00:28
My other cousin, Aparke, is an accomplished physician. My brother is a judge in California and my mom discovered the cure for a rare disease. But today we’re going to talk about a different cousin, my cousin Vic. Vic is the founder of Addaday, which is an e-commerce company that sells massage therapy devices. And right now it’s a seven figure business, but it will be eight figures by the end of this year. Now this interview is valuable because if you’ve ever been interested in creating a plastic related product, you’ll learn a lot about the process today.

00:57
But before we begin, want to thank Klavia for sponsoring this episode. Now, are you working around the clock to build the business that you always imagined? Do you want to communicate with your fast growing list of customers in a personalized way, but in a way that gives you time to work on the rest of your business? Do you ever wonder how the companies you admire, the ones that redefine their categories do it? Companies like Living Proof and Chubbies. Well, they do it by building relationships with their customers from the very beginning, while also evolving in real time as their customers needs change.

01:25
These companies connect quickly with their customers to collect their information and start creating personalized experiences and offers that inspire rapid purchase, often within minutes of uploading their customer data. Now, Klaviyo empowers you to own the most important thing for any business, the relationship between you and your customers and the experiences you deliver from the first email to the last promotion. To learn more about how Klaviyo can help you own your growth, visit klaviyo.com slash my wife. That’s klaviyo.com slash my wife.

01:55
I also want to thank Postscript for sponsoring this episode. Now, if you run an e-commerce business of any kind, you know how important it is to own your customer contact list. This is why I’m focusing a significant amount of my efforts on SMS marketing. SMS or text message marketing is already a top five revenue source for my e-commerce store. And I couldn’t have done it without postscript.io, which is my text message provider. Now, why did I choose Postscript? It’s because they specialize in e-commerce stores and e-commerce is their primary focus.

02:22
Not only is it easy to use, but you can quickly segment your audience based on your exact sales data and implement automated flows like an abandoned cart at the push of a button. Not only that, but it’s price well too, and SMS is the perfect way to engage with your customers. So head on over to postscript.io slash Steve and try it for free. That’s P-O-S-T-S-E-R-I-P-T dot I-O slash Steve. And then finally, I wanted to mention a brand new podcast that I recently released with my partner, Tony.

02:49
Now, unlike this podcast where I interview successful entrepreneurs in e-commerce, the profitable audience podcast covers all things related to content creation and building an audience. Now, no topic is off the table and we tell it like how it is in a raw and entertaining way. So be sure to check out the profitable audience podcast on your favorite podcast app. Now onto the show. Welcome to the My Wife, Quit Her Job.

03:14
podcast, where we’ll 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 Chu.

03:28
Welcome to the My Wife, Quit a Job podcast. Today I’m thrilled to have my cousin Victor on the show. Now, most of you don’t know this about me, but my cousins are probably the most entrepreneurial people that I know. And Victor has actually started a bunch of companies in the past, but he’s currently running Addaday.com, which is a company that sells massage guns to roll out the knots in your calf, back, shoulder, and fight muscle tightness. And in fact, if you are a runner or an athlete, chances are you’ve encountered his products at your local running store, REI, or even Target.

03:58
Yeah, so that’s right. His massagers are at REI and every Target store nationwide. In any case, I believe this is probably the first guest that I’ve had on the podcast that has created his own plastic molds and everything about his product from complete scratch. So today we’re going to talk about how exactly Victor launched his business. And with that, how you doing, man? Good. How are you, Steve? I am good. I’m pretty sure most of the people out there didn’t know I had a cousin. Give us a quick background. know you’ve

04:27
you’ve done a whole bunch of stuff like including physical products, but how did you kind of get into e-commerce and why massagers of all things? So I have been in the tech business for over a decade and when I actually got into the massage business, I wanted to do something completely analog, something that didn’t have connectivity and that could, that didn’t have an expiration date on it or a need for that product to be updated every six months. So compared to

04:56
tech, how would you compare e-commerce versus like the software stuff that used to work on in the past? E-commerce, have to, the relationship with the consumer is completely direct naturally. And you really have to understand who your audience is for the product to move. Because there’s no one else moving it for you except yourself. So that’s the core difference. What about in terms of investment and difficulty? I mean, raising money for any business is difficult.

05:27
And I think what I’ve learned is you have to raise money from the right investors. And if you find the right investor for your project, it’s actually quite easy. But if you’re raising money from someone who’s not interested in your product, you can spend hours with that person and reach no conclusion. Well, what was trying to get at is with these massagers, you didn’t take investment, right? I mean, this is just kind of your own thing. Yeah. No, no. And so it sounds like to me like

05:55
you don’t need nearly as much money to do an e-commerce thing as opposed to all your software ventures were venture backed, right? Yes. Yeah. Yeah. No, you’re right. Yeah. To your point, you don’t, you can start very small and then build as you go. You don’t necessarily have to commit to, you know, millions of dollars for software development to get a product out. No. So why massagers again?

06:25
The core reason was because of my passion for endurance activities. So I run a lot so I found out that Lots of runners get injured. In fact, almost all runners get injured and they need the product So I thought this would be a good product to build for runners if they needed and you know The theory or the hypothesis was correct So you’re doing a hundred mile or in a week, right?

06:52
In a couple days actually. Friday. So let me ask you a couple questions just about product development. Why did you decide, so first off when you started making these, was there any other product like it out there? Because I see massagers. exactly. Absolutely. Yeah, and that’s the inspiration, right? You look at things in the market and you try to make it better. Sometimes you evolve the product, sometimes you come up with something completely new.

07:23
So how did you come up with your product? I mean, I’ve seen massagers all over the place. It feels like a saturated market to me. yeah. I mean, almost all products today are saturated in some way, or form, right? But to answer your question, I was on a trail run in Santa Monica and I had just joined this incredible running group called the SoCal Coyotes.

07:52
I finished the run and came down to run and there was a guy there with a stick roller. It’s like a roller that looks like a stick. And it happened my first time seeing it. And I said, Hey, you know, we, that’s very familiar to me because you know, in Asia, they would have rollers like that, except it was made out of bamboo. And I asked the guy in my K, where’d you get that from? He’s like at a running store and

08:19
I said, which running story he named off, uh, you know, this running story called fleet feet. And I had never heard about a running store before. So, and I asked him, how much is it? He’s like 34 bucks. I’m like 34 bucks for that. And, that’s exactly the impetus for me to kind of go back and, I went on to Alibaba.com and looked for similar skews.

08:45
and then found a product that I thought was comparable and ordered some. And they came to my, and then I had to learn how to, you know, forward, work with a forwarder so the product could get through customs, et cetera. So that kind of was the impetus to that product. Okay. So you ultimately decided to make your own massager from scratch, right? Did you actually sell the ones you bought from Alibaba? I couldn’t sell them actually.

09:12
Okay. So I tried and the everyone that I tried to sell to say, Hey, you know, this is very similar to what I already have. I don’t need, I don’t need to buy this from you. said, why not? I’m giving you a better price and giving you a better margin. And then, you know, they got to the core of it, but you don’t have the brand. And so that kind of woke me up. And I, cause I thought it was very price driven, but you know,

09:39
I’m wrong. There’s a lot of brand recognition tied into these products that help you help separate it from the pact. You know, so I listened to what, when they said no to me, I said, well, how can I earn your business? And a lot of them said, you know, what if you made one that was like this or they gave me some design concept? said, well, if I made it like this, would you be interested? They said, absolutely. So I listened to probably 30 stores,

10:09
across California, give me input on how to design the next recovery tool they had in mind, put that together, created a mold, built the product and then showed them the product in person. And they were all happy when they saw it because it reflected what they told me. And so that gave me a foot in the door. And then I said, you know, you don’t have to pay me until the product sold. So why don’t you just sell it first?

10:38
And they said, so it’s no risk. And that’s what essentially launched the brand. So it ended up, you know, ended up selling really well. And then it went nationwide. So interesting. You decided to go into retail shops before going online. Is that right? Yes. Why is that? That’s all I knew. I really, I really didn’t have that much knowledge in e-comm. So I went where I was most comfortable, which is,

11:07
dealing with retailers. And then from there I learned how to do e-comm really quickly. Did you literally just walk into like a Fleetfeet store and just say, you want to carry these? Yes. Can you just tell me exactly, is that pretty much literally what you said? May I talk to your owner or your buyer? I like to show them some products they would be interested in. Okay. That’s it. But the Fleetfeet, I guess that’s a small running shop. it owner or is it a franchise or?

11:36
Oh, they’re franchise. They’re actually the largest network of running stores actually in the world. have over. I did not know that. Yeah. At the time they were, I think they were 70 stores strong today. They are about 180 stores nationwide. I see. So the person that you’re talking to, is it the owner or is it the. That was the owner at the, the owner of the store at the time. Okay. And then so they each kind of operate on an individual basis.

12:04
So you just gave them a bunch of units and just see how they sold and they just kept ordering more because it sold. Right. They operated, they are a franchise by the way, but they also have company owned stores. I see. Okay. And then after that, are they still on that same arrangement or was that just like a test? Like you give them units and they only pay for what sells. After that, once they know the product moves, then you move into a

12:29
a term basis. So a lot of times it’s net 30, net 60, pending on the store and the relationship. Okay. Let’s talk about product development. Your first stick massager. Can you give us an idea of how much it costs to make one of those and like what the process is like for creating the mold? Yeah, I mean, for a massager, I mean, if you if you want me to get to the pricing, I mean, these molds, so let me let me preface this by

12:58
There are different kinds of molds. There are cheap molds that you can run pop products through that will last maybe 5,000 runs and the mold will go bad. And those are inexpensive. And then there’s good molds, you know, that can last you for a really long time. And when the product comes out, you won’t see the seams, you know, it’s, it’s, it’s very clean. And so those molds are

13:27
generally into five figures. And then you can get modes in four figures. And I would never recommend that. I just don’t. And then you can get like, you know, when you get into electronics, all your modes are in the six figures by default. Really? Why is that? It’s just more components. You know, there’s just so many pieces tied into it. Okay. How much did you invest in your first product? I believe

13:57
300,000 is the starting capital for that business was actually like 80K. We built it off of 80K. Yeah. Is most of that the mold? Most of it was the mold and a lot of it was traveling. Oh, traveling. Okay. Oh, traveling. Right, right. Going to door to door, which is what you’re okay. What about just the product though? Not the traveling costs. Just literally just the mold. you can get it done for under

14:26
If you’re really smart about things under 20 K, okay, you’re good. Yeah, you can get going. How did you find a place to make the mold and manufacturer? That is a very good question. So part of it was luck. I can speak the language fluently. So I was able to get to a manufacturer that could help me build the product.

14:52
efficiently and I was able to qualify that manufacturer actually through some family friends and that gave us some confidence in what they could do. And then we actually moved, you know, I don’t know if you know this, my mom’s side, my grandpa was in the manufacturing business. So we were able to kind of look at some of their old manufacturing partners and ask them for help. Ah, no, I actually did not know that. Yeah.

15:21
So is your supplier in China or where is it? It was originally in China, correct. Okay. then now it’s somewhere else? It’s still in China. Oh, it’s still in China. We’re thinking about another area, but it’s not confirmed yet. During this whole process of making the mold, how important was it? Like, did you actually camp out in China during this process? design process? No. No.

15:50
So it was completely, so you did this remotely. How did you actually convey the design to them? So I would draw that, that part is through iteration. So you would draw something, you would send it to them. They would come back with their like a CAD drawing or yeah, CAD drawing. And then actually it started with pencil and paper. Okay. And then they would CAD draw it for you because it’s cheaper there. Right. So they,

16:19
They would put it on CAD and they sent it back to you and you say, well, this is something I’m interested in. And then they would be fine it. And then they would create a sample around it, like a CNC. And then you see if you like it. And did you have to commit to a certain amount of units to start? Not at the molding. No, the mold is the mold. You don’t have to commit to it. You just pay for the mold. OK. Yeah. And then presumably this mold is really heavy, right?

16:48
Yes. Yes. So the block, it’s a, it’s a block of metal that they carve through. Yeah. So this supplier, they’re making the mold for you and they essentially store the mold for you, Correct. So are you kind of held hostage by that factory? I think that’s a very good question. As you become, you, you need to know where the factory is.

17:18
And we actually, if you’re on that topic, we had one instance where the owner of the factory fled. Oh, really? Okay. Like literally left and the workers went on strike and they wouldn’t let any of the molds leave the factory. And we had the center representative to give them cash to take the mold out and then give it to another factory. This is a true story. Oh my goodness. Okay.

17:47
And those are in October, it was September, sorry, this was August right before delivery for Christmas products. Okay. Yeah, it does happen. So how do you prevent that? Yeah. Do you have two factories that are running the same product? If you have the financial means to do so, I would definitely argue for that. And do we, yeah, and the question is, do we do that? Absolutely. Okay.

18:15
So you do your first production run. How long does that whole process take? Just making the mold. I’m just kind of getting an idea of the timeline here. a good mold, three months. Three months, okay. And then that factory makes it for you. Is everything like pre-negotiated? Like how many units you’re going to get or do you negotiate the mold first and then talk about production? You do the mold first and then in that mold discussion, you have an ideal dollar

18:43
figure you want to hit, right? So let’s say you say, want this product to be 10 bucks. And then they go, okay, well, if you want it to be $10, your injection molding has to be this way, because we only want to shoot it once. And that will add less labor, but the mold cost will go up. And so there’s that kind of negotiation that takes place. I see. Okay. And how big was your first production run? Our first production run was 5,000 units. 5,000 units. Wow. Okay.

19:14
Is that, I mean, that seems like a lot, but yeah, it’s still not that much, right? So 5,000 times 10 is only $50,000. Well, when you don’t know whether it’s going to sell or not, but I guess you had retailers already will. Yeah, we knew, we knew that it would move. We didn’t think it would move in, you know, we knew that over time we would sell through it. Right. Right. So, but we also knew that one of the things that I would,

19:41
There’s a fine line between having enough inventory that motivates you to sell and having no inventory that motivates you very little to sell. Okay. All right. Well, I know for you, 5,000 units sounds low, like for you, because I know what unit quantities. Yeah. Yeah. Yeah. But I would, I think you could do it. think once you own the mold, you can do a 500 unit run if you wanted to.

20:11
Doesn’t matter. The problem is the factory is not going to be very anxious to produce 500 units for you, Because they have to produce like there’s different tiers of manufacturers. So you kind if you’re, if you want to be working with a tier one manufacturer, which means generally the quality delivery is the best, you’re going to have to vibe for that space. So you got to make sure you give them enough business to sustain that line. Right.

20:41
And if you ever want to switch suppliers, is moving the mold kind of a pain or? Yeah, I think generally people have this idea that if I’m going to switch suppliers, I’m going to take the mold with me. Generally, what happens is you don’t do that. You just have another set. Oh, okay. Yeah, you have another set. You should always have two sets. Interesting. At the minimum. Okay. All right. So you get your first units delivered to the stores.

21:11
Are you literally… How’s the payment terms in the beginning? do they just pay you? only. Cash only. So, just… There’s no… There’s no… You mean… You mean… Oh, okay. For the stores. Yeah. The stores is… I think when we started, we gave them like net 60. I see. So you just ping them after 60 days and then they just pay you based on the number of units and… And they either choose for you to… Okay. All right.

21:38
And then when could you start going after some of the larger guys? We actually, you know, when we didn’t really go after the larger guys, luckily they all came after us. So we’re really lucky to have REI asked us to pitch them on being a vendor. that was one of our bigger.

22:06
They found us through these running stores. They shop these running stores and they look at the latest trends. I see. we’re, know, once you, the specialty stores represent a lot of times it’s the newest, coolest things come out of specialty. So a lot of these retailers, they go to these stores to shop, you know, kind of for inspiration. And sometimes they’ll see something they like.

22:35
And in this case, they saw something they liked from Adaday and they contacted us and asked us if we wanted to meet them at a show. And we said, sure. And then we showed them some products and they said they were interested and we produced it for them. That was my next question actually. What type of marketing were you doing besides going from store to store? Were you going to like all the trade shows and everything?

23:02
There is a trade show that we would go to once a year called the running event. And that would be the only trade show we went to. And then we started to go to outdoor retailer and other niche shows like the health and fitness shows. I would say no more than three a year. Was there a positive ROI on those shows or was it mainly for networking?

23:30
Those shows are hit and miss. It depends on the staff you have on the floor. If you don’t know how to network or if you’re not willing to talk to people and be uncomfortable in making sure that people who don’t want to talk to you talk to you and so that you could create opportunities for your brand that you shouldn’t bother going. You know what I mean?

23:56
How big was your staff during all this? I remember it being pretty minimal, right? Yeah, just my wife and I were really the core. Yeah, so you guys were manning the booth probably, right? Personally, I’d imagine. Yep. Yep. Did you do any other marketing besides the retail shops and a couple trade shows? Store marketing, you know, we really made sure that we helped the store communicate our brand to the people who walked through those stores.

24:25
and they did a great job and that actually created the demand for our product online on the e-comm. I mean, what’s their incentive? Like, did you have to pay extra to get your products more visible or is there any? Do we have to pay more money? No, we, they, you know, we try to design the product so it’s catching to the eye and, and they have that, you know, they put it in a recovery session section. So that was pretty organic in nature.

24:54
Here’s what I’m getting at. Like when you go into a store, a lot of times the store has to do a good job of displaying or marketing your product in order for it to sell well, in addition to just being in the store itself, right? So did you do a lot of education in that regard? We did, but they didn’t follow what you wanted them to do. They would still do what they thought was best for your brand. If you sell on Amazon or run any online business for that matter,

25:21
the most important aspect of your long-term success will be your brand. And this is why I work with Steven Weigler and his team from Emerge Council to protect my brand over at Bumblebee Linens. Now what’s unique about Emerge Council is that Steve focuses his legal practice on e-commerce and provides strategic and legal representation to entrepreneurs to protect their IP. So for example, if you’ve ever been ripped off or knocked off on Amazon, then Steve can help you fight back and protect yourself. Now first and foremost, protecting your IP starts with a solid trademark.

25:50
and Emerge Council provides attorney-advised, strategic trademark prosecution both in the United States and abroad for a very low price. And furthermore, the students in my course have used Steve for copyrighting their designs, policing against counterfeits and knockoffs, agreements with co-founders and employees, website and social media policies, privacy policies, vendor agreements, brand registry, you name it. So if you need IP protection services, go to EmergeCouncil.com and get a free consult. And if you tell Steve that I sent you, you’ll get a $100 discount.

26:19
That’s E-M-E-R-G-E-C-O-U-N-S-E-L dot com. Now back to the show.

26:26
And so the fact that your product kind of was standalone and straightforward, it basically sold without any of that being affected. Yes. Okay. Yeah. All right. And then, okay, so let’s fast forward a little bit to today. You decided to move into electronics again. In the beginning of this interview, you said you wanted something that would last a test of time and didn’t need to be updated, right? Correct. And then you just did a 180. Correct. Okay. Explain.

26:57
So the reason that took place was we had seen the consumer move towards connect connected devices such as the Peloton, know, it’s connected to a treadmill or you have room. We saw a lot of tools that in the exercise and fitness domain offer connectivity and we started to see that in massage products.

27:26
And we knew that we had to be a part of that revolution to be relevant as a brand. And I thought long and hard about whether or not I wanted to jump back in and decided that I had taken long enough of break from tech that I’m interested again. And started to create not just one item, but

27:56
a of products, a suite of products that offered connectivity to our app. And we wanted to make those products intelligent and adaptive. that’s what we So why don’t you guys, for the people listening, they probably don’t know what you sell. Can you kind of describe what’s in Target today and what the connectivity and how it works? Sure. There’s three items in Target today. One is a percussive, oscillating, many people call it a gun.

28:26
So it looks it’s shaped like a gun and you It’s basically a massage gun right another product is an oscillating sphere And then another product is we call it call a foam roller that rolls itself So you don’t have to do the foam roller rolls for you. All three products are connected to the app so it learns about what your needs are and through our algorithm administers

28:56
unique therapies through those devices that changes every time you use it. So it’s having like a physical therapist. It’s like having a physical therapist in your home that kind of improves as your symptoms improve. Right. So, okay, so making the leap from just like a static massager, so to speak, to the electronic version, can you kind of

29:23
talk about what the investment was like and what needed to come together for that to happen? That I had to raise money for. Oh, okay. Absolutely. Yeah. I found my cause it’s not even raised money. It’s just you need to raising money means that you’re you needed more capital to do the business. So to get more capital, I actually put more, more money, more of my money in, but it got to the point where we needed more capital to build more products. So

29:53
we had other investors come in to help with that process. But for just that one product, let’s not even talk about money. Like what are the resources needed to make like a static massager into an electronic one that’s connected to your phone and an app and all that stuff? Would be probably 10X more resources. 10X more resources. So what was your first hire? Like I’m just trying to understand the transition. Yeah, we literally hired a

30:23
a app development team. So that’s six people there just to get that started. Is that in the US or overseas? Overseas and the US. Ah, interesting. Okay. Well, this was hybrid. And then we had to add at least four people on product design because it’s far more complicated than a static version because of its percussive nature. know, percussive guns, got to make sure that

30:52
as they percuss, they’re also vibrating the ancillary components. You got to make sure that those stay in place two years, three years, four years, five years down the line. So it’s no longer the supplier’s design team, so to speak. have your own design team. That’s right. That’s right. Yeah. Cause they, you’re going to know, you’re going to know that process a little bit better than that. I mean, you listen to them, they’ll give you ideas and they’ll give you some experience, some, some pointers based off of their experience, but

31:22
They’re not, the stakes are different. You got to make that investment on your own. Okay. Let’s not even talk about the software part. How about just making the gun percussive, like just a standard massage gun without connectivity? What would be the resource? Can you do that without a team? No, no, no. could go to Alibaba and source out a gun that somebody else has created. You just buy it and put your brand on it.

31:51
Um, the problem with those devices really is, uh, there’s no QC. So there’s no quality control. A high likelihood that battery is going to explode at some point in, in your house because there’s no, there’s no control. Right. You got it. Like we source our own battery. We source our own motor, like everything’s source that qualified from a quality qualified factory. When you get, when you, you know,

32:19
when you get a static stick, it’s not going to explode. The stakes are much lower, right? You don’t need to charge it. I really, I really, you know, there’s so many knockoffs now on Amazon and you know, they’ll, they’ll work for the first couple of months and then, then you, know, I don’t know if you want to use that on your children or, know, have that next in your household. I mean, would you say,

32:44
That if you’re going to do an electronics product or something with a battery, whatever, that you have to do everything in house and you just can’t source some random stuff on Alibaba. Yeah. Yeah. Yeah. No, absolutely not. Unless you want to play Russian roulette with your business. I’m not talking about, yeah, just take a liability insurance. No, no, no, no. There’s things that like quality and safety is first and foremost when you get into that kind of product.

33:15
Okay, all right, so you have a team and sounds like it’s getting expensive at this point because you have engineers, probably have, probably, there’s probably a little circuit board in there, right? Yes. And then there’s the mold, there’s the percussive design parts. All right, how long did that process take to get that first gun out? 18 months. 18 months, wow. Okay. Yeah. How did you get into Target then? I mean, there’s no sales history for this thing, right?

33:42
How did we get into Target? Same thing, they approached us. But how did they know about the guy? I mean, it wasn’t even out yet, right? It was out. It was out. It was out. The non-connected version, right? The non-connected version was out and we had a really good business with REI that they knew about. you know, at that time, at that, they’ve been following, according to them, they’ve been following us for several years as a brand. I see. So we were on their radar.

34:12
So it just proves to anyone that if you do a decent job at building your brand, you will get noticed and people will take an interest in you if you do what you’re supposed to do in the marketplace. Let me ask you this. When did the online component come in? Cause I remember when we first started talking, you didn’t even have like a real e-commerce store really, right? No, the online business came when

34:41
We had a lot of people actually emailing us to buy direct from us because they couldn’t find the product on our website at a store because the store may not carry everything you offer in your catalog. I see. So we use that as justification to build our online store. And that’s how it kind of… So the e-commerce component seemed like an afterthought, right?

35:11
Yes, for us it was. Yes, I see. And then when did you start taking that more seriously? And how does that all kind of work together with the retail space? We started to take that well, first, to be frank, we had heard from our partners in our business that how much they were doing online. And we’re like, are you kidding me? That’s how much you’re doing. And so that really put the focus on econ for us. Like, it’s like, wow, we’re leaving

35:41
we’re leaving things on the table, right? So we just started to put more focus on that. So what are your main drives? So let’s just focus on the e-comm side real quick. how do you, what’s your biggest source of traffic on the e-comm side? Our biggest source of traffic on our e-comm side is actually we have a lot of direct searches that are related to people who know of our brand through either clubs

36:11
You know, like different running clubs, different triathlon clubs, these unique community groups that regularly come to us because they’re incentivized to buy from us direct. our second- Wait, hold on. How are they incentivized to buy from you direct? So we give them, you know, kind of group discounts in a sense. Okay. Not a lot, but just enough to incentivize them to come in.

36:40
and buy in bulk opposed to just one off. Almost like a semi Groupon kind of. Does that anger your retailers though at all when you discount? No, because we don’t discount more than 10 % normally. I see. Okay. And it’s very select, right? So it’s not a broad based coupon. No, it’s And you kind of, and it’s direct at these groups of these clubs around the country.

37:10
Okay. Are you doing a lot of paid advertising or social media? Yes, we generally, our paid media is strong. We spend the most Q4. Okay, that makes sense. So and most of the traffic for us, we do very well with Facebook. Facebook is good for us. Instagram is good for us. And

37:38
YouTube is actually not bad for us. I have not seen one of your YouTube ads yet because I actually launching in a few weeks. Ah, are you in it? No, I’m not. Yeah. Yeah. It’s tricky. know, there’s no, there’s you for every business. You just, you have to, you have to learn what funnel works.

38:06
And once you discover that funnel, then you put more resources in that funnel. In some weeks, it could be Instagram and some weeks it could be Facebook. In some weeks it could be YouTube or SEO. It really depends on the message you’re putting out and the product, the price, you know, the four P’s. It’s really dynamic. I call it plastic. It’s, there’s never a day where just like, Oh yeah, we’re just gonna.

38:34
do what we did last year, it’ll be fine. Actually not. Let me ask you this. If you were to start all this over again, would you still have gone the retail route first or would you have gone e-commerce first? I would go e-commerce first. Interesting. Okay. So how would you have proceeded then? If I had built my brand on e-comm 10 years ago, which is when I started, I would probably have a way more substantial e-comm business than I do now.

39:03
And I know that based off of what my competition is doing. Well, okay, let me ask you this. So before, like the way you kind of justified the spend in the beginning was you had all these stores committing to carrying it in their stores. How would you have done the same thing in the econ? How would you have validated this in ecom land? I would have just, um, I would have spent money on SEO way more aggressively than I did.

39:28
in 2010 or 2011. I basically spend no money there. And by the time I decided to spend money, there were other brands that had already cornered that. So when you, let’s say if you Googled massage stick, you know, our brand was nowhere to be found and it would have cost me very little money to make sure that we were one of the first to appear because, you know, because of the algorithm. when you say spend money on SEO,

39:55
What exactly are you talking about? Like what are you investing in specifically? So making sure now, so if you’re bidding for a word, say massage foam roller, that’s a good question, right? Foam roller. Okay. And let’s say 10 years ago, would it cost you like 10 cents to get, to make sure that your foam foam roller is one of the first that appear. Now it’s five to $6.

40:25
You know, it could be that high. And if you had built that base earlier, the algorithm will know that your pages as a foam roller site were the most viewed. And that helps you etch up to the top. So you end up paying less to be at the top of that search query. And then is the same true with social then for you? Yeah, same thing. Okay. Interesting. So when would you have started?

40:54
When is retail, like how does the retail piece kind of come in? Because I know your e-comm side of your business is growing really rapidly. Yes, like super rapidly. I guess what I’m trying to ask is which one is higher maintenance? Definitely. Actually, nowadays, I think e-comm is going to be your highest maintenance. To do e-comm right,

41:24
It’s not easy. Not easy. To get retail right, in my opinion, is easier. I have a bunch of friends who do retail and they’re in a bunch of stores. guess it’s a lot like e-comm in a way because you also have to go around to them and market to them as opposed to like the consumer, Yeah, but in consumer, it’s one-to-one. In retail, it’s more B2B.

41:54
Right. Right. So I mean, for us, it’s we’re making sure that, you know, five of our key customers are are and they know us well enough, they they’re going to execute these top retailers know what they’re doing. Right. OK, that makes sense. Right. You need to hold you. You don’t need to hold their hand. You just make you need to. Your job is to make sure your brand is top of mind when it comes to that category in the nation and they’ll

42:22
They’ll help make sure that it’s in the right aisle, you know, and that it’s presented correctly to their shoppers. mean, they’re professionals when it comes to it. Target knows about how to do that better than anyone. So I just want to give the audience an idea also. You mentioned like a large part of your budget is travel. Like how important is it for you to kind of make the rounds, so to speak?

42:48
I think if you’re, let me put it this way, let’s say you’re making candles and you’re selling candles to specialty shops across the country and these are mom and pop stores that are kind of gift stores and like coastal cities or, and you want to make sure that they sell your product well.

43:15
You should see the owners of those businesses at least once, at least once and get their name. And that’ll make a huge difference in how many candles you sell. Right. For sure. So I would say that if you had a hundred, let’s say if you had, say we had, you know, easily over a thousand retailers that sell our product in specialty, I probably visited all of them once. And some of them

43:45
five to 10 times because it’s relationship, right? Because candles are commodity, you know, so is, you know, a lot of these recovery tools, they’re kind of a commodity. So if you want to develop that relationship, makes a huge, huge difference. You guys on Amazon? Our non electronics are on Amazon. Our electronics are not. Is there a plan to get them on Amazon or? Nope. Okay. Why is that?

44:15
Too many knockoffs and we don’t want to put our brand next to them. Interesting. I view our biggest competition as actually Amazon to be frank. Like the cheap knockoffs on Amazon you mean? Yeah, Amazon itself because Amazon advertises the cheap knockoffs on SEO. Are you scared that Amazon will develop their own connected massage gun? No, no because it’s not their business.

44:43
We do such, what we do, our algorithm, it’s just not something. I mean, for them to do a non-connected device, sure. For them to produce connected device, that’s a whole different area of expertise. I mean, we work for like over 20, 25 doctors. That algorithm built by medical professions, not just like, hey, some guys.

45:09
It’s funny that you say that about Amazon. Like I read somewhere now that almost 70 % of searchers when they’re buying like a something like a massager, they’ll actually go look at the brand website first before making a purchase. I would think that once your brand I mean, it’s in target all across the nation. Now the brand is going to become really strong that the knockoffs won’t be as much of a factor on Amazon. I I would I would love to do a study on on that and see and do a B testing, you know,

45:39
between how many people actually go to Amazon to look for the product at a cheaper price than going there because they went to your brand site first and they went to Amazon to buy that product. Right. You follow me? Yeah. I know a lot of people prefer to just shop on Amazon, right? Because it’s easy. So I’m just wondering if you’re missing out on like 50 % of e-commerce, but by not being on there. That’s all I’m saying. Yeah. And I would dare.

46:09
I would be, you kind of have to pick a lane and then go down that lane. And the lane we picked is to support our retail partners such as Target and REI and make sure that we maximize our business there and have those and leave Amazon alone. Right. Okay. And then, you know, if you go to target.com, you’ll

46:39
you’ll see us having a very strong presence there or REI, know, those, those are, or even Fleetfeet. These are, these are brands that, you know, give us a lot of business. yeah, and a lot of support. Yeah. Yeah. So one thing that we didn’t really get into, but this app, just to add, add one thing, like there’s, there’s no curation in Amazon. So in

47:07
If you go to Amazon, you can find a lot of products on there that have not been qualified by a buying group such as Target. There’s no process. Oh yeah, I know. That’s why there’s so much junk on there. Yeah, the junk is, it’s very hard for people to decipher what’s junk and what’s not junk. And there’s a lot of fraud going on there too. There’s people.

47:35
copying your design and then it’s just not policed well. And so to be honest with you, Steve, if they start to police it better, maybe we’ll sell there one day. But right now it’s, it’s like the wild, wild West and we choose not to be part of that West. Yeah, I think that might be smart. mean, I’ve had many people or not many, but I’ve had a few people on the podcast where their entire product brand, everything, the box, everything got knocked off with inferior product, which lowered the reviews of that brand.

48:04
I lowered the brand equity because they literally copied everything. Yeah, it’s ridiculous. And how are they able to sell on Amazon is the biggest question I have. I don’t want to speak for Amazon, but to them, I think it’s just money, If someone chooses not to sell on there, someone else is going to jump right in. And that’s how they run their platform. It’s fine. I respect that, but that’s not our cup of tea.

48:34
So one thing that we didn’t talk about in this podcast was your master plan. mean, connectivity is cool and all, but this app that you have people sign on where you get the information and there’s, can you talk about the recurring revenue component? Sure. So our, our mission is to make sure that that app helps you deal with any ailments you have or your family has. So if you’re, if you’re sitting at the Thanksgiving table this year and your aunt’s across the table and she says, you know, I have this,

49:04
nagging back pain, we want you to download the Addaday app onto your device. And from there, you’re going to discover therapies that help you with that pain instantly, whether it’s with our device or without our device. And we believe those therapies that we show you through the app are good enough to where you will pay us on a monthly basis to use that app.

49:30
I mean,

50:00
Just like when you see a physical therapist, they’re not going to just use one motion on you for the whole duration of the visit. So speed one does not represent good therapy, neither does speed five. know, you need to have a good therapy means that it’s at different frequencies and amplitude throughout the duration of the session. This is actually the main reason why I am a believer in the product. It’s

50:30
You have a moat. You have IP that can’t really be easily copied. No, it’s actually you can have work. We can deliver up to 67 million various therapies through that through that app. Yeah, with the with the bio zoom. And it’s rare that I do this on the podcast. But I think it’s a no brainer because it is really inexpensive as well. Like typical typical massage guns. I was thinking about getting one a while back. And it was like four or 500 bucks.

50:57
I don’t know how, maybe you can come on and talk about this later, but yours retails for what? $150? $149. $149 with all this stuff. And you’re to have to tell me how you got the supply chain down that much. it, is it mainly just like a volume game or? Well, when you start to source the components separately and you have volume, you can get it to where it’s economical. Yeah. It’s hard. It’s really hard. I probably use every

51:24
all the experience I’ve ever had in manufacturing on this project. And you can find these in Target everywhere. if you guys are in the, was it the fitness section of Target? Yeah, you don’t, yeah, it’s a sports section and it’s under recovery and you don’t have to be an athlete to use it. If you have, you know, common ailments like back pain, plantar fasciitis, or just a sore neck, we have a therapy for you that you can use independent of the massage of the bio zoom.

51:53
which is the massage gun, or you can just use some of our therapies that are, will be shown, is shown to you by Dr. Mike, who’s our in-house doctor and his group of medical specialists ranging from MDs all the way to PT, DPTs. yeah, we’re trying to bring, we’re trying to make sure that if you have something that bothers you, you don’t necessarily always have to wait till you

52:23
get to your PT office for some relief to take place. We’re not saying don’t see your PT. The PT is definitely, this is not here to replace your physical therapist or your chiropractor. This is there to help and assist in between those visits. So if you’re doing 10 visits a year, we hope with this tool and this solution and this app, you can do eight visits. And where can people find your company online?

52:53
addaday.com like add a day to your life. So add a day.com. A D D A D A y.com. Correct. Cool. Hey, Vic, thanks a lot for coming on the show. It’s great to have like family on the show. I had my mom on earlier and that episode actually ended up being a pretty big hit. You should have our other cousin on which are Georgia. Nicole, Nicole. Okay. Yeah, actually, he started his company too. Right and got

53:22
which got acquired. yeah, he will have one. Yeah, that’s a good story too. All right, man. It’s been good. right.

53:32
Hope you enjoyed that episode. Like I said, Vic’s company is blowing up and hopefully I’ll have more to report later on this year about the progress of his growth. For more information about this episode, go to mywifequarterjob.com slash episode 347. And once again, I want to thank Postscript, which is my SMS marketing platform of choice for e-commerce. With a few clicks of a button, you can easily segment and send targeted text messages to your client base. SMS is the next big own marketing platform and you can sign up for free over at postscript.io slash d.

54:00
That’s P-O-S-T-S-E-R-I-P-T.I-O slash Steve. I also want to thank Klaviyo, which is my email marketing platform of choice for eCommerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all these sequences that will make you money on autopilot. So head on over to mywifequitterjob.com slash KLAVIO. Once again, that’s mywifequitterjob.com slash KLAVIO. Now I talk about how I use these tools on my blog, and if you are interested in starting your own eCommerce store,

54:30
heading over to mywifequitterjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

00:28
I never thought that people would want marketing text messages, but it works. In fact, my tiny SMS list is performing on par with my email list, which is easily 10x bigger. Anyway, Postscript specializes in text message marketing for e-commerce, and you can segment your audience just like email. It’s an inexpensive solution, converts like crazy, and you can try it for free over at postscript.io slash Steve. That’s P-O-S-T-S-E-R-I-P-T dot I-O slash Steve. I also want to thank Klaviyo, who’s also a sponsor of the show.

00:55
Now, are you working around the clock to build the business that you always imagined? Do you want to communicate with your fast growing list of customers in a personalized way, but in a way that gives you time to work on the rest of your business? Do you ever wonder how companies you admire, the ones that redefine their categories do it? Companies like Living Proof and Chubbies? Well, they do it by building relationships with their customers from the very beginning, while also evolving in real time as their customers needs change. These companies connect quickly with their customers,

01:23
collect their information and start creating personalized experiences and offers that inspire rapid purchase, often within minutes of uploading their customer data. Now, Klaviyo empowers you to do the most important thing for any business, the relationship between you and your customers and the experiences you deliver from the first email to the last promotion. To learn more about how Klaviyo can help you own your growth, visit klaviyo.com slash mywife. That’s klaviyo.com slash mywife. Now onto the show.

01:53
Welcome to the My Wife, Her Job podcast, where we’ll 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 Chu.

02:11
Welcome to the My Wife Quitter Job podcast. Today I’m thrilled to have Dylan Jacob on the show. Now Dylan is the founder of Brewmate.com, which is a company that sells beer cozies online. And Dylan grew this into a $36 million business in just three years. And the growth of his company was ridiculous. In his first full year, he made 2.1 million. The next year he did 20 and then last year he did 36. Not only that, but he owns the company a hundred percent and bootstrapped it to where it is today.

02:38
And in this episode, we’ll discover how he grew Brewmate so quickly and his strategies for growth. And with that, welcome to the show. Dylan, how are you doing today, I’m doing great, Steve. Thanks for having me on. Yeah, so Dylan, for those of you out there who have never heard of who you are, give us a quick background story about how you got into e-commerce and then how your experiences led up to starting Brewmate. Yeah, so I grew up in a little small town in Indiana, Greenwood. So it’s like 20 minutes south of Indianapolis.

03:07
And there’s not a whole lot to do there. You’re sort of surrounded by corn fields and, you know, people typically get in trouble. I was one of those people that was like what I did in my spare time. seem to find myself in all sorts of situations. And, you know, over time I sort of grew out of that and was able to turn that energy into something a little more positive. And entrepreneurship was one of those things I always gravitated towards. You know, I grew up fairly poor and I was always looking for like odds and ends ways to make money.

03:36
And I was running a little cell phone repair company, like eighth and ninth grade. So I would buy up broken devices. So like iPods and iPhones, and I would have wore the parts from overseas and then I would refurbish them and then resell them. And then sophomore year of high school, a few repair shops popped up locally and that market sort of started to dwindle away. And so I saw an opportunity, you know, I had already secured really good supplier overseas for electronic parts and.

04:07
I started reaching out to the local repair shop. I went in, made friends with them. And what I found a common thread with all of them was that they were all getting their parts off like eBay and Amazon. And I happened to know that all the parts that were on there were BNC grade parts. So they had dead pixels and dust under the screen or they were, you know, I had already navigated all of that. And so I saw an opportunity and I basically told all of them that I could supply them with local parts, you know, same day, a local delivery and.

04:36
that actually started my first real business, which is called GV Supply Company. So over the few years throughout high school, we scaled to a little over 100 bear shops around the US that we were working with at our own Shopify store. I would scout our Instagram for hashtags and send people samples and drop in their DMs and reach out to people in any way that I could. And then they could order the parts directly online and get them delivered straight to their door.

05:03
Um, you know, he had like a year warranty so they could pass that on to their customers. And it was something that, you know, was, was really challenging for me and really fun. And you did this in high school. You yeah, this was in high school. Okay. Um, and so, you know, senior year is rolling around and, I have a very successful business, at least at that time. Um, you know, I was making well in the six figures and I was still like,

05:31
pretty unsure about the whole entrepreneurship thing. It’s sort of like joining a high school acting class and you’re really good at it, but then trying to move to Hollywood and become a big time actor. And so I really just considered it to be a side hustle. I was planning on going to Purdue for engineering, so I had a full ride there. I also had an internship at Rolls-Royce. So I’d leave high school half day and go to Rolls-Royce for the rest of the day. I worked in their engineering department. That was sort of my

06:01
plan. My plan was to be an engineer. wanted to do product development design. I actually wanted to be an inventor. And, you know, that was sort of the direction I was headed in. But I again, like I grew up sort of in this low income household, and I wanted the stability of like, you know, having a college degree and being able to have a steady job and paycheck and something that like entrepreneurship didn’t really offer. And I was pretty scared of. So I went to I went to college there for a semester, I was running this business out of my dorm room.

06:30
taking 18 credit hours and wanting to rip my hair out. And, you know, I remember Christmas break rolled around, so we had a few weeks off and I was down like 20 pounds, like I hadn’t been in the gym and everyone was like, you don’t look very well. And I was like, I don’t feel very well. Like I’m very stressed out and unsure and I don’t know what to do. you know, my friends and family were supportive and you know, I sort of arrived at the decision that I was just going to take a semester off.

06:58
focused on my business. Like I already had a business that was earning me more than I would have been making as an engineer. And even though I didn’t consider it like a lifelong plan, it was a good plan for the intern until I sort of figured out what I wanted to do. This is still a cell phone business, right? Yep. Okay. So I dropped out of college. And I don’t call it dropping out at the time. I really just took a semester off. But four months later, I did sell that company for $100,000.

07:24
and I ended up fully dropping out of college. And that was sort of the turning point for me where I realized that like, you know, entrepreneurship was something that to me, it was everything, it encompassed like everything that I enjoyed. Like it had the building aspect of like what I enjoyed about engineering. You know, it had the potential for like the product development aspect of what I wanted to do for an actual career anyways. And so, you know, I sort of

07:53
was like, Hey, I’m pretty much already doing this. Why not just pursue it and see where it goes. And, you know, as a backup plan, if it doesn’t work out, then I can always go back to school and I have, you know, a nice lump sum of money in my bank account. And, you know, over a few months period after that, I again was pretty unsure because I had just sold my company. And at this point, I was like, well, I need to like start another company because I didn’t want to get a job. And so I actually bought a house. So I spent a year remodeling this house.

08:23
watch YouTube videos, pull permits myself, did literally everything. And that was a nightmare. I didn’t get into it for like flipping houses. literally just wanted, I thought it’d be a fun project. I like building things, but there’s just a little too in depth and I ended up getting sort of trapped doing it for a lot longer than I would have liked to. Okay. How did you end up in beer cozies though? mean. Yeah, so I’m getting there.

08:52
I, in the process of starting or of remodeling the house, I started another company called Beachy Design. And so it was a high end glass tile company. We would do kitchen backsplashes. And I, again, like just felt like there was something missing in this business too. Like, you know, we were importing and designing glass tile for showrooms and interior designers and things like that.

09:18
But it was missing this like product innovation aspect. And so I had always kept this journal, you know, sort of where I would jot down different product ideas that I would have, invention ideas, whatever. And when I first turned 21, I started getting really into craft beer. And so at the time, you, I was sort of done with my house. I was running Vichy Design, which is a glass style company. But I was also looking for something else to really pursue and something that I’d be a little more passionate about that included like

09:48
me being able to take a concept from pen and paper to, you know, product development and also like being able to walk around and see people using my product. Um, and so, you know, I started getting into craft beer and I noticed that like a lot of those cans came in 16 ounce versions and every time I would drink one, the last quarter would always be warm. And so I had just jotted down in my journal, like way to keep 16 ounce beer cans cold. Uh, and that was actually what sort of started like roommate as a whole.

10:18
Um, so the concept for roommate actually started with one beer koozie. That’s our hops later tree out now. Um, but that was like our flagship product. And, know, as I started to investigate that market and realize like, no one was making a 16 ounce beer koozie that actually kept things cold. also realized that like the insulated drinkware industry as a whole was really focusing on the hydration category. So water bottles and coffee mugs and tumblers, no one was really focusing on alcohol. Um, and so that was where I identified like the concept.

10:47
for Brewmate as a whole, which was a company that was designed to like create a better drinking experience and make products specifically for adult beverages only. Okay. How much did it cost to make that first prototype for the 6-in-1 Spear Can? Yeah. So, you the other two businesses, I don’t typically go super in depth on those, but I think they’re important to mention just because they sort of gave me the fundamental building blocks and understanding of like how to source a product, how to get a product created.

11:16
and also like how to do it pretty scrappy. And so, you had mentioned earlier that like I scaled the company without any funding. A lot of that just had to do with the fact that like I had identified little hacks and ways to create products fairly cheap. And as we continue to scale, you know, we’re able to do so properly. And so with that initial prototype, I invested under 10 grand. It was a very rough prototype. I did not include like our current version has three different components. This one only had one.

11:45
but so it was a lot cheaper than like our current version to make. But I had already had sort of a light digital background and so I was able to, you know, Photoshop the product into people’s hands and make a landing page and sort of do like our own version of a Kickstarter. And runs Facebook ads to that page and basically collect emails and then we did pre-orders for that product. Then once it was created. Did ads to that landing page or how did you get people to landing page? Yeah, Facebook ads. Facebook ads. So what are some of your hacks for creating quick

12:14
prototype. Yeah. So, you know, I think the biggest mistake people make is like, they’ll go to a designer first. Um, so they get, you know, they spend three, four months like designing the perfect product and then they’ll take it to a manufacturer. And then the manufacturer shreds it apart and says like, this can’t be done. This can’t be done. This can be done. Um, and their engineers will like re-engineer it to be manufacturable. And so I had actually identified that like, if you find a manufacturer that has a solid engineering team at house,

12:42
Like typically not only will they do the engineering component for free, but you can get there a lot quicker. So, you know, I was able to go to a manufacturer that again, like had a very strong in-house engineering team. is in the US or in Asia? This is overseas. Overseas, okay. there’s a drink where there’s no state-side manufacturers. Okay. Okay. So you actually physically traveled there, I would imagine, right?

13:05
I did, yep. Okay. So I had sort of created a list of different factories I wanted to visit, went and visited, interviewed their engineering teams, sort of went over the design that we had and then settled on the company that I felt most comfortable with. Did you have to commit to a certain number in order for them to do the engineering for you? No, I mean, their minimum order was like a thousand units. So that was something that, you know, I had to sort of negotiate with them on because I didn’t want to order a thousand units because I knew it wasn’t the final product. Okay.

13:33
I mean, just a higher premium to get a smaller batch done. Sure, sure. And this whole process of design, like, did you stay there for an extended period or did you do a lot of it back and forth in the States? I was there for two weeks interviewing engineering teams. And then once I sort of settled on the engineering team that I wanted to work with, then the majority of it was done stateside. So I worked with them directly through Skype and email to sort of dial everything in.

14:01
Did you do any validation on this product before you decided to manufacture it or did you just kind of go for it? Yeah, so the landing page that I mentioned, so before I had actually created or like placed our first order, I actually ran lead generation campaigns to our landing page and collected a couple thousand emails. I went to a couple of the local breweries here. They all had…

14:29
There were showrooms where they sell branded merchandise and chatting with some of the founders there and was like, hey, I think this would be a great addition to your showroom, like this is something you’d be interested in. So I got a commitment from those guys, Satsang King Brewery in Indiana. It like one of the first showrooms to ever carry that product. So I had had a commitment both from direct to consumer customers as well as wholesale customers on the concept. And that was what I used to sort

14:52
be comfortable to be able to pull the trigger on that product. So on this landing page, presumably there were pictures, right? So did you just kind of Photoshop mockups of what you thought it would look like? Well, we had CAD files for the product. So we just did digital renderings. Ah, got it. OK. All right. So it was basically the real thing, just not real images. Exactly. OK. But yeah, we able to take that and Photoshop it into people’s hands in different scenarios and do cut through so people could see how the technology worked and stuff like that.

15:20
Okay, so you spent under 10 grand, you get your first batch of about a thousand units. How did you sell those first units? So we already had a commitment for 240 of those from Sun King. So 25 % of those were already gone. And then the rest, you know, are from the email list that we had, I would say probably 50 % of the other 750 units we had leftover were purchased from customers on that list. And then I made a couple of giveaways on Facebook and then ran some actual Facebook ads after that. But we depleted inventory in under two weeks.

15:50
Wow. So on that landing page, did you talk about price at all or was it just pure interest? Nope. So it went over what the pricing was going to be. It also went over the fact that the product was not the final version. so it was sort of, you know, this is a product that never existed before. So again, it was like people were basically funny at Kickstarter. Like it was people that were interested in 16 ounce beers had had this same issue and wanted a solution for it and were willing to like invest in the original concept.

16:19
And that was how I positioned it. So a lot of those customers went onto an email list where as we were going through the design process for version two, they were kept in the loop and then we gave them a 50 % off discount code on the newer version when it came out, because they supported the original concept. I’m just curious, what was going on through your mind, whether to do a Kickstarter Indiegogo or versus what you just did with the landing page and Facebook ads? Yeah, I mean…

16:46
I had just interviewed a lot of people that had done kickstarters and IndieGoGo campaigns and like, you know, aside from the fact that they take a platform fee, I just felt like a lot of the marketing that went into, you know, driving traffic to their team and get to like the front page or get any sort of traction could have been better utilized, just doing it yourself. And like that was my hypothesis and it seemed to work. So.

17:09
So what’s nice about your product is it has really broad based appeal. So I’m just kind of curious though with that first Facebook ad, can you kind of describe what you targeted, who you targeted and like what your cost per lead was like? Oh, well Facebook ads back then were like very cheap. I honestly don’t remember like what the cost per lead was or anything, but I know like our return on ad spend was probably seven or eight X in terms of like the amount of people actually converted versus what I spend. Okay.

17:37
In terms of, you know, who I was targeting, was people that were interested in like craft beer. Okay. That was really all I targeted in the beginning. Even though like a lot of the light beer brands have 60 ounce can versions, it’s hard to like target someone, let’s say for like Bud Light, and then target someone that like drinks 60 ounce Bud Light cans. But most craft beer cans do come at 60 ounce versions. So like if someone’s interested in craft beer, the odds of them drinking out of 16 ounce cans are like much higher.

18:05
So in the beginning, like I sort of just targeted like men and women between like 21 and 45 that were interested in craft beer. And like that was sort of my target audience. I think with them too, you know, one of the hypothesis that I had was like early adopters are going to be really important. So like people that support Indiegogo or Kickstarter are like early adopters and people who are into craft beer are also sort of like early adopters. Like they like, you know, working with smaller breweries and like

18:34
you know, getting a variety of different beer and like supporting like new variances of beer and things like that. And so I was like, I feel like this is a really good audience to test this with because I feel like they’d be a lot more supportive than just your average drinker. Sure. It was a new concept and it seemed to work. So a lot of those customers were like, you know, very into craft beer and the product did what it said it would. And so they’re all happy. I guess the actual numbers don’t matter as much, but did you have any goals for how many leads you wanted to get?

19:04
and how did you kind of calculate or was it just, hey, let me just get a bunch of people and then enough to sell out this first batch and let’s go with it. No, you I had a lot of capital expenses at the time. So like I had my house, I had my other business, which I had, you know, warehouse for an inventory and everything else. I wasn’t trying to spend a lot of money. My goal, this was a side project. it literally was just something that I was doing on the side. wasn’t, never thought it would turn into what it is today. And so, you know, I wasn’t trying to garner like,

19:33
10,000 leads or anything. was really just, you know, I knew Insulated Drinker, where was one of the fastest growing sectors of housewares from my research. I knew that people liked the vacuum insulated water bottles and coffee mugs and things like that. I knew that there was a sector of the market that was being largely ignored. And, you know, I guess the point is, is like, if people like cold water, and they’re willing to spend $30 on a product to keep their water cold, why wouldn’t they spend

20:02
the same amount to keep beer cold, which one is more expensive and two is something that is like more important to people than water. Like not in terms of like from a health standpoint, but like people get more excited about alcohol than they do about drinking water. And so I was like, I just, felt like this was a market that was untapped, but I wanted to have some sort of validation. Right. Yeah. I I wanted some sort of validation before I sort of jumped the gun and like spending the money on the mold and

20:30
you know, investing in our first inventory batch and stuff like that. okay, it was. All right. So okay, so you sell that of your first batch, you said like a quarter of it was to already pre committed orders and the rest was to that list. Like, how do you go from there to like your first 2 million?

20:49
So after we sold through that first batch, we actually didn’t relaunch our second version until 2017, like beginning of 2017. So we didn’t do a second batch for the Hopsilator. That first batch was just about validation, getting customer feedback. I would send emails and surveys to those customers about what they liked, didn’t like, what they’d like to see in the next version, stuff like that. So in the meantime, again, I had identified that there was this entire market that was being ignored.

21:19
And I had some other ideas. so our, next concept that I was working on was called the wine slater. So it’s our insulated wine growler. So you pour a bottle of wine inside, insulates, uh, and maintains the temperature for over 24 hours. And the idea behind that was like, you can’t take wine in glass free zones. So, you know, parks, uh, beaches, uh, on people’s boats. A lot of times they don’t want you to have them there campsites. There’s a lot of places that you can’t take class and therefore you can’t take wine. And so.

21:47
If you transfer it into a container that’s not made of glass, it takes care of the glass free zone problem. And then the added benefit is that you don’t need to cooler ice. Like you can just pour this into the wine slater, throw it in a backpack and for over 24 hours, like you’ve got perfectly chilled wine. That product was a little easier to create. I had less moving parts. Um, was a lot cheaper to make. And so did the exact same thing over again. At this time I targeted female only again, sort of same, same age demographic, much.

22:16
broader in terms of like who the audience was. So it’s people that were like interested in voting and outdoor activities and wine and sort of this wide variety of people that all sort of fit into this category that I believe like would get benefit out of this product. And this time we actually collected a little over 7,000 emails. thing I think for the 7,000 emails I probably spent under a thousand bucks. What? Okay. We had a landing page.

22:42
Same exact thing, like I had the CAD files turned into digital renders, which then add Photoshop into people’s hands. They’ve got through, talked about the benefits of the product, everything else. I ordered seven. Okay, hold on one sec. So you’re saying you spent like 14 cents a lead? that? Did I do the math correctly?

23:02
I honestly don’t remember, but I know it was a whole lot of money because again, like I had all my money invested in something else. I know it didn’t spend like five grand to do it. And I’m pretty sure it was probably in the like thousand dollar range. Okay. Out of those customers. So we had again, we seem to see like a 30 like open rates were extremely high. So our open rates for those emails were in the like 50 % range, which was actually phenomenal, especially from like

23:30
typically on Facebook, you’re not getting extremely high quality leads. Yeah. And it’s not even something like now when we ran campaigns like that, like we don’t get anything close to that. So I’m not sure if that was just like the period in time or sure or what. Can I ask you a question about the wine product real quick? So you actually have to pour the wine into the container. Yeah. So it comes with a little silicone funnel and you pour the wine inside. so is it just like a thermos then essentially just market it differently? Okay.

23:58
It’s shaped like a wine bottle. It holds a full bottle of wine perfectly. You know, it serves its purpose. It’s like… If you sell on Amazon or run any online business for that matter, the most important aspect of your long-term success will be your brand. And this is why I work with Steven Weigler and his team from Emerge Council to protect my brand over at Bumblebee Linens. Now, what’s unique about Emerge Council is that Steve focuses his legal practice on e-commerce

24:25
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24:54
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25:16
Sorry, I interrupted you. So you did the same process, but you got more leads. sounds like 7x more leads for this launch. And then what? Yeah, so same thing. I ordered 7,000 units, seven different colors for the Wine Slater. So we did all the… We tried to do a spectrum. So was like aqua, so blue, pink, yellow, green, black, white, and I don’t remember what the other color was.

25:45
Same exact process. you know, I, this time actually, you know, I had to invest into 7,000 units, which was a bit more of an undertaking, but like the response to the product was actually significantly better than the hops later was. Um, I think part of that was just the fact that one, we invested a little more into marketing and two, uh, we were targeting a much broader audience, but once that product came in, uh, so that came in November 26th, 2016, and that product sold out in two weeks.

26:13
So we did $270,000 in sales in that two week period. Sold completely out before Christmas. All those products arrived to everyone’s stores before Christmas. And that sort of ended our first year and closed us out at around $300,000 in sales for the year. So that was just based on Facebook leads that you generated in that email list that you had, right? No, the leads, like we had probably a 50 % open rate. And I would say out of that, you know, maybe 1500 to 2000 people actually purchased.

26:43
or at least 1500 to like 2000 units. over that two week period, a lot of that we were running Facebook ads and stuff. again, like I don’t remember what our return on ad spend was, but I know it was very high. And yeah, so over like a two week period, you know, between the email list and the Facebook ads that we were running, we sold out. Could I ask you why you decided to do so many colors on that first run? So funny, it ties back into V2 design.

27:11
Um, so whole concept behind VG design was actually, uh, I had like walked into a granite tile showroom or a granite showroom and spent like four hours picking out granite from my kitchen. And then I walked into a tile showroom to pick out a backsplash and for glass style, were like four color options. Um, and there, just thought there was a disconnect. So like our whole thing in VG design was like, we had the largest color selection for glass tiles. So like a little bit of something for everyone’s taste. And so I sort of applied that same concept to drinkware.

27:40
All the drinkware at the time really came in like solid colors or just stainless steel. And so I thought like bringing color into this and like allowing people to personalize and like using as a conversation piece or like match it, you know, to their outfits or like having it be really like a fashion accessory instead of just a product for their wine would make it a little more powerful. And so it’s just something I wanted to test because with the Hoffs later, we only did stainless steel and black for that first version. Okay.

28:07
with this product since we were targeting women, I just thought as an opportunity to like get a little more funky with the colors. And that actually worked really well. And you know, I now we have, you know, 30 plus different colors for the majority of our products. Dang. So you didn’t find that like one color dominated all the sales and then you had problems getting rid of some of the other colors? No, because we didn’t do like different shades of the same color, right? Like, that was sort of what I was talking about, like with the color spectrum. It was like picking like one green, one blue, one pink. Got it. Okay.

28:36
I’m trying to pick something that fit in each category and like was most popular. So for like blue, did like a Tiffany blue, like Aqua for pink, we did like a neon pink, you know, for, for orange, did like a coral color cause like world’s popular. So, you know, I looked at like Pantone color trends and what’s popular and use that to basically figure out like which color I wanted to select for, each part of the spectrum. And that worked really well because you know,

29:03
Again, like everyone has different buying preferences. So when you have, you know, thousands of people looking at a product, like not everyone’s gonna want to have the same exact thing. Okay. Yeah. All right. So it’s the start of 2017 and it sounds like you have two products at this point, right? Yep. Was it just more of the same to get to that first 2.1 million? Yeah. So we had a product that allowed you to bring wine into glass free zones, but there was nothing to drink it up. So February, 2017, we launched our Uncork series, which was our insulated wine tumbler.

29:34
So now we’re able to create like an insulated wine tumbler set where you could get two wine glasses and the wine slater sort of as a set. And that was like one of our most successful basebook campaigns for like all of 2017. Is this all digital marketing at this point to get sales? Yeah. I mean, we had some retailers, like we had a become a dealer button on the website where people could apply, but we probably have like 50 retailers in 2017 if that.

30:00
And we weren’t actively looking for any, yeah, it was all direct to consumer. All right, did you use anything outside of Facebook? Were you using Google, shopping? We didn’t start using Google till the end of 2017. Okay. So I was actually running all of our Facebook ads until October 2017. I did, again, did not know a lot about Facebook ads. I just knew how to run very basic campaigns. And I started to see, as I was trying to scale our budget, it just wasn’t performing.

30:30
nearly as as I wanted to and we’re starting to see diminishing returns. And so that was when I sort of brought on our first hire, which was Mitmar. Can you comment on why you hired someone versus maybe just getting an agency first off? I talked with agencies. So I talked with Talk Media at the time. They were just a little too expensive. had a minimum commitment and we weren’t in their spend level at that time. then I think their minimum fee was like 10 grand or something.

31:00
So it was like fairly expensive for me. And I also just didn’t really like, you know, I had other friends who had started companies and like they had heard negative things about agencies. So I wanted to have someone like working on our account day to day and not just like sort of touching it, you know, for an hour or whatever. And so I ended up just hiring a contractor. So I used up work and, you know, sort of interviewed probably 10, 15 different people that had.

31:26
good reviews and done a fair amount of work. So like over $100,000 earned and had them do like an audit of our account and put together like a of a roster of like things that they would do differently if they were to come on and then sort of pick the best person for that. Is this a full time hire then or just a contractor in the beginning? Just the contractor and a contract at that time. Okay. And then he basically scaled what you were doing.

31:51
Yeah, so we had done a million dollars in sales from January to October and then from October to December we did another million. So he was able to come on and like pretty much revamp what we were doing and get not only better results than what I was doing, you know, at scale he was able to condense what I had done in 10 months into three. Okay. And we’re getting better results. so

32:16
We didn’t start you asked about Google and other so we didn’t start advertising on Google like shopping network and Snapchat and like all other places that we advertise till 2018. Okay. You sound like a smart guy that you could figure out Facebook ads. I’m just kind of curious what they what your consultant did that you weren’t doing that allow you to scale so quickly. So for me it was like look like audiences and segmenting. It just wasn’t something that I was fantastic at. And so he was like really good at sort of analyzing the data that we had and creating

32:45
I was just kind of beating the same audience over and over and over. And so, you know, our, um, like frequency rate was going up and, know, I’ve tried and create other audiences, they wouldn’t work as well. So it always go back to like what was working. And, um, you know, he was able to like successfully create lookalike audiences where we were able to target new people with similar interests. We’re again, like we’re bringing down the frequency that they’re seeing these ads and we’re getting significantly better results by doing that. So.

33:14
I’m not 100 % sure. I would say a lot of it was just attributed to campaign structure and audience structure. Okay. Well, because I know since I run all my own ads also, it’s a pain in the ass to kind of rotate creatives. I was just wondering, since you’re running this other company, perhaps you might not have had just the time to give it your all in terms of Facebook ads. That’s kind what I was getting at. I was wondering if that was the case. Yeah. I mean, probably a little bit of everything.

33:41
You know like our the creators we were using weren’t fantastic The copy was written by me like I’m sure there’s a lot of factors that played into like why it did significantly better after I brought Him on. Okay. Were you still were you starting to run your Facebook ads directly to your products at this point? Or were you still trying to get leads? No, so we only did leads for the initial two. Okay, you would actually stock inventory. We were running acquisition campaigns

34:09
Okay. I’m able to actually directly to like collection pages. Okay. Hey, I just want to make fun of Austin Bronner here because I saw in one of your other interviews that you said the Spindle Wind pop-up increased your signups by 4x. Was it? Yeah, I wrote about that on a blog post and I got a 2x increase and thing but then everyone started making fun of me because I for you, you got 4x right in terms of the number of leads that you were getting versus the old form, right? Yeah. Yeah. Okay.

34:39
There you go, Bronner, Spend-A-Win pop-up for the win. Okay, sorry, sorry to say that. Do you know who Austin is by any chance? We still use our own version of that today. We have different versions. Like we use a text signup form and then we also have, we just do know, but we did our own custom Spend-A-Win version and it still performs extremely well to this day. Yeah, I wrote my own also actually. Yeah, it performs better than the ones that you can get off the shelf. Okay, sorry, I just wanted to, I thought I’d bring that up just in case people

35:09
still doubt the power of the spin to win. All right. Okay, so you hit 2.1 million in 2017. And then all of sudden you like 10x the following year. What happened? Yeah, so a couple things. I in 2017, I sold my house, I also sold my other business. So I was able to like, so towards the end of that year, I was able to fully invest in roommate. So all the money went in towards investing in inventory for Q4.

35:36
And then a lot of the money that we made in Q4 was reinvested back in inventory for Q1 of 2018. like going into spring and summer, we had pretty solid on an inventory to be able to sustain growth. Cause in 2017, like for a lot of the year we would run pre-orders. So, you know, I would literally drive people to the website, they would pay for the product and then, you know, it’d say like 90 day lead time or whatever. And then we’d get the product created and then I would air ship it in instead of shipping it by sea. So we get it quicker and then we would ship out.

36:05
product and do that in batches. Because again, like I didn’t have the money to really invest in like 1000s and 1000s of units to just talk about that real quick, actually, because I run an ecommerce business and cash flow is always a problem. Right? So you bootstrap this you still own 100 % of this, right? So yeah, we actually just closed an equity deal last Friday. Last Friday, but hitting 36 was all on your own bootstrap, right? Yeah. Okay. How do you get the money to fund the inventory?

36:35
Well, so again, like I had sold my first business, I had rolled that into my second in the house on the house itself. Once it was finished, I was able to pull a line of credit on the house. Okay. I able to leverage that and use that for the business. And then, you know, you’re only allowed to finance 70 % of the house value. And the house wasn’t appraising as high as what I actually sold it for. like, there was just a lot of leftover money that was in that house that

37:03
that I can really touch. when I sold that, you know, I had access to like a significantly larger amount of capital. But yeah, I mean, it was something, you know, I was using this line of credit, but you got to remember like thousands and thousands of units, you know, trying to invest the money into having that on hand, plus having like production deposits on future orders. So you’re not like, you know, running out of stock and placing an order and then waiting 90 days for it to come in, like trying to balance all of that was really difficult. So pre-orders was sort of my answer to that. It allowed me to, you

37:33
pre-sell the product and we didn’t even do it at a discount. But again, these are products that didn’t exist and they came in unique colors and like people wanted them. So they’re willing to wait and we would get maybe 10 % of the customers that didn’t read and you know, didn’t know it was a pre-order or whatever. And we’d either refund them or like explain and a lot of times they were okay with it. But I use that really all throughout 2017 to help grow. I didn’t have to, cause at the same time I was also investing money in like molds and things like that too. So.

38:01
You’re trying to balance all that was difficult, but pre-orders was sort of the answer because it allowed me to pre-sell the product. You get the product in after 90 days, ship it out, and then repeat the process over and over again and sort of roll the money back into the company. But 2018 was the changing point because not only did I sell my other business, my house, we also got our bank line of credit because we had had our two-year anniversary. So after like two years of business, we were able to get a formal $250,000 line of credit from the bank.

38:29
And so it was an unsecured line of credit. It wasn’t collateralized against inventory or anything. I was through SBA. And that was a few month process. I started working on that beginning like January 2018. think end of February, we probably closed that. So like right in time for spring, we were able to place some pretty large orders on top of, you know, the orders we had already placed from the money we had made from Q4 2017. But yeah, I mean, I think, you know, again, like

38:57
I had brought on the guy that I was using for Facebook ads at the end of 2017. We had started seeing really good results with scaling, you know, the financial aspect of like having a lot more money to put in the inventory. think all those things combined are what allowed us to grow so quickly in 2018. And then on top of that, we added in, you know, Google and Google Shopping Network and Snapchat and Pinterest and Bing and Influencer Marketing, like a ton of different channels throughout the year.

39:24
So we’re just reaching customers in a different way and really finding out and figuring out what works for us and what didn’t. Okay. So outside of Facebook, what are those other channels have worked the best for you? So Google works extremely well. Snapchat works very well for us. Influencer marketing works really well for us. Pinterest is okay, but it’s not super scalable. Snapchat even then we weren’t really able to scale it for a long time. It took a year and a half working with our team in beta programs and whatnot.

39:53
their tracking just wasn’t great back then. like, trying to actually track results from their platform was like nearly impossible. So we would spend a little bit of money here and there, but you know, we can fully invest into it because without knowing where we’re getting out of it, like that would have just been like, it didn’t make sense to do. I think Google would be I guess you’re probably talking about shopping then. Or Yeah. Okay.

40:20
I would imagine that the keywords for your thing would be just really expensive. Maybe you can pull it off, but are you using Display Network at all? Yeah, we are. And out of those, which one is working for the best for you in terms of Google land? Between Facebook, Google, and everything else, we spend $2.5 million a month. Our marketing team is 13 people now. I honestly don’t know. I don’t really have my hands in that. Okay. I’m just curious if you knew. Yeah.

40:48
What would you say I mean, man, the fact that you bootstrap this from the ground up means that you were you probably have working knowledge of all aspects of your business at some point in time. So what would you say were your biggest struggles early on? Yeah, so biggest struggles were definitely fulfillment. You know, with the pre order method, it wasn’t super difficult. So I had a shared warehouse. So VT Design, I stored a tile there, when the product would come in, I’d have it delivered to that warehouse. And then I I’d have

41:17
10, 15 friends come help me package these orders over a couple of day period and get them out the door. But it wasn’t until like we got our first facility and started hiring employees for day to day fulfillment that I really understood just how difficult getting products out the door was on time and how much of a distraction it was for me. Because like I, what I really enjoyed in the business was the product development innovation aspect and like.

41:44
there’s none of that in in order fulfillment. And so it was a huge time stock for me. I spent a lot of my time doing this and I didn’t enjoy it at all. No sort of where like shit monk came into play. So like we use a three PL even to this day, which allowed us to completely free up the fulfillment side of things and you know, really focused on what we’re good at. then the second cheaper going with three PL just kind of when you run all the numbers in terms of headcount and mindshare. I definitely did. Yeah, I did at the time even now.

42:13
at the current scale we’re at, it’s iffy. But if you’re under 20, $30 million in sales, definitely for a variety of reasons, like you obviously have the pick fees and warehousing fees and things like that. Typically, the warehousing fees are just passed on, so it’s going to be pretty similar to what you’re paying in your own warehouse. So really, your additional costs are going to be the initial pick fee and then additional pick fees on top of that. If you look at the shipping rates that you get as, let’s say, a company that’s shipping

42:42
200 packages out the day, 200 packages out the door a day versus like a fulfillment center that’s shipping, let’s say 30,000. The rates that they get offset the pick fees. So, you know, I know like our average cost to ship a product was over $10 because our products are really heavy. Like our average package is almost three pounds. Okay. So really heavy, really expensive to ship. And that dropped by over 40 % when we moved over to a fulfillment center, which completely covered.

43:11
Plus, um, you know the initial pick fee and additional pick use for those orders Nice. So there was also a forcing function right because when you sold that tile business presumably the warehouse went with it or um No, because so we ran fulfillment ourselves for seven eight months Okay, so the tile business went I had gotten a new warehouse and which was just for roommate and then we actually upgraded that warehouse three times in a year period so we went from

43:38
3500 square foot warehouse, like 7,000 to 20,000. And same thing, like it was really in that 20,000 square foot warehouse that, and this is beginning of 2018, that we were just seeing major growing pains. Like we had just moved in there, got everything set up. And I remember we got like four cargo containers then, and we were putting it all up on racks and stuff. And it took up like, I don’t know, a third of the warehouse. And we pulled out of that in like three weeks.

44:07
Oh man, crazy. And I was like, oh my gosh, like what a complete waste of time. Like we just set up this new warehouse and like it’s not even going to be big enough for this next order we’re going to have to place. And I had met Dan who owns Shipmong through Forbes 30 under 30. And you know, pretty early in 2018, I started getting, so I think we gave them maybe 30 % of our daily volume upfront. Just to sort of test the relationship. Yeah. We’re like a two or three month period. ended up moving 100 % of that over.

44:37
And then yeah, warehouse, you know, ended up buying out the, think we stopped, we stood out for a year and then the subway serve, um, sort of bailed on that place. And then I just bought out the contract early. Are you guys on Amazon? Yeah. Yeah. So we’re using a FBA. Yeah. So we did the vendor relationship with them for a while. Hated it. Went back to FBA, but yeah, we’ve been on Amazon since late 2018. Okay.

45:06
So in terms of the way product gets in there, do you just have Shipmunk ship over whatever products are as needed to kind of top it off on Amazon? Yeah, exactly. We warehouse all of our stuff in one place. you know, big retailer orders ship out from Shipmunk, direct consumer orders ship out from Shipmunk, FBA shipments are pick packed and fulfilled by Shipmunk. So they, if we if we send five cargo containers to ship or to FBA, then

45:34
They’re the ones like labeling all the cartons and palatizing it, setting up the pickup and whatnot. Okay. And then you’re in a bunch of retail stores. Can you kind of comment on your efforts there? Like is the retail segment more than the e-commerce segment? Nope. So in 2018 we were diversifying our marketing channels. But outside of that, I really wanted to diversify our actual sales channels and create like a true omnichannel brand. I’ve seen too many companies, you know, I talked about like Facebook ad costs.

46:03
So from like 2016 to 18, the amount that like the cost per click and you know, everything else went up across the board was just ridiculous, especially for us. And I just didn’t see it as being sustainable if we were running 100 % of our sales and 100 % reliant through just digital marketing. And so I wanted to create a brand that, know, I had, again, a hypothesis that there were like three different types of customers. There was the…

46:31
brand loyalist, which wants to shop direct with you and they’re on your email list and text list and like they want to be on the know and limited product releases and all that stuff. And then you have your Amazon customer who like they see an ad or someone talk about the product or whatever. And the first thing they do is just go to Amazon because they want like unbiased reviews in Amazon Prime. And then you have the sort of older, more reserved customer who would much rather like see and touch and feel the product in person before making a purchase. And so that’s been in the three categories. It was direct to consumer, Amazon and retail.

47:01
And we really only had direct to consumer. So throughout 2018, we started ramping up our Amazon efforts. We started working with retailers, you know, and moving into 2019 retail was a really, really big focus for us. So this year, wholesale will probably be roughly 30 % of our business. Okay. Another 25 % of that is Amazon and then the rest is direct to consumer. So.

47:29
roughly half of what we do is direct to consumer and the rest is made up by other channels. you know, if we see a downturn in retail, like it’s not really going to affect the overall business and you know, if the cost for advertising goes up and like we have to pull back a little bit on spend for the month on direct to consumer, then like wholesale and Amazon usually make up the difference. So we’ve created this really cool ecosystem where, um, you know, there’s ebbs and flows, but you know, typically our months always end up very well. Um, just because, you know, we do have such a diversified way of

47:58
of reaching customers and selling to them. So I think I saw in another interview that you’re trying to grow this to a nine figure company. What’s it going to take to get there for you? what’s on the road We’re going to be there this year. So we’re at almost $70 million in sales for the year. Wow, nice. Q4 is our biggest quarter. So we typically do 30 to 40%, if not more, of what we do in Q4. So we’ll be over $100 million of revenue this year.

48:26
But a lot of that is attributed to wholesale. So wholesale last year we did 3 million. This year it’s going to be 20 to 25 million. We brought on 115 sales reps across the US. We got into some pretty major retailers that were in Dick’s Sporting Goods and Cabela’s and Bass Pro and Nordstrom and Palmetto Moon and Total Wine and Spirits. We’re in almost 5,000 retailers now. And that’s a big component of it.

48:55
We’ve had a lot of new product releases and our teams continue to grow and we’ve gotten a lot more scrappy. Yeah, it’s a combination of a lot of things, but we’ll be there this year. Let me ask you this question. If you were to do it all over again, would you still go with the digital marketing route followed by retail or would you have gone the other way around? No, absolutely. I would do it the exact same way. Okay. What we’ve seen with retail and why retail is so successful for us is because of direct-to-consumer.

49:24
Think about this, okay, you walk into a store and you see a product for the first time, like you’ve never heard about it, you’ve never seen someone talk about it, you’ve never seen an ad for it. You’re probably just gonna walk by it, right? Like, it’s not gonna stand out to you, because it’s not familiar. With direct-to-consumer, there are, I mean, think about, you know, we reach millions and millions and millions of people every single week, so we’re not getting millions of orders every week, right? So like, people are seeing.

49:51
the brand and seeing the product. But again, they might fit into that category of like people that want to shop direct or like touch and feel the product first before buying it or whatever. And so they walk into a store now and they see roommate and like they’re familiar with the brand. Like, you know, our displays that we have are like designed to stand out and catch your eye. And so we’ve just seen like massive adoption and sell through and a lot of the retailers are seeing something that like they’ve never even seen before.

50:18
just because of that relationship we’ve already built with the consumer before going into retail. Whereas if you do it in the reverse, like you’re really relying on the retailer to like tell your story and you know, they’re not going to do a good job of that. Oh, exactly. Like they can’t tell it the way you can. So if, if you can do that yourself and then just basically use them as a vessel for selling the product, then it’s a, it’s a symbiotic relationship because now they, it’s hands off. Like all they have to do is literally just put it on their shelves.

50:45
And we don’t have to worry about them like telling the brand story wrong or like not positioning the products right or whatever it is because the customer already knows what it is. Like, and now they can touch, feel and buy the product in person. So that’s been something that I think was extremely beneficial. And one of the reasons why wholesale like not only has been so successful, but has been able to scale so quickly. And I think if we did it in reverse, it would not have been that way. Yeah, no, that makes a lot of sense. Hey Dylan, if anyone has any questions about your company or

51:13
want to buy your products, where can they find you guys? Yeah, so my Instagram is at Dylan d y l a n dot Jacob. If you have any questions, just drop me a DM. I answer DMs all the time. And if you want learn about the product, you can go to roommate.com. So BRU m a t e.com. And then our Instagram is BRU dot m a t. Awesome, Dylan. Thanks a lot for coming on show, man. Really appreciate it. Cool. Thanks, Steve.

51:41
Hope you enjoyed that episode. Now I love insane growth stories like Dylan’s when all the pieces just magically come into place. For more information about this episode, go to mywifequitterjob.com slash episode 346. And once again, I want to thank Klaviyo, which is my email marketing platform of choice for e-commerce merchants. You can easily put together automated flows like an abandon card sequence, a post purchase flow, a win back campaign. Basically all these sequences that will make you money on autopilot. So head on over to mywifequitterjob.com slash KLABIYO.

52:09
Once again, that’s mywifequitterjob.com slash KLAVIO. I also want to thank Postscript, which is my SMS marketing platform of choice for e-commerce. With a few clicks of a button, you can easily segment and send targeted text messages to your client base. SMS is the next big own marketing platform, and you can sign up for free over at postscript.io slash Steve. That’s P-O-S-T-S-C-R-I-P-T dot I-O slash Steve. Now, if I talk about how I use these tools in my blog, and if you are interested in starting your own e-commerce store,

52:38
Head on over to mywifequitterjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

00:29
and it’s crushing it for me. I never thought that people would want marketing text messages, but it works. In fact, my tiny SMS list is performing on par with my email list, which is easily 10x bigger. Anyway, Postscript specializes in text message marketing for e-commerce, and you can segment your audience just like email. It’s an inexpensive solution, converts like crazy, and you can try it for free over at postscript.io slash Steve. That’s P-O-S-T-S-E-R-I-P-T dot I-O slash Steve. I also want to thank Klaviyo, who’s also a sponsor of the show.

00:58
Businesses are always the most successful when they own their own data, customer relationships, and their growth. And that’s why more than 50,000 e-commerce brands like Living Proof, Solo Stove, and Nomad trust Klaviyo to deliver their ideal customer experience. Now having used Klaviyo for many years now, I can wholeheartedly say that Klaviyo is the best email automation platform in the world for e-commerce, and you’ll get everything you need to build strong relationships that keep your customers coming back. Now with advertising getting harder and more expensive,

01:26
it’s time to take back control of the customer experience with email and SMS. So if you’re ready to drive future sales and hire a customer lifetime value with a marketing platform built for your long-term growth, get a free trial at claviyo.com slash my wife. That’s K-L-A-V-I-Y-O.com slash my wife. Now onto the show. Welcome to the My Wife, Quit Her Job podcast, where we’ll teach you how to create a business that suits your lifestyle.

01:52
so you can spend more time with your family and focus on doing the things that you love. Here’s your host, Steve Chu.

02:02
Welcome to the My Wife, Could Her Job podcast. Today I’m super excited to have Jamie Kern Lima on the show. Now Jamie is the co-founder of It Cosmetics and she is the first female CEO of a L’Oreal branded brand in the company’s history. And in 2016, Jamie sold It Cosmetics to L’Oreal for $1.2 billion in cash and has been included on the Forbes list of America’s richest self-made women. So what’s funny about this interview today is because I’m not into makeup, I had actually not heard of Jamie.

02:31
until my friend Andrea Deckard met her personally at Turks and Caicos and highly recommended that I have her on the show. And then I casually mentioned that I was having Jamie on the show today and then my wife started going nuts. So before this interview even has been recorded, I have seemingly earned some brownie points with my wife, which I will save for a rainy day. So clearly Jamie has already inspired a bunch of people. And today we’re going to delve deeply into her story and how she did it and without welcome the show, Jamie.

02:59
How are doing today? Oh my goodness. Thank you for having me and thank you. Say hello to your wife for me too. It’s exciting. It’s great to be here. What’s funny about this is it’s rare that I do this, but I’m not young anymore. You know, I’m in my 40s. So I actually tried a little bit of concealer just for kicks and the stuff made my skin flawless. Oh, unfortunately for me, I can’t wear this stuff as a guy. Otherwise I totally would.

03:25
We have a lot of guys that wear it. We have a lot of guys that are yeah, we do. Yeah. So it’s, it’s for everyone, for everyone. I love that your wife got excited. Thank you so much for sharing that. Yeah. It’s such an honor. I know I shared this with you before we started, but I’m inspired by, by you sharing your story and hers too. So thanks for all you’re doing. Cause we’re all in this entrepreneurial journey together. We are definitely. And sometimes it can be a lonely journey.

03:53
So with that out of the way, Jamie, can you tell the audience about why you started It Cosmetics for people who may not have heard your story? Absolutely, yeah. You know, it’s so funny for anyone in your community who kind of fell into entrepreneurship or thought they were gonna do one thing and had a dream and were on that path their whole life. And then all of sudden, you know, in my case, it was really a setback, something that was a setback happening to me that ended up being a setup.

04:23
for launching IT Cosmetics. So I thought I was gonna be a journalist my whole career. Like I love other people’s stories and I really just wanna interview you right now, Steve. Ask a billion questions. So I mean, since the time I was a little girl, I thought, oh, I’m gonna grow up and share other people’s stories. That was my dream job. And so I was working as a TV news anchor and…

04:48
and thought I was in my dream job and I started getting a skin condition called rosacea. And for me, it came in the form of like bright red cheeks that like if you imagine touching your cheeks right now and then feeling like sandpaper with red bumps everywhere. And what started happening is I was anchoring the news and I live in my earpiece from the producer. I would hear, you know, there’s something on your face. There’s something on your face. Could you wipe it off? Could you wipe it off? And I knew there was nothing I could wipe off. I knew it was that.

05:16
the makeup was starting to break up and the redness was coming through. So I saw dermatologists, I started trying every makeup I could find out there and I had no interest, even no thoughts of ever, you know, going into the beauty industry. I didn’t know anything about it. I didn’t have any connections and almost no money. And the more I tried to find products that worked, I couldn’t find anything that worked. And I went through a season of

05:43
of self-doubt, honestly, where I started worrying, I going to lose my job? I going to lose viewers? in the process of this kind of season that I really felt was a setback, got this, like all of a sudden, I guess a lot of entrepreneurs out there have this kind of aha moment where I realized, oh my gosh, okay, if I can’t find anything out there that works for me, there must be like so many other people out there that maybe…

06:11
have the same challenges. Maybe they have different skin issues and nothing works for them too. And if I could actually create something that works, it could help a lot of people. And so I had that moment. And then also one more thing that happened is I had this moment as well where I was like, why is it there’s millions of makeup brands out there, but like, I can’t find anything to work. And I also realized Steve that, you know,

06:39
all of the ads I’d seen my whole life on television or in magazines, I realized, oh, wow, I’ve never seen anybody modeling makeup products that actually has skin like I do and has problems with their skin, challenges with their skin. They all have kind of flawless Photoshopped skin. And I realized kind of a bigger mission, if you will, where I was like, okay, well,

07:03
you know, from the time I was a little girl seeing those ads, I always aspired to look that way, but they also kind of always made me feel like I wasn’t enough. And so I had this kind of double thing happen where I was like, okay, if I could figure out how to make a product that works, and if I create a company where we use real women, all different, you know, ages and shapes and sizes and skin tones and skin challenges as models,

07:30
maybe I can help shift culture inside the beauty industry around inclusivity and around the definition of beauty at the same time. So was this big thing happening yet, like so many people in your community may be listening right now who have gone through this experience. I didn’t know how hard it was going to be to be an entrepreneur. I thought, if I pour all my savings into making a product that actually works, if I can get to that point where a product works,

07:59
Like it’s just gonna sell, right? And yeah, I didn’t know what I didn’t know. And long story short, I wrote the business plan with my husband on our honeymoon flight to South Africa, which is probably the least romantic thing you could do on a honeymoon flight. We got back, quit our jobs and just dove all in from our living room. And what I didn’t know was from the moment we dove all in,

08:25
It would be three years before we could afford to pay ourselves and it would be three years. Like, I love so much the show that you do and how you go, like these types of questions too, because why I wrote the book Believe It in so many ways is because like when you Google my story, you just see like, Denny’s Waitress, you know, builds billion dollar empire. it makes it seem like it’s easy and it makes it seem like a message just got lucky or.

08:54
But it’s like at the end of the day, my journey that I think a lot of other entrepreneurs and human beings can connect to is really a journey of going from not believing in myself to believing and dealing with constant rejection. The first three years of our business, we heard hundreds and hundreds of no’s and I had to figure out like, well, how do I listen to my gut and my knowing or do I listen to what the experts are telling me to change about what I’m doing?

09:22
It’s really a journey of learning to believe in myself and trust myself. And I know it’s the journey of so many other people out there, which is why I wrote the book. So what I love about your story is that you’re actually a husband and wife team. And likewise, I started my e-commerce brand with my wife as well. And what’s also funny is, I’ve obviously read your book, is that I actually use an alter ego to manage support and to actually be on the wedding forums. My person was named Christina Lang and she was a very bubbly bride to be. Wow.

09:51
So, And do you still, is Christina Lang still hustling She is no longer working for the company. No, she moved on, but I understand you did something similar, right? With your support Yeah. I mean, I didn’t intend to, but it was so, I think that, you know, when you’re an entrepreneur and you can’t afford to hire anyone else, it is, you have to just get scrappy, right? And figure out how to do, I mean, I Googled everything, right? And

10:19
but we literally couldn’t afford to hire people that knew what they were doing. And so in the early years, yeah, I mean, oh my goodness. So two things that stand out that maybe help everyone in the community going through this, because we don’t see these things on social media. We see like everyone’s highlight reel and it just looks good. But the real stories, I think help us feel less alone and more enough in what we’re doing. And yeah, mean, two stories that stand out are,

10:46
our one, Marie, right? So, I love that you said that you did this too. I think that’s amazing. So, I was like, oh my gosh, how do I get press for our company? We couldn’t afford to advertise. so, Marie is my middle name. so, Marie at it, cosmetics.com got her own email address. Marie would head customer service and then Marie would pitch all the press. So, like, you know, she would have

11:14
If this were fast forward 10 years, Marie would have emailed you and the whole like my wife Twitter job podcast community saying, Steve, great news. Our founder, Jeannie Kern-Liem is available for an interview. like Marie emailed, good morning America. mean, she would pitch PR to everybody and Marie got no response a lot and also got rejected a lot. But it was like, kind of got to do what you got to do. And I’ll never forget.

11:43
crazy that now this business that we started in our living room this year became the largest luxury makeup company in the country. Why that’s so crazy and why is because for so many years, all of the retailers that we’re so blessed to have partnerships with today all said no for years and that it’s not the right fit, it’s not going to sell well in their stores, and that we needed to change what we were doing and how we were doing it.

12:12
And so I just, you know, somebody in your community might just need to hear this today because when we get rejection, it’s hard to not let it, like confuse it with, maybe my gut is wrong or maybe my, you know, knowing is wrong. And then we start second guessing ourselves and it starts like manifesting into self doubt and it’s hard. But anyways, real quick, the other story that stands out too is,

12:38
So we couldn’t afford to hire a web developer. And so my husband went and bought that big yellow book called HTML for Dummies. literally, and by the way, so all these retailers were saying, no, right? was sending our product because we finally, we poured all of our money into this product and I sent it to all the department stores, to all the beauty retailers, to QVC, which is the 24 hour live television channel, sent it everywhere. All my favorite places to shop and they all

13:07
said no. And so I was like, okay, if we can go direct to consumer, if we get our website up and it’s like, you know, this is going to be huge because the product works and I just believed it. And so he bought the big yellow book, HTML for Dummies and, and built the whole first website and the morning it went live, I felt like it was like, you know, gonna be one of the best days of my life. The way little kids are on

13:34
you know, mornings of holidays, like Christmas morning, right? And I was so excited because I just knew it was going to be huge. And the morning the website went live, there were no orders. And then the next day, no orders. And the next day, no orders. That’s exactly what happened with our website, too. Did it really? Yes, in the beginning. For two weeks, I want to say. Oh, OK. So tell me if this happened to you, too, because maybe you guys are way more classy than I was. I…

14:02
A couple days in, I said to my husband, I said, it’s broken. You didn’t do it right. I said, there’s no way a product this good isn’t getting any sales. You must not have built the site right. It’s broken. And then a couple weeks later, still no orders. And then the day our very first order came in, I was cheering, running around the office, AKA our living room, screaming, your first order, our first order. I knew it. knew it. I’m so excited.

14:31
And he says, he says to me, that was me. He goes, I placed the order to prove to you the site is not broken. And I was like, oh, and it was like, you know, those early days. And so, so for you guys, was a few weeks in. We had the same story. I was the one doubting that the website was working. So I placed the first order and then my wife saw it and said, oh my God, we got our first order. I was like, no, it was just me.

14:55
Sorry. have never, wow. Okay. You’re the very first person I met that has the same story. I love this, right? Because so many people are going through this right now and not seeing, you know, I think when we don’t get that, when things don’t go like we hope they’d go, it’s, hard. It’s hard to keep going. If we don’t have all the tools in place with mindset and with mission and with all of those things, right? It’s so easy to let, I mean, in my case, lack of

15:25
success around me and no proof that my idea was gonna work and also just experts saying no. you know, this stuff comes in so many different forms for people, right? Sometimes it’s our own friends and family that love us and means so well, but they’re the ones that are like, are you sure you should have quit your job or are you sure you’re qualified? Yeah, did you? Yeah. So Jamie, know,

15:54
the audience of this podcast, they’re all small business owners or aspiring business owners. And one of the questions that I got to ask you actually was, how does one even start a makeup company? Let’s say I want to start a cream or concealer for myself. Like how do you even make that? Yeah. So I didn’t know anybody, right? In the beauty industry. And I didn’t know the answer to that question when I started. Literally didn’t know.

16:20
The big blessing of course is Google and reading everything about how things are made. In my case, I never formulated anything in my kitchen, although you certainly can. There’s a lot of entrepreneurs that put together beautiful products inside their home and they formulate them. And I didn’t do that and I don’t have a chemistry background. And so what I did instead was Googled a lot and learned that through reading tons of stuff that’s out there,

16:49
and then starting to go to trade shows, I learned that most cosmetic companies manufacture either in their own facilities they own, but almost all of them also use these third party manufacturing facilities that have tons of chemists and tons of formulators. A lot of them are FDA approved. And so a lot of the big companies use these manufacturers. And so I started doing my homework on who are they and

17:16
you know, and trying to understand the whole process. And what I learned quickly, Steve, was that in the beauty world, who you manufacture with is like the most closely guarded secret. And so, you know, people protect their formulas, they protect who they manufacture with. And so I ended up having to get really scrappy.

17:41
And what I did was I went into all the department stores and kind of just, and I knew most all the brands in existence. Cause I had been, you know, seeing them as a consumer my whole life, but I made a list of every brand that sold inside department store. By the way, this is, I don’t even know if this is embarrassing. I’m going to share it with you though. Cause again, maybe someone out there needs to hear it, but um,

18:02
I made a list of every company, every brand that sold inside the department stores and same with all the brands that sold inside like the Sephora, all the beauty retailers. And I sat in my living room and I cold called every single company and whoever I could get on the phone, I would ask like, oh, I’m looking for a really great manufacturer. Is there anyone you recommend? And most of the people hung up on me. You know I mean? Yeah, of course.

18:30
And I got a hold of one really kind woman who probably should have never shared this. She worked for a smaller makeup company that was sold inside Sephora. Totally not a competitor to what I did either, but she was lovely. And she’s like, oh, here, you know, here’s our favorite one. And she gave me the name of their manufacturer in New York city. And I thanked her and called him up and that he became our very first. I mean, now we have dozens and dozens of manufacturers we work with, but that’s how I got my very first one.

18:58
went out and did a meeting and it was really, think sheer grace because, listen, I was willing to get hung up on hundreds of times, but finally was able to get through to someone and ends up he makes products for a lot of the largest brands in the country. And so they have, you know, all the unsexy stuff I had to learn about, which is like FDA regulatory compliance and clinical, you know, clinical safety testing and all that stuff.

19:26
It was really sheer grace that they ended up being certified and compliant in all those areas. so they made our very first products. How do you make a formulation though, when you don’t have a background in chemistry? Yeah, so, you know, there’s a lot of different ways to do it. The way that we did it is we really leveraged all the chemists that were part of the manufacturer. And we assembled an advisory board as well. And then, you you just have to work with someone who’s patient, because in my case,

19:56
It was hundreds of iterations of our concealer, for example, back and forth before it actually worked for me. So it wasn’t like I could take something out there on the market and say, oh, make it like this, because there wasn’t anything out there that worked for me. And so when we started getting formulation samples, I mean, it was hundreds of iterations. And after launching our concealer and it being the first really big product that had a high repeat purchase rate,

20:24
One of the things that I did right and I did, oh my gosh, I did so many things wrong and I share all of those in the book too. But one of the things that I did right was I kept that, I kept my blinders on when we finally got into retail stores. What happens is they want new all the time. So they’re like, can you have something new for this season, new for this quarter? This is a big trend. Can you make something new for this? Cause everyone’s trying to get short-term money. And you know, we stuck to the whole.

20:52
If it doesn’t work better than anything out there, I don’t want to launch it. And I remember it took us seven years before we launched our first moisturizer. And that was something that, you know, all the stores were asking for, you know, for us to create from day one, but it wasn’t right. And so in that case, I probably drove teams of chemists crazy, but it was like, listen, I have really sensitive skin. And if I can’t wear it, like you can’t fake authenticity. So I can’t go out there and sell something.

21:20
but that doesn’t work for me. And we kept that discipline in terms of saying no to short-term sales because the product wasn’t right yet and really focused on. So in the case of the moisture, I was like seven years before we launched our very first one. So that was so many iterations to get it right. unlike a lot of other companies in the beauty space where they make their money off of what’s trending at the moment,

21:48
and they have constant pressure to launch new innovations nonstop. We took a different approach, which is let’s really get products that are like hero products that are part of your daily life and that women love because that’s where the repeat purchase rates. I’ve always seen business as like anyone can get a sale once and that’s just a sale. But when you have customers that love something so much that they buy it a second time,

22:17
that’s a brand. Right. And I wanted to build a brand. you know, and, and when you do that, I think that’s when you get, you know, avid avid fans that spread the word to you because, know, so many people out there are just looking for us to add value and make their lives better. And, and for the products that and services we create to do what they say. And when they actually do, then people do spread the word. And in the early years, that’s how we stayed alive because we

22:45
couldn’t afford advertising. So was really we kept the lights on because the very few people that started buying the product would post their own befores afters online and started spreading the word organically. And that’s really what kept us alive before we had the big retailers saying yes to us. What’s a realistic startup cost to launch a single product? I mean, why was this company willing to work with you in the beginning when you had nothing?

23:12
Well, we talking like tens of thousands of dollars or no, they actually did my very first samples for free. Really? And yeah, they made my very first samples for free. And you know, I think in their case, they work with enough huge brands and maybe they just went with their gut. I don’t know why, but they made the very first samples for free. And you know, it doesn’t cost much to make it. I mean, they have their formulators time maybe, you I

23:38
poured my heart out in the meeting and told them my big vision for this huge shifting culture in the beauty industry and all this kind of stuff. Maybe they just had a gut feeling and I’m not sure, but there’s definitely manufacturers out there that will do it for free. You just have to be careful. What I mean by that is, and by the way, we started with under $100,000 all in. I have some stories I can share if you want me to about some of the process of getting investors and how that happened and how it didn’t happen.

24:08
All of that. And I share a lot of those in my book, Believe It Too, for the first time. Because I think when we go through that process of looking for money or of hoping people invest, or even if should we bring on investors, you know what I mean? I think that whole journey is so complex and so layered. you know, we- In terms of that first product, was there like a large minimum order quantity? Like the samples were free, but how much did you actually have to buy upfront? Do you remember?

24:37
Oh gosh, let me think back. It wasn’t very high. Yeah, there’s the, but to your point, there’s a lot of contract manufacturers where they, do have minimums for sure. There’s a lot of them that don’t. And I think if you can find one that doesn’t, it’s great. Um, we were only selling two to three orders a day on our website. So if I, if I think back, I feel like the highest MOQ minimum order quantity was probably a thousand units at that place, which is not very high.

25:01
and but you’re right. But you know what I would say to you, Steve, by the way, no one’s ever gone this granular. So let’s go there. I love it. Right. This is the good stuff because like the stuff I wish I had known earlier on, right. The stuff that saves us nights, crying ourselves asleep in terms of I have so many stories of rejection in this book and how I handled it and like, had I done it differently, it would have changed everything. And anyways, but also just we save ourselves time and money. feel like when we share these stories at a granular level. So I love

25:31
You’re the only person in the whole press tour for the book who has asked me anything like this. But yeah, and so what I want to say to that is, you know, there’s the MOQs and minimum order quantities and there’s the, you know, formulation and how much do samples cost and all that. What I would say for me, and this happened, I think through sheer grace also, I just, didn’t know what I didn’t know at the time. And I was very blessed to get a ethical manufacturing partner from day one.

26:00
because that’s not always the case. And I definitely met some down the road that weren’t ethical for sure, because we’ve worked with probably hundreds at this point. But what I would say to every person out there in their business right now, whether it’s a product business or a service business or anything else, is the importance of knowing where you want to go one day. So I knew I eventually wanted to change. I would write in my journal.

26:28
I help billions with a B of women live better lives. I’ve never shared that before, by the way, but anyways, I would write that every single day and I knew where I wanted to go. And so I knew in order to do that and to scale at the pace I had imagined, by the way, this is during the years of getting no, hearing no from everyone. I would still- These are the best years actually for the people listening. And I would still write things like that down that seemed absurd, right? I helped billions of women live better lives. Like I would write those things down.

26:58
And meanwhile, I’m sitting there hoping to have a $1 hot dog from Costco that night because from the stand outside Costco, I don’t know if you’ve ever had one, they’re really good. But we were scrappy, right? And we were hearing no and no after no after no. So one thing happened in terms of contract manufacturing that was really sheer grace. But now when I look back, knowing where you’re going one day. So I knew in order to help billions of women,

27:28
with a B that, OK, we have to scale really big. And in order to do that fast enough, it likely means we’ll either go public as a brand one day or we’ll be acquired by someone who has hundreds of, has people on the ground in hundreds of countries and can really help spread our message quicker than we can do on our own. So I knew that was going to be the end goal one day. What I didn’t know was in order to ever often even just bring on investors, let alone go public.

27:56
or be acquired, there are so many things you have to have buttoned up like crystal clear, I is dotted, T is crossed in order to actually have something of value that they’re gonna pay a lot of money for. And part of that stems from the very beginning of even how you’re setting up your own IP, intellectual property and your own formulations. And one thing that happened by sheer grace,

28:25
But what I would say to maybe someone in your community needs this little tip right now is that, you know, we owned all of our formulas. And when we worked with our very first manufacturer, even when we had no money and we had no success yet, we were able to have ownership of the formula. It just was something intuitively I felt like we needed. Yeah, absolutely. Yeah. And I didn’t yet know how critical that would be.

28:51
And I also didn’t know that there’s something called like in our case and in manufacturing process of a batch recipe. So it’s not just what’s your formula in terms of what are the ingredients and quantitative, but also how is it actually made almost like the way you make a cake, like turn the oven to 325 degrees, add the egg first, mix it for five minutes, whatever that is. The batch recipe for every formula, those two things I didn’t realize how

29:19
critical those would be to own. And what happens is if you don’t get these things in place early on, when you get really successful, manufacturers don’t want to give them to you because they don’t ever want to risk you leaving and making your stuff somewhere else. Right. So you’ve got to get all these things in place early on. And, you know, if anyone in your community knows for sure they want to take on investors or they want to sell their business one day.

29:45
these kind of, know, learn whatever you need to do to make that happen. All the things, right? Listen to this show, meet people that have done, have exited their companies and learn everything you’re going to need to do to make it happen one day. And then back all that up to right now and start getting those things in place. Because I’ve seen so many entrepreneurs that are so excited about the creative side of their business, which that’s the fun part, right? And they’re so excited about

30:15
the product or about what’s selling right now or about revenue or this or that, all those things that matter. And they forget these like unsexy foundational things that if you don’t get in place, you’ll never be able likely never likely never be able to to sell your business or to get what what you should for it. know, we had this play out in real life, you know, after we finally

30:40
finally got yeses from manufacturers and from QV, I mean, from retailers and from QVC. And we were growing and growing and growing. And eight years into our business, we sold 100 % of it to L’Oreal, but we went through the whole process and there was, and I did meetings for three years with them, which I talk about in the book and how it all happened and how it almost didn’t and everything else. But there was a moment where the night before the deal is supposed to happen.

31:08
There was one product out of 400 that we couldn’t find ownership, proof of ownership for. And it was the worst night ever. Our lawyers didn’t know if the deal was going to go through and I knew we owned it. So I knew, and I knew that our manufacturer knew that we owned it and I could not find the document and writing anywhere. And it was a really rough night. And thank God I literally prayed all night and the next and cried. And the next morning,

31:38
they sent it to us in writing and we were able, everything was able to proceed. Uh, but I just, you know, it just, reminds me of like the things that we don’t even think about cause a, they’re not fun. Who wants to deal with this stuff? Right. It’s like getting it all together early on is so important to set you up for, you know, success in the future.

32:01
If you sell on Amazon or run any online business for that matter, the most important aspect of your long-term success will be your brand. And this is why I work with Steven Weigler and his team from Emerge Council to protect my brand over at Bumblebee Linens. Now what’s unique about Emerge Council is that Steve focuses his legal practice on e-commerce and provides strategic and legal representation to entrepreneurs to protect their IP. So for example, if you’ve ever been ripped off or knocked off on Amazon, then Steve can help you fight back and protect yourself.

32:29
Now, first and foremost, protecting our IP starts with a solid trademark and Emerge Council provides attorney-advised strategic trademark prosecution, both in the United States and abroad for a very low price. And furthermore, the students in my course have used Steve for copyrighting their designs, policing against counterfeits and knockoffs, agreements with co-founders and employees, website and social media policies, privacy policies, vendor agreements, brand registry, you name it. So if you need IP protection services, go to EmergeCouncil.com and get a free consult.

32:59
And if you tell Steve that I sent you, you’ll get a $100 discount. That’s E-M-E-R-G-E-C-O-U-N-S-E-L.com. Now back to the show.

33:09
Jamie, if you can look back really far, do you remember how you made your first sale? So before QVC, it seems like QVC is what really launched your product, but back before QVC, how are you getting your sales and even just staying afloat? Yeah, mean, everything was really came down to our website and it was really just two to three orders a day. And it was real people that started spreading the word and posting their own befores and afters. I definitely had friends and family both.

33:36
who knew we weren’t in these retail stores, but they would go into the retail stores, ask to talk to the manager and say, have you heard of IT Cosmetics? And they’re like, it what? Like, oh, can you please do a written request to corporate to carry IT Cosmetics? Like my friends and family would hustle. And I did all the time. I would call stores. Do you carry IT Cosmetics? Can I talk to the manager? I mean, you do what you got to do. But at the end of the day, was, was, you know, grassroots, real people that

34:06
that would try the product and spread their word. It was all really through our website. It was word of mouth basically. It was word of mouth. then we didn’t plan for it to be QVC first, but that happening and the way it happened, single greatest life and business lesson I’ve ever learned in terms of the power of authenticity and the power of trusting your gut over experts advice when they conflict.

34:33
I believe your gut is always more powerful than anyone else’s advice. I think that so many of us let self-doubt and all the things take over to the point where we don’t even hear our own gut or our own knowing anymore. Anybody in that position, I talk about so much of that in the book. But QVC ended up being direct to consumer and was in live and was one of the biggest blessings I could have ever hoped for.

35:01
And it’s essentially became live advertising for us into a hundred million homes. after, you know, every time we would go on QVC, a lot of people would see us on television, but want to actually try the product in person. So that built up demand for actual retail stores to carry our product. And, and then the rest is history after that. It was a long journey. How does one get on QVC and do you actually recommend QVC for most e-commerce brands if you are able to get on the show? Oh, yes.

35:30
I would say do everything to get on QVC. I sent my product there for three years and heard no for three years, dozens of times. I would find anybody I could on LinkedIn who worked at QVC or Sephora or Ulta or department stores and send everyone the product. And it was no for three years. When we finally got a yes from QVC, it changed everything.

35:56
And, I had always heard from other entrepreneurs that you can sell, you know, more on QVC in an hour than you can all year in department stores. As a beauty company, I’d always heard that. And then to see the power of it happening right before my eyes was the craziest journey. You know, Steve, as you know, I, you know, after three years of sending our products to them and hearing, no, no, no, you’re not the right fit.

36:22
It’s a long story that I share in the book on how, but we finally got a yes and got one shot to go live. And here’s the thing, Steve, is like, were, know, as I shared, we were selling only two to three orders a day on our website. And when I learned we got one shot to go live for 10 minutes with our product, it was, we had to hit their sales goal. We had to have over 6,000, we had to sell over 6,000 units of our concealer. And we’re only selling two to three a day on our website.

36:50
but that is large volumes. In the beauty space, it’s consignment. So if it doesn’t sell, you have to take it back. And so our one shot that we got, you should never take a purchase order you can’t afford to lose ever. But at this point, we were three years in and we didn’t know how we were gonna stay alive as a company. And so we said yes to it. And it was this moment where literally everything was on the line.

37:15
We applied for SBA loan. first 22 banks said no, and it was bank number 23 that gave us an SBA loan to cover just the inventory cost of that purchase order. And it was one of the most wild moments in my life because I knew the future of the company surviving basically came down to the 10 minutes and so much pressure. And I flew out there a week before.

37:43
are airing and I sat in this rental car in the parking lot all alone staring at the front door, like praying, crying, feeling like, because we had outside experts had said, here’s what you need to do to have success. Use models with perfect skin, all the stuff that was not why I created the company. And I just had this vision. What if I go on QVC and take my makeup off and show my bright red rosacea, show real women and.

38:08
And I wanted to stand for my values and my beliefs. And we all know what our values and beliefs are. But we often all face situations where someone wants to challenge those or where we’re challenging them ourselves and going, okay, am I gonna stand for what I believe in when it feels like everything’s on the line? And I just had this moment in that rental car where I just imagined like who that woman was watching on the other end.

38:34
it came down to the idea and the belief I have. And now I’ve learned it over and over that you can’t fake authenticity. And I wanted to, you know, I remember thinking of like a woman, like I kept imagining a single mom folding laundry who had forgotten that she mattered and was too busy to remember that she’s beautiful. And I rather have, I remember this moment in the car where I realized like, if she’s going to turn on the television and see me and give me two seconds of her precious time, like,

39:03
I’d rather have her look up on the screen and see me showing my rosacea and showing real women that look like her. Even if she buys nothing, I’d rather have her for that moment feel like she’s seen and like she matters than like go on TV, show flawless skin, you know, like everyone’s done for years. And even if I sold more product, it mean I was standing for nothing. And so, yeah, it came down to a 10 minute window. And Steve, I remember the clock.

39:32
started at 10 minutes and it was like 9.59, 9.58. And I learned, oh my gosh, I learned right before the show that you’re not guaranteed the 10 minutes. If for some reason it wasn’t selling well, they can cut your time live. And it was so much pressure. But I remember the moment my bare face went up on national TV and I showed all different women of every age and shape and size and skin tone and skin challenge. there was like one minute left in the show and the host was.

40:01
Like, oh, the deep shade is almost gone. The tan shade, there’s a few hundred left. And then I remember that the moment, it was down to the 10 minute mark and the big sold out sign came up across the screen. And I started crying on national television and my husband came running through the double doors and I was like, real women have spoken. And he’s like, we’re not going bankrupt. And that one airing turned into five that year and a hundred the next year. And then we did over 250 live shows a year and still do right now. And so we built the biggest

40:31
Beauty Brand and QVC’s history, is at this moment right now. And again, I only share that because it was three years of them saying no, and you’re not the right fit. so, you know, anyone in your community who’s an entrepreneur right now who keeps hearing no, or you’re not the right fit, it’s like, no one can tell you you’re not the right fit. So Jamie, I recently read your book, which I recommend everyone pick up. I’m not sure if it’s going to be, it’s released in February, right?

40:57
Yeah, yeah, it comes out the week of February 22nd. Yeah, I’m so excited. You know what I love? Like I’m interviewing you right now and you actually write exactly like how you talk. So it’s completely authentic, the book. You know what? I wanted to write every word myself. So I said no to a book deal for like five years. So I’m like, you know what? If I’m to do it, you can’t fake authenticity. And I just feel like we’re all this together, which is why I’m grateful for your show too, because it’s like when we share these real stories, it’s

41:25
It’s, you know, it’s, think it has a huge impact on all of our journeys of learning to believe in ourself and trust ourself and, and, and know we’re enough and that we’re not alone and become the person we’re born to be. have two final questions. If we have time, these are quick ones. One is you wrote that balance is a lie. And, and I completely agree. Uh, you have to make some sacrifices in order to be successful.

41:51
And I wanted to ask you if there’s any regrets because you put so much into your work working 20 hour days is that I’m sure some of the things were sacrificed, right? So if you were to do everything all over again, would you have continued on this path? Yeah, I don’t believe that I need, cause I worked a hundred hour weeks for close to 10 years and I don’t think I needed to have done that to have the same outcome. And I wish I had learned to believe

42:21
that my success was possible sooner. And I did learn to believe it. And then I made better decisions, but it was interesting that after three years of hearing no, and you’re not the right fit, and you’re not enough, when we finally started getting yeses, and then Steve, I remember like we finally started getting sales traction, and all of a sudden, all the retailers wanted us, and then all of a sudden we were doing really well. It was almost as if I felt like I had to strike while the iron’s hot, like, oh my gosh.

42:48
What if it all comes crashing down at any moment, right? So many of us, have these moments of success and then we think like, can I believe it? And which is a kind of a form of imposter syndrome in a way. And, you know, we started having the kind of success I’ve never seen in my life. I was not raised around that success when I was working as a Denny’s waitress, saving my tip money to buy a Mac lipstick or Lancome eyeliner. And to start,

43:16
passing those brands in size. These are kind of things where I was just like, oh my gosh, is this real? And so I drove myself so hard and I also became addicted to work. And so did my husband. And we had this realization, right? Because busyness or work addiction is like any other addiction. It separates you from you. And it’s almost numbing to the point where you don’t even feel the day anymore.

43:44
And when we realized this was happening, it was a big part of why we decided, okay, you know what? Let’s partner with another company like L’Oreal instead of going public, because if we went public, we’d still be running it ourselves and it would still all be on us. And I got to the point and I talk a lot about this in the book on how do you learn to trust yourself? Right. And I realized I need to trust myself to not trust myself that I’m not going to keep working a hundred hour weeks. And so.

44:14
We made better decisions and in that. And so when I look back, I don’t believe that working hundred hour weeks is why in any part we created a billion dollar company. I think I could have worked 40 hours or 50 hours or whatever it might be. Would it have happened a little bit slower? Maybe, but maybe not. And I think I would have enjoyed it a lot more. So those would be the big things. Okay. Do you have time for one more? Do you have to go? Yeah. Okay.

44:43
I’m supposed to be on another, you know that I, yeah, yeah. Yeah, that’s why I’m asking. Final question. There’s an excerpt in the book that I’m going to read out loud and I wanted to understand exactly what you meant. There’s one line and this one for some reason when I read it, struck me. said, without intending to, he also instilled to me deep, that deep belief that women are stronger than men, that men hold women back and that women need to be super women to do it all on their own. And I personally, I have two very strong business partners who are both women.

45:12
And I’m terrified now that if they read your book, they’re going to realize that I’m the main thing holding them back. So I’m just kind of curious what you meant by that line. Yeah. So that line is talking about part of my childhood, right? And what I went through. And in this book, I talk a lot about how some of the things that happened to us shape our beliefs and how we’re kind of all in this journey in a lot of ways of almost

45:38
re-figuring out what the right thing is to believe. you know, I talk about being raised with a dad who was an alcoholic and a mom who was superwoman and who kind of did it all. And I talk about the realization that, you know, growing up, I never wanted to get married and I wasn’t sure why. And I realized why, that I had this belief that women are superwomen and that men hold women back.

46:04
All those things. And I talk about the journey of learning to overcome that and of learning to trust my own gut that when my husband proposed, I didn’t want him to propose. I told him not to, but when he did, even though my head told me, Oh, no, no, no. Like, you know, when I checked in with my gut and my internal knowing, I had such peace about it that I said yes. And I continue to unfold a lot of these beliefs in my life. also

46:32
you know, because of how I was raised, I always thought, oh, I’m a lone wolf. I’m independent. Like, I don’t need to depend on anyone else. Like, right, for anyone in your audience right now listening that maybe thinks like, you know, oh, independence is a badge of honor and I’m a lone wolf and I got this. That was me my whole life. I, again, based on the stuff I saw growing up, and then I had this…

46:57
wild journey where I, and I share so much of this book I’ve never shared before, but while building this business, I was, we were also trying to start a family and for 10 years went through IVF, went through everything you can go through and couldn’t carry a pregnancy full term and eventually ended up looking into adoption and surrogacy and, through that process of having our daughter wonder who’s now two.

47:23
I actually needed to depend on another woman in that journey. And it ended up becoming one of the best experiences in my life. And I learned, oh, life isn’t meant to do alone. And oh, being a lone wolf or independent isn’t a badge of honor. In my case, it actually was just a deep seated fear of me not being worthy of other people showing up for. And I learned that.

47:51
And it helped me shift my perspective on not wanting to do it all myself and being afraid to count on other people. So yeah, life’s a journey, right? Yeah. So Jamie, I want to be respectful of your time. If you’ve enjoyed, if you’re listening to this and you’ve enjoyed this conversation, the book is full of very personal stories, things that I would never put down in writing myself. Some of the stories you told in the book that were really interesting.

48:19
So I encourage everyone to go pick up the book. Jamie, you are true to your word. You’re so authentic. Your writing is just like talking to you. And I had a great time talking to you today. Oh, I had such a great time. Steve, thank you so much for having me. I really appreciate it. Thank you so much.

48:38
Hope you enjoyed that episode. Now Jamie is super inspiring and down to earth and I really enjoyed reading her book. So if you need a dose of inspiration, then be sure to check out Believe It on Amazon. For more information about this episode, go to mywifecoderjob.com slash episode 343. And once again, I want to thank Klaviyo, which is my email marketing platform of choice for e-commerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post purchase flow, a win back campaign, basically all these sequences that will make you money on autopilot.

49:06
So head on over to mywifecoupterjob.com slash KLAVIOIO. Once again, that’s mywifecoupterjob.com slash KLAVIOIO. I also want to thank Postscript, which is my SMS marketing platform of choice for e-commerce. With a few clicks of a button, you can easily segment and send targeted text messages to your client base. SMS is the next big own marketing platform, and you can sign up for free over at postscript.io slash div. That’s P-O-S-T-S-E-R-I-P-T dot I-O slash div.

49:35
Now I talk about how I these tools on my blog. If you are interested in starting your own eCommerce store, head on over to mywifequitterjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

00:27
And Klaviyo helps you build more personal connections with each customer based on the things that they really care about. Send more relevant emails by tailoring every experience based on individual preferences and shopping behavior. With top-notch targeting and best in-class segmentation, you can unlock the full potential of your e-commerce data and create email marketing moments that keep shoppers coming back well past the holidays. Just ask Living Proof, Tipsy Elves, Huckberry, or more than the 50,000 other brands growing with Klaviyo.

00:55
And because Klaviyo was built for e-commerce brands of all shapes and sizes, there’s no better marketing platform out there. And you can get started now for free over at klaviyo.com slash my wife. That’s K-L-A-V-I-Y-O dot com slash my wife. I also want to thank Postscript for sponsoring this episode. If you run an e-commerce business of any kind, you know how important it is to own your own customer contact list. And this is why I’m focusing a significant amount of my efforts on SMS marketing.

01:20
SMS, or text message marketing, is already a top five revenue source for my ecommerce store, and I couldn’t have done it without Postscript.io, which is my text message provider. Now, why did I choose Postscript? It’s because they specialize in ecommerce, and ecommerce is their primary focus. Not only is it easy to use, but you can quickly segment your audience based on your exact sales data and implement automated flows like an abandoned cart at the push of a button. Not only that, but it’s price well too, and SMS is the perfect way to engage with your customers.

01:49
So head on over to postscript.io slash Steve and try it for free. That’s P-O-S-T-S-C-R-I-P-T dot I-O slash Steve. Now onto the show.

02:15
Welcome to the My Wife Quarter Job podcast. First off, happy new year. I personally am so glad that 2020 is over with. It’s been a very rough year for both Bumblebee Linens as well as MyWifeQuarterJob.com. So today I’m going to do a solo episode to recap the year for both of my businesses and then discuss what lies ahead in 2021. Now, if you look back to the beginning of the year, things were going actually really great for my e-commerce store as well as my blog in January and February.

02:44
But when March hit, when COVID-19 hit, my business was hit really hard. In fact, my revenue was sliced by more than half when the coronavirus first hit the United States. And as all of you who have been following me for a long time know, my primary products from my e-commerce store are handkerchiefs and weddings for special occasions. In addition, I sell personalized and monogrammed napkins for parties, hotels, airlines, and basically my store was just hit.

03:13
hard everywhere on practically every single front. And because of the coronavirus and the shelter in place rules, no one was getting married. No one was having parties and no one was traveling or staying in hotels. And in addition, a decent sized piece of our business caters to real estate agents as well. But real estate sales stagnated as well during the crisis, which was mainly in March and April. And on March 22nd, my business reached a low point.

03:40
And that’s when my wife and I started to panic a little bit. I remember thinking to myself, okay, if the sales are like this for an extended period, then, you what are we going to do? Should we move the business into a cheaper location? Right now we’re in this warehouse that’s costing us, I think almost $5,000 a month, which is really high. And so, I mean, all these things were going through my head, but then in April, my wife had the idea of selling masks. And so to test the waters,

04:09
What we did is we published a tutorial on how to turn one of our handkerchiefs into a face mask without sewing. And then we started giving away these free handkerchiefs with every purchase along with the tutorials. And this promotion turned out to be a huge hit. And so what we ended up doing is we decided to import a bunch of masks and these masks started selling like hotcakes. And I completely owe this to my wife. She thought of a really great pivot for our products.

04:37
which weren’t being used for weddings right now. So why not just turn that same material into something that people actually want. And those masks sold really well. And then we followed up our mass sales with a line of quarantine gifts. So what are quarantine gifts? Quarantine gifts are, for example, like our monogram cocktail napkins. In the past, they were for weddings, but we decided to embroider them with funny sayings like quarantiney and some other inside COVID-19 jokes. And

05:06
people at this time, I remember because people weren’t seeing each other, they wanted to give each other gifts. And so these, these products in our stores started selling really well. And what ended up happening is that these quarantine gift sales actually got us through April when morale for our business was just about as low as it has ever been for our company. And to make matters worse, while all this stuff was happening in March and April with our e-commerce store,

05:37
I had to cancel our annual e-commerce conference, the Seller Summit. And that period was really stressful for me as well because in a matter of just two weeks, my partner and I, the conference was already sold out at that point, right? My partner Tony, I had to give a bunch of refunds for the event and what was particularly painful is we had to fight with various vendors to get our money back and turn the entire conference virtual.

06:06
easily one of the most stressful business situations that I’ve ever had to deal with. And I remember there was just one vendor and you got to remember at this time, everything was shut down and locked down. And we had this one vendor, which I will not name, purposely charge our credit card after refusing to give us a refund, even though the entire state of Florida was shut down at the planned date of our event, which was in May. So we had to file a charge back for that. We ended up getting our money back and we ended up negotiating with the hotel to postpone our event.

06:35
But still, when everything was up in the air, I was looking at maybe taking a loss in the mid to high five figures, if things didn’t go right. But fortunately, we got our money, we postponed the event, and we ran a virtual event that went surprisingly well. I didn’t know what to expect, because I’d never run a virtual event, but we threw that thing together in a matter of a couple of weeks, and yeah, it was great. It went better than…

07:05
I could possibly have imagined it would go. But even today, obviously what we did is we gave everyone a free ticket who already had a ticket to the virtual event as well as a ticket to the next event. But even today, in the beginning of January, the live event planning still remains in limbo. I know a bunch of people have been getting the vaccine or the vaccination process has been happening already, but from what I’ve been reading, the whole vaccination process has been kind of largely bungled.

07:34
in United States. In order for us to get herd immunity, it’s probably going to take a while for everyone to get the vaccine, let’s just say. I’m very confident that there will be a seller summit this year, but both Tony and I still need to figure a bunch of things out. And even if we do set a date, you we still have to get the speakers and tickets and that sort of thing. It’ll probably happen, but it’s probably going to happen much later in the year when it’s safer to do so. But anyways, after the lows of March and April,

08:04
when I felt like I was getting bombarded from all sides, both businesses, you know, with the Seller Summit and the e-commerce store, things ended up taking a dramatic turnaround. And starting in May, e-commerce just started taking off like crazy. I think because people were stuck at home and brick and mortar stores were closed, everyone just started shopping online and it was crazy. Even my mom, who I talk to every day, my mom is pretty tech agnostic. I mean, she doesn’t like tech, let’s just say.

08:34
and she had long resisted buying stuff online, but all of a sudden during the pandemic, she didn’t want to go to the grocery store and that sort of thing. And so, you know, we showed her how to buy stuff online and she started getting her groceries, her clothing, everything delivered to her doorstep and she loved it. And in fact, you know, even today when stores are open now, obviously she’s probably never going to go back to the old way of physically going to the store. I mean, my mom is getting up there in age and you know, she doesn’t like to drive either.

09:04
and now she’s adopted this online shopping mentality. And this is incidentally why I’m just so bullish on e-commerce in 2021. I went and pulled up some stats. According to Statista, e-commerce as a percentage of retail sales shot up from 11.8 % to 14.3 % in Q3 of 2020. And Q3 of 2020, this is after the stores had already reopened for the holiday season as well.

09:33
And so I sincerely believe that e-commerce is going to skyrocket even further in 2021. And that 2021 will truly be the best time to get into e-commerce. And if you’re already in e-commerce, it’s going to be a really good year. But I do want to clarify that when I talk about e-commerce, it’s not just any type of e-commerce. And here’s my personal take on the situation since there’s many different ways to sell physical products online. But first off, because many people are going to be embracing e-commerce, marketplaces like Amazon,

10:02
will continue to get more competitive and the evil seller activity from what I’ve seen has shown no signs of lessening. And if you listen to episode 332 of my podcast with Amanda Wittenborn, she actually had many of her most profitable listings shut down for copyright infringement when she’s the designer of her products. I she owns the copyright, yet her listings were constantly getting taken down by people accusing her of copyright infringement.

10:27
You know, even after a prolonged battle with these malicious sellers, she still continues to have problems today with these exact same listings, which at the time were bringing in the bulk of her revenue. So what is her strategy today? Well, her Amazon strategy today is to release a bunch of new products and basically try to stay under the radar with their products, because this is what she said. And you can listen to that podcast episode for yourself. As soon as your product hits the best sellers list, it’s ripe for malicious activity.

10:58
So it’s in your best interest, ironically, to not be the best selling item on Amazon. It’s just to kind of make your money, diversify across many different products and basically just stay under the radar. I mean, the fact that you have to go to those lengths, it’s just one of the unfortunate aspects of selling on Amazon today. Because still, even in all through 2020, it’s just way too easy for a malicious seller to take someone down. And things haven’t changed much in 2020.

11:26
And I actually do not foresee many changes in 2021 in this department. And this is why I believe more than ever that having your own brand and your own platform is the way to go in the foreseeable future. Now it’s fine to sell in as many marketplaces as possible to proliferate your sales, but it’s important to not rely on a third party platform for all of your sales. Now, for example, during COVID, Amazon refused to take shipments into their warehouses and over the holiday season, warehouse space was really scarce.

11:54
So people couldn’t send in as much product as they would have liked either. And in fact, Amazon, the way they calculate the amount of inventory you can send in, it doesn’t account for the bursty period over the holidays. so Amazon didn’t let us send in as much as we’d have liked. And we ran out of stock over the holidays and we were forced to go merchant fulfilled. And if you’re an e-commerce store that doesn’t have a fulfillment, a way of fulfillment on your own, then you were out of luck. And if all of your sales were

12:24
during this period when Amazon actually refused to take shipments, then you were completely out of luck. And you know, on that front on owning all of your own stuff, even platforms like Shopify actually started banning people from selling certain products in their shops. And just as an example, an acquaintance of mine selling hand sanitizer was actually shut down by Shopify because Shopify deemed that his prices were too high. They basically thought that he was gouging everyone for hand sanitizer when everyone was on the lookout for hand sanitizer. But in fact,

12:54
He actually was not trying to gouge anyone. His costs had risen dramatically and he was forced to raise prices basically to remain profitable. All right, so if even a platform like Shopify can call the shots on what you can sell, I mean, that’s just a problem right there, right? And I preached this all along, but you need to be in as much control as possible over your business as you can, which basically brings me to my next point.

13:21
Out of all the marketing platforms at your disposal, you should be focusing on your owned marketing assets. And owned marketing assets are platforms that you own, like email, SMS, and to a certain extent, Facebook Messenger. I put an asterisk on that one because kind of technically Facebook controls that platform. But during COVID and the height of the pandemic, both Facebook and Google actually prohibited the advertising of masks online. And when my wife came up with that great idea to sell our own masks,

13:50
we were actually forced to use our own channels to market our new product line. And as I mentioned earlier, during this period, Amazon also suspended shipments of non-essential items to their warehouse, which prevented us from restocking our sold out goods. And without our customer list, our business recovery would not have been possible. And we would have been in deep trouble if we relied on only Amazon for our sales, for example. So if Amazon’s bringing in most of your sales, you have to pause and take a moment to consider playing the long game.

14:21
Now starting your own site and building your own traffic will take longer to ramp up and your sales initially will definitely be less than Amazon. But unless you start at some point, something drastic and beyond your control will eventually happen with your Amazon account. And that’s something that actually I can actually guarantee. What you need to do is you need to plant your seeds now and dig your well before you are thirsty. Because success in e-commerce in 2021 will hinge on your ability to make sales and retain your customers

14:50
for repeat sales.

14:54
If you sell on Amazon or run any online business for that matter, the most important aspect of your long-term success will be your brand. And this is why I work with Steven Weigler and his team from Emerge Council to protect my brand over at Bumblebee Linens. Now what’s unique about Emerge Council is that Steve focuses his legal practice on e-commerce and provides strategic and legal representation to entrepreneurs to protect their IP. So for example, if you’ve ever been ripped off or knocked off on Amazon, then Steve can help you fight back and protect yourself.

15:22
Now, first and foremost, protecting our IP starts with a solid trademark and Emerge Council provides attorney-advised strategic trademark prosecution, both in the United States and abroad for a very low price. And furthermore, the students in my course have used Steve for copyrighting their designs, policing against counterfeits and knockoffs, agreements with co-founders and employees, website and social media policies, privacy policies, vendor agreements, brand registry, you name it. So if you need IP protection services, go to EmergeCouncil.com and get a free consult.

15:52
And if you tell Steve that I sent you, you’ll get a $100 discount. That’s E-M-E-R-G-E-C-O-U-N-S-E-L dot com. Now back to the show.

16:02
So how do you build a lasting customer relationship and increase the lifetime value of your customer? One, you can segment out who your best customers are and treat them like royalty. One thing that we always do is at the end of the year, we go through our customer list, actually usually once a quarter, we go through our best customers. These are people who buy a lot and often, and we reach out to them and we offer them special perks, like special releases of products, or we’ll give them a special coupon code, or we’ll give them…

16:30
like a dedicated representative take their orders. Make them feel special so that they’ll buy from you again and again. We also send emails and texts to our existing customers regularly. So if you’re not sending email out at least once a week, then you’re missing out on a lot of sales. And if you haven’t implemented some of these basic flows, like a pre-purchase flow or an abandoned cart flow, a post purchase flow or a win back flow, look those up on my blog if you don’t know what I’m talking about. You definitely have to implement those with your site.

17:01
You also want to try to increase your average order value. Some of the things that we did this year for our store was we focused a little bit more on bundling certain items, trying to just boost the amount of money that people will spend. Another way to kind of artificially do this is to set a higher free shipping threshold. So by setting your free shipping threshold a little bit higher to entice someone to add an additional item, you can increase your average order value in your sales as well. One thing that I completely redid in the beginning of the year,

17:30
was our cross-sell strategy. So we use Klaviyo, and depending on what someone has purchased, we send them now different post-purchase sequences that cross-sell them complimentary items. So for example, if someone buys cocktail napkins at our store, that sends them down a special email post-purchase sequence that tries to cross-sell them dinner napkins and lunch napkins. And we are also running Facebook Dynamic Cross-Sells as well. Facebook has knowledge of what everyone’s purchased at your store and what they’ve bought.

17:59
And Facebook has a pretty good idea of what products are bought with each other. And so you can actually have Facebook automatically create ads with products that it thinks people are likely to buy once they bought a certain product. It’s called Facebook Dynamic Cross-Sales. It actually works really well. You can also implement a loyalty program. And this is something that we implemented with ManyChat for free. There’s a post on the blog. Just do a search for loyalty program and you can see how I implemented that for free.

18:26
The bottom line, right now, over a third of our business is from repeat customers, and just having these repeat customers establishes a solid foundation for a business to grow every single year because we have that solid base. Now, one thing I also want to mention is that there’s going to be some really big changes on the horizon for Facebook and Google advertisers. That’s worth mentioning, and this all has to do with Apple. Starting in iOS 14, Apple is going to flash a pop-up

18:56
Whenever someone visits your that will ask Apple users for permission to track you across apps and websites owned by other companies. I’ve seen a picture of this pop-up. It’s really obstructive. And just the verbiage that they use, you know, do you give this site permission to track you across apps and websites owned by other companies? I can only imagine that most people are going to opt out of tracking for privacy reasons. And the implications for opting out are really massive.

19:25
in the online advertising world. Because if a user opts out, that means that you can no longer track their activity on your site. This means that you can’t tell if they visited your site, if they added an item to their cart, if they viewed a product, or if they’ve made a purchase. As you know, Apple users represent a pretty big chunk of online devices, and not being able to get conversion data for these customers will greatly reduce the effectiveness of your ads. So this means you won’t know

19:53
that if you’re running an ad, whether it made a conversion, and as a result, your audiences might be grossly off as well. And this is just developing right now. This is relatively new, but as it develops further, I will report back with more. But one of the main ways to fix this right now is to use the Facebook conversion API with your site going forward. Basically, I’m gonna get a little bit technical here, but basically instead of using cookies, which is the way that it’s done now.

20:21
you will actually have to have your server transmit conversion data directly to Facebook via an API call. Basically, instead of relying on cookies, which are little files that are stored in the browser, you will actually have to have your website send the conversion data directly to Facebook or Google. Now, don’t worry if this is over your head. Just be aware that support for your shopping cart for these APIs are coming soon and that you need to implement this as soon as you can if you plan on advertising going forward.

20:50
And you will have to do this separately for Facebook and Google or for whatever advertising platform that you use that currently relies on cookies. Now, regardless of advertising, however, the best way to build sales and traffic is by creating content. All right. It doesn’t matter what you choose, whether it be through blogging, podcasting or video content attracts people who you can then convert to sales. Okay. So let’s sum things up for 2021. Since I talk about a lot of different things here.

21:18
I know that there are listeners of my podcast at every level. And so I’m going to try to address each group differently. So if you already own or run an e-commerce business and you’re still only selling on Amazon, I think it’s time to diversify. I’ve just heard too many horror stories in 2020 for you to put all of your eggs in one basket any longer. And even though our Amazon sales continue to grow every year and Amazon still is a really good moneymaker, those sales from Amazon.

21:47
are not only the least satisfying, but they are the most stressful sales as well. Because you might wake up in the morning, one morning and notice that your listings are suspended or Amazon has done something else to your listing or change things up. And you have to cater to all of Amazon’s whims and the support is terrible. It can easily take you several days just to even get them to respond to you. So as you are diversifying with your own site, which you should do in 2021, make sure that you focus on your own marketing channels.

22:17
So most of you are probably on email already, but I know for a fact that a lot of you are not on SMS. So SMS should be your next target for sure, without a doubt. It’s actually killing it for our store right now. I’m using Postscript.io for my SMS marketing for e-commerce right now. Now, for those of you who have yet to get started with an online business, 2021 is probably the best time to start an e-commerce just as it begins to skyrocket. And if you don’t know what you want to sell yet, then just putting out content

22:46
is probably gonna be your best bet. Produce content on topics that you’re interested in, build an audience, and just let your audience guide your way. And to put out content, actually doesn’t cost much money at all. Starting a YouTube channel is free. Starting a podcast can be as little as five bucks, and starting a blog will cost you as little as $3. Now you gotta realize that starting a business is mostly mental. And I know many of you are probably hesitant to pull the trigger because you might feel

23:16
that you don’t have what it takes to succeed. But ask yourself this, what if you do have what it takes? And in case you think that you don’t have the skills to succeed, here actually is set of skills that everyone has that actually doesn’t require any knowledge at all. One, you can be on time. You can set a schedule to just work on something and just show up. You can also put your best foot forward. Try as hard as you can and just don’t give up.

23:44
on something that you’ve put your mind to. You can have energy and passion for what you’re working on. You can get excited. Find something that you’re excited about and just put out content on it. And once you build that audience, the money will just come. You can actually have a consistent work ethic. Just make sure you show up. Set aside a time in your calendar to work on your business and make it a part of your routine. And it’s important that as you’re working on your business that you have the right attitude.

24:15
Don’t keep telling yourself that this is too hard or that you’ve tried everything. That’s actually one of my pet peeves. Whenever someone tells me that they’ve tried everything and nothing’s working, there’s no way that you’ve tried everything because if you’ve tried everything, that means that you would have found something that worked. So have an open mind, have the right attitude, go into this believing that you’re gonna succeed. And have an open mind, be coachable. If someone is telling you that you’re doing something wrong, don’t make excuses.

24:45
Just analyze and look at what you’re doing and find out ways or find out problems that you’re doing and try to improve on what you’re already doing. And finally, be prepared. And this is very similar to putting your best foot forward. You have to try your hardest to do something and don’t give up. You got to give everything at least three to five years. Don’t start a business thinking that it’s going to be successful in year one. You got to have a long-term mindset because things just take time to grow. Things take time to sink in.

25:13
If you’re taking a course, if you’re trying to learn something, don’t expect to be an expert at it right away. I remember when I was taking this one engineering class in college, was easily the hardest class that I’d ever taken. And when I first reviewed the material, I didn’t understand a thing. And I didn’t understand a thing throughout the entire semester. It was only that last two weeks of the semester did things finally sink in and I ended up doing well in the class. But it took a very long time. Running a business is the exact same.

25:42
So if you have the right attitude, good things will happen. And for 2021, I know that I’m going to be doubling down on content. In fact, I have a couple of special announcements to make in the next couple of episodes on my next content endeavors that I’m really excited about. So here’s to a prosperous 2021 for everyone. And I look forward to hearing what you guys are up to. So I hope you enjoyed my recap of 2020 and what is in store for 2021.

26:11
And for more information about this episode, go to mywifequitterjob.com slash episode 336. And once again, I 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 slash div. That’s P-O-S-T-S-E-R-I-P-T dot I-O slash div. I also want to thank Klaviyo, which is my email marketing platform of choice for e-commerce merchants.

26:40
You can easily put together automated flows like an abandoned card sequence, a post purchase flow or win back campaign. Basically all these sequences that will make you money on autopilot. So head on over to mywifequitterjob.com slash KLAVIO. Once again, that’s mywifequitterjob.com slash KLAVIO. Now I talk about how I use both these tools on my blog. And if you are interested in starting your own e-commerce store, head on over to mywifequitterjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

27:09
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.mywifequitterjob.com.