction within those, but not in the classroom. OK.

05:12
Okay, but the research continues on? The research continues on because I am a curious fellow. So, Bob, I just finished reading the new sections of the latest edition of Influence last night. And I have to say the extra content, in my opinion, could have been a completely different book in itself. The new edition, I think, was like over 200 pages longer than the old one. That’s right, 220 new pages. it was like I appended a…

05:42
another book. I mean, I read the original back in 2007. I think the original one came out in the 80s. Why did you decide to update it after so many years? I’m curious. You know, there’s a couple of reasons. One is that there has been a lot of new research and new knowledge that’s developed within persuasion science that truly deserved place in the new book. And it wasn’t there in the earlier editions.

06:11
Another is the growth and flourishing of the internet in the 12 years since the last edition. It was important for me to demonstrate how these principles of influence have been migrated to new platforms and are enhancing the success of the people who harness those principles in e-commerce.

06:41
And then finally, there’s a new universal principle of influence, the seventh one. The other editions all had six, but I thought there was another one I had missed all these years called Unity. And perhaps we can talk about it during our conversation. definitely are. There’s actually one tidbit in the Unity section of your book that I’ve used on my wife. see. see how I’ll let you know about it once we get to that.

07:10
So that’s the problem. that’s the problem. Like these, these, I know we’re to talk about the ethics also, but like all these powers, they have to be used for good. Right. Right. So I’ve read the book many times at this point, and I must say each time I pick it up, I gained some new insight or a new nugget. And I want to tell you that most of the listeners of this podcast are in the e-commerce space selling physical products online. So what I was hoping to do today,

07:39
is have you walked through some of your latest and most impactful persuasion strategies to convince more people to buy? And I also obviously want to set aside some time to discuss the new principle of influence, unity, and how this principle can be applied as well. So not sure where you want to start with this, Bob. Well, you know, it probably makes sense to briefly walk through the principles themselves and maybe

08:06
emphasize the new one a little bit more since that’s not the one that’s been out there in the information environment. And then talk about any implications of all of that for your listeners. Yeah, let’s do it. Let’s do it. So what are the seven persuasive principles? The first is the principle of reciprocation that says people want to give back to those who have first given to them.

08:35
You know, in every human culture, this rule applies. So if we’ve got customers or clients or even prospects who were not raised in this particular culture, don’t worry. The principle of reciprocity applies in every human society. We are trained from childhood in the rule that you must not take without giving in return. And so what we find is that

09:04
people say yes to those they owe. There’s a very interesting implication of that. It says that, you know, the traditional business model in which we say to others, look, if you will do this first, if you will buy our product, if you will sign our contract, if you will agree to this particular exchange between us,

09:34
We promise we will give back to you everything you expect and more. That’s how we move people by providing this in return. Well, what the rule of reciprocity says is no, there’s another route in which we go first. We give something, we make the first move, and then people feel grateful if we’ve given them benefit and advantages.

10:03
information that’s valuable to them, or they feel obligated to give back to us in return. And so the implication is we, before we try to influence others, we should give them something, some benefit. And online, seems to me that’s information is most easily done and most costlessly done by providing

10:31
a white paper or some kind of a piece of information like the top three mistakes to avoid in this particular arena that we’re talking about today or the top five most effective things to say in a difficult conversation, something like that that gives them a way to increase their outcomes by this rule.

11:00
they need to increase our outcomes consequently. So I think it has a place in online platforms. I’m glad you started with this one, because out of all the seven, this was the actual one that had the most impact on me. And to me, it’s actually counterintuitive. My whole business, my wife quit her job is based on this premise of giving away all this information for free, like all the good stuff. And people

11:30
I get emails every day, people are indebted to me for this information that I’m giving and there’s a small subset of them will just buy anything that I have to sell. So this I would argue is one of the most important ones, at least to me in the online world. You know, there’s one additional optimizer of it and that is if we can segment our market so that what we are giving to our recipients

11:55
is something that is especially relevant to their particular challenges, their particular preferences, their particular needs and so on. That, that supersizes the effect, right? Yeah. In the e-commerce world, can you think of any examples of this? Yeah. So for example, there are organizations,

12:22
that sell, let’s say retail online clothing. And what I’ve seen or even in hotel spaces where there you reserve rooms or air flights and so on, so on. I’ve seen them say, now here is the best options for people with twins, right? Or, know, or

12:52
for people in the early 20s, this is the best thing for, there’s a culture online that will do hotel reservations. And they’ll say, are, this is the best for a romantic weekend. Here’s the best information we can provide you for a business stay. Here’s the best information we can provide you for.

13:19
a family vacation and so on. Oh, well now people feel even more grateful for that piece of benefit that they’ve been afforded. Yeah. So again, it’s the information angle even applies to e-commerce. Right. Yeah. And certainly we can give away free samples of what we offer because that causes people to feel, these, these people want us to really

13:49
try their product without having to incur a cost. That actually always gets me like, oh, so even even our interaction, there’s one thing that you did and you probably realize it, but when you sent me your book, you wrote a small note and that note actually meant everything to me. And I feel like I, I I’m going to do everything that I can to help you out as a result of that. mean, I don’t know if that was intentional, but that was the, that was the effect it had on me.

14:18
Well, I’m glad to hear that, but I’ll give you a piece of evidence that again seems counterintuitive, but really makes the point. There was a study done in a fast food restaurant where for a week when customers came in, a third of them were simply greeted warmly by the manager. And then they went to the counter to order food.

14:47
Another third was given a gift, a very nice little key ring, right? Expensive key ring. That caused those people to buy 12 % more food if they received a key ring before they started to order. That’s just the principle of reciprocity, right? You give back to those who have given to you, but the key was another set of people were given a small cup of yogurt.

15:19
Any economist would say, what? You’re giving people food. Now they’re going to be less hungry. They’re going to be less interested in buying a lot of your food. Those people bought 24 % more food at the counter. Why? Because they got a gift that was personalized to their needs. Why do you go to a restaurant? Because you’re hungry. Somebody gives you free food.

15:48
Now you feel especially grateful to that person for understanding your situation and trying to meet your challenge. So that’s the issue. mean, we need to be sure that we recognize what the challenges are of our potential buyers and be sure that we

16:17
offer them something that’s relevant to those challenges. I know in the example of your latest version, you had an example of McDonald’s giving a balloon out. Is this similar? It’s similar, except that this is about the earlier thing we said about reciprocity is that you have to go first. So in this study, this was done actually in South America, Brazil and Colombia. When

16:45
families came into the McDonald’s, the families in all cases were given a balloon for each child. Half of them were given the balloon as they left each child as a nice thank you for their patronage. The other half were given a balloon as the family came in. Those families bought 45, excuse me.

17:13
25 % more food. It’s amazing. Now here’s the key that I love about this. If you look into the data, that 25 % increase also showed a 20 % increase in coffee orders. The kids weren’t ordering coffee. The parents were ordering coffee. But the key here is

17:42
You do something for my child. You’ve done a personal favor for me. And I’m gonna repay it. So what’s funny is we’ve been experimenting with giving away a free handkerchief with every order, just giving it to them. We put it behind like a text message paywall right now where you have to give a number to get it, but that’s actually been working out really well. I haven’t run the stats. I am curious if it’s increased average order value though, now that we’re talking about it.

18:11
Yeah. Yeah. Interesting. Oh, I know we got seven to go through. maybe we should just go through them and then revisit. Yeah. I want to focus on the unity one also. Yeah. Yeah. Well, the next principle of course is liking. Nobody be surprised that we prefer to say yes to those we like, but there are two small things we can do to increase the power of the liking rule by getting people to feel a rapport with us.

18:41
One is to locate genuine similarities that exist between us because we like those who are like us. The other is to give genuine compliments to those individuals because we like those who do like us and say so, right? So those two things, if they are offered in an exchange, increase liking.

19:10
and people want to do business with those they like. Next principle would be the principle of social proof. When people are uncertain, they don’t look inside themselves for answers. They look outside.

19:26
and one place they look is to those around them like them. If a lot of people like us are raving about a new restaurant or a new piece of software, new film, whatever it is, that reduces our uncertainty that this is the right thing for us to do. So if we can give people honest evidence of

19:55
movement in our direction, or if a lot of people have given us positive ratings on the internet and so on, we’ll be much more likely to get them to move in our direction, reduce their uncertainty, get them off the fence where they’re diddling around and hesitating, well, should I go or should I get more information? As soon as they hear that a lot of other people have done this,

20:23
those people have beta tested the choice for them and they will then say, okay, I can reduce my uncertainty. I can go ahead and move in that direction. And now the most recent research that my team has done along with some, team at Stanford University is to show, if we can show trends in our direction, it doesn’t have to be just a lot of people who are doing it. Even if we still don’t have

20:53
a majority, even if we’re a startup, we don’t have a lot of market share and so on. If we can show a trend to that place where we are now, even if it’s a minority, that causes a new form of social proof, future social proof, because people project that trend into the future. So that was actually one of my questions. So if you don’t have any social

21:22
If you don’t have enough customers, you can just talk about the trends. And I know in the book you mentioned a subtlety when you’re mentioning trends, which I’ll let you get into right now. Yeah. It’s when you, when you mentioned the trend, you should have three data points. So you should be able to say to people, not just a lot of people are doing this or, or more people are buying our

21:52
this model, you should say more and more people are doing so. That gives people three data points. More says two data points, start here, now we’re up to more. If you say more and more, now you’ve got three data points and that’s a trend.

22:18
And if you have actual numbers, presumably that works better, right? If you have three data points. Absolutely. Okay. You can characterize those numbers by saying greater and greater, better and better, more and more and so on. Are there any other ways that you can increase your social proof if you don’t have like a whole bunch of testimonials and customers? You can use testimonials that you do have and put them

22:48
at the top of your messaging so that that evidence infuses everything you are about to say even before you’re going to say it. You’ve got buy-in from people around you. And the key to making that buy-in optimized is that those should be comparable others.

23:18
to your market. They should be people who others can see as like them.

23:29
If you sell on Amazon or run any online business for that matter, the most important aspect of your long-term success will be your brand. And this is why I work with Steven Weigler and his team from Emerge Council to protect my brand over at Bumblebee Linens. Now, what’s unique about Emerge Council is that Steve focuses his legal practice on e-commerce and provides strategic and legal representation to entrepreneurs to protect their IP. So for example, if you’ve ever been ripped off or knocked off on Amazon, then Steve can help you fight back and protect yourself.

23:57
Now, first and foremost, protecting our IP starts with a solid trademark and Emerge Council provides attorney-advised strategic trademark prosecution, both in the United States and abroad for a very low price. And furthermore, the students in my course have used Steve for copyrighting their designs, policing against counterfeits and knockoffs, agreements with co-founders and employees, website and social media policies, privacy policies, vendor agreements, brand registry, you name it. So if you need IP protection services, go to EmergeCouncil.com and get a free consult.

24:27
And if you tell Steve that I sent you, you’ll get a $100 discount. That’s E-M-E-R-G-E-C-O-U-N-S-E-L dot com. Now back to the show.

24:38
And okay, so you have to have knowledge, I guess, of who your target customer is, and then you want to select testimonials. Again, that kind of leads into the principle of unity, right? Does that kind of bleed into that? It does. Right. But we’ll get to that. get to that. I also wanted to highlight one of these studies, which I found fascinating with the McFlurries and McDonald’s. If you want to elaborate on that and how that can be applied to e-commerce as well, that’d be great. Yeah. So

25:07
There was a study, again, in those South American McDonald’s that my colleague Steve J. Martin led. And why is it always South American? I’m just kind of curious. Well, he had a he had a contract from the the marketing of the South American McDonald’s franchise. OK.

25:32
And so they had a lot of McDonald’s locations and they were willing to do some behavioral science research to see how they could increase in this case, the willingness of their customers to buy desserts. Most people at McDonald’s don’t buy a dessert until Steve asked the people behind the counter to say at the end of the order,

26:02
Would you like to try a McFlurry? It’s our most popular dessert. And McFlurry orders went up 45%. So does that imply then that in an e-commerce store, we should just highlight these products and just mention it’s like a best seller? We would be fools of the influence process if we didn’t point to what is already most popular.

26:31
That’s a cue people use to stop getting information and act. Okay, this is the most popular. So you can say, this is the most popular product. This is our most popular feature. This is our most popular payment plan. Whatever we have, you can just point to it and it produces these big effects, costlessly and ethically.

27:00
because you’re not fabricating anything, you’re not counterfeiting any of this information, you’re pointing to something that people use to reduce their uncertainty and act. We kind of glossed over the liking, but this just kind of came to my head, so I wanted to bring it up. When it comes to getting customers to like you, would you recommend just like posting videos of yourself to allow your customers to get to know you as a person? Does that increase your likeability?

27:30
There’s research that shows that. Here’s another piece of research that shows that what you can do online, there’s research to show that having a welcoming letter significantly increases liking and purchases. A welcoming letter is like what you do to somebody who comes to your door, a visitor, come on in, glad that you’re here. Let me show you around.

28:00
Right. You know, there’s an example from my store. I just want to mention. the first email after someone makes a purchase is in fact a thank you letter. It’s written in a very personalized way. We want to thank you for your first purchase from us. Just want to let you know that we’re a small business and we’ll do whatever it takes for you to be happy. And we get, it’s an automated message, but it gets tons of replies. I would take that message and move it at the, to everybody who goes to your

28:29
site before they bought. We’re a small business. We’re very committed to customer service. We’re glad that you’re here. Let me show you around, essentially. It increases conversion significantly. You know, what’s funny is a lot of the students in my class are afraid to put their pictures and be personal on their sites. I encourage it. But if it’s coming from your mouth, that has a lot more authority.

28:59
Well, you know, there’s another place. There’s always an about us section in our on our websites. And when we go there, what we see is the professional backgrounds of people along with a picture. Usually, we should also include personal aspects so people can see connections between ourselves and them.

29:28
So you would include that you’re a Packers fan, for example? I’m a Packers fan. I’m the oldest child. I’m a former baseball player. It’s in high school. All those kinds of things. Yeah. Should we actually just talk about Unity next, since we’ve alluded to it? Yeah, let’s talk about Unity. This is the latest one. And for all of you listening, you probably haven’t heard of this one because it’s brand new to this book.

29:58
This is the one that says that people say yes to those communicators who can convince them that they share an identity, that they are members of the same we group, the kinds of groups that people use the pronoun we to describe. So it would be if

30:26
If I could, if you can convince me to say, know, Steve is like us, that’s good. That’s good. That’s you’ve got the liking principle working for you there, right? We like people who are like us. But if you could convince me to say, Steve is one of us, that’s an entirely different level of willingness to promote

30:56
favor and follow you, Steve. So you mentioned that I’m a Green Bay Packer fan. I grew up in Wisconsin. And a few months ago, I saw an article that described the favorite NFL teams of celebrities. And I learned that Lil Wayne,

31:27
And.

31:31
Timberlake, what’s name? Justin Timberlake. Justin Timberlake are avid Packer fans. Steve, I immediately thought better of their music. And I wanted them to be more successful. Inside the boundaries of we, people say yes to us. If we can arrange for them

32:00
to honestly see us as sharing one of those identities, one of those category memberships, here’s what the research shows. They believe us more. They wanna cooperate with us more. They’re more persuaded by us and they’re more willing to comply with our requests. They trust us more besides. I know that works for me. When I see Asian American film artists

32:29
I’m much more likely to support them and like them because they’re Asian Americans. One thing I wanted to ask you though, is does this work in reverse also? Like if I’m not a Packers fan and you find that out, will that make you dislike me? Not unless there’s an intense rivalry between the Packers and so, yeah. where you, so what I always say is do your homework first, go on.

32:59
LinkedIn, go on Facebook, people are telling us about themselves, all kinds of things about ourselves. When you find one of those connections, then go there. Don’t go to one that isn’t a connection or even maybe a negative one. When you find one of those connections, oh, really, you’re a runner? I’m a runner. You’re an only child? I’m an only child. When you find those things, go there.

33:28
It creates this sense of we-ness and everything becomes easier for the influence process.

33:37
in an online world where you’re not actually having physical conversations and you list some of these things, let’s say on your about page, could that possibly have a negative effect and turn away certain people? It’s conceivable if there’s a rivalry, that’s much more, that’s, much more rare than a connection that people will see. Right. Okay. That makes sense. That makes sense. So how can

34:03
What are some other ways that we can apply? I know you have lots of case studies. Do you wanna just highlight some of your favorite ones in terms of how unity has changed behavior? Yeah. Let me give you two. The first one is sort of about not just business relationships, but personal relationships, especially romantic relationships. And then I’ll provide an example of how that applies to a business relationship.

34:31
but it has to do with a lovely study that was done in Texas where researchers brought couples, romantic couples into an experiment. They had been together for at least two years. And they asked these folks, is there a problem in your relationship, some disagreement that you have that you just haven’t been able to resolve overall this time? And it continues to aggravate

35:01
each of you that you’re at loggerheads on this thing. And they said, what we would like you to do, and they flipped a coin and they said, one of you, we’d like you to be the persuader and try to persuade your partner to move in your direction, right? So come up with one of these problems, the two of you, and then one of you is gonna try to convince the other one.

35:29
And then the researchers left the room. Well, they didn’t really leave the room. They had cameras going and tape recorders running. So they knew what was going on. And they found three kinds of persuaders. One type they called the coercive persuader. They would say to their partner, look, we’ve been at this problem for years and

35:57
You won’t move in my direction. And you know what? If you won’t move now, I’m going to have to do something you won’t like. You’ll be sorry. Right. Not only did that fail to move the partner, it caused the partner to move even further away. Right. Trying to be coercive. a stutter to tell that. That tactic never works. Or never. Yeah. There was a second kind of persuader that the researchers called the rational

36:27
approach, who took the rational approach, they would say, look, if you’ll simply examine the situation more deeply, you’ll see that my position is the more rational, reasonable one. Now that didn’t produce polarization. It just produced laughter. And they, the partner just dismissed that and no change at all.

36:54
but there was a small group of people who hit on a strategy that was costless and the only one that made a difference in causing change in their direction. They would say, you know, we’ve been together now for two years as a couple. I really appreciate it. If you’d move in my direction on this one, I can see how that’s more effective, but I’m curious what the science is behind that.

37:23
The science is they now brought to consciousness the we nature of the couple, of the relationship. And now all the things I mentioned earlier that research shows occur in we relationships, more trust, more cooperation, more persuasion, more compliance with requests.

37:52
all of those now apply to the situation. These people were brilliant. They wouldn’t sit still for the cognitive set that the researchers gave them. Think about a difference between you. Think about something that you can’t agree. In other words, something separate that separates you. These people said,

38:21
maybe there is this thing, but we’ve been together for two years as a couple. And they brought unity to mind, togetherness to mind. And in that category that is now prominent in consciousness, people said, of course, yes, I will. By the way, there was a second strategy that

38:49
some others use that had the same effect for the same reason. They just simply use the pronouns, we, our, and us in making their case for a change. And that was enough. Again, bringing to consciousness the idea of unity. You know what’s funny? As you’re telling me all these things, I’m just picturing your mind because you and your wife are a husband, wife team and me and my wife are husband, wife team.

39:19
I guess the difference is that your wife knows all these principles. So I can just imagine you two going with each other going, honey, we’ve been together for so many years. And I’m just between you and your wife, I’m wondering how it works out. Well, she’ll catch me on this, here’s the, here’s, she is also recognizing, I’m saying that I’m telling her the truth. What I’m saying is let’s get away from this. Let’s get away from this difference here or

39:49
have a context for it, which is the great majority of the space around us is togetherness defined. Now, here’s the other thing that she knows from this research that I described to you. By the rule of reciprocation, what these researchers found was that when the partner moved in the direction of the persuader,

40:16
persuader then moved in the direction of the partner too. And they met in the middle. So you get the rule of reciprocation taking care of both sides by doing this. Someone’s got to take the first step forward. That’s right. And, break the set, the cognitive set of difference. Right? So here’s the, here’s, here’s the business.

40:45
related example. A few years ago, I was preparing a report that had to be submitted the next day. And as I was reading over it, I saw one section of it that wasn’t at all convincing, and not sufficiently convincing to make my point, because it didn’t have some data to really seal the deal. But I knew that a colleague of mine had done a study

41:15
the year before and had collected that kind of data. And so I sent him an email. Let’s say his name was Tim. It wasn’t. I said, Tim, and I described that I have this report. It’s due the next day. It needs the data that you’ve collected. I know you have it in your archives. I’m going to call you and we can find a way to get me that.

41:42
that information in time for me to do this. Well, this guy, Kim, was known as irascible and soured, a very difficult guy in my psychology department, right? So when I called him, he said, hello, Bob, I know why you’re calling. And the answer is no. Look, I can’t be responsible for your poor

42:11
time management skills, Bob. You got yourself into this. I’m a busy man. Also, I can’t just jump and pull this out of my archives, get the data to you in time, right? And before I had read this Texas study, here’s what I would have said. Come on, Tim, I really need this. This thing is due tomorrow.

42:39
He’d already said no to that. So I said, instead, you know, Tim, we’ve been together in the psych department now for 12 years. I really appreciate this. And Steve, I had the data that afternoon. Amazing. You know, it’s funny, thanks to you, Bob. Whenever I read an email or an outreach cold email, I like analyze all the language that’s being used and

43:08
I’ve also found, I mean, I’m gonna definitely use these unity principles now, but I’ve also found that when people talk about me and what benefit that I would get first, I’m not sure what principle of persuasion that is. That works on me. Yep. Yep. Good. mean, that other orientation, right? That I’m not just in it to make a buck for me. I’m actually in it for you to have a good outcome, which I know

43:38
as a side effect will lead to good outcomes for me. Reciprocally, it’ll work. And I also know that when people say, hey, I went to Stanford University just like you did, that works on me too. So that’s unity, right? Absolutely. There was a great study that showed that if researchers put a young woman on a busy intersection on a college campus of walkways,

44:05
asking for donations to the United Way, she got some success. But if she said to them first, excuse me, I’m a student here too. She got 250 % more donations. You know what, I’m just thinking about there’s all these things running through my head right now. There’s this Facebook ad that I run from my handkerchief store that works. And not very many people use handkerchiefs anymore. But the ad was like,

44:32
Am I the only one who use handkerchiefs or message me or, know, if you’re a handkerchief lover and I’ll send you a special offer, that ad works really well. It’s probably because of unity, right? Yes, right. Because if you’re in a smaller unit group, you feel even more intense shared identity. And I’ll give you one approach that think that online marketers can use or

45:02
people who can provide physical items online. One of the things that we have found in the last 10 years that has been a massive success within the marketing community is co-creation of your products and services, right? So what we often do is to get our existing customers, clients, and so on to help us

45:31
create the next version or the next generation of our product. And we ask them to give us input as to what they would like to see and what they would like to be dropped away and so on and what they don’t especially like. And so they co-create with us that product or service. That creates a sense of unity with us.

46:01
because they have acted together with us in this process. And what you find is that you get much greater loyalty and much greater satisfaction from those people who have co-created with you. Even before that new product has come out, they feel of you, they feel one of you. Okay, well, when we do that,

46:30
What we typically say to our informants is, could you give us your opinion on how we could improve our product, you know, that sort of thing. And that’s a mistake.

46:47
When we ask for someone’s opinion, we get a critic. They step away from us. We’re over here and they’re over on the other side of the line between us. If instead of asking for an opinion or even the newest research shows asking for feedback, which is also problematic for the same reason.

47:15
If we ask for their advice, we now get them stepping over the line next to us as our partner. They’re in a togetherness state of mind. And research shows, for example, that in a study that was done online where people received a business plan for a new restaurant called Splash,

47:43
that was going to be a fast food restaurant that focused on healthy food, right? If they were asked for their opinion on this business plan, they were significantly less likely to give it a positive rating than if they were asked for their advice on the same plan. And when researchers looked into it as to why, it was because they felt

48:13
more together with the author of the business plan because they were providing him advice. A lot of things are running through my head right now. So right now I send out a survey to anyone who’s bought. Maybe I should frame it as I need your advice instead of the way I currently have it framed. Steve, that would be my advice. Yeah.

48:41
Yeah, okay. It’s very subtle, but I can see why psychologically that would work. Interesting. Yeah. See, this is the thing I like about this research and I put a lot of it in the new book. The smallest things you can do that produce the biggest impact on your persuasive success, small in terms of effort or time so that you have an enormous return on investment.

49:11
Right? An enormous ROI from changing a word from feedback to advice, you know, or, you know, instead of trying to say, we, I have the better logical position or I’m going to do this. If you don’t move, we just point to something like the extent to which we’ve been working together. I’ve learned that logic never works.

49:40
Over the years, yeah. So it’s interesting. Yeah. Incidentally, that was the thing in the intro. That was the biggest tidbit that I got out of the unity section with respect to interacting with and working together with my wife. Yeah. Right. I can see why. Okay. So we got in the interest of completeness. I do want to just kind of go over the remaining principles of persuasion. So I think we’ve talked about social proof, liking, unity. There’s four more, right?

50:09
We talked about reciprocity. Reciprocity, course, yes. The next one would be authority, which like social proof, serves to reduce people’s uncertainty of what they should do. If we can demonstrate our credentials, our experience, and our know-how in a particular area, people will defer.

50:38
to that, they defer to experts. Sometimes we can borrow that by once again, bringing testimonials from outside of our organization from legitimate experts who can be quoted as saying something either nice about us or about our idea, our vision, our concept.

51:08
If we’ve got that, then people defer and move in our direction. One of the things that I often correct when I see people who want to run an advertising campaign where I give them some advice on it is that they put the testimonials.

51:35
either from similar others or from authorities into the body of their presentation, of their appeal. Those things should go first. In the case of authority, if you see one or two or more testimonials from acknowledged experts, right, advocating what comes next.

52:02
everything that comes next is infused with that authority, with that legitimacy, and it makes it more successful as a persuasive appeal. And if you don’t have access to these experts, I know you mentioned a case study where someone just was dressed as a doctor and they ended up selling more. Is that also? Yeah, it’s that’s so.

52:30
That’s right, but it’s one I wouldn’t recommend because it’s not honest. Why don’t we just stay with the things that make us feel good about doing well? Right. Actually, I didn’t want to touch upon that. mean, your book is basically giving all these strategies that can be used for good and bad. And I know you want to just mention this in this interview. mean, what is that? That’s just your general stance, right? Use these powers for good, not bad.

52:58
Right. And the way to do it is point to them where they genuinely exist in the situation. If you have genuine scarcity, go with that. If you’ve got genuine social proof, go with that. If you’ve got genuine authority, point to it. If you’ve got genuine unity, just point to it. And it changes everything from that moment on. In terms of authority also, I’ve just found that just

53:28
putting out content period kind of just makes you become an authority even though you might not perceive yourself as one. Yes, if you can provide that content, especially in terms of a white paper or an article or an interview that you did with a journalist and so on, and you embed your content in there and people say, oh, geez, that’s great.

53:58
this is somebody I should defer to. This is somebody I can stop getting more sources of information from. I can use this person because he or she is a clear expert. And there’s one last thing about authority that I think is really underused. And that is you get the most horsepower as an authority voice when you

54:28
Don’t just talk about the strengths of your case, but you also mention a weakness or a drawback. That causes people not only to see you as knowledgeable about the pros and the cons, it causes them to see you as credible, as trustworthy, as a trustworthy source of authority influence, right?

54:56
because you’re willing to talk about not just the pros, but also the cons. But you show people how, after you say, know, this may take a little bit longer or this may cost a little bit more, or, you know, this is just, we don’t have a lot of market share yet on this. Then you always say the word,

55:29
and you go to your strengths right there that wipe away the weakness. And what’s left after the weakness is dispatched is a perception of you as a credible source of authoritative information. And they believe more everything you say next. So if I were to advise people in terms of how you present your case,

55:58
All cases have strengths and weaknesses, right? What we typically do is bury the weaknesses at the end or don’t mention them at all. What I say is if you want to know where to put your strongest argument, the most compelling feature of what you have to offer, it should go immediately after you’ve mentioned a weakness and said the word, but.

56:26
to lead into your strength because people are gonna believe that strength now more deeply and more fully than if you hadn’t mentioned the weakness. Is this the same principle as when I see a product online that has only five star reviews, I tend to discount them? It is the same principle that people who are only giving you the positives and not giving you the negatives,

56:56
There’s a study that was done that showed the most effective star rating that produces conversions to your products on your site is not five point reviews. It’s not a five point rating. It’s a range between 4.2 and 4.7. If it’s below 4.2, people are saying, hey, maybe this isn’t such a great thing.

57:25
If it’s above 4.7, people are saying, uh-oh, this might be a phony. These might be, um, you know, manufactured bought, uh, purchased, or, uh, they’re, weeding out the, um, uh, the negative ones. And in fact, I actually never read the five star reviews. only read the two and the three stars come to think of it. Yeah. Yeah.

57:55
Okay, so that’s authority. Here’s a last thing to say about that. If you do get a one or two star review, know, in what people always tell me is that kills me, that irks me because, you know, the majority of them are are much higher. But people look at that one. Here’s what I would say. Always respond to that review and say the following.

58:25
Well, thank you for your response. We’re so happy that the great majority of people have not experienced, have not had your experience with us. So you move immediately to the social proof that’s truly there. You diminish that one by saying you’re an outlier. We’re so glad that the great majority of people have not had that experience, but we certainly regret that you did.

58:54
and we will take steps to make sure that it never happens again. That’s the best way to respond. That’s ingenious actually. In this world of like just Amazon reviews, that sounds like a really great response, especially since it applies the principles of persuasion here and social proof and. Right. Yeah. I think we have a couple more left. I believe scarcity is one of them. Scarcity I want to emphasize because there was a study done of online e-marketing

59:24
uh, uh, and showed that of all of the principles of influence and all six of them, uh, did make a difference, but scarcity was the one that was the most powerful telling people about a limited supply at this price or a limited supply with this feature or a limited supply with a particular inducement or bonus.

59:51
That was the one that had the most power in producing conversions. I vaguely remember in the book, there’s a subtlety there though, right? Well, that works very well. It works better than limited time offers. Limited time doesn’t have competition associated. If you’ve got a limited number,

01:00:20
That means people have to move. They have to get off the fence. If you’ve got a limited time, they can wait until whenever that within that time, they don’t, doesn’t spur them into immediate action. Whereas if you say there’s only five of these left, right at this price, right at this price, I guess, uh, if that’s not true though, you shouldn’t do that. Never, but you can always have an inducement, uh, like a bonus.

01:00:50
And there were only five of them left that have this bonus. Yes, that’s correct. Right. So in my case, like you get a free hanky for the first five people or something like that. Yeah. For the first 100, know, yeah. Yeah. I know, um, on my site, ever since I started putting, like when things get below like 10 units in stock, I like highlight the fact there’s only 10 units left. And I found that as soon as that product hits that threshold, that product sells out much faster. Right.

01:01:20
Scarcity. Yeah, scarcity. It’s interesting. Yeah. So it’s subtle. So limited products versus limited time always works better. And then the last one is commitment and consistency. People want to be consistent with what they have committed themselves to. So if we can arrange for people to make a small step or press an agree button or get to the next stage easily.

01:01:48
then they are more likely to continue to behave in that way in order to be congruent with what they’ve already done. So how can that be applied? Well, so for example, what does it say on your, on the, you know, the thing that you’re a button, right? What it should say is, yes, I want to go on to the next level. It shouldn’t just say yes.

01:02:18
or it shouldn’t just say next, it should give them a commitment that they’ve made a commitment to go on. Interesting. So you’re saying changing that language can have dramatic effects? Yeah. I’ve noticed that on certain things. Yeah. It’s also the case that if you’re trying to get people to subscribe and they have to fill out a long questionnaire, a lot of people are

01:02:45
are reluctant to go through a lot of information. I talk about a study that was done where if you reduce the number of fields that you ask people to complete on the first page of the form, that significantly increases the number who complete it because they’ve gone through the first page easily. And then once they’ve gone through that first page,

01:03:14
they’re more willing to go on to the end. You know, come to think of it, the surveys I’m most likely to fill out are the ones that are one question per page where I keep hitting next. Yeah. Yeah. As opposed to a big long page of questions. principle, right? Right. So that winds up our tour through the 7th. So I just want to tell the listeners out there, I mean, this is an entirely new book. I’ve read the original version many times and this one, as soon as you get it,

01:03:44
It’s, would arguably, I think it’s like twice as thick as the old one. It’s almost like a whole new book. So even if you’ve read this book before the new edition goes way beyond, it went way beyond my expectations. And I’m not just saying that. So Bob, where can people find more about you, the book in just in case they haven’t heard of you before prior to this? The best place is our website. It’s a influence at work.

01:04:14
dot com. Okay, influence at work all one, which is all one word.com. Well, thank you so much for coming on the show. As I mentioned before, I’m a huge fan and it is a great honor to have you on the podcast. Thank you so much. enjoyed it, Steve.

01:04:30
Hope you enjoy that episode. Now even if you’ve read the first edition of Dr. Cialdini’s book, you’ll definitely want to catch the new edition. With 200 new pages, it is literally like reading a completely new book and you’ll always get new nuggets every time you read it. For more information about this episode, go to mywebcuderjob.com slash episode 373. And once again, I’m gonna 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.

01:04:58
SMS is the next big own marketing platform and you can sign up for free over at postscript.io slash div. That’s P-O-S-T-S-E-R-I-P-T dot I-O slash div. I also want to thank Clavio, which is my email marketing platform of choice for ecommerce merchants. You can easily put together automated flows like an abandon card sequence, a post purchase flow, a win back campaign, basically all these sequences that will make you money on autopilot. So head on over to mywifecoderjob.com slash K-L-A-V-I-Y-O.

01:05:25
Once again, that’s mywifequitterjob.com slash KLAVIO. Now I talk about how I use these tools in my blog, and if you are interested in starting your own eCommerce store, head on over to mywifequitterjob.com and sign up for my free 16 mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

00:29
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. Anyway, 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 div. That’s P-O-S-T-S-E-I-P-T dot I-O slash div. I also want to thank Clavio, who is also a sponsor of the show.

00:57
Now, are you working around the clock to build the business you’ve always imagined? And do you want to communicate with your fast growing list of customers in a personalized way, but in a way that gives you time to work on the rest of your business? And do ever wonder how the companies you admire, the ones that redefine their categories do it? Companies like Living Proof and Chubbies. Well, they do it by building relationships with their customers from the very beginning, while also evolving in real time as their customers needs change. And these companies connect quickly with their customers, collect their information, and start creating personalized experiences and offers

01:26
that inspire rapid purchase, often within minutes of uploading their customer data. Now, Klaviyo empowers you to own the most important thing for any business, the relationship between you and your customers and the experiences you deliver from the first email to the last promotion. To learn more about how Klaviyo can help you with your own growth, visit klaviyo.com slash my wife. That’s K-L-A-V-I-Y-O dot com slash my wife. And then finally, I wanted to mention a podcast that I released with my partner, Tony.

01:54
And unlike this podcast 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.

02:19
Welcome to the My Wife Could Her Job podcast. Today I’m thrilled to have Vivian Kay on the show. Now Vivian and I, we’ve never met, but my friend Kurt Elster gave me such a glowing recommendation that I knew that I had to have her on the show. But he did warn me that Vivian is a little bit quiet and reserved. She’s far from that. There we go. Okay, Vivian is the founder and CEO of Kinky Curly Yaqui, a premium textured hair extension brand for black women that she grew to six million without.

02:49
paid advertising, is ridiculous. And what’s even more impressive is that she completely bootstrapped this business from the ground up. So in this episode, Vivian is going to teach us the secrets behind her success. After all, I personally think that it’s unheard of in this day and age to be able to scale business to seven figures without paying for ads. And with that, welcome to show, Vivian. How are doing today? I am absolutely awesome. How are you? I am good. So are you going to be quiet and reserved? Absolutely not.

03:18
With a store name like Kinky Kurly Yaki, like, I don’t think anyone would think that actually. So let’s start there. What’s the history behind that name? Well, so it’s something that I literally just made up. You know, I woke up one morning and made that up, but the words do need something. So Kinky, well, Kinky refers to the kinky coarse texture of afro hair.

03:46
So people who come from the African diaspora, we tend to have coarse curls. And so that’s what the kinky stands for. Facebook sometimes thinks otherwise, but that’s okay. say, I was thinking the other definition of kinky. Yeah, it gets it. We get into a lot of we get a lot of stuff rejected because it’s like, we can’t advertise or do you know, something that’s sexually suggestive. And it’s like, that’s not what we’re talking about. Right. Anyways.

04:12
And then curly, course, that means, you know, just curly hair. And then yaki is what gets people stuck. So it’s sort of an inside joke. So if you’re a black woman and you wear protective styles, then you know what yaki is. But for everyone else, yaki is it’s a texture of hair. So back in the day, they couldn’t mimic black women’s hair straightened like they couldn’t produce it synthetically. So then what they would do is they would get it from a yak from the animal.

04:42
Yak. And they threw an eye at the end and called it Yakky. So whenever you want to refer to black women, black women’s hair straightened, you refer to it as Yakky. So like I mentioned, if you’re a black woman who wears a protective style, so and there’s a lot of us who do that you don’t realize like Beyonce, Oprah, Michelle Obama, like we’re all they’re all wearing protective styles.

05:06
only because our hair isn’t necessarily suited to this North American environment and we need to protect it so it doesn’t strip the moisture from it. And so we do that with braids, wigs and weaves. so Kinky Curly Yakky is just all those texture names all put together and black women, know what that is. so yeah. Yeah. I, this whole time I thought Yakky was something Japanese actually. It probably is. It probably is because you know what? A lot of synthetic hair comes from Korea and Japan. Oh.

05:35
Okay, that I did not know either. yeah. So what motivated you to start this business? Well, Steve, I was running another business. So I was a wedding decorator and I’m in Toronto, Canada, and it’s, you know, one of the most diverse cities in the world. And I was decorating everyone’s weddings. And so I needed to look quote unquote presentable. So for black women, what that means, and you know, just women in general.

06:03
But specifically for black women, means, you know, looking, having straight hair, because having curly hair, curly, tight textured afro hair was seen as unprofessional. Really? I did not know that. It’s still to this day. Like even in the US, there are laws that they had to put in place where they couldn’t discriminate us based on our hair. Right. So a lot of black people wear locks, they wear their hair in an afro, they wear braids, and it’s part of our culture, like

06:33
This is how we wear our hair. But because it’s contrary to that European beauty standard, a lot of us got pressured into straightening our hair. So we were using chemicals that we now know affected our health. Black women have one of the highest rates of fibroids and they connect it to the relaxers. the products that we used to use, the chemical products that we used to use to straighten our hair.

07:02
chemically, when our hair grows naturally this curly. And so I needed something that looked presentable. But whenever I went looking for that, for hair that looked like my hair, it was either buried underneath the sexy, exotic, silkier textures, or the places, the stores didn’t have it at all. Even beauty supply stores didn’t have it at all. So then I thought to myself, huh, you know, whatever. I was trying to solve my own problem, right? So I wanted to find hair that looked like mine and I could protect my hair with it.

07:31
I went to, so I joined haircare forums. joined Facebook groups trying to solve my own problem. And of course, while I was there, I just ended up just being Vivian, right? So, you know, was, was quite, yes, quite a reserved exactly, exactly. And so in doing so, you know, I found the solution to my problem. I went to, you know, I didn’t go to, but I, you know, I reached out to a couple of factories overseas and I kept

07:58
asking for samples and I would order them under different email addresses, asking for the different same texture, but tweak it a little bit just to see if I could continue to get that same quality. So after I finally found something that I liked, I was wearing it and I went to a networking event and another black woman pulled me aside and asked me what my regimen was for getting my hair to look like that and who my hairdresser was. And I was like, girl, this is a weave. And she said, I would buy that.

08:27
And that’s when the light bulb went off. So I thought, well, if she would buy it and I already bought it and I already knew there was a forum, Facebook groups full of women who also would buy it. Then there’s gotta be, you know, it’s got it. There’s gotta be something there. So in the down season of my wedding business in December of 2012, I launched Kinky Curly Yaki on Big Cartel. Big Cartel. Yeah. Big Cartel. Shout out to them. Are they still around?

08:52
I think they are still around because I think I have a student in my class on them and she doesn’t want to switch because you there’s all that inertia. You’re not on Big Cartel anymore right? Oh no. No. over to Shopify in 2015. Okay I bet that was a kind of a pain though too right? It was. It took me a minute. So let’s uh let’s take a step back. I want to talk about the sourcing process here. So you just

09:19
decide to contact factories? Are they in China? Were they in the US or? Yeah, no, they were in China. So you know, this was before Alibaba, right? Or least before. Yeah, at least this was before Alibaba and Aliexpress was really a thing. Sure. Right. So this was just, know, on forums with people had their email addresses listed. Right. Wait, okay, I’m sorry. So you actually found these factories on Facebook groups on a hair on a haircare forum?

09:48
on a haircare for a haircare black haircare forum. So there were forums just dedicated to black hair. But they had they had contact information of Chinese factories on there too. Yeah, absolutely. Absolutely. So they had so they had the factories, they had the salespeople’s names, like they had all that information readily available on these on these Facebook on these haircare forums. Interesting. So were these people on these forums running businesses as well? No, or

10:17
These were just black women who wanted to solve their own problems, right? But they weren’t business, like, you know, they weren’t, I don’t want to, I don’t want to sound like I’m insulting them. They weren’t business minded. Like they weren’t trying to start businesses. They just, we literally just wanted to solve our own problem. And there was nowhere in the U in the U S or Canada that that sold these. So you actually had to go all the way to the factory. Well, here’s the thing. So it’s not like there’s kinky haired girls cutting off their hair.

10:44
in order to create these extensions, right? And so then, you know, the biggest supplier of human hair is India, right? And then the one of the biggest labor forces are in China, right? So what would happen is the hair gets collected in India, and then it goes over to China to get hand processed. So the hair gets collected in India, and then goes over to China for processing because all of our textures are manually made.

11:13
So this, for instance, you can’t tell is a ponytail. So it’s a drawstring ponytail. You guys can’t see it. I’m I took it. Yeah, I’ve taken it off. OK. And what it is is it undergoes. it starts out as straight hair. Uh huh. It starts out as straight hair. And then they they they they hand rod it, the hair around a rod. And then they put it into they put it into like a they put it in some water.

11:43
and then they put it into an oven to bake the texture into the hair. And so it’s not something, it’s such a manually intensive process. It’s not something that, you know, know, it’s not something that can be done in North America. Yeah, exactly. So just in case you guys obviously can’t see what Vivian does, but she literally just took off her hair in front of me. Black women don’t normally do that. So you must be special, So you went to the factory, but you weren’t going to buy in bulk.

12:12
So what did you say to them? Well, at the time, because there weren’t people, I mean, if they were buying, they were buying silkier textures, right? If they were running businesses. So, you know, I asked for a specific texture. I got it. I didn’t. It wasn’t kinky enough for me. So then I would say, well, I need you to do it smaller. I need you to tweak this. I need you to do this. And so they kept doing that until I found the perfect texture. And again, because I was just trying to solve my own problem, like, OK, cool. Yeah, I like it for me.

12:42
That’s it. And there was no communication barrier here. I can, like sometimes I have problems communicating like very simple directions regarding my textiles. I can only imagine like talking to a Chinese person about kinky levels. Well, you just, you just simplify it, right? So all the rods have millimeters, right? So it’s like, so if I wanted, if I wanted this tight curl, I need it to be a two millimeter curl. And so that, and so, and of course you just keep it simple, like, okay, make curl two millimeter.

13:12
Right. That’s it. Okay. And then so you got a sample and then presumably you didn’t buy in bulk in the very beginning, right? No, I would buy for I just bought for myself. Okay. So what would happen is I would buy one, I would buy one and you know, a customer would come in by, you know, two, I would take money and then buy two. So you see that you guys again can’t see this, but I’ve got this bin of Rubbermaid drawers behind me. Yeah, this isn’t the exact one. But this is what I started my business in.

13:42
So I would literally just buy one and then someone would buy two and I would take the money and buy two. And then I would slowly grow my inventory that way. So these factories were willing to just send into you one by one? Yeah. Wow. Well, not one by one, but usually like say, like they didn’t have minimum orders at the time, at that time, right? They didn’t have minimum orders at that time. And so then they were just, they were just willing to sell you three, right? And you would need at least

14:12
three to do your head. Right. Okay. Okay. Can I get an idea? Usually when you get like samples, the shipping is really expensive and the unit is more expensive. So what was like your, I guess I don’t want to ask you what your sourcing costs were, but I mean, the beginning, were you just marking that up like a lot? No, because I didn’t know, like, you know, I wasn’t, I didn’t start the business to do business. Like, you know, I, wanted to solve my own problem and then it just sort of happened to become a business.

14:42
And then didn’t and it snowballed. Right. Let’s about the snowballing. So OK, so you got it. And presumably you posted them in these Facebook groups, I guess. Yeah. Well, you know, what happened was, you know, I got influencers, except at the time they weren’t known as influencers. There were just girls that I knew that also were kinky textures. So I would send it to them and say, hey, girl, can you give me your opinion on this hair? Because I know I like it, but I want to know what you think and how you would manage it and how you would.

15:11
And of course they would take it and go on. This was when YouTube started becoming a thing and people started showing people how to do stuff. And so then that’s what they would do. They would take it and they would wear it and then they would take pictures. And then there was this one girl who did this one spectacularly big Afro. And that’s how it blew up because she said this was the best. And you know, and that was the issue with this type of hair is that it could look good. So you could, and even now.

15:38
You could go to Amazon and buy the same ponytail that I’m wearing for $20. It looks the same, but once you get it, the way it behaves, the way it washes, the way it acts is very different from what we sell, but on surface it looks good. So the fact that, so kinky hair is notorious for being trash after, you know, one wear, but this girl got all this hair and she was able to manage it. That was a big thing at the time. Like, no guys, like this hair.

16:08
really can like this lives up to what she says it is. And that’s because I was my own, like I was solving my own problem. I was my own customer. So I knew what they were complaining about. So I would per if they said, okay, know, kinky hair tangles so easily. Cool. Guess what? This hair doesn’t tangle as easily. And I would show pictures of me running my fingers through the hair, you know, doing all that. And one of the things that I would do to, differentiate myself from other companies was I would wash the hair.

16:36
So the hair doesn’t come looking like this. It comes uniform looking like how it looks right off the rods that I was referring to. Right. So I would wash the hair. So it looked the way it was supposed to look when you’re about to wear it. So then girls would be, well, that’s what I want it to look like. And that was a big problem too. Right. Because you would get them, you know, but one company would say, yeah, it’s this curl. Another company would say it’s the same curl, but when you wash them, they would look totally different. Interesting. So did you have a YouTube channel then? No, no.

17:04
How did you demonstrate all these things? So I, you know, I was one of the first hair extension businesses on Instagram, right? So Instagram launched in like 2011 or something. Right. And I was on there in 2012, 2013. And I was also in these Facebook groups, right? So I would do videos. So I didn’t do a YouTube channel. I just did videos and I would show people. And then I also relied on these other girls that were doing it. And I didn’t even ask them to do it. They would just do it. I’d send them the product and say, girl, tell me what you think. And they would create content out of it.

17:34
How did you find the YouTubers or were they just your friends or? These were just girls in the forums. Oh, okay. The forums in the Facebook groups. Okay. They weren’t YouTube. They weren’t YouTubers at the time. They were just girls who had hair, who had a, who were vlogging or whatever they called it back then. So when you go to one of those communities, like I, I’ve seen it done wrong. Like sometimes people come into my group and they just start saying,

18:03
selling hair extensions. Well, obviously they wouldn’t sell hair extension. But you know what I mean, right? So what was your approach there? Like, how did you come across as not salesy? Well, so the funny thing is, no one knew it was my company. So I was already in these groups, and I was already providing value. I was being Vivian, I was answering questions, even, you know, when it was not hair related stuff, right. And so then this the brand started to get, you know, well known in these groups.

18:32
And so, someone decided that they needed to find out who was behind this company because it’s not like I was like, hey, guys, here’s my company, Kiki Carley. I didn’t do anything of that like that. I was just, here’s, you know, send it to a couple of girls and the girls did whatever they did and then that’s how I grew. And then someone created a fake Facebook profile to out me. So, at the time, me, my cheap butt, my photo butt didn’t buy that who is. That who is privacy.

19:00
for your website. And so then they did the who is search and found my name and then put me on blast in these Facebook groups. But what they thought would be my downfall was actually what helped to create a million dollar company. Because when they found out that it was my company, they were like, oh, well, if this belongs to Vivian, that means it’s black owned. She actually knows what she’s talking about. She were supporting somebody who was in our community all the more better. Boom.

19:30
Business skyrocketed. Amazing. So if you were to do it all over again, would you be more overt about it being your company? Yes, absolutely. Because people don’t necessarily buy hair. They buy me. They buy they don’t buy product. They buy people. So your website though, I guess back in the day, it didn’t look like it does now, right? no. Your face is on it, right? Yeah, it’s pretty obvious that it’s your store. Yes. What was the shape of your website back then?

19:58
Oh, goodness. was, you know, in my Samsung S3, you know, with that, with those crazy filters Instagram used to have, you know, those crazy filters from 2012. those in the show notes. But yeah, yeah. You know, using Microsoft Publisher, you remember Publisher? So the website wasn’t all that, basically. No, it wasn’t. OK, it wasn’t. it’s in the, you know, what you see now is this third iteration.

20:26
Even this, you when I moved to Shopify, was, you know, I did a whole photo shoot I came to, I think it was DC or something, you know, there were the three. these were three bloggers that were up and coming or vloggers that were up and coming. said, girls, can we do a photo shoot? I’ll meet you all at this place in the US and we can all take pictures. And that was in 2016, I believe it was. So you did that on the on the frugal side too, because these are just people in the community.

20:53
Just people in the community who were bloggers or bloggers are trying to be, you know, now they were influencers. Yeah, like 3000 people at the time or 3000 followers. And we did a photo shoot. So, and that was the next version of the website. And of course, started to keep up with the whole, okay, let’s do tutorials and let’s do how to wash your hair. Like all that stuff that’s practically mandatory now was not a thing at the time.

21:21
If you sell on Amazon or run any online business for that matter, the most important aspect of your long-term success will be your brand. And this is why I work with Steven Weigler and his team from Emerge Council to protect my brand over at Bumblebee Linens. Now, what’s unique about Emerge Council is that Steve focuses his legal practice on e-commerce and provides strategic and legal representation to entrepreneurs to protect their IP. So for example, if you’ve ever been ripped off or knocked off on Amazon, then Steve can help you fight back and protect yourself.

21:50
Now, first and foremost, protecting our IP starts with a solid trademark and Emerge Council provides attorney-advised strategic trademark prosecution, both in the United States and abroad for a very low price. And furthermore, the students in my course have used Steve for copyrighting their designs, policing against counterfeits and knockoffs, agreements with co-founders and employees, website and social media policies, privacy policies, vendor agreements, brand registry, you name it. So if you need IP protection services, go to EmergeCouncil.com and get a free consult.

22:19
And if you tell Steve that I sent you, you’ll get a hundred dollar discount. That’s E-M-E-R-G-E-C-O-U-N-S-E-L dot com. Now back to the show. So when you first went on, presumably these are expensive, right? I mean, you just talking about the labor involved, the fact that it’s real hair and you were just giving them away to people on the groups. How did you know who to give them to? That’s the thing. You think you know, right? And you know what I tried to do was I tried to work with

22:49
girls who I knew were really serious about building a brand. Okay. Right. Because you you could see even now you can see that there’s influencers who are just simply doing it for the money. And then there’s people who are actually looking to really engage and grow their audience. Right. And so I watched them, you know, I have a marketing and branding background. So I would just sit and watch girls and be like,

23:11
know, and I fell for a couple of these people, you know, especially the bigger influencers who were like, Yeah, yeah, yeah, send me some hair and we’ll, and we’ll do something then they did nothing with it. Or if they did do something with it, then they wouldn’t, they wouldn’t tag me or whatever the case may be. So I just chose to work with at the time they weren’t known as that but micro influencers, right? What’s considered a micro influencer to you? To me now, I would say 30,000 and under 30,000 followers and under

23:39
So presumably now you probably have a more structured process. So I’m just kind of curious what your process is now for finding an influencer. You know what? I actually stuck a pin in the whole finding an influencer thing. Did yeah, because the game changed. Right. So these girls that I started with that that had 3000 followers back in 2014, 2015 now have over a hundred K. Right. So now these girls are charging, you know, fifteen hundred dollars just for a post. Right.

24:08
Whereas before it was like, okay, I could give them one set of clip-ins and they would create three, like they would create, you know, I would say maybe 10 pieces of content on that one set of clip-ins. Whereas now it’s like, you give them one set of clip-ins, costs you $1,500. You need to send them more stuff in order to create another piece of content. So it’s just been a little bit different. I’ve used apps like, and this was before it got acquired by YouTube, but I think it was called a Fame. Fame bit.

24:35
So before it got acquired, I used them and that, that helped me launch my, my clip-in. So that was a really good, a really good place to do that. But it’s been, I had to stick a pin in it because what I was finding was, you know, all the apps that I was using, especially Instagram became pay to play. Right. So I could pay someone $1,500 for content, but nobody would see it. Right. Yeah. Right. It’s interesting. So did you ever try paid advertising?

25:05
Oh, yes. Well, it wasn’t until it wasn’t until I had already hit my first million. And I thought, wow, well, I built this. I built this first. I built this business without paid ads. So I so I hit my first million without any paid ads, without email, without email, without email. No email. Wow. No email. No email. So this was just simply word of mouth and repeat customers.

25:34
Well, how did you get the repeat customers without email or did they just come back naturally? They just came back naturally. Once you once you once you have that good stuff. And as this was before the market got oversaturated, right? So you’ll have to I didn’t mention this, but I was I created the niche, the niche did not exist before I started it. So I was the only company who was selling only kinky textures.

26:00
So I didn’t even try and slide in, you know, a silkier, you know, more popular texture that you would see on say, Nicki Minaj. No, I wasn’t selling that stuff. I was selling this stuff that, you know, you’re that girl that works the nine to five at Pepsi doesn’t no one even know she’s wearing extensions because it looks like her hair. Right, right. So the influencers early on that you worked with, were they did you continue to work with them? Yes. I worked with them for a good two, three years.

26:28
And then they just got really big and wanted more expensive. Yeah. So then, you know, even one right now I worked with, just landed a gig. She’s in the Seychelles and she landed a gig with Qatar Airlines. wow. Yeah. So, okay. So, but it’s so nice to see that growth, right? Because these are girls that I worked with. Another one launched a hair product company, right? And so it’s nice because these are the girls that I knew.

26:57
were about their business, not just interested in getting free stuff for the sake of getting free stuff. They were interested in growing their brands. And so I feel like we both grew up together. Yeah. Yeah. You know, in my experience, or just even speaking to my colleagues, I find that the influencers who know what they’re worth tend to charge like way too much. Whereas it’s much better to just target people who have decent size followings, but

27:23
They’re not really thinking about monetization just yet. No, I think that people with the decent size following is also engaged with their audience. Right. Right. And there’s that’s one thing that I’ve learned is that those people who have the smaller audiences, even myself, I engage with my followers. So I know I know who my OGs are. know who my regular people comment and DM and and all that stuff. And I can rely on them to to help me do stuff.

27:51
And so I knew that’s, what these girls could do. Whereas now with a lot of these bigger names, it’s like, they don’t even check their DMS. Yeah. Yeah. It’s probably cause it’s just too many. They’re probably flooded with absolutely. And, know, that happens to me too, but still, mean, social media, social media, that’s what you’re, you’re supposed to socialize. Having a one way conversation isn’t, that’s, that’s sad.

28:21
So how did you go from one to six million? Just doing the same thing I did at one million to get to one million, which is just keep doing it. You just do it at scale, right? You just keep doing the same thing. You do more of it. You do a lot of testing. So it’s like, okay, well that worked. That didn’t work. Like say FameBit, FameBit worked famously. Like I loved how it worked. And so then it was like, okay, so how can I do more of that? But at the time there weren’t other FameBits or at least affordable FameBits, right?

28:50
Now there’s a plethora and it’s like, even now they come to me, as I call myself an entrepreneur personality and I’m like, no, you guys are all garbage. You just want access to my data and that’s it. But yeah, no, it’s a challenge. The times are different. I always like to say that I didn’t start the business to become a $6 million business. I started the business to solve my own problem.

29:17
Right. And and so e-commerce for me has become it’s become kind of gross for me. Wait, what? Yeah. Because you know what? Because I’m not into the cack in the row ass and the this and that’s not the reason why I started it. I started it so that Keisha in D.C. can, you know, instead of crying over her failed twist out at six o’clock in the morning when she has a job interview that morning.

29:46
Keisha could just find a wig or find some clip-ins to accentuate or lengthen or add volume to her own hair. And she can go about her business and do her job without people focusing on what she looks like. And so- Presumably you have enough money already. So what are your motivations now then in terms of growth and- Well, honestly, know, I scaled to the 6 million and then I was like, I don’t like it here. I really don’t. And I admire-

30:14
brands that can do that. And the founders are like, yeah, let’s go, let’s go. It turns out I’m not a very good CEO. a better marketer. I’m a better brander. I’m just a better person, I guess you could say. And I like to say that I started Kinky Curly Yakky to give black women confidence. So I enjoy just giving people period confidence. So whether that be black women or women or entrepreneurs or whatever the case may be, I just enjoy

30:44
that journey. So e-commerce just, mean, selling hair extensions just so happens to be one of my, my, my house, right? But it’s not my why selling hair extensions is not my why. Yeah. You know, I was on your website earlier today and I noticed you have like another kind of business that essentially is what you just described, right? That’s outside of your e-commerce. Do you want to talk about that a little bit? Yeah. Well, um, I’ve, you know, what happened was in 2020,

31:14
You know, we all got hit with the pandemic. Yes. And for me, even more so, I got hit with it back in 2019, like Black Friday in that November 2019. Except at the time we didn’t know what it was. Right. We just know China all of a sudden just stops shipping stuff. Yes. Right. And so it was we had a huge supply chain issue because what we sell is human hair product. And all of a sudden everybody stopped going places. Right. And so.

31:43
Um, it was out of my control and you know, my kid was home from virtual school for virtual school. And I had to quickly figure out how to keep cashflow going. And so then I thought, well, what do I, like, what are people doing? Like I had to just sort of sit back and okay, wait, everyone has to go online. Wait, I know how to be online. I know how to set up a Shopify. Everyone, all these brick and mortars and people who used to sell in person are now all, you know, having to open up and do things online. I know how to do that.

32:13
So then I started teaching things like Shopify prep school, getting people just get the essentials up and ready so you can sell whatever you can keep your livelihood and sell it online. So I started doing that. And then I started coaching. people who couldn’t, okay, I have a business. Now they’re at home from their nine to five. Now they have time to think, oh, is this really what I wanna do? No, it’s not. I wanna be an entrepreneur. Okay, well, let me help you do that.

32:38
You know, one thing I forgot to ask you is how do you scale what you do or what made you successful? Because a lot of it is just like talking and interacting with people, which inherently doesn’t scale, right? Yeah. Well, I, know, for the first four years of business, so until 2016, so until June of 2016, I was doing everything myself. So I was customer service, fulfillment, you know, packaging, everything. That was all me. And then in June of 2016, I hired my first employee.

33:08
And even how I hired her was just sort of a roundabout way because I had a partner at the time who was trying to force me to figure, know, put out, put something on monster or, you know, indeed, or whatever it was at that time and find an employee when I was just like, no, I need to really interact with this person. So I went to a beauty supply store and I asked for some help and this girl came to help me I liked the way she did it. And I said, I’m looking for someone to help me with customer service or are you available? She said, sure. I gave her my number. She called me the next day. She’s been my employee ever since the person who answers my, my

33:37
customer service was my second ever customer. So she’s someone who knew me from the forums, who bought my hair and supported. And then she went on mat leave and she’s like, I was like, Oh my gosh, know, customer service is driving me nuts. She’s like, that’s what I do for a living. And I’m on mat leave. So let me help you. She’s been doing that for me ever since. So really it’s about scale for me, isn’t about, you know, having a team of a hundred. It’s just having a small lean team who is really passionate about

34:07
what we’re here to do, right? Which is helping. Yeah, Are you selling on Amazon at all? not. Absolutely not. Okay. No. Is this type of product not good for Amazon because there’s all those cheap knockoffs on there? Yeah, that too. I also feel like I worked really hard to build Kinky Curly up, Yakky up as a brand that I feel like being on Amazon would dilute it. You know,

34:34
Now I realize that being on there is really about brand recognition. So if someone types it in, then boom, okay, well, this brand already has a reputation. If they go to my website, they’ll see I have thousands of reviews. So if I do go on Amazon, would be about brand recognition, but I wouldn’t put my premium products on there because they can’t compete with the $25 ponytail. They can’t. Right. Even though it’s much better quality, you’re just thinking that. Right.

35:04
Okay. Whereas you can do a lot more on your own website to show all of that. Exactly. Right. I own that channel, right? Whereas I don’t own Amazon. Well, actually, what is your primary channel for sales today? Primary sales would be organic, organic organic Instagram or Facebook or organic search, organic search. Yep. So I was up and up on the SEO. So, you know, we’ve got that. So we’ve got that SEO history.

35:33
Right. And so if you type, if you type kinky hair extensions, we’re probably the number one or at least on the first page, number one result. Nice. Can you talk about how you establish those ranks? Like, are you creating content on regular basis? Not right now. So, you know, we were doing blogs back in, I want to say 2017. So we have a bunch of blogs that went up there and they were talking about core things that people back when we would Google. You know, I knew how to SEO all the

36:03
you all the pages and all the pictures and all that jazz. I personally manually did all that because I know what black women are searching for. Right. Yeah. Yeah. Yeah. And so, and so I did all that. So, you know, and it’s paid off. It’s, know, SEO is not a overnight thing. It’s a long-term strategy and it’s paid off. So even now, when I don’t have any ads turned on, the only thing I have on is email.

36:29
It seems like all those cheap knockoffs on Amazon, they’re probably run by Chinese companies. I’m just guessing. I don’t know for sure, but they obviously don’t know what it’s like to have black hair, right? My hair is straight. I would have no idea. And so I guess that’s your main advantage. Yep. Well, what happened when, you know, in 2014, I found out I was pregnant and had my son. And when I came back, there were, uh, you know, I took a two month mat leave or something. I couldn’t even do that. But when I came back, there were all these Chinese companies that popped up.

36:59
and had black women front the companies. Oh, really? Yes. So really, all I know what happens with these Chinese companies is you just sit on YouTube and just watch the content we produce. And then they create products based on the content we produce. Right. How do you fight that? You fight them by being by actually creating a brand that people can that people that your audience can resonate with, right?

37:27
Like with Amazon or these Chinese companies, can’t be me. They don’t know what my, they don’t have the same experiences I have with same skillset. They don’t know what it’s like to have a failed twist out. I know what that feels like. Right. And I can communicate that better than any Chinese company can. Just wondering though, if they like throw money at other black women. They do. They absolutely do. And it makes it hard for companies like mine to compete. Right.

37:55
Right. They flood the market with their products. They pay them, you know, they pay them whatever they pay them. But, know, to the girl who doesn’t care because she just wants free stuff, she produces that one video and she’s done. She doesn’t care. She’s going to have a bin full of all these trashy hair extensions, but who cares? They paid her, you know, 35 bucks or whatever it was for that video and hair that she didn’t have in the first place. Presumably those are one and done. Right. As soon as you buy that cheap product, you’re not going to buy it again. Right. Yeah. Interesting.

38:25
And then you mentioned Instagram is Instagram a large driver of sales or is that more just for branding? It’s more just for branding. It used to be. But because of the whole the whole algorithm and all that jazz, like it’s it’s you know, we we rarely post on there anymore. It’s it’s actually kind of discouraging to post on there, I find. Yeah. But email for us has been organic traffic and organic search and email for us. And we haven’t even touched SMS yet.

38:52
And so it’s something I plan to do this year. It’s just this these past 18 months have just been honestly, I’ve had my head up my ass. Honestly, and like COVID. Yeah. Yeah. And, you I’m a single mother and I’ve been at home with my son in the first grade. So it’s not like I can just leave him with a computer and he’s getting work done. No, I physically have to sit there with him. So last year was not a million dollar year. This year is certainly not a million dollar year. And I’m OK with that.

39:21
I am okay with that. Are you still active in those original groups where you established? No, no, with a lot of those groups, think of they’ve all sort of migrated, you know, everyone’s sort of grown up and grown out, but I still keep in touch. A couple of them still follow me. Like I, a lot of them still follow me. And so it’s nice to see their names pop up every once in on the shop of my dashboard. like, Oh, that was my, I still remember my very first customer.

39:47
Right. And my second and my third. And so, yeah, they still support, but no, I don’t, I don’t go into those groups anymore. So for everyone who’s listening, wanting to do what you do, what would be, I guess your best advice for someone just starting out? I would say, because you bootstrap this whole thing. Yeah. From zero. didn’t have any outside cash or anything. I would say make sure you’re solving a problem and make sure you’re solving a problem that is, um, that resonates with you.

40:17
because this is going to be one of the hardest things outside of parenthood. This is one of the hardest things you’ll ever do. And if you’re not passionate or if you’re not interested or invested in getting in solving that problem and finding the solution, then this is going to be a really tough journey. So I would say one, make sure you’re solving a problem and two, be yourself because

40:46
At first I thought, okay, I would look at the girls who own hair extension companies who had long silky hair and Gucci and Lambos and high heels and all that stuff. And I was not that, I was the exact opposite of that. And at first, that’s the reason why I hid myself. But then as I mentioned, when people actually found out it was me and they knew me for who I was, then they were supportive. And it was like, oh, so I can be myself? Yes, you can.

41:14
And that’s what will differentiate you from the competition. And then finally, I would say study your competition and do something different. So if your competition is selling mugs and all they sell are mugs that are black, then why not sell red mugs, only red mugs and really niche down, niche. So that’s really what I want to get to, niche it down because that’s what’s going to help you get your foot in the door.

41:40
and differentiate you from everyone else doing the exact same thing in the oversaturated market that you’re in, no matter what it is. So once you niche down and you really get well known for doing that one thing, then you can start to expand. You can either go wider or you can go deeper into that niche, but just start out doing that one thing really, really well and get known for it. That’s exactly how we got started.

42:05
We became known for handkerchiefs. And even though I have no passion for those products, I developed a passion for the business part. Right. You know, like the cack and the real ass, right. That you don’t like. That’s actually my wheelhouse. Right.

42:19
And what I like about you, Vivian, just, I mean, we haven’t met before, but now that we’re chatting, you’re just very relatable. And just after talking to you, just want to buy from you. And I think that’s your superpower. Yes, that is right. And that’s the thing, because it’s like, because what I’m, I’m not passionate about selling you hair extensions. I’m passionate about making you feel good about how you are, just you. Right. And I would just buy from you because of you. Right. If I needed hair extensions, I’d be a bonus.

42:48
Thank you. appreciate you saying that. So Vivian, where can people find you online? And I know you have a couple of websites. So yeah, well, for hair extensions, if you’re into that, you can find me at kinkakurlyyaki.com. For myself, I am an absolute pleasure to follow on Instagram, especially in my Instagram stories. I’m known for my Instagram stories. So you can follow me at it’sviviank, that’s I-T-S-V-I-V-I-A-N-K-A-Y-E.

43:18
You’ll see me on the black lady with the crown and balloons. Um, and of course I have a website. So Vivian K.com. So you said that you weren’t doing Instagram. That was for your company, but for yourself or myself doing it. Yeah. that’s how I started to get business that way too. Right. Yes. Because I get high on my own supply. Right. So I’m always wearing my own products. So yeah. So it’s a, yeah. So you’re still doing it. doing it just in a roundabout way. Right.

43:48
Cool. Well, Vivian, it was a pleasure to speak with you. I’m glad that you weren’t reserved and quiet like you normally are. Oh, you know, today was a good day. And I hope this whole lockdown for you lifts so you can get some more work done and all the cat and the rohess stuff that you love. Oh, yes, rohess. Yeah. All right. Take care and thanks a lot.

44:16
Hope you enjoyed that episode and were inspired as much as I was by Vivian’s story. more information about this episode, go to mywifequitterjob.com slash episode 370. And once again, I want to thank Clavio, which is my email marketing platform of choice for e-commerce merchants. You can easily put together automated flows, like an abandoned card sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. So head on over to mywifequitterjob.com slash KLAVIO. Once again, that’s mywifequitterjob.com slash KLAVIO.

44:46
I also want to thank Postscript, which is my SMS marketing platform of choice for ecommerce. 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 dev. That’s P-O-S-T-S-C-R-I-P-T dot I-O slash dev. Now I talk about how I use these tools in my blog, and if you are interested in starting your own ecommerce store, head on over to mywifequaterjob.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.

45:16
Thanks for listening.

00:27
But before I begin, I want to thank Klaviyo for sponsoring this episode. Now I’m super excited to talk about Klaviyo because they’re the email marketing platform that I personally use for my e-commerce store and it depend on them for over 30 % of my revenue. Now you’re probably wondering why Klaviyo and not another provider. Well Klaviyo is the only email platform out there that is specifically built for e-commerce stores and here’s why it’s so powerful. Klaviyo can track every single customer who is shopped in your store in exactly what they bought. So let’s say I want to send out an email to everyone who purchased a red handkerchief in the last week, easy.

00:56
Let’s say I want to set up a special autoresponder sequence to my customers depending on what they bought, piece of cake, and there is full revenue tracking on every single email sent. Klaviyo is the most powerful email platform that I’ve ever used, and you can try them for free over at klaviyo.com slash my wife. That’s K-L-A-V-I-Y-O dot com slash my wife. I also want to thank Postscript for sponsoring this episode. Now, if you run an e-commerce business of any kind, you know how important it is to own your own customer contact list.

01:23
And this is why I’m focusing a significant amount of my efforts on SMS marketing. SMS or text message marketing is already a top five revenue source from my e-commerce store. And I couldn’t have done it without Postscript, which is my text message provider. Now, why did I choose Postscript? It’s because they specialize in e-commerce and that is their primary focus. Not only is it easy to use, but you can quickly segment your audience based on your exact sales data and implement automated flows and abandon cart at the push of a button.

01:50
Not only that, but it’s price well too and SMS is the perfect way to engage with your customers. So head on over to postscript.io slash Steve and try it for free. That’s P O S T S U I P T dot I O slash Steve. And then finally, I want to mention a brand new podcast that I recently released with my partner, Tony. And unlike this podcast where I interviewed successful entrepreneurs in e-commerce, the profitable audience podcast covers all things related to content creation and building an audience.

02:17
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.

02:34
Welcome to the My Wife, Quit Her Job podcast. Today I have my buddy, Chase Diamond on the show. Now, Chase is someone who I met at Nick Shackelford’s Geek Out event, and he is the co-founder of Boundless Labs, which is a top email marketing agency with a special focus on CBD companies. Chase lives and breathes email, and he’s helped his clients send hundreds of millions of emails, resulting in over 50 million in attributable email revenue. Now, if email marketing is not driving at least 20 to 30 % of your total revenue for your e-commerce store,

03:03
then you are probably leaving some money on the table. And what’s also amazing is that Chase has secured crazy results for his clients, like sending emails with a 40 to 70 % open rate. And today, Chase is going to teach us how to run email marketing campaigns specifically for an e-commerce store. What up, Chase? Steve, my man, how are you? I’m doing well, man. I’m glad we got a chance to catch up before we actually hit the record button. But before we start, give me the quick background.

03:31
how you got started with Boundless Labs and how did you get into email of all things? Yeah, absolutely. Thank you for having me. So really long-winded, I got actually started in marketing by accident when I was 14 years old. At the age of 13, I was diagnosed with Crohn’s disease and I was essentially sick for an entire year through lack of awareness and basically lack of a diagnosis for this disease. So as a 14 year old, I took it upon myself to do guerrilla marketing. At the time I didn’t know I was doing guerrilla marketing.

03:58
but I basically was taking out ads in the newspapers. I was calling my friends. I was doing walks and restaurant fundraisers, so on and so forth. So from 14 to 16, I dedicated my lives to raising awareness and fundraising for the Crohn’s and Cladis Foundation. And at 16, I actually became the youngest board member of CCFA and spent a six-year board term working with them. And in college, I had to help pay for my tuition. So I had to work.

04:26
random jobs and internships at one point in time. think I probably had two or three jobs and internships at a time while also playing college soccer, while also doing business clubs and fraternities. So through college, I really got into marketing. I did a bunch of different marketing from SEO to email, to pay acquisition, this, that, and the other. And email really was the thing that stuck with me as the thing that was really intimate and personal, but scalable. And what I really mean by that.

04:53
So within an email, right, if I can get you to open the email, it’s just me and you. And I have your attention for two seconds, 30 seconds a minute, dependent upon how great my content is. Whereas with something like social, you know, if you’re running an ad on, let’s say Facebook or Instagram, not that it’s not effective. Obviously it’s super effective, but you’ll see, you know, an ad and you also see a post from a friend, a family member, you know, boyfriend or girlfriend. So there are other descriptions on your screen. So for me, I really liked the fact that I could send an email to a thousand people.

05:22
100,000 people, a million people, but in a way that felt really personal for each person. So from there, I was basically building after college products that served college students documents. And I was building travel series and email was really the core at what I did. And I did it in the beginning of my career kind of on the cold email side. So I was building massive audiences with cold email, essentially aggregating data from Instagram, from SoundCloud, from forums and driving traffic to

05:51
know, newsletters and communities. So long-winded, did cold email for a couple of years. Nick and I have been close friends for about 15 years and he hit me up and he’s like, dude, the stuff that you’re doing on cold email is so cool. However, you know, I foresee a day in the future, we’re going to probably be on the wrong side of the law. This was before like GDPR and California privacy and all these things. Why don’t you come join me in e-commerce? So I’ve now been doing e-commerce for about three, three and a half years. Thanks to Nick. So long-winded, that’s kind of my story of how it got to

06:21
you know, boundless labs and in our structure. Right? Yeah, you guys merged, right? Yes. So about a year ago, we merged. So we were doing exclusively ecommerce, email marketing, Nick’s company was doing exclusively paid social, we’ve kind of come together. So all in, about 45 to 50 employees, and we offer email paid and content. This is random. But did you guys meet through soccer? Because I remember Nick was almost pro, right? Yes. So we actually met through our brothers playing soccer. So

06:49
I played soccer my whole life, Nick played soccer his whole life, our little brothers played soccer together, so that’s how I met Nick initially. And Nick did play, he had a stint with the LA Galaxy, so he played in college and then he went pro for think a year or two. Yeah, I thought there was some connection there. So hey, so Chase, what are some of the companies that we might have heard of, e-commerce companies that you’ve helped in the past, and what are some of your biggest wins in terms of sales when helping these companies?

07:14
Yeah, so one that was really cool for me growing up, I was a big fan of the Chive, like the men’s millennial kind of newsletter site. And they have an e-commerce brand called the Chivory, which is an eight figure e-commerce brand. So I had the opportunity to consult for them on their email program for about a year and a half to two years. I actually only had stopped because I had my daughter and I kind of was cutting back a little bit on the consulting, but I worked with them for a while and I think we increased their revenue year over year by like 50%. So that was pretty significant for a brand that was doing

07:43
you know, a couple million dollars already from email. So that was a cool one. We currently actually work with a brand called Poopery, which is the spray for the bathroom. Yeah, I’ve seen the commercials. look really good. Maybe I saw them from Nick’s feed actually. Yeah, Poopery is awesome. I mean, that’s like a household name that’s in a bunch of stores. Never thought we’d land them. Happened to get them as a client. So that was really cool. And then like one or two others. We previously worked with a protein company called Orgain.

08:13
They’re sold in a lot of you know, grocery stores, Amazon, so on and so forth. So we work with, you know, a couple really big household names like that, but a lot of our brands typically do between about one to about $20 million in annual revenue. Um, so they’re kind of smaller, fast growing, you know, seven to eight figure brands that not as many people know, but they’re doing a really great job. Those are brands kind of like nugs, which is like the chicken nugget alternative, you know, a brand called hydrant, which is like a, you know,

08:42
kind of like a electrolyte replenishment for your drink, your water, and so on and so forth. Sweet, which actually is the actual target demographic with this podcast, so it’s perfect. So let’s start from the beginning, because you can’t really do a lot of the techniques unless you actually have an email list. So what are your recommendations on building your email list as quickly as possible? So what we do, so we kind of are middle to bottom of the funnel. So we are completely dependent on top of the funnel traffic.

09:12
that brands drive. So typically that is Facebook and Instagram. Outside that is the other platforms like Google, Snap, Pinterest, et cetera. There may be some SEO, maybe some affiliate, maybe some influencers. So once traffic hits the page, that’s kind where we come in. And we basically leverage forms to collect emails. So whether that’s a pop-up, a fly out, an embedded subscription, we leverage forms and we kind of optimize these forms to collect as much traffic as possible. I

09:41
my own kind of research and also through some of the research that I have from privy, basically having like some kind of call to action of just sign up, there’s no discount, there’s no incentive, you can expect that to convert between one to 2 % of the traffic. So for every 100 people that visit your website, if you just have sign up for our newsletter to get our content, you can expect about one to two people to give you their email. If you have an incentive, whether it’s 5%, 10%, 15 % off, you can expect about five to 10 % of those people to give you their emails, right? So

10:10
every 100 visits, if you have some kind of discount or incentive, you can expect five to 10 people to give you their email. And what’s kind of interesting is the whole giveaway type thing. So enter your email to have a chance to be entered into our weekly giveaway or monthly giveaway, whatever it might be, some kind of like enter to win. We’re actually seeing that converting in the low teens in terms of people giving us their email. So 10 out of every 100, 12 out of every 100, so on.

10:36
That’s how we’re typically collecting emails is through the traffic that’s coming onto the website. All right. That’s one. Two. Um, there’s not a lot of control that we necessarily have on this one, but other ways that we collect email is when someone starts checkout and whether they purchased or not, as long as they’ve entered their email, their phone number, their address and click next, we will collect their email. And then outside of that, we’re leveraging, you know, giveaways, um, and ambassador programs and referral programs to try to grow the list. So what is the top converting?

11:06
email form that you guys have seen with the clients? Is it the giveaways? Yeah, so it’s, it’s interesting, right? So the giveaways gets you the most number of emails. It’s a little bit longer tail in terms of actually seeing like what that conversion looks like just because, you know, if you’re doing a weekly or monthly giveaway, someone signs up and then you have to wait a week and then you have to announce whether they want or not. And then, you know, some people convert other people don’t. So giveaway helps you collect the most email, the conversion on it’s pretty decent, but the

11:34
The interesting thing is like the incentive or the offer, that’s actually like the most immediate in terms of conversion, in terms of actually someone purchasing, even though it’s only five to 10 % and it’s less people giving their email than the other, you see the ROI there the quickest just because when someone enters their email to get a discount code, they’re typically gonna buy as soon as that discount code either shows them on the pop-up itself after they submitted the form or directly within the email. So that’s kind of like the interesting thing. So it kind of depends.

12:02
And we’re still trying to track an attribute, someone coming in through a giveaway and then converting and how they converted just since attribution is a whole thing in and of itself. Yeah. The reason why I’m asking you this question is because traditionally when I’ve done some giveaways in the past, the email quality isn’t as good, but the way I’ve been running them is like, I hate having to remember to like give out the prize after a week. So I use, I started using messenger to just give out a prize every single day automatically through the bot. And then that way I’m collecting emails, but the quality of those emails aren’t nearly as good as my

12:32
standard coupon pop-up form. So I was just curious, since you work with a lot more companies. Yeah, that makes sense. And that’s really cool and interesting about the daily messenger thing. OK, so you get your emails. How many emails should you be sending per week? Like, how do you figure out the frequency? And what is the right frequency? Yeah, so there’s two different types of emails that we’re focused on. And there’s actually three types of emails in general. So I’ll talk about the three types in general, and then I’ll talk about what each one are and kind of the cadence. So there’s campaigns.

13:02
There’s flows, flows is synonymous with email automation, and then there’s transactional emails. So a campaign is a one-time send to a group of contacts. Think about like a Black Friday sale, a new product launch, a holiday offer. Right? Those are all campaigns. And I’ll talk about kind of the cadence in one sec. The flows is an email automation. These are emails that are triggered off of an event or behavior. So someone enters their email into a pop-up that then triggers the welcome series for non-buyers, so long as they have not converted already. And then the transactional emails, I don’t talk about as much about those.

13:32
Those are very important, but the reason I don’t talk about it as much is they’re typically set up by default within your Shopify or, you know, WooCommerce, so on and so forth. are things like shipping confirmation, order confirmation. So it is definitely important to kind of edit and make those look on brand and do what you can just because those inherently have a really high open rate. Um, but I mainly talk about the campaigns and flow. So on the campaign side, the way that I think about sending, you know, numbers of emails per week or per month is you start with one per week, right? Send one per week.

14:01
Look at that open rates, look at the click through rates. Those are like the positive engagements, right? Look at the conversion and then look at the negative things, right? The unsubscribe, the market spam, the bounces. If all of those are solid, right? So if the open rate is North or at around 20%, you know, if the click through, obviously it’s going to vary depending on the kind of content you’re sending. Is it plain text? it designed? Is it an offer? Is it content? You know, the click through will obviously vary also varies by industry, but as long as those metrics look healthy and solid based off what you’re at and what your industry is at, cool.

14:31
And if the unsubscribes and mark a spam, the balances are all low. Great. Can you provide a guideline? Like what number is considered low? Yeah. So it depends. like, for example, like mark a spam, that one’s really important to keep extremely low. So I believe it’s one out of 1000 people can mark as spam. think anything over that is considered a little bit high. Right. On the unsubscribed side, typically about like half percent or lower is what you want to be. You know, if you’re at like 1 % or 2 % or 3 % unsubscribes, it’s

15:01
a little bit higher depending on the ESP, the email service provider that you’re using. For example, I Klaviyo recently rolled out benchmarks that you can kind of see based off other stores using Klaviyo in your industry, like what they’re pacing out. So I think that part is really solid just to be able to see great, we’re average at the open rates, we’re below average on click through, you know, so on and so forth. So you look at all these metrics, right? And then if they all look good, send a second email per week, right?

15:28
Second email, right, there’s not an increase in customer support tickets saying, oh my God, you send me two emails per week, what are you doing? Right, send a third email per week. And at that third email per week, if you notice like after you send one more in the fourth email, there’s friction. You know that there’s the optimal number of emails you probably want to send is two to three emails per week, right? So again, like you’re trying to straddle on between maximizing the number of times you got to send because that’s, you know, going to maximize the opportunity to hopefully drive revenue. But you also want to minimize the churn, right? You want to minimize people.

15:58
unsubscribing by sending them too many emails. And the way that you can send more emails per week, which I’ll happen to annoy one person four times or five times or six times is by leveraging segmentation, right? So with some of our brands, we actually will send four or five, six times a week, but one person might only receive two or three of those emails. Sure. that making sense? Yeah, it does. I’m just wondering though, let’s say you are sending these people three emails a week. Would you be concerned if each one of those sends resulted in a 0.5 % unsubscribe rate?

16:27
which were within your guidelines, but at the same time, you’re still shedding a bunch of people. Yeah. Yeah. I think it depends on like how much revenue we’re driving, right? Like if we’re selling these and we’re driving a lot of revenue, um, and then we can go acquire new customers for, you know, profitable, right? So I think it really depends on like the, the unit economics of like how a brand and what their LTV is, whatnot. think, know, about half a percent, I’m doing that, I’m making a lot of money. I’m probably okay with it. Um,

16:55
Again, a lot of the list size that we work with are fairly large, right? So not that half a percent isn’t a big deal. Obviously, the larger the list, the more people that is. But we’re focused like really on trying to drive A, the conversion and B, like the repeat purchase and that relationship. So I’m not super concerned if it’s a few emails per week at like half a percent. If it goes to like 1%, 2%, I would be more concerned. Okay. And then you mentioned segmentation. How do you manage that?

17:24
We were just talking about acquisition forms initially where you give out a coupon or something. How do you know which buckets to put your people in? Yeah, so for us, there’s a couple of main ways that we segment people and everything revolves typically around, you know, an engaged segment. So either an engaged segment by itself. So, you know, 30, 60, 90, 120. So people have opened or clicked over the past 30, 60 days, past 90 days, 120 days, whatever it might be. The way that we pick these segments is we want to be able to get that 20 % open rate on a campaign.

17:53
So if you’re getting like a 30 or 40 % open rate and you’re only hitting a 30 day engage, you’re probably being a little bit too strict. You probably can open that up to like a 45, a 60, a 75. And the reason that we want to get a 20 % open rate on campaigns is that allows us to have good deliverability, right? That means, you know, people are open to emails. Hopefully it’s in the inbox, potentially it’s in the promo. When you’re hitting like a 5 % or 10 % open rate consistently, that’s really bad for your domain reputation. That’s really bad for your deliverability.

18:22
So everything that I’ve done, everything that I’ve heard from any ESP, 20 % of that benchmark. So we picked the segment that allows us to hit that. And then other segments that we’ll hit is an engaged plus gender based, right? So within Klaviyo, they have predictive analytics where they can tell you someone’s likely male or likely female, right? So for males, we might show the content for men first and then for females second. And for females, we’ll show maybe the content for females first and male second, right? And just by having like the switch in that cadence.

18:51
does increase engagement from what we’ve seen because it’s more relevant right when they open the email. So that’s one thing we might do for gender. Another segment that we might hit is geography, right? So two examples there. I live in California on the West Coast, right? And it’s like 75 degrees out right now. Someone can send me an email, say an apparel company sends me an email with flip flops and shorts. I would probably buy that right now. Whereas on the East Coast, right? Maybe in New York right now, you would have to send like a

19:20
a beanie, a sweatshirt, and sweatpants because no one else is going to buy flip-flop thread if they’re not in great weather right now. That’s one way we think about geography. Another way we think about geo, a lot of our brands have both domestic and international customers. Say, for example, in the US, we have free shipping. We might segment the US people and send them a free shipping offer while internationally, wouldn’t. That geography is another.

19:49
previous buyers, someone’s purchased product A that’s complementary with product B. So they’ve bought item A, they haven’t purchased B, right? That might be another segment. So those are kind of some of the segments that we focus on most often. And then we could kind of get more granular from their VIPs and so on. So can we talk about the open rate of 20 % as your benchmark? So let’s say your 120 list, meaning it’s opened within the last 120 days, doesn’t hit that threshold. What do you do with those people?

20:18
Do you continue to send to them or like, let’s say you’re reaching like a 10 % open rate on a particular time-based segment. What do you do? Yeah. So there, there’s a couple of things that we do. So one thing that we’ll do is we’ll have a special segment set up for people that typically shop during Black Friday, Cyber Monday, right? And we’ll kind of protect these people. We won’t necessarily send to them too frequently. We’ll send to them maybe let’s say once a quarter and then during Black Friday and Cyber Monday.

20:47
be pretty aggressive because what we’ve noticed is there are just people that are on our list that have shopped last one or two years of a Black Friday, seven Monday around the holidays, but they don’t do anything around the rest of the year. we’ll kind of protect these people and keep them in a segment that will exclude from ongoing campaigns. we also want to keep them protected where we don’t suppress or delete them. that’s kind of one thing that we’ll do. But the main thing that we’ll really do outside that small sliver of people is we’ll find, so for example, depending on how many times you send per week and whatnot,

21:17
So I’ll give a couple of examples. So say you send once a week, you want to give people probably at least 10, 15 chances to open. So once a week, that’s four month. So at about, let’s say, three to four month mark, we’ll want to have those people that have not opened all those emails automatically go into a sunset unengaged. So that’s basically a fancy way of saying a breakup series. So we want to find that window of time where we’ve given people enough chances and they haven’t opened, where they’re likely never to open.

21:47
So we’ll drop them through kind of like a last chance, you here’s an offer, you know, do you want to hear from us? If you do great, if you don’t, you know, we’re going to get rid of you. So we’ll send them through a sunset unengaged, they’ll automatically have a property that says unengaged equals true, if you’re using Klaviyo. And then we’ll go through on like a monthly basis and suppress those people. So that way we’re not paying more money for them. That way we’re not accidentally sending to them and causing potential issues.

22:13
Yeah, I’m just wondering what you do for the borderline folks though. Do you just reduce the frequency for those? So for example, let’s say you have them segmented by month, right? Open the last month, open the last two months, three months, four months. Let’s say within your four to five month people, or sorry, like three to four month people, they’re at a percentage that is low, but it’s lower than 20%. Do you continue sending to that segment? So we would, yeah, we would, to your point, we would drop the frequency and we would

22:41
lump that in with like the overall sense. So what I see some people do, right, is they’ll send to like they’re engaged and that’ll get like a 30 % of rain. And then they’ll send their unengaged, which gets like a 2%, right? Like that looks really, really bad. I don’t hear many people talking about this, but like, I believe in a process of blending the data. So that way, you know, ESPs don’t actually know what’s happening. And that sounds kind of like sneaky, but like, it’s just a way to go about it where I’d rather have, let’s say, you know, a 15 % open rate, um, sending to.

23:08
So that looped in group or even the 10 % open rate that you mentioned versus having a 30 % on one and like a 2 % on the other, right? It looks really, really bad. But yeah, I would probably send to them if you’re three times a week, four times a week, maybe once a week, once every other week. And then from there, as those people kind of expand and they don’t open, then they’ll hopefully fall into that unengaged segment, which will then trigger the breakup series. Okay. That’s actually instantly what I do. I was just kind of curious what you do, mainly because Klavia actually sends you a nasty email.

23:39
if your open rate drops below a certain amount. Exactly. And, you know, this might be going too much back into my gray hat days with like the cold email stuff. But what I learned back then and no ESP would ever admit this or agree with this, which is fine. But we basically used to send tons of high quality outbound cold email. Like we were sending millions and millions of emails. And what we actually noticed is like these ESPs and people

24:06
They don’t actually care whether someone’s opted in or not, right? They say that they do, and they said that they don’t tolerate purchase lists. And I’m not telling anyone to go do this, right? This is something that worked a long time ago and you have to be very careful. But what we notice is say we had a hundred thousand people opt in into our newsletter. We could merge, let’s say 5,000 of these people that were completely cold in with this hundred thousand person list. And the ESPs would never know that those people were added and uploaded because the good people would mirror the metrics of the bad people. So I’ve known for a long time,

24:34
blending and the mirroring of the data is something that was really kind of interesting. But anyways, that’s kind of like something I figured out before. And that’s kind of why I still do that practice today. But all the people today are opted in all white hat, you know, none of this gross stuff. If you sell on Amazon or run any online business for that matter, the most important aspect of your long term success will be your brand. And this is why I work with Steven Weigler and his team from Emerge Council to protect my brand over at Bumblebee Linens.

25:02
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25:32
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25:57
I’ve also heard of ESPs putting you on a worse IP or a lower quality IP as well. Like if you send too many emails with a lower open rate, just kind of behind the scenes. Yeah, so you have either like a shared IP or a shared pool or kind of like a dedicated IP or a dedicated pool, right? So they typically group people together based off of size of a list and also engagement and behavior, right? So the great thing about a shared thing is if you’re starting out, you get a

26:27
leverage to some degree, like the shared pool and the benefits that being said at the end of the day, like, you know, one rotten egg really spoils the bunch. So if you’re on a pool where someone is really, you know, doing things that are, you know, I don’t want to say illegal, but doing things that are not best practices, right? It really can hurt you. Right. So a good practice and recommended practice for people is to move to like a dedicated thing. So that way you control your own destiny. But again, it’s, it’s, it’s a little bit more to it than that, but to your point, like,

26:54
Yeah, that’s definitely something that can happen. So you do have to be careful and mindful. If you’re following best practices and you’re getting in trouble, it could be worth looking into, you know, asking who else is on the shared pool. What does that look like? Is there ability to move to a different or better pool? And sometimes too, depending on how much you’re paying the ESP, right? You might be on a preferred pool. you recommend going dedicated IP as soon as you can then? So

27:20
I want to say yes. I, all my own personal stuff, like my personal newsletter and everything that I do, I do do a dedicated one. That being said, like a lot of people that are going to hear this and listen to this probably aren’t following all the best practices, aren’t probably being religious about cleaning the last and doing these things. So I would hate to say yes and get people in trouble. Like if you’re not sure what you’re doing or you’re kind of doing email, even if you’re doing it well, but you don’t know all the things that you don’t know, I think a shared is probably safer. Okay.

27:49
Well, we’ve been talking about open rates for a while. What are some of these things that you do to get these crazy open rates that I’ve seen you get? Yeah, so it’s a couple of things, right? Well, on the automation side, right? Like the open rates there inherently are going to be higher. So on a welcome series for non-buyers, email one, you should be seeing 40, 60, 70%, right? Like the open rates on these automation emails should be really, really high. So you have to take advantage of it. The abandoned cards to customer thank yous.

28:18
So on the automation side, just because someone has taken an action that will then trigger an email, that relevance is what I think allows some of those emails to be super high and engaging. But on the campaign side, again, it’s picking the right segment, leveraging the right content. So basically, talking about the open rates, just going back to that really quickly, there’s four main factors that determine whether someone’s going to open your email. One that you have some control over, but not really, is where your email lands.

28:46
the inbox, is it in the promotion, is it in the spams? You have every power in your hand to stay out of the spam by following best practices. Whether you’re in the inbox or the promotions, it’s really kind of a coin toss. It really just depends. The more things that you do that are personalized, having live text and plain text involved with your emails, the better. Again, that’s not a guarantee. There’s no silver bullet. So where your email lands will have an impact on your open rate. Next is from left to right in your email, you have the from name.

29:16
the subject line in the preview text, right? The from name. So if it’s my newsletter, it’s Chase Diamond, right? If it’s your newsletter, it’s Steve or whatever it might be. My wife quit my job. Right. Do the people, are they familiar with it? Do they recognize it? Are they interested in the content that you sent previously? If yes, great. Then the open rate. think the open rate is the most important thing that you can control is the, or sorry, sorry. The subject line is the most important thing that you can control for the open rate. Is the subject line something that’s interesting, intriguing? it personalized? Is it witty?

29:45
but also has to be related to the content. And then the preview text is that text that you see to the right of the subject line. That’s almost like a second subject line. So you have to use the two hand in hand to make people really have enough info, but also leaves them wanting a little bit more that they do open. So those are kind of like the four levers that you can kind of pull. You have to be running A-B tests on the subject line. After you’ve tested subject lines, you have to be running A-B tests on the preview text, things like that. So those are the things that impact kind of the open rate. Does that make sense?

30:15
Yeah. So how do you run your AB test? Do you just send to a very small segment your, your test? then once you find out the winner, then you send the rest out. Yeah. And it depends on the list size, right? Like we want to make sure that there’s enough significance on the test that is worthy of being, you know, statistically significant. So depending on your list size, right? Like some of the lists that we work with are a million people big, right? So we could send to 10 % of that list, right? Version A and version B, and we have ample amount of data.

30:45
However, if your list is really small, you might need to send to a larger percentage on the testing just to have significance. So if you have a 10,000 person list that you’re sending to, you might need to hit 20 or 30 % of the list in a test. So that way you have at least thousand or 1500 people receiving each variation. But typically, right, a fair split for most clients we work with is a 20, 80. So 20 % of people receive the test and then the 80 % of the people will receive the winning variation.

31:14
And there’s two ways that we run tests. You can only one one away at a time. If we’re running something that tries to get people to open it, say a subject line, we’ll run a test on the open rate. So depending on which open rate has the highest percentage, we’ll then select that subject line. Or if we’re running a content test, we’re only going to have one subject line. The subject lines will be the same, but instead we’re going to be testing the content. So we’ll want to have that test run off the click through, right? So whichever click through has the highest percentage, we’ll send that version. Do you run an A-B test on every single send?

31:44
for the companies you work with? Nine out 10 times we do. The one out of 10 times that we go is when something is so last minute and so urgent that needs to go out that we forgot about, or there’s an emergency, right? So, say there was like a weather or something that affected fulfillment, right? And we needed to send an email out to everyone that’s purchased over the last week or something. And we would just send that out ASAP with our best guess and our best judgment because that’s really time sensitive. So when we have a little bit more time, you know,

32:12
And typically we’ll run an A-B test for anywhere on like two to four hours if we can, right? So two is typically the shortest amount of time that we’ll recommend and then four is probably the longest. Anything past that you’re maybe kind of missing out on kind of optimal send times. So nine out 10 times A-B test, you know, we do. What is, can you give me an example subject line that just kind of killed it for an e-commerce store that had a really high open rate? Just to get, people an idea of what like a good subject line is.

32:41
Yeah. So for, let’s say like a welcome series for non buyers, right? You know, we honestly keep that pretty simple. Um, let’s something like, you know, welcome to whatever, or, know, here’s your 15 % offer or congrats your end, you know, welcome to the family. So, so like, we kind of keep it somewhat simple, like on the welcome series, know, but other emails, you know, we might leverage, let’s say like something in brackets, right? Like let’s say for example, like new in kind of brackets, and then we might have like,

33:11
new, you you don’t want to miss this or something like, so we’re kind of leveraging things like more based on FOMO, like you don’t want to miss this or last chance or going fast or something around time. we’re leveraging like countdown timers within emails. In my weekly newsletter, actually every single Monday that I send, I actually break down the subject line of the week that we send. And I also break down like what the open rate and the click through was. And, you know, even saying that I can’t even remember what the last one was that I sent two days ago, right? Sure. Yeah.

33:41
Yeah. What is your view on single versus double opt-in? Because I know all the ESPs want you to use double, but realistically, I don’t know any e-commerce store that uses double. And so I’m just kind of curious what your opinion is. Yeah, I’d say again, nine out 10 times we’re using single opt-in. The ESP is right. They say that’s best practice. They always push you to do that. Within Klaviyo by default, they actually have double opt-in set up and you actually have to ping their customer service saying, hey, can you please

34:08
unlock the ability for me to go to a single opt-in, they’ll unlock it. Then you have to go in for each list and click that you don’t want it. Right. So not that they make the process impossible, but they do add some barrier and then you add some friction because they want you to leverage it. say for example, like you have a hundred people that enter their email into your pop-up and you have a double opt-in, you you might only get 50 to 70 % of those people actually go into the email and clicking confirm, right? Maybe even less. So you’re missing out on a lot of people that.

34:36
might’ve just missed that first email that could be engaged. So yeah, nine out of 10 times we use single opt-in. The one out of 10 time that we’ve known is if someone has a lot of bounced emails, I don’t know if they got hit with something that’s spam or maybe they have like a spin to win, right? One of those wheel of things and people just keep entering random emails cause they want the best code. Maybe if you’re running Facebook lead ads, right? And you’re not having people, you know, manually enter their email and it’s defaulting their email from when they’re in college, right? That they don’t have access to.

35:03
So in rare cases where like the bounce rate is really high on like a first email, then we’ll switch to a double opt-in for a period of time just to see if that kind of changes it. But yeah, I’m a big believer in single opt-in just because I follow the best practices and I’d rather have more people on my list. And then I’d rather filter them out later by myself versus Clay deal not allowing me to send emails that don’t confirm. Yeah, I I found cases where the double opt-in email doesn’t even get delivered. So you actually have no chance of getting them on your list in some cases.

35:33
Right, that would suck. And I could definitely see that happening, Email is definitely not like a perfect thing. Sometimes emails that are supposed to go to the inbox go to the promotion spam and vice versa. So we talked about some of the default segments that apply to most stores like demographics and opens. What are some of the specialized ones that you create for customers? So one kind of cool thing that we do within Claviy in particular, I’m not sure if you can do this in other ESPs or not. Hopefully you can.

36:02
But within Quavio, you have the ability to create custom tracking links. So I’ll give you kind of two examples. So most companies have like a product navigation, a product header, right? We’ll say something like, men’s, women’s, children’s, sale, right? All these different buttons that you can click. We’ll actually tag each of those buttons. That way when someone clicks on one of them, we’ll automatically add a property to their profile saying, Steve clicked on the males category, right? And Chase clicked on the males category.

36:29
and our wives clicked on the females or the kids category. So we’ll tag the product navigation within these emails. So that way we know not only if people have purchased what they’re interested in, but also basically just off of intent and browse and viewing something, what people are interested in. So that’s one thing that we’ll do. So we’ll have a specific flow or specific segment for someone that’s clicked on the category of men’s. And then we’ll run that against Klaviyo’s predictive analytics of whether they think they’re likely male. We now have two points that say,

36:57
their gender and they’re interested in this, right? So I never talked about gender before, but that’s one thing that we do on that. The other thing that we do is, for example, with the child, the child breed, they sell tons of apparel, they have tons of different categories. It’s almost impossible to know what interests people have unless they’ve viewed or added something to cart. So what we’ll basically do in their welcome series is we’ll pick the top nine categories. We’ll show them in the email, like, hey, here are our top nine categories. Here are funny t-shirts, drinking t-shirts, sports t-shirts, et cetera.

37:27
And we’ll have each of those links and those buttons tagged for when someone clicks on it. So, you know, I like sports. So if I click on the welcome to your email of the sports category, that will automatically update my profile saying, is interested in sports. Then we’ll start sending campaigns to you about sports t-shirts and whatnot. Right. So we’re using like these links to track these different types of things. You also could do a survey within an email, right? Of like, you know, Hey, what are your thoughts on, you know, this versus that? Do you like buying things one time or subscriptions?

37:56
So if we’re working with a brand, Hydrate, that has a one-time purchase or a subscription purchase and someone clicks, hey, I like to buy things one time, all the discounts and campaigns we’re going to run, it’s going be promoting one-off products. However, if someone clicks that they’re interested in subscriptions because they want to bundle and save and not have to remember every month to order, we’ll start sending people offers about subscriptions. So those are some other things that we do that I think are a little bit more advanced that people aren’t really talking about.

38:24
So someone might only get an email two or three times a week, but you have all these segments in there, which really means that you’re doing a lot more sends, right? So you’re doing a lot more sends to different segments. how do you, how do you work out like the amount of work involved in sending to so many segments with, you know, the amount of sales and the segmentation that you can do? Does that make sense? Yeah, 100%. And again, I think we’re at a little different like revenue stage and list size. We’re like,

38:53
some of these slivers of segments are still pretty big, right? We’re working with hundreds of thousands or millions of people list. So for us, like we basically plan all campaigns a month out and we basically build like three, four or five different kind of master templates that we’re going to use for the month. So a lot of this is more like modular, right? So in the case of sending a campaign to men and a campaign to women, it’s more or less the same thing, just the order of swapped, right? So it’s just a matter of putting, you know, women’s first for women.

39:23
and men second, then for men’s, know, men’s first, women’s second, right? So in theory, it sounds like a lot of work, but in something like that, where we’re going to send two different campaigns in a week to gender, it’s pretty easy. In some of these other cases, right? We have a lot of building blocks from other clients, from the same clients that we’ll send three months ago, right? So if we’re to send a UGC email, right? User-generated content email this week, of harping on social proof and kind of just showing people different.

39:52
styles and diversity. We can pull elements that we did from the UGC campaign from last quarter. So we’re really focused on efficiency. And a lot of times because these lists are so big and because they’re so segmented, the ROI and the engagements there, and also too, we’re an agency. So we are getting paid based on the number of emails that we send. Obviously the emails have to be profitable for our clients. it’s kind of like the synergy for us at least. But I think for a smaller store that’s doing it in-house, that has limited resources,

40:22
I think just sending two or three emails a week to an engaged segment, that is better than not sending any emails at all. Sometimes good enough gets the job done. I’m sure people that are listening to this are going to be $100,000 a month, they’re going to be a million dollars a month, they’re going to be $50 million a month. You do have to make sure that the juice is worth the squeeze. I think a lot of people get caught up with not sending enough emails per week. That’s how I would err on anyone listening that is thinking this is so overwhelming is create templates.

40:51
Start trying to plan out a couple of weeks or a month in advance. Leverage as much of the same assets as you can. Just swap in new graphics, maybe new call to actions, but leverage the templates you have. Don’t custom code every single email if you don’t have to. In that example that you gave where you were tagging people based on which links they clicked, what do you do with the people that open but don’t click at all? Are you just dealing with those people who clicked in a separate segment and you’re still sending emails to the people who didn’t click anything separately?

41:20
Yeah, exactly. So the people that open, if they don’t click anything, they’ll just be getting a little bit more like, you know, generic emails since we’re not specific to like what their interests are. They’ll kind of be like in the, the engaged bucket, right. Or like the gender bucket or the geo bucket versus like, you know, the engaged male that like sports, right. So obviously we prefer to be super targeted in laser focus because obviously that’s going to increase open rates, cook through rates, conversion rates. But, but truthfully, a lot of people don’t do those types of things. Right. So.

41:50
I don’t have an exact percentage, right? But for every person that’s opening the email out of every 10, we’re probably only getting like one or two people, potentially three people to give us these kind of interests or these questions or these behaviors. And again, they don’t know that they’re doing this, right? There’s no incentive for them to do it. This is the thing that we’re collecting on the backend. So from what I understand, if you can have a tighter segment, you’ll send specific emails to that segment. Otherwise, they go to this general pool that you’re already sending to people who are engaged with your list overall.

42:19
That’s correct. And also too, think one thing that I should have mentioned before is it really depends on like what you’re selling, right? For example, with the brand Hydrant, they sell basically two different main products and they have different flavors of each. So one product is just like a hydration kind of supplement packet by itself. The other one is hydration plus, was basically just electrolytes plus caffeine, right? They have two different products and then they have different flavors of each. So with them, we can only do so much, right? We can try to learn about someone’s

42:47
behavior in terms of, again, the subscription versus one-time purchase, um, flavor preferences through like a quiz, et cetera. But we can’t do like the gender. We could do geo to some extent, right? Like if it’s really a hot day, we might come up with a last minute sentence saying, Hey, you know, you’re in, you’re in California and make sure that you’re hydrated today. It’s going to be 90 degrees. Um, so it really also just depends on like the number of skews in the category that you’re in things like, you know, apparel and home goods and some of these other categories.

43:15
really lend themselves to doing a lot more of these things where other companies that are a single product store or just a few product stores, you have to be a little bit more crafty and there’s less things that you can do. Right. What is your best advice on escaping the promotions tab? Yeah, the best, again, there’s definitely no silver bullets. I don’t want this to come across like that, but the best thing that you could do is leverage personalization in the subject line and then also in the content. And then basically leveraging as much

43:44
live text as possible. And basically what I mean, right, is there’s plain text, right? A lot of times companies just have plain text that looks like text, but it’s actually an image. Actually having text that you type out within the email provider itself, that’s not behind an image. Having live text is, I think, really important. So I think those are kind of good things.

44:06
The earlier on that you can get people to click an email, the earlier on you can get people to reply to your email, the earlier on that you can get people to hopefully drag your email into the inbox. Those are all other things that you could do, but again, those don’t guarantee hitting the primary. Since you just touched on this, text or HTML based emails? Man, I know there’s such an ongoing debate about the two. And again, I don’t mean to be that guy, but I’m really somewhere in the middle. I think it depends on the brand, it depends on the email.

44:35
A lot of the brands we work with are really obsessed with brand and that’s everything to them. So they come in wanting to err on the side of being more designed and more branded because that’s them. And we’ll slowly start pushing them away from like 100 % design to like 75 % not design, 25 % kind of plain text. So a couple of use cases of plain text that I think you have to test. The first email after someone purchased, customer, thank you email.

45:00
typically coming from like the founder or the community manager, whoever it kind of is, the evangelist of the brand, you know, just sending a thank you and their gratitude, I plain text, maybe even having a signature at the bottom. I think that feels like a good one. Say you’re sending three abandoned cart emails, having that third abandoned cart email basically be like, hey, I my team sent you two emails this week, wanted to check in to see if you had any questions, let us know if there’s anything we could do with you. think that’s a great candidate for a plain text email. I even think sometimes, you know,

45:29
certain campaigns, like whether it’s like, you hey, quick heads up, we’re dropping something new tomorrow, stay tuned. Even a simple plain text email like that, I think is great. So I think it depends on like your audience. think it depends on, but we do send a lot of branded kind of HTML emails for our clients just because we happen to work with a lot of brands that are focused on how they are perceived. sounds like anytime you want to come across as more personal, you might want to go plain text based on your examples that you just gave. Yes. Right. Okay.

45:59
All right, last question. What are some of the coolest things that you were doing in email marketing today right now that most people are not doing yet? Yeah, I think a couple of things. I think one goes back to like the custom tracking, right? The link and learning more about behavior. think that’s one. Two, this is actually something I’ve never talked about, I think on a podcast, but basically what we’re doing. So because we have clients that have such a list and again, because churn is inevitable, people are going to unsubscribe. No one’s really taking advantage of that unsubscribe window, right? So

46:27
happens is you click on subscribe, you say, want to unsubscribe, then you basically get an unsubscribe confirmation on the page. We’re taking advantage of that real estate that says, hey, Steve, you’ve been unsubscribed, but by the way, in the next 24 hours, if you do want to make a purchase, here’s a custom discount code. So we’re actually showing someone a discount code when they unsubscribe on that window because we’ve lost them anyways. We might as well take a last chance to get them to convert. And I wouldn’t say the conversion is high as a percentage, but in terms of the number of people opting out,

46:56
it since that’s so big number of people that are actually converting is pretty large. I wish I could remember the exact numbers, but one of our brands, a bigger brand, I don’t know, they highly had, let’s say 50,000 people unsubscribe over the course of, I don’t know, eight months or 10 months or a year, I don’t remember the exact number. We ended up converting of like the 50,000 people. think we have like 500 or 700 people actually convert. That’s really good actually. Which isn’t huge, right? As a percentage.

47:23
But like that was pretty significant in terms of like 500 sales that were like free money. So again, because it’s so much volume, we’re getting a lot other stores, right? Maybe, maybe it’s lower, but any sale you get, even if you get one sale, 10 sales, 20 sales on people that aren’t subscribing, that’s free money to you. So that’s one thing that we’re doing that I’ve never really seen anyone else do that I’ve never really ever talked about out loud. that’s another.

47:49
One thing that we’re testing, I can’t really talk about it a whole lot yet since I don’t have a lot of ample data, but we’re testing AMP, which is basically accelerated mobile pages, which makes emails behave a lot more like landing pages. So it’ll make emails a little bit more interactive around being able to do like a product carousel. So just like you’re on a website, you can click between product images. You can do that same type of thing within an email. They have this thing called the accordion where you could click on a category and it can expand it out.

48:16
So basically what we’re trying to build is like an FAQ within an email at the very bottom. Now, what’s your return policy? How long is shipping going to take? And it’s kind of all stacked together unless people click it. So those are kind of the things that we’re testing. There are certain barriers, like you have to get approved by the ESP, you have to get approved by Google, you have to be highly technical. So it has proved to be a little bit challenging to kind of roll out for clients, but I’m kind of starting to test this a little bit just on like on my own.

48:45
personal newsletter. So hopefully we’ll be able to send something like that out over the coming months. What about the use of GIFs or animated images in the emails? Do you guys do a lot of that? We do a lot of GIFs. So right now, at least within Klaviyo, they don’t support the ability to show videos the way that you have to be able to, if you want to link out to a video, you either have to do a screenshot of like, you know, the video with a play button, or you can kind of do a, you know, a GIF or whatnot to try to get people to do it.

49:12
So that’s kind of one thing that we do to get people to go to a video if we’re going to do it. We also use GIFs a lot to kind of get around the whole AMP thing, right? If we want to do like a product carousel or kind of like a UGC where we’re shutting off people, we kind of leverage GIFs. I think, you know, we’re probably sending for clients, we work with 50 clients on the email side right now. You know, we’re probably sending, I don’t know, hundreds of emails a week, conservatively. I’d say probably like at least a quarter of those have a GIF. Nice. So Jayce, we’ve been chatting for a while.

49:41
Time has kind of flown. I wanted to give everyone out there the opportunity to find you in case they need your services or they have any questions for you just about email in general. Yeah. So for me, the two places that I’m posting a lot of content in, and they’re both free, is on Twitter. So my handle is Ecom Chase Diamond. There’s no way in diamond. So it’s Ecom Chase, and then last name is D-I-M-O-N-D. So Ecom Chase Diamond, tons of free e-commerce email marketing tips.

50:09
And then on there, you’ll be able to find my free weekly newsletter. Every single Monday, I send a interview, a guide, a tip of things that are working for our clients. So those are my two free resources that I think people will get a lot of value from. And if they need your consulting, I don’t know what the minimum company size that you work with us, but if you wouldn’t mind just mentioning it in case people are looking for those email marketing services. Yeah, on the email side, we’re typically working with brands that are on Klaviyo.

50:37
They have a list size of at least 10 to 15,000 people at minimum, and they’re doing north of a million dollars in terms of annual e-com revenue. Okay. And then also the, I guess the sister side, I shouldn’t call Nick a sister, I guess, but he does the like Facebook ads and paid social essentially, right? Yeah. Client size is pretty typical. They’re around the million dollars or more in terms of annual revenue. So basically we’re focused on paid social, primarily Facebook and Instagram, and then

51:07
We also do have a content studio where we’re a videography and photography for social and also email. Cool. Hey, well, Chase, I appreciate you coming on, man. I’m sure the audience learned a ton about email and we talk about a lot of things that a lot of people aren’t doing. So that’s great. Thanks a lot. Yeah, thanks so much, man. Appreciate it.

51:29
Hope you enjoy that episode. Now if you aren’t sending out emails on a regular basis and segmenting your audience properly, then you are leaving a lot of money on the table. For more information about this episode, go to mywifecoderjob.com slash episode 363. And once again, I 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 Steve.

51:58
That’s P-O-S-T-S-U-R-I-P-T dot I-O slash D-U. I also want to thank Clavio, which is my email marketing platform of choice for eCommerce merchants. You can easily put together automated flows like an abandon card sequence, a post purchase flow or win back campaign. Basically all these sequences that will make you money on autopilot. So head on over to mywifequitterjob.com slash K-L-A-V-I-O-Y-O. Once again, that’s mywifequitterjob.com slash K-L-A-V-I-O-Y-O. Now I talk about how I these tools on my blog. And if you are interested in starting your own eCommerce store,

52:28
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
And Andrew, if you’re listening to this episode, let me know what you think. Now, before we begin, I want to thank Postscript for sponsoring this episode. Postscript is my SMS or text messaging provider that I use for e-commerce, 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. Anyway, Postscript specializes in text message marketing for e-commerce, and you can segment your audience just like email.

00:55
It’s an inexpensive solution converts like crazy and you can try it for free over at postscript.io slash Steve. That’s P-O-S-T-S-E-R-I-P-T dot I-O slash Steve. I also want to thank Clavio who is also a sponsor of the show. Now, are you working around the clock to build the business you’ve always imagined? Do you want to communicate with your fast growing list of customers in a personalized way, but in a way that gives you time to work on the rest of your business? And do ever wonder how the companies you admire are the ones that redefine their categories do it? Companies like Living Proof and Chubbies.

01:24
Well, they do it by building relationships with their customers from the very beginning, while also evolving in real time as their customers needs change. These companies connect quickly with their customers, collect their information and start creating personalized experiences and offers that inspire rapid purchase, often within minutes of uploading their customer data. Now, Klaviyo empowers you to own the most important thing for any business, the relationship between you and your customers and the experiences you deliver from the first email to the last promotion. And to learn more about how Klaviyo helps you own your

01:54
growth, visit claviyo.com slash my wife. That’s K L A V I Y O dot com slash my wife. And then finally, I want to mention a brand new podcast that I recently released with my partner Tony. And unlike this podcast where I interviewed 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.

02:35
Welcome to the My Wife Could Her Job podcast. Today I’m thrilled to have Pat Haggerty on the show. Now I’ve been looking forward to this interview for a very long time and we’re all gonna have a good time together today. Now I’m not sure if you remember the very first interview I ever conducted with Andrew Udarian from Ecommerce Fuel when he sold his business, Right Channel Radios. Well, Andrew sold his drop shipping business to Pat towards the middle of 2016 and since the sale, Pat has grown Right Channel Radios significantly.

03:05
And his business selling CB radios continues to thrive today, especially during COVID. So today, we’re gonna have Pat teach us what he did over the years to grow his sales and make Andrew totally regret selling his business. And with that, welcome to show. Pat, how are you doing today? My wife quit her job podcast. What’s up, Steve? Oh, it’s good to catch up with you, man. I had a really good time when I went out to Montana that one time. I really want to go back actually, whenever I can travel again. Yeah, yeah, you got to get out here.

03:35
You gotta get out here with it’s a better place with you here, Steve. That’s for sure. You know what’s funny? A lot of my buddies are moving out there right now. They’re probably driving at the cost of property out there as we speak. Yeah, they’re the worst. We don’t. don’t like your buddies. One that you can come, but the rest of those jerks keep them out of here. It’s thing. I mean, I just talked to actually one of the guys who works dual plane, dual planes, drop shipping software. Yeah. But one of the like my main rep over there.

04:06
He’s coming out here and he’s like, hey, we just sold our place and we’re looking for a place in Bozeman, but it’s really hard to find a home. And I’m like, yeah, it’s your fault. And all the other folks just like you. No, it’s true though. It’s tough to find a home here. Property values have skyrocketed. So I guess my home’s worth a lot more, so that’s fun. But we’re also trying to buy another place and it’s really hard to do that. Yeah, I wouldn’t be surprised if it becomes the next Bay Area over there.

04:33
Oh, don’t say that. anyway. Catch us up. Okay, so let’s go back to 2016. When did you acquire Right Channel and what was the multiple? Do you remember? So yep, closed on the sale of Right Channel radio’s May 31st, 2016. And the multiple is just over three. I think it was like 3.1 something. Which basically means that within three years, provided you didn’t even go at all, you would have gotten your money back, right? Yep.

05:03
And are you still the sole owner of the business? You know, I’m not the sole owner. I do have a couple very minority partners. When it came time to get financing for the business, one of my partners is my parents, which I’m actually thrilled to have them a part of it. But essentially, when I went finance the business, I needed a couple co-signers on the loan that had more assets than I did.

05:30
And then I think back in the day, it was just you and maybe one VA. Is that right? That’s correct. Okay. And then now do you have more employees? Oh, man, it’s been a wild ride. Yes, I do have more employees. And since I’m on the business, I started off with the same model me myself one VA, I’ve moved to I’ve moved to using some contractors in the business. And now I have two stateside employees. these full time employees? Not not full time, not full time to

05:57
part-time employees doing phones and customer service responsibilities. And then I have a contractor who does a bunch of project management along with myself. And so it is the four of us who are kind of deeply ingrained in the business at this point. Yep. Nice. And what is the business model of the store? Has it changed? Is it still pure drop shipping for the most part? We are drop shippers, drop shipping for the win, my friend. Nice. Yeah, the model’s been great. yeah, we…

06:27
Yeah, so nothing’s really changed. We inventory a very, very small amount of product, but not enough to call us anything other than a dropshipper, that’s for sure. Have there been any plans to like private label anything under your own brand or is it, are you planning on still sticking with the dropship model? We will primarily stick with the dropship model until it doesn’t make sense to do so any longer. Yes, I’m going to, the plan is now to just take some very vehicle specific mounts and try to.

06:56
when new vehicles come on the market. Because one of the things we sell for the folks who don’t know, so we sell radio equipment, you need to have put an antenna on your vehicle for a lot of the equipment we sell. And so you need a mount that’s specific to whatever make model of vehicle you have. Sometimes the manufacturing companies for these mounts sort of lag behind with new vehicle, like new vehicle body styles and things like that come out. So we just want to be on the, I guess more on the forefront of building those mounts and labeling those. And so that’s the plan and that’s

07:25
That’s what we’re gonna be moving towards on the latter part of this year. You know what I really like about this interview here is I get a lot of questions just on drop shipping in general, which I’m hoping you could answer as part of running a successful drop ship store. So first of all, a lot of people are worried about the margins. Would you mind commenting on like what your average margins are? Yeah, so I try to keep our margins at 30%. Okay. 30 % or higher. Yeah, it can be tough. There’s definitely times.

07:53
It’s a dip below that. fact, in December, I was closer to that 25 % and we’ve had to bump it up. Shipping has become a real issue. I think that’s been the toughest thing because both because of the amount of volume we’ve done, especially this year, not not we, but I’m talking about us as a whole, like, let’s say America, the amount of packages America’s ordered has caused both UPS and USPS and other shipping companies to increase their rates and do increase their rates, reduce their promises.

08:23
and generally do a worse job of delivering packages. Yeah, that’s for sure. Yeah, no kidding. That was this last year, especially towards the latter part of the year, the thing that has been squeezing our margins the most. yeah, mean, it’s a very, if you’re drop shipping, for anybody who wants to get into it, you want to find a product that you can really add some value to, right? What we don’t do is we don’t just throw a bunch of products up on a page and expect that.

08:50
somebody’s gonna buy them. You have to be able to provide some sort of tangible value to your customer, whether you’re a dropshipping business or any other business, whether that’s with your product, whether that’s with your service. I mean, at the end of the day, you just have to bring value to the customer and that’s why they’re gonna choose to buy Actually, what is your primary value add? More technical knowledge, product technical knowledge, installation advice, the products that we carry.

09:18
aren’t as straightforward, like a lot of them aren’t plug and play per se. So it requires some specific knowledge to know, what parts do I need for this complete radio system for my Jeep? Let’s say they just brought a brand new 2020 Gladiator and they want to, you know, outfit it with a CB system or GMRS radio system. And they’re wondering, okay, what mounts do I need? What kind of cable do I need to go from the mount, you know, to the radio? What antenna is right? And then once this stuff is installed, you know, for CB, you actually have to like,

09:47
you have to tune the antenna. It’s hard in a day where everything is plug and play, right, to imagine that there’s some equipment out there that you actually still have to install and then tune for it to work properly. And so because there’s a lot of complexities around our product, we’re able to answer the questions around those in a way that drives sales and gives customers great experiences. So in terms of pricing then, presumably there’s other people that sell this exact same products that you carry, right? absolutely.

10:16
Would you say you’re on the higher end of pricing or in the middle or low? I try to be on the higher end. However, it’s interesting competing with marketplaces because I was just alerted yesterday by a customer that one of our top selling antennas they said oh man, you’re you’re cheaper than Amazon and I thought to myself I need to raise the price of that You know, I’m like I’m definitely selling it for two less. Yeah, we we try to be on the higher end right because we we bring value

10:45
in ways that a third party marketplace can’t. Or a marketplace can’t. So yeah, we try to be on the higher end. So let me ask you this then, what if I call you up and I get all this advice and then I go and buy it from somewhere cheap? Is there some service contracts that you provide that make me want to buy from you or is it just goodwill? Oh yeah, just goodwill. Presumably you’d want to be a humane person.

11:12
and you wouldn’t do that to somebody. No, I’m just giving you a hard time. I was like, of myself, oh, would I do that to you, Would I do that to you? No, I mean, it happens from time to time. But the truth is, most folks care to buy from somebody who knows the product. the thing is, Steve, it’s not like we’re that much more expensive. talking maybe we’re $10 more, right?

11:40
For a lot of people, it’s worth $10 to do it. Now, if we were $50 more, that would probably start to create some real problems. But I’m talking like, yeah, we’re like maybe $10 over what somebody might be able to piece something together for on their own, but then maybe they miss a part, right? And they have to order it again. That costs time and delays. then if they order from us, if they have issues or if they have questions, they can actually call and talk to a person about it who knows something about it. I mean, you can’t call, you couldn’t call Amazon about.

12:10
You know, Yeah, definitely. mean, what kind of I mean or or anything else by that, you know, so there you go. So that implies then that everyone on your support staff is very knowledgeable about the products that sounds really hard to find, actually. You know, it the products that we have are complex in some ways, but, know, I’m actually just currently training, training a new hire. And this was his third week, and I’d say he’s very close.

12:40
I mean, he’s already had customers comment and say, hey, his name’s Paul. they said, hey, Paul is super helpful. Really appreciated his product knowledge and expertise and just patience to talk me through the process. That happened just a couple of days ago. So, wow, yes, it’s technical in nature. And there are some things that I will always know that maybe my support staff isn’t going to be able to communicate. They’ll be able to communicate 95 % of it, no problem and help.

13:09
99 % of problems. So it works. Do you get a lot of sales over the phone then?

13:17
Good question about. I’m trying to think of what our percentages were last year. It was less than 10 % phone sales. I want to say it was closer to seven, which is pretty actually, which is pretty weak for us. The year before we did more last year, we did just a ton more volume though. We did did also some a fair amount of work on on CR on some conversion rate optimization tactics, creating our.

13:46
making our website a little bit more mobile friendly to bolster our conversion rate a little bit. So I think that that’s also pushed that percentage down a little bit. However, I do feel like we have a handful of touch points with customers when they call us or email us and then they go self-serve purchase online. Okay. And the last time I interviewed you, Darian, about his business, it was obviously before you’d acquired it. I remember him telling me that it was pretty manual.

14:11
I think he said like at the end of the day, he had spreadsheets that he sent off to distributors to have things shipped. Is it more automated now? Much more automated. You know, since that time, you know, there’s there’s been soft drop shipping software developed. And truthfully, one of the things I’m working, spending a lot of time on now is just really getting getting our drop shipping software set up to so so everything is is very automated. It’s very intelligent. I mean, we used to have to back in the day, you know,

14:39
we would have to manually, we were manually inputting tracking numbers. That was one of our VA’s primary jobs. You we would get an invoice, the tracking number, they would go on the website and literally copy and paste it in there. But now obviously all that information is automatically uploaded into Shopify from the drop shipping software we use called Duoplane, which is great. They have a great team over there. Is that Sanaki’s friends company? Yeah, yeah, Sanaki’s former partner, CINNA. I can’t remember CINNA’s last name, but yeah.

15:08
Can you just describe briefly what the software does so that it does it apply to most dropship vendors or do they have to have a tie into it as well? So they they can tie it in. So a couple of my vendors are very low tech and so they have some. Some kind of pretty old data feeds and inventory systems. All that to say what the system does is you know orders come in through us. You know.

15:36
through my website, through Shopify, those upload into Dualplane. Dualplane looks at the orders and looks at the, you know, take a look at the SKUs on the orders. And then the way that we have it set up is it will then route that order, send that order to the distributor that is closest to, that has the product in stock and is closest to the customer to reduce shipping costs and all that good stuff. And then it will ship out. If there’s an issue, then our customers or our vendors would say, hey, you know, we don’t have this part.

16:05
maybe let’s say if there’s something wrong with the inventory feed and, and it shows they had the part and they didn’t, they would communicate that back to us and we would just route it to another supplier. You can split ship, you can create, you know, some different, different rules within, within dual plane, how you want your orders shipped. And you could just choose the lowest cost supplier and have it go that way all the time too. Like I said, we, we choose to go closest to the customer for the quickest, you know, quickest shipment and, uh, you know, quickest delivery time.

16:36
by low tech, let’s say your distributors really low tech, like how would you expect them to connect to Duo Plane? is it like, how do you set, like to your lowest tech distributor, how do you send the order? Or how does Duo Plane do it, I guess? Yeah, so, so Duo Plane sends the order in an email format to them and then they either upload it, if they have an inventory system, then they would upload it via CSV into their inventory system and they would send a file and Duo Plane would.

17:03
grab the information on the CSV, or I even have one distributor where it legitimately pulls the tracking number out of the text of an email. So, an email. they send us the- I mean, it’s, yeah, there’s some real challenges, but if you have some higher tech distributors, it makes it lot easier. So. I see. Okay. So dual planes like glue, essentially. Like however your distributor wants the data or the order, that’s what dual plane does essentially. Yep. And they have a team over there that works to see that.

17:32
you get the information you need. We have had some cases where, you know, they’ve said, we can’t, you know, pull data out of this, this kind of report. But, you just try to work around that and problem solve. Yep. How does the inventory work then for the low tech guys? Do they give you a real time feed of how much stuff’s left? They all have feeds. So they at least have that much, right? So if you have any kind of inventory system, you should have some kind of FTP where you actually

18:02
show what you have. I mean, they’re not only paper. They’re not that low tech where they’re writing everything on paper all the time, but it is still pretty low tech. Yeah. it real time though? Like, you check it before? Like, is it updated in real time on your site or does it sometimes happen where you actually sell something that’s accidentally out of stock? No, I accidentally sell some things that are out of stock. I actually don’t have it set up where it necessarily manipulates the number.

18:30
on Shopify on our inventory numbers. The parts that we carry, Steve, I generally don’t carry things that, well, first off, I have distributors that have very overlapping inventory. So it’s very rare for them to be out of some products. When they are out of those products, we’ll manually list them out of stock because it’s something that we’ll know about. it’s, you know, and also we’re not talking like, I don’t have tens of thousands of SKUs either. You know, I run on around like 500-ish SKUs.

19:00
So it’s not an over. Yeah, yeah, but it’s not an overwhelming amount where you where you lose track of the product that you sell. If I had 20,000 SKUs, you know, it would be different. It’d be different game, right? So sure. Okay. And then if someone orders from different distributors, they might still get different packages or their order broken up into multiple packages, right? Once in a while we do that. We try to avoid doing that. But I’m just trying to get it happens.

19:28
of like when you’re charging someone for shipping, that’s based on weight or dollar amount or? We do free shipping on orders over $75 and then I have essentially like three different shipping tiers for different weights of products. Okay. And then it’s up to Duoplane to route it to the cheapest place or all to one distributor preferably, right? Yeah, what it does is it just tries to first route it all to one distributor and then the distributor

19:58
closest. So whoever has the product and whoever is closest to the customer is how the logic works. ahead. I was going say, you have overlapping distributors for almost all of your products so that there is a way for, so Dualplane actually does some routing. Okay. Exactly. Nice. Okay. Let’s talk about your day to day. I remember before you were working four hours a day on this, this is way back in the day. What are your

20:26
duties now running the store on a day-to-day basis? Oh, good question. Well, I am still way more involved in the business as far as like daily operations than I would like to be. Over the years, you know, we because of the products we sell and what I was sharing before, the kind of nature of our business where we are, you know, are a little bit higher touch. I’ve just, you know, really taken.

20:53
taking pride in making sure that we provide really, really great customer service. Now it’s looked different over the years. When we first started, it was me and a VA and I was doing probably way more than I should. And I contracted some folks out to help specifically with phone calls and some email quotes and things like that. That worked for a little while, but now I’ve just decided I think the best way to do it is to have state-side employees who understand the product, who are happy to talk on the phone and you know.

21:22
answer customer questions and emails. Right now we have two customer service reps, and then I can fill in for like really kind of the higher level questions. And yeah, that’s that’s what it looks like now. I’m currently working on getting another VA hopefully, hopefully I’ll hear back tomorrow about new a new prospect for a VA so we can have whoever that person is, you know, help a little bit with customer service, but also some data and reports and things like that, that we’re trying to generate daily as well.

21:52
Here’s what I got a little bit. I feel like I got a little bit lost in the question. Now would you go ahead? What I was trying to get at is it sounds like a lot of it is automated now, whereas it wasn’t before. So outside of customer support, what work left is there?

22:08
Not a ton. The only other thing is we do have situations like right now we’re dealing with some shortages in raw materials. So we have some popular products that have now become out of stock because, for instance, one of our main products is a fiberglass antenna. Well, the company that makes this antenna ran out of fiberglass. And so we’re really starting to feel some of the

22:35
some of the effects of sort of like the interruption in the supply chain system due to COVID now. And so we’ve had to be a little bit more creative about solving like, you know, when we have like a primary product that’s in a lot of our packages come out of stock, you know, solving, you know, what are we going to, what are we going to substitute in here? How are we going to communicate it to the customer? How are we going to, you know, work with different distributors and how are we going to find some more of these antennas?

23:04
things like that. I’ve been doing more of that. beyond that, mean, that’s about what it is other than, you know, just, I guess, planning, creating more content. you know, but by and large, that’s kind of the precipice I’m sort of on right now, Steve, is I finally have the hands to start taking care of the customer service where I was just really involved with that more. And so I’m really just kind of extracting out of my, I’m in the process of really extracting myself from that world.

23:36
If you sell on Amazon or run any online business for that matter, the most important aspect of your long-term success will be your brand. And this is why I work with Steven Weigler and his team from Emerge Council to protect my brand over at Bumblebee Linens. Now what’s unique about Emerge Council is that Steve focuses his legal practice on e-commerce and provides strategic and legal representation to entrepreneurs to protect their IP. So for example, if you’ve ever been ripped off or knocked off on Amazon, then Steve can help you fight back and protect yourself.

24:04
Now, first and foremost, protecting our IP starts with a solid trademark and Emerge Council provides attorney-advised strategic trademark prosecution, both in the United States and abroad for a very low price. And furthermore, the students in my course have used Steve for copyrighting their designs, policing against counterfeits and knockoffs, agreements with co-founders and employees, website and social media policies, privacy policies, vendor agreements, brand registry, you name it. So if you need IP protection services, go to EmergeCouncil.com and get a free consult.

24:34
And if you tell Steve that I sent you, you’ll get a hundred dollar discount. That’s E-M-E-R-G-E-C-O-U-N-S-E-L dot com. Now back to the show. So it sounds like you’re kind of looking for new products. That’s like one of your primary duties. Let me ask you a question then. What is stopping you from just carrying a whole bunch of stuff since you don’t have to carry inventory?

24:59
You mentioned you only have 500 SKUs, right? Why not carry a thousand? Good question. I think you just really want to be focused on what makes sense for your niche. If there are products that make sense for us to carry, and we are expanding out into some, I hope to have maybe a thousand SKUs maybe a few years down the line, but they will all be around high quality radio equipment, coax cables, things like that. We’ve branched out in the past and sold

25:27
You know, some like LED headlights, like high-end LED headlights and other products like that. And they just haven’t done well because that’s not what folks are coming to our website for. know, all of our traffic for the most part is organic. You know, we do really do well with, you know, long tail search, things like that. And so when folks are landing on our page, they’re not necessarily looking for LED headlights, you know, they’re looking for radio specific equipment. So I suppose we could, and I could, you know, litter the site with a bunch of coax, you know, connectors and

25:56
all this other stuff and maybe to be profitable but also sometimes carrying those more obscure products creates a lot more questions than it does profit. And then you spend time trying to work with hobbyists to figure out some random system than you do just kind of focusing on the bread and butter and what really makes money. Yeah, that makes sense. If the support costs exceed the potential profit, then it makes sense not to carry.

26:23
Yeah, but there isn’t a lot of stuff we’re saying no to. A lot of the products we sell, I mean, we sell very much, you know, we sell, we sell CB radios, you know, and so it’s a very mature product. There’s not a whole lot of new ones coming onto the market, you know? And so on some level, it doesn’t make sense to add a bunch more, but we, but recently we have expanded into, you know, other frequency radios. I’d mentioned GMRS.

26:48
mobile radios that that’s something that’s become really popular. So we’ve expanded probably 30 skews into that and we’ll be creating some more and we’re building content around that this spring as well. So, okay. mean, we’ll grow in that direction and in some hand equipment as well. But yeah, that’s what it looks like. Also, I think that you want to know your products well. So just littering the catalog with too many things, I think can be a little bit of a

27:17
Right, dilutes your expertise in a way too. I see. It could. It really can. Okay. Let’s switch gears a little bit and talk about what changes you made with Right Channel now that you didn’t have you, Darien, weighing you down. I mean, that guy probably weighed you down like a ton of bricks, right? Oh man, the burden was lifted. You know, I think once I bought the business, it became the only thing we were doing, right?

27:46
I was working half a day on Right Channel Radios before I bought it. And then I just went into, we just made ourselves a lot more available to our customers in virtually every way, more available on the phone, via email. When you turn the switch, and I love Andrew and I loved working for him when I did, but when you flip the switch and you start seeing that money go from

28:15
or we start seeing the money from your sales come directly into your bank account, that definitely in my mind at least flipped a switch and man, I was doing anything I could to get anybody who called or emailed us, I was working as hard as I could to get, convert any of those sales. That’s funny how that happens. It’s the truth, know, it’s the ultimate, it’s just the ultimate ownership, you know, when you start seeing that come when you do pay also.

28:42
I also took out a huge loan and so that’s motivating. So I want to make sure my kids get to eat. So there you go. give us some numbers, Pat. Like how much has it grown? And let’s talk about your most recent years growth also. So how much has it grown since you bought it? uh, yep. Just did the calculation here. So it’s 47 % up. So we’ve grown 47 % since I purchased this, purchased it, uh, 2016 almost five years at this point, just under five years. Yep.

29:10
You made your money back after three and these past couple years plus the growth has all been gravy. So sounds like it’s a win win all across the board for you. Yeah, that and I mean, we’re doing because we’re doing significantly more revenue as well. I mean, I think that if we ever did want to sell down the line that both bolsters the multiple quite a bit. And so it’s been it’s been quite nice. It’s obviously had some some challenges, but yeah, 40 percent, seven percent up. And then we just closed the

29:39
The books on our biggest month ever in January, were, yeah, we did. I don’t know, Eudarian Mike. Do we want to make Eudarian jealous? You don’t have to say if you don’t want to. I think we just got to say, so we did, we just did our first month over 200K in January. Oh baby, I can’t, I couldn’t believe it. Congratulations, man. Yeah, thank you. And I am just thrilled and it’s been a wild ride. It’s been great to you.

30:08
I know you, Darren, have never seen that kind of money before. No, sorry, sorry, friend. mean, you know, that’s why I had to move from Bozeman to Tucson. So there you go. So let’s talk about what you did after the acquisition that grew the sales actually.

30:24
After the acquisition, like I think the main thing Steve was really just focusing on that customer experience and bringing a lot more value to the customer that that came in that did a that did a handful of things. I saw our return customer rate go up pretty, pretty significantly. You know, did to boost that. I think I think honestly, it was just as simple as being more available to the customer, being very responsive to.

30:54
You know chats. Well, we we added chat. I don’t think we we I think we might have done it there for a little bit But anyway added did everything from adding live chat to the website Which is funny to talk about or even think that we didn’t have that at one time But I guess five years somewhat on some level. It’s kind of a long time ago I don’t remember you expanding your phone hours, too Yeah, Yeah, because we only we only did you know, we’re only available half the day, which is kind of weird, you know when it

31:23
business is only available on the phone for four to five hours a day as opposed to eight to nine. So yeah, we absolutely expanded all that. And then we’re just more responsive the email. And I think I mean, that that was about as simple as it was was just being more available to the customer. There was no secret sauce or anything like that or anything that that we did that was super strategic. So how do you most of your sales today? Is it still the same as it was?

31:51
No, well, I mean, we drive a lot of organic traffic. However, we’re significantly more active with our email marketing. We send emails every single week. We’ve, we’ve developed a lot more, um, a lot more customer flows for different customer segments, you know, between like, you know, win back campaigns, retention campaigns. And I think that our content overall is just better, but we send very, very regular emails to our customers. So we’re communicating with them a lot more. You guys using PlayView? Yeah.

32:21
Oh yeah, sweet. I it’s, yeah, it’s the thing to use. Was Andrew using Klaviyo back then? I’m trying to think. That was a long time ago. Was he? Oh yeah. Yeah, man. You know what? I used to have, this is when Klaviyo first launched. We used to use Skype or not Skype. No, we used to use Skype. Yeah. We used to use Skype to talk with each other. And I had Ed, what is it? Ed Halen? Oh yeah. Yeah. Yeah. Ed Halen and Ed Edward.

32:48
Had them on Skype and I would call them up if I was having an issue way back in the day No jokes, and we were like really early adapters to clay vo I still have the same account still using it. So nice. Yeah, we never use we never use anything else at this point can’t understand Yeah, why why we would ever ever go but so it’s been great I remember clay view at the very beginning and when they’re you know templates weren’t really that great, but now they’re awesome And and I don’t make any of the emails myself. So it’s even better

33:17
So there you go. So you mentioned a lot of your traffic is still organic. that imply that you’re constantly, cause you’re getting new products in all the time, right? So does that imply you’re constantly churning out more content or updating the existing one? Yeah. So we are creating more content in the way of technical resources and blogs and things like that. But it’s, it’s far less than you would think. I think that we’ve just done a good job creating content in the past. You know, most of our project pages.

33:47
product pages have very in-depth descriptions. We have video content. We have our own photo content, things that just really set us apart from the competition who’s selling the same products that we have. But recently, man, we published this blog about just CB frequencies. I talked about what frequencies CB radio uses and what those frequencies are typically used or what those channels are typically used for. it’s, man, that thing’s been

34:17
You know, that thing is blown up. It’s it’s it. think last month had more hits than our SWR tuning article, which was our, you know, or our intended tuning article, which was our, highest performing articles. And now, you know, we just launched this new piece of content and yeah. Also recently the, the, uh, recent Google algorithm updates, the one in, I think it was December 3rd and the other on January 7th and eight have both been very kind to us. And so I think that.

34:47
As we’ve created content over the years, we’ve created content for humans primarily while obviously putting, using some keyword, you know, targeted keywords in our product, just made a descriptions and tags and things like that. Anyway, I’d like to say it’s been, it’s really paid off. remember that was Euderian strategy. That was one thing that you guys did really well back when he owned it. And it’s nice to see that.

35:15
I mean, a lot of this stuff takes time, right? So it’s great that, you know, finally it’s just decide to explode, like Google decided to explode the traffic. So you did a good job laying the foundation. Yeah. know what? He, you know what he did. Way to go, Andrew. Yeah. Let’s give him some credit for that. Hey, there you go. Give him a pat on the back. Yeah, he did. And I think, you know, from the beginning, uh, I think he even explained it in a way to me about how, how he went about creating content that

35:45
really sunk in. Yeah, we’ve never tried to game the search engine by any way, shape or form, you know, by keyword stuffing or anything like that. And so we’ve just always written for humans and it’s working out now. That’s for sure. Cool. And then are you doing anything paid at all? Or is it the reason why I asked that is because I know the margins are lower for dropshipping. mentioned you try to maintain 25 to 30, which is kind of borderline, I think, for advertising. So yeah, just kind of curious.

36:15
Yeah, so I do very, very little paid traffic and I probably should do more. Right now I have an AdWords budget that is embarrassingly low at around like $500 a month, it yielded, I should probably, I’ll just say that it yielded enough in sales. I should probably look at scaling that up a little bit. Yes, it costs to bring that traffic in, but when you’re spending as little as I am on that paid stuff, I should probably start.

36:45
Hey, there’s, I mean, you only have certain amount of things to focus on, right? Sounds like content’s working for you guys and you’re just putting the pedal down on content. So. Well, that’s, that’s, that’s every entrepreneur’s thing, right? Is there are a hundred other things that I could be, you know, focusing on or, man, this should really require some attention. It’s like, yes, at the end of the day, it’s about like, what’s your capacity to do that? You can’t do everything, you know? So, and you can’t also manage.

37:12
a thousand contractors doing everything for you either then you just end up in the hole. So there you go. Can we talk a little bit about your lifestyle and what this running this business is like? That’s kind of why I was getting that earlier on what your day to day was like. Is your lifestyle pretty free? It it has ebbed and flowed. So yes. In the in early days, I would say, you know, it’s very focused. And then I got these contractors and they were

37:40
you know, doing a great job on the phone. And then my lifestyle became very free. And I really wasn’t, I wasn’t really needed at the office a lot. And the thing is though, I, so I had these contractors and they were, were doing a pretty good job on the phone. And then I had this VA and she had been with us for a really long time at the beginning. She was awesome, but things started to not go quite as well. And details started getting missed and, it was about December of 2019. And I just,

38:08
I was just really getting this sinking feeling that, you know, I had a very free lifestyle, but it just felt like I wasn’t present enough in the business. And it seemed like, what’s the word that I’m trying to say? Disconnected? I no, I just maybe disconnected the word. just felt like we were doing about 80 % as good of a job as we could have been doing. Like we’re doing a good job. not doing a great job, you know?

38:36
And the thing is in our niche, we exist to just provide like the best recommendations, the best experience. And so I made a change. I let the contractors go, the phone contractors, let them move on. I let my VA move on somewhere else. so this, this was, this was a, well, you know, it was what it was, but for a while there, I was just kind of like setting the groundwork for what the business was going to look like next, getting ready to bring some more people on.

39:05
man and then COVID hit and then our business exploded and it was just me for, no joke Steve, like six months. And so yeah, from about March of last year until August, had, mean, what was my life? My lifestyle was not great. I still got out and I biked and I speeded with the kids and stuff like that. But man, I worked more in 2020 than I have in quite a few years. So I’ll just say it.

39:34
I feel like the lifestyle thing ebbs and flows. Generally speaking, I’ve kept like a pretty good lifestyle and a very nice lifestyle of the business. I’m out biking quite a bit, know, multiple days a week in the winter. You know, like I was telling you, you know, before we started this, I’m taking these kids up to Bridger bowl. We’ll get up there about three days a week. And so it’s, it’s been good. I’m not very, very rich lifestyle, but there was a solid six months there where I didn’t really have much of a life at all. I was in the worst shape. I’d been in, a long time.

40:03
and I was just working like a dog every day. I mean, when the sales are exploding like that due to COVID, man, that’s, I mean, that’s, it’s a good thing. So, well, yeah, it’s a good thing. I mean, you were packing boxes at one time. remember. Oh yeah, I do that. I mean, it was bad for us because we couldn’t hire anyone because we didn’t want to interview anyone. Yeah. Right. So I was in there packing every day during the holidays. Yeah. I remember that. I remember seeing, I remember seeing that. Yup. Got to do what you got to do. it’s your business at the end of the day, man.

40:31
If you, you know, at some point, if you don’t go into it, it’s not going to get done. So there you go. was going to ask you, what do you do about returns? Do they get sent straight back to the manufacturer? Do they come back to you? I try to have them know I have them all sent back to the distributor. Okay. And so yeah, I, I, our return policy could use some love, but the way that I have it now is if anybody receives a defective product, we just immediately replace it, send them a return label and get the other one back.

41:01
Very hassle free the thing is that they want to return a like brand new product. You know we have an ra system in place It’s on them to ship it back to us I am working on a system where they can get they can essentially pay for a label to toss it on there That would be a lot more customer friendly so working on that now But that’s what it looks like and then it goes we we we get an ra on one of my distributors I can generate my own ra the other one we need to get an authorization, but it normally only takes a couple hours and

41:29
We try turn those around pretty quick. Okay. So you don’t actually handle the return product for them. I don’t. Okay. No, I just remember back in the day, I think you guys had a lot of product returned directly to you. I think that’s changed, right? Yeah, that’s changed. That’s changed quite a bit. Yeah. We’ve cut down on that. I’ve one of the ways that you cut down on a product just showing up at your house is you just try to make sure that your address isn’t anywhere that your actual address. So I’ll have like Bozeman, Montana.

41:58
listed but I will not have the street address listed. I must say really, really dig for it. But all that to say, I mean, I have a solid, probably like $2,500 to $3,000 worth of CB gear in my garage if anybody wants to come buy some. There you go, come on over. So are you worried about Amazon at all? Just kind of, because in theory, a lot of this stuff can be found on Amazon for cheaper. You mentioned a couple cases where it wasn’t, but.

42:26
Are you worried at all about Amazon kind of undercutting you on price? You know, that that’s always that’s always a concern. Yeah, it’s definitely something to be cognizant of. The edge we have over Amazon is that when somebody wants to order the products that we sell, they don’t need just one thing. Typically, they need a variety of things, and it can be confusing and hard to find them all and know that they’re all going to be compatible with each other.

42:55
And so when you look at ordering via Amazon, which I’m sure they’re, I’m sure they’re selling more revenue and TV equipment than we are. mean, that’s to go, it goes without, goes without saying, but am I worried about Amazon? I mean, at some level, after all the nightmare stories that I’ve heard, you know, from our other customers or from other resellers being on Amazon, it makes me really happy that, that we don’t depend on any marketplace. I hope.

43:23
Well, I don’t know. I think it would be really hard for Amazon to get to a point where they can really compete with us in the realm of service. But, you know, don’t underestimate those guys for the time being. think we definitely edge them out in a lot of ways. Maybe somebody can find something a little bit cheaper over there. And if they want to do that, fine, that’s not a customer though. So I think after talking to you now, I think in a lot of ways your product is

43:50
pretty ideal for drop chipping. It’s kind of complicated. There’s a lot of moving parts that might be incompatible with each other. So I’d feel much more comfortable. I would just go up to you and say, hey, this is what I want to do. Just tell me what to buy, right? Exactly, exactly. And that’s what we have customers do all day every day is they just, call up and they say, hey, I’m a newbie at this. We just need some help. Show us what to buy. And the truth is most of the time when they say that we already have a pre-existing kit for what they need, they just.

44:19
Maybe they weren’t able to find it on the website. But the truth is a lot of times people just want to call and they just want that reassurance that this is the actual right thing that they need. know, right. So the million dollar question, I guess then is, would you recommend dropshipping as a model to other people? I think if you’re going to drop ship, you have to have just like, just like any business, you need to understand how you’re going to bring value to your customer, throwing up a website and putting products on it.

44:49
You know, and just, that’s not gonna work. Or at least I think it would be very hard to make that work. You have to have some specific value that you can bring your customer. And as long as you are bringing value to your customer, then I think you’re gonna do fine, whether you’re dropshipping, whether you’re selling a branded product. At the end of the day, I don’t think that matters quite as much. Now, obviously, if you have your own product and brand, you can enjoy some margins, but.

45:19
Yeah, I mean, what I recommend drop shipping. If you were in my shoes, if you are in my shoes, the same shoes I was in when I bought the business from Andrew when I was working for him, where, you he wants to sell this business and we have all these super happy customers. I’m getting emails every single day where folks are saying, wow, we love you guys so much. You were so helpful to us. Absolutely. I would not discourage you from buying a business just because it’s a drop shipper.

45:47
because that’s already evidence that you’re bringing value. If you’re just starting up from scratch, I think it’s gonna be significantly harder, but I do think it can be done if you can bring value to the end customer, no doubt about it. I’m just wondering if like the traffic from your content just all of sudden dried up. What is like the backup plan? Good question. I mean, you your email lists obviously, right?

46:12
Yeah, yeah, no, we have our we have our email list. We have paid traffic. We get a lot of direct traffic to Steve. So even if let’s say, let’s say we stopped getting organic traffic tomorrow, about I want to say like 20 to 25 % of our traffic right now has been for last month was direct. And so that’s just people typing in for those that don’t know that just people typing in right channel reviews.com and coming coming direct to our business past customers. We would you know, we leverage up our email really high.

46:42
Come to think of it, you said 25%. 20, maybe it’s closer to 20 Steve. No, mean, it’s still really high. That’s pretty good. Yeah. Yeah. That’s not bad. It’s because on some level we have built a brand for ourselves over the last handful of years. you know, we’ve been, this is our 13th year in business. Andrew started the business in 2008. So, you know, we’ve been around for a minute. I would really do something that I probably should be doing right now.

47:11
is I would really start reaching out and doing sales calls to people who I could see being larger corporate clients like, you know, mines and construction companies and other commercial companies that use our equipment. And then I would start writing a lot more content. That’s the other thing. I would just turn on the content creation, or turn the content creation switch. I’d probably recreate content that we created in the past, create more video content.

47:41
do some more, you know, product photography, the things that I believe really turn, you know, or really move the needle. And, you know, it would take a while to recover. There’s no doubt about that. But at the end of the day, you know, the nice thing about dropshipping is I don’t have like, this, you know, exorbitant amount of inventory that I’m sitting on, or I have, you know, most of my fixed costs are all in, you know, SaaS products, things like that.

48:08
So it’s not as crippling. And if it all dried up, that’s one thing about a business like this, right? It typically doesn’t just go to zero. If things get slower, I mean, that can definitely happen. Margins are getting squeezed, but it would be very unlikely for us to go from where we’re at now to just go to zero. That would be quite unlikely. I mean, I think it only has to go up at this point, actually, given the interest in that particular area.

48:35
Maybe next time when you hit eight figures, we’ll have you back and make you dare and feel really bad. Man, I just feel good. I feel good to be on such a distinguished podcast. I’ve been on e-commerce fuel a couple of times, but it’s not, you know, my wife quit her job is just, yeah, I know it’s not the same. Yeah. You know, I mean, I’ll be daring the other day. Give him a hard time. I mean,

48:58
last two podcasts have just been him monologuing. He’s having a hard time getting people to come on the thing. you know? you have any thought on this or what? He’s having problems getting guests these days, you know? So he’s forced to do those long drawn out monologues now. Just a long drawn out monologue. was like, man, what’s going on over there, buddy? Just joking, Andrew. We love you, bud. Yeah. So Pat, just in case, know CB radios are really popular now, especially post COVID.

49:25
Where can people find you, your store, and if they have any questions about that area at all, where can they find you? Yeah, so you can find us, of course, on our website, rightchannelradios.com. We have a Facebook page for Right Channel, of course. We have an Instagram, Right Channel Radios. You can find us there. And then we have a pretty cool Facebook group that we started called Overland Coms. And we’re just about to hit the thousand member mark over there. That’s been kind of a cool thing that we did start up in the midst of.

49:53
all the craziness of COVID, they started that Facebook group for people who are into this and have assigned a couple just interested members as moderators and they’ve just been doing a great job. yeah, Overland comms Facebook group. And then of course our website, rightchannelradios.com, all our contact information is there if they want to check that out. And then we have the same for Instagram and Facebook. They want to look us up on either of those channels. Nice. know those social channels are new since you, Darren also, I don’t remember him having any social channels back in the day.

50:22
We had a Facebook page, but we put not very much into it to save lives. Cool man, hey Pat, appreciate you coming on. I had a great time. I’ve been looking forward to this interview for quite some time. Thanks Steve. It’s great to talk to you and I just appreciate you having me on. Thank you very I can’t wait to head out to Bozeman again. Maybe during the summer, right? That’s the best time to go I think.

50:50
Freezing negative eight today. I’m in the office I had to come to office because trying to do a podcast in my house when I have five kids running around Isn’t the quietest environment so I’m at the office and man. It’s nighttime and the temperatures are just dropping I’m feeling every every degree go down. Oh man, you know We might who knows we might try to get a property out there and drive your property prices further higher

51:16
Please do. Yeah. I’ll start sending you some of the listings I’m looking at. If you guys could start bidding on them, really appreciate that. I’m like, Pat, isn’t this your address? Yeah, isn’t this your address? you should send some returns this way too, all right? Cool, Pat. I appreciate you coming on. And take care, man.

51:37
Hope you enjoy that episode. And if you ever see Andrew, ask him about this episode with Pat. More information about this episode, go to mywifequitterjob.com slash episode 362. And once again, I want to thank Clavio, which is my email marketing platform of choice for e-commerce merchants. You can easily put together automated flows like an abandoned card sequence, post purchase flow, a win back campaign, basically all these sequences that will make you money on autopilot. So head on over to mywifequitterjob.com slash KLAVIO.

52:05
Once again, that’s mywifequitterjob.com slash KLAVIO. 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 next big own marketing platform, and you can sign up for free over at postscript.io slash div. That’s P-O-S-T-S-E-R-I-P-T dot I-O slash div. Now I talk about how I use these tools on my blog, and if you are interested in starting your own e-commerce store,

52:33
Head on over to mywifequitterjob.com and sign up for my free 16 mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.