But before we begin, I want to thank PostScript.io 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. I sincerely believe that SMS or text message marketing is going to be a huge channel for my store going forward and I have chosen PostScript.io to be my text provider. Now why PostScript? it’s because they specialize in e-commerce stores and e-commerce is their primary focus and 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 it’s priceable too and you only pay for the messages that you actually send. So, head on over to PostScript.io/Steve and try it for free. That’s postscript.io/Steve.

I also want to thank Klaviyo for sponsoring this episode. Now, it’s safe to say that most of us have been doing more online shopping lately. And if you’re an e-commerce brand, that means you might be seeing more first-time customers, but once they made that first purchase, how do you keep them coming back? Well, that’s What Klaviyo is for. Klaviyo is the ultimate email and SMS marketing platform for e-commerce Brands. It gives you the tools to build your contact list. Send memorable emails automate key messages and more a lot more and that’s why more than 30,000 e-commerce brands like Chubbies Brooklyn and Livingproof use Klaviyo to build a loyal following. Strong customer relationships mean more repeat sales enthusiastic word of mouth and less depending on third-party ads. So, whether you’re launching a new business or taking your brand to the next level Klaviyo can help you grow faster and it is free to get started. Visit Klaviyo.com/mywife to create a free account. That’s Klaviyo.com/mywife. Now on to the show.

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

Steve: Welcome to the My Wife Quit Her Job Podcast today I’m thrilled to have Michael Jamin on the show. Now, Michael is someone who I met at e-commerce feel alive and he is also going to be a speaker at the Seller Summit in May. Now, Michael specializes in creating brand stories for companies. He’s been writing for television since 1996 and his many credits include, Just Shoot Me, King of the Hill, Beavis and Butt-head, Wilfred, Out of Practice, Rules of Engagement, Lopez and Tacoma FD. Now by applying his knowledge of storytelling Michael grew he and his wife’s company Twirly Girl into a multimillion-dollar girls’ clothing brand and today he helps other small businesses do the same through his company cardboard rocket ships and with that welcome to show Michael. How you doing today, man?

Michael: Hey, thank you Steve. I’m good. Thank you.

Steve: So, Michael, you know for all those who don’t know who you are. Give us a quick background story on how you got started with brand storytelling and how you and your wife decided to launch an e-commerce store selling girls’ clothing.

Michael: Yeah. That’s weird. So back in 2007. My wife just wanted to make our daughters we have two little girls just like a special dress for them. Just you know, because just a beautiful special dress like a twirly dress and so she took some classes and she made them in the girls wore them to school and next thing, you know, all the other kids like, “Hey, we want one!” and the parents wanted my wife, you know to sew them and she was like, well sure but she was happy to do it. But you know, she explained that these are… She’s like a lot of fabric the best fabric. It’s the stitching that she uses very high quality. It’s like it’s pretty intensive. It’s not like a regular dress you just going to get, you know, at Macy’s and so it’ll cost more and the parents are like, “That’s no problem.

You know, we want it. We just you know, we see how good it looks so we want it.” So, she started doing that and next thing you know, a local boutique found her and they wanted to order dresses and she’s like, “All right, so she just was sewing them on the dining room table.

Steve: How did that boutique discover her?

Michael: I think the girls were just wearing it outside the mall and like the woman’s like, “Oh my God, I want to see these.” And it was just like that. It was a woman who owned a boutique.

Steve: Oh, wow. Okay.

Michael: I believe that was that’s how it happened. Yeah and then next thing on Nordstrom was expressing interest and like it just kind of exploded and so at that point you could no longer sew ‘em on the dining room table, you know, she had a higher… We hired local sewers and contractors in LA…

Steve: In the garment district? Or?

Michael: And so, most of our in the Garment District, Yeah. Or close by. And so yeah, then it was like, “Well, why don’t you put them online and so… We… You know made a website and then in those… Like we really had no idea how to do any of this online. I mean just none and so all the first two websites were like terrible and you know, but the orders were still coming in and so, you know, it’s a learning curve.

Steve: What were the orders coming in from?

Michael: You know, it wasn’t a lot it was… You built the site and then it was just basically SEO or people hearing about it and just you know, we had labels on addresses and so people would see here the labels easy to label and they place an order.

Steve: Okay, so it was mainly word of mouth in the very beginning?

Michael: And it wasn’t a ton of business. We weren’t really advertising then.

Steve: Okay. You mentioned SEO I would imagine ranking for dress related terms is really difficult right?

Michael: It’s impossible. The only thing we ranked first on is twirly dresses.

Steve: What is it totally dress? I’m just kind of curious.

Michael: You know, it’s when you spin around the dress kind of flares out. It’s got a full circle skirt. So dreadfully flares out and you know creates like a hoop…

Steve: Oh, yeah. Okay. I know what you’re talking about. I have a little girl that’s why I’m asking. Maybe I’ll get one after this.

Michael: Yeah. Yeah, we’ll set you up.

Steve: So, validating your niche just kind of came naturally right? People just love the dresses. It’s not like you intentionally decided to start a business doing this in the very beginning…

Michael: Right and the dresses are there higher price because they’re made in America. So, some people have a lot of reluctance to buy that much on a dress and you know, we kind of explained that in the branding it’s like, “Well, these aren’t dresses really they’re happy childhood memories. There’s a difference. It’s going to cost you more…”

Steve: How much are we talking about here for a dress?

Michael: Well, so most of our dresses are reversible. So, it’s literally two dresses in one that are kind of like sewn together. And so that range it’s like… It could be like $84-ish in that area.

Steve: So, it’s not outrageous…

Michael: It’s not when you consider like, you know high quality dress like that you buy at a mall might be like in the 40’s. So, you know but that’s not reversible. So, it costs twice as much but people still freak out. I mean, they’re like, “This is not a ten-dollar dress that I can get at Walmart.” Yeah, right, but the quality, you know, you came here compare, so you have to… I had to learn really because I… You know, I just wanted to help out so I started doing the marketing. I really had to learn how to sell something and express why it would cost more and why you shouldn’t be looking at the numbers? Why you shouldn’t be looking at price?

Steve: Can I get an idea of like the designs are they completely unique? Like is your wife designing all of them?

Michael: Yeah. Yeah.

Steve: Okay. So how does how does she do it? What’s your process?

Michael: Well, some of the just it’s weird like we have I think we own three or four or more trade dress design. So, it’s very hard to get a trade dress from the government saying that this is you can’t you know patent it most that’s you know, because the dress is a dress. It’s hard to get that so we have a few of them because as the designs are so unique and original. So that’s kind of like a patented back. Like wow, you got a trade dress…

Steve: So, no one can copy the dress design?

Michael: Specifically, yeah, they have to be they would have to make significant changes to the design. It doesn’t mean it doesn’t happen. People… You know, you just have to enforce it. But, if you’ve got a twirly girl shop, you’d see all the designs.

Steve: So, given that in the beginning it was word of mouth. But once you go online, you know, you’re trying to convince total strangers who can’t really touch and feel this dress before they buy and as you mentioned before $84 is on the high side, like we’ve spent like 50 bucks for our girl’s dresses. So, I guess 84 is a little bit on the high side. So, how did Twirly Girl generate most of its sales once you started, I guess marketing to total strangers who couldn’t actually touch the product.

Michael: Right. And by the way, they’re made in America so that, right there the labour…

Steve: That’s true. Right.

Michael: So, you use that as a selling point, you know made in… Because like right now it’s so interesting back in the 90s half of all the clothing sold in this country was made in America half and now it’s less than 2%. So it’s like a novelty. It’s like wow, I mean, there’s just no industry anymore here. So, when you explain it like that they go, “Okay, I get why it costs more.” and then I really sell the values about you know, what we’re about and I sell… I basically learned this from our customers. They would say, “Wow. I remember having a dress like this when I was little my mother sewed it.” And after hearing that over and over again I picked up on I was like, okay these aren’t dresses.

It’s their happy childhood memories and then once I started selling… Once I started telling that particular story things kind of change, they go, you know, you’re right. You can’t express the how soft it is in the website. You can even mention… Maybe you can put made in America everywhere. People are going to see it. So, in the marketing is all about telling happy childhood memories and I tell that over and over again and then people get it. They finally, you know…

Steve: So, before we get into like the guts of the storytelling, I am just kind of curious. How come you don’t have these dresses made overseas? Where you could lower your price and reduce that one barrier to purchase.

Michael: Well, there is a certain amount of appeal to buying made in USA. It’s a lot of people really like that. But also, we make everything in such limited quantities, you know, that’s just how my wife wants to do it. Small runs that we’re constantly changing, so that the inventory is always fresh. So if you were to… If you would make it overseas you really have to make a huge… A large quantity and it would have to be three versions instead of 30 because you know you just have… And then at the end of the season you’d have to mark everything down by half to liquidate to move, to make room for the next season. It doesn’t make any sense because it’s not like these dresses go out of style.

That’s just the way the everyone else is doing and I think everyone else is playing in the dark ages because that’s just how it’s always been done.

Steve: So, they don’t go out of style then. Can you just sell the same design season after season? Is that what you guys do?

Michael: Yeah, we don’t mark it down…

Steve: Right that implies that you could get it from overseas, then right?

Michael: But I would have to order in such large quantities and I wouldn’t have the same variety that I have now. So that’s a real barrier for me. It’s like, you know, it’s like you go on our website now and you all look at all these, all the varieties that can get and you couldn’t do that now. if I had to do it overseas and then there’s the issue of, if something comes to you with a flaw in it, and that happens. You know, now you’re spending another six weeks sending it back to get fixed and never mind. If I were making in China now, I’d be out of business because nothing’s coming from there now.

Steve: Right? Well factories are starting to open up now. But yeah, yeah, I get you’re getting at, yeah. It’s a huge house. So, I was just wondering like if you had some bestsellers that always sell out, you could in fact get that one design mass-produced somewhere.

Michael: I could but then I wouldn’t have any variety. I would have like, you know a thousand of one dress and then what if someone doesn’t like it or what if you know, but now they can come to the website and it’s like a candy shop. You’ll see all these different colors and sizes and everything and that’s part of the appeal is that you’re getting like kind of a… We sell everything and everything is numbered like a work of art, so you’re getting dressed number 40 out of 56 or whatever.

Steve: So, you mentioned that the message that really resonated with your customers was you know, childhood memories. How did you come up with that?

Michael: Well, that was that was my… I was me, listening to my customers. They would say that. I would listen, watch the you know, the comments on Facebook or the reviews they’d leave and then over and over I started hearing. I think it’s oh… Okay because you know, I didn’t grow up wearing dresses. So, and you know my wife she didn’t have a happy childhood, so she didn’t wear dresses either growing up. It was something that was lacking for her, but she made it for our daughters so that they could experience this and it all kind of came together.

T’was like, okay. This is a memory that you know, kids grow up so fast, so they have this, you know up until like 12 or so and then girls suddenly change. They want to be you know, sophisticated, they want to wear a black and they want to you know, that childhood thing is over so quick. So, but it’s always just a memory of you know that a lot of these girls have…

Steve: And how do you turn that into I guess a story and how do you convey that to the customer?

Michael: Constantly. So, one thing I talk about is when you have a message, you have to say it seven times before someone hears it. It just doesn’t really, you know doesn’t resonate. So, for example, if you’re going to see a movie, you maybe you’ll see you know, someone mentioned the movie the title of a movie and they go, “Oh, yeah, I want to see that.” And then you’ll see a trailer for you. “Oh that looks good.” But then you after that you forgotten all about the movie and then you’ll see a billboard. “Oh, right. I want to go see that movie.” and then you’ll forget and you see a guy on a talk show and it really seven times before It occurs to you like, “Oh right. I want to go see this movie.” And so, it’s the same thing with branding you have to tell whatever story you’re telling. It’s like seven times in various ways before they finally get it. So, on our advertising on Facebook, you know, I’ll say more than a dress. It’s a happy childhood memory or I’ll say something about dresses for girl… That girls remember forever and I’ll put that everywhere. I’ll put it you know in an e-mail. I’ll talk about, you know a memory, I’ll talk about…

I’ll feature a girl, you know, and their story or in my advertising, everything is a happy childhood memory. So, it’s over and over again and I get it all the time. I’ll see the comments that people leave on our on our site or on Facebook and like and they just talk about, “Yeah, it is a memory. I remember my dressing, you know, I want to get that from my child or my granddaughter”

Steve: Does Twirly Girl generate most of its sales from Facebook?

Michael: Yeah. Yeah.

Steve: Okay. So, can we talk about I guess the types of ads that you’re running? Are they video ads? Are the image ads? Like when you’re telling this story, what is like your top of funnel look like?

Michael: Well I described It as an ecosystem. So if I show a static image ad, and that’s what I’m doing a lot of that right now where I just show just a flat address and saying here it is and you know, then I’ll retarget that with either a video ad, I have number different videos just like a video of a girl twirling in the dress so you can see the motion or I’ll retarget that one from one of my longer I do these ads that’re like three minutes long which are all funny and it’s about kind of like going down the rabbit hole so that very creative and fun like that. So, if I have to do both. I it’s you know, if I’m doing just a static image, then every target with these videos. If I just do the video, we’re talking about the tagging images. All works together.

Because part of my problem is that, you know, so little girls don’t have credit cards, so they don’t buy it themselves, right? So, your marketing for moms and grandmothers and so even if they want to buy today, they’re not going to because they got to find out there’s girls’ favorite size if every color or size or whatever so you have to kind of hit them. Keep on hitting them before they make a purchase.

Steve: Interesting. So with your Facebook ads then it because I’ve seen some of these videos and it’s really hard to convey a video in a podcast but I will actually post one of your videos in the show notes for this episode, but do you lead with the video or do you lead with the image? Like what is the strategy there?

Michael: Currently, I’m leading with the image and then the follow-up the video but last year I did the opposite so…

Steve: And is there a reason for that? I was just kind of curious because those videos are really good. They’re really convincing.

Michael: Yeah, there’s it just depends what’s working if they are, if my body is gets saturated by something that I kind of switch to the next thing.

Steve: So what I was hoping to do today, Michael was like you have this brand Twirly Girl that you’ve found this store that you can tell over and over and over again, but the problem is a lot of people out there that are selling like mundane products. Like I don’t know like, Office Products or jewelry or what-not. Stuff that might not… People might not think that they have a good hook for people to buy. So I know you kind of teach this and you have this formula for coming up with a story and I was hoping we kind of walk through that with just some example of someone selling something boring.

Michael: Yeah. Yeah, there’s a good… Okay that’s perfect. I just took on this is client home kind of consulting for. And he said, “Yeah my products a little boring. So, I don’t know if you’re going to go to help me. What do you sell?” He said. Well, it’s basically name tags for he makes them for businesses and you know, just name tags and I go well that’s not boring. That’s like the best thing ever because… What’s everyone’s favorite word in the English language is their name, people love hearing their name. It’s like if you say your name, these electrodes light up in your brain. I mean it. We’re conditioned to like and that’s why people desire fame they want other people to know their names.

So, I was like, you’re not selling name tags, you’re selling recognition and your selling recognition in every sense of the word. If you’re important enough to have a name tag, what does that say about you? A nametag could open a conversation with someone, with a customer. And so, I think that kind of opened his eyes and was like, oh he’s like, “Wow. I’m selling name tags, you know, it’s I really believe it applies to every. I’m sure there’s an exception to the rule but, I haven’t met that person.

Steve: Well, let’s go with these this name tag example here. So that’s great. You tell me that it’s all about name recognition. Like what do I do with that information?

Michael: Well for him, that’s kind of what we’re mapping out. I don’t want to go to…

Steve: Ohh you don’t want to use that… Cause’ I probably know who you’re talking about. Actually. It’s probably a mutual friend of ours at ECF. I’m guessing.

Michael: I don’t think so. But he did learn that he did hear from me through somebody ECF so I don’t know.

Steve: So I mean, can we just pick a boring example, let’s say I’m selling staplers. Hehe.

Michael: Okay. Well stay put well, you’re probably selling I guess office supply office supplies. So you’re selling you know, I guess what you’re probably selling is productivity and an organization and so you’re selling something more emotional than just a stupid stapler and a stapler is probably let’s say a stapler probably the first thing you get when you set up your shop. I mean, you got to get you know, you’re sitting at your desk. What do I need? I need a pen a stapler. It’s you know, it’s like the basics. If that were a good example, you know, I think that’s kind of what you’re selling is.

Steve: Or let’s uhm… I’m trying to think of a good sample we can go with like so when you’re creating these videos to tell your story, are you not focusing on the product anymore then? Are you just literally just telling the story?

Michael: I’m focusing on what on what they want the brand to be. I don’t think people like products are boring. Like apple doesn’t so like if someone says they like apple they don’t say, “Oh, I love the Apple iPhone 4S.” They go, “I love Apple.” You know, that’s what they talk about. The brand. They don’t talk about the product. And so, I think that’s what distinguishes brand, you know a good brand from a from a boring brand is that is the overall story that they’re selling, not just the products. Because products, everyone has you know, you can get that product somewhere else. But if you’re selling your brand then that product you can look that product through the brand so like an example, I use them back in the 80s. You remember… Well, I mean…

Steve: I’m a child of the 80s.

Michael: Do you remember Izod Lacoste?

Steve: Of course! Alligators shirts?

Michael: Yeah, right. Exactly. So, everyone preppy was the thing back then, right? Everyone had to wear these great the green or the pink Izod Lacoste right? Because that preppy. There were, the Izod was selling prep, which was having money and wealth in going yachting. And you know, that’s what they were saying this lifestyle, there’s rich lifestyle and so you had to have the shirt with the alligator on it. But pretty soon, they were being knocked off by Le Tigre. Remember them?

Steve: I don’t know. I don’t even know if I had genuine alligator shirts, actually. To be honest with you. Haha.

Michael: Well the knock off was Le Tigre. And so, it was the same exact shirt, but it had a tiger on it. Okay, and it sold that much less because that’s a knockoff but it’s kind of defeated the point. Like if you were rich or want to pretend, you’re rich you’d spend the extra $15 on this shirt because that’s what their shirt represented. It was the alligator you were buying you weren’t buying the shirt; you’re buying the alligator.

Steve: So, I understand that but how do you get to that point? So if we want to go with the productivity example, we just alluded to earlier, what sort of like… How would you tell that story?

Michael: Of the stapler guy? Well, I guess I would want to know that’s why it’s…

Steve: I guess what’s the process like I’m not asking you just come up with it. But like how do you think about it? So, you already came up with this hook so it sounds like you need to come up some sort of hook that that trigger something emotionally. Right?

Michael: Right. I would find out why that person got into that business. I’d ask me the first question and they’ll say well it was just a stupid business. I found like a no, it’s not as to why did you choose that one?

Steve: Well, let’s say this person says, oh I use jungle scout and I found that it was a good product that with little demand and that’s why I started it.

Michael: Okay, but why did you… Okay. What were you doing before you became an entrepreneur?

Steve: Let’s say I was a customer service agent.

Michael: And then what was wrong with that?

Steve: Bored at work.

Michael: Okay. Right? And so, and what are your reward and what else you probably weren’t making a lot of money…

Steve: Weren’t making a lot of money. I didn’t enjoy talking to people who are angry and complained about their products.

Michael: There you go. Okay. So, then you decided to open up your own business and you knew then that you weren’t going to have… You don’t have a business where people were angry and compelling about their products. You want to help them and help them get their own businesses off the ground because that was exciting and not boring to you. So, there’s the passion behind what your product is. You could be selling, you know, it doesn’t matter whether you’re selling staplers or pencils or whatever it is. You’re talking about the passion that you the reason why you got into this business and the reason why you’re going to be trustworthy and why someone wants to purchase from you. Because you know, you’re not going to be that kind of the guy who’s….

Who has something of an awful product with poor service, you already did that for a living and you know, how awful that is?

Steve: Interesting. So, what you are suggesting actually is essentially like an origin story?

Michael: Yeah. Yeah and in that if that’s the story like if you have a product that isn’t sexy like staplers. Well then fine, let’s talk about you and talk about why you’re the one selling staplers and why I should trust you because I could buy stapler and staple it from anybody. But if I like you and I trust you and I understand why you got into the business now. I trust you, right? That’s the first step.

Steve: So, I would imagine putting together a short video that kind of talks about your story and putting that on your about page, but would you suggest using that in your advertisements as well?

Michael: Well, I draw, you know, I think the most valuable… The three most valuable things you can get when someone comes to your website, of course, there’s a purchase. Second to that is getting their email so you can you know, if they don’t buy so you can purchase later and the third is getting them to your “about us” page so that they can learn about you. So yeah, you could put a video there or you could you know, you could just type it out or you can make that the first or the second of your email campaigns or that story. I’m not sure I would open unless you can do it in a funny way and it can be done like Dollar Shave Club, they were selling… You know, there’s boring razors, but that guy is so… He creates a great commercial so you’d have to really know how to make a dynamic commercial to do that.

Steve: Well, so let’s talk about Twirly Girl. How do you guys do it?

Michael: So, it’s funny because the reason why I called my side business cardboard rocket ships. It’s because I wanted the second commercial, we made was I had my wife stepped out of a cardboard rocket ship and I built that everything in the garage. And your first line is I just returned from Jupiter where we source all for all our fabrics, you know comes out of a rocket and it’s you know, it’s all nonsense because it’s like the brand that we sell is basically, it’s basically Willy Wonka. it’s as if Willy Wonka was a dress company, so it’s a lot of imagination and those are all childhood memories like playing with rocket ships and make believe and all that fun stuff.

So yeah, so that’s how we did it for her just you know step in and that it grabs you like what you came out of a rocket ship and everyone knows it’s made up. And it looks like it’s it looks like a guy built in his garage, which is fine. That’s how kids do make believe they don’t, you know, they built stuff themselves, you know with cardboard boxes.

Steve: So video which I’ve seen by the way, which is excellent. Are you putting that on your about page or how you getting people to actually watch that video?

Michael: That one so I have five videos similar to that. You know, like you’re all just as fun and crazy and I got two more coming up. That one I’m running just ads on Facebook and it takes some. That one. Yeah runs on Facebook and it takes them to my home page where you can see the other four videos. Yeah. And so, and if you like that one that get retargeted one of the other videos that are similar to it. So what I get out of that is, you know on my website, you know, even if I get a 3% conversion rate, which is considered pretty good, you know for all the people who are seeing the ad what about the other 97% so that ad is the, that the intention of that ad is to do something with another 97% will never buy because they don’t want to dress, they don’t have a child, they don’t need it, you know. So, to get some value out of those people those ads get shared a ton.

Steve: Oh, because their viral.

Michael: Yeah. I mean it you can’t make something go viral. But if you make something that that doesn’t… That selling something other than a dress, I’m selling imagination, I’m selling, you know a memory then then that has a higher chance of going viral.

Steve: If you sell an Amazon or run any online business for that matter, you’re going to need a trademark to protect your intellectual property. Not only that but a trademark is absolutely necessary to register your brand on Amazon. Now, I used to think that any old trademark registration service would work and that could even try to register my own trademark by myself on the cheap, but I was dead wrong. Securing a trademark without a strategy in place usually results in either an outright rejection or a worthless unenforceable trademark. Now, that is why I work with Stephen Wiegler and his team from Emerge counsel. They have a package service called total TM, which provides the same attention to detail and process that large law firms do at a fraction of the price.

Now for me personally, I like Emerge Council because of their philosophy, their goal is to maximize IP protection while minimizing the price. So, before you decide to register a trademark by yourself or file for other I could protection such as a copyright or a patent, check out Emerge counsel first and get a free consult. For more information go to emergecouncil.com and click on the Amazon Sellers’ button and tell Steve that Steve sent you to receive a $100 discount on the total TM package for Amazon sellers. Once again, that’s emergecounsel.com over at emergecounsel.com. Now back to the show.

Steve: How do you get the other people to watch the other four videos? You mentioned you have five videos and let’s say someone watches one video and lands on your site. How do you get them to watch the other ones?

Michael: Well there and they want to watch it. I mean, you know…

Steve: Ohh they’re right on the front page on the homepage

Michael: Yeah on the homepage.

Steve: I see.

Michael: But also all retargeted on Facebook. Now just I’ll show them the other ads.

Steve: How does email kind of come into play? Like, how do you how are you grabbing email addresses and getting people to come back?

Michael: So that is the only time I offer a discount and that’s 10% to sign up and that’s the, you know I talk about this a lot as like I don’t believe in discounting my products are competing on price because I’m not something, I’m not selling something anybody else has so I don’t need to mark it down. So, but in order to get somebody to sign up on your email, you do have to offer them something. So, it’s a 10% off coupon and that’s basically all we ever offer. You know, when I send out an email blast once a month or whatever. It’s the same offer 10%.

Steve: And then terms of your autoresponder sequence once someone gets that coupon, I’d imagine there’s more storytelling there. I’m just trying to ask how you structure your email sequence.

Michael: So, for the automated email. So, what okay, every three weeks or four weeks. We send out a blast, you know, here’s our new arrival say 10%. And so those are just regular standard but then for the automation sequence every different email, I’m not trying to sell there. I’m just trying to sell the brand and so I just tell a different story about us. I tell a story about how, why my wife got into the business then I tell a story about how I got into the business and then I have another story where it’s like…

Steve: So, you’re a part of the story not just your wife?

Michael: Well, we have we have there’s multiple stories to tell so I have my own story, she has her story.

Steve: Interesting.

Michael: One day everyone in the office had to go to Atlanta for a trade show. So that left me I had someone had to watch the shop or and fulfill, you know, take care of everything and I was the only one, right? Because everyone was gone. And so, I had this idea of… Okay, I’m going to learn the business from the ground up. I’ll see how it really works and I’ll make things more efficient and you know, that was my arrogance and then as I… It was overwhelming.

I was like, I don’t know, you know, I don’t have do any of this stuff and I learned how to do it and I realized why the in efficiencies in our brand actually are actually will give the product a lot of character and why I couldn’t get rid of all those inefficiencies because that’s what breathes life into it. Like every process was. Oh, I get why we’re doing this now and so I just wrote a story about that. And so, and I…

Steve: That actually sounds like a movie.

Michael: Well wasn’t that dramatic. Hehe.

Steve: Well so it’s like you’re stuck alone running this business and like you’re making a mess of it. Trying to improve upon it and at the end you realize that you know, all these inefficiencies are in place for a reason and that’s what makes the brand special.

Michael: Right yeah. And so, I do, you know, I’m a screenwriter. So, I guess you’re right I come to it from that point of view. But I so, I wrote that and it’s not a long email, you know, I don’t know how many words but it’s a page and people right back on that and they send me notes. “Oh, you did great!” and I think this is like they’re encouraging and stuff. “Hang in there.”

Steve: That’s funny. Okay.

Michael: Yeah, so and that’s just that’s just good engagement. It’s getting people… First it helps you. Your open rate because people want to read your stuff, but also, you’re getting to people just to feel like oh, you’re a person. You’re not just a faceless, you know brand.

Steve: What’s the subject line on these emails? I’m just kind of curious to get people to open.

Michael: Okay. One of them is CEO promoted to mailroom. That one’s called that see how…

Steve: Hahaha. Okay.

Michael: You know and the other ones oh for my wife Story how it was like how a mother what was it called that I’d have to look it up. I was but it was something like by how a mother created a million-dollar business, you know, it’s just interesting and it’s true. It’s kind of how that’s how her origin story is.

Steve: Interesting. It’s got nothing to do with the product. So, I mean this is like a fundamental shift that it’s hard to fathom for people who aren’t used to doing this, right?

Michael: Yeah, and that’s kind of why I walk them through it and help them. But that’s I think that’s the fun part because I think people relate to people they don’t relate to business like big giant brands and when we first started, I was very insecure about that. I was like, well who’s going to buy from us? If they know you’re selling on the sonar dresses on the dining room table. Who’s going to trust us? And so we kind of took out all the personality. We try to make it seem like a big giant brand and that’s like such a mistake. I think that’s what big giant brands, what they do is they opposite they try to make themselves look small and personable and that’s why they hire faces like progressive like they have flow. They give the brand of face even though flow is never going to pick up the phone when you call, they try to make it seem like flow will.

So yeah, it’s really about just you know telling your personal story and if you’re proud of your business and you should be, you should tell your story and I think one of the added benefits is like on days that we are that were slow and I having someone’s got a slow day but will get an email from someone or will get a comment on Facebook and you can like they chose how much they love us and help me know they’re referring their friends to us and they’ll you know, they’ll share. “I love this brand.” “Have you seen these videos?” or whatever and so that’ll pick me up on a good on a bad day. You’re like, okay, we’re doing everything right just calm down. It’s just a slow day don’t panic.

Steve: Others think about my autoresponder sequence right now I have emails where I’m just kind of talking about the products. I’m wondering whether I should just totally replace those with creative stories. Like I enjoy writing those creative story type of emails. I have a couple of in my sequence but a lot of them are really just talking about the product and you know, those are boring. So, what how do you find the balance between product or is it just all story?

Michael: Well for the automation we have you know, I think there’s like we’re constantly adding so I think maybe we have eight or ten different, you know story kind of where I talk about our values and so I don’t like to and then sometimes I’ll give a coupon at the end. Oh, thanks for reading save 10% for you know for your trouble and just you know, again, it’s the same offer.

Steve: But that’s not the point of the email is not to get the coupon, right?

Michael: Yeah. The point is not to sell its just to share. You know and I do think if you give somebody something first and that could be a laugh and emotion or you’re just sharing your vulnerability. If you give them that, they’re likely… They’re more likely to give you something in return which is their business or referral or whatever and so I would try to just mix it up a little bit. I mean that’s kind of the name if the name of your website. It’s the name, you know, you’re talking about your wife.

Steve: Oh, I’m not talking about the blog I’m talking about the store part. The blog is all personal, All-Stars pretty much. Here’s a question that I’m sure you’ve gotten before in the past. What if someone doesn’t want to put themselves out there? Like what if they don’t want to get on camera? What if they don’t want to be a… What if they don’t want to get personal?

Michael: Well, I think well if you don’t want to be on camera, I guess if you wanted to create something. And you hire an actor for example, that’s kind of what the world’s most fast interesting man. You’ve seen that for the commercials and it’s all horseshit but he’s funny right? He’s still you know, how he rides the bull to work every day, you know, and we know he doesn’t ride a bull to work. And so that’s the face of the brand. So, you know, you hire someone and they create, you know, I help brands do this as well. Kind of create a persona so that when you speak to your customer, you’re always speaking to them and that voice that pompous know-it-all adventure man voice which people recognize and they know it’s tongue-in-cheek and that’s the voice of your brand.

That’s fine too. I would still encourage that brand to get a little personal maybe on their “about us” page where there’s just a photo of the owner and why the owner got into it and it’s not like you’re oversharing it’s not like you’re talking about something horribly personal but you’re just giving a little bit. You’re giving a taste of why you’re doing this and the struggles and the obstacles that you faced at that it shouldn’t make anybody to uncomfortable. It really is, you know, it’s not so intimate that sharing, you know horrible secret about yourself.

Steve: That’s interesting your kind of like blurring the lines between like the blog and the store. So, you would suggest talking about some of your pain points and running the business?

Michael: Yeah. We all have those pain points…

Steve: No, we all do it’s just… I really, usually do not see those as part of store emails.

Michael: I would try and see what happens where its worst-case worst that can happen. If someone falls in love with you like no one ever, you know, there’s a great quote by Oscar Wilde whose genius, right? And he said you, “you’d worry less about what about what people thought of you, if you realized how little they did.” and that works on so many… Like it basically means “A” they already think you’re garbage anyway, so what are you worried about which is funny. But I think he really is meanings means to say is like in five seconds later. They’re not going to remember this.

Anyway there, you know, they got their own problems. No one’s really worried about you know, how you come across they have their own issues. So, but if you can share and connect to somebody on a on a personal relationship, I don’t think you’re going to be judged. I think they’re going to say, “oh, yeah. I have the same problem.” You know.

Steve: I’m just thinking about my other storms signature. Wonder if I should lead with, you know, wife quits her job to stay at home with the kids and creates a million-dollar business. As one of the autoresponder sequences for the store. I just never thought of doing that before.

Michael: Well type it up and send it over and I’ll look at it. Hehe.

Steve: Well, okay. So, a lot of this involves creativity. So how do you teach creativity?

Michael: You know, it’s funny. I always someone just asked me like, “oh, well, maybe I should make a module and that’s all I’m going to make a video of that as well my website and it’ll be like a 30-minute of my creative process and it’s not like a you can’t teach someone.

Steve: What can we talk about this process a little bit. I mean I’m curious.

Michael: Yeah. Well, so I think so. I’m a like I said like we talked about I’ve been a sitcom writer for 25 years. So, and I remember I was working at King of the Hill during… On 911 right so that day everyone was stayed home from work, but the next day we had to go back to work and we had to make comedy and no one was in the mood. I promise. No one was in the mood for weeks to say and even funny it was somber like we’re all in morning, but we had to write these scripts and we had to write these funny scenes and it was is almost surreal is like a like, how do we do this when we all just want to sob and so you kind of just relied on our training and which is and is going to be someone would pitch a joke and then the room no one would laugh people go. Yeah.

That’s funny. That’s funny put that in. You know, it was that kind of thing. We rely on your training to kind of make this product. And so that’s kind of how I think about the creative process. It’s really about taking two things that are very ordinary and putting them together. So, a lot of people think creativity is like blue sky and then the sky is the limit we can do anything we want like that doesn’t that makes creativity harder. Creativity is about imposing limits on yourself. And so, for example, if you ever watch the show Project Runway, have you seen that?

Steve: I have my wife watches it.

Michael: Yeah, so like they have different challenges every week. And so, one week it would be one of their challenges these unconventional challenge. So instead of giving people cloth, they’ll say here going to a candy store and use all the candies to candy wrappers or whatever to make clothes out of so it’s unconventional right? So that’s a limit you’re saying make a dress, but you can only use rappers or candy or you know, Red Vines or licorice. So, you’re imposing that limit on yourself and then they come up with the most creative things because oh, wow. I didn’t realize you could use candy that way put it together to make something flowy and beautiful.

And so, it’s the same thing for creativity put a put a rule on yourself saying, “okay. I’m going to have a thank you page or I’m going to send a thank you email but I’m going to say thank you without saying thank you” like but okay try that. Well, maybe you could say gracias or whatever or maybe you could say. I’m indebted to you forever. I’m in an R. I’m naming my child after you but then at that’s how you can get creative on a thank you page is by, how can I say thank you without actually using the word “Thank you.”

Steve: Lemme ask you this. How is all this measurable? Like when you create a brand story and let’s say you change up all the copy and you have these videos. How do you know that It’s actually doing something?

Michael: Yeah. I mean like you can A/B test and I’m not I don’t think when it comes to creativity that’s like the best measure of things is like well which joke is…

Steve: Oh you mentioned like trying out one of these story emails, right? For example, like the one I just described about how my wife quit her job. Do you measure the effectiveness of that email by the amount of sales of brings in? Or the number of people who reply?

Michael: I would measure that by maybe the click rate or the open rate and just compare it to some of your other ones. I do have you know; I do have coupons on those thanks for reading. Here’s Goose coupon so I can measure which emails do better than others, but there’s so many other factors because it’s like well did someone buy from this email because the story’s better or do they buy it just because it was earlier in sequence. Like you just don’t know.

Steve: Right? So, is there a way to find out?

Michael: I don’t know that I don’t really worry myself with that. I just try to tell a lot of different stories and some because you know one story is going to resonate with one person a different way than another one is. So it’s a little apples to oranges to me.

Steve: For the for like your best performing story. Like what is the open rate and click thru on that email? I’m just kind of curious.

Michael: Well, I’d have to look that up

Steve: but it’s is it a significantly higher than average? Like I think the average just like 17% or something like that.

Michael: Yeah. I always shoot. Shoot for an open rate of you know in the low 20s.

Steve: Okay

Michael: so I definitely get that but I wouldn’t get that for a regular email blast. I get that for sure, you know with my story emails. Yeah.

Steve: I guess another good sign of like a really strong brand is repeat business.

Michael: Yeah.

Steve: Do you happen to know on top up your head what your repeat customer it is and with these people are they like opening all of your emails? Are they?

Michael: I get you know, I don’t have it’s fun with I’ve tried to do the numbers on that and it’s just too tricky to I’ve tried you know, it’s sort of like, you know, I’m not a spreadsheet Guy where you know, so I don’t know that but I do know that’s what we hear from our customers and that it’s like so sending, you know, a birthday offer often people buy for birthday. So we get them into our birthday club and that always performs well because you know if they if some if a girl’s birthdays in March chances are they’re going to order in February for a gift. so I said that I remind the people the next year in February. So that always does well because it’s you know, you know at that’s repeat business.

In terms of in terms of how do I know just because I could tell from the comments they leave on our site and on found on our Facebook page, you know I can just tell

Steve: and then this you mentioned earlier this this creative process that you constrain. Can you just share at least something like a framework that you have? What does it mean exactly to constrain or be constrained or constrain the creative process?

Michael: Okay. So for example for the videos and you can go see those videos on our website, you’re on Twirly Girl shop or on cardboard rocket tube. You can see how I do them. So the limits on those videos would be okay. How do I make a commercial that sells and that tell us about our brand and my budget is $1,400. So that’s a limit right there. I’m not going to spend more than that on, you know, so okay is that means I have to buy everything make everything all the props out of cardboard and spray paint. That’s a limit right there. And another limit is okay the brand voice that we use for our brand and you would note. Well, some people have picked up on this is Willy Wonka. I write everything as if we are Willy Wonka and I never reference Willy Wonka.

I never put my wife in a you know in a purple hat and a purple, you know top hat or anything. I don’t steal any lines. I don’t even say Willy Wonka, but I talked to them in that crazy voice. Willy Wonka was a little he was very mid. I’m talking about the Gene Wilder version is very mischievous. He was very and naughty and a little crazy and almost like you got spooky at times but he was like And loves what he Wonka it was magical. And so that’s that’s a limit. Okay. So, how do I write all my dialogue for the for the ad or every time we talked, you know, when I when I do a certain kind of branding email I only talk talk as if I’m channeling that voice. So that’s a limit. You know, I’m not using any one else’s voice. I’m using trying to do it as if through Willy Wonka, so I’m not you know, I’m not referencing Alice in Wonderland. I’m just doing Willy Wonka.

Steve: How did you come up with that? Willy Wonka angle in the first place?

Michael: it just kind of you know, I just love that to me. That’s a happy childhood memory for me. It’s like why do I remember my childhood? So if I can associate Twirly girl with other happy childhood memories like Willy Wonka it all it all kind of fits together.

Steve: It seems like your creative process is always based on your personal experiences. And do you recommend that most people do the same?

Michael: I think so because that’s what makes it authentic like you can’t make that up. So when I had when I tell people to write I’m like just be truthful. no cliches ever ever. Like I hate cliches everyone does and it’s there inauthentic. It’s just that stuff that’s out there and there are cliches in the comedy writing world. We call them we call them clams and that’s a No-No. So like and you hear this all the time on you know, someone would say, oh, I like doing homework said no one ever, like said no one ever is a cliche. It’s a clam right? It’s not your joke. It’s a joke. You’ve heard a thousand times or and someone post on Facebook I know a dog eating a watermelon and then they write this so this period is a cliche it’s not your thought. It’s in the first person who came up with that was a genius after that is just you know, or if someone says I’m switching you to decaf like that.

You’ve heard that a billion times right? It’s just it’s not fresh never use that so this speaks to authenticity when you’re taught when you’re telling your brand your Brand Story refer back to instances and specifics from your childhood because that can’t be made up. And that’s your personal story. That’s what people want to relate to. They don’t want my story. They want, you know your story.

Steve: So Michael we’ve been chatting for about 40 minutes. I kind of want to end this episode with a set of action items. So if you are running a brand and you think that the products are mundane what are set of action items that these people should take?

Michael: well first is I’d figure out like why you why you got into this line of business in the first place. And talk about. Okay what? You’re doing beforehand. And then why are you doing this now? And now I can now I can trust you because I know what you what you really want in life and what your what Your obstacle was getting there. So I’d bring a little bit of your own personality into it.

Steve: I wonder if like you have to embellish that a little bit because some people just say hey, I just want to make money.

Michael: but why do you want to make money? Okay, so well because my you know, I grew up poor and we never had anything and I have kids and I don’t want my kids to grow up poor and I want my kids. I want to give them the best of everything and so I don’t want to have when I was a child. Woke up worried, you know if we’re going to have food that day and I don’t want them to suffer that way. So, okay. So now I get it. So if you say I want to become a billionaire and Rich like we have Beezus. Well, yeah your jerk, but if you talk about why you really what spot underneath it. What’s really driving you that fear? You know that memory that was painful now people are going to root for you.

Steve: When you whenever you say something, it sounds infinitely more interesting.

Michael: Oh I think, that’s my training, right? Yeah, but we all have that but but right we all have that story. just have to know how to access it.

Steve: Do you have any other action items?

Michael: Well, those those the first I mean this this is really for people who I don’t want to know if you’re getting bored with your company or your you know, you’re getting bored with the whole process or you want to pick up sales and you don’t you’re tired of marking things down then this is what this is for. It’s like if you go on you Of a linklater, but you can go and made a free course for people just watch it’s like 25 minutes of how you know how branding creates value and so it’s free to sign up for it and enter your email and I’ll send it to you and it’ll help you learn how to get your first foot forward on this.

Steve: I think really it’s all about getting people to think about different things like prior to talking to you. I never would have thought to talk about our origin story on the actual store Page because in my mind at least everythingin my emails and what not have talked about the products it focuses on the products and what they’re used for in the value propositions, but just by adding an extra layer of story to it people are going to be rooting for the owner as opposed to just any other products

Michael: But they’re also going to know why they can trust you. I think right there like Okay. So this guy selling something why should I believe him? Like, who is he if I know? Okay now I know a little more about you and how you got to where you are today. I’m like well hell I want to be that to I want that too or at least I want a root for you I want Help you in some small way.

Steve: What’s hilarious about this is these are the exact things I do on my blog to sell my courses, but they are not things that I do with the e-commerce store. I just never thought to meld the two together.

Michael: Yeah, I think yeah. Well, I guess you know it sometimes takes an outsider to point it out that off. It’s often the case. I think.

Steve: so Michael tell us where can we find this free course?

Michael: so if you go to cardboardrocketships.com and you know pop-up will come up there and just sign up for the free video and enter your e-mail at cardboardRocketships.com. That’s it.

Steve: Cool. Well, hey Michael. Thanks a lot for coming on the show and I guess opening my mind to different ways to Market my business among the readers to yeah.

Michael: Yeah, and you know, by the way if they sign up and then they’ll get emails as well. And then you can see you could just studied my email even if you’re not interested in using the course, you can study the emails to okay this here’s a guy who’s sending out stories, you know stories each time. He’s telling a different story so that may help you as well.

Steve: Okay. Yeah. Hey Mike. Thanks a lot for coming on the show man.

Michael: Yeah. Thank you for having me. What a pleasure.

Steve: Hope you enjoyed that episode. Now as I mentioned earlier Michael was a speaker at my annual e-commerce conference. And what is cool is that he helped out a number of attendees live on camera established their story Brands right there live. It was awesome. For more information about this episode go to mywifequitherjob.com/episode313.

And once again, I want to thank Klaviyo for sponsoring this episode, Klaviyo which is my email marketing platform of choice for e-commerce Merchants. You can easily put together automated flows like an abandoned cart sequence, a post purchase flow or win back campaign. Basically, all these sequences that will make you money on autopilot. So head on over to mywifequitherjob.com/klaviyo and try it for free. Once again, that’s mywifequitherjob.com/klaviyo

I also want to thank PostScript.io 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/Steve. That’s Postscript.io/Steve.

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

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

But before we begin I want to thank Klaviyo for sponsoring this episode Klaviyo helps Brands build relationships across any distance delivering email marketing moments. Your customers will appreciate Ember and share in good times and bad and since it is all driven by real-time e-commerce data, you can make sure every interaction feels more personal now when you have a 360 degree view of the customer the growth possibilities are endless. So visit clay veoh.com my wife to try for free. Once again, that’s KLAVIYO.com/mywife. Now on to the show.

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

Steve: Welcome to the my wife quit her job podcast today. We are doing a special episode because I’m not interviewing anyone, instead I brought Toni Anderson back on the podcast for like the millionth time to do a recap of seller Summit 2020, which just took place last week. Now the seller Summit is a conference at Toni and I throw every single year and it’s a show about bringing e-commerce entrepreneurs together virtually this time and learning new strategies on how to sell physical products online.

And this is our fifth year and easily the most One yet due to the coronavirus. So today we are going to talk about how we had to Pivot everything at the last minute and key takeaways from the talks. So how you doing today? Toni? Thanks for taking the time to come back on. So this is our fifth year ticket sales were going great leading up to March. We’re almost sold out and then covid-19 happened. Just trying to get your thoughts on how you felt things went this year.

Toni: You know, I thought we did the best that we could in the circumstances having never have run an online event before Or I think there were definitely some challenges for us. But I think overall people really got a lot out of Seller Summit 2020.

Steve: Yeah, I mean it was really stressful throwing things together cut at the last minute, right? We had like a month to prepare for it. But yeah, since I’m in charge of tech I was extra nervous for this whole virtual thing, but it went pretty smoothly. I think we only had one minor technical hiccup with one talk.

Toni: Yeah, and I think the complicated part of it is it was that it wasn’t just you and I talking for three days. We were bringing on people from all over actually all over the world. Right? And so we’re not relying on multiple internet connections, multiple cameras, multiple microphones that we don’t have any control over because all of our speakers are using their own computers and things like that. So I think it added a layer of complexity that made us both a little bit nervous.

Steve: And also on your part with the planning like we had people from Australia, you know all over the US to and just planning the timing was a little complicated too.

Toni: yeah because we had East Coast speakers West Oh speakers. And it’s one thing when everyone is in the same location physically and then you can ask everybody to get up at 9 a.m. But it’s hard to ask someone on the west coast to get up super early to do a talk. You know what I mean? It’s just it just adds a layer of complexity. I totally agree.

Steve: Yeah, I mean I still like having a live event better, but I think it probably went as good as it could have gone in terms of virtual events. And one thing that we were talking about this earlier as we really like having the live chat on there when speakers are talking because typically Someone’s talking up there. You’re not getting into the minds of the audience. And so I thought that was a really good value add.

Toni: it reminded me of what is the Disney movie about the girl and it’s the characters are inside her brain and there’s like anger and joy, I guess It’s the

Steve: Inside my head right? Is that what it’s called?

Toni: Inside Out.

Steve: Inside out. That’s it. Yep.

Toni: Yeah. Okay, so it reminded me of that movie because typically when you’re in a big conference Auditorium, you can see on people’s faces for the most part like, oh they’re losing the crowd or the crowds really into it, but it was really enjoyable to read their commentary as the sessions were going along.

Steve: Yeah, totally and people were having questions along the way and I think a lot of people who might not have normally asked questions if it were alive were asking all sorts of questions in the live chat.

Toni: Absolutely because I think it is intimidating if you’re in a ballroom and there’s 200 people and someone walks over and hand you a microphone. You got to stand up for some people that’s very natural. But for other people that is like no way in a million years, are they ever going to do that.

Steve: And I think we had extended QA. Which in my opinion is actually made these talks this year a lot more in-depth than in previous years when we had to do it live right because we have limited time when we’re live.

Toni: Because when you’re live you have to account for people switching rooms, you know having to wait in line to go to the bathroom getting a drink whatever when your virtual you just assume people can kind of do that at their Leisure and they don’t have you don’t have to add these like 15 minute blocks for breaks. So we were allowed we were able to extend our speaker time. I want to say each speaker had around 10 to 18 minutes for QA.

Steve: Somehow longer I think Derek Halpern. I think we went on for an hour and 45 minutes.

Toni: Well that’s the benefit, same with Mike Jackness right because he was the last talk.

Steve: Oh That’s true. Yeah

Toni: Of the first day. Which people really love because he was able to bring on his VA who was located in the Philippines. And so they were able to do an extended Q&A as well because they were the last Talk of the night. However, I was ready for bed at that point.

Steve: So I don’t know if it was a combination of having the live chat and the extended QA. But I actually personally thought that this year’s content was actually better than any of the prior years.

Toni: It was my favorite year for content for sure.

Steve: Yeah, and I don’t know if what the difference was really maybe it was the speakers maybe is the content but I want to say also is the extended QA in the live chat as well.

Toni: Yeah, I think with what the live chat did was it allowed the speakers to go in-depth into some of the points that they had made during their talks which they which actually they get at the round tables at the event, right? So they’re able to do that at a later time on the last day. However, it doesn’t get to happen in the big room with everybody.

Steve: Yeah, I think that’s probably what it was and then instead of like having the round tables like we usually do I think the live chat actually essentially took the place of that, right?

Toni: Yeah. Absolutely

Steve: So let’s go down some key takeaways of the talks so I kicked it off with the keynote and I did want to share with the listeners some statistics that I gathered for this keynote. I’m probably gonna publish the keynote online, but I just want to give you some of the highlights. I published a bunch of statistics on the of Corona on e-commerce and I had Jake Cohen on a couple of weeks ago to kind of discuss Klaviyo’s numbers, but overall I would say everything in e-commerce is up.

The only categories that are really down right now are like men’s Formal wear, Bridal Wear, party and event supplies and that sort of thing luggage. Everything else is up big time and I kind of quoted some statistics here and I think from just clear videos customers. It seems like everyone is up. Up between 20 and 30 percent Gorgias, which is another sponsor quoted similar numbers. And what was really interesting is when I looked at Shopify’s Global traffic numbers and what we did is we compared Black Friday with the traffic that we were getting in April and every single day in April was like Black Friday.

Which essentially meant it was like Black Friday every day for people on Shopify. So I don’t know if you find that believable or not, but I guess it’s the statistics don’t lie.

Toni: It’s interesting because I don’t, I definitely believe the statistics but yet at the same time. I’m hearing Sellers and Facebook groups and things like that talking about how they’re struggling.

Steve: Yeah, you know, I’m here that too and we’re in the event industry. So like in my keynote I was talking about how we were down in the beginning and we kind of pivoted it to quarantine gifts. So Linens with funny sayings on them and that sort of thing and that’s actually what made the difference for us, but I guess when you hear about people complaining like they’re down online, I guess the extremes of the one who are going to post, right?

Toni: Absolutely. And I also think too. I think I think of someone else who was able to Pivot was Amanda Whitten born who sells birthday invitations and she was able to Pivot into making I think teacher thank you postcards and things like that. I think the people that don’t have the ability to Pivot and then to mine that comes like more Amazon specific Shoppers.

Steve: Yeah

Toni: Or Sellers where they are selling, you know, very specific skews on Amazon. They weren’t able to ship things in things like that. That’s hard to Pivot right because you’re not going to be able to import a different product you don’t control a lot of those supply lines and those are the people that are probably the ones that are very vocal in the groups that I’m seeing.

Steve: yeah I mean like if you just look at Amanda for example like she couldn’t ship any more product in so she went Merchant fulfilled and it was nuts

Toni: Great

Steve: but a lot of these larger companies who don’t have fulfillment infrastructure obviously can’t do that so.

Toni: right.

Steve: Facebook ads cpms plummeted I got some stats from my buddies over at mute 6 Facebook ad costs are down like 25% and So based on all this overall and I can only speak in aggregate here this is the best time to be in e-commerce like there’s going to be a new normal because everyone’s used to shopping at home now and this is going to persist for quite some time I think

Toni: well that was one of the biggest takeaways I don’t want to skip to the take away so quickly but the one thing that really stuck out to me that I feel like multiple speakers talked about was that the one thing that this whole quarantine shelter-in-place has done Is open people’s eyes to shopping online. So people who were not shopping online before or were not shopping online regularly are now becoming regulars shopping online.

And so that opens up a huge opportunity and I think in either your keynote or someone else had that the sales online have surpassed brick-and-mortar right in April, I think so, I think that’s where the opportunity is for the e-commerce sellers right? Is that you’re going to get these new customers who were may be wary of shopping online before because they weren’t forced to, now it’s becoming comfortable for them and it’s going to become something regular.

Steve: I mean, you know, it’s a big deal when my mom who’s I think going to be 80 years old is using instacart and everything when she has not ever done that before

Toni: right

Steve: and she’s using Zoom as a verb now. “You want to zoom it tonight?” you know, there’s gonna be

Toni: Hey we zoomed it to The Seller Summit.

Steve: Oh, that’s true.

Toni: Did you put that video up everywhere or just on private

Steve: No no not yet. I still have to put it up everywhere. But yeah, so we held this opening party on zoom, and it was nuts. It was a lot of fun though.

Toni: It was funny because up until two minutes before we went live. You were saying to me. No one’s going to show up. No ones gonna show up.

Steve: Yeah

Toni: It’s gonna be it’s gonna be you and me and one other person and I think whenever we went to login and I had it set where people had to sit in the waiting room just because I wanted to make sure that we didn’t get any trolls. I said, you know, we went we were maybe five minutes before launch and I said, we have 15 people in the waiting room. And then I said, we have 20 people in the waiting room. We have 22 people in the waiting room, so it was crazy. I think we ended up with like 45 plus people on at one time people had to came and get went but it was pretty cool.

Steve: I think I was trying to be fashionably late and then you texted me panicking.

Toni: Yeah I remember I was I was like, where are you?

Steve: I didn’t think they were gonna be that many people on time and waiting to be honest with you, but it was a pleasant surprise

Toni: and it was cool because even though I will say it does not take the place of in-person meetups. It was nice that everybody got a chance. Introduce themselves say hello say a little bit about themselves and just what it I think it helps the next day when people were in the chat that they put a name with a face because they had seen them the night before on the zoom call.

Steve: Oh, yeah, totally totally I think it I think it totally helped. I mean is the best that we could do under the circumstances for people to meet each other

Toni: Hey and people had Zoom backgrounds which just made made my night as you know

Steve: And everyone was drinking too. So it’s kind of like a cocktail party

Toni: cocktail party that I didn’t have to stay up late for so I might be lamenting this every year. I don’t know.

Steve: So the overall theme of Seller Summit this year was on owned marketing. So this is marketing that you can control because of all these things have been happening on Amazon. It was just post in the Wall Street Journal that Amazon surprisingly and shockingly was using cellular data to launch their own competing products. And so yeah, the theme was own marketing we covered three main categories one was earned marketing, which is where you get Word of Mouth sales. Social Media mentions reviews owned marketing is where you actually own the medium. So this these are things like your own online store, your email list ], your SMS list, your messenger list, SEO organic Facebook and that sort of thing.

And then of course paid advertising, Facebook ads, Google ads, Amazon ads, influencer marketing and marketing. And so what I thought I’d do for the rest of this podcast is to kind of go over some key takeaways from the talks.

Alright, so the first talk was from Andrea and she taught us how to use SMS marketing to grow your business. And I hope that her talk kind of solidified that SMS is going to be the next big thing. I am contributing a lot of my resources towards getting SMS marketing up for my e-commerce store. And once again, once you have someone’s cell phone number, that’s yours. It’s like an email address except better because people always open their text. Now you might be thinking to yourself that people might not want to be marketed via text, but it’s happening right now and it’s slowly going to become more widely accepted

Toni: and I love the idea that this is just one more component in a way to reach your customers and for me personally, I don’t mind getting text marketing because you can always unsubscribe is very simple and it is true. I open every text that I get. So I think this is a definitely a talk to listen to multiple times.

Steve: and if it’s a company they actually want to hear from then you’re probably not going to mind. So, for example, I get text messages from this chicken place right down the street for sales and I actually don’t mind and oftentimes the texts influence me to go eat there that night.

Toni: Oh, absolutely I get the Chipotle text and like that. Absolutely influences me getting Chipotle.

Steve: Oh, just okay. I didn’t I’m not on the Chipotle SMS list. I guess

Toni: they do all their coupons through SMS, which is actually pretty smart right because I know when they probably text me I’m usually going to get a coupon

Steve: exactly. Yeah same with that chicken place for me. So if you guys aren’t doing SMS marketing I encourage you to give it a try and look at Klaviyo because if you already using klaviyo it kind of like a no-brainer since they have all your sales data already.

The next talk was from Jeff Oxford and he taught everyone how to grow your organic search traffic for your eCommerce store. I really love this talk Toni. I don’t know what you thought of it.

Toni: It’s I love this talk. This was probably in my top top three talks this year. He’s such a good presenter. Everything is so clear and understandable and he you always walk away with some strategies. And actually I’ve always I’ve already started to implement a couple of the Outreach strategies that he recommended in his talk.

Steve: And I want to say that he pretty much covered. He did a good job of covering almost all of SEO in just like an hour and he got a ton of questions also in the live chat.

Toni: Yes. That one was one of our top question sessions for sure.

Steve: Yeah, and a lot of people who are coming off of Amazon starting on their own store, you know organic traffic is probably going to play a decent sized chunk of your overall sales.

The next talk was from Natasha Takahashi. She taught us how to leverage chat Bots to grow your eCommerce store. Now I’ve been using chat Bots for jeez, I think at least three, four years now at this point and is actually now a significant portion of my sales for mywifequitherjob.com. Especially it’s probably close to like 40% of my sales. I know you’re not using chatbots yet Toni. What did you think of this talk?

Toni: So I I loved this talk. I thought this was a great. First of all, Natasha is an amazing presenter. I loved just she’s very organized and it’s very easy to follow but what I thought was interesting about this talk, is it got the Sub chat going in our Seller Summit Group and people were in the chat talking about everything as she was talking. So I’m gonna have to go watch it again because I didn’t get all of her strategies because I was busy monitoring because people actually were talking about you Steve and how you were actually a chatbot and there was that was the only way you could get things done.

Steve: I remember that.

Toni: I was in there monitoring the chat while she was talking thinking I am not getting like half of this but after her talk what I what I was able to get from it, it’s Something I need to do. It’s just one of those things right? You know, it’s like one more thing in your business and I don’t want to jump ahead but we hadn’t someone else talk about working in your business on what is already successful. So as I was ready to jump into chatbots, then I heard another talk and I was like, okay, maybe not maybe not yet.

Steve: Yeah, we’ll get to that talk. Actually. It’s a very important talk about getting overwhelmed with all the strategies that you learn in a conference, but I found it actually did a great job of just clarifying why you should even go into Facebook Messenger Marketing in the first place.

Toni: Right and it’s so it’s so much less expensive right now than email marketing and I think you were talking about this and I think she references as well, you’re getting about Forex return right compared to email. Is that what your numbers were?

Steve: Oh, yeah. Yeah. I mean the engagement is so much higher than email right now.

Toni: Yeah, so it feels like a no-brainer. But at the same time it also feels like something really big to set up. So it’s one of those things that I feel like I have to balance with my own business, but it’s definitely definitely on my list and and high up. For sure.

Steve: Yes, I mean, you’ve got a lot more plates than I have to juggle.

So the next talk was a summit favorite back in 2016 Drew Senaki, he spoke that first year. We launched it hasn’t been back since but I kind of roped him back into coming on and speaking this year and I loved his talk. He talked about how to make your business recession-proof and my take away from here and and just just for context here Drew runs a nine-figure e-commerce store. He’s the CEO of auto anything and it’s primarily a Dropship Outlet and I talked about this a lot.

But you know when you’re dropshipping you pretty much don’t have your own brand because you’re selling other people’s products and during this whole covid-19 Drew found a lot of different ways to Pivot his business in order to actually grow. I think he was he ended up being up 30% after all the things that he did.

Toni:Yeah, and I think he followed one of the undercurrents of the summit was the importance of being able to Pivot and the importance and he talked about the business that he had. I think it was 2008. Where we had the recession and he didn’t pivot. And he basically I don’t know if he lost the business. I don’t exactly know what happened to that but he talked about the difference between what he did 12 years ago and what he’s doing today and how we need to be thinking about that in our own business.

And I think you know, he used a lot of really great examples about people that were able to Pivot and then I think we you know, we ourselves like you pivoted you talked about how you guys have changed your napkins up, you know, you’re doing some quarantine things and offering some things that you hadn’t offered before we know some other people that have done the same thing and I think it was just sort of sort of a wake-up call to people that if they haven’t pivoted this is the opportunity. They need to jump on it.

Steve: And his example with auto anything just goes to show that even if you don’t have your own branded products, there are ways to Pivot your business to kind of Stand Out Among the crowd.

Toni: Yep.

Steve: I don’t want to give too much away there.

The next talk was from awesome broader first time speaker at the summit longtime friend, excellent speaker. He runs the e-commerce influence podcast. He talked about how the top e-commerce businesses scale. And what you can learn from them Austin used to run an agency, and he also runs this service called brand growth experts and he interacts with lot of different companies and he recognized certain patterns that allow businesses to grow. My key takeaway from his talk actually was that all the most successful Founders always protect themselves from burnout and if you feel stuck it’s because you are doing too much not too little.

Toni: that’s interesting. That was not my takeaway.

Steve: That was not your take away? Okay

Toni: It was not my takeaway was when he talked about how most of the successful business owners did one thing really really well and that’s what they focused on.

Steve: Yes. That was my next

Toni: Yeah, if it was influencer marketing then they just killed it and influencer marketing and they didn’t worry about, you know, create a new YouTube channel or doing chat Bots or anything like that and if it was Facebook ads and they just became like Facebook ad Masters and that’s what they did and it’s not that nothing else happened. But that’s where they devoted like their time and their energy and any training that they needed, you know, they focus on that and that really stuck with me.

Steve: Yeah along those same lines Austin mentioned that his most successful clients only really used two channels to scale. Now, I know for our e-commerce store, we used one channel to hit six figures and all you need is to pretty much to hit seven or more.

Toni: Yeah, and I think what happens in this was I thought was such a great. He kicked off the conference right after your keynote and I thought it was a really great talk to start with because you attend any conference virtual in person and you hear so many awesome ideas and so many people in different fields are very very successful doing what they’re doing. But there’s no way that you as one person or a person with a small company can do all of that really well, so I think his talk was a good reminder that you only need to pick one or two things to scale.

Steve: Right. Hence, you are focusing on email. I believe right now and messenger is at the top of your list, but you’re focusing on what’s working right now for you.

Toni: Yep

Steve: and the companies that were all supportive of own marketing the sponsors for the conference. We had klaviyo who you guys have probably heard a bunch of times on this podcast already. Zippify which is Ezra Firestone’s company. He helps you build landing pages and he has this cool one click upsell for Shopify. Bigcommerce, which is one of my main shopping carts of choice because they have this really cool WordPress integration where you can actually have your blog and your store in the same domain. And Pickfoo, which is a polling company where you can get instant feedback about anything from real humans within 15 minutes.

Now, the next section of the Seller Summit was all about paid marketing and you know, I met this guy Nick Shackelford. He was introduced to me by Ezra he invited me down to his event in LA I had an amazing time and at that point, I knew that I had to have him talk and he spoke specifically about how to scale Facebook ads through hidden audiences. And this is actually one of my favorite talks at the event. He actually showed us so he spends millions of dollars per month on Facebook and he literally showed us his exact campaigns in this talk and I don’t spend nearly as much money as Nick and it was just interesting to see an account of someone whose scales so quickly. What did you think Toni?

Toni: I thought he had a great talk. I think the first part of his talk when he talked about those hidden audiences, I think for most e-commerce sellers was just like a complete brain blow right just never thought of that strategy before so I love that he brought that Up. And then I think the second part of his talk where he basically went in his face book dashboard and showed us. Everything was nuts. I don’t know anybody who’s ever done that before at a conference. So that was just amazing and people that know anything about Facebook ads were I was getting messages because I can’t believe he’s doing this.

I can’t believe you showing this is amazing. So he just had a great presentation clearly knows what he’s talking about. But most importantly he used to be a professional soccer player and I was like Googling him all after his talk. To find out more about it.

Steve: You’re not a stalker.

Toni: Yeah, I’m not a stalker. It’s totally normal fine. But yeah, he he was incredible great great presentation. And definitely if you haven’t watched it all the way through you need to watch that second half. It’s just gold.

Steve: Just to give you an idea like what I start out with the campaign just starting out I’m using I’m usually blowing like 20 to 30 dollars a day. Just just to kind of you know, hash things out. Nick, I think he’ll just put down five hundred or thousand dollars a day. Just from the start just to show you like he’s you Spending all this money on Facebook and making money.

Toni: and I think the Q&A on that was good to he did it. I think we had a little extended time with him as well because he was the last session before break and he actually did walk through some strategies for people who don’t have a thousand dollars a day to spend because that’s usually most people when they’re getting started right? They don’t have a thousand dollars a day spent on Facebook ads. So he did walk through some strategies for folks who don’t have the budget that he gets to work with.

Steve: Yeah. Basically you just take what he’s doing and just scale it down to whatever level you’re at.

Next talk was Brett Curry and he talked about mastering Google ads for Amazon and sponsored brand video ads. Now, I actually didn’t know this but Amazon actually allows you to do attribution or conversion attribution now, so basically what that means is if I send a Google ad or a Facebook ad over to Amazon, there’s a way to actually get credit for the sale and tell Facebook that it actually resulted in a conversion. This is huge. I didn’t know about this because I guess apparently this program is in beta. But Brett actually introduce that to me.

Toni: Yeah and Brett is that this is his third year at the summit and every year he gives a great presentation. But this year I feel like everything that he presented. I had no idea that you were able to do and like I was just yeah crazy

Steve: and sponsored brand video ads turns out to be like the highest converting Amazon ads that you can run right now and I wasn’t running them. So I’m going to go ahead and do that now and try it.

Toni: peaker 1: Yeah, that’s that video is on my priority to re-watch. That’s one of the first ones I want to re-watch because I feel like he covered a ton of information and it’s all stuff that I’m not doing and I had some of that I had no idea I could even do.

Steve: totally totally I mean, I guess, you know, when you run an agency you always have to be on The Cutting Edge of all the advertising platforms.

Steve: If you sell on Amazon or run any online business for that matter, you’re going to need a trademark to protect your intellectual property. Not only that but a trademark is absolutely necessary to register your brand on Amazon. Now, I used to think that any old trademark registration service would work and that could even try to register my own trademark by myself on the cheap, but I was dead wrong. Securing a trademark without a strategy in place usually results in either an outright rejection or a worthless unenforceable trademark. Now, that is why I work with Stephen Weigler and his team from Emerge counsel. They have a package service called total TM, which provides the same attention to detail and process that large law firms do at a fraction of the price. Now for me personally, I like Emerge Council because of their philosophy, their goal is to maximize IP protection while minimizing the price. So before you decide to register a trademark by yourself or file for other I could protection such as a copyright or a patent, check out Emerge counsel first and get a free consult. For more information go to emergecouncil.com and click on the Amazon sellers button and tell Steve that Steve sent you to receive a $100 discount on the total TM package for Amazon sellers. Once again, that’s emergecounsel.com over at emergecounsel.com. Now back to the show.

Next talk was Ed Ruffin, Edward Ruffin, PPC Ed he likes to be called and he talked about how to use sales funnels to maximize your Amazon advertising. What I liked about Ed’s talk is he kind of gave a more holistic view of Amazon advertising across the entire funnel and because over the years Amazon now has like a complete advertising system where you can actually Target cold customers all the way down to the bottom of the funnel with Amazon sponsored product ads.

Toni: Yeah and what I love about #PPCEd as we call him is that I’ve never seen someone get so passionate and excited about something. So boring is

Steve: I don’t think it’s boring. I don’t know what you’re talking about.

Toni: All right, you know what, I mean. It’s he’s talking about even when he gets super technical. He’s still like waving his arms and very excited about everything and I feel like I like this was once again his talk was my favorite of all the talks. In Seller Summit just because I loved that big picture because he started off with the big picture and then he brought it in to like those actionable strategies that you can actually go into your Amazon account and execute today.

Steve: Totally. So I always loved watching PPC Ed it’s funny because I called him edit first things like no. No, my name is PPC Ed and I’m like sorry man. I guess I’ll call you PPC Ed from now on.

Next talk was from Ilana Wexler. She had talked the prior Year got rave reviews this year. She talked about the paid traffic puzzle and YouTube ads. So if you’re just starting out and you have no idea where to advertise a lot of had this really cool strategy in place. That will help you figure out where you should be focusing your efforts and I don’t want to give too much away, but it all starts with retargeting and then just kind of gradually expanding your audiences and she uses the analogy of filling out the different pieces of your advertising puzzle.

Toni: Yeah, and once again, she always has such a great job of explaining everything and what I love about all of our speakers, is that a lot of times I don’t know about you but I will watch a video or a webinar about how to do some of these things and they don’t actually give you this actual strategies. He’s like they don’t show you how to walk you through exactly how to do it and all of our speakers walk you through the entire process. So if you don’t have any idea how to do something you’ll be able to do it by the end of the talk.

Steve: Totally you might have to watch the talk multiple times. But yes, you will know how to do it by the end talk.

Toni: Yeah

Steve: and for the are paid advertising sponsor was seller labs and I didn’t know this before but they actually offer managed PPC Services now and we actually did a little case study and maybe I’ll put the blog post in the show notes here, but they actually took over my Amazon Advertising account and what I did is I pit what they did against what I was doing. You can read the blog post for the results. Where actually publish actual numbers, but I highly recommend these guys if you want someone to manage your Amazon PPC ads.

Now, the next section of Seller Summit was all about earned marketing, and this is actually my favorite section after all you can’t get Word of Mouth advertising, media mentions and that sort of thing unless you have a strong brand unless you have a strong Brand Story and unless you excel at customer service.

And so one talk and he kind of went first along these in this genre of talks was Michael jamming and he talked about how to use the power of Storytelling to boost your brand, fantastic talk. So he sells ladies dresses, girl’s dresses along with his wife and he showed some specific examples of you know, how he told his brand story and after seeing these video examples. It was very obvious why that stores a multimillion-dollar company today

Toni: Yeah, and he also, Examples of his customer service emails and his shipping emails and I think the all the fulfill, anything that you get is an email that normally you would just send a blanket email and this power of Storytelling is so amazing that people were actually responding and sharing the email content on shipping emails. Right? I mean, who does that? I mean that’s and it’s free advertising and he was he’s gave examples of how you know any time that they were telling a story The Organic reach of you know anything on social media or people’s just sharing that content, you know by forwarding an email to their friends is just phenomenal.

Steve: Here’s what I thought was even more impressive. So a lot of times we sell commonplace items that you don’t think might have a good story associated with it. Right? And so what Michael did and his talk is he solicited volunteers from the seller summit audience to come up and he actually helped them with their brand story because he has this nice framework to help you do it and I think it was Dana and Wesley Steyer. Presented their solar panel company and Michael turned their story into something amazing.

Toni: Yeah, so we had we actually got three people to volunteer. We had Dana and then we had Dale he came on to talk about some of his cleaning products. And then Jesse came on to talk about his he has some athlete or some skin products, I think but yeah in each case Michael was able to because he talks about like what do you selling? And then what are you really selling?

Steve: Right.

Toni: And so Dana Michelle was saying they sell those solar kids, but what they’re really selling or the DIY solar kit. Kids, but what they’re really selling is freedom, right because they’re for those small houses and you know, he was able to just like in what two minutes he was able to craft like this whole pitch for them. It was pretty incredible.

Steve: It sounded really good to me. Like it just framed the product. I mean, I wasn’t even thinking about the product anymore. Actually. I was thinking about the message behind the product by the end

Toni: Yeah

Steve: definitely don’t think

Toni: yeah. That was what that he I love that. I love that talk like that was probably my favorite talk just because I love I mean That’s you know, that’s what I like to do. Anyways, of course, it’s in my wheelhouse but I love the storytelling component and it’s cool to see that it’s not just like oh that’s cool to tell funny to be funny or to tell compelling stories that actually can have an impact on your business.

Steve: and then next up. We had Eric Bandholtz of beardbrand longtime friend. I’ve known this guy forever. He taught us the secrets to YouTube marketing because YouTube marketing actually drives 40 percent of his sales and I you guys know I’ve been working on my YouTube channel for the last couple months and I I learned a lot from his talk.

Toni: Yeah, Eric does a great job. He actually went into his YouTube analytics showed how basically how they strategize how they make decisions based on what types of videos to film sort of the benchmarks for them. And I thought that was really interesting because usually most people are not going to go into their analytics and show you anything but he was willing to do that and basically use his own site and he actually has three channels but use those three channels as examples for how to basically Run YouTube marketing for your own businesses.

Steve: And specifically for physical products.

Toni: Yep.

Steve: Yeah next up. We had Derek Halpern and this is the one that he talked I think for an hour and 45 minutes. So the title of his talk was 250,000 orders in two years how to Captivate customers with story and you know, even though the total was similar to Michael’s title. The content was actually a whole lot different but the theme was very similar. You got to think of some underlying message behind your products so that people Fall in love with your message and your brand.

Toni: Yeah, and he even talked about how they were able to what did they do? I did something on Black Friday I don’t remember the exact numbers where they didn’t have to Discount anything but yet they still got a huge increase in sales because of another strategy that they took something completely different which I thought was pretty genius. And if you’ve ever if you’ve ever heard Derek speak you will wake up when he starts talking. He does not pull any punches. He’s very animated and he is a straight shooter. He does not mess around when it comes to talking about is business and what they’ve done to grow it.

Steve: Yeah. I mean, I’ve known Derek for a long time. I like that. He’s just blunt. I mean very blunt and very open like if you ask him a question, he will answer it with brutal honesty. I guess that’s the best way to put it.

Toni: but I you know people really it was it was a great way to end he ended the summit. He was our last speaker and it was a great way to end it because I think people sometimes well, what did he even said? Something about himself. I don’t know what it was. He doesn’t sugarcoat anything and I think that that was really good because I think at the end of the day a lot of times people just need to hear it straight right and hear what worked what didn’t and be able to just be told that really bluntly.

As opposed to sort of I think a lot of times you go to these events or you go to sessions and it’s like everything is wonderful and perfect and he talked about the things that didn’t work and did and I think that’s important for people to hear.

Steve: Oh, yeah, totally he talked about the good and the bad. And the sponsor on this track was Gorgias. Which is the tool that both Toni and I use to manage all the customer service for all of our businesses because you can track all of your social media channels all in one place and it pulls up all your orders on your Ecommerce store and you can reply to common questions like where the heck is my order all in one click. And Of course the Seller Summit would not be the same without having some Amazon talks.

So the first Amazon talk we had was from Brad Moss the former head of Seller Central and he talked about what was working on Amazon in 2020 and something that I was really surprised at and again, this is a guy who specializes in Amazon sales. He was telling everyone to start selling off of Amazon and the importance of building your own brand.

Toni: Yes, and it was funny because he got started and I had to run out of the room and I come back and you’ve messed you messaged me and said he’s talking about selling off Amazon.

Steve: Haha Yeah

Toni: Like wait, this is an Amazon talk what’s going on?

Steve: I know

Toni: but he’s you know, he’s such a he’s been to Seller Summit I think this would be his what third or fourth time. Always a fan favorite because one you know, he always gives a great talk on and he’s always up to date on what’s going on with Amazon and I think to hear from an am someone former had to sell some Seller Central to say like hey, this is what Amazon’s doing. And he was one I think he was the one talking about Amazon grabbing that data, right?

He talked about that in his talk as well for him to say. Hey, you need to be thinking about this brand creation as opposed to just selling, you know, 200SKUs. Completely independent of each other.

Steve: Yeah.

Toni: I think that was powerful for people because he’s someone That is not just speculating. He actually has pretty good knowledge of what’s going on.

Steve: He does and just the fact that he’s telling everyone to sell outside of Amazon now just just says something about where ecommerce is going.

Toni: Yeah

Steve: Next up we had Greg Merser on how to get Amazon reviews in 2020 and there’s actually one tactic that I did not know about that was free. And that was really shocking. I’m definitely going to take advantage of that.

Toni: Yeah. I didn’t know about that either actually most of the people in the chat didn’t I think that was a bombshell for a lot of people

Steve: They were like what I thought you had to pay two thousand dollars to do that. And yeah, I mean obviously Greg would know this because he runs jungle Scout but there’s a lot of hidden tips that he shared in this talk and I’m definitely going to be implementing them

Toni: and I have to say one of the like side highlights of this talk was that if you know Greg, you know, he’s very white hat with the Amazon. He does everything above board. He really is, you know, he likes to give people really solid advice and there were a couple questions that were definitely not white hat. Right? in the chat and he said, you know, he said he made a comment about it and like hey, I can’t really endorse that or recommend that because it’s not you know, and then you started putting on the ticker black hat tips for this entire.

It does to poor Greg like literally like the nicest guy always like doing the right thing and then the rest of the time it was all like black hat tips from Greg Mercer. Which is like the cool part about the virtual event because you could not have been trolling him while he was on stage.

Steve: So I can only do that because we’re friends but I definitely wouldn’t have done that for a total stranger or maybe I would have but more subtly.

Toni: Yeah, not not quite as obvious as you did there where you created a banner on his screen.

Steve: So the Amazon sponsors for the event was Getida. Getida is a service that helps you get reimbursed. It’s for Amazon Amazon loses your inventory all the time. And basically they’re they’re losing your money all the time and Getida helps you get reimbursements back. And one thing that was really cool was Getida. I offered four hundred dollars in free reimbursements which basically covered the cost of the event.

And we also had product labs. This is Brad Mosses’ company he offers Consulting and of course Jungle Scout, which is Greg’s company and jungle Scout has really come a long way over the years. I mean, they’ve been a longtime sponsor. They now pretty much do everything related to Amazon all under the same tool at one low price.

All right, next up we talked about how Chinese people are taking over Amazon and Over that happens, there’s gonna be lots of counterfeits. And so we had Steven Wiggler our attorney Toni I use him and he talked about a low-cost strategy to protect against Chinese knock-offs. This was a huge hit because apparently a lot of people are getting knocked off and just a quick note patents are not the answer.

Toni: and I loved he mapped out this exact strategy and you could take it and implement it and you don’t even need an attorney to do it, which I liked. I mean, he basically told you how you could do it without Out, you know, you only spend a couple hundred dollars. I think at the end of the day, but I have to say the funniest part about his talk was that he used an illustration of a straw hat that was his product that he came on when he signed on the video for you and I he was wearing this like gardening hat.

Steve: Oh Yeah

Toni: right? and you and I were both like why is he wearing a gardening hat? Like this doesn’t make any sense and then he ended up using it. He actually took the hat and basically dissected it about all the different parts of it that you can use to it. Basically using as your product and how you could protect it and all these different ways. We use it as a really cool illustration so that people could understand there’s multiple ways to protect your property your photos all that stuff.

Steve: definitely got my attention because I was like, why are you wearing that hat and then turns out it was part of the presentation

Toni: thank goodness

Steve: and Steven, why go to runs emerge counsel. He offers trademark services and IP protection services, so you can just send them an email go to their website. Just tell him I sent you and I’m sure he’ll give you a discount of some sort.

Toni: And honestly, I have to tell you like I know we’re talking about our virtual event, but he’s a reason to come to the physical Seller Summit because he will talk you will give you legal advice and talk to you all day long at his table for free.

Steve: Yes. I don’t know any lawyers that do that. I know like this lawyer that I talked to like even talking to on the phone. I got a bill in the mail and I was I was a little annoyed but Steven will talk to you for free.

Next section of talks were on improving efficiency of your store. And the first person we had up was Elizabeth Mercer and she talked About understanding the big picture when managing your supply chain. Now Liz sells over sized products you sells furniture on Amazon. And as you know storing large items on Amazon is really expensive. So you have to make sure that you have your supply chain down path. I guess one of my key takeaways is I didn’t realize how much Elizabeth communicates with their vendor oftentimes people don’t communicate with their vendor until it’s too late when something goes wrong and by that time it is really too late. I don’t know what were some of your takeaways with this first one.

Toni: Well first of all I was yeah, that was my number one take away to with it. I don’t do half of this.

Steve: Yes

Toni: when she and in like some of the communication and her processes that she talked about. I was like, I don’t do any of this and no wonder you know, things are probably not as efficient as they could be the second thing that I was just I thought was amazing was that no matter what the there was a ton of questions on this talk as well and she basically answered every question even if it wasn’t even if I don’t think she necessarily was working in that area. She’s so knowledgeable on this that she basically talked everything supply chain, which was pretty impressive.

Steve: I mean, I think that was her major and I would argue that the Q&A section was just as good as the actual Talk itself.

Toni: Yeah, I especially with this one because there were so many questions on this one. I think that the QA was as good as the presentation.

Steve: Yeah next up. We had a fan favorite Mike Jackness and he talked about how he created this awesome team in the Philippines to manage operations. And what I liked about his talk is he actually brought in the person who runs his Philippines office to come give a talk as well.

Toni: What I what I thought was great about this is we’ve realized that Mike doesn’t do anything anymore. Yes. It’s all his Filipino team.

Steve: He literally does nothing and actually Mike slides were really impactful because he talked about the cost savings and if he had hired everyone in the US on his team, he would not be making any profit whatsoever. And in fact, I think he would be losing like 20%.

Toni: Yeah. And what I loved about Mike’s talk is that he brought his manager on and she basically explained everything from like from the cultural side of the Philippines. So and I think that’s one of the reasons why people when they sometimes hire overseas, it’s not successful because they don’t understand that there are definitely some cultural differences. And so she talked a lot about that in her talk. She also talked about how to build a company culture overseas, which I thought was really great.

Because you and I both have overseas VAs and so for me just take I took away a lot of there’s things that I can do better with communicating with my VA, and there’s things that I can do to make her job easier because I’m not always thinking about the differences. The other thing that I really liked about this is they really gotten into specifics about pay for overseas VAs like how you know, everything from vacation and sick, you know, sick leave and things like that like those types of policies because I think when you hire in the US there’s basically some like understood rules or depending on what state you live in you know, there’s sometimes, you know, there’s minimum wage laws and things like that.

Overseas, It’s gets kind of murky, especially if not using an agency and so I love that they broke that down and talked about what they did to help build a really loyal team.

Steve: Yeah, actually she outlined her exact process for hiring as well, which I thought was pretty cool because it’s it’s a little different due to the cultural differences.

Next up. We had Scotty V on how to get massive results in your business and do what truly matters and you know, Scott he is a ball of fire when he has the mic and I don’t know maybe it was It after listened to his talk. You said you had problems sleeping.

Toni: I did I could not fall asleep that night. I think he ended with his talking about what 9:15 maybe and I think I didn’t fall asleep till about 12, maybe midnight or maybe later because I just everything that he was talking about was still swollen in my head. Plus. He’s so high energy. It just gets you excited and amped up

Steve: totally and you know, you come out of seller someone with a bunch of different tactics, and I thought Scott stalk was important on kind of prioritizing and focusing your efforts.

Toni: and what I loved about Scott’s talk was that he actually talked a lot about the past year of his own life and how he basically had all these things going on in 2019 and he got a little bit burn out right? And so he talked about having to sort of come back and realize like he needed to start prioritizing you start focusing on and he used his own life as an example. And I think a lot of people someone like Scott right?

He’s you know in the Limelight. He’s got a very popular podcast got a very active Facebook group people think that his life is amazing all the time, right because he’s high energy, you know, but I think it’s good for people to see. Like hey, everybody’s going through the same struggles. Everybody gets burnout everybody sometimes bites off more than they can chew and here’s how you can deal with it. And in these tactics work, you know.

Steve: they absolutely do and they’re not just tactics. I mean, these are things that you really have to just sit down and evaluate from time to time.

Toni: Yeah tactic wasn’t the right word, but I couldn’t think of the right. How do you how do you how do you manage your life with a tactic? I don’t know, you know.

Steve: The last up we had Charles Mullins of quitelight and he taught us how to boost the value of your business with math and logic. Now, if you run a business right now, there’s some things that you really have to consider. Even if you don’t plan on selling your business anytime soon. These are things that you have to consider ahead of time because they increase the value of your business and Charles’s talk also allowed you to kind of figure out how much your business is actually worth in the current environment, which I thought was very valuable.

Toni: Yeah. I really like that talk one of the things that stood out to me was has he talked about all these things that you need to be doing in your business if you’re thinking about selling but then he talked about the one thing that you didn’t want to do was I don’t remember the, I used the wrong terminology, but he talked about you don’t want to make it too polished on the outside because you want people to see opportunity in your business.

And that was something interesting because it to me it’s kind of like when you sell a house or you want, you know, you put your best foot forward, right you clean everything up and hide all the bad stuff, but in reality like some of that stuff actually works, too. Advantage because buyers want to see an opportunity when they’re looking to purchase a business.

Steve: Yeah. Absolutely. It’s kind of like when you buy your fixer, I think all of your houses have been fixers and you’ve made a lot of money doing this right same philosophy. Kind of?

Toni: Yeah, but in your mind you like in my mind though, and I’m not you know, I’m not thinking about selling a business right now, but I you know, if I was going to I would think oh, I want everything to be perfect. Right? I want the website to look better. I want this to be better. But at the same time there’s actually things that are way more important when you want to sell your business, so you should be focusing on other than these externals because the external might actually hurt you.

Steve: Yeah, and then there’s also the ad backs. I mean there’s a ton of information in Charles’s talk.

Toni: Yeah, there’s some crazy spreadsheets.

Steve: And we were proud to have Quietlight as the premium sponsor the Platinum sponsor this year. So Quitelight. I’ve known Joe and Chuck for gotten many years and our friend Mike Jackness has sold his business who QuietLight. We really trust these guys. So if you’re interested in buying and selling a business definitely look towards Quiet Light brokerage.

And we talked about, you know, hiring a Filipino team both Tony and I we actually used Intelligencia to find our VAs over in the Philippines. What’s nice about them is they actually have an office that has power and internet and the Filipino employees actually go into the office do the work. So there’s never any power outages or any sort of thing. And you also don’t have to deal about you don’t have to deal with benefits or that sort of thing because they handle everything for you.

Toni: They also pre-screen all of your applicant. So if you’re looking for someone with a specific skill set they will actually pre-screen people and that way you’re not waiting through, you know hundreds of applications. I know I’ve used other services that are just you know, log on to a website and put out a job application and you know, we’ve had to wait through tons of people but they actually narrow it down for you based on information you give them so it’s really helpful.

Steve: Yeah highly recommended. The next sponsor was SkuVault. So if you are selling on multiple channels like eBay, Amazon as well as your own site, you’re going to need a central location to store all that information into manage your inventory and that’s what SkuVault does. Recommended our longtime friend over at RPC Logistics Pam Kale, if you need Freight forwarding Services always recommend Pam choose great. She’s a great people person. She’ll take care of you and she’ll do it with a smile.

And then finally there was Brex and Brex is actually really important for e-commerce because they offer this card that lets you float money 60 days instead of 30 days without any interest. So instead of trying to take out a loan for your inventory. You can just put it on the Brex card. Or did I miss any talks Toni? I think that’s it, right?

Toni: I don’t know it feels like a lot of talk. So yeah, I think we got them all I’m looking through your slides right now. I think we’re good.

Steve: Yeah, I mean like I said before I hope this was an indication with this podcast episode. I thought the content this year was amazing and I don’t know exactly why that is because you know, we did have a lot of the similar speakers as prior years, but the content that, maybe was the live QA or maybe it was the extended QA but I got a lot out of these talks more so than any other year.

Toni: I agree. This is the first year that you and I have actually been able to go to all the talks.

Steve: That’s correct. Usually we’re in separate rooms because we do double track but this year we did everything in single track.

Toni: Yeah, so I think that was another thing as we got to hear everything live which typically only one of us hears it live and the other persons in the other room. So I think that was a big factor as well and I think the new speakers that we added this year just really were awesome like awesome additions to our Seller Summit lineup.

Steve: So Tony can people still access these recordings?

Steve: Absolutely. You can actually still pretty Just a virtual pass and the virtual pass comes with every session including our keynote and all the Q&A. So all the extended QA there’s very little editing done this year because it was all virtual. So all that QA is on the virtual passes. You hear us reading the question. So everything’s really clear. I know sometimes it’s not always clear when you’re actually in a venue.

So Steve and I are reading those questions out this you get the extended QA plus all the PDFs from the speaker’s all their presentation. So you get to get a good look at those slides and we are having those for sale. I don’t know. I think what till like June 30th?

Steve: I think so. We typically close it off after a while. Yeah, June 30 is sounds like a good date as you can tell we’re prepared to announce this date because I didn’t know that Tony was going to throw that date out, but that sounds good.

Toni: Well, I think we need to you know, you we can’t keep these forever for sale because then we have to move on to 2021. Right? And we’ve got to focus on that. And so I think and also these talks are super relevant now but in a couple of years some of these strategies will change so we don’t like to keep these sessions on sale forever. So you got to get them now

Steve: and stay tuned I guess for the 2021 announcement, which I believe we should have in the next couple of weeks or so.

Toni: Hopefully still trying to negotiate some things some details. So we want to get that to everybody as soon as possible. But for now you can enjoy, how many sessions is this 18, 19 sessions?

Steve: Actually there was a bonus section that session that I forgot to talk about which is from Getida. Getida actually record like we didn’t have it on the schedule, but they recorded a special session on. Actually how to save money with your Amazon business and it kind of goes into depth about all the I knowhow to phrases but all the different ways that Amazon can screw you and how to get your money back basically. It was very valuable.

Toni: Yeah, so we actually joked that the cool thing about this is you can binge watch the Seller Summit in a weekend. So it’s basically taking the taking over Netflix for a weekend. You can binge watch all the sudden.

Steve: Yeah you can pretend It’s like Tiger King and watch all seven episodes all at once except in this case would be 19 episodes.

Toni: I will be regretful that I’m saying this but I feel like Seller Summit might be slightly more valuable.

Steve: just slightly more valuable man. This woman has been talking about Tiger King for like the last month ever, since it came out, good Lord.

Toni: Exactly. No, I plan. That’s my goal. I plan I have a vacation coming up and I plan on watching a lot of these talks while I’m on vacation just because I feel like with most of them. There’s so many nuggets in there that you can’t just watch them once.

Steve: And I plan on watching these all over again as I am sheltered in place for the next couple months and with that Toni thanks for coming on again. It was a pleasure.

Toni: Thanks for having me.

Steve: Hope you enjoyed that episode. Now, you can access all the Sellers Summit 2020 videos over at Sellersummit.com until July after which we will close it down forever. For more information about this episode go to mywifequitherjob.com/ episode305.

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

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

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

But before we begin I want to give a quick shout-out to Privy who’s a sponsor of the show. Privy is a tool that I use to build my email list for both my blog and my online store and right now I’m using Privy Display a cool Wheel of Fortune pop-up basically user gives your email for a chance to win valuable prizes in our store and customers love the gamification aspect of this and when implemented this form email signups increased by a hundred thirty one percent. Now, you can also use Privy to reduce car abandoned with cart saver pop-ups and abandoned cart email sequences as well one super low price that is much cheaper than using a full-blown email marketing solution. So bottom line Privy allows me to turn visitors into email subscribers and recover lost sales so head on over to privy.com/steve and try it for free if you decide you need to the more advanced features use coupon code MWQHJ for fifteen percent off once again that’s privy.com/steve.

I also want to give a quick shout out to Klaviyo for sponsoring this episode. Klaviyo helps brands build relationships across any distance delivering email marketing moments. Your customers will appreciate, remember and share in good times and bad. And since it is all driven by real-time e-commerce data, you can make sure every interaction feels more personal. Now when you have a 360 degree view of the customer the growth possibilities are endless. So visit klaviyo.com/mywife and try for free. That’s KLAVIYO.com/mywife. Now on to the show.

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

Steve: Welcome to the my wife quit her job podcast today. I’m thrilled to have my friend Hanson Li on the show. Now Hanson is an old Stanford classmate of mine and he runs the salt Partners group, which is a development and Investment Company focused on the food and beverage industry. That’s right Hanson owns a bunch of restaurants. I think over 40, across the world including a bunch of michelin-rated restaurants such as Atelier crenn, and he also makes ice cream over at humphry slocombe. Now as you know, All of us on lockdown the entire restaurant industry is hurting big time.

So I want to have Hanson on today to talk about some of the online and offline initiatives that he’s been making to make up for the Lost revenue and I’ve actually always been interested in the restaurant industry. So I’m also going to have Hansen explain how the restaurant business Works including the margins, costs you name it. And with that welcome to show Hanson. How you doing today?

Hanson: Pretty good. Hi, Steve. How are you?

Steve: Good. Good good glad to have you on. so just quick funny story for the listeners, even though Hanson I overlapped at Stanford and we got a lot of mutual friends. We actually didn’t meet until I was invited to one of his restaurant test openings. And when I was introduced to him, I actually wasn’t sure who he was so I kind of quickly shook his hand and then proceeded to stuff my face and the food was incredible. So Hansen give us your background story and how you got into the food business?

Hanson: Sure, having I was born in Hong Kong and food has always been an important part of you know family and just life in general. Actually in Stanford I actually credit Stanford with my love of eating and cooking. So all four years of Stanford. I was lucky that I had access to your kitchen where I would make midnight nachos for the dorm. So that got my love of feeding people a lot of good food and just seeing the joy that freaking brain now I didn’t get started in the food industry.

Steve: What was your major by the way Hanson?

Hanson: Oh I was I was a biology major in sociology. So all important classes for business.

Steve: You were pre-med weren’t you?

Hanson: I wasn’t Pe-med. I was pre-law is going to go to law school and practice genetics law and I find myself falling asleep and I’m in my first biochemistry class. So that was that it

Steve: Oh man. I wish I had lived in the dorms and you were cooking for everyone and that’s awesome.

Hanson: It was it was always a lot of fun right to bring food to a lot of people and I think that that love really started At Stanford and I opened my first restaurant when I was 28 in 2002 in Austin, Texas

Steve: Interesting are not in the area.

Hanson: NO, I know this is a quick story on that. I was living in DC route to college. I was moving back to the Bay Area for business school and I had a year off basically. Well, it was after September 11, so I had year off with no work. I visited some friends in, Texas. and on that trip three of us decided to buy this little coffee house in downtown Austin, Texas and took it over and happy to report that 18 years is still there.

Steve: Awesome. Awesome. Okay, so that’s how you got started. And then when did this whole salt Investment Group start happening?

Hanson: it started in 2014 after spending 10 years doing Investment Banking and private equity in mostly in China after business school I, you know in 2013 I was looking at about to turn 40 and decided that I didn’t really want to stay in the finance industry for the long run. So I looked around and decided to pursue my passion in food and the hospitality business.

Steve: That’s that’s awesome. We’re your parents on board with this? I’m not sure if my parents would have been on board with this.

Hanson: I was too old by that time. I was turning 40.

Steve: That’s true. That’s true.

Hanson: No, they were you know, I mean everyone including my wife having full support and this Pursuit it’s hard and running restaurants are hard. And so my initial idea for Salt Partners was to really understand the risks right in the business and try to take as much risk off the table as possible.

Steve: Yeah, and and you have an investment banking background. So I would imagine that at least all the financials be in place and you would know what a good business is and how it should be run

Hanson: Yes and part of that is understanding what It is and also then how to change it right is I think a lot of small businesses run into the problem of even though you might understand how the different components of expenses work. You don’t have the time to get to it all

Steve: yeah and most people who are running small businesses. Don’t even think about a lot of the financial aspects like the costs in the in a structure and that sort of thing also. So before we talk about the effects of Corona on the food industry, what I was hoping to do is and I’m pretty sure a lot of Listeners don’t really even know how restaurants work. I mean at a base level you serve food and people pay for it. Right? But I mean, it sounds simple but I’m pretty sure it’s a lot more complicated than that. So I’m actually personally curious like what are the margins like and what is the breakdown look like in terms of expenses and that sort of thing?

Hanson: sure and a typical restaurant. I’ll use the Bay Area San Francisco Bay Area. This is where most of my restaurants are. If you start with sales as a hundred percent then you know you’re expecting to spend between 27 to 30 percent of that on the cost of goods. So this is what you know the produce to meet the proteins the wine that you buy in San Francisco, you know, you will be spending between 35 to 40% on cost related to your team. So this includes a salary, benefits and the taxes that we pay. So between those two the cost of food. And the cost of our team members that would add up to 70% and in the Industry we call that the Prime cost.

After that, The big bucket is occupancy of just being physically in a space. So that’s rent, utilities that’s insurance and that could range from 10 to 12% So on all those three big buckets, we already at 80 to 83 percent in terms of expense ratio to our sales. Then add on Raw GNA cost and so if you’re running a restaurant with an operating margin in to 10 to 12 percent, that’s pretty good within the industry and that should carry you forward and that should generate a pretty good return on what you invested originally.

Steve: that’s crazy. And you know, 10 to 12 just doesn’t sound like a whole lot to me and I’m just kind of speaking from e-commerce land. I don’t know you gotta you gotta run things really tight then right? In order to to make any money.

Hanson: We do and answers I think part of my in going hypothesis. Right when I saw Partners is that you know as a small business owner running a restaurant and the restaurant is a physical business, right and physically tiring you’re at the restaurant as a smaller 7 days a week working, you know morning to night and a lot of expenses may go by the wayside in terms of just being understanding what they should be. So my favorite example is merchant processing cost like what the fee that you pay for credit cards?

A lot of time. What I’ve seen is you go to the bank open a bank account to start a business and a sign you up for a merchant processing account. And that merchant processing rate is negotiable. Many people don’t know that because it’s fee issued by the bank, but it turns out you can shop around you can change merchant processor. And so that’s one of you know one one area that we are back and look at In terms of optimizing for our merchant processing rates

Steve: you know, what’s funny is that since your margins are so low. I bet the merchant processing rate actually connect you make a pretty big difference. Then I know for restaurants in person the rate is lower than e-commerce, right? So typically e-commerce. I think the lowest you can get is something like one point eight ish. I would say in volume. Just kind of curious what the in person rate looks like?

Hanson: well that’s similar in terms of what we can get in person and you know as you know, much of Processing fee can rate, can have you know straight percentage rate or it could be per transaction plus a percentage

Steve: Yeah.

Hanson: So again depends on the size of your transaction, right? If you’re a coffee shop paying 15 cents per transaction plus percentage is probably worse off than just being a straight percentage and that changes over time right? So that’s that we look at you know, the thing that we like to look at is just you know on a typical day if you’re busy restaurant, you might get 20 vendors coming in everyday dropping stuff off. A case of wine, you know, here’s some gloves and let us comes in and it’s hard to keep track of the actual expenses that you’re paying.

So what did you pay for eggs last week? You actually have to you know, a lot of time you have access to Rifle through your physical invoices and figure out the price of eggs. So we try to Institute across our restaurant right means to capture all of the information in the electronically so we can actually look and ask the question. What do we pay for eggs last week? Often times you realize that you’re paying for stuff that they are that gone up in price that you might not realize and we don’t even realize and we have the you like, you know, we have good electronic data for a lot of our expenses.

Steve: So one thing I’m actually surprised that when you’re breaking down the margin is your actual food cost being 30 to 40 percent. I always thought that just the margins for food in itself were really large. So for example, like when I go to a Chinese restaurant and I ordered a bowl of rice, they charged me a buck 50 for that bowl of rice, right? But that rice is probably like pennies

Hanson: it is and then if you balance it out right with you know the beef right that you order right? And so so the gross margin right? I mean flip it around, right? So the cost is 30 percent of sales, right? So gross margin is 70% just on the cost of food. So it’s not the best right now. Okay, it’s hard to compare to the software margin, but in terms of selling physical Goods to get seventy percent gross margin

Steve: right

Hanson: now that’s, It’s not terrible.

Steve: Yeah. Yeah. No, it’s better. An e-commerce in general unless your private labeling your own products. I’m just kind of curious. What are you guys purchase your food from is it completely separate? Is it a completely separate Channel than like a grocery store?

Hanson: it is so we purchase from Wholesale Distributors and the main difference is really that the packages are vastly different which is one of the struggles as we seen out during covid of repurposing the food supply chain to restaurants into retail market. Bow because you know at our restaurant we buy eggs, we buy a hundred eighty at a time. That’s the standard pack size So it’s 15 dozens that comes in and in flat or it is, you know, 10-pound bag or Twenty five-pound bag of flour that comes in because of the volume that a restaurant you imagine a restaurant will go through and so the flour that’s probably doesn’t work too well within the home. So it is a simply separate different is a separate supply chain.

Steve: So I would imagine is the food substantially cheaper when you buy in those volumes like it’s probably Costco on steroids right?

Hanson: on some items. Yes, and on some items. No, right because there are only so many places you can buy certain items right there. You are variety of suppliers is not as many us as consumers. We can buy a dozen eggs from If it plays a number places In San Francisco, but there are only a small number of Distributors that would deliver eggs to your restaurant. So the Distributors have a little bit of pricing power.

Steve: I see okay, and and I know starting a restaurant is requires a lot of upfront capital and I was just wondering if you can give me an idea in SF is really the only place I kind of know but like how much would it cost to start like a low mid and high-end restaurant in SF and I know this is there’s so many variables in play. But if we assume like I don’t know like in a thousand square foot restaurant or 500 square foot. I don’t know whatever your restaurants based on experience.

Hanson: So for a 2000 square-foot restaurant in the Bay Area a budget could come half a million to two million dollars and that level, yes. It’s not for the faint of heart.

Steve: That’s for like a lower. Like I know it depends on like the decor and there’s a whole bunch of different factors. But our is that the quote for like a low-end or

Hanson: no. I’m And so, you know 2 million dollars on a 2000 square-foot space would be would be you know higher end and you know, 2,000 square foot for half a million dollar would be you know will be simpler. Right? and the things that complicated was in a restaurant and expenses is how complicated your kitchen setup is. Because there’s a lot of stuff behind the walls. They actually get really expensive the finishes certainly just like, you know if you’re in your home. Your finish this could be it could be a 10x difference right between cheap materials and expensive materials.

But you know, some of the most expensive stuff is stuff that you don’t see so, you know, you have a lot of plumbing needs for example, and you need to reroute a lot of Plumbing that that cost is could go up astronomical in terms of how complicated things in and how expensive things could be.

Steve: And then typically when you open a restaurant, do you try to take over an existing space where everything is more or less set up? Or do you like to start with a clean slate?

Hanson: I’ve done both, you know with an existing space. If you are if you go in with eyes wide open and understand that yes, we’re not going to move a lot of stuff. Then it could be cheaper. But just like a lot of things right when you start, you know, when there’s something a wall there and you want to move it. It’s actually cheaper to just build a new wall right than moving a wall.

Steve: So this is so when you started that coffee shop when you took over that coffee shop. I was just kind of curious what the comparison is for that like how much did you invest in that business when you first started?

Hanson: Oh not nearly as much. Yeah taxes being a easiest rate, right that’s going to open the business. You know, that was only a couple hundred thousand dollars and we actually bought an. We bought an existing coffee shop decorated it and rebranded it. But yeah, that was a quick turnaround regions of that build.

Steve: Ooh Okay. Yes. So this is like a lot of upfront Capital. It’s almost like you have to get investors then to start a business unless you front all the cost yourself, I guess.

Hanson: Yeah, and and also there’s not a lot of channels in terms of raising institutional Equity or debt. Right? Most banks would not lend to you opening a new restaurant unless you have real estate attached to it, but generally yes is friends and family is people, you know in your circle and investing in you and your concept.

Steve: All right, so you have did you say Over 40 Restaurants as part of your network?

Hanson: No, no 14

Steve: 14

Hanson: 14 Restaurants not 40

Steve: 14. Okay. So how are you dealing with the employment situation? I mean the coronavirus is obviously shut everyone down. So how have you dealt with this crisis?

Hanson: for so all the 14 restaurants I have it ranges from as you mentioned option ice cream shop and I humphry slocombe all the way to Atelier crenn a Michelin three-star restaurant. So the different restaurants in the portfolio really, you know the first week when the Also in place happen in the Bay Area. There’s a lot of soul-searching in terms of who we are in the interim while we are technically closed for in restaurant dining, some of the restaurants. We just closed.

Like so we have a couple of bars for example bars on you know, when the shelter in place was mandated There’s No Business Like You have to close. There’s no takeout and delivery of alcohol. Now right ABC change the rules a week later, so So you can now deliver alcohol, but that that time on you know on March 16th, there’s no business. So we had to let everyone go and just pause the business completely

Steve: when you say Let everyone go do you mean like furlough or I actually don’t even know what the difference is. Is it lay off versus furlough?

Hanson: Yes. Unfortunately, it was layoffs. And so yeah, I mean it’s even been with the restaurants that we still have that are not currently Doing takeout and delivery business. We still have had to let go of seventy eighty percent of Staff.

Steve: Oh my goodness.

Hanson : And that’s because you know as it is now the case, you know, we’re doing Revenue through delivery and take out but it is at a small fraction of what we were doing before

Steve: actually. Can we talk about that real quick? How what percentage is to take out? I mean, I imagine the takeout business has increased and I’m just kind of curious how much it it offsets like the regular restaurant Revenue.

Hanson: Oh right. Now the takeout business. This price is 10 to 30% of what we’re doing before.

Steve: Oh man Okay

Hanson: The different restaurants. Yeah build their the spend is, the spend has decreased right? Here’s what people spend on outside food. Yes take out has increased by a lot. Even if for someone who loves to cook like me, like, you know, I’m getting to take out tonight. It’s just there only I eat half

Steve: all right

Hanson: in a given week. So even if you spend the same amount on food, right? You’re probably not, the wine. You just drinking the wine that you have at home. So right off the bat, you know a restaurant even a full-service dying fine dining dinner restaurant, you know, probably thirty percent of sales is alcohol and beverage related and right out of the top right that that doesn’t take place anymore right in the takeout and delivery.

Steve: I’m kind of curious. So alcohol. I imagine the margins on alcohol are super high right? I’m just how does this work? I know you have to get like a liquor license. How much does that cost and whether the larger than alcohol

Hanson: sure so in San Francisco, so let’s start with the state. Okay State of California has couple dozen different type of alcohol licenses. It ranges from you need a license to make beer. You need a license to be a corner liquor store as a different license. If you I brew pub that’s a different license. You are a full-service restaurant. In San Francisco, There are certain type of alcohol licenses that are capped. So there are only so many of them. So just like taxi medallions. Is that right? It has the same effect

Steve: right

Hanson: So a full liquor license in San Francisco before covid was not a quarter million dollars.

Steve: Oof Okay

Hanson: It has dropped since then, nice. I just checked the price last week and it’s down to like a $160,000 and I imagine it will probably go down even more as the crisis do more shake out of the businesses, gross margin on alcohol, you know is 80 to 90%

Steve: right. Okay, but you have to make up 250,000 for the license. Okay.

Hanson: Yes

Steve: and people aren’t taking out. I don’t know. Are you selling bottles of wine through the takeout business at all or no?

Hanson: Some of my businesses are yes, we are so Or at the Atelier crenn, for example

Steve: that’s your three-star Michelin?

Hanson: Yeah. So a Telly is our Michelin three-star restaurant there to Sister restaurants bark Ren and petite crenn. So the team combined forces after that first week of shelter in place and pivoted into a takeout business. So if we now have a Michelin three star restaurant selling $38 three course meals to go and within that we are also selling wine, so one angle that Molly has found that was says been fun for a customer is a three bottle blind tasting kit.

So we actually tinfoil the the bottle so you take bottles home is blind. We give a little print out guide for you to taste the wine and that has been very popular. It’s a little more fun, right? We are all stuck in the house right now. We’re all looking for a little bit of entertainment.

Steve: I’m just kind of curious for take out for like a high-end. You mentioned like Atelier crenn is a three-star Michelin and then the next one down. Is a one-star Michelin and then you have petite cress. I know that when I dine at a Michelin star restaurant, it’s the experience more than just a food right? So I just want to know like what was your decision to keep that restaurant open versus some of your lower-end ones?

Hanson: sure

Steve: and was that one affected more than your lower end ones?

Hanson: So for the crenn restaurants, I think there was a strong desire by the by the core team to keep feeding people. I think ultimately. Whether you’re at a cheaper restaurant or the fine dining restaurant, the people behind it right has a passion, to deliver hospitality and food to people and feed people and bring joy to people and the team thought that there’s a way for us to keep doing that and is still important to do that especially during this difficult time. And so one of the things that I think that I found, you know, that that is going to be amazing. You’re looking ahead is you have all these fine dining restaurants including ours like thinking and rethinking about the takeout and delivery experience.

And you know, we are we were very peculiar about kind of the packaging that we use and the team is continuing to evolve right now in terms of how do we deliver that crenn Hospitality in the back to you? And I think that’s to your Point Reyes. You come to the restaurant for the food but also For the experience for Hospitality for the environment. And yeah, we’re also trying to figure out right now. How do we capture that in a box right on in the bag for you.

Steve: So you mentioned earlier you have this wine testing kit? That sounds brilliant actually. What are what are some other things and actually how is this the response been for that actually?

Hanson: it’s been very popular. We’re selling out and it’s been great and it’s also been first satisfying for both you know, us, our team, owner and also for the team to see how well received it as by folks bringing cren back to their house. We also getting a lot of shout outs in terms of people who are experienced cren for the first time because of a high price point. It hasn’t been for everyone. It’s a special-occasion place and now, you know, you can get a you know, a three michilan meal cooked by three Michelin star team for $38. pick up from our restaurant in San Francisco, so it’s been very well received.

Steve: I see so you drastically drop the price too?

Hanson: oh, yes. Yes, you know a meal in you know a regular meal at a atelier crenn starts at 345 per person.

Steve: Okay, and now it’s 35 or 40 dollars

Hanson: $38

Steve: Wow. Okay, that is an incredible deal then

Hanson: we hope so and I think people have been eating it up and to your question earlier in terms of other fun things that we’re doing and we’re trying to do. So we’re probably planning a virtual dinner party right now. We’re you know guests will get the crenn the crenn kits can log onto a virtual dinner party with our team members and enjoy the same food at different places. And so that’s another way that we’re

Steve: how does that work? I like the idea, but how does it work?

Hanson: Well, this is also in the plans Steve, right now. So I in my mind’s eye right is you know, let’s say you buy, you know, Crenn kits for you and You know and we host a Friday night dinner party from six to seven. So you would log on we will log on as well. So maybe maybe me Chef Dominique and myself or could be with our sommelier to find director Courtney will get on as well and maybe 20 people that gets on the dinner party and we sit around for an hour enjoying ourselves.

And then the model we thought about is maybe is a one-to-many right where we put you know corny in front and she can go through the wine with you for half an hour right at the beginning of dinner or could be one of our chefs, you know showing you how to like a live stream of showing how to prep the dinner.

Steve: I love this.

Hanson: how to reheat it how to Plate it.

Steve: Yeah.

Hanson: So again, it’s true, you know again, how do you know now that you know, we can get you to our restaurant. It’s how we get our restaurant to your home.

Steve: Have you started this initiative yet? Or is it still in the planning?

Hanson: Oh, yeah. Okay. No. Yeah. We’re in the planning phase right now.

Steve: How are you dealing with each one of your restaurants? I mean so you have the you have a bunch of restaurants and then you have the ice cream business. How are they? How are you treating those differently?

Hanson: Well, I think for you know, when this storm started hitting in the beginning of March, we already started planning on what happens if we have to close what happens if we have to decrease our capacity or occupancy within the restaurant by you know by 50% we saw the I will restrictions. So for our fine dining restaurants, we have a lot of international guests who flies in for dinner. So we already know that that was going to decrease so I think you know, each of the restaurants really had to find itself in the beginning in terms of who we want to be in this weird one to two month period when we’re in lockdown.

For ice cream for humphry slocombe and you know, actually we’ve kept our stores open. We haven’t closed our stores.

Steve: really, okay.

Hanson: And that’s because you know for ice cream for Humphrey slocombe. We’ve always had a pretty robust delivery business in terms of guests or during the three Postmates, ubereats, doordash, caviar you name it and having ice cream deliver to their home not surprisingly a hub that has skyrocketed over the last month as everyone is stuck at home. So for Humphrey slocombe, you know, even though our business has been hurt substantially by not having customers at our retail shops. Our retail shops still have been no we’ve been able to manage to keep them open with just a takeout and delivery business.

Steve: So people just see you no longer serving into cones and stuff. It’s just like pints at this point.

Hanson: Yes. Yes, and then and then we are really using our different retail stores as pick up points for the delivery providers.

Steve: And then for yourself for your three star Michelin restaurant you’re trying To create these experiences and then you have the wine tasting kit. I know you have like a comfort food restaurant, right? I can remember what it’s called.

Hanson: Sure. So is Brown Sugar Kitchen over an open is Southern food, it’s soul food. And for that restaurant, our partner Chef Tanya Holland. She’s run Brown Sugar Kitchen for over 10 years in Oakland. So she was well-known and well-loved within the community and so for that restaurant one of the things that you know, we were lucky to do is we’re partnering with a local tech company called Marketa and they are sponsoring meals. So they are paying us to make meals for nonprofits in the Oakland area.

Steve: That’s smart Okay, so so they’re raising money. So it’s sponsored by Marketo.

Hanson: Yes, Marketa McAdams payment. It’s a payment company there. Their headquarter is a couple blocks away from our restaurant and their CEO reached out to our restaurant at the beginning of the pandemic and offered this to us, which is really thoughtful for them right to think of money from them filter to local restaurants. So therefore we get some income and keep some jobs and we make the food and right now we’re making food three days a week a couple hundred thirty hundred 50 meals a day to three different nonprofits in the Oakland area.

Steve: I know a couple of restaurants in this area what they’ve done is they’re taking donations for food then they’re serving that food to doctors on the front lines treating the virus and that’s worked out really well also

Hanson: So yes, we have that initiative within the clan group as well. So we are sending 200 meals every Friday to UCSF and we have a again we have a corporate commitment. So Lexus stepped out and they donated money to us and we’re able to we will be serving three. Thousand meals to UCSF over the next 14 weeks

Steve: nice and you mentioned earlier that you turn some of these restaurants also into a grocery. How does that work?

Hanson: Sure. It’s a one of with one of my restaurants were testing out the idea of that. We talked about earlier about the supply chain right to if we’re to restaurants and how it is different to grocery stores. Well, we’re getting some of those produce in bulk and then we packing them into Boxes, produce boxes essential good boxes, and we’re selling them, you know, 30 bucks a box you get eggs bacon in the beginning we were including, you know, a box of disposable gloves.

Steve: Ha ha ha

Hanson: In the Box as well. Yeah, and I know there are no we’re doing that on the first small scale. I know some other restaurants in the Bay area that are doing it really as their main source of business now, there’s this great restaurant in near where I live in the mission district, you know the chef there turn his restaurant into a general store. So the selection is applied from you know, canned goods to you know, I bought you know, 5 pounds of fish from him last week and you know, he’s you know, he’s really looking at this as something that he probably have to do for for a bit longer

Steve: and the attraction of buying from a restaurant is because the nature of the food is different presumably higher quality

Hanson: We get access to Seafood probably better than you want you to get from your local grocery stores right now is also, you know, it’s less of a problem now, but you know over the last month there was some supply chain issues right to the grocery stores. Eggs incredibly expensive because everyone had bought out the eggs, you’ve all heard about the toilet paper situation. Right now, there’s a shortage of flour and East in the grocery stores because Is everyone is baking at home now?

And so they are so there’s access right from the restaurant perspective that can access a different supply chain and then repurpose it to the customer. I mean another great thing about the restaurants are doing the grocery is that you know, there’s probably one or two big grocery stores near where you live, but there are a hundred different restaurants, right? So, you know, they become they could become you know, a neighborhood pick up place right for for some essential groceries and without you having Everyone having to go to a Safeway or Whole Foods

Steve: right?. So out of all the initiatives that you’ve made to kind of pivot your business during this coronavirus situation, which ones have been working the best?

Hanson: Oh, I think you know the cren kits from the cren group has been working really well. I’ve also been very gratified to see the motto of corporate sponsorships in terms of putting money into the local ecosystem, right and Then that being turned into physical mules to be donated added to the medical front line or two nonprofits and I hope that continues right because before this pandemic, I don’t know that that’s happened really right in terms of corporates. You’re putting their, you know, their social impact budget right into the food system in that way.

Steve: How does one get these battleships is that all relationships or?

Hanson: is it is relationship, but honestly, you know for both Marketa and Lexus, they asked a question to us. How can they be helpful? So it was really from them and from the corporation side in terms of you know, we have some budget and how can we put it to work in a meaningful way and this one is a double bang for the buck right? Because it’s money going to the restaurant right? They need it right now and in the food going to you know, the front line whose speeding more than ever now because it working so often and for nonprofits.

Serving at-risk clients, you know the food bank is having a lot of problems right now because a lot of them rely on volunteers and it’s hard to get volunteers to work right now so we know they’re the restaurants have really stepped in into providing food for the needy.

Steve: Did you have prior relationships with Lexus Marketa or did they just randomly approached you?

Hanson: Lexus. We have a serious relationship already. Okay, Chef Dominique. Crenn is a brand ambassador for them and in Marketa is three blocks away from us. Hosted their holiday party at our restaurant back in December so their neighbors of ours.

Steve: Okay Okay, right. Yeah. No, it’s I was just wondering because I would imagine that a lot of the restaurants out there are not getting corporate sponsors and you know over the years you’ve kind of developed relationships with companies or maybe they’ve hosted their parties at your restaurants, which is kind of indication of the quality of the food that you serve

Hanson: and and quality of our neighbors really lives up in our partner. So we’re lucky to have them with us.

Steve: so you mentioned earlier that you’re doing all these initiatives and when I asked you earlier like in regards to decision whether to close or not, I mean it all comes down to economics in a way right? I guess you’re different in that you have this collection of properties where for example, the ice cream business is way up and maybe that can offset some of the cost for some of your other restaurants, which restaurants have been hurt the most?

Hanson: so my structure is actually all separate. So all the different companies are separate so they are We know there are not related from a cap table perspective. Except for our common ownership. The bar business is hurt the most right because simply we can even be open right and you no longer term, right? If I don’t get the next 12 months. Now, there’s a big question right in terms of how cuz customer demand will come back or not. Right?

Are we ready to go out yet and bars are places where people people go out to and so that’s a big question right now in terms of how we pivot our bars into places where you know, I think gone on a days were we pack it in on a Friday and Saturday night right at least for the foreseeable future.

Steve: Yeah.

Hanson: So knowing that it’s not going to happen. So how do we change the bar model to deal with the current reality?

Steve: Are you ready to share some of your ideas or?

Hanson: oh no ideas we were working on is we probably have Make some of our bars all reservation only. So the idea that you know Steve you and I want to grab a drink we’ll probably make a reservation at a bar show up at eight o’clock have a drink or two and then head out, you know, there’s not going to be a big happy hour crowd anymore right in terms of you’re going out after work. And get grab a drink. So that’s one small idea. We thought about in terms of what alcohol delivery means in terms of craft cocktails or other. Other type of alcohol. I know some bars in the San Francisco area have done okay with that, but we don’t know yet. Like we’re still we’re still thinking and learning and see what others are doing.

Steve: Do you plan on so you have the cren box. And then you are thinking about doing this I guess a live stream from the restaurant. Do you plan on making some of these changes permanently with your restaurants moving forward after this virus passes because it will eventually pass.

Hanson: So one of the Silver Lining so I think everything in the world balance out right is I still have a lot of anxiety about reopening the restaurant as they were because I know I know it’s California isn’t to put a capacity restriction on our restaurants and make the tables to be 6 feet apart. So, you know, we’re doing the analysis right now to see how we can run these restaurants at a fifty percent capacity. You know, if you recall, you know, you know earlier in our conversation about the gross the gross margin and the expense ratios, right?

Well if them starting at 50 percent as opposed to a hundred percent, yes, my variable costs will go down. But you know, there’s still a lot of fixed cost in the in our model, whether 50% of sales would we go or not? So there’s a huge uncertainty and anxiety I think for all restaurants in the next 12 months, even if we are allowed to reopen.

Steve: But presumably headcount is going to go down. I guess your fixed costs of the location stay the same but headcount will go down and obviously cost of food will go down too right because you’re serving less people.

Hanson: Yes. So the variable costs will go down and labor costs, you know the salary in the like it’s not completely variable on linear, right? You have to have some Base number of Staff even if you’re serving, you know only half the So so that’s part of the analysis right now is to really understand when a one is what how can we what the operating model needs to be to in a world where we only at best right be able to get 50% of our Revenue. So that’s the in restaurant dining site, right but some of the new stuff that we tried out.

Yes, certainly. We’re going to keep doing it. So the cren kits is here to stay and And we are now thinking about how to you know further that business or the idea right of bringing cren to your home is that these meals that were three course meals that were selling at 38, 38 dollars. Is it other brand of products that we can deliver to you? Or you can pick up, down the road when you know social distancing is not as strict as it is now. Is there a model where we actually Two of our team members to cook a dinner party for you at your house, for example, so those are all under consideration right now.

Steve: you know handsome one thing. I like about you with our conversations is that you’re always thinking about creative ideas and one thing since this is an e-commerce podcast. I was wanted to get your opinion on whether you actually see e-commerce in the food industry growing and are you planning on investing more in the This e-commerce aspect of your business even after this social distancing becomes a little bit more relaxed.

Hanson: Absolutely and I think we will all see a vast increase on the number of yummy stuff. You can buy online. One of the hurdles right that basically this pandemic broke through was you have a lot of great chefs in everywhere in this country. Who for one reason or another have been resistant on both either third-party delivery. I having their food delivered to your home or having food the packaged and be sold online now part of it is that we’ve been in this, you know, huge Bull Run in the economy. So if you’re successful restaurateur, despite the math that I share with you a restaurant can still be very lucrative right and and you know, the a lot of Restaurant tours chefs, Somalis now part of why they do what they do is the in-person hospitality right is delivering that joy in a restaurant.

Steve: right

Hanson: I think this banana hammock right has forced everyone to three think about how do I capture that Joy and hospitality and put it in a box or a bag and have you enjoy it somewhere else and you see it across the country now all these great restaurants that are doing these takeout meals And repackaging their food for online sales. I think over the next couple years. You’re going to see a you know, a Renaissance of great food being sold by, you know, delivery trento be it, you know immediate delivery to your home for tonight or through e-commerce and through a shipment platform.

Steve: How does a how do platforms like doordash and ubereats fall into this. So when you’re doing takeout and delivery, are you relying on these third-party services or do you have some other infrastructure in place to deliver the food?

Hanson: We’re taking small steps. So for cren Kits is actually all pick up. Okay, so you have to come to our restaurant to pick up for some of our other restaurants. We are doing our own delivery. So we’ve repurposed and as some of our staff members to become delivery drivers and to send food out ourselves. Some we are you know, hopefully silicon for example uses and works with all the third party delivery platform.

Steve: Just curious. What is the incentive for you to do your own delivery versus user Network like doordash and UberEats. It’s is it substantially more expensive to use the third party

Hanson: service the third party service takes between 15 to 30% of the top.

Steve: Wow. Okay

Hanson: obviously, they deal with the logistics. So, you know you’re paying for or is like paying for FedEx next-day delivery, right? some of the reasons why we’ve decided to do our delivery on our own one is well, if I’m paying 30% to through a third-party delivery company, I can purchase these that money and pay my own staff to do to the delivery. We also living in a weird world right now where you know, you’re mostly home so is easy for a amateur a delivery person. Or restaurant to deliver food to you, right because you’re generally home.

So it’s the delivery we’re doing is not nearly as complicated or complex right in terms of what doordash and ubereats managed, but you know, this was a way to keep some hours for staff to use that use that money that we were going to spend anyway, and you know supposed to paying doordash we’re paying our own staff to do it. I do see though kind of going forward in terms of as of a lot of restaurants right re asking right whether it makes more sense for us to have our own delivery operations, then paying the 20-30 percent to a third party.

Steve: Right. I guess my last question for you. Hanson is what are some of your predictions on the future? And when do you see things going back to normal again in the restaurant industry?

Hanson: Oh the billion-dollar question.

Steve: Or is it never gonna go back to normal? who knows

Hanson: I was talking to someone yesterday, you know, despite having this many restaurants like I know so little right now about what’s going to happen. There are going to be two phases is going to be this next 12 months where before there is a vaccine and how consumers are going to behave whether to go out or not. Then that’s going to be a world after the vaccine. In the meantime, though. I think all of us are getting a little more used to ordering takeout. Yeah, all of us are getting a little you small used to paying a little more for take out because now there are good restaurants that are actually delivering like really good food to you at a price point which probably was really high, you know before the coronavirus.

So I think the new well for Restaurants are gonna be different. Unfortunately, a lot of restaurants won’t open back up again after they’ve been forced to close, you know, we’re lucky that you know, all of our restaurants are generally doing pretty well. And but if you’re you know, if you’re a restaurant down looking at, you know one to five percent operating margin, you know over the next 12 months you can only see half the people it doesn’t make sense to open again.

So you see a lot of empty storefronts unfortunately. You also see, you know, I predict, you know, kind of how our test around cren kits about takeout and delivery food. I think that is going to continue to rise in terms of what we do as restaurants, but I think the new world is going to be very different from the old world.

Steve: even after the vaccines and and what now come out?

Hanson: I think so because I think by that time in 18 months, customer Behavior would have been really affected right as opposed to going out to you know, all of Garden in spending 60 bucks 80 bucks for a family of four you now realize that huh. There’s this really great Italian restaurant that delivers food now and it’s just as good. for a little cheaper maybe so I think that more I think after the vaccine right you see restaurants focusing even more in the in restaurant experience, good food has you know has been the main thing of why people go to restaurants.

I think good food becomes one of the reasons people go to restaurants in the future. It’s going to be about, you know, getting together with people the hospitality the experience. I think that’s going to be even more important in a world where you know, everyone is now used to getting takeout.

Steve: All right Hanson. Thanks a lot for sharing your insights. In the restaurant industry. I love your creativity and what you’re doing with keeping your restaurants afloat. And I mean it’s going to be guys like you who survive this you think of creative ways to stay in business and offer things that other restaurants aren’t doing and it’s going to be the people who are just kind of stagnant who are going to be the ones who won’t survive this that well so great job.

Hanson: No. Thank you Steve and I you know, where You know, I talked to a lot of other restaurant tours as well and no one of the things that we all need right now is to somehow convince. Everyone that going out is okay. It’s not just going to be on us right. So I think you know we need you know, that’s why we’re I’m in continuing conversation with all the restaurant tours and other operators because all of us need to pitch in and help each other and make everyone know that it’s safe. You know, these are the problem. We doing and here’s why it’s still fun to go out. I think you know, hopefully it won’t be too long before we bring fun back to everyone’s lives.

Steve: And you know Hanson I actually have a number of listeners here in the Bay Area. So if you wouldn’t mind just telling people what your restaurants are the ones that are doing take out, that’d be great.

Hanson: Oh, thank you Steve. So open in Oakland. We have Brown Sugar Kitchen. And then I we mentioned humphry slocombe ice cream. We have spots in Berkeley Oakland and San Francisco. Oh and also in San Mateo so you can order humphry slocombe to be delivered or picked up. In San Francisco, my cren restaurants are doing take out and they’ll be picked up from our restaurants in the Marina. And then finally my restaurant B-side in Hayes Valley. We’re doing meal delivery. So yummy stuff make from our scratch kitchen that can sit in your fridge for a few days and reheat it easily. So those are some of the restaurants that are still making a go at it.

Steve: Awesome and then the cren restaurants. What type of food is that?

Hanson: What’s the menu this week the menu this week the $38 cren kit It is a vegetable soup. Most of the veggies come from our farm up in Sonoma. Then there’s housemate brioche that we’re famous for I forgot what the entree is. There’s also a vegetarian previous entrees included a couscous salad, a veggie primeita, which is the most delicious baked potato gratin that you have with veggies inside is like a shepherd pie but vegetarian and then dessert, So Juan Contreras was are you know, James Beard nominated finalist chef from Atelia Crenn and he’s making all the different desserts with his team

Steve: Nice why that sounds delicious. Well, I’ll be sure to get the word out and way to go Hanson. I look forward to being able to go out once again and I’ll be sure to visit some of your restaurants when I actually haven’t had the opportunity to but yeah, I’ll make an effort to thanks a lot.

Hanson: Thank you save.

Steve: All right. Take care.

Hope you enjoyed that episode. Now running a restaurant during these times is tough. But if you sit down and get creative you will survive and prepare yourself for the new normal. For more information about this episode. Go to mywifequitherjob.com./episode302.

And once again, I want to thank Klaviyo for sponsoring this episode, Klaviyo is my email marketing platform of choice for e-commerce Merchants. You can easily put together automated flows like an abandoned cart sequence a post purchase flow or win back campaign. Basically, all these sequences that will make you money on autopilot. So head on over to mywifequitherjob.com/klaviyo. Once again, That’s mywifequitherjob.com/klaviyo.

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

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

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

But before we begin, I want to thank Klaviyo for sponsoring this episode. Klaviyo helps brands build relationships across any distance delivering email marketing moments. Your customers will appreciate, remember and share in good times and bad. And since it is all driven by real-time e-commerce data, you can make sure every interaction feels more personal. Now when you have a 360 degree view of the customer the growth possibilities are endless. So visit klaviyo.com/mywife and try for free. That’s KLAVIYO.com/mywife. Now on to the show.

I also want to thank Privy who’s a sponsor of the show. Privy is a tool that I use to build my email list for both my blog and my online store. Now, what does privy do? Well Privy is an email list growth platform and they manage all my email capture forms and I use Privy hand-in-hand with my email marketing provider. Now, there are a bunch of companies out there that are managing email capture forms, but I like Privy because they specialize in e-commerce. And right now I’m using Privy Display a cool Wheel of Fortune pop-up basically user gives your email for a chance to win valuable prizes in our store and customers love the gamification aspect of this and when I implemented this form email signups increased by a hundred thirty one percent. Now, you can also use Privy to reduce cart abandoned with cart saver pop-ups and abandoned cart email sequences as well on super low price that is much cheaper than using a full-blown email marketing solution. So bottom line, Privy allows me to turn visitors into email subscribers which I then feed to my email providers to close the sale so head on over to privy.com/steve and try it for free. And if you decide you need some more advanced features use coupon code MWQHJ for fifteen percent off. Once again that’s privy.com/steve. Now on to the show.

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

Steve: Welcome to the my wife quit her job podcast. Today I’m thrilled to have Jake Cohen back on the show, now Jake is the product marketing lead over at klaviyo. And last time we spoke. We spoke about how to improve your email deliverability back in episode 228, but today we’re not going to be talking about email marketing or Klaviyo much at all instead for the past month or so Jake has been heading up a special covid-19 coronavirus task force to research gather and synthesized e-commerce data to share with the broader e-commerce community and the data that they’ve compiled is based on insights from over 30,000 customers and their sales activity along with thousands of survey responses

And I know I for one interested in how other shops are doing and I know my shop over bumblebee Linens has been down because our biggest customers are wedding and event planners. And right now no weddings are events are happening. So Jake really happy to have you on the show man. Welcome.

Jake: You are hired that was a fantastic explanation of what we’re doing and I appreciate the invite so we can share.

Steve: Well, Jake great to have you back. Can you just quickly remind the audience who you are what you are working on and why you decided to take on this initiative?

Jake: Absolutely. So I’m Jake. Hello. I work at klaviyo. I am right now working on product marketing which is basically trying to make sure that klaviyo explains itself in a way that makes sense to people And helps them understand what we do we change direction in terms of what we were actually focused on around March 17th. I think, you know things started to really get crazy in terms of everyone started to work from home. We heard a lot of e-commerce Brands just start kind of freaking out, you know sales are dropping. What do we do? And so we asked ourselves, you know, our job really is to provide value every day.

What can we do? That’s the most valuable thing for our businesses today and what we heard from them was listen, we just don’t even know what’s going on. So we can’t even we don’t know what to do with ourselves hour-by-hour because things are changing so rapidly and we said, all right, that’s the answer. We are going to allocate, you know, a substantial amount of our energy to be the sort of Clearinghouse the news source of what is happening in the world as it relates to e-commerce. So that Brands can have a steady reliable place to turn to understand what’s happening and we should provide them with guidance on what we think they should do so they can make the most informed and the best decisions for their brand so they can survive today and Thrive both today and tomorrow.

And I’m very proud of the team that we’ve assembled to do this the information that we’ve shared the site that we’ve spun up and I think the business is that we’ve helped it’s been really really fun to pull it together and we’ve learned a lot really quickly.

Steve: I mean, I can’t wait to delve into the data. But before you before we get to that, how does it work? Exactly and how are you collecting this data?

Jake: Yeah, so it started overnight with a little Google form that I put out on Twitter and I just asked I literally asked a bunch of e-commerce Brands. I was like what’s happening, you know, what’s going on with your sales, what’s going on with your supply chain what’s going on with your ad spend what’s going on with your web traffic and I got a hundred and 50 responses overnight.

Steve: Wow, okay.

Jake: and he said I said, holy smokes. I think there’s something out here and you know, we invested more on that and very quickly. We had like an open field. You know, what can we do better and a lot of brand said tell us what consumers are thinking so we can plan we said, okay. It’s a good idea. So then we started the consumer survey and we’ve evolved those and they’ve become a little bit more mature and sophisticated in the questions they ask and so those started happening. We said all right. Well, this was by the way how we found out literally on March 17th and 18th that there are actually some brands that were exploding as a result, you know, the coronavirus hitting.

At the time very few, but really exploding and so we said, okay. Well we’re sitting on all this data. Why don’t we actually go look at it? And so then we took brought over, you know, one of our senior data scientists to join our team and she’s been pouring through our data slicing dicing everything to sort of see if our hypotheses made sense and Help us learn and what’s going on? And so now we have you know, daily brand insights from Brands all around the world. We talked to two for a day as well. We have consumer insights from all over the world. We have hundreds of people that responded that and then you know every day we’re looking at sales data across 32600 customers globally to see what’s happening. And so we have a unique perspective on everything that’s going on.

Steve: Nice. Let’s get to it. Okay, so the for those companies that are kicking but what are they selling?

Jake: What a good question Okay, so Is what we call new Essentials. So what one of the things that we learned really early on is that consumers traditionally the spending the consumers were going to make was following a sort of classic framework from Believe It or Not, psychology. Have you heard of Maslow’s hierarchy of needs?

Steve: I have. Yes. Absolutely.

Jake: Okay

Steve: you want to explain it though in case they don’t know

Jake: Yes, super quick for the audience Abe Maslow. Is this sociologists and psychologists in the mid-1900s 1950s and he wrote this thing called The Hierarchy of needs which explained what normal people prioritize in terms of what they buy what they do and in what order and it starts on the base with food and water and then it goes to shelter, you know security so that you feel safe then it goes to belonging because people want to feel connected to each other then it goes to self-esteem so that you buy things that make you feel good and only once you satisfy all those things there’s you know, the top of the pyramid is self-actualization, which is when you pursue creative Endeavors and explore and try new things.

And so we started to see Categories beyond food and nutrition start to Trend up and those were office supplies. Those were Health and Beauty those were sporting goods and we saw this is super weird. Like why is that happening and it struck us that since people were relegated to work from home for an extended period of time. They had a new environment a new set of circumstances which dictated new Essentials for their new world. And so the categories that comprise new Essentials are in alphabetical order because I have it listed here.

Steve Haha Okay.

Jake: apparel and accessories but specifically activewear because people are working out more at home, electronics because people had to buy homes stuff and they want to entertain themselves. We hear people buying iPads and things hardware and Home Improvement, Health and Beauty, which is a fascinating one, housewares home furnishings and garden office supplies. I mentioned specialty Sporting Goods toys and hobbies education and Telecommunications are all trending up on average more than other categories.

Steve: I know weights are like sold out everywhere.

Jake: Yep

Steve: because everyone wants to work out at home. So if you’re in these categories and you’re sold out, I don’t know if you have this data, but if you’re selling out then shouldn’t the sales, how’s the supply chain. I don’t know if we want to jump. I don’t know how you want to take this.

Jake: anywhere you want. I literally I have absurd amount. in my head about all this.

Steve: Okay

Jake: So supply chain has been fascinating. That’s one of the questions that we actually asked every day what’s happening with your supply chain and let me actually pull it up so I can tell you exactly what’s going on.

Steve: Yeah, so these companies are doing well presumably they’re selling out right? product is just flying off the shelves and at some point they’re not going to have any product left to sell and just kind of curious what they’re doing.

Jake: Yeah, so some brands are selling out and that makes it very difficult for them to replenish and in fact hearing from consumers more and more they’re exploring more and more new brands. I think it’s because some places are running out that said a lot of people are not affected by inventory being down there. To replenish especially because China is coming back now. So if you Source from there, it’s coming. It’s just on a delay where they make it domestically and warehouses and fulfillment centers are considered essential in a majority of States. So they’re still working.

So if I look at supply chain affected, I’m looking at a daily Trend that we’ve been collecting since the 17th people report delays. There’s only roughly ten percent of respondents that say they don’t have access to all their inventory. Otherwise people are good to go. So more than 50% of brands are completely fine in terms of their supply chain.

Steve: Yeah, I mean, I’ve noticed that with my store as well like dislike the supply chain is fine. We were delayed maybe a most a couple of weeks and we’ve been getting shipments all the time. So it’s good to know that everyone else. I guess 90% of the people aren’t feeling that way.

Jake: Yeah. I mean I you know, I these are these are General Trends there’s obviously gonna be exceptions. But this is you know overarching lie what we’re hearing.

Steve: I have a quick question for you just involved with taking service and and this is just kind of from my own past experience people who are doing well will tend to fill out the surveys whereas businesses, who are struggling might not want to share that they’re not doing so well. Do you see that as the case or under how you mitigating that effect?

Jake: We do not see that I can tell you that. Let’s see over 20% of people who responded last week told me their sales are going down in the beginning of this that was over fifty percent. So people are two interesting things. What were observing is number one, people are so interested in simply understanding that they understand the give-and-take of sharing and then getting back aggregate insights. And so and we’ve been doing that daily. So I think People have been comfortable sharing. Also, we don’t say a brand new sales are down of course and we could leave it the other the other thing is, you know, we were a little nervous about that when we started looking at the survey early on seeing what percentage of Brands were up or down.

But then we end up looking at our own data and the numbers were almost identical which is fascinating because while you know, not every single day of the survey was perfectly statistically significant or do we advertise it as such the trends are spot-on and it matches, you know, like literally Like a 2% you know P value of it being not accurate. It’s kind of remarkable. Actually how it mapped up.

Steve: Interesting. Okay. So we talked about like the categories that are doing well and clearly they’re going to be fine and they’re probably really confident. Can we talk a little bit more about the businesses that are kind of down specifically what I’m looking for are, you mentioned that it went down from 50 percent to 20 percent down right? over time and clearly these people are pivoting somehow, right? So I’m just kind of curious what strategies are working and what they’re doing to Buck this trend?

Jake: Well, actually so two things it’s not necessarily true that Brands who are now up and less down pivoted their products. Okay. We’re actually seeing an evolution of consumer demand. And so one of the things actually just recorded a video. So if you go to Klaviyo.com you click on the green header bar. It’s going to take you to a dedicated coronavirus page where we have all of our insights and all of our resources there. We publish this stuff and so this will go up but literally, Let me pull this up here. What I just reported is that e-commerce sales are completely exploding and if you look at it by category, I’ll use a parallel as an example on March 15th. Apparel sales across all klaviyo customers were below total sales for 2019.

Steve: Wow, okay

Jake: this week they are up more than a hundred percent

Steve: Right, because they realize that they can’t they’re going to be hold out of at home for a long time. I would guess.

Jake: Yes, and so two things happened. Consumers one, started working out more and wanted to feel good about working out. So we saw Fitness apparel and accessories explode. I can also test that my wife buying things. Yeah, that’s true too. My hypothesis is with spring and summer coming in stores not opening, you know certainly in the next couple weeks. I think we’re going to see people buy more and more clothing looking forward to when they can go out and so we’re going to see that continue to go up. So number one consumers are changing what they’re buying still in the context of new Essentials, but they’re changing and so some brands that’s on initial hit are now doing better.

The second is yes, some brands are pivoting, but it’s fairly hard to do, you know, the success stories that I’ve heard is pistol lake is an example of a brand that they happen to be an apparel brand. They sell men’s like minimalist clothing out of LA and we published a story on them. They on March 15th had their sales get hammered wrote a plea to their customers to if they ever considered buying anything to please buy it now that gave them the cash flow they needed to not have to lay off anybody and with that they took their Factory and they completely turn it over to sell masks and they sold through 3,000 units in a day

Steve: Interesting. Wow. Okay. I have a similar story to share to share their so, you know, we sell wedding handkerchiefs and that sort of thing and obviously weddings in that sort of thing are going on right now. So what we did is we my wife actually made a craft on how to make a mask out of a handkerchief and then we just sent out an email that said hey, we’re going to give away a free handkerchief with any purchase along with these instructions, and we’ve been running that campaign for the past two weeks and it’s been doing really well.

Jake: That’s great. That’s awesome. How did you guys get that idea?

Steve: It’s all my wife. Like I’m obviously not a craft person. But I think I think there is this one craft that just went viral with something else. Maybe it was with the bandana and she was like, hey, we sell handkerchiefs we can make these into into masks and so we’re actually thinking about selling mask now too because we have all these really cool designs like the handkerchiefs are really intricate. And so we’re trying to actually find some contract sewer right now to make them.

Jake: it’s super interesting. That’s really cool. I actually think masks are here to stay. I think that people are going to be wearing them through the rest of 2020 in public and I think right now people are scrambling to get masks that are simply comfortable but what’s going to evolve is just like clothing and fashion people will want to express themselves individually and they’re going to want to find a mask that sort of Suits them. And so there’s going to be a massive long tail of awesome designs and cool different fabrics and different features as the market sort of evolved and figures out what people want.

So I definitely think there’s an opportunity there for a ton of different brands to sell things that people identify with and will wear out every day in public. I think I agree with you. I don’t know if you’ve been to Asia but wearing masks in Asia has kind of been the norm for a while now. So..

Jake: It’s comin here.

Steve: It’s probably coming here. Yeah, I mean there’s a lot of people going into Mask though. So at some point, I think it’ll be like the fidget spinner.

Jake: Yeah, right. Yeah.

Steve: everyone will make them and then gradually they’ll tell down over time.

Jake: We’ll see we’ll see where it goes.

Steve: So what other strategies are working, I’m Of interested in kind of the pivots that you’ve heard of before we move on to the rest of the data.

Jake: Yeah. I mean the biggest sort of counterintuitive Trend that I’ve heard is that acquisition through ads is more cost-effective than ever and easier than ever. I’m hearing brand say that row ads is, you know through the roof cpms and cpcs are down competition on ads has effectively gone away as most large brands of pulled out. I heard you know last last week the 16th of April was the biggest day that we’ve seen this entire year. They probably I have to compare it to last year Black Friday, but probably bigger than that and I heard a number of Brands say that they’re on site conversion rate was over 5%.

And so, you know to me what’s going on is with people not being able to go to stores spending more time online more time on social more time on email. They’re looking for either the products that they want or four ideas of cool things that they may want. There are trying new brands. And so if you know a brand has cash flow as willing to take the risk sort of sell that It’s totally working and I’m also seeing that some of our best performing emails are doing pre-sales. And so I’m wondering if there’s a combination of pre-selling items through ads to both acquire customers and to engage our existing customers I think is going to generate a lot of sales providing you can be transparent about when you can fulfill the sale date.

Steve: That’s interesting. I’ve seen cpms drop 20 to 25% on my end for my demographic just kind of curious you have the survey data are most people upping their ad spend or reducing it?

Jake: Up.

Steve: Okay.

Jake: They weren’t at first there was like a little Arbitrage moment. But right now let’s see roughly. What’s this 25 percent of Brands report increasing their ad spend which is pretty consistent. Most of them are keeping it the same at like 25 percent, you know, we continue to hear that 15-20 percent of people just I’ve stopped spinning ads out, right and then, you know a similar amount are spending less. This is roughly in line with the overarching distribution of sales going up or down the difference is with brands that have sales going up there going up like three hundred to a thousand percent. They’re not going up a little bit.

Steve: Okay

Jake: and so, you know, there’s a relatively even split in the number of brands that are up or down but the brands that are up our way up, It’s kind of crazy.

Steve: but the brands that are down I’m kind of curious are they are they upping their ad spend to try to compensate for it or are those the guys that are just turning everything off?

Jake: most of them from what I can tell in this? This is now I’m an anecdotal and this is not statistically significant.

Steve: Okay

Jake: but most of them say that they are reducing their ad spend because they’re concerned about cash flow and they’re concerned about the future. So they’re relying more on strategies that can try and organically push people to their site. They’re working with other brands to try and trade list or cross-promote before they go increase the ad spend because they don’t want to burn cash right now because they don’t know how long they have to last in this current stasis.

Steve: Okay, that makes sense. So just Take the people out there who are running e-commerce stores that are down what industries are actually getting hammered right now?

Jake: Jewelry is having a tough time.

Steve: Okay

Jake: actually pull up my charts. Hang on. I just got rushed charts from our data scientist so I can look.

Steve: nice. I can tell you’re a geek about this Jake.

Jake: Oh my God, I spreadsheets. It’s kind of crazy, jewelry is having a tough time, although interestingly. So well, let me take a step back. Every single category has brands that are up and brands that are down. So when I say a category is up, I’m not saying every single person that sells that is doing well at all. But it tends to be that if you look at the you know number of companies in that category. It tends to be the more of them are doing better than less in the categories that are up. So jewelry as an example tends to have more brands that are down but there are some brands that are doing exceptionally well. We see spikes in particular of companies that sell Boolean. So if you sell like coins, this gold bars, yeah like that, you know, we put that in jewelry and they’re doing in like the spikes on the graph from

Steve: Of course with the FED printing money like crazy. Yeah gold is great.

Jake: Yeah. There’s your head, we’re seeing that’s like that’s the one that’s really had a tough time apparel and accessories was hurting for a while, but they have rebounded in a super hard way. Most everyone else is doing better Automotive is obviously down.

Steve: What about travel accessories? I would imagine those are down too

Jake: Travel accessories are way down. Down way way way down. Although we are I’ve been encouraging, haven’t seen this yet. I’ve only seen out of apparel, but I haven’t been encouraging travel accessories to partner with brands that sell things that people need now or to sort of like pre-sell stuff for the future so that people can look forward to trips in the future because I think you can get people to do that, but I haven’t I haven’t really seen it yet. So luggage is down. You know, I

Steve: give me an example of partnering with someone like what do you mean exactly?

Jake: So well one example, I can tell you from the Fitness space. There is a fitness apparel company that was way down and they were losing money and they’re having a problem and they reached out to bunch of gyms and basically said hey oh sorry, excuse me other way around there was a gym that was down. Obviously. Jim was closed. And so what the gym did to try and get revenue is they went to a fitness apparel company and said, hey we can promote your goods to our customers. If you give us some rev share and help us out

Steve: look affiliate program kind of?

Jake: yes, exactly. Okay partner has been massively successful

Steve: nice.

Jake: So, you know, I’d have to spend some energy thinking about for a specific category. You know, what the right partnership is, but you know, there are a lot of businesses that are closed that have customer bases who are active and spending money and there’s a lot of Brands trying to find those people and so there’s definitely Partnerships in there, especially at local businesses if you can strike them up

Steve: okay. So it sounds like based on what we’ve talked about so far. The majority of categories are up except for a handful.

Jake: Yeah, and I mean it shouldn’t really be that shocking because consumers can’t go to stores. so, you know the bet is do we believe consumers are still spending money, you know at a relative similar rate even just down a little bit and I think we’ve seen that the answer is yes, they’re still spending money just not as much as they did two months ago. And if you take away an entire category that was a majority of sales for through stores and you basically take it away e-commerce is going to obviously benefit from that because people need to buy from somewhere.

Steve: Sure. Absolutely. How much is eCommerce up overall. Do you have that data?

Jake: Yes. I do. Let me pull that up. This is insane, video slides. Here we go. It is up 80% since January.

Steve: Whoo crazy. I know for our store we were doing awesome up until March probably like the first week of March and then because our things are very event-related. That’s when things started going down. But this year had been a great year up until that point.

Jake: Yeah, we one of the things that we’re starting to think about is, how permanent is the shift, obviously when stores open people will go to stores. But what we’re seeing is we did a deep dive in New York as an example and we saw that week over week. There are more people shopping online than ever before and they’re spending more than ever before and so we’re starting to wonder, you know, is this forcing A catalyst a sort of acceleration of people to e-commerce that more people are learning how to buy online. They’re trying new categories online. They’re expanding what they’re purchasing online. They’re sort of changing their expectations on you know, how long they’re willing to wait for items how permanent will this be?

And you know next year when we look back what percentage of overall retail sales will be from e-commerce going forward. You know, I personally think it’s going to hit 22 23 24 percent up from mid teens, which is a huge huge jump.

Steve: I think It was 15 last year, right? Yeah.

Jake: Yep. I think it’s going to be low 20s next year. I think it’s going to be huge.

Steve: I would tend to agree with you and I’m just using my mom as an example. Like she didn’t know about Zoom. So like yell teleconferencing is new and then she’s been shopping online more than ever because she just can’t step out of the house.

Jake: Right? And so the question is how much of that will become something that she’s learned his comfortable with in the future. For example on a rainy day. Is she going to Brave, you know going to the store or she’s going to log onto her computer and and by their yeah, I don’t know.

Steve: Yeah. No, I totally agree. Can we talk about some of the other negative aspects of this? What about on the other employment side layoffs? And that sort of thing to have data on that?

Jake: Yeah that, super interesting we’re digging into this more because obviously it’s happening more but through our consumer survey. We asked people if they’re recently unemployed and what they’re doing and ironically spending among people who are recently unemployed on electronics was up more than Who are not unemployed.

Steve: interesting

Jake: we think what’s going on is people are you know buying if they’re you know white collar worker non essential worker. They’re buying, you know office equipment to try and interview right? Because they don’t get to keep their stuff from work. I personally think that consumers are spending money thinking that they’ll be home for months because a lot of companies aren’t hiring want to stay entertained. So I think they’re buying you know, iPads and gaming consoles and drones and you know things to play with.

Steve: That kind of goes against Maslow, right? You’d think they’d be stuck stocking on TP and stuff.

Jake: Well that assumes that they haven’t already done that and most people have you know, I think now they’re bored. Right? And so they want to they want to do something that’s creative and like keeps their mind occupied. And so that’s that sort of self-actualization. That’s why toys and hobbies are up. That’s why I like electronics or up, you know. That’s what we’re seeing.

Steve: Yeah, let’s talk a little bit about like the mental aspects of this so I imagine I’ve seen the survey. So how are people, how are Brands feeling about the future?

Jake: It’s a really good question. It’s completely dependent on how their stores doing.

Steve: Okay

Jake: so interestingly Brands so for I’ll go it we do grams of sales operations and sales down brands that are flat. And in fact, let me actually pull it up because I want to actually read you some quotes Choice quotes that come up.

Steve: Okay

Jake: The overarching for Brands were sales are up there super optimistic. Stick they don’t think that this is going to last forever. And so they’re definitely trying to take advantage but they think that they’re going to have more customers than ever before overall. You know sales will be higher than they had been in the past. They see it as like a net Boon to the e-commerce space overall, still scrolling, hang on. Brands who are down the general sentiment is nervousness and the nervousness is around how long this will last they’re nervous around, you know, will they be able To survive.

Their nervous around will they be able to pay their staff, their nervous around how they’ll sort of like keep up going forward for brands that are flat. It’s kind of mixed. They’re basically like we think will be good. And so we’re going to kind of stick it out. That’s the general take

Steve: Stick it out mean, no layoffs no change.

Jake: They’re not there. So when you the people the things that people are most afraid of and really don’t want is they don’t want to lay people off. And they don’t want to go out of business, you know, when I interestingly separate thread. I spent all of q1 interviewing roughly 50 businesses around their dreams around their aspirations. I ask people to question how will you know when you’ve made it which was fascinating and the consistent theme to my surprise across everyone is they wanted to be able to hire great people? Support them and give them a comfortable awesome lifestyle and work creatively with them every day.

That was their dream come true. And so I think that that manifests here, like people don’t want to lay people off. They don’t want to reduce their payroll their inventory, but they don’t want to go out of business either and so they’re working with that balance and I think for brands that are flat they’re not planning on cutting back materially there just may be decreasing some of their plans spends or not increasing. Ads get you know tend to get pulled back with in that bucket. They’re trying to just see this through so that they can quote make it to the other side.

Steve: And for the brands that are down. Have you seen layoffs?

Jake: I don’t know the answer to that explicitly.

Steve: Okay

Jake: I can say I’m looking at a question right now. I haven’t split it up yet. But it says how will you know, if you’re successful coming out of this and 17 percent of respondents said that they will have rehired laid off or furloughed workers. I haven’t looked what percentage of those are people with sales down. I can do that. But you know the bigger answer 71 percent of people believe that they’ll be successful when they see their sales rise again.

Steve: If you sell on Amazon or run any online business for that matter, you’re going to need a trademark to protect your intellectual property. Not only that but a trademark is absolutely necessary to register your brand on Amazon. Now, I used to think that any old trademark registration service would work and that could even try to register my own trademark by myself on the cheap, but I was dead wrong. Securing a trademark without a strategy in place usually results in either an outright rejection or a worthless unenforceable trademark. Now, that is why I work with Stephen Weigler and his team from Emerge counsel. They have a package service called total TM, which provides the same attention to detail and process that large law firms do at a fraction of the price. Now for me personally, I like Emerge Council because of their philosophy, their goal is to maximize IP protection while minimizing the price. So before you decide to register a trademark by yourself or file for other I could protection such as a copyright or a patent, check out Emerge counsel first and get a free consult. For more information go to emergecouncil.com and click on the Amazon sellers button and tell Steve that Steve sent you to receive a $100 discount on the total TM package for Amazon sellers. Once again, that’s emergecounsel.com over at emergecounsel.com. Now back to the show.

Steve: I mean I can tell you how I’m feeling about this and how we’re dealing with this since sales are down. We’ve been just having our employees going every other day and we’re confident that everything is going to be fine. Just because once people start getting married again. Well we’ve seen actually is so we actually embroider The Wedding Date on these handkerchiefs and we’ve seen a lot of people come back to us and say hey can we redo and adjust the date since we postponed it and I suspect that

Jake: oh fascinating.

Steve: Yeah. And so what we do is we give them a major discount on the redo, of course because you know, we have to throw away. Handkerchief with the old data obviously just do a new one but people have been coming back and they’ve been pushing their weddings out towards the end of the year and some have even postponed until the following year. So I insisted that our business will be fine.

Jake: It’s funny as you say that I’m reminded now that we were supposed to go to a wedding in June and they just delayed a year. I hadn’t thought of that.

Steve: Okay. Yeah. Yeah. So for me, it’s an obvious is only one data point is that we just need to get to the point where there’s either a vaccine or an antibody test and I think once people are comfortable moving again. I think everything will come right back.

Jake: I agree with you two things to share one. You said something interesting. You know, I’m just one person just the data point. But the reality is, you know, what I’m finding is each of these data points. Like there’s so many other people going through exceptionally common and similar experiences. Likely, however, you’re feeling there are many many people out there feeling the same thing and doing something similar. For whatever, that’s worth.

Steve: You know, what’s interesting Jake tomorrow. Actually, I’m having a friend of mine on the show that owns like 40 Restaurants and just kind of curious how he’s pivoting everything because rest of us has taken a huge hit.

Jake: huge hit. Did you see the article from Tom colicchio and had to lay off 300 people?

Steve: No man crazy. No.

Jake: Yes. It was really it was sad. I mean he it was in the New York Times and he was like it took me, you know, 12 15 years to build this Empire and like in a month. It’s basically because the cash flow business, you know, it’s like basically gone. It’s really sad. The other thing I was going to share is I’m publishing maybe tomorrow some predictions on when I think things will start to turn around and also like how it will unfold so that people can can can kind of get ready and I know that could be an interesting thing to talk about too.

Steve: yeah. Well, you just gonna leave you hanging like that?

Jake: The Cliffhanger I told I basically I think that the this isn’t going to be you know, turn the light on kind of situation. I think we’re going to see a slower evolution back to people coming back into the economy. So, I tend to look at examples in the past to help inform what might happen in the future. So I’m looking at China when Wuhan opened up again, and I’m looking at watching closely what happens in Germany and in China and Wuhan when they start around March 27th, they relaxed some of the restrictions and so people were allowed to go back to work and they were allowed to travel depending on their health status mostly, regionally and what’s interesting is while you know, within a week or two 92% of businesses were open only 60% of employees were going back to work. So that’s the first little clue that you know, public health will necessarily not have every single person rushing back. Number two, you know one of that makes me a little more pessimistic about the comeback in the US is China had this health app. Are you familiar with this?

Steve: Yes. Yeah, but explain it to the listeners.

Jake: Sure. So Ali Baba, I think a ten-cent work together and build this app. And so what it does is every single person in China is required to have this app to go anywhere to leave their compounds where they live and to join to go on public transportation and to go to work and what they do is there’s this little QR code that they have to hold up which can get scanned and it shows a color that says whether or not they are healthy and the way that someone is determine if they’re healthy as they have to enter their symptoms and then every so often a government official checks and verifies that what they said is true. And so, what happens as a result of that is you have a completely centralized view of the health of every single citizen in the state that will never happen in United States, ever.

Steve: Yes yeah.

Jake: And so one of the reasons that I think the unit that China on a particular, was able to ramp production and their Manufacturing in their industry back up so quickly is because they were able to have this visibility. They were able to test they were able to isolate when things started to spike back up so that we didn’t have a whole secondary wave because Americans are so stringent about security and privacy and unwilling to share this information. You know, I think we’re a little bit more vulnerable to a second wave because we will be slower to see it and respond to it and it will cause it will require a more, you know drastic response. I’m not I wouldn’t be shocked if there’s another period later this year where everyone has to go back home for a couple weeks. We’ll see.

Steve: Well, I agree with you mainly because the attitudes here are different like there was a protest in Huntington Beach. I think last week where people just gotten protested the whole quarantine. And that stuff would never happen in China. I mean, they would just squash that real quick. No questions asked.

Jake: but the interesting thing so so let’s assume, you know, we’re a little slower and it’s a little harder but it happens right the question that I wanted to answers. This mean for e-commerce, and you know the interesting thing when you look at Wuhan is sales over the course of March and into April from e-commerce for way up over February. And so as soon as people start to go out, they started buying more stuff. And so I spent you know, that seems counterintuitive to me, but I think the answer is number one. They have new needs. So when they you know when you go outside, what’s the first thing you’re going to do you go see your loved ones you go. See your friends you go visit something that you haven’t been able to see in a long time you go for a drive you go to a beach you do stuff. You couldn’t do it. Right?

And you need to buy things along the way whether you bring a gift or whether you need new clothes for that or whether you have to pay for lodging or whatever happens. And so there’s there’s you know, spending that happens. And so the question becomes where can they buy? I don’t think that as soon as people are allowed to leave the home stores are suddenly going to welcome everyone in with open arms and people would feel comfortable going I suspect we’ll see, you know similar to what we’re seeing in grocery store is where there’s a fine. Number of people per hour per day at a time and you can buy certain number of things whatever that will translate to many of the stores that have been closed.

And so I think that consumers are going to have new needs and new purchasing triggers and still not be able to return to stores and not be comfortable doing so so it’s actually going to lead to another increase in e-commerce sales across the board until stores come back.

Steve: You know, what’s funny is I just put out a it was a YouTube video that exactly paralleled what you just said, I think E Commerce is going to be the new normal and it’s going to take like probably a good year for retail sales to kind of get back to normal again because people are going to be hesitant. Like I know my wife, she’s not gonna be flying anywhere. She’s not going to be going out shopping unless she absolutely has to go.

Jake: Yeah, I think the really interesting thing. I’m super excited to well I should say I hope this doesn’t happen. But I guess I’m curious about is is like will what will happen in like September and October because I think, my personal opinion I miss is total conjecture total guessing. It’s just just Jake here. I think that we’re not going to see anyone going into any stores or any businesses opening until mid late June. I think then people will decide based on their comfort. What they will do I think in July will start to see like crazy sales and crazy advertisements you go, you know spend in stores and then I think August is going to be the time where hopefully we have sufficient test coverage.

But August is going to be the time whether you know, there’s another Resurgence in cases or not. And in August that’s going to tell us, you know, whether or not we’re prepared to deal with it in September and that is going to set the tone for the holiday season and if the if that’s goes well and we make it through and we don’t have another wave things will start to translate trickle back to normal. But if there’s another wave, Ecommerce sales are going to be up 5x 6X. It’s going to be absolutely insane.

Steve: I really want to, depends on whether there’s going to be an effective treatment for this and the when the vaccine comes out. I think that’s when everything is going to go back to normal but in the meantime

Jake: so when do you think that will be?

Steve: so my mom is actually in this field and she said the vaccine is probably a year away, but test the antibody test just to see if you you know, if you’ve already immune to it that will come out much sooner and I think there’s already some stuff that looks pretty positive might come out pretty soon. As long as the treatment is effective such that people don’t die, then that is a huge that’s another huge step right in giving you the confidence to actually go out there and take the risk.

Jake: totally agree with that. So I agree with you on the vaccine. My guess is May 2021. I think that the antibody test you’re right, but we had a tough start because we loosen restrictions on who could sell it. We have a whole bunch of antibody tests that are in sufficiently sensitive. So they don’t actually produce the right results.

Steve: Yeah

Jake: and I think are pessimistic which is you have to have trust for that to like work.

Steve: Yeah

Jake: but we’ll see. I hope that’s better. You know, I saw that Chiliad last week said they have a treatment like

Steve: I saw that yeah

Jake: I don’t know what to make of that yet. But I agree with you, you know, if there’s something that you can take that will effectively mitigate this thing to be like a light flu or like a bad cold and people don’t die as a result or not many died as a result. I think they’ll make a big difference, but you have to get everyone to trust that that’s actually true and that’s going to require, you know month or two months worth of data and it might end up yielding the same timeline.

Steve: Yeah. I mean if you hark back to Thousand one, you know, when the World Trade Center went down. I remember it took me actually a long time to want to fly again, even though it was completely irrational right? I mean ironically is probably the safest time to fly right out of bed, but it still took me like a good six to eight months for me to actually want to get hop on a plane again just mentioned.

Jake: I think yeah, I think the longer this goes on the more skeptical people become and without having exceptionally clear progress that is communicated unilaterally its it is people have to organically regain that trust which means they have to go through experiences on their own and that’s really hard to do.

Steve: So Jake if you were to kind of summarize maybe the three key points of all the data that you’ve gathered so far, what would they be?

Jake: Number one e-commerce sales are up across basically every category and they will continue to go up. So if you’re in an e-commerce, if your cell e-commerce your position to do well and you should keep at it. Number two, It is a good time to spend on acquisition and to get new customers. I believe that as the economy starts to open. We’re going to see a tremendous influx of advertisers trying to get people back to stores. It will become way too expensive to advertise and only the brands that have a big customer. Is and can communicate through our own channels them will ultimately succeed number three. If you’re a brand that is cells e-commerce, but is down there are absolutely opportunities to connect with customers, even if it’s not for sales, so it’s still a time to grow your customer base.

Consumers are looking to connect their spending more time online. And if you invest in growing That Base it will pay dividends down the road because you won’t have to compete for that attention later. You’ll be able to communicate and they will be excited to spend with you in the future.

Steve: So just a corollary what you just said, so that kind of implies that you should be spending more money on ads to acquire the customer. Even if it’s at Breakeven acquire the customer now plan for the future so that when you have that base, you can just sell to them once they’re more likely to buy or even if you’re losing a lot too

Jake: that’s my belief. Yeah.

Steve: Yeah Jake where can people find all these resources and take that survey?

Jake: go to Klaviyo.com at the top of the website is a green header bar. Click on that header bar and you’ll be taken to a site that has It’s coming multiple times a day a link to the survey. If you fill it out. You’ll get an email with results everyday and you can see day by day trends of which categories are selling and how much they’re selling.

Steve: and I will definitely link that up in the show notes. Is there a way to get like a daily digest so you actually don’t have to physically go to the site?

Jake: Yep, if you if you fill out the survey, you’ll get that digest.

Steve Okay, awesome.

Jake: and it’ll come right into your inbox.

Steve: Awesome. And if anyone has any questions for you Jake, is there a way to reach you on like other on Twitter or whatnot?

Jake: Yeah, always you can definitely email me. My email is Jake.cohen@klaviyo.com. I love feedback if they’re specific ideas that you want to dig into. You know, we’ve also put together this entire website of strategies of how of what to do and how to succeed during this time, which you can get on that site that I mentioned. So if people have ideas On how to do anything. We literally have published like 70 articles so far and then you know, if you want follow me on Twitter, it’s @Jfccohen, I try to share interesting strategies or things that are working so that we can just help each other grow through this tough time.

Steve: and I also want to emphasize like even if you’re a consumer there’s a survey also right on the consumer side as well.

Jake: Yeah, and it’s really helpful when people fill that out because it helps Brands understand what consumers want so they can make the adjustment to serve the needs of people as they evolve.

Steve: Yes. So I just want to emphasize to everyone who’s listening to this what we just talked about in this episode kind of only scratches the surface of all the data that they’ve gathered. So even if you’re a consumer or a store owner, I encourage you to go fill out that survey and then get all that data because it is very interesting and it will help everyone get through this.

Jake: as an example for digging into what people are doing with their stimulus package pay out money and that’s having later this week from the consumer survey.

Steve: Yeah. Well, so we feel that the PPP and we were one of the first ones I think to feel that we were way ahead of some other But I think most of the money went to small Banks which is a little annoying but that’s another conversation.

Jake: that was such a disaster.

Steve: Yeah, that’s another conversation itself.

Jake: yeah that isn’t, it’s so is and I feel terrible about how that’s all unfolded. It’s been such a mess.

Steve: Yeah, but Jake thanks a lot for coming on and sharing your insights. I don’t think there’s any other company that’s compiling all this data. So I really appreciate you doing this and sharing all the data with everybody.

Hope you enjoyed that episode. Now, the effect of the coronavirus on e-commerce can only be a good thing. And if you look at the stats on the clay via website, you’ll see that practically every e-commerce category is skyrocketing. For more information about this episode. Go to mywifequitherjob.com/episode301.

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

I also want to thank Klaviyo for sponsoring this episode, Klaviyo is my email marketing platform of choice for e-commerce Merchants. You can easily put together automated flows like an abandoned cart sequence a post purchase flow or win back campaign. Basically, all these sequences that will make you money on autopilot. So head on over to mywifequitherjob.com/klaviyo. Once again, That’s mywifequitherjob.com/klaviyo.

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

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