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

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

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

I also want to give a shout out to Privy who is also a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now Privy is an email list growth platform and they manage all of my email capture forms, and I use Privy hand in hand with my email marketing provider.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Steve: I think so.

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

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

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

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

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

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

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

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

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

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

Toni: Yeah.

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

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

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

Toni: Yeah. Yeah.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Steve: He did.

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

Steve: Most interesting man in the world yes.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Toni: Yeah, absolutely.

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

Toni: Yeah you beat me.

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

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

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

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

Toni: Yeah.

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

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

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

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

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

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

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

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

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

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

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

Toni: How was that?

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

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

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

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

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

Steve: He’s like the LeBron.

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

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

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

Toni: Yeah.

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

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

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

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

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

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

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

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

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

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

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

Toni: Another…

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

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

Steve: Has low energy.

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

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

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

Toni: Yeah.

Steve: Which was soundproofed, yeah.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Toni: That’s true.

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

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

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

Toni: Yeah.

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

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

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

Toni: I agree. I agree.

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

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

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

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

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

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

Steve: And what are the dates?

Toni: The dates are May 15 through May 17.

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

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

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

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

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

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

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

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

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

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

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

Steve: Yes, it is. It is true.

Toni: Lies, lies.

Steve: All right. Take care.

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

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

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

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

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

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

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

Right now for example, I’m using Privy to display a cool wheel of fortune pop-up. Basically a user gives their email for a chance to win valuable prizes in our store. And customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%.

Bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve, and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ For 15% off. Once again that’s P-R-I-V-Y.com/Steve.

Now I also want to give a shout out to Klaviyo who is also a sponsor of the show. Always blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 30% of my revenues. Now Klaviyo is the only email platform out there that is specifically built for ecommerce stores and here is why it’s so powerful.

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

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

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

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

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

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

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

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

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

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

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

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

Steve: Okay so…

Kevin: [inaudible 00:05:46]

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

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

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

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

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

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

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

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

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

Steve: Yes, yes, yes.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Steve: Yeah sure of course.

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

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

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

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

Kevin: Yes, yes.

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

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

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

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

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

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

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

Kevin: Yes.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Steve: Interesting, okay.

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

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

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

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

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

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

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

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

Steve: Why is that?

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

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

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

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

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

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

Steve: Can you give some examples?

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

Steve: So they force you to use unique packaging?

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

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

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

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

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

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

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

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

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

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

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

Steve: Correct.

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

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

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

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

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

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

Steve: Oh man, that’s crazy.

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

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

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

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

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

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

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

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

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

Kevin: You’re giving me too much credit.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Steve: What is that product?

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

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

Kevin: No.

Steve: No it’s unfortunate.

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

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

Kevin: Cool, thanks a lot Steve.

Steve: All right, take care.

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

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

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

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

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

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

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

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

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

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

Now I also want to give a shout out to Privy who is also a sponsor of the show. And Privy is the tool that I use to build my email list for both my blog and my online store. Now Privy is an email list growth platform, and they manage all my email capture forms. And I use Privy hand in hand with my email marketing provider. Now there are a bunch of companies out there that will manage your email capture forms, but I like privy because they specialize in ecommerce.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Steve: Yeah.

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

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

Andrew: Oh they have.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Andrew: And you complain about…

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

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

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

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

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

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

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

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

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

Steve: So is that gross margins or net margins?

Andrew: Gross margin.

Steve: Gross margin, okay got it.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Steve: Okay.

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

Steve: Yeah or only selling on Amazon.

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

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

Andrew: Yeah. You mean just anecdotally?

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

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

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

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

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

Steve: That’s crazy.

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

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

Steve: Wow, Amazon is just killing it.

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

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

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

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

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

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

Andrew: Yeah 2.66% yep.

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

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

Steve: Oh God, this survey is worthless man.

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

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

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

Steve: Ouch okay.

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

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

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

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

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

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

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

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

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

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

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

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

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

Steve: Probably Bezos.

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

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

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

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

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

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

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

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

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

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

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

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

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

Andrew: Thank you for wishing that.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Andrew: Yeah so coming from full circle here back to the community.

Steve: Yeah.

Andrew: The reason we do the events is not to make money, like we make that little bit of money off of it, but when you look at how much time and energy goes into it it’s we’re probably making two three dollars an hour, it’s terrible. It’s not a good money maker. We do it because — I do it because it’s the most effective way to build relationships and to build community. And for us that’s – for Ecommerce Fuel that’s the biggest thing we’re focused on trying to build a genuine tight knit value adding community for seven figure store owners.

And so that’s kind of the mentality I bring to it. I try to really use the event as a way to cement and strengthen the bonds between the community members than a lot of the other meeting online because I mean meeting in person it’s kind of cliché, but there’s nothing like it and you can’t replace it.

Steve: Yeah totally. So for my event at least the Sellers Summit, I don’t have like this really tight community of forum members. And so the way I try to build community that way is I guess getting my most loyal listeners and readers kind of all in one place so I can get to know them better, and the hope is that these people will come back over and over again, and every year our existing relationships will be strengthened.

Andrew: Yeah, have you seen it like have you seen a good percentage of people…

Steve: Yeah. I don’t have the exact statistics, but I think it was like thirty something percent. We also changed the event a little bit this year in that we are screening for revenue and we’re hoping to get a large percentage of people who actually sell full time as opposed to pure beginners.

Andrew: Yeah I know it’s a great event, I was able to come last year, I was there the first year you did it.

Steve: Tell everyone what you were doing during the event last year.

Andrew: I was in an interview within meet up in the Utah desert hanging out with a bunch of other people who have an obsession with having fun and playing and sleeping in 30 year old fans.

Steve: Yes, yes I don’t know e-commerce Sellers Summit camping out in a van with a bunch of fanatics.

Andrew: If I hadn’t committed to it and paid for it ahead of time, I wouldn’t have been there. And I will be there this year, I’m very much looking forward to it Steve.

Steve: Cool. Andrew, where can people find this job board, where can people find your forums, and where can people find information about your event?

Andrew: Yeah thanks. So Ecommercefuel.com is the best place just to check out everything. If you want or interested in learning more about the community or joining, you can head over there and just click at the join now button, and you can learn more about how that whole process works. The event is limited to community members only. So if you do want to be a part of that, just the first step would be joining the community.

And on the job board front, if you are — we’ve got a job board that we’re launching, and the real vision and focus behind it is to be able to help seven figure store owners get great marketing talent and world class customer support. So if you have a store and you’re looking for people, looking to find a place you can post jobs and get great talent, that’s going to be the focus.

And if you’re in the e-commerce world as well and you want to find out about opportunities with kind of really interesting, fun, cool e-commerce companies, and we’re also going to some internships as well. So if you’re kind of still just getting — if you’ve got a lot of hustle and grit and maybe some insider experience but not a ton of e-commerce professional experience but you want to maybe learn about some of those intern opportunities, we’ll have those over there as well. So, all those would be Ecommercefuel.com/jobs.

Steve: Is this job board for the general public?

Andrew: It will be yes.

Steve: Okay.

Andrew: Yeah we’re definitely going to make it a little more tied in and hopefully will be more of a service to the board members first and foremost, the community members, but yeah it will definitely be available to the general public.

Steve: Cool man. Well Andrew, thanks for coming on again after three years, and thanks for being my very first guest which jump started the entire podcast.

Andrew: Hey, thanks for taking on a limb and let me come back on knowing my personality and what I could potentially do to damage the brand. So thanks for having me, but it’s good to be on as always.

Steve: Yeah man, I think you’re due for a Photoshop job, so we’ll see what we could do about your podcast image for this episode.

Andrew: Thank you dude for a warning before.

Steve: All right dude, take care man.

Andrew: Hey thanks Steve.

Steve: Hope you enjoyed that episode. If any of you are selling online and making over $250,000 in yearly revenue, then I highly encourage that you sign up for Andrew’s forum over at Ecommercefuel.com. It will make a huge difference to your business. For more information about this episode, go to Mywifequitherjob.com/episode208.

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

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

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

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