Audio

128: The Dark Side Of SEO And Little Used Ways To Rank In Search With Glen Allsopp

The Dark Side Of SEO And How To Rank In Search With Glen Allsopp

Today, I’m thrilled to have Glen Allsop on the show. Glen runs the awesome site ViperChill.com where he teaches people how to get traffic to their websites.

Glen and I actually go way back to 2010 where we were members of the same blog voting group and we’ve loosely kept in touch since. He’s got an amazing array of articles that go into incredible depth. I want to say a short post for him is like 3000 words. And the reason why I follow Glen’s work is because he talks about topics that other people would not dare talk about.

For example, he talks about his experiments with private blog networks. He does in depth analysis on link building, both white and grey hat tactics. He doesn’t write very often, but when he does he always drops an atomic bomb in your brain. And with that, enjoy the episode!

What You’ll Learn

  • How to avoid getting penalized by Google and why big companies are getting away with it.
  • Some SEO tactics big companies are using that are black hat.
  • Which grey hat tactics would Glen consider using for new sites.
  • Glen’s main strategy when it comes to ranking a site in search.
  • Where Glen promotes his content.

Other Resources And Books

Sponsors

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Transcript

Intro: You are listening to the My Wife Quit Her Job podcast, and if you are new here, it’s a show where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now I don’t bring on these famous entrepreneurs to simply celebrate their success, instead I have them take us back to the beginning, and delve deeply into the exact strategies they used early on to gain traction for their businesses.If you enjoy this podcast, please leave me a review on iTunes, and if you want to learn how to start your own online business, be sure to sign up for my free six day mini-course where I show you how my wife and I managed to make over 100K in profit in our first year of business. So go to mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini-course right away via email. Now on to the show.

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

Steve: Welcome to the My Wife Quit Her Job podcast. Today I’m thrilled to have Glen Allsopp on the show. Glen runs the awesome site viperchill.com where he teaches people how to get traffic to their websites. Glen and I actually go way back to I want to say early 2010 where we were a member of the same blog group, and we’ve kind of loosely kept in touch ever since. He’s got an amazing array of articles that go in to incredible depth. I want to say that a short post for him is like 3,000 to 4,000 words. I’m not even exaggerating.

The reason why I follow Glen’s work is because he talks about topics that other people would not dare talk about. For example, he talks about his experiments with private blog networks. He goes in depth on analysis on link building, both white and grey hat tactics. He doesn’t write very often, but when he does, he always drops an atomic bomb in your head. With that welcome to the show Glen, how are you doing today man?

Glen: Steve I’m very here. Thank you for that awesome introduction.

Steve: It’s been so long, and jeez I’m so happy to have you on the podcast today. A bunch of people in the audience probably know who you are, but if you won’t mind just giving a very brief intro, how you got started online and the history behind ViperChill, your agencies and basically what you’ve been up to online.

Glen: Yeah, sure. It was my birthday last month. I turned 27 years old. The reason I say that just to put things into perspective. I actually started ViperChill 11 years ago. So I was 16 years old. You can go and check that in archives. You can see how terrible my website designs and my writing used to be. ViperChill was pretty much one of the first sites I started. It was actually the second website.

The first website I started was a Deejaying website. I was trying to get into Deejaying at the time. I wasn’t trying to get famous; I was just at home and having fun with it. I turned tables and stuff like that. I set up a website about it and no one came. I decided to learn about how Google works, and we started ranking for things like Deejay forums and reviews for particular equipments and stuff like that.
I realized I was actually having a lot more fun working out how Google works than it was actually learning how to mix tracks together and matching beats and stuff like that, so I started ViperChill. It was very much a kind of a diary of my SEO experiments. Like I said it was just something I seemed to enjoy far more than actually the original reason I had actually learned SEO in the first place.

As you said, we go way back, so I think 2008, 2009 something like that. I have 6, 7, 8 years now. I started plug in ID. I had just moved to South Africa. I got offered a job there when I was 18. Someone had found me, they were reading my blog, they found me on an SEO forum and they said, “Would you like to move to South Africa and come and work for us.” I was in college at the time. I had a part time job in a closed store in the UK. I turned it down. I thought it was ridiculous. I don’t know anyone in South Africa.

I goggled a bit about it and I was like it’s so unsafe, don’t go there. Like I said I was still living with my parents, still at home, I was like 16, 17 at this point. I told my mom like, “Hey this crazy guy in South Africa offered me a job to go and do internet marketing with all these big brands.” She said, “So you said yes?” I was kind of surprised and she said, “You know you don’t like college which is true.” I’m folding clothes in some shop and working out all my spare hours trying to rank websites in Google. She said, “Just go and do it.”

A few weeks later, I was 17 about to turn 18, I moved to Cape Town, South Africa and that’s where I started plug in ID. If anyone listening, it’s no longer online. I did end up selling that website. But yeah, that’s pretty much how we met and how my journey started.

Steve: I was just kind of coming through your blog and on your about page I think it said that you cleared 7 figures last year in 2015. I’m pretty sure that ViperChills isn’t really monetized. I was just wondering what you guys do actually just to generate revenue?

Glen: A lot of– we talked a bit about before the show. What I spent the last few years doing. Kind of go back to my original story a bit. I got to work with all these amazing clients in South Africa. I got to do instant marketing for like Land Rover and Nissan and Hewlett Packard, like the South African division. I got to work with all of these awesome clients, but the problem is, I soon learned when you are working with these awesome clients, although it sounds good, they are so slow to making any changes that you recommend.

You know if there’s an article I think they should write that could go viral, or an SEO change that they should implement to get more search traffic, that has to go to my manager, to their marketing manager, to their legal team, back to their manager, back to my manager, back to me. A change that should have really taken like a day for a personal website could take two months for one of these big clients. It wasn’t really ideal.

What I started doing on the side was I know about SEO, I know how to rank. I started deciding to rank more websites. I got into the affiliate kind of stuff and ranking websites that way. Like I said, one of the first websites was ViperChill and I just really loved doing SEO, and especially doing it for other people and new challenges and stuff like that. For the last two or three years now, we have built– so I say we is my business partner Diggy. We have built almost a dozen, so 10 or 11 I think maybe now niche focused SEO agencies.

So we have an SEO agency that only works with companies in Singapore. We have an SEO agency that only works with car dealers in the US, and so on. The reason I do that, is so it’s all one company, but the reason I separate all of the branding is because these companies, they want to work with someone who they feel, this is the guy I want. When you are selling SEO, you’ve got to compete with hundreds of thousands of emails that companies get saying, “Hey we can do SEO for you. Do you want SEO or do you want link building.” You don’t stand out. It’s very difficult.

What we did is we branded ourselves to say the SEO agency for Singapore, and yeah when we contacted people they would say, “Oh he’s doing SEO, but he only does it for guys in Singapore. He must know what he’s doing.” Pretty much all of my revenue for last year and pretty much the three years before that as well is just doing SEO for clients.

Steve: So that’s really smart. I imagine you pick very lucrative verticals to go into. You mentioned car dealers, right?

Glen: Yeah.

Steve: That means you probably own like all the SEO guys from the car dealerships I would imagine, right?

Glen: It’s actually very competitive space.

Steve: Oh it is, okay.

Glen: The reason I got into it is actually I found two brands. I’m trying to remember their names right now. I think one is called Auto Shop Solutions, and they build websites just for car dealers. There was another one who do like mailings, like direct mailings for car dealers. They print out the little fliers they can send out to potential clients and so on. I thought these guys have been doing a lot of money doing website sign just for car dealers. These guys are making a lot of money doing direct mail just for car dealers. I want to try SEO.

As I got into it, I did notice there was quite a bit of competition. Sadly I like to work remotely. A lot of potential clients do want to be able to meet you face to face as well which isn’t something that I wanted to do personally. But yeah, we do pretty well and like I said, as long as you have the right angle when you are approaching someone, you know, “This is my SEO Company. I only work with car dealers. I’ve researched how Google ranks websites in the automotive niche. I know the big competitors already. I know what kind of content people share in that industry. Would you like me to help you as well?” That’s pretty much…

Steve: That’s a very compelling argument. What I really like about you Glen as I mentioned earlier is that you cover topics that no one else really covers, and that just makes it super interesting. You talk a lot about SEO in your posts, and I was hoping to kind of steer the conversation towards like anomalies and grey hat tactics that are still working to rank in search today, even though Google has pretty much scared everyone from manual link building.

Glen: Right.

Steve: So let’s start with– you mentioned private blog networks earlier in our conversation. Are those still working, and is it dangerous?

Glen: First of all they definitely still work. Two to three years ago they were, I can’t say they were working better, but people were less scared to implement the tactic. So people were, I could happily say, “Hey, I run private blog networks,” and though people thought it was a bit, not purely white hat, they don’t really have such negative opinion about it. And then the official Google announcement came that we are cracking down the link networks. Everyone got scared and worried about it and so on. When Google say something you know people listen and they get worried.

I find today that the guys who do private blog networks and the people who build them generally do so privately which is myself as well. I still rank affiliate websites to this day and little niche websites. I don’t do this for clients, but I think it’s important to know what works. I think any good SEO should know all of the “earned links”– I’m making little speech bubbles speech marks with my fingers here. They should know what works naturally and what’s on the other side of the fence as well.

They are generally frowned upon by Google. They are kind of frowned upon if you say you offer that as a service or you do it. But as long as you can build them in a way that’s– it’s some way to review the website manually, it would look like a legitimate website, then for the most part you can be pretty safe.

That being said, you know if you are working with a huge client, you know like Land Rover or Hewlett Packard or something, obviously I wouldn’t go and do that for them. They could get a lot of negative backlash and so on. If you are happy to do it privately and for your own websites, it’s definitely something I would be comfortable recommending as long as you know the risks involved, but as far as doing it for clients and big brands and stuff like that, generally a no, no with that tactic.

Steve: I mean if you are doing a private blog network just for yourself, really that’s just a collection of websites then at that point, right?

Glen: Yeah, so it’s let’s just say you want a website, you want to rank for how to learn Spanish or something like that, and you want to sell a video course or an eBook or whatever on that topic, then you would go, and the way to rank in Google, a very simplistic way to break it all down is that you need links. So you need other websites linking to you. Now it’s not the easiest things in the world.

There are tens of thousands, maybe hundreds of thousands of websites on how to learn Spanish. They are all trying to compete. They are all on traffic from Google. They are all trying to get links. It’s not that easy. The short cut and the route many of us take is to go and build your own website on the similar topics, building out other websites on how to learn Spanish, and then linking them back to my original website in the hope that we’ll rank higher.

Steve: How do you get those, I mean there’s only so much time. You probably have to spend a lot of time to build up the sites in your blog network.

Glen: To be honest, my own experience is that the blog networks themselves do not have to be very good sites at all. Actually, especially two years ago, I would set up websites that were just three or four pages. They would still pass for what we call like link juice to what we also call the money site, that’s a website that we want to rank. They would still pass the juice. What you want to do is to kind of again the speed up the process which is why we do private link networks in the first place, and to kind of level the playing field a little bit is you want to find domains that used to be used for a website originally.

So someone had build a website, they’ve build a resource on the topic and for whatever reason, they let the website die, the domain expired, you can go and register it and so on. Then what we do is go pick up those domains that expired, put a website on it. There are people who recommend copying the old content. I would never do that.

First of all it’s illegal. But there are actually a lot of services out there that would copy the content from a website, how it used to look like before it experienced. But I will just build up new content on that website. And the reason we do this is because people were already linking to that website originally, so it kind of has again the most authority that it can pass on to your website.

Steve: Interesting. Yeah, I heard about this like a couple of years ago, but all of a sudden like no one started writing about it anymore. It’s still in fact is effective is what you are saying?

Glen: Yeah, and the reason no one is writing about it like I said is because of that Google update which made everyone, if you want to have a clean image when you are talking about internet marketing and SEO, then you kind of veer away from talking about private link networks.

Steve: I see, I see, interesting. So you recommend doing it just for yourself. I was going to say like the point of a private blog network is to be able to sell access to it. But it sounds like no one is really selling access to it. They are being extremely careful about who they allow into this network.

Glen: Yeah, there are certainly quite a lot of people who still sell access. I used to do the same. I don’t do that anymore. I actually sold the business that I did that with. So there are definitely people who still sell access to their private networks, but you are more likely to find them on private forums like Black Hat World and so on, than you are people being open about it in public like there used to be.

Steve: I see. One of the things that also intrigued me lately, and you are not the only person to have told me this, but there’s all these places where you can still buy back links on very reputable sites. Is that still going on with some of the larger companies that you know of, and like is it risky and where can you find places to do this?

Glen: What a lot of people do to get links on the most authoritative websites, and I’m talking about Forbes, Huffington Post, ink.com, entrepreneur.com, and obviously the respected big brands in different industries outside of business and marketing is that they connect with the people who are writing articles for those websites. Of course, Entrepreneur, they are not going to have a big section in their websites side basting sponsored links and here’s all the links.

What you can do is you can find someone who is regularly contributing to the website and say, “Hey I have a client, or I have my own website. I would like you to link to it. Would you sell a link in your next article, or is there anything else I can do for you?” I’ve heard of examples of people like fixing someone’s logo on their website in return for them writing about them on Forbes or something like that. It’s not always a direct money transaction, but generally it’s about reaching out to again the regular contributors. I can’t even speak today. I’m not going to try and say that word again. Reaching out to them and just seeing would they mention you.

That’s kind of– I wouldn’t say underground, but it’s you know, it’s not something that they are going to be saying, “Hey pay me money and I will write for you on Forbes.” You have to connect with them yourself and see what you can do with that. As far as buying links goes and seeing opportunities, what I recommend if you want to see how deep paid links buying goes on the internet is find– generally it’s kind of open source software and open source tools, and they allow you to sponsor the kind of development of their tool and in return they will give you a link back as a thank you.

Now of course any opportunity to get links, SEO will take advantage of. If you go to any kind of big open source software, open sourcing and people can get for free and they can download it and put it on their server whatever it is, even something like My SQL, they have a sponsors page, phpBB forum software. They have a sponsor’s page, and you will see the people who are already taking advantage of link buying.

And then because I’m a real total nerd when it comes to this SEO stuff, not only will I see, okay who’s buying all the links in this page, but then I’ll go and check all of the other back links and you know you it just– if you keep going and you keep going down the warm hole, and seeing all of the sites that are buying links somewhere, you will find all of these other opportunities in other websites where they are clearly buying links. Now, again not all of them are very open, so they are not all honest like hey, sponsor us for a $20 and you get a link.

Actually, one I contacted two weeks ago, has six sponsors and they look like kind of clearly generic websites, and they charge $10,000 a year for the link, so some people are paying a lot of money for these back links. Not all of them are open, and a lot of them you can see that the link is clearly bought, like it just doesn’t fit with the website. So maybe a website about WordPress themes and in the photo they have a link to law firm Michigan or something like that.

Although they don’t clearly state that they sell links, you can, and I generally do contact them, and how much are you selling links, how much do you sell them for and so on. Again it’s not something you will see out in the open too much, but there’s definitely a big industry and a lot of money being spent on links.

Steve: But if you can spot them, doesn’t that mean that Google can probably spot them as well.

Glen: Yeah, well here is the thing, let’s just say, I can’t remember which one. Say my SQL, what it is the other one, phpMyAdmin, they also have a lot of sponsor links on their website. There’s no way to detect whether I went and bought that for myself or someone bought it for me, and try to do negative things to my SEO. What SEOs generally would like Google to state– so a couple of days ago I read this amazing comment by Danny Sullivan.

He writes for Search Engine Land, pretty much the biggest authority on updates to Google and Bing and Yahoo and so on. His comments back from a few years ago when Google was saying no follow links in infographics and “no follow” just for everyone else means make sure that the link doesn’t count. You’re trying to get search, increase search engine rankings for it, and make sure you do that. And Danny said, “Google, will you just say we can’t do any link building. It would be so much easier than saying you can’t do this, you can’t do this, don’t do this, don’t do this.”

Yes, you have to be careful with any kind of link building. What I do is again, you have to keep your mind this, although I could buy and be buying links for myself, someone else could be buying them for me, and you know I could be penalized. I think Google has to be very careful, and the ideal solution for pretty much everyone, not only I think for Google’s reputation but for SEOs and link builders is for Google to just not count links that they don’t think are worth passing on.

I’m sure someone from Google already knows phpMyAdmin. You know it’s one of the biggest server softwares in the world used by millions of people. I’m sure if someone from Google found that sponsorship page, ideally they would just say this link isn’t passing any credit. You can keep buying it, you can keep thinking it’s helping your SEO, but actually we are not passing on any weight from this domain.

Again, although some of these links are very easy to spot, we don’t know who’s buying them. It could be someone trying to hurt the reputation of someone else. So ideally they are just not counted and you don’t really know.

Steve: If you decide to go this route, what are some best tactics to avoid getting penalized?

Glen: If you are going to be buying links?

Steve: Yes.

Glen: I think the safest route is generally to try and get links in content. So contacting webmasters who blog, people who write for these big websites. There’s no– without speaking with the writer directly, there’s no guaranteed way to know whether or not a link was paid for. In my view although it’s a bit of an idealistic view, if I find a website of mine got penalized, and again this happens very, very rarely these days.

Actually the people who tend to get penalized are the ones who are very public about their websites. I think it was Spencer Haws from Niche Site Pursuits. He was doing, he was using– I can’t remember exact thing. I think he was using PBNs, but he was very public about his case study and what was going on, and then a few months later on he got a thin content, or a bad back link warning, or something like that from Google.

So it’s generally the guys who are public about what they are doing with SEO tend to get caught, because they are kind of admitting to their process, and those who are– I don’t really see any big penalties happening for a lot of sites. For example the last major Google penalty that kind of got the SEO world talking was for Rap Genius, and this was a couple of years ago now.

They describe what Rap lyrics really mean and song lyrics, and they get millions of visitors a month. They were found to be doing some shady stuff like openly asking their audience for reviews and back links and so on, and they only got caught because they were actually asking about it in public. It wasn’t something like Google detected themselves. Someone blogged about it, and SEO blogged about it, Google saw that SEO’s blog post, and then they got penalized.

So as I was going to say, if I find a website of mine is going to get penalized which is very, very rare, it hasn’t happened for a long time, I could theoretically go on build the same links for my competition, get them penalized and have a better website of mine ranking high.

Steve: Right. So what’s really cool is that as I was just combing through some your articles in the last year, and you are pointing out that a lot of big companies are getting away with just blatant link building. And would you consider that black hat, grey hat, and why are they getting away with it?

Glen: The post I think you’re referring to is my article 16 companies dominating Google?

Steve: Yes.

Glen: So originally that post was entirely supposed to be about one network. It was about Hearst Media and for those who don’t know Hearst Media they own brands like, Elle, Esquire, Cosmopolitan, Woman’s Day and so on. So they owned a lot of fashion titles and they took those to the web, and they all started linking to one website bestproducts.com.

Now, I see nothing wrong with that, okay so Steve if you start a new website, it’s pretty normal for you to want to link to that from your own website not necessarily for such traffic and rankings, but to let your audience know I have this new website, and it’s fairly normal to want to link it from your website.

So what they were doing is for all of their websites Cosmo, Elle, Esquire, Vogue, and so on you will see in the footer of those websites every single one of them links to a brand new website which is bestproducts.com. Now again, because they own the website, I don’t see anything wrong with that tactic. However, what I don’t really like seeing is that Google have massively rewarded this tactic. I can’t remember the exact numbers, but this Best Products is now getting a few million visitors per month from Google, and it’s only a couple months old.

So anyone else trying to do the same thing for a product review website unless you work for one of these big brands, then you have no chance of getting those amazing links. So in my theory again Hearst weren’t doing anything wrong, but I really don’t like seeing Google give them so much weight, because it’s not something someone else can replicate, and in other words it’s just big money taking over.

So I wouldn’t say it’s black hat or grey hat or anything like that. It’s totally normal for a website to want to link to their other websites, but as far as Google are giving it so much credit is pretty disappointing for the SEO world.

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Steve: So there’s another example you gave I think on a different article where Houzz was putting in links on their widgets or something like that. I mean is that blatantly black hat too?

Glen: Yes. I tend to find black hat as hacking websites and stuff like that. It’s very negative term to me, so I will put this more on a grey hat side of things. So what they were doing, so Houzz, I think they are going to IPO next year and probably for a few billion dollars they’re valued at the moment, home design community.

You can put a widget on your website showing like bathroom photos or the latest house photos in that community and so on, and what they were doing is they were sticking in I think it was about ten links to all of their pages on their websites if you installed the widget. So you think the widget preview just shows you that you are going to get nice bath photos that you can put on the side bar of your home design blog, but in reality when you install the widget you had ten links to all of these different pages on Houzz.

Now I audit them, I don’t really like auditing, but I hated seeing this, because there are a lot of webmasters who had no idea. They are just normal mom and pop bloggers, whatever. They don’t think about link building and SEO, they are putting these widgets on their site, and they’re suddenly linking to all of these pages on Houzz.

They don’t really know what it is and what it’s for. So again I audited them on my blog, and within 24 hours they took away all of those links, they removed all of the links from their widget. No comments, no emails from them, but I was pretty proud of that. It’s nice to see and I checked…

Steve: It’s clearly working, right?

Glen: Yeah clearly working. Their search traffic was through the roof. And so I checked a few months ago, and although they removed it previously, they have now added one link back. It’s fine to add a link in a widget, but should really be no followed again. That’s kind of telling Google don’t count this link as something for search engine rankings. They are not doing that. They certainly should know that there should be no following that link and they’re linking to the photos pages on their website.

I’m pretty sure it’s just houzz.com/photos and that’s H-O-U-Z-Z for anyone again for people listening houzz.com/photos, but that links to all the other main pages on their site like bathroom photos, bedroom photos, kitchen photos, and those such terms they’re ranking pretty number one for everything in Google. Their search terms are sending them hundreds of thousands of visitors every single month. So again they went back to the kind of that shady grey hat ways, they are putting links on people’s website that people don’t know about, and they’re getting a lot of search traffic in return.

Steve: How do you feel about, let’s just take about a WordPress plug-in for example, like a free plug-in, but within that plug-in there’s like a little back link going back to their site? I mean does that tactic work, and how do you feel about that in terms of risk?

Glen: If the link is– on a general level forgetting about such changes for a second, I think that’s fine. If you’re using a free plug-in and add something to your website you give credit to the author. Now when it comes to search, Google recommends and strongly recommends that you no-follow that link again. So you’re telling them don’t use this link as something that would count for my search engine rankings, but it may send me traffic from that website to mine which is fine.

So if it’s going to be a popular plug in and it’s going to be used by a lot of people, very risky, someone’s going to mention it, someone’s going to talk about it, maybe Google are going to find it. Another thing, you have to be worried about is having too many links with the same text. You have … If I’m trying to rank for a holiday in Spanish. Even 90% of my links are just holiday in Spanish. There is something very odd going on there unnatural. It’s probably going to set off a few flags …

Steve: Houzz has been getting away with this right, maybe because they are such a strong domain that it doesn’t matter as much?

Glen: Yeah, exactly that’s pretty much my theory is that because they have many types of links anyway, some that don’t fit into the ideal criteria, they are left alone. To be honest that theory was thrown away when we see what happened when Hearst Media sent all their links to BestProducts.com. They didn’t have any other type of link, just links from every page in the footer of their other websites and now they are just ranking for everything in Google.
Again this is the reason I test so much, and the reason I write infrequently, but when I do I try and cover something in such depth is because what Google always say and what they recommend and what should be the case is actually very often not the case at all. Houzz get away with it one because Google didn’t find it. They are definitely not as smart as we think they are.

Two they have a strong brand and they have so many links that they negate the less quality ones. Again Best Products showed us that Google just aren’t good at saying these links shouldn’t count. They’ve got to scan what billions of web pages every day, rank for billions and billions of different search terms. There’s going to be a lot of things that they get wrong.

Steve: One thing I wanted to talk about is a lot of people listening they are not going to have really strong domains or really strong websites. I wanted to just switch gears a little bit and just talk about how you would proceed to rank let’s say a brand new ecommerce site in search. What would be your strategy at a high level?

Glen: The first thing I would do is just make sure all my onsite stuff is good. I don’t have a lot of duplicate pages. I’m not duplicate content everywhere; you want have a unique descriptions for your items and so on. Just always, although links are the most important factor you definitely just want to make sure you take care of the fundamentals to make sure that when you are getting links that they actually have a bit more effect. If I was going to start a brand new ecommerce blog I would definitely focus on trying to be creative and very transparent. I’d have a blog on there, content marketing. Although I’m focused on a lot of other aspects of link building I actually enjoy content marketing the most. I love having ideas for content and actually putting it out there.

In the ecommerce industry for instance I think you have to be creative. For example one company, it’s a bit borderline on ethics, but they are a slippers company in the UK and what they did is they ordered a slipper in size 43. That’s UK sizes; no more if it’s a 10 in UK it would be 43 in America. We are talking about a 44 in the UK, whatever that is in the States. They ordered it from China, and then they created this article saying, “Oh we ordered some slippers from China but they got our size wrong. The guys are sleeping inside the slipper, they got our size wrong.”

And obviously everyone started talking about it. Everyone linking to it, they got links in the Daily Mail, the Metro in the UK, they Guardian Newspaper. Look what happened when these guys ordered slippers from China. They got, lost in translation, wasn’t the case at all. They ordered the slippers themselves; it’s a viral stunt. It depends on your definition …

Steve: Let’s talk about that a little bit. How important is it to be deliberate with the keywords that you are targeting for a post as opposed to just making something go viral?

Glen: Well the thing that you have to keep in mind is that links to a page to spread throughout a website. They started ranking for slipper related terms but if people are searching for slippers they don’t really want to read an article on big slippers, they want to actually buy the product.
What you have to do is there’s two things; first of all keep in mind that the link authority and link juice whatever you want to call it should theoretically flow through to other pages on the website so you have your category pages ranking higher naturally. The other point is make sure there are elements on the page, on that page that will direct people to relevant product categories on your site.

For example Amazon, they rank for pretty much everything but those internal pages don’t actually have a lot of back links. It’s just because their domain as whole has built up so much authority. As long as you are getting links from other sources they don’t always have to be for specific keywords to a page that you actually want to rank high in Google when people are searching for product terms but it should help your website authority overall.

Steve: Interesting, because right now for my blog I always take the time, I fire up Long Tail Pro, and I look for keywords that I can rank for pretty easily for the post but it sounds like I should probably be mixing those up with maybe viral titles to just attract more back links which in turn will spread that juice to my other posts. Is that accurate?

Glen: Yeah I think it depends on the audience. For your blog, you have a specific audience. I think it would be a bit strange for them if you suddenly started writing things with click bait titles that were clearly designed just to attract links. I think that might put your audience off a little bit. Whereas an ecommerce brand they don’t, if they don’t already have a following like you said it’s a new site they can test new things and get away with things a little bit better.

One website I found doing very well with this was a … I think they sell kilts and just men’s clothing basically. They created a tactical army kilt. They created this kilt with all these pockets and so on, and it was a fake product, but everyone started talking about it and they got many requests that they actually made it into a real item, a kilt that you can actually take into battle with you. Yeah it got a lot of people talking.

It depends on your audience. I’m trying to think of a big clothing brand. Like a Louis Vuitton or Gucci or something like that it would be very bad for their brand to try and put out these viral stuff in order to get links and so on. For someone just starting out in this specific niche industry can definitely be a way to get people noticing your brand.

Steve: How do you feel about having the blog on a sub domain as opposed to the main domain which is what you might have to do with if you use a fully hosted shopping cart for example? Is it an absolute no, no?

Glen: I definitely prefer a blog to be on a sub folder. How Google worked for a long time and I believe this still to be the case is that a sub-domain is essentially being thought of as a new domain. Any “juice” that you want to pass from the sub domain to the main site isn’t really there unless the blog itself has a lot of links to it. Whereas as you are on a sub folder the authority of the main domain is passing authority to those sub pages and now those blog articles can rank higher because of the authority of the demand.

Preferably if you have the option definitely you put a blog on a sub-folder. If it’s going to be an integral part of your marketing anyway and you are going to be taking it seriously people are going to be linking to your blog. If it has to be on a sub folder, people have made it work, it’s definitely not impossible but ideally it would be on a sub-folder for me rather than a sub domain.

Steve: Okay and since we’ve been talking about grey hat tactics would you employ any of these tactics to give a boost to an ecommerce store if you were starting out?

Glen: As long as they know the risks involved then it’s something I would do. For example if I could get someone on the Huffington Post I don’t know what I’m selling. Let’s just say I’m selling a new line of designer glasses.

Steve: Sure.

Glen: If Huffington Post are doing a blog post, if they have a writer who talks about accessories and fashion and stuff like that. If I could suggest to them do a blog post comparing the UV protection of cheap sunglasses compared to for a dollar or those that costs $300. Giving them ideas for content and getting links from them and maybe the case that it’s a friend of mine or I paid them for that mention.

Or I gave them advice in their own websites, in their careers, something in return for that link. In Google’s world, ideal world I wouldn’t get that link or it shouldn’t count because I actively went out to seek that link unnaturally. Whereas to me what … I guess the simple solution is to try and build links that will also send traffic.
Do people really go and check out the sponsor’s page of phpMyAdmin? Not really, do they really go and click on these links not really. If I’m commenting on blogs or I’m participating in forums or I’m trying to offer great content on my website all of the things that could also get traffic to my of site then it’s generated the links I would want to build. Sometimes there are … Google have made it so that people are scared to do any link building.

In their eyes pretty much anything could be seen as grey hat if it’s not somehow I just got … Randomly got a link from these websites, it just happened. I actively go out and seek links. I guess that’s always seen as against their guidelines, but for a new site I’ll definitely try and reach out to influencers and authorities and see if there is any way I can get them to talk about me and of course send links back to my site.

Steve: Using that Huffington Post example, essentially Google has forced us to use social engineering to get these links. I was just curious what your strategy would be to reach out to someone on Huffington Post in your example who is writing about fashion or whatever that could be relevant to your store.
Glen: Sometimes it’s very obvious and that someone is already sending out links that are on a page basis. For example there is a guy … I’m not going to say his name. There is a guy who writes for Businessinsider.com in their wall room section. Very clearly half the articles he writes are … I don’t know if it’s him personally being paid or Business Insider trying to do in content ads or whatever it is, native ads if you want to call them.

I don’t know if it’s them collecting the money, but those articles are clearly being paid for. In that case I would just go to the guy and say again I’m trying not to say his name. I would just contact …

Steve: No that’s fine. What are some elements that you can instantly determine that these links are paid for? Are they just totally out of context or?

Glen: It’s just too much promotion and nice things and so many links. The one I saw recently was like this guy writes the best blog on this topic and then with a weird keyword link. He also just has a new book coming out which you can find here, I really recommend it. It’s just whereas if Mark Zuckerberg does something they’re really critical.

Whereas this new guy who no one’s ever heard of they are super nice about it and they just want to link to all pages of his website, which really stands out to me. Yeah you can just watch, for example one person I found recently is actually a team of people, 4 or 5 guys. I just noticed that in half the articles they were writing for Forbes and Entrepreneur they were all linking to each other.

You would say, “Guys look I know what’s going on.” I’m often very direct, “Look I know what’s going on I want to get in. I want to get a piece of this action as anyways get involved.” Same for Business Insider I would be very direct. Whereas if I wasn’t too sure or I just wanted to reach out at someone from Huffington Post I would generally just say something like, “Hey I really enjoyed your article about X. I also have a website like this is there any way we could discuss how I could help promote myself, it could be worth your time.” Don’t directly mention money or anything like that just saying, “I’m happy to … I’m happy to do something in return for your time.”

Steve: Interesting and when the people do respond do they just give you a rate sheet or how does it usually work, the conversation?

Glen: Funnily, if it’s a website, if I’m buying the link directly from a website and not a writer for one of these things they will literally reply with 2 sentences. “Hey Glen … “Actually I don’t use my name but will reply to the person the alias that I’m emailing from. If they see it’s from ViperChill as they go its, he just wants to write about me and selling links or whatever. They will say, “Hey yeah homepage link is $20 a month, if you want me to write a post for you its $100. If you want me to write the content it’s $150.” They’ll be very, very direct in their response a lot of the time. Other people will dismiss it.
If you do email someone who would never accept money which is a lot of people they will just ignore the email. Other people they are, “Yeah what do you have in mind.” I have an upcoming article on X, I could probably mention it, would you pay for that and so on.

Steve: Okay how do you feel about services like Tomoson which are places where you pay money for bloggers to review items?

Glen: What was that website sorry, Tomoson?

Steve: Tomoson yeah.

Glen: I don’t know about it personally.

Steve: Okay or just sites in general that hook you up with bloggers that are willing to review products.

Glen: Well the one thing that you have to be wary of is one of the links no follow or due follow, are they going to pass any juice? If they are generally the ones that aren’t going to be passing link authority, link juice. If they are is it easy for someone else to be able to do the same? Can a hundred people go to that same person and get links that’s going to look a bit dodgy for your website.

It’s going to … Maybe they are going to get flagged in the future or something like that. The one thing you want to be careful of in any network is you want to make sure that you don’t know about the website upfront. I don’t want … If there is a big database of all of these people selling reviews then that’s a bad sign. It’s very easy to see then of course someone else can see that, someone else being Google staff could see that and potentially crack down on that also.

As far as traffic and stuff goes again now everything is about search. If it could send you traffic go for it but probably you might want to as for that link to be no follow. If you are trying to get due follow links then just make sure it’s not too easy for everyone else to do the same and then not too obvious about what they are doing.

Steve: Okay and I’m just curious I’m jumping around a little bit here but what are your views on just content on your blog in terms of being a little thin? For example let’s say you had a blog for 5 or 6 years and some of your earlier posts are just really crappy. Do you recommend going back and deleting those or going back and rewriting them to make them much more complete? What are your thoughts on just kind of going through your old content?

Glen: Yeah I think I’m actually doing that right now. I rank 4th, 3rd or 4th in Google anywhere you search from, for WordPress SEO. I’m actually going to talk about interesting little text here right now and that post written in 2010 or ’11 I think it was. It still ranked for that even though it’s 6 years old. I have actually been working, that was around a 3,000 web post. It’s actually now a 10,000 word post in Evernote.

Steve: I was about to say 3000 words is pretty short for your Glen.

Glen: Yeah it’s about 10,000 words in Evernote. I still have to format that and spell check it and then I’m actually going to update that article because it still gets so much traffic. I definitely recommend to answer your question directly, yeah. If you can go back the way to maximize your time is to see which pages are getting the most search traffic already and start with those. They are …

Steve: Just turn those into much more comprehensive resources?

Glen: Yeah more comprehensive resources and just implementing things that are more talked about today. For example content upgrades, where you can offer someone a PDF of your post or a checklist that they can follow. They weren’t popular a few years ago; people didn’t used to use them. Now you can implement that in an old article and start getting more email subscribers for that post.

That’s exactly what I’m going to be doing on my WordPress SEO article. Making a more comprehensive, more up to date, more relevant, checking that the sources that maybe you linked to in the past still exist and so on. Maybe adding content upgrades, maybe linking to other relevant pages and posts on your site that you didn’t have previously.

Going back to what I did, that … like I said the articles was written in 2010 or 2011. Around 3 years ago Google made a massive update around freshness. Pretty much all search results had a date in them when the article was published. You’ll see that now you can search for anything, personally development, marketing related. You will see a date for a lot of results, not all of them for when the article was last updated. I had dropped to … What I did first of all it looked bad.

I thought people were going to Google searching for WordPress SEO in 2013 and they are seeing my article is written in 2010. They are probably not going to click on the result. I added a line of text, the first line of text in the article I changed it to last updated June 2014 or something like that. Within a few days Google noticed that change and everyone then assumed my article was fresh, I didn’t change anything else on the page.

Steve: Interesting.

Glen: I only changed the first sentence and then it looked like it was a more relevant article. Now I actually did this, I am planning to update the post but I did this as an SEO experiment very recently. I once again changed it. If you go to viperchills.com/wordpress-SEO the only thing I changed in the article was the first sentence that says last updated March something 2016. Now the reason I did this is because my page had dropped to 7th or 8th. My ranking had dropped 7th or 8th in Google for WordPress SEO and WordPress SEO guide.

Now 2 years later I updated that text showing that it was more fresh and my rankings have came back up to 3rd or 4th. It’s just something slightly unethical at least if you haven’t actually updated the page. For me it was an experiment to see are Google still giving value to content that they believe is more fresh, and I definitely believe that is the case.

Steve: Do you think that’s why comments are important because when someone leaves a comment technically that updates the page right?

Glen: Yeah originally, and I’m actually working on a big article for this that’s why I’m interested in it right now. Is that originally comments didn’t seem to be affecting the date that Google were picking up on. Actually a lot of bloggers that removed their dates from their comments because they didn’t want it to look older than it was. You’ll see that in Ramit Sethi, my friend Ramsey.

Steve: The same thing I did too yeah.

Glen: Yeah and was yours because of SEO reasons or just …

Steve: It was more because I didn’t want someone to come in and see an old article and just immediately dismiss it.

Glen: Right okay, yeah I can understand that. Definitely a lot of people did it for SEO reasons. I faked that in a way but I do plan on updating the article. As I was saying comments didn’t used to seem to be noticed by Google, however the dates are now. A good example of this is Udemy, the online training community.
If someone writes a new review on the page for a course Google will take that date for the latest review and put that as when the course was actually last updated. Even though the course could’ve been published years ago people now see it in search results and think, “Hey it’s only … It was updated 2 days ago, I’ll click on this.”

Steve: Interesting. Okay you are suggesting that adding the dates back into the comments might be valuable from a freshness perspective?

Glen: Absolutely, and but of course there is the other side of the coin like you said someone comes to my article in WordPress SEO they see a comment from 2010 they would concern that it’s still relevant today.

Steve: What are your views on the disavow tool and removing potentially bad backgrounds? Do you ever use that tool at all?

Glen: Yeah I think it’s a huge pain to be honest with you. It’s like Google are outsourcing their own job. As I was saying earlier it would be so nice if Google just … If they could just figure out we are not going to count these links. You don’t have to disavow them but we are worth more than $100 billion we are just going to … We are going to use our engineers and find out which links we should encounter.
We are not going to count those links, whereas they are saying, “Go out there and actively tell us which links you have that you don’t think are relevant.” And we are in Google’s playing field so there is not really too much we can do about it. If you do have a lot of links and you have warnings and stuff and webmaster tools then it’s just something that you have to do.

Steve: Okay you do use it but only when you get a warning or do you proactively do it?

Glen: Yeah if I’m taking on a new client then I’ll proactively do it just to … If I’m going to be building good new links, I want them to have the best effect possible. I don’t want to it to be, the website to be hindered in any way from any previous link building and stuff like that. If I was taking on a new client it’s something I would look into proactively.

Steve: I want to like end with a friend contacted me, and he knew that I was talking to you today. I just want to ask one of his questions to you.

Glen: Sure.

Steve: He has this domain and no matter what he does, and there is no panel he is associated with it, he can’t get anything to rank. Is it fair to say that there are certain domains that are just dead to Google and that you should start with a brand new domain? Have you ever seen that happen?

Glen: I have seen that yeah. Actually funnily there was a period 2 years ago when all dot info domains were removed from Google. There were slip offs that Google can make where a domain just doesn’t get rankings. There was a case I’m trying to remember the name, I think it’s Slash Film, a very popular movie review website. All of a sudden they lost all their traffic overnight, and there was a lot of other movie review websites complaining on Twitter saying hey we’ve lost all that traffic.
Eventually one of Google Googlers got in touch with them on Twitter saying, hey we had a little mistake there, we are going to rectify it in a few days. It’s something that Google can do on their end and you may not get any warnings, you may not really know about it. It’s definitely possible that something’s happened to that particular domain and you should start new.

Before he does that I definitely rule out that he’s just … Make sure he is not ranking just because he doesn’t have links or it’s very, very competitive and so on. Yeah definitely rule all of the obvious stuff out before he does go and create a new website.

Steve: Okay, hey Glenn we’ve been chatting for quite a while, and I want to be respectful of your time. I learned a lot today. Where can people find you if they need either your services or they just want to check out what you have to put out, or if they have an hour to read one of your posts?

Glen: Steve, thank you so much for having me. Sure they can find me on Viperchill.com that’s V-I-P-E-R-C-H-I-L-L, that’s the same username for Facebook and Twitter. Yeah just pretty much ViperChill is the best place, we can go from there.

Steve: Okay and you guys should really sign up for his email list, because in my opinion you can correct me if I’m wrong, you put out stuff on your email list that does not go out on your blog or anything, right?

Glen: Yeah, actually the first email I send if you join my email list is more than 40 … more than 30,000 words of content that I don’t link to anywhere else, just in the first email.

Steve: Yeah, but his posts are really addictive, and you should just go checkout his blog first and if you like what he puts out then sign up for his list by all means.

Glen: Thank you very much Steve.

Steve: All right Glen, thanks a lot for coming to the show man, I really appreciate it.

Glen: Cheers man, have a good one.

Steve: All right take care. Hope you enjoyed that episode. What I love about Glen is that he’s not afraid to talk about this grey hat SEO techniques. He never hesitates to call out larger companies for their actions. He always tells it like it is and he knows a tone about SEO from practicing what he preaches.
For more information about this episode go to mywifequiteherjob.com/episode128, and if you enjoyed this episode please go to iTunes and leave me a review. It is the best way to support the show, and please tell your friends because the greatest compliment that you can give me is to refer this podcast to someone else either in person or to share it on the web.

Now if you are interested in starting your own online business be sure to sign up for my free 6 day mini-course where I show you how my wife and I managed to make over 100K in profit in our first year of business. So go to mywifequiteherjob.com for more information, signup right there on the front page and I’ll send you the course via email immediately. 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.mywifequiteherjob.com.

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In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

127: How Nathan Latka Created The 8 Figure Business Heyo.com By Age 24

127: How Nathan Latka Created Heyo, An 8 Figure Business By Age 24

Today, I’m thrilled to have Nathan Latka on the show. Nathan is the founder of Heyo.com which is a company that does social giveaways for Facebook and other social media platforms.

Now what’s amazing about Nathan is that he started this 8 figure company at age 24 and then recently sold it to his main competitor for a nice sum.

What’s also cool is that Nathan started his businesses knowing absolutely nothing at age 21 and actually made 70K worth of revenue before he ever started building his product.

His story is truly inspirational. Enjoy the episode!

What You’ll Learn

  • How Nathan came up with the idea of starting Heyo
  • How Nathan pre-sold his first customers with nothing
  • How he found his partners
  • Nathan’s primary marketing channels
  • How Nathan grew Heyo exponentially

Other Resources And Books

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Transcript

Steve: You are listening to the My Wife Quit Her Job podcast, and if you are new here it’s a show where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now I don’t bring on these famous entrepreneurs to simply celebrate their success, instead I have them take us back to the beginning and delve deeply into the exact strategies they used early on to gain traction for their businesses.If you enjoy this podcast, please leave me a review on iTunes and if you want to learn how to start your own online business be sure to sign up for my free six day mini-course where I show you how my wife and I managed to make over 100,000K in profit in our first year of business. So go to mywifequitherjob.com, sign up right there on the front page and I’ll send you the mini-course right away via email. Now on to the show.

Welcome to The My Wife Quite Her Job podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here’s your host, SteveChou.

Steve: Welcome to the My Wife Quit Her Job podcast. Today, I’m thrilled to have Nathan Latka on the show. Nathan is the founder of heyo.com which is a company that does social giveaways for Facebook, and other social media platforms. What’s amazing about Nathan is that he started this eight figure company at age 24, and then recently sold it to his main competitor for a very nice sum.

Now what’s also cool is that Nathan started his business knowing absolutely nothing at age 21, and actually made $70,000 worth of sales before he even started building his product. Now his story is truly inspirational and with that welcome to the show Nathan, how are you doing today man?

Nathan: Steve, thank you for having me man. I’m excited to be here.

Steve: Dude you know what, when I was in college I wasn’t doing any of this stuff. I’m just curious, how did you come up with the idea of starting Heyo. What’s the backstory here?

Nathan: Well, there’s not, I’m not going to try and make this sound sexy or anything other than what it actually was which was insecurity. I mean I was an architecture as a freshman at Virginia Tech. This is 09, and I overheard fifth years complaining, whining, pitching, and mourning that they couldn’t get a job, because no one was hiring architects after financial crush. I said, “No way I’m going to put myself through 5 years of college and do not have a guaranteed job at the end.”

I got super insecure and Steve that night I’ll never forget it. I went back to my dorm room, 12 foot, by 10 foot white cinder block stacked on top of each other. I was wearing my ex-girlfriend’s red Christmas boxer she had bought me, and I just started cold calling people who had Facebook fan pages with the word executive in them. And I would convince them on the call that they needed an executive Facebook fan page which coincidently I had.

Steve: How did you think about that? I mean, it seems kind of random.

Nathan: I mean, part of it was, right. I just wanted a way to make money. I mean, I went back to my dorm room and said, “I don’t have to rely on college or a job, how do I make money.” I’m like, “Well I’m using Facebook already as a college student. Let me search how businesses are using it.”

I learned that businesses use these things called fan pages, and I said if I can call up some people who have big egos because they have executive on their fan page title, convince them and like take a shot at their ego and make them feel vulnerable, and then be able to feel that vulnerability with my product, boom baby, I got a business.

Steve: How did you decide on your first customer list? Did you cold call these people?

Nathan: Yeah, they were. I was just cold calling people. I literally even do it today. I just went to Facebook, in the search bar I typed executive and a bunch of fan pages will come up with kind of like [inaudible 00:03:21] or something there for executive, or other people that call themselves an executive. Then I would look in their about section on Facebook page and get their phone number and call them and go from there.

Steve: Interesting, so you mentioned barefoot executive. Was that your first victim, I mean customer?

Nathan: Yeah, she was my first customer. By the way, like the least egotistical person you’ll ever meet. Amazing, amazing lady, but yeah she was the first $700 sale.

Steve: Okay, so how did you come up with that number? Just all seems kind of random to me. So you just cold call her and said you wanted to create a Facebook page for her for $700, and she said yes?

Nathan: No, it way more psychological warfare than that. It was, “Hey Carrie. My name is Nathan Latka. I’m just calling because I see you call yourself the Barefoot executive, but I noticed you don’t have an executive fan page tab. Are you an executive?” And she’s going to do one of two things when I say that. She’s going to say screw you and hung up, or she’s going to go what’s an executive fan page tab?

Thankfully she did the latter and gave me an opportunity to explain what it was, which was a landing page kind of tab on Facebook, where she could capture emails and run contests and things. Eventually she agreed to purchase and I said great, here’s my PayPal button. You can deposit $700 and then I need 6 months to deliver you the quality of product that I want to deliver to you, and if I can’t, I will refund you. The rule is when I did because if I didn’t make enough sales, I would refund everybody because it wasn’t worth my time to learn how to code.

Steve: Sorry, so your initial thing was just a PayPal button. It wasn’t on a website or wasn’t on a Facebook page with the PayPal button.

Nathan: I setup my own Facebook page for free. I couldn’t afford to go daddy domain. So I just did my own Facebook page with a PayPal button built in.

Steve: Okay then you’d used this same strategy. Is that how you made that $70,000?

Nathan: Yeah, exactly. So I sold over the next 6 months from my dorm room. I sold hundreds of those at 700 bucks a pop and then started watching YouTube videos on how to code something called FBML Facebook markup language. And that’s how I started building pages.

Steve: So your delivery time was 6 months and that was acceptable for everybody?

Nathan: You are thinking about it the wrong way. They are thinking about, “Wow if it’s going to take him six months to deliver the quality that he wants, it’s going to be an amazing quality, right?” It’s all how you word it. It’s positioning.

Steve: Okay. It’s a Facebook page though right?

Nathan: Yeah, yeah.

Steve: Okay.

Nathan: I mean look you work with an agent and if you hire an agency, they are like, do like, social making and [inaudible 00:05:33] crazy stuff now or designs or logos, I mean some of those take many, many weeks. I mean it wasn’t crazy. You just have to understand, it’s all comes down to the positioning.

Yeah, sure anyone listening who was skeptical was going to go, “Why the hell do people give him 6 months?” It’s because you didn’t get my kung fu judo skills on [inaudible 00:05:49] where I say like, I have to– I am coding this in FBML. I want to make sure the graphics are exactly right. I want to make sure the hexadecimal codes match your website colors perfectly. I want to make sure we get your MailChimp form embedded perfectly. I want to make sure this works on mobile as well.

So I’m going to need 6 months to make sure I deliver you the quality of product that you would expect from yourself, all right. And if I don’t, and if I can’t deliver you that kind of quality, I will refund you after 6 months. And it was a no brainer.

Steve: Okay, so you are not a technical guy from what it sounds like.

Nathan: That’s correct. I was architecture.

Steve: Okay, so you get a hundred people to sign up, and you’ve got to deliver that within 6 months. So you are busy learning how to do this on YouTube. Did you start doing them by hand or what was the next step?

Nathan: Yeah, that’s right. I did them all by hand. So just on my own– like I would use templates and edit the templates for each customer, but I did them all by hand. Eventually what I learned was I brought on 2 technical cofounders, and realized I didn’t want to spend my time building every page.

That’s like what an agency would do. To really build a big business, I needed a software platform where they could pay me monthly just go build their own pages using drag and drop technology. So I gave up 40% of the business to two technical cofounders. We grew it…

Steve: How did you find your partners?

Nathan: I created the entrepreneur club at Virginia Tech specifically to undercover, recruit 2 technical people. And then on the second or third meeting that year, I just said, “Hey guys I’ve got 70 grand in presales. Here’s my PayPal account with a screen shot. I need two or one technical cofounder. I’m willing to give up 40% to one set.” These two guys raised their hands. They both wanted to do and I said fine. Both of you can join. I barely knew the guys. I said but you have to [inaudible 00:07:25] 40% and that was that.

Steve: Okay, so you didn’t vet them or anything? These are just random college students?

Nathan: Yeah, that is one of my biggest mistakes. I knew these guys for about 2 minutes before we were signing founder agreements.

Steve: Oh my goodness. Okay so this was the precursor to Heyo, or was this Heyo?

Nathan: This was the build, yeah– we launched it as Lujure and then we renamed it as Heyo. But yeah, this was the same business.

Steve: Okay, so let’s talk about that a little bit. How did that work out and why was it your biggest mistake?

Nathan: Well, because I’m an action kind of guy. I like moving fast, but that was just a big mistake because like one of those guys ended up having a kid at year end, another one just didn’t align. So neither of them are with me anymore.

Ultimately, when I sold the business, there was a large chunk of equity that was on you know, I like to call it unallocated basically equity which is equity that is out of a business that’s not active. That’s never a good place to be. Thankfully we were able to buy some of the equity back, but you want to always keep equity active in your business.

Steve: So these guys actually invested a good portion of their stock?

Nathan: Yeah, I didn’t know what investing was. So everyone was vested from the outside which was like not good.

Steve: Oh okay, so they had 40% right off the butt.

Nathan: Yeah, you have to remember Steve, I’m like– like this is pre-puberty Nathan. I was like, I know nothing about business.

Steve: How old are you now Nathan, I’m just curious.

Nathan: 26.

Steve: Okay, so this is six years or five years ago.

Nathan: This all when I started when I was 19. That was when the presales came in, and when I started to get the thing going.

Steve: Okay so you have these customers, you do everything by hand, and then you start with this technical cofounders. What was your role at that point? Was it to get more business or?

Nathan: Yeah, yeah everything except coding. Sparking out new products docs to pass to them, you know, YO framing, new customers, webinar, support, all that stuff.

Steve: Let’s talk about some of these primary marketing channels. So early on when you had nothing, how did you get your first customers?

Nathan: Well me cold calling. So everyone who purchased the $700 one I did up-sale them a $30 a month plan to say, “Hey if you want to make edits on this instead of paying me 700 bucks every time, just pay us 30 bucks a month and you can edit whenever you want.” That’s why…

Steve: Okay, Nathan you are a really amazing sales guy, can you pretend I’m like one of your target customers. What would you say to me?

Nathan: Hey Steve. So you call yourself executive Steve on your Facebook page, but look I’ve done some research on this and I don’t– It doesn’t look like you have an executive Facebook fan page tab. Why don’t you have that upgrade yet?

Steve: Okay and I’ll ask, what is an executive Facebook fan page tab?

Nathan: See all executives on their Facebook page, they use it usually to capture emails to build their list so that they can sell more of their coaching or whatever they sell, but you are not doing any of that. Is there a reason why you are not doing that?

Steve: Because I didn’t know this existed.

Nathan: Yeah, here’s 3 examples from people that I just did this for. Here’s, Carrie Wilkerson. Do you want me to give you her phone number, so you can call her and ask what it’s like. Now, remember Steve, this is real Nathan speaking. I didn’t have any of these built yet, but what I would do is I would still use people that I’ve already purchased as referral.

Steve: Interesting. And did anyone ever contact these people?

Nathan: I always give out numbers, but I never heard of anyone actually following up and then and calling. They could have but they didn’t.

Steve: Interesting. So you delivered ultimately to this Carrie Wilkerson?

Nathan: Yeah I did.

Steve: And she was happy with everything and did she start endorsing you?

Nathan: Yeah, she was great. She would talk about us on stage when she spoke. It would drive tons of new customers.

Steve: In order to do that, you must have had a tremendous impact on her. What did– did you just deliver the page, or did you deliver anything else? How did that happen?

Nathan: I don’t have a good answer there. I mean I went above and beyond. For sure I want to blew her away, but ultimately it just comes down to kind of doing what you are saying you are going to do on time. I mean that was the key. I mean we over the span, once we got the software, the service business launch which is the monthly recurring model of this which we call the Lujure in the early days.

We grew it from nothing to about 35 grand in monthly recurring revenue in about 6 months. It went fast. When we sold it four years later which was February 2016 of this year, we sold it and had 10,000 monthly paying customers. They were paying between 30 and 300 bucks a month and raised 2.5 million bucks of venture capital, 20 team members. I mean it scaled fast.

Steve: So was that initial, was it $35,000 a month. Was that just through cold calling?

Nathan: No, a lot of that was– so once we got like an initial 10 or 12 or 15 people actually using the software, we also had a free plan. When people used the free plan, every fan page tab they published, they’d power by Heyo on it. A lot of our new customers would come in because they saw powered Heyo on another tab. It was product marketing.

Steve: Interesting. Can you comment a little bit about just offering a free option, and how much that cost and what are some of the pros and cons?

Nathan: In software that’s a marginal expense. You are looking– in a software world, after you build the initial prototype, unless you are really making changes or updates daily, you are going to be looking at gross margins in the 80 and 90% range, and that margins if you are controlling your marketing costs and your salary and rent and all that, your net margins could easily be passing 50, 60%. So it’s highly, highly profitable. So yeah, free users to us on average costs one or two cents per month.

Steve: Okay. Because what I found after talking to some other software guys is that when you go with that free model sometimes that takes up all of your resources in terms of just support, not necessarily just several resources.

Nathan: That’s the stupidest thing I’ve ever– that’s where most software founders eat their feet. It’s very difficult– especially if you are going out a no touch sales process on a mass market product, you know say more than a hundred or 200 customers, you can’t have support on a free plan. That’s the dumbest thing, because how it happens is the people that take most of your support time will be the free users, and a person paying you $300 a month you will never hear from.

Steve: Exactly. But in that respect, how many of your free users ended up becoming paying customers?

Nathan: We convert on average anywhere between like 11 and 13% of free users in a paid customer after the first 2 or 3 months.

Steve: Okay, and the reason you kept the free plan was because it was free marketing because of that Heyo link?

Nathan: That’s exactly right. It was our cheapest marketing avenue.

Steve: Interesting. So people would see these promotions, and I’m not that familiar with your product actually, so you do a giveaway and in the sign up form I guess, there’s a little powered by Heyo link?

Nathan: Yeah, it’s right on the Facebook tab. By the way, the folks that acquired the company they are keeping it live. It’s a key piece of their business. So it’s still live and Heyo.com so people can see it. But yeah, that’s exactly right to say, just like when you send an email from your phone and it says sent by phone? Same concept.

Steve: Okay and did you keep track of what the click throughs were like for those?

Nathan: Yeah this was– I mean– we started this, years ago. If I was going to say direct numbers for you now, I won’t be able to do it. But generally again generally about 30 to 40% of our new customers every month came from that powered by Heyo on free accounts.

Steve: That’s crazy. In terms of just people– did the people mostly start with the free account and then transition, or did a lot of people just start up by paying?

Nathan: That’s a tough question. I don’t really answer that.

Steve: Let me ask it in a different way then, what incentivized someone to actually come to you? How did you convince people to actually sign up and pay the money?

Nathan: They wanted to remove powered by Heyo.

Steve: That was the only reason?

Nathan: That wasn’t the only reason. It’s was a key reason. There were some other things like we unlock some additional options like you could do more. There were analytics if you paid, things like that.

Steve: I see, I see, so typical freemium stuff. So you get most of the features of the product and if you are more advanced user you want analytics, you pay the extra money and then you put your own branding on there.

Nathan: That’s right. I mean when you study some of the most powerful– on my podcast, when I have software and service entrepreneurs come on, I’ve had many that I’ve gotten over a billion, with a B, billion dollar valuations. The difference between people that have million dollar valuations or million dollars of revenue which is a billion dollars in revenue is they have, I don’t really know what to call it other than like product axis. Picture like– Steve you know what a Cartesian plane is? Like an X and Y axis?

Steve: Aha.

Nathan: You can then add in like a Z axis. Software folks that are listening who are broke, typically they only allow people to upgrade to get like more features or something like that. Where people make a lot of money is they have one axis that people upgrade on based off they unlock more features, they have another axis where maybe you unlock more seats for your company.

They have another axis where it’s like you– some other usage base metric, more storage space, or something. The more kind of pricing or usage based upgrade metrics you have, the stronger and usually more compelling it is for you to drive kind of up sale work revenue, and that’s rebuild really big businesses. We were trying to do that at Heyo. We had multiple pricing axes like this.

Steve: It was usage based increase in pricing, is what you are saying?

Nathan: It wasn’t just that. Again, we had multiple. One was you either you unlock more features, one was instead of just one fan page tab, they could launch 5 fan page tabs, and another pricing axis was instead of just using us on one Facebook page, you could use us on 10 Facebook pages, another one was if you want to invite your team members, you can have up to 10 seats. Again, that way, every time you get on a sales call you just figure out which pricing axis most directly aligns with the person you are talking to, and then sell them on that upgrade.

Steve: Interesting. I also noticed when I was on the page this morning that the way you were priced, it seems to be targeting like the individual consumer as opposed to businesses. It’s very low priced. Can you talk a little bit about your strategy for going after those people as opposed to some of the bigger customers who are going to be less maintenance?

Nathan: So I’m not involved anymore. I’ve been out of the business for about 6 months now, so I don’t know what they are doing with the pricing. What I can tell you is the main reason they acquired us was because– Votigo is the acquiring company. Their product is an enterprise focused product. That goes between 5 grand and 50 grand. They wanted something more downstream, because the downstream clients would eventually upgrade into higher priced plans. Their model is get as many people paying as little as possible as fast as possible, because it’s a great distribution channel to up-sale.

Steve: In terms of when you were starting, you mentioned that your freemium customers would have been, if you offered support, one of the most painy ass customers that you would have had. Just curious, why you stuck with going after those lower end customers as well?

Nathan: Because we didn’t have to support. We didn’t offer support.

Steve: At all for any of the plans?

Nathan: No, we didn’t offer them for free people.

Steve: Oh yeah, that’s what I meant though. Even the lower, like your lowest paid plans were in the order of like 20, 30 bucks, right?

Nathan: Well, sometimes we weren’t offering support on those either. That’s another pricing axis that you can say okay, one is a chat support. One is a phone and chat, one is phone, chat and email.

Steve: Okay. How lean was your company in the very beginning just curious? Like did you have a dedicated support person, developers?

Nathan: We would have between one and two dedicated support people depending on the time of the business, and our dev team would be between three and six depending on the day.

Steve: These are fulltime people or were they contractors?

Nathan: No, no, these were full time.

Steve: Okay.

Nathan: Yeah, full time.

Steve: And by the time you reached that $35,000 per month run rate, was your staff just like a handful of people still?

Nathan: Yeah. We were like five or six people. It was three founders, a support person, and one other kind ad man I think.

Steve: You mentioned, so you got a lot of business through that link through freemium. Did you also do anything else? Were you running ads, were you doing social media marketing, SEO, content marketing?

Nathan: Yeah, Steve, we tested all the paid stuff. I got to tell you is the quickest way to waste the most money possible. When I look at everything I’ve done in life business wise, I am the most dangerous when I have brainwashed myself to thinking that I’m broke, and I have no money because you get really creative. We tried paid stuff, it just did not work well, content marketing worked really great. We did a lot of webinars that drove a lot of new business. Those were our big channels.

Steve: Can we talk about some of your webinars since I’ve had a lot of luck with that with my business. How did you structure webinars? How did you get people on, and what was the content like?

Nathan: I’m just curious, how are you using those in your business?

Steve: Yes, so I sell a course on ecommerce, and so usually what I do is I get on and I teach a very detailed lesson on how to get started, and then at the end I mention that I run this class and if you want to join this there’s a limited time discount.

Nathan: Got it, got it. Yeah, we basically did the same thing. We would get the title would be, “10 Ways to Capture 6,000 emails From Your Facebook page.” We would feature 10 of our clients that are using us. At the end we would sell the annual $300, or the monthly $30 plan.

Steve: Interesting. So how did you get these people on? Were these just people from your email list, were you running ads to get people on or?

Nathan: It was almost all email list from our free user base. All the webinars are targeted at free users who had yet to upgrade to paid.

Steve: I see. What was the reason to getting the sign up right now?

Nathan: For the webinar or for a paid plan?

Steve: For a paid plan during the webinar.

Nathan: You’d always bonus, we’d had bonuses. I see a lot of people make this mistake. They discount to try and get people to take action. I think it’s one of the least intelligent things you can do because it devalues your brand. What we would do is we would add bonuses. So, “Hey guys, we love people that take action.” I’m in webinar pitch mode. We love people that take action. If you decide to purchase our $30 month plan right now, what we would do is we will send you a research report, take it from a 100 campaigns last month.

We’ll show you the three calls to action to use on your fan page that get the highest opt in rates. And we will show you how you should use the– what your image should be like in the upper right of your campaign to make sure you increase the conversion rate from fans to new email leads. If you sign up now, you’ll get those bonuses. Okay, there’s two left. Johnny thanks for signing up. There’s one left. Oh Karen got the last one. All right guys, thanks so much. Bye, bye.”

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Steve: Interesting. It sounds like content that you should already have on your site to encourage people to– that content helps them improve their campaigns, right?

Nathan: Yeah we do, yeah. Some of the content was on a blog, some of it wasn’t. But you have to create some incentive to get people to take action now, otherwise people are going to [inaudible 00:22:37] their hands the whole day.

Steve: Interesting. And what was your conversion rate like, I’m just curious?

Nathan: We would convert– of everyone who registered, we would get anywhere between– we actually pretty high tenants rates. We would get between 40 and 45% action.

Steve: Wow, that’s really high.

Nathan: It’s because we had an on boarding sequence for webinars. When you signed up, you’d get like a worksheet with fill in the blanks, so that would drive curiosity and encourage you to show up. Other people that showed up about 95% would stay to minute 47 which was when we gave the pitch. And usually between 7 and 17-ish percent would purchase a pay plan.

Steve: That is really high actually.

Nathan: Yeah, it was great. We were doing about two webinars kind of a week for many, many years.

Steve: Wow. And how many people would show up at these webinars?

Nathan: Anywhere between a 100 and 400.

Steve: Okay so that was– so that’s not a whole lot of people to drive a lot of business early on. What were some of your other marketing channels?

Nathan: What do you mean?

Steve: Meaning like you are getting like 17 per webinar. So that’s like 34–

Nathan: Yeah, new customers.

Steve: That obviously wasn’t like the main driver of customers, right?

Nathan: No, it was the main driver.

Steve: Oh it was the main driver.

Nathan: Early on, webinars was– the webinars plus the product marketing, powered by Heyo. Those were our two main drivers of new customers.

Steve: That’s amazing. And you had no luck with PPC at all, huh?

Nathan: No I just think it’s so– it’s just not intelligent. I mean look, maybe I’m just stupid, I don’t understand PPC. Look, if I can make money without spending money, I’d rather do that.

Steve: Absolutely. But if you are making money with your ads, it’s just another avenue to get more people to your site, right?

Nathan: Yeah, but the thing with ads, like, I just lie to you in my opinion. What happens is we have our ad guy. He goes, “Nathan we found a channel. It’s great. I can get one new customer for you, I can get one click for a $1.75. It takes a hundred clicks to get a new 3 on my paying customer and it’s great.” I’m like, “Okay great. Spend 5 grand next month on that.” Well the promise, like the number has changed. The keyword diminishes in our turn.

That part of gold is only 2 inches deep, so once you go through out inches then we have to find another channel. It’s actually a lot of work. What happens is like PPC plays emotional games with you. You find economics that work and you stick in the next sell sheet and project it over the next 7 years and you think wow, we are going to be a billion dollar company, because we found this channel. Nobody talks about, how to measure diminishing returns on PPC. And that’s really the key to understanding in my opinion PPC and paid ads.

Steve: Interesting. In my experience, the search ads have been pretty steady, meaning it is pretty predictable, but is the Facebook ads where you have to constantly be putting our new creatives, finding new audiences and that sort of thing. Did you find the same– did you have the same experience across all the different ad platforms?

Nathan: No, I don’t have a lot of experience on Google. A lot of our kind of pay per click stuff are cost per click that was on Facebook.

Steve: Okay. That makes sense. Facebook is a ton of maintenance in that respect.

Nathan: Yeah.

Steve: Okay, so what about SEO and your content marketing? I would imagine most of your content was teaching people how to use your platform and how to get leads, right?

Nathan: Yeah, I was just pulling data from our back end and making it and publishing it infographics and things like that.

Steve: Okay, and so how did you scale then? Like how did you go from the 34 or whatever people that you would get per webinar. Was it just a gradual uptake, or was there a point in your business where it just hockey-sticked?

Nathan: No I mean look if it was 4-5 years of work to build it to where we got it. It’s a slow gradual add five, six grand in monthly recurring revenue per month. It was a gradual turn, so you got a net five grand-ish per month. Then you keep doing that for five years, and before you know it, you got a big company.

Steve: Okay. I’m just curious though. Why did you decide to take on funding? What did you do with the money and why did you need it?

Nathan: It was just– it was not a good decision, ego, to be honest with you. I mean when we first raised– when we hit about 33 grand in monthly recurring revenue, when I was sending– I would send email updates out to kind of just business people I respected about how the business was doing, and we started getting replies of people going, “Hey can we invest?” And I said, “What do you mean invest, I don’t even know what means.” And they would– I would say, “Can you teach me?”

They’d invest time to tell me what it was. I’m like, “Sure why not. It would be great to have more of that person’s mind thinking about Heyo,” because I assumed if they put money, they’d think about us more. We never actually kind of needed the money, but I used financing as a way to get more mind share of the investors which would help us grow. But we were never in a point where we needed capital.

Steve: Just curious though, did they help a lot in terms of introducing you to other contacts, what was their value add?

Nathan: Oh totally, I mean, I will not bring on an angel investor. I look at them almost like an employee. I have a full list of like tasks I’d want them to do if we accepted their money. They had like many of them helped with all those things. It was very helpful to think about it that way.

Steve: Interesting. Was most of your funding angels, or did you get VC funding?

Nathan: We got 550 grand from angels in pack in March 2011 I believe was the year. But those were like very smart, David Cohen invested, the founder of Techstars. Pat Condon the founder of RackSpace, Dave McClure 500 Startups. We had, many people would say the A list. I mean we had the A list angels in the business, and we were in like the mountains of southwest Virginia, not the valley, not New York.

It was– many people say it was very impressive. We raised 550 there on a convertible no with a 5 million dollar cap, and 8% interest rate and 25% discount. I can explain it if you want in a second. Then we raised, many years after that, 2 million dollars on 8.5 million dollar putting money evaluation which was, that was a typical VC kind of a deal.

Steve: Yeah, actually, can you explain the first deal with the angels? I’ve always been curious. What is the difference between taking money from an angel versus a VC, and what was your decision making process there?

Nathan: Let me not talk about the person you take it from, let me talk about the form of how you take it from different.

Steve: Okay.

Nathan: The first deal that we did was called a convertible node. Convertible node is almost you can think of it like paying debt, but it’s very unlikely that it will ever get called. They put in 500 grand. Let’s just say 500 to make the number even. They put in 500 grand so that 500 grand will accumulate interest at 8%. And whenever we did do a price round meaning when someone else would come in and say Nathan your business is worth 8 million dollars, those angels that put in 500 grand would convert into equity.

They don’t have any equity when they put in the 550 or the 500, right? They convert into equity which is why it’s called a convertible node when we raised that first price round. A price round means there’s a evaluation on the business. They’d convert in at a discount. We were rewarding them for backing us early. They were our first backers. Then they got a 25% discount. That’s what a convertible node is, is that helpful?

Steve: Yes. It is very helpful, cool. You mentioned that taking money was a big mistake. Why do you say that?

Nathan: We just– less soon the angel side, more on the VC side. We just didn’t need the money. I would read TechCrunch and see all my friends raising capital. I’m competitive and I’m like, “Screw it. I can raise capital too.” Boom, boom, I took like two days. I mean it was super quick. It was nice for people to do that. But man oh man, we just got lazy. Once we raised capital, we just go lazy.

Steve: So you didn’t need the money and you didn’t have it allocated, but you have to spend it, right once you get it.

Nathan: Exactly. Every board meeting was this clash because investors want us to spend money faster, so we like have no money which means you have to– which means by the way you have to go cash flow negative. Because if you raise 2 million bucks and you have to spend it, and that 2 million is not coming from revenue, it’s going to put you in the red. I mean that makes sense to anybody. It puts you in the red which I hated.

I hated that because at some point, you are either going to have to cut back expenses to go back in the green or the black, or you keep spending and you have to go raise more money which means you have to go give up more equity to a VC which I don’t like that road either. It wasn’t good. It wasn’t good. I don’t think I’ll raise again unless it is very, very, very strategic money in the new business that I’m launching.

Steve: How did you spend that money?

Nathan: Well a lot of it we run ads which is like PPC.

Steve: Yeah.

Nathan: Yeah just horrible spend people, we had amazing, amazing people but we hired too fast. What else? We moved to a new bigger office. We went from paying a grand per month in rent to six grand per month in rent which was not a smart decision. Just things like that. We just got less creative because we had more money.

Steve: How did it work when your original two founding engineers left, because there was a lot of technical data at that point, right, when your founders leave? Did you just hire– did you rewrite the whole code base?

Nathan: No, no, I mean they had a team they were managing. So just the top person they were managing became the CTO.

Steve: I see. I see.

Nathan: So it was a team of five or six developers at that point.

Steve: Can we talk a little bit about churn. What tactics do you use to kind of encourage people to stay?

Nathan: Well, so, [inaudible 00:31:29] invented a very cool term called PQL, Product Qualified Lead. What that means is, don’t look so much at revenue coming in per month or MLR or free to paid plan, but rather look at usage metrics. So you kind of know in the back of your mind when you sell someone Steve a course on ecommerce, but they don’t watch the first video or if they never log in, you know that person is way more likely to email you ask for a refund.

It’s much better to look at the actions that you want your audience to be taking that you know will help them not churn, and focus on getting those actions done, and then just trust that channel will take care of itself. Does that make sense?

Steve: Yeah. So you probably walk them through the set up process which is probably one of your big huddles, right?

Nathan: Exactly, like we knew we had to first get the first email that went out, had to get them to log in. Then we had to get them to connect their Facebook fan page. Then we had to get them to launch their first campaign, capture their first email address through the campaign. Then once we got them to do these core metrics, it was then get them to a paid plan. Then once they were happy in a paid plan, it was getting them to invite their friends so we get more customers. There’s a whole life cycle that we built out.

Steve: So this is all done through email, or did you do some personal calling as well?

Nathan: No, most people done via kind of a no touch, so emails and kind of in product updates and tutorials.

Steve: Then those people who weren’t responding, I guess, even though they– do most of the people who were responding, were they free plans or were there any people who paid who actually didn’t use the product at all?

Nathan: Oh gosh, I mean have you ever ordered a coffee and then you throw it away when you eyes still have [fog 00:33:05] because it’s cold, same concept. We had people that paid that would never log in. It’s like, what the hell are you doing? Why did you buy the product? It happens all the time.

A lot of people lie to themselves. They’ll just go, “Oh look our MRL is great.” But that could be a very weak base of monthly recurring revenue if your usage metrics aren’t really high. That’s why private stocks like Twitter and Facebook, that’s why investors care so much about monthly active users and less about revenue.

Steve: Interesting, so if the people aren’t using the product, chances are they are not checking their emails either. I’m just curious, what did you do with that data? Once you figured out the people who weren’t using, what did you do with those people?

Nathan: We just would keep trying to reach out to them I mean via email. There wasn’t– we wouldn’t work really hard for people when we realized they weren’t even going to engage with the product.

Steve: In terms of your best customers, did you do anything special with those people?

Nathan: We’d feature them in blog posts, we would feature them on webinars, we’d invite them to guest post, things like that, let them know of upcoming features. We kind of had them in part of the inner circle.

Steve: Okay, and then in terms of your target customers, it seems like all of your stuff was organic.

Nathan: Well a lot of it was. I mean the majority of it was. It was product marketing, created by Heyo and webinars. The free plan stuff is huge. I mean you capture a lot of emails with the free plan.

Steve: How did you get people to evangelize your service? You mentioned Carrie Wilkerson, was she one of the evangelist that helped you grow your business? Or did you have other methods of– I’m just curious how you grew to such a large company, and whether it was just an organic path, or were there certain tactics that you used to accelerate the process.

Nathan: It’s a combination of both. I mean, first asking the question when someone pays for your product, what are you expecting to get just in an email. That’s just a question and they reply to you and they say, well, I hope that you can launch a Facebook page. You are like, great. We are getting the right customers. If someone writes back and says, I was hoping you are going to help me launch a hot air balloon. Like where the hell did that lead come from. What did they read that made them pay for us and think we were going to help them launch a hot air balloon? That’s not what we do.

That’s a key thing. It’s first understand what they think they are getting, and then check in, in a weeks later and say did you get what you expected? A lot of people use MPS score for that. It’s just, again making sure you are getting people in your funnel that match what your product delivers, making you sure they get that and the rest will take care of itself in terms of people talking about it.

Steve: The reason why I’m really interested in what you are doing here is I plan on starting a SaaS company too since I just recently gave notice at my job.

Nathan: Nice Steve. That is a big deal man, congrats.

Steve: What I want–

Nathan: Wait hold on Steve. What did you give up? I want to know like how much you gave up. What was your salary you quit on?

Steve: I’m not going to reveal that.

Nathan: Come on Steve.

Steve: I can’t do it. I can’t do it.

Nathan: More or less than six figures?

Steve: More than six figures. I mean I was an engineering director.

Nathan: Oh gosh, you were making like yeah. Were you in the valley?

Steve: Yeah I’m in the valley.

Nathan: Oh gosh. You are like, you don’t have to [inaudible 00:36:07] but you are like two or three hundred easy. Was it a software startup or a company that’s established?

Steve: I was director of microprocessor design. So I designed microprocessors.

Nathan: Oh gosh yeah. I love that Steve. People have to understand that because there are so many people listening. I know at least on my show, I don’t know if it’s the case on your show, but people– the reason people never go and start their own thing is because they don’t hear stories of other people giving up big things. People might be listening going, but I have two kids and I have a hundred thousand dollar job. Why would I ever give that up to start my own thing? When people hear your own story, it gets them more excited, and the hey they can do it.

Steve: Well let me tell you this Nathan, I’m a real conservative guy, and I actually didn’t give up a whole lot. My salary is like a very small portion of my overall revenue. In that respect, I’m pretty conservative. I wasn’t giving up that much. I mean it sounds like a large sum to maybe some of the people who are listening, but in terms of just overall house hold income, it wasn’t that big of a deal, and which is why it allowed me to pull the trigger.

Nathan: Yeah, if everything fails in the startup you are telling me you probably have like 12 or 24 months of runaway easy of personal expenses covered.

Steve: I’m even more conservative than that. I’ve got like a decade probably.

Nathan: That’s great. How old are you?

Steve: I am 40.

Nathan: Okay, got it. So you’ve been saving for a while.

Steve: Yeah.

Nathan: Yeah, that’s great.

Steve: But unfortunately I didn’t start this until much later. If I started at 19, I’d be like all powerful right now.

Nathan: Yeah, I’m in that mode right now. When I sold Heyo, by the way I recorded the whole negotiation. The buyer’s on the phone with me, I put it on the podcast. There’s a point where I’m like, “I want this many millions,” and he’s like screw you basically, and hangs up right. God knows if it’s going to go through or not. But I record all that, and put it on the show and I mean people can listen if they want at nathanlatka.com/sold to hear that. But Steve what I will tell you is like the second I sold that business, I had offers all over the place, like great offers to go take jobs that I would say would be easy salary wise for someone who is 26 in the top 1%.

But dude it took so much to say no because those would have been so comfortable and I would have done that for like a decade, and sure I would have saved a lot of money blah, blah, blah. There’s something special about turning down something safe, and being kind of in the wild and then just trusting yourself they are going to be able to feel that empty space you created with something amazing.

Steve: Let me ask you this. What is your end game? What are you doing right now?

Nathan: Oh gosh, I saw a bunch of things. I plan to launch a best-selling book next year, I’m going to sell a million copies in the first two years. That will put it like one of the best all time. That’s the next thing I’m focused on. On 2036 I will be eligible age-wise to run for president, so I plan to run for president and win. I want to launch a ticket company public by the time I turn 34. That’s another goal, probably after the presidency or maybe before I don’t know, probably after.

I plan to launch the world’s largest hedge fund, and that’s because I see so much waste in a lot of these public companies that I’m studying. I just have a lot of companies that can talk a lot of these [inaudible 00:38:58] and just spit off cash flow. I have all kinds of little goals like that. People are listening going, “No Nathan is such a capitalist.” And yeah, you’re damn right, I’m a capitalist. I love that.

Steve: That is amazing. What’s your book going to be about?

Nathan: When is it going to be out?

Steve: No, what is it going to be about? Oh, you’ve already written it?

Nathan: What is it going to be about? Yeah, it’s a– the working title, okay the working title is New Rich. The reason I chose that title is because we are talking pretty costive about how I kind of break down my dollar of income. It’s basically how I think a lot. If you look at someone’s personal balance sheet right now, like they have car on it, the house on it, foreign insurance, dah, dah, dah. Like we are moving into a world where rich people are actually, they are buying experiences and they are owning less physical assets, because there’s these companies that hold these physical assets on their balance sheet.

For example Uber will own the car in 10 years and you will just use the car. That saves you an expense. Someone else, [inaudible 00:40:04] will own your house and you will just use the house. So there’s this concept of like new rich that I’m kind of thinking about, which I think is critical for people who are my age that comes to kind of compounding money saving money, keeping expenses low, and investing in unbelievable experiences for yourself that keep people happy, healthy and growing. So it’s going to be something along those lines.

Steve: That sounds great. Can we talk a little bit about your conference too, because we chatted about this before, and the way you are running it is pretty unique. Feel free to talk about it.

Nathan: Yeah, what do you think is unique about it?

Steve: I think you are pitting against– you are pitting different speakers together to actually show exactly their process, and you are putting them into a competition live. Did I interpret that correctly?

Nathan: That’s accurate. Yeah, so I go to a lot of these conferences and it’s like two days. It’s like everyone is out to drink at night, and then you just have to like “Get through the speakers.” You know the speakers are usually like you are watching them going, “I’m way smarter than these people. Why are they on stage?” It’s because these speakers are friends of the conference organizer or something like that. Usually they are this like boring and not fun. So what I’m doing, like I don’t care about my speakers to be quite honest with you. I care about the audience getting something that they’ve never gotten before.

So part of– some of my sessions I’m going to be interviewing like one is called– let me see. One is called king of content. I’m going to have people like Neil Patel and Joe Pulizzi [inaudible 00:41:25] on stage launching a blog post live. There will be kind of 2 screens on stage, you’ll get to see their desktops as they launch a piece of content, and whoever gets the most unique views to their piece of content over that 60 minutes segment, I will write you know a $10,000, $20,000 $30,000 check to their charity or something. But the point is each segment is a competition where the experts are performing instead of talking. The audience gets to watch and learn from the performance.

Steve: That’s sounds amazing.

Nathan: Yeah.

Steve: For all of you guys out there.

Nathan: I tell you about the monkey Steve?

Steve: You did earlier, but feel free to talk about the monkeys.

Nathan: Was that– we didn’t record that.

Steve: We didn’t record that I know.

Nathan: I have these two capuchin monkeys. You want to talk about writing cold emails that get a reply, these two capuchin monkeys can sit at a computer, they can write email, and they can actually close deals better than most of you guys, the sales people. I mean it’s unbelievable how these monkeys work. You look at these monkeys and you go, “Oh brown fur, nice eyes, you know, bone structure looks normal.” But they are just not normal monkeys.

They are going to help me kick off the show, and yeah love that your people if they want to join me, they can check out more of the sessions which I think they’ll get a kick out at nathanlatka.com/austinlive. We’ll wrap it all up Steve with– we have a very cool Grammy award winner performer at the end of the show. Two of them will pit against each other. It’s going to be like American idol except two Grammy artists going each other.

Steve: Dude that’s awesome. Hey Nathan, where can people find you if they want to contact you?

Nathan: The best place to do it, I give out my personal phone number on my podcast which is called The Top Entrepreneurs. You can search that in iTunes or Stitcher now. It’s an orange logo with my kind of face black and white. You can find me there. They can also find me on Twitter at @nathanlatka. Or feel free to just shoot me a text directly. My number is 703-431-2709.

Steve: Amazing, you just gave out your phone number just like that.

Nathan: You know the sad thing is no one is going to text me.

Steve: No one is going to text you?

Nathan: That’s my challenge to the audience.

Steve: I texted you the other day, didn’t I?

Nathan: You did. I always give it out and only very few, it’s crazy– people mourn and groan, I can’t reach the person I want to reach. Well they probably gave their phone number somewhere. You just have to search hard enough, so there’s mine.

Steve: Sounds good Nathan. Thanks for coming on the show man.

Nathan: Thanks Steve.

Steve: All right take care. Hope you enjoyed that episode. As you can probably tell from the interview, Nathan is a go-getter. It just goes to show that it doesn’t matter how old you are, it’s just a matter of going out and doing something.
For more information about this episode go to mywifequiteherjob.com/episode127, and if you enjoyed this episode please go to iTunes and leave me a review. It is by far the best way to support the show and please tell your friends because the greatest compliment that you can give me is to refer this podcast to someone else either in person, or to share it on the web.
If you are interested in starting your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business. So go to mywifequiteherjob.com for more information, sign up right there on the front page, and I’ll send you the course via email immediately. 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.

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126: How To Make 7 Figures Selling Wall Decals Online With Jason Weisenthal

How To Make 7 Figures Selling Wall Decals Online With Jason Weisenthal

Today I’m thrilled to have Jason Weisenthal on the show. Jason is someone who I met at a mastermind group meeting that I attended in San Francisco last year.

And what’s cool about Jason is that he has managed to combine tech and ecommerce together to form WallMonkeys.com, an online store that offers more than 20 million images that you can print and stick on your wall.

Not only is his business model ingenious but he can basically run his 7 figure ecommerce company with just a handful of employees because of all of the automation that he has developed.

What’s also cool is that he has encouraged and raised his son to be a seasoned entrepreneur as well which something that I plan on doing with my kids. In fact, I really wanted his son on the show today, but Jason told me that I had to interview him first. Enjoy!

What You’ll Learn

  • Jason’s motivations were for starting his business.
  • What he was doing prior to Wall Monkeys.
  • The ingenious way Jason obtains the content for his stickers.
  • Why he chose the licensing route instead of creating his own images.
  • What a licensing deal looks like and how much it costs.
  • How to manage millions of images and products listings.

Other Resources And Books

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Transcript

Steve: You’re listening to the My Wife Quit Her Job podcast. If you are new here, it’s a show where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now I don’t bring on these famous entrepreneurs to simply celebrate their success, instead I have them take us back to the beginning and delve deeply into the exact strategies they used early on to gain traction for their businesses.Now if you enjoy this podcast, please leave me a review on iTunes. If you want to learn how to start your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business. Go to mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email. 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 thrilled to have Jason Weisenthal. Jason is someone who I met at a Mastermind group meeting that I attended in San Francisco last year. What’s cool about Jason is that he has managed to combine tech and ecommerce together to form Wallmonkeys.com, which is an online store that offers more than 20 million images that you can print and stick on your wall.

Not only is his business model ingenious, but he can basically run his seven figure ecommerce company with just a handful of employees, because of all the automation that he has developed. What’s also cool is that he has encouraged and raised his son to be a seasoned entrepreneur as well, which is something that I plan on doing with my kids.

In fact I really wanted his son on the show today, but Jason told me that I had to interview him first. Fine, I’ll guess I’ll settle for dad. Welcome to the show Jason. How are you doing today man?

Jason: I’m great Steve. Thanks for having me.

Steve: Give us a quick background story about Wall Monkeys and how you came up with the idea of selling wall decals online, and what you were doing beforehand also?

Jason: Before Wall Monkeys, I was in a completely different business. I owned a retail children shoe store for about 14 years in New Jersey. Business was good, grew the business, was kind of …

Steve: Was it brick and mortar? Sorry.

Jason: Yeah, brick and mortar. Everybody walked in the front door: Nikes, Air Force Ones, Jordans, Timberlands, all that good stuff. We really had a good business, solid crew of employees and was finding myself bored in my office too often. I started to look at other businesses. It’s right around when Fathead came around, and I’m sure you’re familiar with Fathead. They have all the professional athletes. I thought it would be really cool to put … My son was playing little league baseball and so was my daughter. I thought it would be really cool to put my kids on the wall instead of Derek Jeter, A. Rod or a football player.

I checked out, looked around online and no one was doing it. That was the extent of my market research. I knew nothing about it, I just bought a printer. I did my research and bought the proper printer, found someone to help me learn how to use it, had someone to build a custom website. I just found people to put the pieces together and just learned step by step on my own.

Steve: Wait, so just based on that, you decided to start a store where people can upload pictures of their kids.

Jason: Yeah. I pretty much bought the printer.

Steve: Lease or did you buy?

Jason: I bought it.

Steve: Oh wow!

Jason: My retail business was doing fine. The printer at that time I think it was about $25,000. I didn’t want a monthly payment. Again there really wasn’t too much research. Shopify wasn’t around. It was just at the very beginning. It actually turned out to be a good idea that was just too soon. Cell phones didn’t take high enough resolution images. Parents who wanted to order, they had a hard time uploading the proper file sizes. We really struggled at the beginning. It was a good thing that it was a hobby and not my source of income, because we would have failed for sure.

Steve: I can imagine that’d be a pain in the butt, right, because a lot of people don’t know about images, and what’s required for printing.

Jason: Yeah. At that time I think most cell phones had about like a 1.3 megapixel image, and then email programs were compressing images. People would send a picture of their kid was like a spec in the background. A lot of times the sales we did make we were refunding … We didn’t have content at that time, it was all custom. While it was a good idea, it was too soon. I was able to stick it out and keep trying different ideas until I found a better way to make money in that same business.

Steve: How do you get your content today actually?

Jason: The majority of our content comes from licensing deals with companies like National Geographic, and Corbis Images, and Stocktrek images and some other stock photography companies. I looked for over time just to fill in every possible niche for medical images or animals, or just whatever I thought we needed more of. I found a company and made a deal. Now we have access to … Oh God probably 60 million images if you wanted to look.

Steve: That’s crazy. Do you still let people upload their own images anymore or no?

Jason: We do. Custom is a big part of our business. Whether it’s professional photographers or companies uploading business logos, things for trade shows … One of our strong suits is we are really good at turning orders around quickly, and it’s made in the USA. Custom is actually growing quite nicely right now because our quality is great, and our turnaround time is faster than practically anyone. Maybe it might be faster than everyone.

Steve: I’m just curious though. Why did you choose the licensing route instead of creating your own images and your own artwork?

Jason: When I first stumbled upon the idea of some content, I started with basic silhouettes and I was literally in my basement by myself. Again I wasn’t a graphic artist or anything … Clipping images in Photoshop and Illustrator, and saving them, and file naming them. I noticed they were starting to sell and just like any good entrepreneur, you do 100, you do 200 and you say, “Of 100, 200 sells, it’s going to take me a while to get to a million. What’s the fastest way to get a lot of images?” That’s through a licensing deal. That’s what we did. We went from nothing to a few 100, to millions. When you offer millions, you sell more.

Steve: What does a licensing deal look like, I’m curious? How much does it cost you guys and how is the deal structured?

Jason: There is 2 ways. It depends on the company you’re dealing with and the amount of money that you’re maybe either guaranteeing them, or based on your relationship. You’re either paying them a percentage of the sale. If you make $100 sale you might pay as an example, 10% or you can pay a flat dollar fee.

Steve: 10% of the sale or 10% of some other number you agree to.

Jason: 10% of it. It’s a retail. Print on demand … That’s an example. Not every deal is that, that’s just an example number but yeah, it would be on the retail selling price. Then we do have a couple of deals that are just based on … Because we print a lot of images, a flat fee per image. That works out to be a better deal for us, but because the volume is high, it works for us and for our partners.

Steve: I see. Is there any upfront cost?

Jason: For the licensing deals?

Steve: Yeah.

Jason: Again if you are a new person coming into the business, it depends on the brand, the licensing. We don’t have Disney. If you wanted Disney … Even if you could even get it, there would be a huge upfront cost. Some of our deals, I can’t tell you the exact numbers, but because of either our history or because of the confidence and knowing we would sell, some companies, you have to make sure you pay them say $25,000 or $50,000 over the course of the year to get that. It’s a volume discount just like anything else, so either based on if you’re willing to agree to a guaranteed minimum, or if your purchase history proves that you’re worthy of a better rate you can … Just like calling up anyone else to renegotiate, you can work out a better deal.

Steve: For you though when you were starting out with nothing, how did you approach your first company?

Jason: Actually he’s a really great friend of mine now. There is stock photo company … No one was really doing this for print on demand like APIs for … All these stock images were relatively new. The industry was totally different. I had this idea to rather than buy the images upfront which is what people were doing, I wanted to offer all of a company’s images, let my customers browse them, and then only pay when a sale is made.

That really wasn’t how it was happening. I just pitched my idea. You probably know or you’ve read how people say it all the time, just ask, somebody might say, “Yes”. I made my sales pitch and said, “I think this will benefit your company and mine. This is what I want to do. This is my vision.” The person that was in-charge of North America pitched it to the CEO, and they trusted me, and we made it work.

Steve: This is when you had nothing and your friend was instrumental in opening up the doors for you so to speak.

Jason: He wasn’t a friend then. Its just this company is our longest standing partner. The company is Fotolia. They got bought by Adobe several months ago. Chad believed in what I said and pushed it through. Just because it’s been so many years and he’s such a great guy, now we are great friends. At the time he just believed in what I presented.

Steve: One thing that I’ve been wondering is our online store only has 480 skews. Here you are talking about 60 million. Does that imply that you have 60 million product pages or just a library of 60 million products on your sites?

Jason: We filter down and we’re about to … It’s going to look really good in probably about definitely less than 2 weeks. It might be ready in a few days. Our search is pretty complicated. We have a Solr database. If we have access to 60 million, we’re going to offer far less than that. There is a lot of filters we use to purposely eliminate many images. It probably ends up being about the top 10% is what you could search through my site.

Steve: How does it work? Did you have to develop your own search algorithm or you have a Google Box or something? How do you do that?

Jason: We use Solr which like MySQL. Solr is a search program. I don’t know how to explain it. I don’t know if your people would really care so much about that, but because we had so many images we needed to create a custom solution. We couldn’t use Google search tool. We couldn’t use some of the other elastic search.

There is companies out there that will handle your database and do things like predictive texts and making suggestions and learning from sales. We built ours from scratch because we are importing so much metadata and images that we just needed to build it ourselves.

Steve: I’m curious, how many people do you guys have now? The last we talked it sounded like you only had a handful of people, right?

Jason: The business is really … The simplest way is its 2 pieces. We have the office where it’s customer service, production, shipping. Everything that has to do with the customer placing the order to the order leaving. That all happens 5 minutes from house in Maryland. In the office we have about … Not about, we have exactly 6 people and then outside of that is where everything else is: IT, things to do with SEO, pay-per-click advertising.

Those people are all outsourced freelancers, but I have pretty good relationships with them now. Most of them are giving me more than half their time. I’m definitely primary source of income and there is 8 people that do that. They are all part time to some degree, but there is a lot of IT.

We are constantly working on something, whether it has do with how we send information to Amazon or something to do with … Right now we have 3 people that are working to finish improving search on our site and how navigation works completely, how you can go through the user experience. That project is going to end and those 3 guys are going to drop off. I’ll probably dream up something new 5 minutes after that.

Steve: Everything is project based, and they’re of … You just hire them on a consulting basis.

Jason: For that kind of project. My pay-per-click guy has been with me for over a year now. I did hire a woman who is operations manager. She’s really helped become a go between the developers and people in the office and just to really take away a lot of the tedious tasks from me so that I can focus on bigger things. That’s been very, very helpful.

Steve: Are you a technical guy at all?

Jason: I am not technical programming wise but I have … The only way I can explain it, I can think it and communicate it very clearly. I know what skills are needed. I can and then hire the right people. I also have one of my IT guys who used to do a lot of programming. He is pretty much oversees all of the IT projects. His role, he doesn’t program anymore. He just takes what I say that’s in English and communicates it to these guys to the final …

Steve: Sure. No that’s all you really need, yeah.

Jason: Yeah, I know what I’m good at. Then I found people that fill in those places where I need help.

Steve: One thing I was curious about, you mentioned in the very beginning that you purchased your printer right off the bat, did you ever consider just having a printing partner because I used to work for a printing company. I know those machines are finicky and they require maintenance. I was just curious why you went that route right away.

Jason: At the very beginning, I could have looked for a partner, a company to print but I feel very strongly that’s our core competency is printing and we do a lot of rush orders a lot of things that are time sensitive, a lot of things where errors are not acceptable. If it’s your core competency, you need to do that in-house.

There’s no way that I would outsource printing. That’s what we do. If I outsource that, most of what we say, and most of our advantage over other companies would vanish, they would be in the hands of someone else to do the job.

Steve: Okay, and so you do it yourself mainly for customer service reasons and deliverable reasons, why we do our own embroidery, right?

Jason: It’s quality control. It’s our processes, it’s our procedures. It’s our automation. It’s our … If we make a mistake we can learn from it. There’s just no other way in my mind.

Steve: How much did it cost you to start the company then? Actually how many partners do you have now, I’m just curious.

Jason: We have 4. We use different printers now. We also now have cutters so we have … There’s 6 pieces of equipment in the office that are either printing and cutting or printing or cutting. How much did it cost us to start the business? I guess the printer cost $25,000. I probably spent another, God I don’t know. I’ll say $50,000. By the time I learned how to print and made a bunch of mistakes, built a website, painfully because it wasn’t really that easy back then, probably about 50 grand.

Steve: What platform are you on now? It was custom before but did you change platforms over the years?

Jason: Yeah, we use Magento.

Steve: Magento okay. Enterprise or regular?

Jason: Regular but it’s very highly customized. We’ve spent a lot on customizing that platform.

Steve: Okay, let’s talk about your process a little bit. Do you guys carry any inventory at all or is it all print-on-demand?

Jason: We ship some of our best sellers to Amazon now FBA. It is all print on demand. Orders come in and around 6 or 7 am every morning, we run an automation procedure that goes and pulls all the orders from the various sales channels, and then runs it through another automation that will identify and grab all the images that much the order and resizes them and renames them and puts them into the proper folders.

We print and ship over 95% of our orders within 24 hours. There’s no reason to hold inventory. We just print on demand and we get it right out.

Steve: As a tech guy, I’m really in awe of this automation that you have. Literally an order comes in, and then machines just automatically resize everything and then is it as simple as it being sent to the printer automatically and someone just needs to be there to pick it up and box it?

Jason: I wish. It’s not exactly but yeah, most of the steps it’s just, you just broke it down step by step so it’s not one big magical automation. We use … Our Amazon orders come in through ShipWorks. The program we wrote goes into ShipWorks and grabs the orders. The resizing, those are actions that we add written, scripts we had written that work in Photoshop and Illustrator and then we rename files with certain naming patterns. I had someone write a program that nests the orders to make the optimal use of space.

Once it gets through the whole process, the automatic part, the orders are nested. They are groups of orders that we just because of, just to make sure in case there’s a cancelled order or there’s a size change. If there’s something that needs to be addressed, that’s where the humans come in and will then take those orders and you are pretty much just dragging them into the rip software that’s going to print them.

Yeah, we print and we just have to cut the sheets off as they come and then they go to the back and the shipping labels are ready to go and the guys cut the orders down and march them up and put them into the shipping tubes, put the labels on. It’s still a process but we’ve just taken away a lot of the like the key stroke errors and a lot of the time wasting.

Steve: Sure, sure. No that’s incredible. You mentioned that you are selling on Amazon FBA as well. Given that most of your business on demand, how does it work for Amazon? I think I heard a rumor from someone. I can’t remember whether it was Jason or not who told me that you have a million skews on Amazon?

Jason: Yeah, we have more than a million. It’s a long tussle. We don’t have a million best sellers. We have a way to put a lot of listings up there and then the ones that are the best sellers, those are the ones that we’ll print in advance and send those to Amazon for FBA because they are going to show up as prime and the customer is going to get them faster. It’s important but it’s not that large of a percentage of our business because it’s such a long time. Everyday about 30% of our orders are images that are being ordered for the very first time.

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Steve: Okay, in terms of Amazon then, how does your process work? Do you just ship a bunch there, see what sells and then drop some of the ones that aren’t selling?

Jason: No. We are going from historical sales data. We didn’t start to use FBA until I’ll say maybe a year or so ago. We have been selling on Amazon for years already. We have whatever tens of thousands, hundreds of thousands of sales and we can look in. We know certain things where you see them print 10 or 12 times every single day or whatever the number is.

Those were the items that we sent to Amazon first because they are going to sell even more and also it’s going to save time on a day to day basis. It’s a lot easier to send a 100 or 200 of something to Amazon than it is to send 10, 10, 10, 10, 10 every day to 10 individual customers.

Steve: I was just thinking; when you have that many listings, how do you do, do you spend a lot of time on the listings then? Amazon search is very important and I’m just curios how you manage so many different skews and still put out an optimized listing on Amazon. Do you run ads?

Jason: Yes we run ads. We’ve been trying to ramp up the spending as much as we can. It’s a lot easier to spend money on Google than it is on Amazon. The Amazon ads have been the most efficient ads spending that we have. To create the listing you have to optimize them, they are not as optimized as if you did them by hand. We have an automated process that creates the listings for us and it uses a combination of I call it static and dynamic information. The static information to be the brand name. Every listing has to say Wall Monkeys, wall decals but then it will take a look at the … Then grab from the image the title for example and say Picasso whatever.

We know to create all the sizes it’s … Everything is automated where it makes the size, it knows our pricing, it adds the shipping weight. All these things are preprogrammed in so that if we have a new batch of say 50,000 images, we can create those listings. We have software that sits on Google cloud and we can create those listings completely and send those to Amazon within 24 hours including the images. If you have a picture of whatever it is, a dog, it needs to also go on a wall and looks like it’s a wall decal, we’ve got that part of the process automated also where most people are doing that manually and it’s really time consuming.

Steve: What about SEO on your own website? With so many different listings, is it the same procedure as Amazon essentially? You take the title and you create a page, with that as the title tag?

Jason: Yeah. It’s similar. We do pay attention to the differences and say, how many characters are allowed for the title or what are the subtle differences that we are aware of. We are indexing many, many pages. It’s similar but different. We are just trying to make the changes where we can. With the new site, with the new Solr search, there’s going to be much better improvements as far as landing pages for categories and sub categories and different artists and things which I think is going to help our SEO. That’s an area that we can definitely improve.

Steve: Just curious, where for your main website, where do you most of your customers come in. Is it through SEO or other means?

Jason: SEO and we disband a fair amount on pay-per-click. Then, ripping customers are, especially our business customers, come back more frequently.

Steve: Business customers. That implies … Is that a large part of your business the business customers as opposed to the consumers?

Jason: It’s growing. Amazon, about I would say 18 months or 2 years ago, it became a little bit scary that Amazon was such a large percentage of our sales. Just like everyone, you need to diversify. We started to put a lot more effort into just getting sales from anywhere else and business to business jumped out as a really good place to go after. That’s something that we are focusing on.

Steve: That’s totally what we did also because those guys they don’t want to order on Amazon. They want to talk to someone on the phone and they have consistent business. That’s been really good for us as well.

Jason: Yeah, and the concern it’s not a race to the bottom with pricing like Amazon is, different … Is a different beast completely. A lot of the business customers, what they want is really great service and if they need it on a certain day, they want to have confidence that it’s going to get there. They are not as price sensitive as they are professionalism and accuracy sensitive.

Steve: Just curious, do you price your products the same on Amazon as you do on your own site?

Jason: We do but most of the business sales are going to be custom. We are just working off of what our pricing is; per square foot versus how much does that picture of a pink puppy cost or something.

Steve: Do you guys do anything with your Amazon stuff to get them back on to your website or you just keep the Amazon channel completely separate?

Jason: If I’m answering this with Amazon listening. That’s what every man … We follow the rules. We follow the rules right closely. I do look at it as Amazon’s customers are, all those sales, those are Amazon’s customers, not Wall Monkeys’ customers but we definitely know that and we see sales from both places. We don’t actively try and break rules and divert people, but on Amazon we are Wall Monkeys wall decors. You probably don’t need a PhD to figure out that if you type in WallMonkeys.com you might be able to see our website and find other things.

Steve: Let’s talk about the early phase of your business when you first got started. How did you get your first sales?

Jason: We got really lucky. One of the biggest breaks even though we didn’t make much money at the beginning, something that helped a lot was about 3 weeks after I started the company, 3 weeks after I got the website up, the contact number on the website was my cell phone. I was running it from either printing from my basement or running it from my kitchen table.

Steve: That’s awesome.

Jason: My phone rings and it was Darren Rovell. He works at ESPN now but he was a sport supporter for CNBC. Says he’s Darren Rovell and I knew who he was. He said, “Hey I was just checking out your products. It looks really great. I was looking at Fathead and I just think this is such a great idea. How would you like to be highlighted as one of the best gifts, best Christmas gifts for dad for 2009?”

Steve: I’m sorry how did this happen?

Jason: He was just doing research on Fathead and bumped into my company because we were one of the first. He just called me on the phone and asked if I wanted Wall Monkeys to be highlighted on CNBC right before Christmas. That was just a huge break because that made sales, but then we also from that we ended up … Somebody, a guy wrote an article for ESPN, the magazine and a couple of other outlets reached out. We got a bunch of press which really helped with sales for months after that. We were making sales every day off of the momentum of Darren Rovell.

Steve: Was that before you had all these licensing deals in place?

Jason: We had nothing, we just had customers, we had 3 weeks. I didn’t even really know how to … Had to have a graphic designer setup the orders to print. I was … We knew nothing.

Steve: That’s amazing, okay they must have found you through search, then I guess…

Jason: Yeah Darren Rovell found me through search. I still talk to him once in a while. I have printed some stuff for him and now he works for ESPN. He is just a really great guy. He was like right time, right place and it was just really fortunate; it was like a nice break.

Steve: Can we talk about search strategy? Do you pump out a lot of blog post? What’s your content strategy to get ranked?

Jason: It could be a lot better. We were blogging a lot more, right now we are not. Right now we are focusing on social media more. We have a visual product so every day in the office where everyone is taking pictures and putting them into this Google cloud … I’m sorry Google drive folder and Instagram and Pinterest right now seem to be best for us as far as driving traffic.

Steve: Okay and in terms of pay-per-click, are you running Facebook ads, Instagram ads, Pinterest ads?

Jason: Almost all of our spending is Google and Amazon. Amazon we are trying to ramp it as much as possible they just don’t seem to use our whole ads spent. I’m not sure where the magic formula is there yet.

Steve: In terms of Google you have so many different images that I can’t even imagine running one of your campaigns. How do you structure these campaigns, or are you bidding on more general terms like wall decals?

Jason: We are not bidding on wall decals, those are general terms.

Steve: Yeah because that would be a really expensive …

Jason: We just have niches. Different business niches, maybe veterinarians or nail salons, hair salons. We know what images. Again we have … We know what sold. We know where we want to drive people and we … It’s taken a long time to build them out but we built out very specific campaigns to target very specific niches.

Steve: Are you using the display network or just search ads?

Jason: Just search ads. Again I pay … I have, I see all the reporting. We have a lot of reports that come to me as well as talking to my pay-per-click guy every once a week but we get … I get reports like crazy.

Steve: Okay.

Jason: We are constantly trying to spend more and refine it and he’s got metrics to hit and luckily we’ve actually we’ve really been hitting them which is nice. I think once, I got to keep saying but once that new searches works on our site, I think all of our numbers are going to get better.

Steve: Have you tried some of the other ad platforms like Facebook and Pinterest. I would imagine those would work pretty well for you guys?

Jason: Facebook we just haven’t … we need to build out … I still feel like we are a start up. I can make a huge list and tell you all the things that were either not doing well enough or not doing yet that I want to. Facebook we’ve … Facebook ads haven’t been great for us but we are also not employing the strategy that I would want to. We need to build out a lot more landing pages to send people to where we really want them to go. Like I said yeah I would say for right now Google and Amazon it’s … And Amazon in particular it’s just keep trying to spend more because it works the best.

Steve: Let’s talk about what’s working well for you guys in terms of getting business. What are some of the things that you are doing that’s generating a lot of business for you?

Jason: FBA definitely is where we’ve been adding more and Amazon’s is huge.

Steve: Have you run into any problems with Amazon?

Jason: We have problems all the time. Recently there has been a lot … We have Wall Monkeys as our brand, it’s trademarked, we are in Amazon’s brand registry. Recently we’ve been spending hours every week. People are getting onto our listings and we have to send cease and desist letters and it’s a real time suck.

Steve: Right.

Jason: Its seems to be more of a free fall than never which is another reason to focus on, to put some more energy on our ecommerce side and on business to business and other things. There is just more sellers than ever and I don’t know when they are going to lock it down or put a limit on it. It’s getting … I see it getting diluted.

Steve: Oh yeah totally I give it 1 or 2 more years until it becomes saturated with junk and then Amazon has to do something about it.

Jason: I think they need to do something now. They don’t protect … they don’t want to get involved fighting for us for us for the brand. They will only get involved if the customer isn’t getting the product as described. Otherwise they are just going to make the money and they are not going to get involved.

Steve: Yeah in that regard, when you guys are doing customer service for Amazon or your own site generally do you just … I imagine your costs are pretty low. It’s just the cost of the paper and the ink right? When you guys run customer service, whenever someone complains do you just essentially give away the product and give them refund or?

Jason: Pretty much.

Steve: Okay.

Jason: Yeah if we think someone is really trying to be deceitful we’ll address it but yeah it’s just kind of the … one of the prices you pay especially for doing business on Amazon.

Steve: Does it worry you at all. What are some of the things that you are doing to shift away from Amazon to your own site?

Jason: There is a couple of things. It doesn’t worry me. I think if you are entrepreneur lots of things worry you. If I wanted to worry all day long I could probably do that. One of the biggest things that we are doing is we do have a pretty good scale at creating these mass listings on Amazon, and how we do it on our website also. We just started helping a couple of other companies create listings for their print on demand products on Amazon.

Companies that don’t have … Again they are facing the challenges that most people face. They might have 1000 listings or 2000 but they have access to say 50000 images and they can’t create those listings. Other companies are now paying us which is really great. Let them enable them they make money and we don’t have to … we are not going to enter that category anyway.

Steve: Is this software that you are selling?

Jason: We are not selling them software. It is software but we are doing it ourselves, we are not putting it in the hands of the customer. We are … There are bigger relationships. We are managing them. We are working hand in hand to create the listings for them and make them live.

Steve: I see okay, a services based thing. Are they your competition though?

Jason: No never. If we sell wall decals there might be a company that sells picture frames and they want to put images in those frames. Picture frames, pictures … A framed picture isn’t going to compete with a wall decal. Putting those images on a coffee mug as an example but you could go on Zazzle and look at hundreds of products. Getting the images is no problem it’s creating listings and all the metadata that needs to be plugged in in the right places, that people have a hard time with.

Steve: Okay going forward, you’ve been doing wall decals for quite a while now. What is your focus right now? Is it to grow the company; is it to enjoy life, what is your end goal with it?

Jason: I don’t know about end goal but right now my focus has been on for a while and I have been spending a lot of energy on just efficiencies in the office, and having creating a better work environment and happy employees. Then personally the same thing. I guard my morning rituals and the way I want my day to go and how I spend my time.

I guard that and always work on that religiously. Now that those things are a lot more in line I think now we are going to be poised for a really big phase of growth for the Wall Monkeys business. I felt we needed to get these other pieces straight before we grew sales more.

Steve: Where is that growth going to be coming from you think?

Jason: I think it’s going to come from all over. I think the biggest drivers are going to be … I keep saying B2B but there is a lot of businesses out there that don’t know we exist, and we are going to let them know that we exist. We also …

Steve: How do you plan on doing that? What’s your strategy for reaching out to B2B?

Jason: I don’t think I want to share it.

Steve: Okay.

Jason: I’ve spent a lot of time thinking about how we go after businesses and …

Steve: Okay.

Jason: Yeah, that’s something I guess everybody doesn’t need to hear.

Steve: Yeah, okay sure. I was curious because we are doing the same thing, maybe after this.

Jason: Yeah, we could talk about it after we hang up the phone.

Steve: Okay, sorry you got B2B, are you, A, Amazon is just going to grow naturally on its own. Do you have any specific strategies for growing your Amazon business?

Jason: We are going to update our listings, there’s … When we update our listings it’s not like going in and updating one, it’s like a pretty big deal because we are … We might be making some pretty major changes across a few hundred thousand listings. You want to really think about it and test it and make sure that they are going through the right way.

I guess the best way say it is, I feel we can do … Aside from the way we process orders and how quickly and accurately we do that, that’s majority of the time, almost every other part of our business can be improved. Whether it’s the ecommerce site, the search, our listings on Amazon, the quality of the content on Amazon, I feel we can do everything better.

Steve: Yeah, but it’s … Maybe you have limited resources, I’m just curious, are you going to be focusing on other ad platforms like Facebook? You mentioned you didn’t feel like you have been giving it any justice, are you going to start blogging again …

Jason: Facebook ads, when the search is done, there is going to be many landing pages for categories, sub categories, artists, lots of different businesses and business niches and types of images. Targeted Facebook advertising is going to be a pretty big part as well as I think our Google advertising has been … Is going to become a lot more efficient because we can change the pages that we’re driving the traffic to.

Steve: Okay, and in terms of staff, do you plan on growing that or do you feel running really lean is one of your goals?

Jason: Running lean is definitely one of my goals. One of the biggest challenges is managing people, I’ve learnt … Again I ran a retail business for 14 years, I’ve been doing this for 8 years, and I feel I’m learning all the time. Running lean is key and paying for A players is something that I learned too late, whether it’s programmers or the people putting in the images.

With programmers especially with Upwork and things like that, you can hire … There’s such a range. You could hire a $15 an hour php guy or you can hire someone who makes $100 an hour or more and there’s times when it really makes sense to hire those guys that are … To search out who’s the best in the world and just pay for it.

Steve: Where do you find these people, are they referrals or are you using services like Upwork?

Jason: Yeah, I’ll ask my network or I’ll use Upwork. For our search right now for Solar I went into that, I knew it was complicated, and I knew it was a specialized skill, and I took the approach on that one. Where can I find who is the best in the world, and I’m going to pay him. I looked on LinkedIn, LinkedIn is a pretty good resource just to look in groups and find … Get leads that way.

But for Solar this project I found the guy on Upwork and you just have to really know what you are looking for very specifically and check their references and make sure you are getting what you pay for. Hiring IT, IT project especially custom work, those are very expensive mistakes to me, because you are starting over you are wasting time, the money and time loss there is it’s expensive and exhausting.

Steve: We are coming on 40 minutes now, I was just curious, do you have any advice for people out there who want to go and into ecommerce? I’m just curious would you if you were to start all over again today, would go be doing this again? Your particular nature, physical products?

Jason: I like what I do, we have a niche, I feel we are … There’s lot of opportunity in my niche; selling on Amazon in general I think is pretty full. I think there might be more opportunity in helping … If I was going to start all over again I would, or if I just close my business tomorrow, or something happened, I would probably focus on using the knowledge that I have to help other sellers sell more, or help companies that have a weak or no presence, establish a strong presence. I think there is more money, a better opportunity, a better freedom helping others than there is in trying to fight it out on your own.

Steve: Interesting. One thing I also forgot to ask you, are you guys using email marketing at all for Wall Monkeys?

Jason: Yeah, we use … We actually use Constant Contact.

Steve: Constant Contact, okay. Is that a large part of your business?

Jason: When we send a good one, it is.

Steve: Okay, these are one offs, do you have auto responder sequences or?

Jason: We do, we have auto responder sequences and things, but I … They are fine, I like to look at the effectiveness of the weekly emails that we send and see if we’re crafting those messages the right way.

Steve: All right Jason, well hey thanks a lot for coming on the show man, I’ve always been really … I admire your business mainly because to me you are not really an ecommerce company, you are like a tech company because of all these process that you’ve put in place. You just happen to sell wall decals but the whole process was well thought out, and the fact you are able to run such a large company with still few people is pretty amazing to me.

Jason: Thank you.

Steve: Does that mean that I can have your son on next?

Jason: Yeah, you could ask him all the questions about being as teen entrepreneur, the websites he built and all that good stuff.

Steve: All right, thanks J.

Jason: All right.

Steve: Take care man.

Jason: Thank you Steve.

Steve: Hope you enjoyed that episode. What I find especially cool about Jason is that he’s managed to turn his wall decal company into a tech company by automating most of the processes. I also find that his business model is pretty ingenious. There are a lot of wall decal companies out there, but Wall Monkeys stands out, because they have the largest selection.

For more information about this episode go to mywifequiteherjob.com/episode126, and if you enjoy this episode please go to iTunes and leave me a review. It’s the best way to support the show and please tell your friends because the greatest compliment that you can give me is to refer this podcast to someone else either in person or to share it on the web.

Now if you are interested in starting your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business. So go to mywifequiteherjob.com for more information, sign up right there on the front page, and I’ll send you the course via email immediately. Thanks for listening.

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125: Shipping Logistics And How To Transport Your Goods From Overseas With Pam Cail

Shipping Logistics And How To Transport Your Goods From Overseas With Pam Cail

Today I’m thrilled to have a very special guest on the show Pam Cail. Pam is the VP of a company called HYCLogistics and she’s helped thousands of sellers get their goods to their warehouses from Asia.

They’ve been in business since 1948 and she knows shipping and logistics inside and out. The reason why I have her on the show today is because many people are intimidated by the importing process.

Plus, my wife and I import many times a year by sea and we’ve also been confused by all of the fees that we get nickle and dimed on. We pretty much accept these fees blindly but they do add up.

So I’ve invited Pam on the show to hopefully clear up the most scary questions that people have about importing.

What You’ll Learn

  • Pam’s motivations for starting her business.
  • The margins for a logistics company and how the fees are factored in.
  • The biggest mistakes that people make when importing from overseas
  • How to find the permits that are required.
  • The Pros/cons of EXW vs FOB
  • When you should use air courier vs air freight vs sea freight
  • When to use a stateside broker vs an international broker.

Other Resources And Books

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Transcript

Steve: You’re listening to the My Wife Quit her Job podcast. If you are new here, it’s a show where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now I don’t bring on these famous entrepreneurs to simply celebrate their success, instead I have them take us back to the beginning and delve deeply into the exact strategies they used early on to gain traction for their businesses.Now if you enjoy this podcast, please leave me a review on iTunes. If you want to learn how to start your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business. Go to Mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email. 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 thrilled to have a very special guest on the show, Pam Cail. Pam is the VP of a company called HYC Logistics, and she’s helped thousands of sellers get their goods to their warehouses from Asia. They’ve been in business since 1948. She knows shipping and logistics inside and out.

The reason I’ve decided to have her on the show today is because many people are very intimidated by the importing process. Plus my wife and I import many times a year by sea, and I’ve been often confused by all the fees on my invoices where we kind of feel like we’re getting nickel and dimed on. We pretty much pay these blindly in a lot of cases, but they do add up.

I’ve invited Pam on the show to hopefully clear up the most scary questions that people have about importing. With that welcome to the show Pam, how are you doing today?

Pam: Hi. Thank you. I’m doing great. I am. I’m very excited to be here.

Steve: Very excited to have you. What I want to start out with was can you give us a quick background story and tell us how you ended up running HYC Logistics?

Pam: I have always pretty much had a transportation background in my family. My father was the vice president of a large trucking company, and my mother was a school teacher. Together we’ve always talked about helping, learning, and also the trucking and transportation world. With that, I got into the accounting side of international shipping through a large a freight forwarder.

I started at the bottom doing accounts for savable accounts payable and have worked my way up. When Harvey Yaffee Company asked me to join their team, I was thrilled and I actually started as an accounting manager here, went into exports, imports. Now I am very happy to say that I run the company, and I’ve got a great group of people.

Steve: I’ve often wondered how someone gets into the shipping and logistics business. It sounds like it was something that you’ve done with your family and then you were interested in the business and worked your way up.

Pam: That’s exactly right.

Steve: I’ve always been curious; from a business perspective what are the margins like in such a heavy service based business? How are your fees factored in the equation when you help someone?

Pam: They are very minimal. I do have to say my CFO many a times says, “Who started this business?” Because most people in the jewelry industry, in the furniture industry, 200% 500% mark-up, whatever … In the shipping industry and freight forwarding like we do with the brokerage service, these are very minimal. At certain times if we make $50 that’s a good day. Anyway it ends up being relative to everything that actually is done at the shipment level if you do just brokerage or warehousing or transportation or whatever.

You make a minimal on each one of them. This is not one of those companies that you’re going to find, going to have the 24 karat gold garbage can. It’s nothing. We chose poorly if that’s what we wanted to achieve. All in all it’s a very necessary part of shipping in our economy and I guess having the background that I do, it’s certainly rewarding. We have time and we have the education to share with everybody and that’s what drives us, not the money.

Steve: A lot of people probably come to you with importing help. What are the biggest mistakes that you see that people have when they are first starting to do their first shipments when they first come to you?

Pam: I think one of them is telling the supplier that they are a new person in this. Just being overly honest because you don’t really know how they are going to react to you. Are they going to tell you things that may not be true or they might be true to them only? For instance, I was told that by one person that they only import into New York. This person came to me and said, “I see that you could only import into the United States by way of New York?” I said, “Where did you hear that?” They said, “Well the supplier.” See the supplier only imported into New York.

Therefore it was honest of the supplier, but it was misleading and they didn’t even know to ask the question, “Well, what about the other ports or is there anything else?” When you are a new person, you don’t even know the questions to ask. That’s the damn fault of not having a representative on the USA side.

When everything is handled on the Asia side, the China side or anywhere else, they don’t know the US customs laws. They don’t know what ports are available, what’s best, what our weather is even like. Are the rail roads flooded or are they iced over in Chicago during the winter? Those types of things we try to say, “Okay. Everyone is good at their area. Find an expert at their area especially if you are not.”

Steve: What are some of the questions that you should be asking to the vendor?

Pam: It depends on the shipment. That is one of those that has the weight, the volume, where your freight, what port they use, where are they going to ship out of, if it’s FOB. There are differences: is it air or ocean and is it airline or air courier express?

Steve: Let’s talk about that a little bit actually. I know typically when I go with a vendor they sometimes give me 2 different quotes. One for EXW and one for FOB. Can you comment on the pros and cons of both incoterms terms? First of all, if you wouldn’t mind defining them and then talking about the pros and cons.

Pam: Incoterms are an international commercial term. It’s used in both the exporting country and the importing country. In layman’s terms it tells you where and how your freight is going to be routed. As you asked, the Ex Works and FOB … The responsibilities of the partners … Ex Works is when your … Which would be my customer would be responsible for providing the financial means of getting their freight from the factory to the ship, the port.

FOB means Free On Board which means that the supplier of my client is financially responsible to get the product to the port. Then my client’s financial responsibility starts at the port, at exportation. There is big difference on that. If your freight forwarder doesn’t have a way to get your export freight to the port that could be a problem. You always want to make sure that if you do have Ex-Works terms on your commercial invoice, that you also have the ways and means of getting it from the warehouse to the port.

Steve: I noticed that the Ex Works quote is always less than the FOB quote probably because of that fact. Is that something you recommend or do you always recommend going with FOB at first?

Pam: No. I don’t have a preference. I do suggest that you get 2 quotes for your product because a lot of times the FOB will be more expensive than the EX Works. You need to judge and you need to analyze and say, “If the FOB quote is $500 more, would it better for you to get an Ex Works quote and have your freight forwarder bring it for $200 to the dock?” If you have that time and you have the desire it’s good to analyze all these. If not the simplest way for my clients is to have FOB terms. They know that it will get there when it’s supposed to and they don’t have to worry about a trucker or anything else on the Asia side that they are not familiar with.

Steve: I’m thinking about some of my factories that we use. They are deep within rural China where it might hard to actually get a freight forwarder there to move the goods to the port. Is that something that you guys handle too?

Pam: Yes, we do. We handle that because we have an agent and a partner over in China. That’s where I use their connection. Sometimes if you’ve got an agent that is not very large, they won’t have the connection. Sometimes if you’ve got agent that’s very large, they don’t want to take the time to go to rural China. They want to just do the nice easy [inaudible 00:12:11] type.

Steve: It just comes down to price really then, EXW versus FOB?

Pam: It does.

Steve: You also mentioned a couple of things. You mentioned air courier, air freight, and sea freight. Would you mind telling us what the differences are first? What some of the guidelines are in using one versus the other?

Pam: The air courier is the most expensive. The sea freight is the least expensive. With the caveat being that sea freight deals with minimums. You don’t want to have the shipment too small to where your minimums end up being larger than your courier. Then the middle of the road is airline is the fastest, but it also is not the most expensive and you can send a few cartons by airline that necessarily might be the middle of the road.

We always look at the carton count and see what’s best for the customer. I would highly recommend that anyone who has a freight forwarder and a broker that they ask for these options because surprisingly enough it maybe that you need to increase your carton count by 10 to make sea freight be so much cheaper.

Then the reverse depending on your financial status and so forth, you may not be able to do that or your supplier may not be able to give you 10 more cartons. Then you end up having maybe the courier versus the airline. Sometimes the courier ends up being cheaper than the airline because of the time of year and also the quantity.

Steve: Interesting, can we talk about the cut offs? When is a good time to use air courier versus air freight for example?

Pam: There is not really a precise cut off on that air courier versus air freight because air courier can be very pricey at Christmas time. It could be $8 a kilo whereas an airline maybe $1.97 a kilo. The difference on the courier and the airline is that on an airline is going to have to go an airport. You are going to have terminal charges and they are going to put it on a pallet. You are going to have to pay for those individual fees, the security filing, all that type. That will add extra dollars to your shipment but it won’t add all the way up to $8 a kilo.

Steve: Okay, would say then that air freight is always cheaper than air courier regardless of the size of your shipment?

Pam: No, I would not say that. Be careful with the season. I’m getting very good air courier rights right now. In a month, when the big retail stores start bringing in their end of the year holiday stuff, courier is going to go up fly up out of the chart. Then it’s going to be better to do airline and also think too that some of these airlines only need a small few packages to fill up their body in their cargo part. You will be able to get an airline right for a little cheaper. Whereas say in express shipment, that’s usually booked for the retail stores and so forth as a whole body of a plane.

Steve: Interesting. Okay, it sounds over the holidays; air courier will tend to be a lot more expensive than air freight. Whereas during the non peak times of the year, courier might be the same price or even cheaper than air freight, does that …

Pam: Yes, that’s it.

Steve: The reason for … Air freight, can we walk through that process? How much more of a hustle is it in the air courier because in the air courier case, they deliver everything straight to your warehouse. You don’t have to worry about anything right?

Pam: Right and it is much simpler, easier, they let the … It’s like sending a FedEx envelope. It’s all right there. All pretty, all but a bow on it. Airline, it would be the same basic airport from wherever you are guest origin is. Then it would bring in to the terminal whereas the courier will come into a warehouse or your final destination or whatever. You’d have to find the airport closest to where it would be. You would then need to take the second step of getting it to the final destination which would be adding trucking to it.

Steve: Okay, could I physically go to the airport and pick the stuff up myself though?

Pam: Yes you can. Yes you can. Now, depending on and I always say depending on the area that you are picking it up, some ports are more friendly, some airports are more friendly to having people walk in and go to the CFS. It is truly your right to be able to do that. Some of the busier airports, you will have to stay in line and wait for hours and pick decent time. You have got to weigh out what your value of time is.

Steve: Okay, and then you also have to factor in the cost of trucking from the airport to your destination which can be expensive as well, right?

Pam: Exactly. Then also don’t forget, our US customs brokerage services on an airline. You do have to … You have to pay for a broker just like in ocean freight for airline.

Steve: I see, I see. Okay, it ends up being a lot more of a hustle whereas air courier handles all that stuff and in my experience you pay the customs after the fact.

Pam: Right.

Steve: Okay, air freight is like sea freight. You have to handle all the customs and everything. The only difference really is that things are shipped by airline instead of boat and there’s no minimum it seems.

Pam: Exactly, right on.

Steve: Got it, got it. All right, that middle of the road option is that … First of all is air freight as fast as air courier or is it going to be slower?

Pam: It’s going to be slower but just by a couple days.

Steve: Okay, because of customs? Is that why?

Pam: No, just that they don’t … Air courier is known for getting to the United States in 3 days, 5 days whatever, however long it is. They leave every night. That’s how the name of the game is get it on there and put it on the first airplane that leaves China. Whereas the airline is a scheduled appointment just like an ocean freight is a scheduled …

Steve: I see. I see. Okay, and let’s talk about sea freight then and when it makes sense to go by sea.

Pam: It makes sense to go by sea when you’re carton count and your CBMs are around 3 CBMs. Depending on the size or the weight volume that determines what’s going to happen on sea freight. You can … I can’t say, okay 73 cartons is the magic number because your port may be different. Let’s concentrate more on the CBMs because that’s how ocean freight is calculated. Everything is calculated based on CBMs.

Steve: Which stands for cubic meters, correct?

Pam: Yes, cubic meters. Whereas an air freight, it’s all calculated by kilos and chargeable weight. Well on ocean freight, there’s no chargeable weight. A CBM is a CBM. A cubic meter is a cubic meter. We’ve got a small typo around here. I always tell the people I say, “Okay pretend it’s a small round table with corners.” To get an idea of what a CBM looks like. That’s the visual of a CBM.

On ocean freight usually from China and Asia they actually come loose. All your cartons come loose. Then when it gets to the United States, it is palletized at the container freight station which is the CFS. You are not paying for the weight of the pallet. You are not paying for someone in China to handle it differently. You don’t have to worry about a pallet jack or a fork lift or anything like that. We do agree with the Asian way of sending it loose freight because of we do not want to pay for any extra weight than we have to.

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Steve: So just to summarize what you said. Sea freight is just by volume. It’s charged by volume whereas air freight is always charged by weight. It makes sense when you have stuff that’s super heavy that you go via sea freight because there’s no incremental cost to adding more stuff because it’s all calculated by a container load.

Pam: Exactly, exactly.

Steve: Okay, can we talk about less than a container load versus having your own container? How does LCL work?

Pam: A less than container load is LCL freight. What happens there is that say you’ve got your cartons and you only have 5 CBM, we are going to assume an FOP which means free on port. Your supplier is going to bring it to the port. The port has a container freight station where they put all these individual cartons together and they load a container. All right, I can arrange a container, my agent can arrange a container, the freight forwarder can arrange it, it could be any which way. We are going to say this is just a generic container.

Steve: Sure.

Pam: MSC has a generic container which is Mediterranean shipping line. Your 5 CBMs are part of this 20 foot container which unless you are sending water you really can’t go much more than 25, 28 CBMs in a 20 foot. Your 5 CBMs are part of we’ll say this 25 CBM container. Now, your freight is put with several other people’s freight. You don’t know them. You don’t know what it is, you don’t know their documentation status, you don’t know if they’re smuggling drugs, you don’t know if they are packaged right. The only thing you can know is that if it is HAZMAT it will not go into a normal container. It will go into a HAZMAT container. You are not going to be exploding … There’s not going to be your container blowing up because you got something next to you inside that container.

You’ve got all, we’ll call it all freight of all kinds and it’s on the container and now you get into the CFS. Your 5 CBMs are put together with this paper work, signed off, checked in, loaded in the container. When it gets to the United States, it is then taken off the vessel with a huge crane and it is taken back to a container freight station where it is actually divided up again. Your 5 CBMs and say your 70 cartons is put over here with this paper work and so forth. That container is divided out again.

The negative part of the LCL and sharing a container is that if your buddy, your new BFF that’s in that with you, if they get called for an exam, the whole container stays in an exam state until it is all cleared. US customs will not partially clear a container. Your paper work and your items might be perfect but if you are sharing it with somebody that’s not, that’s when it’s a negative. You might have a delay or a cost for sitting on the dock. That would be a downside of that even though you are an innocent party.

Steve: For example, let’s say I was sharing a container with someone who didn’t properly label their goods, customs goes in and they notice that the goods weren’t labeled properly, that would delay my shipment as well?

Pam: Yes, yes.

Steve: Okay, I see. Is there any control over who your buddy is on a container?

Pam: I have made that control because I do my own containers. I know that we handle the paper work; I know the due diligence that goes into the products that are picked and put on the container. The control of that is and can be handled if you’ve got somebody like me that will basically hand pick who your new BFFs are.

Steve: I see. Okay since you guys do a lot of business, and often times it’s from the same originating port, you are able to put together different customers within the same container because you know what’s in there and you know that they’ve labeled everything properly and it will clear customs, is that accurate?

Pam: Exactly. They will all have their continuous bonds and we won’t have any hang ups as far as a single entry bond having to be signed off.

Steve: I see, okay. Given that you know who your buddies are on a container and everything clears, is there any other disadvantages to using LCL?

Pam: I don’t really know. It is more costly after it gets to probably about 7 to 10 CBMs. We always recommend if you are at the 10 CBM mark, it is actually going to be cheaper for you to get a full container and only fill it up half way or see if I can find somebody to marry with you because the port charges are so expensive. The core load of these are so expensive. Basically they want to deter having to unload 200 cartons on the CFAs.

They would rather say, “Okay we are dealing with union laborers; we are dealing with port charges that our government mandated so it’s more pricey.” They’ll put extra charges on there, extra fees for that, which is the extra labor and time that they are going to have to do that with. They are going to have to prioritize all those 200 cartons and they come every which way on those pallets. It’s not a nice neat like you would think in a warehouse type environment, palletizing. They’ll just throw along any each way to get them all together.

Then of course something like Amazon or someone that you would want to send it and have a good name for yourself. You would not want to send a pallet looking as though it was all mixed up and upside down yeah.

Steve: Interesting, when you have your full container it doesn’t need to be unloaded for inspection?

Pam: No it doesn’t it will … If it does need inspection and I say an exam inspection, they’ll take the whole container and run through the electronic ice. Then if that still fails then they will ask for it to be moved off of the site. Then they’ll unload it and that’s called an intensive exam. Those are really pricey.

Steve: Okay how often does that happen?

Pam: Not very often we rarely have intensive exams but that’s not to say that you don’t get them. The exams … We usually say about 30% of the US customs has to be examined, things that go through US customs about 30%. That’s where we get into this. Examined and intensive examined are 2 different things. Running it through a laser basically seeing if there is anything that flashes up is totally different and a lot cheaper because it can all stay in the container.

When you start unloading, now you’ve got union workers, government workers and you’ve got an offsite facility. You have to take it off site this that is bonded for an intensive. That’s why it’s so pricey as well.

Steve: Okay how does one decides on a good port of entry for a shipment; let’s say if you don’t live near water?

Pam: It depends your final destination, and how quickly you need it too. Now why we send so much to Long Beach is because it takes 13 to 15 days of sailing time to get it there. Well that’s pretty quick. If you’ve got your decks on a row and your supplier is actually done when they say, and you’ve got it all, everything paid documents everything perfect.

You could have your freight in 30 days if you did a container or whatever. You could have it easily at your warehouse in 30 days. It only takes we’ll say 15 for ground purposes, 15 days for sailing, a few days at the port on each side. It doesn’t … This is one that doesn’t get an exam and you are sitting here looking at 23 days.

Steve: If I’m in New York for example, would it pay to get it shipped to Long Beach and then trucked over. Would that be the fastest way versus sailing all the way around?

Pam: That would be the fastest way, it’s not the cheapest but it would be the fastest way.

Steve: Okay, I see and there is just tradeoffs that depend on how fast you need your goods. What would be cost differential for example for a container?

Pam: I don’t even know to be honest with you. I can tell you that we just, we looked at a trucking for … From LA to Tampa and it runs about $4500.

Steve: Okay for a container load?

Pam: For a container load.

Steve: Okay that’s significant.

Pam: Very significant. New York probably $5200 maybe, because there is a little diversion there.

Steve: Sailing to New York takes significantly longer right?

Pam: It does because it’s called all water A-W-S is all water. We’ve got all water to Houston, Miami, New York. The only one that we have that’s the most economical would be to LA or possibly Seattle to Cama getting into upstate up there. It does take even a couple of more days longer to get to Seattle to Cama than it does LA. Now the other choice is not to truck it. Bring it in to LA and to put it on a rail. A rail road and rail it to New York.

Steve: Interesting okay.

Pam: How it works is there is … We do it in degrees. The ocean freight, sea sailing is the cheapest. You want to keep it on there as long as you can if time doesn’t matter. [inaudible 00:35:55]. Then the rail … The rail road is cheaper, then truck it. You want to keep it on the rail as long as you can. Then the third is you track it the shortest distance you can.

Steve: Okay that makes sense. Can we talk a little bit about customs bonds, first of all what are they and why do you need one?

Pam: All right in order to import into the United States you have to have a customs bond. That gives basically permission for a responsible insurance policy for US customs to get their duty and taxes paid okay? We’ve got 2 types; we’ve got a continuous bond and a single entry bond. A single entry bond is based on 1 entry, 1 shipment and it’s paid every time. It is more costly and it is based on duty and value of your commercial invoice. In a matter of speaking you could easily pay more for a single entry bond than a customs bond, a continuous bond. A continuous bond is $500 for 12 consecutive months.

That means if you got it today this is June, it would expire on June 9th. It’s not a January to December, and you can’t partial you can’t pay for a half of the year. Its 12 months continuous and it starts where it is. In a matter of depending on your duty and your commercial value, you could easily pay for your continuous bond in 3 shipments. Sometimes 2 if you’ve got a high duty rate or a high commercial value right? Remember its $550 a thousand based on the duty and commercial revenue.

Steve: Okay and in general if you plan on doing at least 3 shipments it pays to get the continuous bond?

Pam: Yes, if there is several other caveats to the continuous bond that I personally like. I think it is good to be known by the US government as you support the economic and the retail market wherever you are selling if you are a wholesaler, retailer whatever. You want the government to know that you are not a fly by night. That you are not doing this one time. You are invested in the US economy.

With a continuous bond, that’s what its stating to somebody that just sees a log. It says, “Okay this guy’s really serious about making a difference in our retail or wholesale world.” Whereas a single entry bond it says, “Oh I’m going to give this a try, I’m going to put my toe in it just a little bit, and it may not happen.” Also you’ll have …

Steve: Would you say then you are less likely to get an in-depth exam if you have a continuous bond or?

Pam: I would because that is what we hear. There is nothing of course written that way but it does seem to be an issue on that. Why, if I could explain why. With the single entry bond, the physical paperwork, the documents, they hold your commercial invoice, your packing list, the 7501 which talks about the duty and your release. That is the paperwork, and it basically has to be taken to US customs and signed off. Then that paperwork has to be reviewed at the same time that they are reviewing your product.

You got US customs officer that is actually got your stack of papers in his hands, and he is also looking at your 70 cartons or whatever. He is, just in human sight. If you’re going to have to put your John Hancock on something, you are going to look twice because you know that your authorities know that you are standing right there by and if it doesn’t say that it is made in China or if something doesn’t look right then shame on you. You are just lying; you are leaving yourself wide open for an exam I think personally because of just human nature.

Steve: Interesting, okay that is really good to know. Couple of other things that I often get asked is how do you know what all the different permits that are required when you are importing something in?

Pam: US customs and the government, it stated that you as the importer have to know everything you need to import. You don’t have to do it but you have to know what you need. Let’s just be real, you don’t know everything you need because you don’t even know what to ask. You know that if you’ve got [inaudible 00:42:06] and so forth, you know that if you got a food article that you know food and drug is needed.

It is very important that your US customs broker is up to date and knows about this. If you need certificates, if it’s something that requires FDA or XCC trademark, but if you have a blue tick with the trademark, you’ve got to have permission and that’s got be part of your document packing. That is very important to get this done before it sits at the port, because remember the port is very expensive because it’s union labor and that port has got a lot of movement in it, and that space is very expensive if you are holding, if you are taking up a room.

Steve: Okay.

Pam: For the actual cost, do your due diligence ahead of time. Make sure your customs broker is familiar with the rulings and the filings that are associated with your [inaudible 00:43:21] code which is how deviant taxes are calculated.

Steve: Okay, I can’t imagine doing all these stuff on my own which is why I have always used a customs broker, but I’m just … Can we just go through the entire process from beginning to end, in terms of what’s necessary. I imagine when someone comes to you, you probably ask them very specific questions on how large their shipment is, exactly what they are importing. Can you just walk me through the process as if I was coming to you as a client.

Pam: Sure, the very first thing is we ask a group of 13-17 questions, and that makes it much easier for you to get a qualified quote. We are strong and your quote needs to be your invoice. How can you run a company if you keep getting bills that come through after the facts? We ask very detailed questions. Where is your supplier, what is your incoterms, is it FOP or Ex-Works, do you even have a picture of it so that my compliance manager can look at it and make sure that we are suggesting the correct [inaudible 00:44:44] code.

We go through your carton count, volume pieces, how the value is done. We make sure everything is fair including the commodity, the origin destination. We even go in to; do you need a lift gate at the final destination? Does your warehouse have the access for a regular truck to come in or do you need a lift gate? If you have, do you live in a rural area if you are going to have it be delivered to your house? Will you have someone there to unload because you only have 2 hours free time. Then you start getting charges for holding up the truck driver, and the container or their truck.

We try to get as much information as we can on this, and then that is the generic first of, and then we start getting nitty gritty. We start taking you through the ocean freight? This is your cost. Do you want marine insurance? That’s insurance that covers you while you are at sea. Do you want additional insurance? Do you want warehousing? Do you want trucking? That’s talked about.

Now we have to talk about the Asia side. Does your China supplier have an export license if it’s going to be FOB terms because remember FOB means they get it all the way, and it’s to the ship. Your supplier has to clear it through China customs. Your supplier has to make sure the documents are correct, and in China they have to be licensed just like we have to be licensed in the United States. If not then we need to find somebody who is, that can offer that service.

Steve: Incidentally if you go Ex-Works, the responsibility then is on you to clear China customs, is that correct?

Pam: Yes, that is correct. We need to find out a little more, and then sometimes people don’t know. We will interact with the supplier at this point in time, and we will ask these questions, and keep the client in copy. Sometimes they get too in depth with the answers, and they get confused as far as what are we really trying to say or something especially if you’ve got a language barrier. Then we bring it on, and we go through and we take care of everything, make sure everything is taken care of even if we are not responsible for it.

We make sure that you are taken care of with the terms in China. We get it on the water, we bring it to the port, after the port we break it down. If it’s LCL, if it’s not LCL which is less than container load. If it is a full container, we will get a tractor; we will bring the container to our warehouse. We will take it apart at that point in time, unload it and then we can store it, or we send it on to the final destination.

Steve: Do you have warehouses at each port?

Pam: Not at each port, we have a warehouse in California, and we have a warehouse in Tampa. We are looking into a warehouse in Miami at this point in time. At this point our warehouse in California is more the storage and the traditional warehouse. The Tampa warehouse is more for bundling, shrink wrapping, maybe making something, putting a bow on it.

It’s a little more, what should I say, detailed, and whereas, I was thinking the traditional warehouse is your fork cleft, and you’ve got a bunch of boxes moving around. They can do, is it broken, is it damaged, but can that fork cleft driver really put some shrink wrap round a perfume bottle or a lotion and make it look as good as if it was on a Macy’s shelf, probably thinking not. That’s why we ended up with our Tampa warehouse.

Steve: Doe that imply then that people can ship their goods from China directly to you for some processing and then have you forwarded directly to Amazon’s warehouse?

Pam: Yes, most definitely.

Steve: Okay, I didn’t realize that was a service that you guys offered.

Pam: We do, when I say we are full service we are full service. We can pick it up. The only thing that I can’t do is I can’t pick your product, but everything else I can take care of it, and we can take what you want. We’ve actually improved some people’s product that has got into Amazon. Somebody used to put their product in like a little baggy, for lack of a better word. He folded it over and put a sticker on it, and that was his label, the danger warning and all that. Well when we took it to our Tampa warehouse because he just wasn’t getting the dollar value that he felt like he needed.

We took it our Tampa warehouse and said, “What can we do?” Rather than the 3 labels, and they weren’t always even, we made up an insert that bagged the product, so you could see it, and then we shrink wrapped it to where it did the like the image. Where it all sucks around the product, so that it was nice and neat rather than this zip lock bag. He is very happy; he has gotten his price up because it looks like it is an expensive product that it is. The product was being devalued based on the packaging, and our Tampa warehouse came up with that idea, and he is very happy.

Steve: Interesting, hey Pam, where can people reach you if they need to contact you? If they have any questions about the import process or anything like that?

Pam: You could reach me at, pam@hyclogistics.com, and then copy please my A team that will go to several people incase I’m out of town or away from my desk or helping someone else, and that would be ateam@hyclogistics.com.

Steve: Thanks a lot for your time today Pam. I learnt a lot especially about the air freight versus sea freight. I have actually never used air freight before; I didn’t even realize that that was an option actually.

Pam: Good, it’s a bright new world out there.

Steve: Yeah, and the disadvantages of LCL versus full container, I was not aware of those either, so I learnt a lot today.

Pam: Wonderful, wonderful well I would be happy to help you anytime.

Steve: Awesome, well thanks for your time Pam. Take care.

Pam: Thank you, bye bye.

Steve: Hope you enjoyed that episode. Importing your goods from overseas for the first time can be quite intimidating, and hopefully today’s interview with Pam gave you some insights on what’s involved. If you have any questions you can always contact pam@hyclogistics.com and tell her I sent you.

For more information about this episode go to mywifequitherjob.com/episode125. If you enjoyed this episode, please go to iTunes and leave me a review. It is by far the best way to support the show, and please tell your friends because the greatest compliment that you can give me is to refer this podcast to someone else, either in person or to share it on the web.

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124: How To Prevent Your Amazon Account From Getting Suspended With Cynthia Stine

How To Prevent Your Amazon Account From Getting Suspended With Cynthia Stine

Today I’m thrilled to have Cynthia Stine on the show. Cynthia is someone I met at the Import Summit last year and she runs a site called OnlineSalesStepByStep.com where she offers a variety of very unique services related to Amazon.

She’s has worked with hundreds of Amazon sellers over the years and she specializes in helping companies get out of the Amazon penalty box.

If you’re ever suspended, Cynthia will help you get unsuspended.

If a dirty seller is purposely trying to sabotage you, Cynthia can help.

If want to know all of the tips and tricks on how to keep your Amazon account clean, Cynthia is your woman.

Enjoy the interview!

What You’ll Learn

  • The most common reason why a seller gets banned
  • Some things to watch out to prevent getting banned
  • Evil things sellers are doing and what can you do about it
  • What you have to do to get reinstated
  • The primary thing that private label sellers selling FBA have to worry about

Other Resources And Books

Sponsors

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Transcript

Intro: You are listening to the My Wife Quit her Job Podcast. And if you are new here, it’s a show where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now I don’t bring on these famous entrepreneurs simply to celebrate their success, instead I have them take us back to the beginning and delve deeply into the exact strategies they used early on to gain traction for their businesses.Now if you enjoy this podcast please leave me a review on iTunes, and if you want to learn how to start your own online business, be sure to sign up for my free six-day mini course, where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequiteherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email, now onto the show.

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 thrilled to have Cynthia Stine on the show. Cynthia is someone I met at the Import Summer last year, and she runs a site called onlinesalesstepbystep.com, where she offers a variety of very unique services related to Amazon. She’s worked with hundreds of Amazon sellers over the years, and she specializes in helping companies get out of the Amazon penalty box.

If you are ever suspended, Cynthia will help you get unsuspended. If a dirty seller purposely try to sabotage you Cynthia can help, and if you want to know all the tips and tricks on how to keep your Amazon account clean, Cynthia is your woman as well. She also has a book out called Suspension Prevention: Get Reinstated and Protect your Amazon Seller Account, of which I own a coveted and personally signed copy. With that welcome to the show Cynthia, how are you doing today?

Cynthia: Hi, good morning?

Steve: Good morning. Helping people’s accounts get reinstated is very niche, and very random in my mind, so can you give us a quick background story on how you got started helping people get their accounts reinstated.

Cynthia: Sure, I’ve been an Amazon seller since 2010, and before that I was a business consultant. I’ve been doing crisis work, turnaround work, all kinds of communications work for over 25 years, and then I got to selling on Amazon and I wrote my first book about how to get started selling on Amazon, and as a offshoot to that I would do some consulting on the side. That was fun and few hours a months whatever, and in 2014 some of my clients started coming to me who had been suspended, and they said can you help us. I thought well I’ll do my best.

I started helping them get reinstated, and I saw a lot of different situations, and so in February of 2015 I put up my little e-shingle as it were, and I said hey I do this as well, I do reinstatements and I wrote a couple of blog post about it, and I mean wow, the doors just blew off. I had no idea that there was such a huge demand. I was by myself, in March of 2015, by this time last year I had brought out a business partner, and now at this time that I’m talking to you we have 7 people in the US, and 14 in the Philippines, and we are all working very hard to help our customers, our sellers keep their accounts clean.

I have sort of a maintenance and a preventative aspect of what I do. Then for those who are suspended, of course we get them reinstated, and so that’s and then somehow in, I don’t know I had no sleep last summer, somehow in the dead of night last summer I also wrote that book Suspension Prevention, and I did that because there were so many sellers who just had no clue what was going on, and why Amazon was doing this, because Amazon didn’t tell anyone. They didn’t put out a memo, they didn’t say here’s we are about to tweak the algorithm, and here’s what it means.

They didn’t do any of that, and they didn’t put anything on the dashboard for us to look at either. Most split sellers and most of my clients are very good sellers, they religiously check their dashboards everyday to make sure their metrics are in line with Amazon expectations. They would have these great metrics, green, green, 100, 100, and they were getting suspended, and they were bewildered and of course upset.

That’s what my book was about, was just trying to get people to see what was going on and help them be aware, so they didn’t have to be suspended to find out what was going on, and so that’s also why I’ve been speaking and out there is not to sell my book, because that’s not where I make my money. It is to help people get ahead of what could be a potential problem in their account. That’s the gospel according to Cynthia, and that’s what my team is all about, and we all feel the same way about it I guess, which is we’re all focused on helping sellers and 4 of us, consultants are sellers ourselves.

Steve: Okay, that was my next question; you are still selling physical products today?

Cynthia: Yes. Now, obviously I have automated my business 100%, and it’s much smaller than it was, because I just can’t give it – I mean Timothy Ferriss talks about the 4 hour work week. When it comes to selling on Amazon it’s more like a 1 hour work month, I just have not given it the time that I can, but it’s still very important to me to sell on Amazon, because as someone who has run several consulting companies over the years I know there’s a life cycle to them, and I want to be able to sell again one day when maybe this tuff dies out.

Steve: Have you ever been suspended yourself?

Cynthia: No. Luckily and honestly it would be a horror if I ever was, because everything that I teach my clients to do I make sure that my team is doing on my account as well. So we are very– We keep a really close eye on my tiny account.

Steve: Okay, I was just thinking it from the perspective of like in order to know it works you should get suspended yourself and then get reinstated, but…

Cynthia: No, no, no I don’t– all that we do is just give me even greater empathy for my clients, but I actually have seen hundreds of different ways to get suspended, which is I put them in my book and I talk about them, and I write about things in my blog. What happens is Amazon will, they had a huge tweak to the algorithm last spring, but since then they’ve had little tweaks every couple of weeks, and I know they have done something new, because we’ll get a rush of sellers who all look the same.

Like there was one week where we had like 5 sellers who sold pearl jewelry. [inaudible 00:07:41] we hadn’t had any jewelry in quite a while, and then all of a sudden we get 5, all for the same reason. I’m like oh tweaked the algorithm I see, and that’s how it goes, so like we had a whole bunch of people suspended for improper product review programs.

Steve: Okay, I want to touch in all this stuff eventually yeah.

Cynthia: Okay yeah. Again, it was like oh, oh Amazon has tweaked the algorithm, and so well we had had sellers all along who were getting suspended for product reviews, but when you get a bunch in a row you know that there’s something going on. So the tweaking of the algorithm as I call it is something that goes on constantly at Amazon.

Steve: One of my biggest fears is waking up one day to my Amazon account dead in the water, and so you mention a bunch of reasons so far about how you can get suspended. What are some of the things that have been happening recently on why people have been getting suspended, and I also want to touch on how you can prevent all that stuff from happening.

Cynthia: Okay, well so basically some of the things that we’ve seen just in the last few weeks is we’ve seen people getting suspended for their product review programs.

Steve: Okay, let’s talk about that.

Cynthia: Yeah, so let’s start with that. What happened a few weeks ago was that sellers were getting suspended for their product review programs, and they were actually naming names in the suspension, which I have never seen before. They named AMZ Trader Tracker, anyway they named them, and the reason for the suspension. I was just shocked because I have never seen that before. Then basically what they are coming down on sellers for in this case was excessive giveaways, there was too many giveaways, and then…

Steve: What does excessive mean?

Cynthia: Well wouldn’t it be nice if they would tell us that, because here’s what we’ve discovered by trial and error, it’s less than 20%. If you are selling 100 units a day for example, you can’t give away 20 or more products a day, so this is what we’ve just learnt by trial and error. So I have my clients experimenting with between 15% and 20% to see if we can find the magic number in the algorithm, but anyway so you have to give away less than 20% of your volume of sales, and that’s…

Steve: What does that mean if you are first starting out, then you have no sales, no sales history at all?

Cynthia: Right, and that’s a different case, so what we’ve seen– we haven’t seen anybody shut down for excessive sales who is just launching a product. These are guys who have been selling this product day in and day out, months, years and they just constantly do product review giveaways, right just the concept part of the marketing campaign. Amazon knows you are going to do a big [inaudible 00:10:40] to launch a product. I don’t know where the cut off is where it stops being a launch, and starts being a pattern, do you know what I mean?

Steve: Yeah sure.

Cynthia: But I would say from what I’ve seen anyway, I think most people can feel pretty comfortable having a big push in the first month of a new product, that Amazon is not going to– as long as they see that this starts converting to real sales, they will understand what you are doing. If most of the so called sales of your product are all giveaways and it doesn’t start to shift to real sales, then they are going to say that something is wrong, like maybe your product is crappy.

I do tell people if you are going to run a product review program, make sure that it’s a comprehensive plan, don’t just rely on getting reviews on the platform, you should be trying to promote and support your product on Facebook, on Pinterest if it’s a visual product, on everything you can think of Reddit, LinkedIn. Maybe not LinkedIn but you should really look at trying to get people to write blogs about it, and just do a sort of a traditional marketing campaign around that product, and build a fun base.

I think that’s just smart anyway, because anytime you can capture someone’s email off the Amazon platform, well they are yours for life, so you can the next time you launch a product why you can market to them. This just makes sense on every level, but it is hard work and people don’t want to do it, and so some of them they just focus on, okay I’m going to save all this money into a product review program. The other reason that they get…

Steve: Would you say that these large scale review programs are pretty much dead then?

Cynthia: No, what’s happening is they are changing, so AMZ Review Tracker, for example coincidentally after that week when so many sellers were suspended changed their policy. One of the policies that they– one of the things that they were doing that Amazon came down on was what we call super URLs.

Steve: Okay right.

Cynthia: Manipulation of the platform is another reason that people were getting suspended, and that’s again where you try to force the browser experience by putting in the keywords into the URL, so they are not naturally going out to the platform and looking for your product, they are they are using specific keywords. Basically a lot of review programs have cut that out, because I think Amazon has spoken pretty clearly on that being against policy. That’s what they call manipulation of the platform.

There are other ways that people manipulate the platform, and one of them is to try to hide that the products were given away for free or for a dollar. If they don’t put the disclaimer that says, “Hey I got this product for – I did this count in exchange for an honest review,” they are not only violating Amazon’s policy, but they are violating FCC policy, and Amazon has a zero tolerance policy for this. What happens with my clients who were suspended is they have to do what I call confess and repent, and so they have to admit what they did wrong, and then they have to provide Amazon the list of the reviews that violated policy.

Steve: My goodness, okay.

Cynthia: Another violation that I see is people who do like a lot of these reviews, Facebook groups, or review programs, and I’m talking about the reviewers now. A lot of times they’ll go out and put a review up before they even receive the product, like the review will appear the next day, and that’s because they are obligated to write a review.

They are getting this product for cheap, and they are obligated to write reviews, so some of them are just highly efficient, and they just get it out there because they don’t give a crap about what they are saying. Amazon of course doesn’t like that either. I had a client recently where we had the spreadsheet, and it was just hundreds and hundreds of lines long of reviews that violate policy. Either because they were written too close to the purchase, or they didn’t use the disclaimer. And literally all those reviews are — I mean I’m talking hundreds maybe a thousand are wiped out. Because when Amazon gets that spreadsheet, they are going to remove all of them from my client’s products.

And they will most likely shut down the reviewer as well, which means they will remove all the reviews by that reviewer throughout the platform. So that means that I may wake up one day and suddenly a bunch of reviews are gone from my site. No, I’m not in trouble, but it’s because these reviewers were violating policy on somebody else’s account. So…

Steve: So what’s your policy on using review groups? Because I imagine a lot of review groups have people like this person who got banned, right? Like the reviewer I mean.

Cynthia: Yes, well and that’s the thing, so what — here is the thing. People think oh I’ll just do a group and it will be efficient and cheap and easy and all this stuff. But what you really need to do is keep track of the reviews that are written. You need to keep track of when they bought the product, when they wrote the review, if they complied with Amazon’s rules. So you still need to keep a track of it.

And I would say this for people who are doing large scale campaigns this is going to be a daily event. Where you are literally going to have to review your reviews, and then for violators go after them nicely, but immediately. And say, “Oh maybe you are thinking of a different product, because you reviewed our product and you haven’t even received it yet.” Or you have to say, “Oh I noticed that you didn’t include the disclaimer, could you please include the disclaimer.” So it becomes the seller’s job to police their own reviews. So you can’t abdicate that.

Steve: At any event that they don’t do what you are asking at least you have the record that you tried right, is that the idea?

Cynthia: Yes, and this is where it gets a little effie, because I haven’t quite figured out like what the seller should do. So let’s say that the problem is — I mean here is my belief that the seller should turn in the reviewer if they don’t comply. So if you send them a friendly email or write them a note, and they don’t comply within a couple of days, you are obligated to turn them in to Amazon.

Steve: How do you do that?

Cynthia: Basically I would either — this is another thing I haven’t quite figured out. I would probably just send them email to seller performance.

Steve: Okay that’s interesting. So you are having your clients do all these things now, like review all the reviews and proactively…

Cynthia: Well we are starting to. Right now there is nothing that makes it really easy right now. I know Seller Labs has a product that’s coming out, but they are launching very soon, which I think will really help automate this process. It will work a lot like their Feedback Genius where you will be notified when you get a product review. And you can filter it if you just want to see the negative reviews, right? Most of my clients who are running review programs; they are going to want to see all of their reviews, because again they have to check them for compliance.

This is a service that we are starting to offer our clients where we do the TDS checking everyday part, and it’s I guess in beta if you want to put it that way. But yeah it changes because now Amazon has clearly said the seller is responsible. So if the reviewer doesn’t follow the rules the seller is the one who can lose their account.

Steve: Interesting, so let’s switch gears a little bit, like so we talked about review groups and reviews. But let’s say you are not participating in review groups and you are getting your reviews kind of organically. What are some — and let’s say you are not doing anything black hat, like you are just a typical Amazon seller following the rules. What are some of the reasons that you’ve seen those types of people get banned?

Cynthia: For their review programs?

Steve: Not for review, let’s say they are not participating in review programs, they are doing everything by the book, but then one day they get banned. What are some of the common reasons for that happening?

Cynthia: Oh sure okay, so a lot of reasons why sellers have been getting suspended since last spring relate to product quality. This is the hidden metric that I talk about because there is nothing on your dashboard that measures your product quality metrics. There is nothing that says here is the acceptable number you sold as new or not as described, or not as advertised that you are allowed to have before we shut you down. So it’s really tough and that’s why we created our get clean stay clean services was to help our clients stay ahead. And we are very, very conservative because honestly it doesn’t take very many some of these for them to shut you down.

Steve: How many does it take actually; can you give me an idea?

Cynthia: I wish I could do that, because it does seem to vary, again it’s an algorithm. So it is based somewhat on how things are going in your account, and what type of claim it is. Like inauthentic, they’ll pretty much check any counterfeit, they’ll shut down your listing every complaint pretty much.

Steve: Really, so one complaint will do it?

Cynthia: For a listing yes. So for the account, for as new as we can tell it looks like you are allowed to have maybe three or four before your account goes down. So yeah there is like a zero tolerance policy about this, which is why I tell people if you get a warning from Amazon or they shut down a listing, you need to respond immediately. Even if you have no intention of selling anymore of that product, you have to respond to it as if it were a suspension, because otherwise these are going to account against you.

So a lot of my clients who were suspended for these product quality reasons, part of their problem was they just sort of let them go, right? They would look at them and they would either just stop selling that product or whatever, but they didn’t realize that this wasn’t the only warning they were going to get. And they didn’t realize that how serious Amazon takes it right.

Then here is the thing, a lot of them don’t know what it means. So if I say to you, you sold as new and you buy wholesale, they are like what you are you talking about, all my stuff is new, right? The thing is Amazon knows that, they know your stuff is new, but what they are telling you is that when the buyer opened their happy Amazon box, and looked at the product they thought it looked worn, used, abused, dirty, to one maybe the corners were crushed in.

I mean it’s hard to say, but they looked at it and it looked like something that had been sitting in garage sale somewhere versus a brand new product, right? In Amazon you can’t do like eBay where you say your new inbox, right? You can’t do that, you either is perfectly sparkly, brand new and beautiful, or its not and that’s it. Like there is no, yeah it’s all green on the outside, but it’s still new, no. You would have to say that that was used good, right? So that’s where…

Steve: So is that usually a packaging problem then for these people?

Cynthia: Yeah, it’s usually a packaging problem, it might be a shipping problem, it might be something like that. It may be weared at getting in the inventory. So I have a lot of clients who buy from liquidators, right? So obviously these products that they are buying have been sitting on various shelves for a long time. Then they get thrown into a big truck, someone buys the track load. So by the time that box gets up to Amazon it does look like it’s been around.

And it maybe still [inaudible 00:23:30] and all of that, but it doesn’t look nice. So one of the things I tell my sellers is you have to make sure that what you are sending out is pristine. You can’t just throw anyhow thing up there on Amazon and think it’s going to sell. Now if you have some mumpy bumpy dirty dusty boxes, and it’s in a category where you can sell used, then sell it as used and you will be fine.

But the other thing that’s taking down a lot of sellers, so besides the physical quality of the box, yes things like inauthentic. And well that’s really more of a policy violation than a product quality issue; they tend to go hand in hand. And a lot of times people will again open their box, and they’ll think this is a piece of crap. And they’ll think maybe it’s brutally either fake or it’s not real. So they’ll make a claim to Amazon that they are returning it, because it’s not real right, or it’s fake or whatever. And that gets sellers in trouble.

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Steve: Does that apply to people selling other people’s products, or does that apply to private label as well?

Cynthia: Well yeah any product. So I often have private label clients who were shocked that they are getting inauthentic claims or even counterfeit. Because they are like wait a minute, I manufacture my own, I am the manufacturer, right? How can they think this, I am the only one selling this on Amazon. But that tells them that they have a product quality problem. Like for some reason why somebody gets the box or the bottle or whatever and they think this isn’t the real thing.

And sometimes there really is a product defect. I mean I think about people who private label shampoo for example. If the formulation isn’t just right, or sometimes if the bottle isn’t sealed properly, then people are thinking, hey this is like — this has been previously opened right, because it doesn’t have the seal on the top. And technically the rule says, Amazon rule says we have to have that seal on the top of the bottle, right? It can either be around the outside, a little plastic [inaudible 00:26:45] crappy thing. Or it can be the actual cap under the cap, but we are supposed to have that.

I can’t tell you how many clients of mine have gotten in trouble with inauthentic claims or counterfeit claims. Because or even used sold as new because they didn’t have that seal. Or they were trying to just sort of seal it themselves with a piece of tape. And I thought are you insane or whatever. So again if you are going to manufacture your own, make sure that it’s properly packaged.

Steve: Does that mean that you have your clients monitor their refund reason, like if there is a refund request?

Cynthia: Yes, so these are the hidden matrix. What I tell my clients to do and what we do for them if they hire us to do this work, is we go and the first thing we look at is the imperfect orders report, which is right under the perfect orders on the dashboard basically. So if you open that page under performance, the one that has all the greens and stuff, and you go to the right hand side and go most of the way down the page, as I’m saying this is the most hidden report I have ever seen. There you’ll see this imperfect orders report.

And the reason it’s important is because this is the roadmap. I always sort if by acing so that I can understand which acings are building up problems, right? And Amazon considers imperfect anything that the client or the buyer has to contact you for. So if they email you, if they got to return/refund, if they file A to Z claim.

If they do any of those stuff it’s an imperfect order right? Because in Amazon’s world perfect is, they buy the product, they love it, you never hear from them again, right? We are all happy, and as a bonus if they leave you positive feedback or write a product review that even better, right? You get bonus points for that. So that’s where I start because that chart where you put down into a spreadsheet, it tells you where the problems are.

Like they say well okay so for this acing where I have 10 issues, I see three people left me negative feedback. Two people sent me an email, I had all these returns, and I had an A to Z claim, I’m just making that up. But then I know where to go work, because I’ll say what’s happening with this acing, why am I getting all these returns? So you really need to try to read what’s happening, right? Oh wow it looks like it’s getting torn up on its way to the buyer, right? They are getting torn packages or this or that.

Once you know what’s happening you can fix it and that’s what Amazon wants you to do, which is why I have my clients look at these reports every week. Because that way you can catch things before they get big, and before they get to Amazon’s level of attention. Now the other reports are the returns report, FBA merchant fulfilled, and of course negative feedback.

And now for my clients who are doing product review programs, they should be reviewing their product reviews if not every day at least once a week. Because again if somebody is violating policy you can let it sit up there for very long, you need to take proactive action quickly. So that’s the thing, you can’t wait and do it once a month. And by that time you will be suspended for excessive reviews, or manipulating the platform or whatever. So that’s a lot of work like…

Steve: Yeah it sounds like a lot of work.

Cynthia: Yeah, and so we try it to make it easier for our clients, but that’s what we do for a lot of our clients, and we are monitoring this for them. We are taking care of the issues. If we see a lot of a particular kind of claim on the account, we’ll tell our clients. And then one of the things that we do is we also email all of our negative returns. So everybody who returns a product for a negative reason, not a typical changed my mind, didn’t like the color. But you sell this new, inauthentic, or one of those negative reasons, we send them an email and we do this for our clients every week.

We send them an email and say, oh we are really sorry this didn’t work out for you, can you tell us what we could have done to make this a better experience. So it’s like very open ended, but and what we’ve been trying to do of course is to get real feedback that we can maybe act on and figure out why are they returning this.

Like I had a client yesterday where when we were examining why they were getting so many returns on a particular product, it was a pair of tights. And everyone was saying it was not as described, and you’re like shit, it’s pair of tights. I mean but when we looked at the listing we could see where the confusion was coming from. And it was literally a color switch on the listing.

So I said to them, you need to fix those listing before you sell anymore of these tights. And they are like, well we sell thousands of these, and we’ve only got X percentage of returns, and I said I understand that. I said if these were normal sort of defective returns, change my mind returns, I wouldn’t care. I said but they are not, these are negative returns, you have to fix these. So we had them close down their listing, and now we are working with the [inaudible 00:32:10] department to fix the listings, and then they can turn it back on again.

So that’s why I’m saying it becomes an ongoing like sloping task to try and figure out what’s really going on. I told them if you — if we can’t figure it out, you are going to need to call these guys, some of these returns. Like even though we email them, only a few will respond, you know what I mean. So I’m like you have to be more aggressive, because this is a problem and you are going to lose your ability to sell this product that you are selling thousands of every month. So like you get to smile with them my friend.

Steve: What’s the usual progression, will that listing get suspended first, or will the account get suspended?

Cynthia: Again it depends on the status of the account to begin with. So if they don’t have much going on, and this is just kind of a one off, the listing will get suspended. But here is the thing, with this particular client they already had other listings suspended for similar reasons. So I’m like you can’t afford to get anymore of these, because that’s the thing. When Amazon sees that you have several listings suspended for similar reasons, they think you are not paying attention.

And the other thing that’s hard for my clients to grasp right away, especially my high volume sellers is, if they find a problem. Like in this case it was a listing problem, and I think we should be able to get it cleaned up pretty quickly. But if they find a problem and they fix it, they have to fix it for every product they sell. Like you can’t just keep building up not as described on your products, you can’t.

Amazon is like, hey you haven’t learned anything, right? You just can’t do it as it comes up, you need to have a plan in place that you are constantly looking at your listings and making sure your products match. And then when something shows up on your report, like oh my gosh we’ve had three returns in the last 60 days for not as described. Then you can of course drill down real hard on that one, because something is going on there. But you don’t want to have — you don’t want to keep having the same problem over and over again and having get to a level where Amazon pays attention.

Steve: Will the imperfect orders report disclose most of this stuff, like you should know like way ahead of time when something wrong is potentially going to happen, right?

Cynthia: Yes, what the imperfect orders report will show you is the acings that are building up problems. So again if you see 10 imperfect orders, it doesn’t mean that they are all negative returns, it just that they are imperfect. But then it’s like a roadmap like I said then you go look at why are these product being returned. And again if they are just saying oh it wasn’t quite the shade of blue I needed, or stuff like that.

Then you are like don’t worry about it. But if you start to see — so that’s why you have to go look at your returns as well. The two reports work together, and you have to look at your negative feedback of course, we should anyway. But again there is valuable clues in there. And what people don’t realize is that Amazon, when they are searching your store or whatever for trigger words; this is what the algorithm does. It searches all your buyer messages, it searches negative feedback, it searches returns, A to Z claims, everything.

So I had a client who had a listing shut down where the buyer literally said, I know this isn’t fake, but it seems really dirty, right? I know it isn’t fake; he got shut down for counterfeit. Because the word fake was in there, in that case it was just the listing, we got it back. And we pointed out the obvious. Because again the algorithm is that’s a robot, right? It’s trained to do certain things; it’s not trained to think thoughtfully about it, like oh he said not fake.

Steve: Great, so let’s talk about that a little bit. Because I know there is a lot of – it’s a very competitive world out there, and a lot of people are doing this maliciously. So what are the things that you can do when people are purposely trying to sabotage you?

Cynthia: Dirty seller tricks? Oh my God I hate dirty seller tricks. The latest story dirty seller trick, and they do seem to go kind of into charts or waves. I don’t know if people are just picking up on these on Facebook or what. But they try to do; you do see this in waves. So the latest wave of dirty seller tricks that we’ve seen has been claims of copyright infringement, okay? So we are all familiar with the occasion of getting the Cs into Cs letter through the platform. And you always have to sit and wonder are they serious, are they real, or is this just bullshit, right? But the dirty seller trick that I am talking about is where they will actually file the claim with Amazon, which by the way means that they are singing under oath and apparently a perjury that this is true.

So I can’t believe the balls on some of these guys, but they will file this claim saying these sellers are violating my whatever. My pattern, my copyright whatever, and then of course everybody gets shut down on that listing. Or they say this guy is the only one selling on that listing right, because he is the rights holder. So then what happens is the sellers are like trying to resolve the issue with the rights holder, and the rights holder just ignores them, right? Because they know that these guys are not going to get back on the listing unless the rights holder sends an email to Amazon saying this issue has been resolved.

So this is the latest one that I have seen, it’s caused a lot of heartache. And we have been able and I’ll just say this for anyone listening out there who thinks this might be a good idea. That what we do is we get that, we reverse the tables on them. So for my clients who are willing to fight, we reverse the tables and I have got a number of sellers suspended for pulling this particular dirty seller trick. It’s against the Amazon policy, if you lie on that forum, they take it very seriously. But anyway I have just seen it over and over again over the past couple of months. And then I can say it will tie up a very lucrative acing for a long period of time.

And sometimes you have to hire a lawyer to get it, and even with a lawyer it doesn’t necessarily get resolved. Because here is the thing, if you say to Amazon oh Amazon I have tried and tried and tried to reach this guy, and he is not returning my calls and my emails. They’ll be like, oh too bad, resolve it with them, they just stay out of it, right? They are not going to get involved. So we’ve sometimes had to — our clients have had to hire attorneys and things like that to get that listing back.

So it’s worth it to them, but even my clients who just perpetuate like they are like oh, well I didn’t mean violate trademark or whatever, or I don’t want to deal with it, like I’m not making enough sales off of this to– I’ll just walk away. But again, if that company does not send the notice to Amazon saying this issue is resolved, then this black mark stays on my client’s record. It shows that he’s not resolving this issue. I have to help them somehow get Amazon to undertake their account that they did everything in their power to resolve this, and that they are no long selling the product.

You would think that an email would be enough, but it’s not. That’s where I get really angry at this particular dirty seller trick, because it costs my clients money even when they are more than willing just to walk away.

Steve: I see. When you say suspended like what is the typical reinstatement time when you are successful?

Cynthia: Okay, from the– you have 17 days once you are suspended to turn in your plan of action. I usually very much, I mean depending on when our clients come to us, it’s much faster than that. But you have 17 days. The first time you turn in something, sometimes they reinstate you right away, and you are done. It’s great. I’ve had clients reinstated in 20 minutes.

Steve: Really? Okay.

Cynthia: They are very happy. By the way this does not include last summer which was a night mare. Amazon was taking 3 weeks to get back to people. I’m talking about today. Today, ever since I would say like December, we can generally get a response within a day or two. What they’ve been doing lately is what we call the plan or the store. What happens is these guys in India, that’s what seller performance is, they have metrics as well. They have to go through 17 of these an hour, if they fall back with one every 3 minutes.

If they fall behind, what happens is they’ll start to cheat, right? Because it so fast to simply send an email back saying, it’s a form letter. Thank you very much, but we still need more information about X even though you just send them a plan of action for X. And so we recognized what this was last December, and it’s still going on.

Our clients would get frustrated. They will wonder if we knew what we were doing. I’m like, “Yes, yes it’s just the plan. Nobody has read your plan yet?” I mean, literally they have not read it. They are just cheating. They are like thanks, send them back up, thanks, send them back up. We’ll usually play that game a few times, and we’ll send it back in. We might tweak it a little bit, but we just basically keep sending it back in, and if that doesn’t work then we’ll escalate it.

Steve: What does escalation mean?

Cynthia: Well, we have other email addresses inside Amazon that kind of go above seller performance.

Steve: Interesting, and these are Amazon employees or?

Cynthia: Yeah, yeah, these are the– there is an escalation team.

Steve: Okay.

Cynthia: That’s when you are not getting satisfaction from seller support, or seller central or seller performance, seller performance. Yeah, they have bosses too. Then there’s always the ultimate last resort which is writing a Jeff Bezos letter. I always caution people that that’s a last resort, because his people can take weeks to get back to you. You don’t want that. I mean that is a last resort.

What you want is to get a faster response by working within the system, and usually if we just escalate it that usually takes care of it. My clients are like, “How do you know they are not reading it?” I say, “You will know when they read it.” It’s true, because as soon as they read it, they reinstate them. That’s the thing. Or even if they do legitimately have an additional question or something, the email you get back is very different. It’s not the [inaudible 00:44:06]. The answer to your question, this process can take anywhere from 20 minutes to a couple of weeks.

Steve: Couple of weeks? Wow, okay.

Cynthia: Depending on Amazon. That’s the thing, we’ve seen some weeks where we’ll have 10 punts going on at a time. It’s driving us crazy, our clients are going crazy, we are just like sending it back and sending it back in with an escalating and blah, blah, blah. Our process, in terms of punt escalation, Jeff letter is about a business week four, five days, five, you know again getting the answers back from them that all that can add some additional time.

All I can say to my clients who are very frustrated by this is it’s still so much better than last summer where we wouldn’t even get the first answer for three weeks. Like I said, so usually I can get people reinstated quicker in a week or two, and sometimes the same day, sometimes the same day.

Steve: I’m curious what happens to the dirty sellers that file these false claims, because Amazon usually will just ban you first right, before getting your testimony. I still really hope that these malicious sellers are getting punished. Do you have any insight into that?

Cynthia: Yes, they are if they work with me, because first we get our clients reinstated. Then, we go after the dirty seller and we file a policy violation against them. That’s the thing, and I’m really good at writing policy violations.

Steve: What does that entail exactly?

Cynthia: If you go into seller central help, and you go to that page where it’s like why are you contacting us basically? There’s like another and under there you can file a policy violation against another seller. And so what I usually do is I keep it very factual. I ask Amazon to look into it, and to help us and…

Steve: Will you say that this seller purposely did this or like– I’m just kind of curious like how you word it in such a way even if you don’t have like all the evidence, right?

Cynthia: Right. A lot of times we won’t. That’s exactly what we say is that we don’t have the ability to investigate this, but you do, because Amazon knows everything that happens on their platform. So what we will just do is we’ll put the case before them, and will say it is our suspicion or our belief that this seller never intended to respond, or never intended to work with us to resolve this issue, and that it was in fact a tactic to kick competition off this listing.

Then you always have to put it in terms of the buyer experience, which diminishes the buyer experience by limiting choice and also raises the price and– I’ve said different things like that. But basically you’re always going to put it out there why this impacts the buyer.

Steve: Got it.

Cynthia: Not, “Those guys we hate them. They are mean.” You can’t do that. You have to really focus on why this is against Amazon policy, and why it affects the buyer. Another dirty seller trick that I see a lot is someone will buy a bunch of your product, and you are like, “Yeey, I’m in the money.” Then they will return all of them on the same day, and they will have a negative reason for returning them. And so because the part of what the algorithm looks at is velocity.

If they suddenly– if you’re one person who bought 10 units, but if they see 10 units coming back on the same day, they go into danger mode. Like, the algorithm freaks out, and you can get suspended just because there’s velocity on that acing. Like that acing might get immediately suspended. That’s a dirty seller trick that they do. So you can explain to them, no, it’s just one order.

Again, when– you know one order, 10 items. This is a trick. If you see it once, you know. If you see it a couple of times, two or three times, and it starts to look like a pattern, that’s a dirty seller trick, and that’s where you need to go and report it to Amazon, and you can say, “It is our belief that they never intended to keep this purchase, but it was bought specifically for the purpose of damaging our metrics. Because they straw our purchase,” and things like that. That works really well.

Steve: It does, interesting.

Cynthia: Oh yeah.

Steve: Even if they just wrote to– like if I was doing this intelligently I will just have different people do this, right?

Cynthia: Yes, and that’s why it gets harder to detect. But again, if you haven’t gone along selling, selling, selling, and then all of a sudden you get a bunch of attacks. I have a client this has happened to where his competitor thought they were very clever, because they were having people buy from all across the country and do this. Now you may think, how did he know that they were working together? Well because in this case they were really stupid. All of them used the exact same language, I mean exact.

It was honestly cut and paste including typos, and they used the exact same picture. That never happens. You know what I’m saying? Like they didn’t even take their own picture of the product. And then the picture that they took of the product wasn’t even of the product that they purchased. It was a related product. This was just a bungled job. In that case it was pretty easy to prove, but again, if you see a pattern, you can say to Amazon who loves patterns. “We’ve seen this pattern and we’re wondering if perhaps this might be going on. Could you please look into it?” What Amazon will do is if it’s a really strong case, they’ll take you down. But maybe it’s not very strong, maybe it’s a [inaudible 00:50:29], and then they’ll send you a warning.

You may wonder how do I know this? I have had clients who’ve had this warning in their performance notifications. I said, “What the hell! You want me to represent you and you do dirty seller tricks.” We had to have a little conversation first. That’s– anyway, I know that Amazon does this. They even punish buyers by the way. People don’t realize this, but we saw a rush of buyers losing their buying accounts. And when you lose your buyer account, if you are also a seller, you lose that as well.

Steve: Nice.

Cynthia: This is for all the people who abuse Amazon’s returns policy, and they have too many returns. In case you are wondering how many returns you are allowed, by the way these are free returns. If you are paying for the returns, you can have as many as you like. But if you are claiming a reason always just so you can get the free return, beware because it’s a very limited amount. Again when Amazon sees velocity, they see that it’s a habit.

I mean if you have one free return a year, you are going to be fine. But if you are having one every month, you are out of there. And they are not going to wait for you to use up all your free returns. Basically what I heard which is only hearsay, but I heard that you get like 26 in a lifetime, 26 free returns. After that, that’s it. You don’t get anymore.

Like I said though, if you were getting one a year, and you were buying lots of other products and not returning it or paying for the return, then they are not going to like kick you off once you have 26 years from now. But if they see there’s a pattern that is theft.

Steve: Is it a violation to leave a review without a disclaimer as a buyer? Or is that the seller’s responsibility?

Cynthia: The seller is held responsible. The buyer is also responsible. And so again what will usually happen is you will get the warning from Amazon saying, “Okay now look, you need to do this disclaimer as an FCC regulation blah, blah, blah. You get one chance, and that’s it.” That’s why with all these most review programs, they are very good about telling their people that they have to do the disclaimer. But what they are not good at is policing it. They may say, don’t forget the disclaimer, but they are not out there really checking these reviews to make sure that they are.

Steve: Well, that takes a lot of work.

Cynthia: Yeah. And I’m saying most of these programs, because some of them actually do. Some of them, so if you are looking at a product review program, that would be one thing to look for to see if they actually police the reviews, and make sure that they do leave the disclaimer.

Steve: Okay, hey Cynthia, we’ve been chatting for a while, and I have to be honest with you, after talking with you, I don’t feel as comfortable selling on Amazon.

Cynthia: Well, that’s because I showed you a bunch of stuff you didn’t know. And so it’s scary, because now you are asking yourself what else don’t I know.

Steve: That’s correct. Yes absolutely.

Cynthia: Yeah, actually you know a lot, and that’s why I want to tell you and anybody listening to this is you now know a lot that you can do to protect yourself. My hope is now that you’ve been forewarned, you are forewarned, and you will never have to hire me professionally.

Steve: Incidentally, a lot of what we have talked about today is actually in Cynthia’s book and she covers all this stuff in a lot more depth in her suspension prevention book. Cynthia, I learned a lot just from talking to you today. Where can people find you should they need these services that you offer?

Cynthia: I have 2 websites. One is very simply suspensionprevention.com. That’s focused on obviously my reinstatement services. Then I have a blog onlinesalesstepbystep.com. And by the way in my blog, a couple of times a month I’m writing on this topic constantly. It’s a good place to just sort of check out what’s new and what’s going on. Those are my two websites and both of those sites which I’m in the process of sort of merging. In both those sites is you can find our services there. You can sign up online to get started with us.

Steve: Okay, and then if you end up finding that your account is suspended at like 5:30 am, I will be posting Cynthia’s cell phone number in case you are desperate.

Cynthia: No. I was telling Steve earlier, I had to buy, not buy; I got an app for my phone that turns off all the sounds between certain hours just so I wouldn’t hear all the middle of the night texts and phone calls coming in from my clients and prospects, because I need my sleep.

Steve: Yeah, absolutely. I can imagine that the people calling you are probably quite desperate and in great need of help.

Cynthia: Yes definitely.

Steve: All right Cynthia. Thanks a lot for coming on the show. This was great. I’m sure everyone is going to love it, thank you.

Cynthia: Thanks for having me. Bye.

Steve: Take care.

Hope you enjoyed that episode. Amazon is getting more and more cut throat every year. With other people trying to sabotage your listings and Amazon constantly changing the rules, you really have to monitor your account in order to make sure you are obeying their terms of service. If you ever get suspended, make sure you call Cynthia Stine.

For more information about this episode, go to Mywifequitherjob.com/episode124. If you enjoyed this episode, please go to iTunes and leave me a review. It’s by far the best way to support the show. Please tell your friends because the greatest complement that you can give me is to refer this podcast to someone else either in person or to share it on the web.

If you are interested in starting your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business. Go to Mywifequitherjob.com for more information, sign up right there on the front page, and I’ll send you the course immediately via email immediately. 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.

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123: How To Raise 9.1 Million Dollars On KickStarter With Zach Smith Of Funded Today

123: How To Raise 9.1 Million Dollars On KickStarter With Zach Smith Of Funded Today

Today I’m thrilled to have a very special guest on the show, Zach Smith. Zach is the founder of a company called Funded Today and he’s helped hundreds of startups achieve success with their crowd funding campaigns.

For example, he helped raise over 9.1 million to launch the popular travel jacket from Baubax. And chances are if you are on Facebook, you probably saw an ad for it because it was a pretty cool product.

In fact, this jacket became the most funded clothing project in the history of crowdfunding and one of the top 5 most successful Kickstarters of all time.

Zach is a real down to earth and easy going guy and today he’s going to teach us the secret to launching a successful crowdfunding campaign.

What You’ll Learn

  • Zach’s motivations for starting his business.
  • How much impact an agency like Funded Today can have on a campaign versus doing it yourself.
  • How to launch a successful Kickstarter
  • How to generate buzz for a kickstarter.
  • Why Zach is able to scale a campaign so incredibly well.
  • How to develop a large audience and reach many people.

Other Resources And Books

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Transcript

Intro: You are listening to the My Wife Quit Her Job podcast, and if you are new here, it’s a show where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now I don’t bring on these famous entrepreneurs to simply celebrate their success. Instead I have them take us back to the beginning and delve deeply into the exact strategies they used early on to gain traction for their businesses.Now if you enjoy this podcast, please leave me a review on iTunes. And if you want to learn how to start your own online business, be sure to sign up for my free 6 day mini course, where I show you how my wife and I managed to make over 100K in profit in our first year of business. So go to mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email. Now onto the show.

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 thrilled to have a very special guest on the show, Zack Smith. Now, Zack is the founder of a company called Funded Today and he’s helped hundreds of startups achieve success with their crowdfunding campaigns. For example he’s helped raise over $9.1M to launch the popular travel jacket from Baubax. Chances are if you are on Facebook you probably saw an ad for this jacket because it was a pretty cool product. In fact this jacket became the most funded clothing project in the history of crowdfunding and one of the top 5 most successful Kickstarters of all time.

Anyway, I met Zack at the import summit last year as we were both speakers. He’s a real down to earth and easy going guy. Today he’s going to teach us the secrets to launching a successful crowdfunding campaign. And with that, welcome to the show Zack. How are you doing today man?

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

Steve: Yeah, give us a quick background story about how you started Funded Today and how you came up with the idea in the first place.

Zack: Yeah, I came home from serving in an LDS church mission and a guy that I knew had been very successful during that time. He was working in the investment industry and I said, “Hey can I come and mess around with you and just see what you are doing.” He said, “Sure.” And he took me under his wings. This was about a decade ago.

I started seeing what he did. He got excited about some of the stuff that I was able to do, because I was like a go getter hustling type of entrepreneur. He said let’s start a side business together and we did. That business became very successful, and we ultimately sold it a few years later. I took what I learnt from that and applied it as a business consultant.

As a business consultant I basically was doing internet marketing related strategies for all kinds of different clients all over the world. Well, one particular client who happened to live where I am from in [inaudible 00:03:02] in Utah area, said, “We can’t afford your rates but there’s thing called crowdfunding, Kickstarter.” Then he goes, “Have you heard of it?” Now at the time I actually hadn’t. They said, “Well how about we do this, we’ll pay you a percentage of all the money you raise and we’ll launch our new project,” it was called the RooSport 2.0, if you want to look it up, “We’ll launch our new project on Kickstarter and we’ll give you a percentage on it.” I said, “All right.” I was in a pretty good financial position at the time. I said, “Let’s try it out.” I did.

In the next 30 days, we raised $115,000 for a project that wasn’t even raising $2,000 a month on their website before hand. It changed these people’s lives. Now they have a multimillion dollar business that’s done really well. That story spread because everybody saw this little RooSport running wallet take off and raise six figures in 30 days on a crowdfunding site and a lot of people wanted to know how they did it. From there, Funded Today was born. We suddenly had 10, 20, 30 people and we selectively picked those clients out and we continued to raise that money. Then as you mentioned in the introduction, we raised money for the Baubax travel jacket, contributing nearly $5M of his $9.1M raise. The rest is history.

Now everybody’s heard about Funded Today. If they are crowdfunding a project, chances are they probably have heard of Funded Today or are working with Funded Today. We had a joke last year that if you had a project that raised more than a million dollars on Kickstarter chances are Funded Today was the company behind it. It was almost true, like literally 90% of the campaigns that did really were on Kickstarter; Funded Today was the driving force behind that success.

Steve: Dude that’s awesome. That first project, did you front the money yourself for all of the promotion?

Zack: That’s right, and we continue to do that for the most part. If your campaign meets our marketing success criteria we front all of the costs. We act as a mini-bank or a mini-lender. In fact I was speaking at the Utah Crowdfunding Conference yesterday and a lot of people talked about how they don’t have money and that’s why they go to crowdfunding.

If you don’t have money in your campaign successful meaning it’s raising money as a good positive ROI, you need to spend money. You should raise as much money as possible on your Kickstarter or Indiegogo campaign is live but if you only have ten grand, or 20 grand in your name, you might spend that in a couple days and you might raise $40,000 $50,000 $60,000 $100,000 $200,000 on that spend but now you have no money to spend and you have a successful campaign. That’s where Funded Today comes in. We can front millions of dollars with our essentially unlimited lines of credit for clients to raise them as much money as possible during that crucial window of crowdfunding.

Steve: So can you comment on some of the impacts you’ve had on some of your campaigns of them doing it themselves versus when you stepped in.

Zack: Yeah, I would say, and it’s becoming less and less likely probably 60% of the campaigns Funded Today works with have already started to raise money. Baubax travel jacket is a great example. He’d raised $4.5M or so when he hired Funded Today. But he was stalling, he was slowing down and he wasn’t making any money on the money he was spending.

He was making money on PR, on media and things like that but when he was actually spending money to make money on channels like twitter and Pinterest and Instagram and Facebook, he was losing money. He told me actually in a text message a couple … Because I’ve always been telling people it was $60,000. He’s like, “No I actually spent $150,000 to raise $150,000.” Basically he’d spend a dollar and make a dollar and that’s not profitable at all because you’ve got your cost to get sold and Kickstarter fees and other fees.

He hired us and obviously the rest is history. We were able to turn it profitable for him and for our company. I’d say a lot of people raise money and then they reach a trough, they reach a value. It’s peak and troughs. It’s a huge spike at the first and then a plateau or deadness. We come on and we revive those campaigns or amplify efforts from existing successful campaigns. That being said, we’ve had a lot of success with prelaunch now meaning we work with people right from the beginning. We’ve had even success where we had a campaign called Freewaves out of Orlando Florida.

Another one of our very first campaigns we run, they hired us with only 100 hours left and we were able to save that campaign. With a $300,000 goal we raised them closed to $200,000 in the remaining hours of their campaign because Kickstarter’s all or nothing funding mean if you don’t raise all the money that you set your goal for you don’t get any of it and they had only raised a $100,000 or $200,000 and they had a $300,000 goal.

They had to raise 100,000 more in the just the last 4, 5 days of their campaign. We took a risk on that one and we were able to be successful because they had moderate success before us. I mean a $100,000 is nothing to be ashamed of. Crowdfunding, they just didn’t have the right marketing in place to match the great product that they had and that’s where Funded Today came in to save the day.

Steve: That implies that a Kickstarter, a successful Kickstarter, is a lot to do with your own personal marketing as opposed to just kind of relying on Kickstarter’s exposure. Is that accurate?

Zack: That’s so true. I’d say 5 years ago, and this is an anecdotal story. I had a friend named Ryan Crabtree, everybody’s probably heard of the crabby wallet if you are a Kickstarter or a crowdfunding guru. One of the first campaigns that did really, really well for wallets, raised $325,000. To this day, if you talk to Ryan and I’ve got this because he came over to my home and chatted for a couple of hours. Literally he said he did nothing to raise that $325,000 and he showed me his dashboard. I’ve seen all the traffic and referral resources. Literally, it’s all just Kickstarter.

That was 5 years ago, 4 years ago, I forget how long but several years ago. Nowadays if you put your campaign on Kickstarter even if it’s a Baubax travel jacket quality, you probably won’t raise very much money if any if you don’t have the right marketing to match the great product. It’s just not that way anymore.

Steve: Okay, that’s interesting then. If you go just based on that, and it’s all your own personal stuff, why even bother going with the Kickstarter, why not just set up your own landing page and get leads and pre-orders that way?

Zack: Another great question because the power of the crowd is actually still there. The key is, Kickstarter is a paradoxical vehicle in the sense that you might set a goal of $10,000 but until you hit that goal of $10,000, the crowd doesn’t necessarily consider it successful. By leveraging your friends and family, we call the triple F, friends, family and fools. People who back your project before you launch, you’ll get a little bit of a kick from Kickstarter organically. If your project resonates with that it will stay in the top. Kickstarter has an algorithm for popularity and based upon the total number of pledges you have, and the duration those pledges came in, and the intensity propensity those pledges have, your campaign will stay popular.

The number is getting higher but I’d say, 200 or 250 backers, if you can get those backers within the first 8 hours of your campaign, you might be one of the most popular projects on all of Kickstarter. One of the most popular projects in all of Kickstarter that’s suddenly put your project in front of millions of people. Those millions of people you are not going to be getting anywhere else. That’s the power the Kickstarter still has and that’s the power of crowdfunding.

Steve: Okay, you just had to reach that certain threshold until it goes viral essentially.

Zack: Correct. Now if your project is one of those projects that doesn’t last or maybe it lasts a little bit but keeps bouncing around and maybe it doesn’t stay top 50 on Kickstarter, that’s where you need to create a sort of consistency. Consistency is best achieved through paid media. Paid media means spending money to make money. That way you can generate the consistency necessary to stay in the top of Kickstarter and then harvest those people organically who are visiting Kickstarter every single day.

Steve: Okay, I read some articles about Funded Today and how you are able to reach billions of people to get the word out on campaigns, and I was just curious what percentage of that is paid ads versus like your own audience and versus your own list?

Zach: It’s becoming more and more our own internal list because at Funded Today we believe it’s best to own everything you possibly can. I’d say 2 years ago, it was more spending money to make money. Now we have a cash back program that’s really cool, that we have thousands of people a part of. We have audiences that are segmented and audiences, perhaps in our emailing list.

We have audiences that are segmented in terms of a wallet, in terms of a watch, in terms of travel, in terms of luggage, in terms of shoes, socks, clothes, boots, pretty much you name it. With the exception being video gaming, board games which are a huge part on Kickstarter and crowdfunding. We have access to more people interested in those sorts of products than any other company in the world. Probably than anybody in the whole world.

Steve: Okay, this is just something you developed over time, right?

Zach: Yap, that’s right.

Steve: Okay, and do you have remarketing pixels segmentation also?

Zach: Oh yeah.

Steve: Okay, so is it mainly Facebook or do you use AdWords and some of the other advertising platforms as well?

Zach: AdWords, the short answer is anywhere we spend money, we … Anywhere we spend money and it’s generating a positive ROI or at least break even for us but making money for the clients, then we spend money. That depends on every single campaign; we’ve had a lot of success on Pinterest believe it or not, for campaigns that are really visual.

We’ve had a lot of success on Instagram. In fact we just got done raising money for a guy named Joseph May for a Breton backpack, and his Breton briefcase backpack raised $250,000. A lot of that was actually from Instagram. It really resonated well with that crowd, but yeah we absolutely spent a lot of money on Facebook as well.

Steve: Was that on Instagram ads or do you just have a very strong Instagram account?

Zach: We have Instagram ads and then we have an influencer network. Meaning famous people, A B C D list celebrities, a lot of B and C meaning their borderline becoming mainstream famous but they are really internet famous. They’ll post for campaigns in exchange for either cash, the product, et cetera, and they’re part of Funded Today’s Cashback Network. They post for our campaigns, the campaigns that resonate with their brand, in exchange for some kickbacks.

Steve: Okay. Let’s say I’m just a regular Joe schmo. I want to do a Kickstarter; can you walk me through the process and best practices on how to raise the most money?

Zach: Yeah. The first thing you want to do is have a long-term vision in mind. I believe you can launch really quickly and that’s what I love about Kickstarter but I’d say you want to give yourself 90 to 120 days. You have the idea in your head, okay. Now what do I do? Hopefully we’re talking about you already have a product, is that what we bare assuming, you already have something you want to launch?

Steve: Yeah, is it necessary to have a prototype first of all?

Zach: Kickstarter, I feel like validates you more and wants to give you more love when they know you have something. That being said and again I don’t know if the rules have changed recently because I do feel like they’re gaining more and more strict in terms of prototypes and for good reason. Look at Coolest Cooler, they haven’t shipped still, but if you don’t have a prototype you can likely launch it, if not on Kickstarter, for sure on Indiegogo.

I personally like to see most of my clients with prototypes, and here’s why, you can ship those prototypes back and forth to all the different media and journalists and do PR tours before for prelaunch. Getting all these people excited about it and then they’ll post for you through embargo press the day you launch.

Steve: Okay, let’s assume we have a prototype then.

Zach: Okay, you have a prototype. Let’s say you are 120 days out. The first thing you want to do is you want to go on a media tour, and a media tour, you can do this by yourself or you can do this with an agency. We like to do a little bit internal and a little bit that we outsource, but the thing is about press it’s very political, it’s very much about who you know, and it’s very much about diversifying. A lot of people are like, “I love PRmediaNow or I love Proper Propaganda.”

Those are both pretty good firms, the issue is they may or may not work for you. Press has hit a mess and that’s why Funded Today doesn’t rely on press but if you’re going prelaunch, it make sense to get as many press people involved because they might know somebody at The Wall Street Journal and he might know somebody at the New York Times, and someone might know somebody at TechCrunch. If you have all these people helping on your campaign between then all, you actually might land a lot of press, but if you just …

Steve: If you know nobody then is there a particular strategy? Would you recommend hiring someone or what would you do?

Zach: If you know nobody and you have 120 days before your launch, why not spend the first month trying to figure out how to get press for yourself. Journalists love somebody that’s really passionate about their brand. It’s like the entrepreneur story; we even talked about with our paid media advertising. A lot of our advertisements we call them hero shots or founder shots or product shots and it’s basically if you invented a watch, it would be you wearing the watch, smiling looking at the camera or something. We find those do really well because people are like, “Oh look, this guy invented the watch and here’s a picture and here’s him.”

The same philosophy or behavioral psychology works with press as well. If they see that you are the one passionate about your product and you are then one literally emailing and trying to win a press, I think they resonate with that better sometimes than even having an agency. That being said, agencies sometimes have relationships, they don’t care about the, “Oh he’s the founder, he’s whatever.” They won’t necessarily give that more press events, they might just be like, “Oh yeah I know this guy, I’m going to post for this guy because we have such and such a relationship.”

Steve: Okay, in the very beginning, did you just go through and find names of editors who write about this stuff and just cold contact them?

Zach: That’s right yeah. I developed templates, I developed follow up. One of the best tricks and I teach this to every single person that works for our company is, “Hey just following up” I send them an email, a really good pitch on whatever the product might be, and then I wait 24 hours and if they haven’t said anything, “Hey John, hey Steve, hey Bill.” Whatever the name is, “Just following up.” That’s all I say.

You’d be surprised what the just following up email does, “Oh hey sorry I missed that, now I got to [inaudible 00:15:52]. It makes you look like a real person, it makes you look genuine, it makes you look like you are passionate about your product, and it makes it look like you weren’t just sending millions of people a pitch email. That you are actually passionate about following up and getting in touch with somebody who can help to write about your product.

Steve: Okay, sounds good, sounds good. Do you use any software to do this or is it just use a calendar?

Zach: We originally had Cision, we originally had Meltwater and these are big. I think they are the best types of PR media software you can have. It basically keeps an updated database of everything, but once you use those for a while, you have all the contacts and it doesn’t make sense to continue. At this point we have thousands and thousands of names, emails, phone numbers of pretty much anybody who’s ever written about crowdfunding. Our database is very extensive in the sense of who we know and our relationships are a lot better too with a lot of the journals and press that we work with.

Steve: Okay, let’s you’ve gone around; you’ve got a couple of press people on your side, what’s the next step?

Zach: The next step is to be very clear about your launch date. You want to make sure the press know to write about you on … Let’s say you are launching on today, today at 5 o’clock PM. I would like you to drop an article anytime within the first 24 hours after Friday April 29th at 5 o’clock PM Mountain Standard Time. Can I embargo you to do that for me Steve?

Steve: Okay.

Zach: Yes great, okay great. Here’s a couple of things, here’s a couple of images, here’s our media kit, here’s a few things I think you should see. Make sure your use this link, make sure you give them a link to your Kickstarter page because you’d be surprised how many times you get big press and they don’t include a link. It’s just devastating if they don’t link out to your project because now you get all these press and exposure from a huge site, even like The Wall Street journal and they don’t link to it. You get 500 clicks and you are like, “Oh my Gosh, I have only 500 clicks form The Wall Street journal. Well, it’s because they didn’t put a link into your article.

That’s the most important thing you can do with the press, is make sure you coach them, because for some reason it seems like either they know not to do that or they don’t like linking traffic. Whatever their strategy is, they don’t like to include a link and make sure you get that in writing that they’re going to put a link in it. Give them a link to write.

If your campaign hasn’t launched yet, one thing people don’t know and this is just a little bit of inside information, you can use the preview link on Kickstarter and that will transition into the real link. You’re like, “What’s my link, what link should I give them?” Just give them your preview link, and then that preview link will transition into the full link once your campaign goes live so you won’t have to be scrambling last minute to give all your press and journalists a link.

Steve: You mentioned media kit, what goes in that?

Zach: Media kit is your hero shots, your images of your product, a media PR, a press release, a contact information, you’re …

Steve: Okay, that includes videos of the product and stuff … ?

Zach: For sure.

Steve: Okay.

Zach: Whatever you want to say and I can give some example of some media kits as well if you want those after.

Steve: Yeah absolutely I will link to those. Cool, we got that set up, we’ve launched our campaign, we got some initial press, then what?

Zach: The other thing I would do if you haven’t and we’re still talking maybe, 90 days out now. You’ve got your press embargo, you got all that lined up. Start networking with other people that ran Kickstarter campaigns. Let’s say I’m running a boot campaign for some really nice high-end fashionable boots. Let’s say you are a person who launched a sock campaign that had 5000 backers a year ago.

“Hey Steve, I’m launching this boot campaign and I fell like your socks are their perfect compliment, would you mind if I linked out to your socks, like a week or 2 in? I’ve already got X and X and X lined up for press, I’m probably going to have thousands of backers here within a week or 2. So 2 or 3 weeks into my campaign, I promise I’m going to tell all my backers about your boots which will give you all kinds of traffic to your website since you probably are not making as much money anymore on your boots because you are not on Kickstarter anymore.

In exchange for that I’m launching on at 5 o’clock PM on April 29th, wondering if you might tell your 5000 backers about these awesome boots I’m making. Do you think that’ll be a good compliment?” “Yeah, I’d love that” “Okay great. I agree to post for you on May 17th at 8 AM to my list of X number of backers at that time.” Do that with 100 people …

Steve: Just good old standard legwork marketing.

Zach: Yap, You’ll be surprised what that does and to give you a hint what those does, I raised $126,000 in less than 48 hours for the Perch. Which is now called the UVO laptop stand. We did this also with The Greatest Pants, McMacular, that’s on right now, raised them quite a bit of money. We did this with the Edge Desk. The guy that was the main marketer behind Furby and Cabbage Patch dolls, and that campaign raised hundreds of thousands of dollars as well. Those are just three examples. We do this every single time we have a good product launch lined up. One of the ones that comes to mind…

Steve: Just as an example since I actually know the McMacular guys. For their pants, who did you reach out to complement their Kickstarter?

Zack: That’s the advantage of Funded Today again not tooting my own horn so much here. We have literally probably 1000 people now that have thousands and thousands of backers that are part of Funded Today’s Network. Basically they are contractually incentivized to post for projects because that’s how they got their initial kick. “Hey, to pay it forward. We helped you raise money 5 months ago. Now it’s your turn to help this person raise money.”

We have lots of people that do that. You can see the spike on McMacular if you look at the graph. Some of the better spikes are Edge Desk or UVO, the purchased laptop stands. It just depends on how much pre-launch is in place. Plug Phones is another good example that’s live on Kickstarter right now that Funded Today started with from the beginning.

Steve: If you don’t have your network, it’s just that your ability to cold call and convince these people, incentivize them to just help, right?

Zack: Exactly. It’s about good old fashion hustle.

Steve: Got it.

Zack: It works really well so you should always do that because otherwise, how are you going to build your email list? You don’t have money to build an email list. You don’t have any connections. It’s just about building those connections and helping people see the value of your product and leveraging as much as you possibly can to get people excited to help you out down the road because you might not have much to offer until then.

Steve: At this time, are you also reaching out to bloggers and influencers as well?

Zack: Yeah. That would be the same part of media tour. I was talking bigger names like Wall Street Journal, TechCrunch, Mashable, but absolutely reach out to smaller sized blogs. Even a blog like yours which is a great size blog might be a good person to reach out to for a particular type of crowdfunding campaign.

Steve: Do you have to give away the product typically do you find?

Zack: It just depends on what the person wants. I’m all about trying to find the right angle and right pitch to make people want to do it for the good of the person or the good of the entrepreneur just because they love the product. Sometimes the initial pitch will be more philanthropical, but then they’ll come back with, “Yeah. I’d love to do that, but can I get the wallet too?” “Yeah, sure I can give you.” You know what I mean? That kind of thing.

Steve: Sure.

Zack: Then you are getting a lot of value for somebody posting for you or write an article about you for very little cost to yourself.

Steve: I was just wondering if you could share some techniques to get a person’s attention in the first place, because I get pitches all the time and most of them are bad.

Zack: What pitch has resonated with you? Do you ever have somebody where you are like, “You know what, that’s actually good. That resonated with me.”

Steve: Usually it’s much more personal where they actually know a lot about me.

Zack: I love that.

Steve: To start with. Then they’ll quote something that they like and what not. It’s just very subtle.

Zack: You are so true. We definitely have a formula for exactly what you described. When I was on Andrew Warner’s Mixergy, I talked about that as well where basically, how to resonate with someone? It really is getting to know what they write about, what they’ve said. Show something that you’ve read from theirs a year ago and then quote something that they wrote a week or two ago.

Maybe in that first pitch you’ll say, “Hey. I just wanted to hi. Let me know if there is anything I can do to help.” Then maybe wait another week and say, “Hey. I just want to follow up. Loved the article you wrote this week. By the way, my name is Zach Smith. I’m launching this product called the Edge Desk and so and so about it. I think it might be a good fit, but I’m not quite sure. Wonder if we might chat about it for two or three minutes? You got a second.”

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Steve : You know actually, come to think of it now the people that have resonated with me the most don’t go for the kill in the first email. It’s a gradual thing over several weeks so to speak.

Zack: Exactly. It really is about … Maybe they’ll even know that you’re trying to get something, but you got to just be patient. In life you can get everything you want, but you got to realize it doesn’t all come immediately even though we are kind of more entitlement, gratuitous generation. If you’re just a little more patient, you’ll find that you resonate with somebody way more than everybody else because like, “Yeah. This guy emails me every single week, but I can’t see what he is up to. Who is he? I kind of know what he’s doing here, but man, why doesn’t he ask me?”

Steve: “It’s this dude in Utah, he won’t stop emailing me.”

Zack: We joke about it at Funded Today. If you ever want to get hired at our company, persistence is key. We’ll literally ignore your first 4, 5 emails if you’re trying to get a job with us because we want to see how much you’ll hustle because we know how hard it is to get press. We know how hard it is to get outreach. We know how hard it is to lineup people to do things. If you can’t stay persistence with us, we don’t want you working with us.

Steve: That’s why you did not answer me at first.

Zack: I’m sorry. It just shows, Steve … This shows how persistence he is.

Steve: Who’s that annoying Chinese guy who keeps … We got press. We’re doing some legwork here to get some people to help promote. What else do you guys do?

Zack: Once you have all of that lined up, now it comes time for product validation. Product validation happens whether or not your meet our marketing success criteria. That’s essentially the first 1 to 7 days of your campaign where we are running paid media, testing, using statistical significance and P values to figure out what audience is going to resonate? What demographic is good for your product? How much we can project that we’ll make across the life of the campaign. Essentially we’ll stop all efforts and we’ll walk away from a campaign if we can’t achieve a statically significant long term projection for a campaign meaning it is not all the way positive for our company.

We’ll walk away from a campaign and say, “This is probably a product you should abandon. This is a product you should pivot upon and here are the reasons we think and here are the things that we are finding from everybody based upon the feedback and surveys and all the stuff that we are doing, or this is a product you need to walk away from. This isn’t a good idea and the market place has spoken.”

Steve: It’d be nice to figure out before the price campaign and all that stuff, right?

Zack: A lot of campaigns … Like I said, with 60% of our campaigns, we are not doing all the stuff I talked about. If we were to do the pre-launch for your campaign. This isn’t something we would do for everybody. You’re going through a 21 point checklist to see if you qualify based upon everything we’ve learned. We might still be wronger. If we are wronger, it sucks. We’ve only been wrong once where we picked something pre-launch and it wasn’t successful. Everything else we picked pre-launch has raised 6 figures or more, most of the time high multiple 6 figures.

If we are wrong on a pre-launch value, you’re absolutely right. That’s why we love the product validation so much, but we have to take plans on pre-launch now because some of them have really good ideas that are based upon the successes that we have had on past campaigns. We can leverage a lot of the data and information that we know that work for another campaign and reasonably project that it will do well as well.

Steve: Walk me through this validation process.

Zack: Again, are you a pre-launch campaign? Are you a campaign that’s already launched?

Steve: Let’s do a pre-launch. Let’s do it as if you were doing it from scratch yourself?

Zack: Let’s say you’ve got something like Baubax travel jackets since we used that an example. The differencing point with yours its features are different. It’s the same kind of thing, but it’s a Baubax travel jacket, but it’s got different features. We’d immediately probably say that’s successful for us. Here is why. We have all the information and everything we did to raise the $9.1M for the Baubax travel jacket. That’s a gimme. You have something like that, we’ll probably …

Steve: Let’s get something that’s not necessary gimme. I just want to know how you run your Facebook ads to get these metrics.

Zack: Because we have more information and more Intel on nearly every single segment that’s ever been ran on Kickstarter so whether it’s pants, shoes, luggage, wallets, watches. I’m just trying to think of some random things … 3D printers. What else have we raised money for on Kickstarter?

Steve: You know what I’m getting at. Let’s say its fully different thing that you’d never had of like some random gadget and you want to get an idea if whether it’s going to work or not. You mention you run Facebook campaigns and based on those metrics you can determine and project what you think it’s going to make. I just want you to walk me through that process.

Zack: This is a person with no assets of their own.

Steve: With no assets of their own. Let’s say they have enough money to run Facebook campaigns. I want you to do it as if you were you with unlimited resources.

Zack: Let’s see.

Steve: Would you put together like a Facebook ad campaign and just target a whole bunch of different interest groups?

Zach: If I don’t have any resources at first, I’m going to struggle. The first thing you want to do is you want to contact a campaign that is somehow similar. Let’s just use the boots and soccer analogy again. Even though it might be something completely different, but I’m sure if it’s completely different, there is something similar that has been crowdfunded before that you can reference. That’s what you want to do. In fact a great example right now is our client Bryce Fisher. He has a company called Raveon, and Raveon raised millions of dollars for their heated jacket.

Right now they are running a second campaign, they have already fulfilled on the first one, and he’s done really well. In fact he got it funded within the first 24 hours. This is all him too. We are not even working on the second campaign yet. We will be working on it in a few more weeks, but he did exactly what I’m going to describe. He looked at his existing list of Raveon backers, and that’s how he began to run, targeting on Reddit, Instagram, Pinterest and Facebook.

He actually, because he thought, and this is an outdoor product, this is a sleeping bag, a heated sleeping bag. It’s similar but is different enough. He found that his list of Raveon backers. All the, they called it a lookalike audience on Facebook, if you want to talk about Facebook specifically. He found that actually, his Raveon backers were more fashionistas, more fashionable people, more not outdoorsy type, and they didn’t convert well.

His strategy is exactly what you want to do. Let’s say you are not Bryce, let’s say you don’t have a past campaign. You reach out to someone like Bryce, and you say, “Hey Bryce, I got this heated sleeping bag thing, I don’t think it’d going to compete with you, but I think your list of people would be the ideal fit. Would you mind letting me create a pixel, or create an audience.

I mean you don’t have to give me the names; you don’t have to do anything like that. I promise I will never email, I will never sell, I will never do anything.” And make sure where you live up to your word there because you’re getting into some crazy stuff there. “If you do that for me, I will do whatever.” You know, whatever you want me to do for me, buy him lunch, give him money, whatever works.

Then you use that list of people to start your initial targeting, that’s how I do it. Otherwise if you are just trying to randomly figure out what’s going to work, I don’t really think you are going to be able to make Facebook or Instagram or Pinterest. I know you won’t because we have never been able to make it work very well. You have to have an existing list of people that have backed something similar in order to be successful on paid media.

Steve: Okay, did you have a chicken and egg problem for some of your first campaigns in that respect?

Zach: That’s a great question. I had an advantage because of my 10 years of business consulting. I had access for the real sport. I had access to email list, lookalikes and audiences that I could start with to build out additional audiences, in skill and find similar audiences, so that I could grow my reach and my potential to scale.

Steve: Okay, what it sounds like here then is that you guys actually don’t do that much audience research or random exploring on Facebook actually to get the audiences, is that accurate?

Zach: Well it’s accurate in the sense we are not just randomly going crazy on Facebook with no data. That being said, we are taking existing things that we have, based upon all the 100s of things that we’ve run, and we are finding more segments that match up and pair nicely with what we have.

Steve: It always starts with the basis of something.

Zach: Exactly, I just don’t … You might be able to, but I have never been able to be extremely successful going with nothing.

Steve: Okay and when you are creating your Facebook campaigns, you will start with a lookalike audience and it will branch out to known interest and audiences that you are fairly confident will work right off the back.

Zach: That’s right.

Steve: Okay, when you are running these campaigns, and you mentioned that you front all the money, right? You have to make this work, and during that first 7 days, what are your metrics determine whether something is going to work or not?

Zach: The most important thing we look at is something called earnings per visitor, or earnings per view, and every single Indiegogo Kickstarter campaign allows Google analytics to be hooked up to it now, and it’s a very simple metric. It’s for every single person coming to my site, how much money I’m I making. We like to see that number greater than $2.

Steve: Greater than $2, what is so special about that $2 number?

Zach: Not anything necessarily special, it’s just that’s what we’ve seen as we’ve grabbed the medium from the thousands of campaigns that we’ve worked with. That’s what we have seen the majority of campaigns have a greater than $2 number to be successful.

Steve: Okay and one thing I forgot to ask you in the beginning is you guys take a percentage of the money that’s generated right?

Zach: That’s right, from wherever we come on.

Steve: Is that typically on the order of; you said 35% I think before we started recording here. Okay and based on that number, $2 is something that you will determine that would be profitable?

Zach: Exactly, $2 are cases to either be break even or profitable. Obviously we want to make money, if we’re break even and raise money for the client, sometime we will take on a campaign we are not even making any money, but it’s raising a lot of money for the client, and it’s making Funded Today look really good. Another campaign, not another campaign, 10, 20, 30 more campaigns might approach us after hearing about Funded Today working with that campaign, and we might be profitable for those campaigns. It’s about customer life time value in that sense.

Steve: For your own business, do you make any of these clients sign anything that they’ll help you; you are allowed to share their results after the fact.

Zach: Yeah, every single client agrees to give us a testimonial for if we are successful. They agree to give us a video testimony, and every single client we work with that were successful for. Successful means passes the 1 to 7 days of due diligence and product validation. If they are successful they put a badge on their site. These campaigns like Baubax travel jacket, I looked at the Google analytics 2 days ago, because I was talking with [inaudible 00:36:00], and he still had a thousand five hundred people sitting on his site, and it’s like 5, 6, 7 months ago that that happened.

Just imagine the amount of visitors and eye balls that come, and see that Funded Today was the reason that Baubax travel jacket raised so much money. We get a lot of traffic and visitors, and then coupled out with 500 campaigns that all Funded Today badges, it gets to be a lot of traffic coming to your site hearing about what you did.

Steve: Your business has grown based on word of mouth essentially, is that accurate?

Zach: Yeah, that’s exactly right, word of mouth in the sense of the internet, the viral spread of information.

Steve: Okay and you are running these Facebook campaigns, and can I just get an idea of how much you would start with your bids, and how you scale it up?

Zach: It’s always to test for statistical significance. How much we spend, how much we scale, I literally base everything on statistical significance, and we always have. Statistical significance is just about looking at your end, your big population and then your little end, your sample population, and finding the right number of visitors you need, and the right number of conversions you need, and once you have that right, math doesn’t lie, it’s a pretty amazing thing because …

Steve: Walk me through an example if you can with some numbers.

Zach: Let’s say, to break it all down, let’s just use $1000 as an example maybe. Let’s say you spend $1000 and let’s say it raises $10,000 okay? $10000.35, and let’s say on that $1000, I don’t know. What are you getting clicks for?

Steve: Under a buck.

Zach: Under a buck okay, let’s say they are a buck each to make it easier. You spend $1000 that’s a thousand clicks, a thousand clicks raise you $10000, and let’s say the deal is 35% and so in that sense Funded Today would have made $2500. That’s a pretty good return; we look at the earnings per visitor. Earnings per visitor is really simple. You send 1000 clicks, you raise $10000, so what is your earnings per view, $10, that’s 5 times better than the two. In terms of statistically significant, you wouldn’t have to spend $1000 and get 1000 clicks, and raise $10000 to achieve statistical significance.

Statistical significance could be achieved spending much less in this example because it was … This example you gave it so profitable, you could probably have achieved hat on a $250 spend, and this particular example. From that point we would tell the client, “Okay, looks like you passed the test, everything is statistically significant.” They’d see the results because their campaign would have been raising a lot of money, and then it’s just scaling from there.

How do we scale it from there? We simply look at the audience size that we were targeting for that particular group, and we look at how many days left on the campaign to make sure that we are maximizing that reach and making sure every single person within that audience is going to be targeted within the 30-60 days, or however long what we have left on the campaign, and then we just scale according to time left on the campaign.

Steve: Do you create multiple creative’s; do you test headlines creative’s and all that sort of thing?

Zach: Yeah, every single thing like that is being tested, we start with, it just depends. I usually start with 10-20 different creative, images adcopy. Then we look at how all those perform across smaller segment sizes. We pick the best one and we scale that one exponentially.

Steve: Okay and in terms of frequency, are you aiming for everyone in that particular audience to try see that ad once?

Zach: At least yeah, generally we don’t like to go more than 2.

Steve: Okay, not more than 2. You make your calculations on what to bid so that you cover what you think you are going to cover within that certain time period.

Zach: That’s right.

Steve: Okay and one question I did have, and this is a little bit unrelated …

Zach: Oh sorry, and just to throw in that, that’s just one audience. Now we’ve got that working. The entire length of the campaign, we are testing out new things. We might only have 5 additional campaigns but we are testing out new audiences that we haven’t yet tested out just because we’ve been testing out hundreds of other audience along the way. The idea is to eventually have hundreds if not thousands of audiences turned on that are all converting profitably and that’s how the scaling works.

Again following that same principle though of testing … Just because you passed the product validation for that 1 to 7 days doesn’t mean we are not validating more and more audiences. We just want to make sure we validate our biggest, strongest audiences first and scale more audiences throughout the rest of the campaign.

Steve: The following question for that was, is Facebook like your primary advertising campaign or do you find equal success with Google and Pinterest, Instagram?

Zach: I would say…

Steve: Is it just all depends?

Zach: Yeah. It all depends. Again it’s a bad answer, but wherever we can spend money to make money, we’re going to pretty crazy. On [inaudible 00:40:48] Facebook did horribly, Instagram did extremely well. Weird, I don’t know why.

Steve: Interesting, the same company and very similar.

Zach: [inaudible 00:40:57] watches Pintrest did really, really well.

Steve: Pintrest ads. What is the different … I’ve always been curious about this. There is a whole bunch of different crowdfunding sites like Kickstarter, Indiegogo, GoFundMe. What are the differences?

Zach: The biggest difference … GoFundMe I would say is more for social or personal kind of causes. I get I’m not on GoFundMe a ton. We’ve never actually raised money on the site, but GoFundMe is more for, “Hey. I’ve got cancer or my dad just died or I need to pay for a funeral or I’ve got to go on this trip or whatever it is.” It’s just like the name sounds, GoFundMe. Give me money for this, give me money for that. I’d say it’s more social philanthropical kind of thing.

Indiegogo, Kickstarter are definitely competitors. The stuff you see on those 2 sites are pretty similar. Kickstarter has a better audience in the sense that if you are on Kickstarter and you are successful, you are going to see that Kickstarter helped you out quite a bit. For one reason or another, the way Kickstarter’s website is set up, the way it converts; the way people understand the site. If you’re successful on Kickstarter, you are going to see multiple success: success upon, success upon success. It’s that snow ball effect. On Indiegogo, it’s going to require much more of your own work.

That being said Indiegogo is like awesome. They’re nice. They’re kind. They take care of you. I love Kickstarter, don’t get me wrong, but Kickstarter’s model is more like, “Hey. Don’t touch this. We’re good. We’re great, but we don’t really want to be bugged or talked to.” It’s kind of their strategy. Again this will probably get me in trouble but I don’t even know if should I say it, but I’m going to. I didn’t come up with analogy so with that disclaimer.

We love Indiegogo too and we love Kickstarter. We love both the sites. Indiegogo, they have something where if you are really successful they’ll put you on their newsletter. We get a lot of newsletter features because we generate a lot of pledges. That increases the go-go factor which is a factor that Indiegogo uses to keep track of how well campaigns are doing. It’s a combination of pledges, traffic visitors, how quickly all those pledges came, et cetera and the length of time. Indiegogo is like the ugly girl who always watching, who’ll do anything for you, but you are always like, “I don’t know.” Kickstarter is like the beautiful, sexy, supermodel who you’re never going to have, but you keep trying because she never completely turns you down.

Steve: Let me know if you want to cut that out before this goes live.

Zach: I don’t know. Again, I didn’t make up that analogy. That analogy is from … I forget who it’s from, but I’ve always remembered it. To be honest, it’s true.

Steve: There is no reason not to launch on both. Is there?

Zach: You don’t want to launch on both the platforms at the same times. What I like doing it and we find like 60, 70% of our business comes Kickstarter just because that’s where we started I think. We are starting to get a lot more on Indiegogo because now we are their number one partner, and they have this cool little partner page that features all the partners. Because we are number one I think a lot of people see us and come and try to hire us. That being said, 60% of our clients are in Kickstarter.

If we are successful on Kickstarter, Indiegogo has this awesome thing that Kickstarter doesn’t have and I don’t know if they ever will or they are not wanting to do it. It’s called In Demand Funding. After you campaign ends, you can continue to raise money and just extend the shipping or manufacturing date on Indiegogo. Let’s say you plan on delivering in three months on Kickstarter, you might say, “Hey. You missed us on Kickstarter, but you still want to get the product. Well we’re going to be delivering in 6 months if you want to still get it here.

We allow pre-orders on Indiegogo in demand. We have a lot of success going in demand. We have clients we work called Meater which is a smart thermometer. We’ve raised them I think probably more than a million dollars more in demand. UsBidi, a really good campaign that’s raised way more than it raised on Kickstarter in demand. The BetterBack, Katherine Krug, she’s raised quite a bit of money in demand. She’s one of our clients.

Steve: That’s interesting. I wonder … Because there is a sense of urgency with the Kickstarter. Doesn’t that get lost with in demand?

Zach: You know what, that’s what interesting. I think there is still some kind of social element. You get to bring that big number that you raised on Kickstarter or Indiegogo. You get to have that big number in front. People are like, “This must be successful. It raised a million dollars. It raised 3 million dollars. It raised 5 million dollars.” Maybe all that numbers and all the metrics and the social elements, either you lose a bit of the scarcity perhaps. Maybe that creates the sense of people wanting to buy. We’ve found convergence to be okay in demand as well.

Steve: What is like a typical conversion rate for a good campaign?

Zach: Typical good conversion rate for a good campaign … I got Curtis here with me. Curtis, what do you think?

Curtis: From direct, online 3 to 5.

Zach: 3 to 5 percent he says from direct traffic.

Steve: That’s pretty good. Then we just say the average is somewhere around 2.

Zach: Average is like 1 to 2. What about from paid media? Paid media is about 1 to 2, but average for a good campaign is going to be 3 to 5. It does depend on price point as well.

Steve: You mentioned a whole bunch of successes that you’ve had in the past. Some of these were like a year or 2 years ago. How has the crowfunding landscape changed over time?

Zach: The biggest thing that’s changed is you can’t just put a project on Kickstarter or Indiegogo and expect to make money. You definitely have to do a lot of leg work, a lot of stuff upfront. That being said, by doing all that good stuff up front, you have a chance to raise way more money than you ever did in the past. That’s the biggest thing. I think it requires a lot of work upfront.

Steve: It sounds like a lot of your tactics are just social engineering in a way, just good old fashioned leg work.

Zach: That’s right. All we’ve done is taken that good old fashioned leg work and scaled it.

Steve: Then also kept these contacts in place so that you have a base for everything that you’ve launched now.

Zach: Absolutely.

Steve: Zach, I learned a lot today. Where can people find you and pitch their ideas? I understand you don’t get that many pitches on a regular basis. If someone wants to contact you or your company, where can they find you?

Zach: Best place to get us is on Funded.today. It’s not .com. it’s Funded.today because we get your project funded today, so Funded.today. Then on Funded.today, you can click on the Do I Qualify. Let me see what it’s called now. I think it’s Do I Qualify. Learn more … It’s Learn More now. If you click the big green Learn More About on top fold, click and then it will take you to a page. You can watch that short two or three minute video. Then click, Finally Do I Qualify?

We go through a list of questions that we want to know about you, how did you hear about us? Generally within 48 hours we put you in touch with a client specialist. Client specialist … You are probably smarter than me in terms of the daily grind. I just talked to Curtis about a few numbers because he is on the scene so much more than me. They are basically crowdfunding consultants who talk to you about your campaign, talk over what the process is going to look like, answer any of your questions, and determine if what we do is going to be a good fit for your campaign or not.

Steve: Are there any obvious signs that you might not be a good fit?

Zach: I think if you come to us and if you have raised … We have this a lot, believe or not. If you have like 1 to 5 pledges and you’ve been on the crowdfunding site for 2, 3 weeks, you might not have a good idea. We see that a lot. You’d be surprised how many people are like, “I just need good marketing.” I just don’t necessarily know if I’d buy that. That being said, even on cases like that before where we’ve actually turned a campaign that had hardly any backers into 100,000 plus campaign.

If you believe in your idea enough, we should absolutely chat.

Steve: See that’s the thing. I tend to think that a lot of it does have to do with marketing because a lot of people they are good at inventing but then they suck at doing the legwork.

Zach: You are so right. Sometimes when you see 1 to 5 people, you know they didn’t even talk to their friends and family. Its like, “You didn’t have like 5 friends who wanted to throw you money.” That being said, you are exactly right. We talked to inventors all the time that are scared of the internet or have no idea how to even do anything or how they got their Kickstarter page put together in the first place. There absolutely is that. That’s not bad.

We love those kinds of people because as crazy as it sounds, I’ve basically invented 2 things my entire life. I pitched everyday, 60, 70 times. You’d think I’d more inventive, but sadly the creative juices don’t necessarily flow from me at least in the sense of products. I think I’m more creative in the sense of marketing and how to figure out new ways to raise money for people.

Steve: And social engineering. Yeah totally.

Zach: I wish I was more creative because I love the things we’ve brought to life. It’s so fun like right now I’m wearing an original reign watch. I have silver socks on. I’m wearing Wolcox boots. I’ve got McMacular pants. I’m wearing a silver shirt. I’ve got premium underwear from Miguel. It’s like literally everything I have on is from something that Funded Today helped to bring life. It’s exciting. I love to tell those stories and I love to see that we’ve created all these jobs and helped all these entrepreneurs live the life of their dreams. That’s what makes Funded Today so amazing.

Steve: I just want to add a little tit bit since … Is that when I first met you it was just very easy to talk to you. I can kind of see how you are able to reach out and establish great relationships with people. It’s just a talent I guess.

Zach: Thank you. You are very kind. I could say the same thing about you, but you do it 10 times better than me.

Steve: There you go with the praise. It’s not going to work this time buddy.

Zach: I mean it.

Steve: All right man. Hey, thanks a lot for coming on the show man.

Zach: I appreciate it Steve. Thanks for having me.

Steve: All right. Take care

Zach: Bye-bye.

Steve: Hope you enjoyed that episode. Now crowdfunding wasn’t around when I first started my online store, but today it’s definitely a viable way to validate your product or fund your first production run. If you do decide to crowdfund a campaign, there is no one else I would ask except for Zach.

For more information about this episode go to Mywifequitherjob.com/episode123. If you enjoyed this episode, please go to iTunes and leave me a review. It’s by far the best way to support the show. Please tell your friends because the greatest complement that you can give me is to refer this podcast to someone else either in person or to share it on the web.

If you are interested in starting your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business. Go to Mywifequitherjob.com for more information. Sign up right there on the front page and I’ll send you the course immediately via email. 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.

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122: How To Make 600K Selling T-Shirts On TeeSpring With Derek Pankaew

How To Make 600K Selling T-Shirts On TeeSpring With Derek Pankaew

Today I’m happy to have Derek Pankaew on the show. Derek is someone who I met at the Ecommerce Fuel Live conference and it was pretty random how we started talking.

I was sitting directly behind him during a session and I couldn’t help but peek at his screen. And I found that the screen saver on his computer was a running count of his age. I took notice and we started chatting.

And as luck would have it, Derek was selling t-shirts at the time and making a killing doing it. Now if you’ve followed my blog for a while, an example that I use of what not to sell is t-shirts because it’s way too saturated.

But Derek has made over 600K with a gross profit of 335K selling t-shirts online in a pretty short period of time and in this interview he shares how he did it. Enjoy the episode!

What You’ll Learn

  • How Derek came up with selling tshirts online
  • What was special about Derek’s tshirts that made them sell online.
  • His motivations for starting his business.
  • How and where Derek advertises his t-shirts.
  • Which sales channels worked for his business and which did not.
  • His primary source of customers
  • The challenges of selling t-shirts as a sustainable business

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Transcript

Intro: You are listening to the My Wife Quit Her Job podcast, and if you are new here, it’s a show where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now I don’t bring on these famous entrepreneurs to simply celebrate their success, instead I have them take us back to the beginning and delve deeply into the exact strategies they used early on to gain traction for their businesses.Now if you enjoy this podcast, please leave me a review on iTunes, and if you want to learn how to start your own online business, be sure to sign up for my free 6 day mini course, where I show you how my wife and I managed to make over 100K in profit in our first year of business. So go to mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email, now onto the show.
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 thrilled to have Derek Pankaew on the show. Now Derek is actually someone who I met at the eCommerceFuel Live Conference, and it was actually pretty random how we started talking. Behind one of the sessions I was sitting directly behind him, and I couldn’t help but peek at his screen because it was like right in my face.

I found out that the screen saver on his computer was like a running count of his age, and I took notice of that and we just started chatting. As luck would have it Derek was selling t-shirts at the time and making a killing doing it. Now if you’ve followed my blog for a while, an example that I use of what not to sell are t-shirts because it’s a really saturated industry.

Now Derek has actually made over 600K with a gross profit of 335K selling t-shirts online in a pretty short period of time which is pretty crazy to me. Anyway Derek is working on a lot of different projects right now, but I kind of want to dig deep on how he managed to make such large profit selling t-shirts online. With that welcome to the show Derek how are you doing today man?

Derek: I’m doing great, how are you doing Steve?

Steve: Still have that screen saver or has it changed?

Derek: Let me check how … It’s turned off at the moment, but I liked it. I’ve already turned it back on now that you reminded me.

Steve: I think it was in seconds or something like that, so I had to calculate like what your age was, I don’t know…

Derek: Yeah it’s a really good reminder for me of my … The short time I have on this planet and most of it.

Steve: I’m curious here, how did you come up with selling t-shirts and what was your secret sauce that allowed you to sell so many online?

Derek: How I came up with selling t-shirts, I was living in Vietnam at the time. I met someone else who was doing this business pretty successfully. He actually got out of the business, and we were just chatting and I was like, “Yeah, what do you do?” He told me what he does and he said he just finished selling t-shirts. I was like,” Selling t-shirts? How is that going?” He was like,” Yeah it was good. I made maybe like 20K, 25K a month.”

And I was like,” What? What were you doing?” So then he told me about the business model. I had done some Google AdWords in the past, and I figured Facebook ads couldn’t be that much different. After talking to him for a bit I went home. I started researching this business model, bought some courses around Facebook ads and taught myself Facebook ads and then took him out to dinner again.

I had more specific questions this time, and then after having a couple of conversations with this guy who has done it before and then spending sometimes studying on my own, I just started launching campaigns. What was the second question?

Steve: So let’s back up a little bit because a lot of people aren’t really familiar. I mean we’ve chatted for a while but … so first off how did you obtain these t-shirts, how did you get the designs, and that sort of thing?

Derek: Okay great, so I was selling mostly on a platform called Teespring, which allows you to upload designs to this platform, and they will print the shirts and send it to your customers for you. I don’t have to deal with customer service; I don’t have to deal with fulfillment. All I do, there is basically I have 2 jobs, one is to get the designs up, and the other is to market the designs.

So the marketing is almost 100% Facebook ads, basically it is 100% Facebook ads. I tested some other things like Pinterest ads, but for the most part the whole business was basically built off of Facebook ads. As for where the designs come from, they actually come from a ton of different places. So some of it is through competitive research, so I’ll use tools like TeeGrasp is probably the number one tool in the t-shirt …

Steve: What does that tool do?

Derek: It scrapes all of the different t-shirt websites. It scrapes Teespring, it scrapes Teechip, it scrapes Gearbubble for all the t-shirts that are launched on those different platforms. It lets you see what markets people are in, what kinds of designs are selling well. Using that tool I’m able to come off with offshoots. If a design that said beware of the crazy chicken lady is selling well for chickens, then I might think of beware of the crazy goat lady for women who have goats. Using offshoots of existing designs by using spy tools this one method, once…

Steve: Oh backup, on Teespring do you get all the revenue numbers for everyone who is selling t-shirts?

Derek: No, you see the sales numbers for everyone who is selling t-shirts and you can extrapolate to the revenue numbers from that.

Steve: Okay, because the t-shirts are like 20 bucks probably, is that…

Derek: Yeah, typically really simple designs are about 20 bucks, and then if there is multi colored front and back print and you are looking like 23, 24.

Steve: So you really know how much someone is making, right?

Derek: On Teespring yes you can have a pretty good guess. The numbers do change because if you are selling hoodies … You are usually able to sell a few different kinds of shirts at once. If they are selling hoodies the margins are a lot higher on hoodies, and you can’t really tell what the split is between the t-shirts and the things they are selling. In other platforms such as Teechip will actually let you hide the amount of sales you are getting. On Teespring you can figure out the revenue approximately, but on some of the other platforms you can’t.

Steve: Okay, and then some of these research tools that you are mentioning would you mind talking about what they are and what they do exactly?

Derek: Sure yeah, the 2 most common ones that I’m aware of are Teegrasp which this tool is like a Google spider. This tool will go to all these different websites and just see these t-shirts and it will take a screenshot of the front and a screenshot of the back. If the number of sales is publicly available, it will grab that data as well and then compile all of it in the spreadsheet.

If I wanted to go in the market for example we use chickens. I could go into Teegrasp and just type in chickens, and it will show me all the shirts that had been launched in that market before. What percentage of the campaigns have hit, meaning it had at least enough to print. How many shirts…

Steve: And what is that number?

Derek: I believe it’s 3.

Steve: Oh that’s it, okay.

Derek: I have actually been out of the Teespring business for a little while now, so I don’t actually know if they updated that. They were talking about making it one, but last time I was in the business it was 3.

Steve: Okay, and so these tools, are they free or do you have to pay for them?

Derek: So Teegrasp is not free, I think it’s 50 … somewhere between $50 and $100 a month. Another tool that I use was just Pinterest. Pineterst.com/source/Teespring.com, and they’ll give you a really, really good live feed of what’s being shared the most on Pinterest from Teespring. That has a really close correlation to what’s selling really well.

You can just replace Teespring.com with all the other sites that run it, so Teechip.com is another big website that sells t-shirts. Gearbubble.com, so you can just replace that and spy on a lot of different websites that are currently selling t-shirts, so Pinterest is free obviously.

Steve: You go through and you find out what the best selling shirts are, and then you make little offshoots of them. Are there any copyright issues with doing that?

Derek: That’s only one of the sources that we use. I’d be really careful about the copyrights so I wouldn’t copy the design, I’d only copy partial quotes. Often times the way I would use these tools is to identify markets. If we use chicken again as the example, if I see that chicken people who have chickens in their backyards and are really passionate about raising chickens are buying t-shirts, then I might … Once I figure that out using these kind of competitive intelligence tools, I would just go to Google images and type in like funny quotes about chicken. Chicken means, funny chicken weird or whatever just start looking for weird quotes.

Often times we’d actually … This wouldn’t work for the first or second t-shirt that we do in a market. By the time we are on our third, fourth, fifth t-shirt to the same market we start to build a Facebook page that has some following. We are able to just start posting these images, the memes that we see on Google images. Or we also look on Reddit and a couple of other places. We just post these to our existing audience and we see which ones get the most likes and the most comments and we turn those quotes into t-shirts. We use a live feedback mechanism as well.

Steve: Just curious, how many t-shirts sales would actually interest you to go into a certain market?

Derek: I probably want to see a campaign with at least probably at least a 100.

Steve: Oh okay, so not that many really?

Derek: Yeah.

Steve: Okay so if you see like a t-shirt that sold more than a 100 units, that would be something you would consider going into?

Derek: Yeah absolutely. One thing too, one really important thing to realize with Teespring is that it’s a really, really high volume game in terms of the number of designs you need to put out to do this well. On a weekly basis we are launching 40 to 50 different designs.

Steve: Holy crap okay, so we are talking like … oh my God that’s a lot of designs every day.

Derek: Yeah totally, and most of them will fail. Like 9 out of 10 will not just make any money, and 9 out of 10 will lose money. The 1 out of 10 that makes money will more than make up for the ones that lose money. When I say that if I see that a shirt has done 100 sales in that market that’s really … That’s good enough for me to spend 1 out of 50 of my experiments on a weekly basis on that market to see if it sells.

Steve: So is your team like all graphic designers?

Derek: The team was 3 graphic designers, 1 assistant who was helping with Facebook ads and 1 assistant who was helping with all the other menial stuff, answering comments, creating Facebook pages etcetera.

Steve: Okay, and so you were creating designs from scratch then. You’d come up with an idea and a quote, and you’d have your graphic designer pout together some sort of graphic and integrate that quote in?

Derek: Yeah, so a lot of these quotes were very were scalable or tempertized. The quote I mentioned earlier beware of the crazy chicken lady. You could replace that with literally 30 different animals, right. Often times off of the 40 or 50 designs we were doing a week there were actually maybe only like 3 or 4 unique designs, and we are just scaling them out to different markets at the same time, does that makes sense?

Steve: Yeah totally, okay and so this Facebook page that you were talking about. That Facebook page obviously only caters to a very specific niche, right?

Derek: Correct.

Steve: So did you start that Facebook page right from the start and start posting to it?

Derek: So in the beginning I ran everything out of one Facebook page, so I was running 50 different markets out of one Facebook page. Until someone told me that if you do that, any other Teespring marketer can just come to this page and see all the markets you are in. After that point, the practice really is, the best practice in Teespring is to have one page for every market you are in.

Once I started doing that, yes, we would create a Facebook page for every single market we are in from the very beginning, even if we didn’t know if we would sell anything. Then, but we wouldn’t post any content to it until we are starting to make sales. Once it’s clear that this market is going to be profitable for us that’s when I started putting content on the page.

Steve: How often would you post to this page? You just had this blank page until you knew that the t-shirt was going to sell and then you started posting to it.

Derek: Yeah, actually we only built … There were only 4 pages out of maybe; we probably tested like 300 different markets. We only built 4 pages where we were posting regularly, because it is a lot of effort to find a bunch of post. We can’t just post images. We have to actually write a couple of sentences with each post. It’s actually quite a bit of effort to run these Facebook pages.

We were posting about 5 times a day, so about 35 posts a week because most of the audience … The Facebook formula for reach is, you will reach 4% of your audience for a post or something like that. Even though we were posting 35 times a week, people were probably only going to see our posts twice a week anyway.

Steve: Did you buy likes in the beginning or was it all organic?

Derek: Yes, for the pages that we are actively building, we did buy likes and for the rest we didn’t. In retrospect I don’t think it’s really worth it.

Steve: Interesting. Okay.

Derek: Yeah, I don’t think it was really worth it.

Steve: How do you jump start the page then?

Derek: A lot of people actually like the page, just from … If we run a t-shirt campaign and we spend $5,000, $8,000, $10,000 on the Facebook ad campaign, and that ad is seen by 100,000 people or whatever. A pretty good portion of them will just like the page from the ad itself. If we are, after we spent a few thousand dollars on ads, we’ll probably have a thousand likes, couple of two thousand likes just from people who like t-shirts and want to have … If you are a big fun of chickens and you are really passionate about it, and you see this t-shirt that’s hilarious.

It’s an inside joke for you and your people, then you might just like the page and like see what other t-shirts they come up with in the future.

Steve: Okay, and then with this page then, did people kind of engage with the page later on? How did you use this page later on once you got a little bit of traction? Actually first of all how many fans did you for your highest page, how many fans did you get?

Derek: About 38,000.

Steve: Okay, that’s a pretty good number of chicken lovers there. How did you use this page once you had it established?

Derek: A lot of it was posting, so posting these images, these memes, these quotes and seeing what people respond to. The best campaign I ever did sold about $33,000 in gross revenue and about $22,000 in net profit. That came from just a quote that got insane engagement. We were just posting it and for me I would never have guessed this quote would do so well. This quote got like 10 times more engagement than anything else we posted.
Then I took that quote and went to 99 designs and paid a lot more than I normally pay for design. Usually I’m paying like $15, but I paid $250 for this design. That just … It was a really good design. It just took off. It was the highest seller I ever seen. Yeah, just posting quotes to the page …

Steve: Are you going to tell me what the quote is or what? Or is that a secret?

Derek: I’d rather not share that in particular.

Steve: Okay, that’s fine.

Derek: Let’s see, where were we? Oh yeah how to engage. Just posting quotes and getting responses from people, using that to gauge what kinds of quotes to put on t-shirts in the future. Actually I think, I don’t have any way to quantify this, but I think in the markets where we are actively posting because we are showing up in people’s newsfeeds more often, it actually increases our conversion rate. There’s like a branding effect to it. I can’t really quantify that in any casual way.

Steve: Sure, were these shirts branded even though they were sold on Teespring, or there’s no branding at all?

Derek: Not really. The brand is just our Facebook page, I think people just get used to seeing it.

Steve: Okay. Let’s shift gears a little bit and talk about the bread and butter of this business which is the marketing side. You bought, you obviously spent a lot of money on Facebook ads, and I was hoping you could just kind of walk me through the strategy that you used to market these t-shirts.

Derek: Sure yeah. The goal with this, there’s kind of a 2 problem goal. There is, first you want to cast your net wide while keeping it to the most passionate people possible, and I will explain what that means in a second. Second, you want to use a very data driven approach to eliminate all the places where you are wasting money.

Coming back to the chicken example, typically I would separate everything. I would start with anywhere between 3 to 5 ad sets. An ad set for anyone who doesn’t know it’s just a grouping in Facebook ads of different keywords, different interests that you can target. I would put similar interests into the same ad set. I might target at magazines. Magazines is one that tends to convert really well, and I would just list off a few different groupings that I frequently target. Magazines is one, websites is one, suppliers, manufactures and tools is another one, organizations is another one. Those are …

Steve: What about celebrities, do you target celebrities?

Derek: Celebrities? So if there are authors, or speakers, those could do really well. If they are like if I was in the golfing market, I definitely wouldn’t target like Tiger Woods. If I was to target a celebrity I would make sure it’s like a number 8, like b-list celebrity. Not the top 10 golfers, but like the 33rd golfer so that only people who are super passionate about golf would be liking this person. Even that said, in my experience celebrities don’t, those interests don’t convert that well. Typically I wouldn’t test that until I was like scaling a campaign that’s proving to convert.

Steve: Okay. One question I did want to ask, when you are writing these Facebook ads, you get conversion data from Teespring, right that directly correlated?

Derek: Yeah.

Steve: Okay. Can we just take your chicken example for example and then just tell the audience how you would put together an ad set for it.

Derek: Sure. First I go to Google and I type in chicken magazines. It will pull up I think backyard chicken is the name of a magazine. Chicken farmer I think, I don’t know if that one’s actually a real one. There’s usually maybe 3 or 4 magazines in a market. If it’s a really big market there might be like 5 to 10 magazines.

I would just put all those in one ad set. Next I would look up the most common tools you would need. With chickens it might be bird feed, chicken coops, cages like whatever those supplies are. I look up the names of those suppliers and I would click that into a Facebook ads. I look for the most high trafficked or the most engaged websites. I don’t remember actually what those websites are in the chicken market.

Steve: It’s okay.

Derek: Whatever they are, the websites that the people tend to frequent, and then organizations. Chickens might not have it, but for cattle for example, you have a Cattle Farmers Association, the American Beef Association. Whatever the associations that people who are in that market would tend to join, just put those all in one category. Typically I would have … Hold on, give me one moment. I’m just going to look up if there’s any other ones I missed. Typically I would start with 3 to 5 different ad sets. Each of those I would further cut those in half, and half the traffic would go to mobile and half the traffic would go to desktop.

Steve: Okay, and do you factor by age also or segment by age?

Derek: I don’t segment by age in the beginning. I will do that later on, but in the beginning I would just … I usually start at about 30 years old and go to 65 plus. I found that for t-shirts, people between 18 and 30 don’t really buy. They buy but I usually end losing money. I think my guess is that they just have less money so they are not as …

Steve: Do you ever use any of the ones who are you only want to target people who make over a certain amount?

Derek: No. I think that data in general isn’t very good because most of the data that Facebook gets is given to Facebook by the user. You type something in your status and Facebook knows you’re into chickens because you are posting photos of your chickens or talking about your chickens. The financial data they are buying it from third party sources and then trying to correlate it to your Facebook account. I think in general that data is not all that good.

Steve: Okay. Your first ad really is just interests … The categories that you are talking about for your ad sets and then just half mobile, half desktop, that’s your first campaign.

Derek: Yeah, interest 30-65 plus half mobile, half desktop. We are still targeting people who are really passionate about this topic but we are casting a wide net.

Steve: What about how many creatives do you make and how many headlines and that sort of thing also in your first iteration.

Derek: Just 1 and usually actually throughout the whole campaign, we typically just have 1 ad. Remember we are launching 50 campaigns a week. In each ad is an image that has to be made in Photoshop. If we are doing multiple ads it would just add a ton of time to our process. Just to keep things scalable and running smoothly. We just did 1ad basically.

Steve: What is your image? Is it just a picture of the t-shirt?

Derek: Yeah, it’s a picture of the t-shirt blown up as large as the image will allow which is like color on the background. Sometimes like a border around the shirt, like a stroke to make it stand out from the newsfeed a little bit more.

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Steve: Okay, any text on the image at all?

Derek: Nope.

Steve: What would your headline look like then?

Derek: There is no headline. The format of the post that we were doing was … It’s a little bit different than … The normal Facebook ad is 1200 pixels by 628 pixels. It’s kind of like a horizontal rectangle and if you click on it goes to a website. Most of the stuff that we were doing with TeeSpring we were actually doing 1200 by 1200 so it’s a much larger ad. We posted on our Facebook page and then we used that creative as the ad.

There’s actually no, there’s no headline on it. It’s like if you see a friend’s post with an image on it, there’s no headline on it. It looks exactly like that except it’s Facebook ad. It’s a slightly different format that we were using.

Steve: Okay. Cool. You found through experimentation I would gather.

Derek: Yeah, it was kind of industry standard too.

Steve: Oh it was, okay.

Derek: Because it’s a t-shirt just having more screen real estate from the bigger size of the image, tends to work better for … At least I found when I did it tended to work better than having the half the size.

Steve: Okay, that makes sense. It’s just literally like a picture with no headline underneath the image and then just some text above it.

Derek: Yeah, exactly and the text above it would say like limited run, campaign ends in ten days, new shirt for chicken, new shirt for chicken farmers available in 5 different colors. Just kind of hypie time’s running out kind of text.

Steve: Then how much money would you put on each of these ad sets in the beginning?

Derek: In each of these ad sets, Facebook has changed the policy around this a little bit. We used to be able to put any amount of money we want on it. Now there’s a $5 per ad set minimum generally unless you tweak things. When I was doing it, I was basically dividing $15 among all the ad sets. If we were doing 3 ad sets and then split those in half, so that there’ is 3 desktop and 3 mobile, then I would just divide $15 amongst the 6 ad sets.

It would be $250 a day for the initially test. Basically what I was willing to do, I would be willing to spend $15-20 dollars on a Facebook ad set to see if it would make a sale or not. Usually what I find is that by the time I campaign, I spend $15-20, if it hasn’t made one sale, it’s probably dead. If it’s made 1 or 2 sales, it’s in limbo. I have no idea if that’s going to make money or not. If it has made 3-5 sales then it’s probably a winner.

Steve: Okay so a couple of clarifications here, all these ads go straight to the TeeSpring page of that t-shirt where they can checkout directly. There is no landing page or anything it just goes straight to the checkout page.

Derek: Yeah, that’s right.

Steve: How much traffic can you possibly get of $15 worth divided amongst 6 ad sets?

Derek: Like how many clicks, or what do you mean?

Steve: Yeah, how many clicks and what is a good conversion rate?

Derek: The conversion rate is anywhere between 8-13%

Steve: Wow, that’s crazy high

Derek: Yeah, it is pretty high, but again we are only hitting 1 out of 10 designs. The ones that hit, yeah they really resonate with the market. I actually don’t know how many clicks I get; I don’t think that’s something I looked at on a regular basis. I just looked up the ad span versus revenue.

Steve: Okay, I was just curious, I mean it’s probably somewhere in the order of 20 cents to a dollar maybe per click, I don’t know. That’s sounds too high actually for, to get there.

Derek: I think I was generally paying a little bit over a dollar per click actually.

Steve: Really? Okay

Derek: On an account wide basis, but that, actually now that I think about it, on an account wide basis that would include the shirts that were losing money as well. I actually don’t know how much per click I was paying for the ones that were making money.

Steve: On your bidding, did you just let Facebook bid by purchase? Yeah got it. Okay, so you get some data, and certain ones are dud, certain ones are in limbo and certain ones are kicking butt hopefully right?

Derek: Yeah exactly. I’d spend, usually if I spend $15 or $20 in day 1 I would scale that up to say $50 in day 2 and $100 in day 3, and then $150 $200 on day 4. I know that’s a lot faster scaling than a lot of people in Facebook ads advocate. I think standard in Facebook ads is to raise your budgets by 50% every 3-5 days. TeeSpring is a little bit different, I think because you are literally in a race against other people.

If you have design that is selling well using the tools that we talked about earlier, people can see what is selling well, and you will literally have 4 knock offs within 2 days. It really is, like once an idea is in the sphere of t-shirt marketers, you are just in a race to spend the money and get it in front of every single person in that market, and capture all the sales before somebody else knocks you off.

Steve: That sounds really like cut throat to me. All right, what do you do with the limbo designs; do you scale those as well?

Derek: Yeah, I spend a little bit more money. I will just let it keep running at $20 a day. Yeah basically I will just …

Steve: You mentioned segmenting by mobile and desktop, can you share some of your experiences with that. Like are most of the sales on mobile or back when you were doing it?

Derek: It’s completely market dependent. Some designs will sell on both, some designs will not sell on desktop, and some designs will not sell on mobile. I haven’t found any coloration, I can’t guess. I can’t say older people tend to buy on desktop, artistic people on mobile. Literally I cannot guess what it is, but some markets bind it on different devices and I don’t know why.

Steve: Okay that’s very interesting. In a typical test like the chicken one that you described, do you have this 6 ad sets, you ever have cases where all of them are bad and you just go back to the drawing board, or is that the common case?

Derek: That’s really a common case. I won’t try and revive things that are making money, if it doesn’t make money after … if I spend $20, like one sale I’m usually making $8-$12 so if I spend $20 even if I made 1 sale I’m actually still losing money. If I spend $20 and I make no sales, I just dump it.

Steve: Let’s say you have a couple of mediocre ones; walk me through that process. Let’s say you’ve made one sale in your $15 experiment?

Derek: Probably I will just let spend another $15-30, and just check it daily. Sometimes what will happen is it will make 1 sale and after I spend another $20 it will suddenly jump to let’s say 6 sales, if that is the case, then great. I will keep running it; often times what happens it will just break even or lose money. By the time I spend $50 and it’s not making money then I will probably kill it off.

Steve: Sound like your threshold is 2 per day, is that 2 per $15 is that accurate?

Derek: I didn’t understand the question can you …

Steve: Meaning like you need to sell at least 2 to be profitable, from what you were saying?

Derek: Yes, that’s right.

Steve: At a $15 per day clip. As long you are making at least 2 per $15 spent you will just scale it right?

Derek: The important thing, the reason I do it this way is because it’s actually more costlier to miss a winner than it is to spend money on the losers. If I spend $15 on it and it makes 1 sale, I’m losing a bit of money. If I spend another $15, I might lose another additional $15, but if that was actually a winner. A winner can make anywhere between $500-$20000. If it was actually just a statistical fluke that it didn’t make a bunch of sales off the first $15 and I killed it too early I could literally have just lost $10000. That’s why I let myself bleed out a little bit more money just to make sure I’m not missing out on the winner, does that make sense?

Steve: Yeah, it totally does, just curios, how big are these audiences and do you ever burn them out quickly?

Derek: All the time. How big are the audiences? Anywhere between, the smallest market I ever did, I’m happy to share what this market is. The smallest market I ever did was female space ship engineers.

Steve: Wow that is a really, okay, that’s like nothing.

Derek: Yeah, that market I think only had about 2000 people I could target on Facebook. I spent $3000 and I made $4000 back. It was a super high return on ad spend, but I burnt out the audience within a week or 2. The largest audience I think I targeted was 650000 people. I’d say anywhere between low thousands to high hundreds of thousands. I don’t think I have ever gone larger than a million.

Steve: Okay, It sounds like these t-shirts don’t really have lime a long life span, is that accurate?

Derek: That is probably accurate. I have heard of people, and I’m probably leaving money on the table by not doing this, but a lot of people will, once they burn out a design, by burn out I mean that the ad had a frequency of 2 and usually that’s when it stops working. When everyone in your industry has seen that t-shirt twice and hasn’t bought, that’s usually when you start losing money.

By what I have heard a lot of people doing is they would run the shirt and then 3 or 4 months afterwards they would run it again, and it would be profitable for them. Yeah, typically one t-shirt campaign will last anywhere between 1 week to 2 and a half weeks. That’s probably pretty standard.
Steve: Sounds like there is a ton of maintenance. You have to pump up out new creatives all the time and it sounds like you’re constantly turning these out every single couple of weeks. It’s not like you have a winner and you can ride it for a year longer, is that accurate?

Derek: Yeah, that’s accurate. You definitely can’t ride a winner for a year. That would be amazing but yeah.

Steve: Are you allowed to re-target. Does TeeSpring let you put pixels on the landing pages and stuff or …

Derek: Yeah, you can retarget.

Steve: Okay, so do you do that?

Derek: Yes, we are targeting otherwise really high, definitely recommended.

Steve: Did they let you gather emails?

Derek: No, but you can send emails to their customers through their systems. I do know other people who they put a landing page in front of the TeeSpring page. It will just be the image of the design and then put your email here to receive a $5 discount or whatever. Yeah if you want emails you’ll have to collect them yourself. There are other platforms. Teechip for example if you sell through their platform they will let you export all the emails from customers.

Steve: Did you go that route as well?

Derek: I didn’t, I just never … My impression of Teechip is that, they have worse printing and worse customer service, and for me the interface as the marketer was worse as well. I just didn’t want to do it.

Steve: I was just thinking that, if you had that landing page like you said that people do and what you gathered a list of like crazy female space ship engineers, you can continually pump out designs, and just email them to them, right?

Derek: Yeah, an actually I think a lot of the TeeSpring people are moving that way, and actually moving off of TeeSpring and starting their own Shopify stores. Selling t-shirts still, but in specific markets, building their own audiences and building more of a brand.

Steve: Everything is Facebook then. Google doesn’t sound like it would work that well, because people aren’t really searching for female space ship engineer t-shirts right?

Derek: Yeah, I haven’t heard of anyone doing this, but I think that Google display network could actually work. I never tested it. I did test Pinterest ads which actually converted pretty well but the volume was really low compared to Facebook ads. I was just, you couldn’t spend any money, but the money you could spend would return pretty well.

Steve: In terms of lookalike audiences, were you doing that as well?

Derek: Yeah, I found out look alike audiences off of clicks didn’t really help that much. Once we have enough buyers, which is usually about … Technically you need 200 buyers that show up in the Facebook pixel which means probably about 300 actual buyers. Once you have enough buyers to make a customer audience, and to create a lookalike audience, I found that does converts pretty well.

What worked best for me was using that lookalike audience and then just putting a broad keyword on top of it. Let’s say I was targeting fencing for example, people who fence, I would probably not just target fencing if I didn’t have a look alike audience, but if I had a look alike audience, I would just lay a really broad key word on top of it and that would work pretty well. I have heard of people just using them naked lookalike audience. Just look alike audience with no interest. That never tested well for me personally, but I have heard that can work pretty well as well.

Steve: When you start incorporating this stuff into your ads, you stared out with your 5 or 6 ad sets, when did you incorporate lookalikes into the mix?

Derek: That’s pretty late actually. The next step, once I have tested the campaign and it’s converting well, I’m starting to scale up, I will start checking on a day to day basis the breakdowns which is are male or females buying, what devices, what countries are they from, what regions of the country are they from, what age range etcetera.

This I’ll start checking by the time I’ve spent, probably by the time I’ve spent $50 because often times you will see it really early. You will see that I spent 50 bucks, I have made 9 sales, and literally all 9 of them are from women. That stuff, sometimes you see it early, sometimes it takes a few hundred dollars. For me to start using look alike audiences, I’m probably looking at least $1000 in ad spend before that really comes in play.

Steve: Okay, that’s like half the life cycle of your entire campaign right?

Derek: No, there are some campaigns that can get pretty high in spending.

Steve: Okay, let’s back up a little bit, when did you start refining your interest, at what point do you start doing that? Or the demographics I
should say.

Derek: I’d say by $40-$50 in spending. I won’t always be able to make any decisions at that point, but I’ll at least start looking at that point.

Steve: Okay, of the campaigns that have been successful, do you create a new ad set or do you just change the existing one?

Derek: I turn off the ones that are not making any money, and the ones that are making money, I will do 2 things. Often times I will break them out. Let’s say I have 6 magazines all on 1 ad set, I might turn off the magazines ad set or I might leave it running, and just break all the 6 of them into their individual ad sets, so I can see which magazine specifically are converting.

I will go look for more stuff as well like magazines. I’ll usually find all the magazines but if their websites for example. I might only have found the top 3 or 4 websites in the industry, but if I’m finding that websites are converting well, I might just go look for all 20 of them, and maybe only 9 of them will show up in Facebook ads as targetable. I will just go look for more of the same stuff that’s converting, if that makes sense.

Steve: In the case where it’s only females that are buying will you lay that on top of these existing ad sets?

Derek: Yeah

Steve: Interesting, and then, let’s say there was like 3 males and 7 females, would you still run the males like a lower spend?

Derek: If it’s profitable, yeah, just like if otherwise positive I will let it run, why not.

Steve: It sounds like a lot maintenance here. Are you using any tools, or are you using any tools to help maintain your Facebook ads, or was it all just power editor?

Derek: It’s power editor and Google spreadsheets.

Steve: Google spreadsheets wow, okay. I had this question written down here, what are the challenges with this model, and it seems pretty clear to me that it’s just really cut throat and you constantly have to be churning out stuff, because there’s not anything that is going to last a long time.

Derek: Yeah, I think that’s true, and I think if I were to do it again, I would definitely be building a store, I’d be collecting an email list. I would break off of TeeSpring. TeeSpring actually does fulfillment now. You can have a Shopify store and they’ll print for you. I would still probably have started with TeeSpring because I wouldn’t have known what markets were converting well for me, but by the time I knew what markets were converting I would have definitely moved away from selling on someone else’s platform and built my own.

Steve: Earlier you weren’t willing to reveal like that coach, or that really popular shit, does that imply that it’s still selling?

Derek: I thought about, I haven’t turned it back on, but I imagine that if I just re-ran the same design it would actually make few thousand dollars.

Steve: Okay, and there is hope, right? Once your 2 week campaign or whatever is over, you can just run it again at some future time, like during Christmas time, actually how much does seasonality play in this business?

Derek: I think it actually plays quite a lot. I don’t think, I think year round there is decency as always, but around Christmas is just ridiculous. We did over 100K in sales in a 30 day period, and people are just buying during that month. I think TeeSpring’s still are really a good business not around Christmas, but yeah there is definitely a huge bump around Christmas.

Steve: Okay, and in terms of just copying, do people just copy you over verbatim sometimes?

Derek: Yes.

Steve: Is there anything you can do about it?

Derek: On TeeSpring, yes. TeeSpring, email them and say, “Hey this is copyright infringement.” but there is so many platforms. There is, like I mentioned Teechip, Gearbubble. There is literally a dozen out there. The biggest 3 or 4 care about copyright, but the little ones, they don’t care. If you get knocked off and it’s on some random website with, not a strong legal team, I don’t think there is much you can do about it.

Steve: Okay, Derek, you mentioned that you stopped doing this a little under a year ago, what caused you to get out of this business, and what are you working on now?

Derek: What caused me to get out of the business was I don’t think I built my team in a stable and scalable way where I could not be doing a lot of the Facebook ads work. Basically I hired people around where I was living in Thailand, and a lot of them were travelers, a lot of them were entrepreneurs working on their own stuff. After a few months they would naturally leave and it was just really unstable, the team I built, and I decided to try and rebuild the team using Filipino virtual assistance.

I flew to the Philippines, I hired a couple of BAs and I trained them on how to use the system I was building, and it turned out that as soon as anything changed in Facebook ads or on TeeSpring, they have to be retrained over again because weren’t actually … They didn’t have a deep understanding of Facebook ads. Basically I made some mistakes in hiring and building the team.

The reason I closed it down, as we were talking about, to do this well we have to launch a ton of designs, it’s a ton of work. I was probably working 50-60 hours a week. I think by the time it was clear to me that the second team wouldn’t work out; I just didn’t have the energy to do it over again.

At the same time I had Amazon via supplements business that was starting to do pretty well, and I was working on another physical product. Design it from scratch and just, I had a lot of other things, some of them were starting to take off, and taking my attention, and I just decided, “You know what, it’s been a good run, but I don’t think I want to continue with the TeeSpring thing, and so dispose it.”

Steve: Have you found that FBA has been a lot less work for a greater return?

Derek: It’s so much less work, yeah. It’s literally the most passive income I have ever seen in my life.

Steve: Well, there is an endorsement for anyone out there listening. Private label stuff white label stuff on Amazon using FBA. Although supplements is pretty competitive, right?

Derek: Yeah, it is pretty competitive.

Steve: We don’t have that much time left, but is your strategy similar? Do you run Facebook ads for your stuff or are you … Is it just giveaways, how do you market your supplements?

Derek: Yeah it’s giveaways and Amazon PPC. Typically I do a little bit of over 20K a month. I’m not the biggest seller in the world. I’m actually, hopefully a lot of my products are ranked somewhere on the bottom of page 1, top of page 2. I’m not in crazy bidding wars for the top spot. I just launched products and I’m happy to be in the middle, if that makes sense.

Steve: Yeah, you are like under the radar, so to speak. Making a pretty good income, especially since you like to travel to Asia all the time where the cost of living is really low.

Derek: For sure.

Steve: Cool man, hey Derek I learnt a lot about the t-shirt business today. I had no idea that so many people were making money selling t-shirts online. I thank you for that. If anyone has any questions for you, I don’t know if you have a blog or anything, but where can people find you?

Derek: I don’t have a blog, they could email me. I’m pretty open to email in general. My email is DerekPankaew@gmail.com.

Steve: Yeah, I’ll link that up, and hey Derek thanks a lot for your time, I really appreciate it.

Derek: Your welcome, it was my pleasure.

Steve: All right, take care.

Hope you enjoyed that episode. In general when anyone comes up to me wanting to sell t-shirts online, I’m almost always 100% skeptical, but Derek clearly made it work, and it’s really interesting how you can leverage and base an entire business off of Facebook advertising.
For more information about this episode, go to mywifequitherjob.com/episode122. If you enjoyed this episode please got to iTunes and leave me a review. It is by far the best way to support the show, and please tell your friends, because the greatest compliment that you can give me is to refer this podcast to someone else either in person or to share it on the web.
And if you are interested in starting your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to mywifequitherjob.com for more information, sign up right there on the front page, and I’ll send you the course via email immediately. 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.myifequitherjob.com.

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121: How To Start A Successful Ecommerce Conference On Your First Try With Steve Chou And Toni Anderson

121: How To Start A Successful Ecommerce Conference On Your First Try With Steve Chou And Toni Anderson

Today’s episode is a little different in that I’m not interviewing anyone on the show. Instead, I brought in my partner Toni Anderson to talk about how we launched The Sellers Summit, our ecommerce learning conference!

This was my first event ever and I discuss all of the little things that were involved in planning and running the event. If you plan on launching your own conference someday, our mistakes and successes may help you out!

I really loved every minute and I met so many new awesome people as well.

Right now, we are selling virtual passes to the conference for a limited time. Because our event sold out so quickly, many of you did not have the opportunity to attend.

So I’m doing my best to bring the event directly to you.

If you purchase a virtual pass by July 18, you will be invited to a live Q&A webinar where some of the speakers of the Sellers Summit will be present to answer your questions. It’s the closest thing to attending that I could think of without actually going.

Click Here To Grab Your Virtual Pass

What You’ll Learn

  • Our motivations for starting the Sellers Summit
  • How we sold out so quickly
  • Our strategy for making the attendees ecstatic
  • How we chose our speakers
  • What we did right and what we did wrong
  • How we chose the venue

Other Resources And Books

Transcript

Intro: You are listening to the My Wife Quit Her Job podcast, and if you are new here, it’s a show where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now I don’t bring on these famous entrepreneurs to simply celebrate their success, instead I have them take us back to the beginning and delve deeply into the exact strategies they used early on to gain traction for their businesses.

Now if you enjoy this podcast, please leave me a review on iTunes, and if you want to learn how to start your own online business, be sure to sign up for my free 6 day mini course, where I show you how my wife and I managed to make over 100K in profit in our first year of business. So go to mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email, now onto the show.

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 is going to be a special episode because I’m not interviewing anyone on the show today. Instead, I brought my partner Toni Anderson on the podcast to talk about the Seller’s Summit, which was a conference that we both threw last month in Miami, Florida. It was my very first conference. I thought it would be interesting to talk about the planning, the preparations, the attention to detail and all of the ups and down involved in planning the event. First off, how are you doing today Toni? Thanks for taking the time to come on.

Toni: Thanks for having me again.

Steve: Yeah, and I wanted to talk about the motivation for the conference, because it was kind of funny. I did not want to do it in the beginning, because if you think about the conference in terms of just upfront risk and monetary reward, you got to put a lot of money upfront to do the conference and you don’t do a conference to make any money.

People have to travel, you got to sell tickets, you got to get sponsors, you got to book a venue, deal with logistics. It’s like planning a wedding all over again, not that I planned my wedding or anything, but still how did you convince me to do it? I knew I wanted to do it, but I can’t even remember what you said to me.

Toni: I think it was a consistent wearing down, wasn’t it? Through multiple meetings, over the fall of 2015?

Steve: Yeah, because there was a stretch when we were seeing each other. We saw each other for like a full week, right? Straight was it?

Toni: Yes. I think we saw each other in September at a conference, and then we saw each other again in October at 2 different conferences, and I think we just kept having that conversation over and over again about is it really worth it? Is it worth it for your brand; is it worth it for my time? What are the benefits truly at bottom-line for us to do this, because it was definitely a huge risk?

Steve: Just for listeners out there, Toni does wear on you and after a while you just want to give up and go commit suicide. Anyway sorry, so what were your motivations actually? I think I asked you this before, but I don’t even remember your answer because at the time you had just started getting into ecommerce, right?

Toni: Right. I had been– I started selling in May. When we were talking about this, I’d only been selling for 4 or 5 months. I think what appealed to me was being able to be on the planning team, or ownership team of an event, in a field that I didn’t have a lot connections in. I have a lot of connections in the marketing and social media world, but in the ecommerce world, I don’t really anybody but you, not anymore.

For me it was very appealing to be able to be a part of something where it would give me access to the thought leaders and people that are really making a big impact in that community, and it was a way to jump to the top pretty quickly. For me that was a huge appeal to be on that side of things.

Steve: If you consider me the top, that’s very sad.

Toni: Right, I have low standards though. Don’t worry.

Steve: Okay, all right. Good because you had been running conferences for the past 7 years, is that right?

Toni: Yeah, so I’ve been running blog, primarily blog conferences, marketing events for bloggers. This was a little bit different, and we were really trying to reach a totally different audience.

Steve: Just for my knowledge, why are you shifting away from the blogging crowd to ecommerce?

Toni: I really like ecommerce a lot better than I like blogging. I love blogging, it will always be something that I do, but the ecommerce was a way to step back a little bit I think if anybody out there is a blogger or has been in that world. You really have to put a lot of your personal life out there on a blog.

My kids are getting older and it was time to do something where they didn’t have to be front and centre all the time. My personal life didn’t have to be exposed. Ecommerce has got a lot of anonymity to it. That really appealed to me.

Steve: Yeah, I know for me, my motivations were I actually wanted to go and meet some of the people that were reading my blog or taking my class. I know for me, going to conferences had such a huge impact on my businesses, and in fact both my blog and my ecommerce store did not really start taking off until I started meeting other likeminded entrepreneurs.

I know my students were asking for this for such a long time. Thankfully Toni was there just nagging and nagging at me to do this, maybe nagging is not the right word Toni, I apologize. Pleasantly whispering in my ear that I should do this, and she actually gave me the courage to take the plunge because she had the experience of running these conferences for the past 7 years. You still there Toni?

Toni: I am.

Steve: Okay, not pissed, okay good. The first thing that we did, and I was really squeamish about this entire idea from the start actually. First thing that Toni suggested was, “Hey, why not just send out an email and have people sign up for a list just to confirm that the idea is a viable one.” What I did was I just put together a very quick and dirty landing page saying, “Hey, I’m thinking about putting on an event next year, and it’s going to be called,”– actually we didn’t even have a name.

It was basically ecommerce based conference. I just said, “Hey, sign up for this email list if you are interested.” I think that list just immediately got like a thousand people. From there I was like okay, maybe some people are interested in this, and maybe we can actually pull this off. Is there anything else that you said to me, I can’t remember to kind of convince me that was going to work?

Toni: I think we said whenever you agree to put up that landing page, I think we said, if we can get a thousand people to sign up, we can move forward. I think that was our number because we felt like, we wanted the conference to be really small. I know we are going to talk about that later. We felt like a thousand people when you think about who’s actually going to commit and do it, that was a good number. Then I think we got a thousand really quickly. I think that sort of for you was enough to push you, push you to actually doing it.

Steve: Yeah. How does that usually translate though just curious? Like what percentage of people who go on an interest list actually end up signing up in your experience?

Toni: I mean, I would say probably 5% or less. It shows the interest I think is the big thing. Is there people even willing to like give us that information of, “Yeah we are interested in getting marketed to for the event?” I thought a thousand, because that doesn’t include actually marketing it, right or doing advertising, or getting speakers involved, getting them marketing it for us as well, or word of mouth kind of thing. I think that’s why we picked that thousand number.

Steve: Okay, then, I forgot to mention some of my other motivations for doing the conference. I actually really like interacting with other entrepreneurs, and so having a conference was also an excuse for me to invite other more successful entrepreneurs to actually come and speak, and then we could actually hangout for a weekend and really get to know these people. In fact, that was how I met Toni. We met at World Domination Summit. I want to say it was at 2013 or through 2012.

Toni: I think it was 13.

Steve: 2013. When I first met Toni, like never in a million years would I have thought that I would be working with her, not because of anything negative or anything, but it was just like a random meeting. You were in the blogging space, mainly catering to mums, would you say?

Toni: Yeah.

Steve: Here I was running about entrepreneurship. It’s just really random. All these connections and the people that you meet over the years, just somewhat randomly may become your business partner some day. That was another motivation that I forgot to mention.

Toni: Right, and I think 2, it helped that we had just come off this conference circuit last fall where we had been to conference after conference after conference. I think when we were at the final conference; we met Daniel Solid who ended up speaking at Seller’s Summit. I think having that fresh in our minds of just thinking like,” Wow, we’ve been in this thing for 4 days or 3 days.” However long it was and we’ve already made all these connections with people that we probably would have never crossed paths with outside of being at the event. I think that was a huge motivator. Two, just being right in that experience and then making the decision soon after that.

Steve: Here’s actually a little known fact about me. I have never really worked with anyone in a partnership capacity before, because I like to do things myself. I use contractors to do different things. This was actually the first time that I ever partnered with anyone on anything. The reason why I felt comfortable with Toni was because if she could hang out with me for multiple days like 24/7 and not go crazy then I figured that it might work.

Toni: I think that’s a compliment, I’m not sure.

Steve: It means you have a high tolerance.

Toni: I have a high tolerance.

Steve: One of the top questions actually that people kept asking me even during the ticket sales and everything was why we actually chose the venue that we did. The Seller Summit was held in Miami, Florida. The way this worked was, I went up to Toni and said,” Hey, can you just do some research on different venues, and then get back to me with a short list.” I relied on Toni to steer me in the right direction. Really this is a question for you Toni. How did we narrow down the venue list?

Toni: A city or the hotel or both.

Steve: Both. Let’s start with the city actually.

Toni: Yeah, I think we had a conversation and we had some cities in mind. Unfortunately, or fortunately, with the conference, you’ve got to keep in mind what does that city bring as far as the hotel pricing, airport proximity to hotels, things like that. I mean, we had some great locations that were 45 minutes from the airport.

People that are flying and don’t want to pay for a 45 minute cab drive or rent-a-car. You’ve got to think about the attendees and what they are willing to pay, and obviously being conscious of their budgets. Miami came to the top because the rooms were affordable, and their proximity to the airport was under 20 dollar cab ride which was kind of the goal for the location.

I think we had it narrowed down to 3 or 4 cities at the end, but Miami just worked the best with the international airport, the walk-ability of the location, the hotel that we were at. This year you could walk to just about any restaurant you wanted to go to. Once you flew in, you didn’t need a car which was really nice. We did have a majority of the people attend from outside of the Miami area.

I think that that plays a big part of making those decisions, because you know people are going to spend money on a ticket and a flight and a hotel. You are trying to minimize their cost once they get there by giving them restaurant options, and not having to do the car thing and things like that. It’s Miami, it’s a fun city. I think for people that don’t live in Florida, it’s a tourist … It’s a place where it’s like, “Hey I can combine this, maybe I’ll bring my spouse. We can add an extra day, go to the beach something like that.” That was appealing too I think about the Miami location.

Steve: The other thing that we forgot to mention also is that we pretty much decided we were going to launch this conference in November, which didn’t give a whole lot of time. Initially, we were actually even planning on having a conference in April. We actually launched over Thanksgiving which is, from what you told me, it sounds like a really bad time to launch, right, over Thanksgiving?

Toni: I think when we are trying to get ecommerce folks to pay attention to us, we launch black Friday. That’s probably not the best, probably not the best time to get anybody’s attention, because I wasn’t paying attention myself and I’m running the thing. Yeah, I think we launched at a tough time just because I know for me I was focused on maxing my sales out for that month. I know you were super busy and you guys were running out of stock too.

I think for a lot of– it was a tough time, but it was also good because people were bringing a lot of income at that time too. They did have some extra money and thinking maybe end of year expenses type of thing. Deciding how to, it’s pros and cons, but it was definitely tough just to get people’s attention during that last quarter of the year.

Steve: Yeah, I think what were the other venues we were considering? I think Denver, Austin …

Toni: I think those were the 3. Miami, Denver and Austin. Austin is just with South by Southwest, it’s just too expensive. It’s not affordable for attendees to basically get rooms. Denver I think the weekends that we could find availability were still maybe in their winter season, I mean Denver can get a snowfall in May.

Steve: Yeah, there was a conference like a week before ours and there were snowfalls the entire time.

Toni: Right. I think that for us was a pretty big risk. I know that I did a conferencing in Colorado Springs in July, and we had people straying on the runway in Denver with the freak weather issue. I think it’s tough. Denver is a tough spot with weather, but obviously it’s a great location too. I think had we been able to work out the dates that would have been a definite contender.

Steve: I know for me, I wanted to go to a place that I had never been to in the past. I really like hot weather and beach kind of atmosphere. Miami kind of stood out to me because right near the water, it was very walk-able from the hotel through all the restaurants. There are some really good restaurants there including that Italian place we went to. Then people could just head over the beach if they wanted to afterwards. A lot of people actually took their spouses.

Toni: Which I think was great because we did offer like a networking spouse pass. The spouse could explore [inaudible 00:14:37] during the day, and then attend the networking event at night which I know people appreciated being able to introduce their spouse to other people at their meeting. There was multiple connections going on there too.

Steve: But outside the venue, really the goals for the conference for me at least, and I go to like maybe 5 or 6 conferences every year, and a lot of times when I go to a conference I hear people get up there like the speakers and they talk about their success stories. A lot of times their stories are very inspiring, but what ends up happening is I’ll head home super inspired to take action. Then that inspiration just wears off after a couple of weeks.

My vision for the conference is that I wanted to cut down on the inspirational stuff, and then focus more on the actionable items. I didn’t want all the speakers to come to my conference and talk about their success stories. I wanted to make it very small and intimate and have kind of like a teaching environment. You were completely on the same page right Toni, because your previous conferences were the same way?

Toni: Absolutely and I just … I know we met at World Domination Summit which is a very fun event, but every talk at World Domination is inspirational, which …

Steve: Yeah, actually the World Domination Summit was like the anti Seller Summit I would say, right?

Toni: Yeah, which it’s a great event, but it’s absolutely the opposite of what I think we both thought would be best in the ecommerce world. Because I think the people that we wanted to attend already were inspired to start something. Or at least begin the research process whether they were researching a product or … They needed those practical like,” Hey I’m stuck in the importing process. Or I’m stuck with the … Okay I have the Amazon sales, but I don’t know how to do that to my own website.” We really wanted to help people get unstuck from whatever step they were in the process.

Steve: Yes, a lot of the speakers including my speech that I gave was a step by step that walked you through certain things. That was the information that I wanted to be given at the event. It’s funny and I went actually back and watched some of the recordings of some of the speakers. Part of the beginning of their speeches they said,” Hey Steve told me to cut down on the inspirational stuff and focus more on the actionable stuff. So I’m just going to … this is the only slide that I’m giving that’s going to talk about my background. Let’s jump into the good stuff now.”

Toni: Yeah I saw that too in editing, most people spend very little time talking about these things.

Steve: Which sounds terrible, but …

Toni: I think and actually sometimes now I think I have watched almost every talk for a second time. It’s amazing what I missed even just sitting in there because there was so much information given in some of those talks. Most of the talks where I didn’t have a baseline knowledge. It was really helpful to be able to sit in front of my computer and have my notebook out, and be able to freeze the frame. I’m going to implement this right this minute because now I’m basically sitting in a college lecture kind of thing.

Steve: Yeah, and that’s actually one of the main reasons why I insisted on getting everything recorded. Now not every conference would do this, but I think in a teaching sort of conference it’s important to get the recordings so that everyone can watch a lecture over and over again to get all the finer points of what was pointed out. I remember actually when we were talking about this, we were planning. I asked you, “Hey how much would it cost to just record everything and have an AV person in every room?” Then I think you quoted some insane costs, right?

Toni: I did. I think I said a lot that was probably my …

Steve: Yes and I was like, “Well how much is a lot? Like we have to have this, and then yeah.” Ultimately it was important to me. We ate the cost on that. I think it is important for any conference especially a content focused sort of conference to have video recording. That was another thing that we wanted to make sure that we invested in.

Toni: I agree and I think going back and looking through even the slide decks of our speakers those slides were so content rich, that to be able to have those and go back through them because while they were speaking obviously you were getting a great overview and you were understanding the principles behind what they were talking about. Being able to go back and actually read those slides and see the detail on a lot of them. A lot of them were screenshots of different parts of the process, which for me I’m a visual learner, so it’s very helpful to go back and be able to look at those.

Steve: I mean the other goal too is we sent out a couple of surveys once people bought tickets. We noticed that some people were beginners, and then some people were experienced sellers. I don’t know … Do you remember the breakdown actually ultimately of what the experience versus the beginners were?

Toni: I think we had about 25% of the attendees were full time sellers. Like this was their primary job. About 50% were either selling or … Selling but not to the point where they felt they had a viable business. It was … There was another 25% they were in the middle like maybe they never planned on quitting their full time job, and this was going to be a side thing. We were probably 50, 25-25 at the end of the day.

Steve: Yeah, and so that compelled … Originally we were just going to do a single track which meant everybody would watch every single lecture like the same way. Once we got the survey results, and we realized that we needed to divide it up into 2 distinct tracks. One catering specifically to beginners, and then another tracks catering to the more advanced people.

Toni: Right, I think when we started we thought we would get all beginners.

Steve: Yeah, actually that was the case and that was just kind of this misconception I had about my list. I didn’t realize that there were so many experienced guys who were coming to the conference.

Toni: Yeah, which I thought it was fun. I thought it was fun to have a nice mix of people, because it was fun to see them make the connections at the event. Even people that weren’t speakers, but the people who were there that were experienced sellers were able to mentor some of the less experienced. I know Ryan Gourmande, am I saying his name correctly? He met up with I can’t think of that guy’s name that sold the trigger kits.

Steve: Oh yes I don’t remember his name either, but there was 2 guys on trigger kits actually yeah.

Toni: I noticed like their connection. They really hit it off throughout the event and were able to pass knowledge back and forth to each other. I saw a lot of that. They just happen to be sitting in the front row on most of the talks. I noticed them but yeah I noticed that a lot which was cool to see everybody that was there I think was really valuable. Even if they were a new seller they maybe had a background in something else that was able to provide benefit in a different topic for other attendees.

Steve: So what I really liked about the conference was from working with you was there was a lot of attention to detail. For me at least my only request was that one of my pet peeves for going to your conference is I always lose the conference schedule. After fumbling through my bag pack and looking for the schedule. I know I wanted the schedule on the name tag. That was my only requirement, but you actually thought of a whole bunch of other things that were really detailed oriented that I probably wouldn’t have thought of. You want to mention some of those things?

Toni: Yes, so I think the schedule, the schedule and the name tag is something I have done at previous events. It’s always met with like, “Oh thank you so much, I never can keep track of a schedule.” I can’t keep track of a room key. I mean I love having the schedule on the back of the name tag, I think it makes it easy to figure out where you are going.

I think another thing that was good is that we gave a detailed account of what the talks were going to be about before the talks. So that people didn’t just show up and then feel panicky. They had 12 hours to make a decision about what session they were going to that they had the ability to plan out their event before they got there. I think another thing that I really liked and I don’t know if this is much attention to detail but is all of our speakers were very available to our attendees.

Which to me I have been to events where the speaker shows up, gives the talk and leaves. To me that was one of the most important things about this conference was that we needed to make sure that our speakers were going to be very available for the attendees and willing to sit down. One of the things that we did that was helpful for that was that we all ate lunch together every day. The lunch was in the hotel. People didn’t have to leave which meant you had more time to eat and talk to people, because you weren’t rushing out to try to find a place to eat. Then people were able to make those connections at lunch. I think the tables sat 8 or 10 people, but it allowed … By the end of the first day you could already see friendships form.

That was really nice that we gave people a lot of opportunities to hang out with each other. We did the networking events every night. That was really another opportunity. They met at lunch and then they could meet up again at night or you could talk to new people. Our speakers for the most part attended all of that with the attendees. Our sponsors did too which was really important for us as well.

We wanted them to be a part of this too because it’s great for the sponsors to have a table and they can go up and talk to them. It’s really nice to just be able to sit down and have a conversation at lunch and not have this pressured sales pitch. Or just like, “Hey I’m just going to meet you and talk about my family or we are going to talk about what I do.” Then you develop this relationship with somebody as opposed to this shake hands, pass a business card out and then never talk to them again.

Steve: Here is what I noticed. The first day everyone was … At the first mix everyone was super stiff. Like, “Hi, my name is whatever.” But the second day like everyone was a lot looser and by like the third day everyone was like hugging each other. Like they knew each other for years, which was really fun to actually see.

One thing that you forgot to mention that I actually noticed was I liked how you structured the conference in such a way that we had like our own little private nook of the hotel. I have been to conferences where you have to actually walk 5 minutes to get to the next room if you want to attend a session. Everything was just really close to each other. There was no way to avoid the other attendees. We had our own little private nook together.

Toni: Yeah and I think that was another factor in why we picked that hotel, was that not every hotel is set up to be able to do that. And you are right that made it really nice, because one it cut down on the time people had to spend trying to get where they needed to go. Then two they really weren’t able to leave each other, which I think is a good thing for them unless you are a total introvert, then I apologize.

Steve: Well see that’s where open bar comes in. I insisted on open bar every single night, because in my experience when I go to conferences that’s where the good stuff comes out. You start to … You are having a couple of beers with someone that you just met, and you talk about your businesses. Then before you know it a lot of sensitive information gets leaked out there, and so that’s why I insisted on it.

Toni: Your next job will be with the CIA.

Steve: Of course I don’t drink anything during these events, I just pry for information. The other thing that was important also was we wanted to keep it small, right? Because I have gotten lost at big events where I just end up hanging out with the people that I already know. When you keep it small that kind of fosters networking and encourages people to reach out to new people.

Toni: Well I think too when you have it small is that you can’t avoid people. Well not that you would want to avoid people, but you see the same people over and over again all day. At some point you have to introduce yourself, because it gets awkward that you haven’t because you are bumping into them getting coffee, or you are sitting next to them in 2 sessions or then you’re at lunch. I think the smallness, when you are at a conference … World Domination was what? 3,000 people the year we were there.

Steve: Yeah, that’s a lot of people.

Toni: As soon as I met you and the people I was with I was like I’ll never meet anybody else. I have my people, I don’t have to meet anybody else because I have them and I never saw the same people again. That’s really how … That’s what tends to happen at those bigger events and the smaller events, you can’t avoid people, once again sorry to the introverts.

Steve: I thought the introverts did pretty well at the conference to be honest with you.

Toni: I did too and you know why? We got feedback about this from several attendees is that we had that Facebook group, that pre-event Facebook group that allowed people to introduce them. We had … I think we even had an introduce yourself thread and I think Scott Volker came in and said, “Hey tell me about your business.”

We had a lot of speakers in there saying,” Hey give me some feedback about, this is what I’m talking about what do you want to learn?” I think that was really valuable especially for people that aren’t … I mean I am a mastered extrovert, but I still think it’s hard to just walk up to somebody I don’t know at all and introduce myself, so …

Steve: Well that’s what I did with you at the World Domination Summit if I recall.

Toni: Yeah it is, yeah but I think having that Facebook group you had a face with a name. You had already interacted with them online. If some of the people shared rides from the airport … By the time they got to Miami and to the hotel it didn’t feel like you were talking to strangers. It felt like you already had some sort of relationship with these people even if it was online, it didn’t feel as awkward.

Steve: Yeah and speaking of the speakers, I was very careful in choosing the people who were going to speak at the conference. I basically only wanted to get specialists. People who were focused on a very specific topic and knew it inside and out, for example I had Spencer Hawes talk about SEO. That’s pretty much what he is done in his internet career.

Scott Volker from the Amazing Seller really focused on Amazon selling, launching products and that sort of thing. Greg Mercer he runs Jungle Scout. He’s got this tool that helps people do research and that’s like all he does. He is also a very successful Amazon seller as well. Every single person was hand selected to actually cover a very specific topic in deep depth, and so yeah.

Toni: I think that was a positive, but conference logistic wise it makes it tough.

Steve: Why is that?

Toni: Well because if you have a talk, let’s think Erick. Erick did a talk on Gmail ads, right? That was his talk. So you are devoting 50 minutes to Gmail ads. That’s a lot of time. If you get a generalist up there they are going to talk about 7 things in 15 minutes and you can check all these boxes. The problem is you don’t get any real information on any of those 7 things, you get very cursory.

I think to me I love when everyone is a specialist, because then … I walked out of Curt’s Google analytics talk with my mind blown. I have already re-watched his talk 3 times. There was so much information in there for me in that one talk, super valuable. It’s almost like taking a course in Google analytics just to go to the one talk. It’s tough because you are then trying to cram in all this really great information in 48 hours which is basically what you have for the event.

Steve: Yeah, absolutely I mean I was ending up taking notes myself on a lot of these talks. Jeff Cowen … Amazon changes all the time, and Jeff gave an awesome talk on how to rank your products on Amazon, which kind of blew me away. Daniel Sarlad’s talk about how he runs his Amazon business blew me away. There was like 2 or 3 points on there that I didn’t even know people were doing out there. It was just nice that all the speakers were so open in revealing some of the secrets to their success.

Toni: Yeah, I was surprised at them. I was surprised that they were more willing to share the fact that they shared, but I thought it was awesome that they did.

Steve: Yeah totally, and then Lars with the whole sourcing thing. Lars is like my go to guy for product sourcing, and then Dru is just an amazing person when it comes to email and just marketing because he’s worked with so many different companies. It was incredible how everyone was willing to share so much stuff, and we’ve got it all on recording now, which is pretty cool.

Okay, so one thing I was also wanted to mention was– that worked really well for us was the VIP passes that we offered. For people who were willing to pay a little bit extra, we had a couple of special events just for VIP people. The thing that worked the best for the VIP customers were, we offered these 30 minutes one on one consults.

I knew in my experience at least teaching my class is that even though you might have all the information from the sessions and that sort of thing, there is always going to be questions that you have that are very specific towards your business. Perhaps you might have a question that is very specific to a certain thing that you might be selling, and by offering these consults, it allowed the attendees to ask very specific questions about their businesses that we could help them out with.

Toni: Yeah, and I think we got a lot of feedback from them telling us how valuable that was to their business. On top of that I think you are right, being able to … Because the reality is you don’t have time, Scott Walker doesn’t have time, Greg Mercer, all these guys that did our one on ones for the VIPs, they can’t be taking one on one consults on a regular basis. It’s obviously not scalable.

Steve: Yes, it is not.

Toni: I think for them to be able … I think and you did this in your office hours sometimes where it was just to ask me anything. I think those are so valuable because sometimes you get to a point, you and I had this conversation in a day where I was trying to set up a listing, and I was having issues, and I said I would pay so much money for someone to just tell me how to do this right now.

Steve: I recall asking for a 1,000 bucks, but you didn’t pay me anything.

Toni: Oh sorry, you also didn’t tell me how to do it.

Steve: Well, you didn’t pay me.

Toni: I think for some people, just being able to have that face time with someone who’s seen a lot of success in a certain area, and I think one of the things with the VIPs is we had them doing this survey and said, “Hey what is your biggest pain point?” Then we really tried to be purposeful in who we paired them up with. If someone had a problem with SEO, they were getting with Spencer, I mean that was just a done deal. If someone wants to do Amazon they are getting Greg or Scott or Jeff.

We tried to be really get … Treg was trying to do more with drop shipping and so we paired him up with Andrew. I think that that was really helpful that we tried to get them what the person is going to give them the most bank for their buck during that time. I think just having that ability to ask, ask Scott anything you want to ask him, most people don’t have that opportunity.

Steve: Yeah, and all the speakers, they were just so generous with their time. Some of these sessions went over 30 minutes, and it didn’t really matter. I’m just very grateful for everyone who took part in that.

Toni: Absolutely, and I know we had Michael Jackness, who wasn’t even a speaker at the event, although easily could have been a speaker. He was connecting with these people before the events. I think there was so much of that with the speaker just really investing in those VIP people, and they were investing in everybody at the conference, but they take that extra time, and a lot of them had to move their travel schedule, or they weren’t going out to dinner because they were with somebody. I think that was really valuable, and I’m very appreciative that they were able to take the time and do that.

Steve: Yeah, absolutely. What’s funny is that, what ended up happening is that we ended up selling out our tickets over the holidays pretty much, and demand ended up being just so high for these tickets, but we wanted to keep it small, and so we ended up with a the sold out conference way ahead of time. I want to switch gears a little bit now and just talk about what worked well at the conference from both of our perspectives, and what did not work so well. We already talked a lot about the good stuff already, what needed work in your opinion?

Toni: Well I think one of the things, and we heard this from some attendees too was that, I think we gave a people a ton of networking time, but the evening networking was really loud, and part of it was the room size … We had planned to have it outside and then the weather wasn’t cooperating with us every night. Part of it was that I think maybe at an outside space the noise would have disappeared a little bit more, but people were definitely yelling to have a conversation, and that’s not ideal. I mean it’s like that awkward when you are yelling and then the music stops and you are still yelling.

Steve: Well it’s funny; we didn’t have any music either. It was just pure talking noise.

Toni: Yeah, so there wasn’t really … There was no background sound just people, which you know part of me is like when I walk into a room and it’s really loud, I’m happy because it means everyone is talking, but then you feel bad because that, I think you and I both stopped on this second, the first real morning our boys were already going from talking so much. One of them was just coming out that you don’t normally talk that much in real life, but then also just having to talk at this other volume to be heard.

I think the amount of networking we gave people was awesome. Could it have been … Is there a way you do where people don’t feel like they are yelling? Maybe it’s different spacing, maybe it’s … Who knows, but I think that that would be something we can definitely do a better job of next year.

Steve: Yeah, and then I was thinking also that maybe we can do something for maybe the introverts. A little bit more just to maybe like pair them up ahead of time with other people who they can hang out with at the conference. I don’t know, I’m not an introvert, so it’s a little hard to relate, but I don’t know, what do you think?

Toni: I do, I’m not– but I asked on Facebook after the conference, I said, “Hey introverted friends.” Because I apparently have a lot of them. What makes you feel more comfortable? For us, I think you are willing to walk up to me in the middle of Portland square, you don’t know who I am and just interrupt me and to meet me, and I’m willing to do the same too, but for most people that would be terrifying if you are not an extrovert.

A lot of things we did and I think we did accidently, like did the Facebook group. We didn’t do the Facebook group because we thought we have a bunch of introverts. We just did the Facebook group because we thought it would be fun people to connect, but it helped a lot of people in the end to connect.

I think be more purposeful in that. Trying to really think about like, “Hey if I may be talking to some of our attendees from this past year, how can we make it more comfortable, how do we get you connected earlier.” I think there is a lot of things we can do to help people feel like they are coming in already a part of something.

Steve: That’s a good segway into what I wanted to talk about next which was kind of tips on getting the most out of the time in the conference. There are some conference super stars, and I just wanted to give a shout out to Barry real quick. Barry, like pretty much documented the entire conference on the Facebook group, and he immediately stood out for at least me, because there was no way I was leaving that conference without knowing Barry.

Toni: Yeah, for sure, I think he did a really good job of just connecting with just about everybody. It’s just like every night in the Facebook group after the conference was over, I would see a post from Barry saying, “Hey, I’m at the pool, on my computer, who want to join me?” My room overlooked the pool, so I’m like opening my curtain and there was like 15 people at the pool and they were with Barry. He did a really good job of making the effort to meet people and get out there and definitely, I think everybody knew Barry by the end of the conference which is awesome.

Steve: I also want to give a special thanks to William who took so many wonderful photos of the conference, and he stood out to me also because he was just so selfless. I want to say that, he was taking shots and not paying attention to some of the sessions. So big thanks.

Toni: I think, and we had several attendees, I know Cindy. One of our attendees was just very, “Do you need any help? Is everything good? Is there anything I can get for you? Do you need coffee? Do you need water?” There were several attendees like her that just came with another one, “Hey, how is it going? How are you doing?” Not just, you know can we turn the air conditioning up or down although we should have been able to do that more often in some of those rooms.

I think that’s another way to set yourself out, and just offer help. I don’t think, obviously people are buying a ticket and paying to attend, so I’m not saying you need to go and work, but it definitely appear if you say, “Hey, can I send you the photos I took?” “Sure, I’d love it even if they are in your iPhone; we would love to have as much.” You and I have time to take the photos.”

Another thing too and you stressed this a lot in your keynote, and I think we pushed it in some of the emails, but introduce yourself to the speakers. I mean people get a little star struck sometimes at conferences, and they don’t want. I think if someone even came up to you and was like, “I can’t believe I’m meeting you.” And it’s like as someone who …

Steve: I think I turned around I was like, “Are you talking to me?”

Toni: I’m like I know him; it’s not that big of a deal. I get that way with certain people, so I know that it’s just common to– because these are people you’ve probably followed online or listened to their podcasts, or read their blog or whatever space that they’re in, so to meet them it’s kind of, “Oh, I’m meeting one of my idol or someone I look up to.” They are all just really just normal gootsy people.

I think when you go, introduce yourself to definitely the speakers, but it’s really as many people as you can, and I think the connecting in the Facebook group a lot of people, got in there and shared their story. Then when you get there, you have a connection with someone else who is there, like “Oh, I like to rescue pets too, or I live in the Pacific North West.” Or whatever the connection is, you’ve got this immediate … I’m with the person we were there, we were there at the … The little unofficial event, we were at the bar.

Steve: The warrior’s game, yes.

Toni: Yes, and I was taught … Nick was there talking and all of a sudden I heard him say something about sports center, and I was like, okay we have a connection, we can talk about sports. I think you look for those ways to have …

Steve: I think he regretted that decision, but yeah.

Toni: He did, I’m sorry …

Steve: He probably talked to zero off.

Toni: I think you got to look for those commonalities because it might not be, you might think to look at somebody and think we got nothing in common, but then once you start talking to them, you realize that there’s a lot more, and yeah there is probably some ways you can partner. I think we had people talking about partnerships.

Steve: Actually, it did happen. I just can’t remember the names off head, but oh I think I know what happened. There was a product, and I think it was Nick’s product, but Daniel was thinking about selling the same thing, so now they are partners.

Toni: Okay, yeah but you don’t know that until you have that initial,” Hey I listened to Mike and Mike too.”

Steve: Yeah, I just want to give a special thanks to Mike Jackness also, so technically he wasn’t a speaker, he was just an attendee, but man, he was dropping knowledge bombs left and right, and there was swaves of attendees just hurdled around him like soaking in all his knowledge, so that was pretty awesome.

Toni: I think that was really helpful to have people like Mike that weren’t there as a speaker, but were really willing to mentor other attendees.

Steve: Yeah, totally. Yes, because the tickets sold out so fast over the holidays. I think they sold out in like the middle or end of February, that left like a good 3 months of people who were just hammering us for tickets, and unfortunately we didn’t have any left to sell because we wanted to keep the events so small, and so I thought about this for a long time and what I ended up thinking about was offering all the sessions out as a virtual pass with a little bonus.

Instead of you guys having to come to Florida to attend the conference, I thought that I would try to bring the conference to you, and so an as an added value, we are going to start releasing these virtual passes where you can get access to all the recordings, but I have actually talked with some of the other speakers who spoke at the Seller’s Summit, and we are going to go ahead and do a live Q&A webinar for anyone who decides to purchase a virtual pass.

Toni: Yeah, along with the live Q&A that we going to have with some off our Seller’s Summit speakers, we also have a Facebook group dedicated to virtual pass holders, so that way you can connect and network with other virtual pass holders, and hopefully learn something in that group, build relationships, be able to network, possibly find a partnership. That’s a huge value add to be able to have those conversations in a meaningful way with people that are all trying to do the same thing which is sell online. We have that; we also have MP3 recordings, right Steve?

Steve: Yes, that’s correct. A lot of times people want to, thanks to this whole podcast boom, a lot of people like to listen to their stuff on the go, and that’s why we are offering high definition videos in addition to the MP3, so you can consume the content in any way that you want. Here is a couple of things I just want to share. All of the sessions at the conference are just very practical and actionable tips. I just want to mention Ryan Gomidy. He actually came to my Google shopping session, and he said that one session paid for itself, because I went into such detail on how I run my profitable campaigns online.

Toni: We are including all of these Seller Summit sessions in 2016 will be in this virtual pass along with the MP3s which Steve mentioned as well as all of the slide decks from the speakers. That will give you the opportunity to go to those decks, grab the information from the slide decks, and really help you take a deep dive into some of the session topics that we presented there.

Steve: After you’ve gotten the chance to go through all the videos, we will go ahead and schedule that live Q&A session with the speakers, to answer any questions that you might have had on any of the given sessions.

Toni: Who is going to be there? Who is doing the Q&A?

Steve: So right now we have Greg Mercer, we have Scott Walker and we have Mike Jackness. Depending on– what I’m going to do is I’m going to actually survey everyone who purchases, and ask them which questions they have, and depending on the questions, I might go ahead and invite the appropriate people to come in and answer those questions.

Toni: Awesome.

Steve: It’s not set in stone, but the virtual pass is going to be offered at sellersummit.com/virtualpass. If you’re interested in getting access to the sessions and the live Q&A session, go to that URL and go ahead and sign up. Once again that’s sellerssummit.com/virtualpass all one word. All right Toni thanks a lot for coming on. I know that the running a conference has been just a tremendous experience for me, and I’m very thankful that I met you, and you nagged and pounded me into submission to actually start this thing, and we are definitely going to have another Seller’s Summit next year for sure.

Toni: Yes, I think I have a contract on your desk, don’t I?

Steve: Yes, you do and we are probably going to discuss it right now because there is a large upfront cost, and I always get nervous about all this stuff, but I think I’m a little more confident this year that we will be able to have another successful event.

Toni: I think so.

Steve: All right, take care Toni.

Toni: Bye.

Steve: There you have it, a behind the scenes look at how Toni and I started my very first conference the Seller’s Summit, which ended up being a huge success. And if you are interested in getting access to the session videos, please go to sellerssummit.com/virtualpass. Once again we will be offering that live Q&A session with some of the other speakers to answer all of your questions live and in person.

For more information about this episode, go to mywifequitherjob.com/episode121. If you enjoyed this episode please got to iTunes and leave me a review. It is by far the best way to support the show, and please tell your friends, because the greatest compliment that you can give me is to refer this podcast to someone else either in person or to share it on the web.

And if you are interested in starting your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to mywifequitherjob.com for more information, sign up right there on the front page, and I’ll send you the course via email immediately. 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.myifequitherjob.com.

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120: How To Rank In Amazon And The Right Way To Solicit Reviews With Jeff Cohen of Seller Labs

How To Rank In Amazon And Get Legit Reviews With Jeff Cohen of Seller Labs

Today I’m thrilled to have Jeff Cohen on the show. Jeff is someone I met at the Import Summit last year and he’s the director of business management over at Seller Labs.

Chances are if you are selling on Amazon, you’re probably using one of their awesome tools. For example, Feedback Genius which is a tool I use heavily, is a must have tool that automates the acquisition of customer reviews.

And they have other awesome tools like Snag Shout which help you gather additional reviews and discover profitable products to sell on Amazon. All of these tools have tens if not hundreds of thousands of users and they are awesome.

Anyway, I wanted Jeff on the show today because he has access to a lot of Amazon data and works deeply with a wide variety of Amazon sellers. In other words, he follows the industry closely and knows a ton about what’s going on.

What You’ll Learn

  • How they come up with the idea for their software.
  • The current review landscape on Amazon. Are paid reviews ok to have?
  • The strategies that used to work on Amazon but should be avoided today.
  • What successful sellers are doing to launch their products.
  • The best practice for feedback emails and what’s working today

Other Resources And Books

Transcript

Intro: You are listening to the My Wife Quit Her Job podcast, and if you are new here, it’s a show where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now I don’t bring on these famous entrepreneurs to simply celebrate their success, instead I have them take us back to the beginning and delve deeply into the exact strategies they used early on to gain traction for their businesses.

Now if you enjoy this podcast, please leave me a review on iTunes, and if you want to learn how to start your own online business, be sure to sign up for my free 6 day mini course, where I show you how my wife and I managed to make over 100 K in profit in our first year of business. So go to mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email, now onto the show.

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 thrilled to have Jeff Cohen on the show. Now Jeff is someone who I met at the import summit last year, and he is the director of business management over at Seller Labs. Now chances are if you were selling on Amazon you were probably using one of their awesome tools. So for example Feedback Genius is a tool that I use heavily, and it’s a must have tool that automates the acquisition of customer reviews. And they have other awesome tools like Snagshout and Scope which help you gather additional reviews and discover profitable products to sell on Amazon.

Now all these tools have tens if not hundreds of thousands of users and they are awesome. But anyway I wanted Jeff on the show today, because he has access to a lot of Amazon data, and he works deeply with a wide variety of Amazon sellers. In other words he follows the industry very closely, and he knows a ton of what’s going on. And with that welcome to the show Jeff, how are you doing today man?

Jeff: Great Steve, thanks for having me, thanks for setting me up. I guess I have a lot to live up to now; I’m going to try to deliver.

Steve: Yes, so before we begin give us the quick background story and tell us how Seller Labs got started, and kind of how you guys all came with the idea of Amazon automation software.

Jeff: Yeah, so if you go back into the history of Seller Labs our two co-founders were working on a physical product business. So they were buying books at retail auction, so all the books and products that literally fall off of the truck and never get delivered to you by USPS ended up in a warehouse outside of Atlanta Georgia. And they would do auctions on a weekly basis, and Brandon and Paul kind of got started in the industry doing some online arbitrage with books, and then got into buying physical books from the USPS auction.

And I think when they started it was out of the basement of their house which quickly grew into about 3000 or 4000 square foot storage locker, which within about six months grew into a 10,000 square foot warehouse. And from auction they were really buying everything from books to batteries, to lagos [ph], to precious metals, right? So you…

Steve: These aren’t textbooks right, these are book books?

Jeff: No, they weren’t — so we — they kind of got started in the textbooks space, but it was also regular dollar books. Text books obviously have a higher profit margin.

Steve: Sure.

Jeff: Yeah, but it was everything from that to precious medals. And the USPS auction was really fun and people that kind of were involved in the internet back in those days, they didn’t knew how this worked, but you walked into a huge warehouse right. And everything was in gaylords [ph] and for those that don’t know what a Gaylord is imagine like a wood skid with like a four foot wall all around it, and then inside that wall is just piled with stuff right?

And you walked around and everything was in lots, and so you couldn’t see anything beyond the top layer of that box. So you had to like make this educated guess as to the retail, or online value of the box that you were going to buy and then you bid on it. And the more boxes you bought the better you got it estimating their cost and such like that.

And Brandon is a programmer by nature, and so he was programming all of our inventory and shelving, and deciding what went into FBA and what stayed at our warehouse. And we had this problem, and the problem was that we would properly describe books, but we would still get negative seller feedback. And so Brandon was trying to solve a problem of how do I get seller feedback on my good books, because I only seem to get negative feedback on my bad books.

And that was really the initial build of Feedback Genius was solving that problem, so that we could target messages specifically based on condition type at that time. Or length of delivery so people that got their books they were in good condition and got them first. We were asking them for feedback to combat the people who got books with water stains and couldn’t read, then it had water stains and then wanted to complain about it.

Steve: I see so this is for seller feedback or product feedback or both?

Jeff: So the system was really built– if you go back into like 2011, 2012, seller feedback was what everybody needed. And the concept of product reviews didn’t really exist in the way that it does today.

Steve: Okay, and so are those guys still selling any physical products, or is it just all software now at this point?

Jeff: Yeah, so in 2013 we attended a conference looking for software to build our business and we realized that we had better software than the software that was out there. So we transitioned at that point in time and started shuttering our warehouse, and moved to a full blown software company. So in 2014, a little over two years ago or almost two years ago we left the physical product space, and now we are just a fully fledged software company with over 30 employees out of Athens, Georgia.

Steve: So you actually developed the tool out of your own needs, and then just kind of adapted it for the masses?

Jeff: Yeah, and I think what most people find in most of the tools that are in the market especially the Amazon market, that’s how they were designed. They were somebody’s spreadsheet, or they were somebody’s internal tool to help them with their problem. And then they were kind of who were built out to scale. And that is one of the tricks of the Amazon world is building a tool that can scale properly to thousands of customers.

Steve: So was that the same thing with Snagshout and Scope?

Jeff: Yeah, so Snagshout was actually a funny story. So Paul’s wife was starting to get involved with buying discounted products online, and writing reviews for them. And she was mad because whenever she would go to get a product they had already given away their 20 or 25 of them.

So Paul really kind of designed Snagshout as a way for his wife to be able to get access to more products to test and write reviews on, and because he was like, well I could just build one of those, and we could have people list products on it and you could get access to those products, and we could build a better system.

Because back in those days, this was in like October of 2015 you had to post your item up for review, and then you had to collect all of this information back from your reviewer to understand who the reviewer was. And there was nothing automated about the process. So we really seeked at that point to automate the process, but typically good software is designed to solve an internal problem that you have, that you feel the market is having as well.

Steve: So interesting Snagshout was developed for his wife, and then they later decided to prioritize it, or was that the intention all along?

Jeff: That was the intention all along. It was — we saw the growth of the Amazon reviewer market growing obviously with everything we have within Feedback Genius. We saw the number of sellers requesting product reviews increasing significantly, the number of sellers moving to the private label industry increasing significantly.

And as we were making changes to the Seller Lab — the Feedback Genius platform to be more product review oriented, we built out Snagshout. So we kind of looked at Feedback Genius as your way of developing organic reviews. And then Snagshout is your version of Amazon lightening deals, or Amazon vine, so it’s your way to kind of jump start your campaigns.

Steve: Okay and so both of your top products Snagshout and Feedback Genius involve helping an Amazon seller get more feedback for their products. But recently in the past few months I would say Amazon has been cracking down on artificial reviews, and kind of degrading the value of giveaway types of reviews. So can you give us some insight on what the current review landscape is like?

Jeff: Yeah, so I’ll take a little bit of – Let’s go back, I’m going to first say there’s nothing artificial about the reviews, and I’ll explain the difference between artificial and fake reviews, and the review landscape as it exist today, so let’s hit that up first. Amazon had a law suit that was in probably about a year ago in 2015, where they sued a company that was selling Amazon reviews. And flat out if you went to their site, it said buy an Amazon review, I think it was like $50 or something like that.

One of the courses that sells in the market place, or was sold in the marketplace was telling people the value of the review was $50, and then magically this company started charging $50 for a review. But what they did they became highly illegal besides charging for a review, is they never actually physically shipped the product to the end user.

So the end user would go online and they would buy the product using the coupon code, but the product would never be shipped, they would ship actually just an envelope with nothing in it, so that Amazon believed that a shipment took place, and so the seller was never having to actually give up the physical product, so that was totally fake reviews.

The second totally fake reviews that Amazon cracked down on were the Fiverr websites where you could pay somebody on Fiverr to just go on and write reviews. And Amazon explicitly states in their terms of service, that you should not and cannot write reviews for products for which you have not used. So you can’t ask your best friend to go write a review for your product if they’ve never used your product.
And so obviously that’s hard for them to crack down on, because there’s no way for them to know that’s the idea of the verified review, but when there’s people just flat out selling reviews, they can trace it and track it in that way.

In August of 2015, I’m trying to keep my calendar straight in my head, Amazon made an update to their terms of service, and it really sent the whole industry into a bit of a teasy, and within that update of their terms of service, they made a couple very slight wording changes that really made everybody unsure of what was happening, and so they added a terminology that said that you cannot provide excessive couponing, and that you cannot intent to manipulate the sales algorithm.

Those two things really sent everybody into this world of trying to understand what does Amazon mean, and everybody from that point forward has been looking for Amazon to say can I do this, can I not do that, can I use a super URL, can I not use a super URL. We in the Amazon world as sellers are looking for this black or white, tell us what we can do, tell us what we can’t do.

Prior to the update in 2015, any purchase, whether the purchase was free or full price, they got a review qualified as what we call the verified review. One of the things that was noticed immediately after that update was that if you gave a product away for free, the verified review badge disappeared from the listing, and Amazon has gone back within their algorithm and cleaned up some things.

Essentially what Amazon was saying was you need to really purchase this if you got it for free, and a lot of people get hanged up on the disclaimer, but understand that the disclaimer that Amazon requires you to leave, you have to leave a disclaimer that says you received the product for free or just counter exchange for your honest opinion. Well there is an Amazon rule that’s also a federal trade commission rule.

Steve you probably know this from your blogging days, if you go back in the history what happen was we would send products to bloggers, and we would ask them to write about it, you might even pay a blogger to write about your product.

Steve: Right, and it has to be fully disclosed.

Jeff: Right, and that’s all federal trade commission, and that’s the same thing that Amazon is trying to implement within their reviews.

Steve: Okay.

Jeff: Now it’s August of 2015, the whole world is kind of turned upside down, and everyone is trying to figure out what the terms of service changes mean, and we made a couple of changes at Snagshout in the intent to protect our customers. So we stopped using super URLs and for people who don’t know…

Steve: What if you decide – Yeah, I was going to say please just define that for the listeners.

Jess: A super URL is a link that sends you to Amazon, and it is adding information to the link so that Amazon believes that a search has occurred on their sites. So I just gave you the really basic version of it, but I could share a link to a blog post.

Steve: That’s good enough.

Jeff: It gives you a very technical explanation of it.

Steve: Okay, I’ll link that up in the show notes.

Jeff: What Amazon was saying, was hey we know you are doing this, and you are doing this with the intent to manipulate, so we are going to say there’s no more intentional manipulation of the algorithm. Our personal interpretation of that was that that’s what a super URL was. We subsequently had a meeting with Amazon in Seattle, and we flat out asked them and they said we do not recommend you use super URLs.
Now we all know Amazon and they cannot, they will not come out and publically state anything like that, but we feel very confident that super URLs are bad, and that whether they are negative to the seller today or will be in the future, we are positive that they are bad and they will negatively affect the seller either today or in the future. It might not lead to an account suspension, but it could lead to a downgrading of your search results or some other type of penalty like we’ve seen in the Google…

Steve: I see Amazon walking in Google’s footsteps really. Google went through all this before in like 2013 I think, and Amazon is just catching up with their own internal product search stuff.

Jeff: Exactly, I mean Panda, Penguin, Kangaroo, all the animals that utilize the sites who were doing it bad, but weren’t breaking the rules, found out that in the long run they were breaking the rules, and went into a purgatory that was realty hard to get out of.

Steve: Okay, so no super URLs. Can you comment a little bit on just like the weight of these give away type of review now.

Jeff: Yeah, so nobody knows the answer, and that’s the one thing I always like to state from the beginning. I love websites that say we are 100% Amazon compliant. Understand that what that means when a site says that is that they believe they are 100% Amazon compliant because they didn’t get a stamp from Amazon telling them that they are compliant. The weight of the reviews, they are different thoughts and strategies in the market as to what now constitutes a verified review.

We have seen products given away at an 80% discount that still get a verified review, and we’ve seen ones that don’t. And so I think it’s very – Our believe, just our general believe is that products given away for a discount of 50 or 60% off are in the realm that will most likely still get a verified review. Now there is no way to know whether that number is 52 or 48 or 61, but that’s our general belief is that that is a discount that is not excessive, and that is not raising red flags with Amazon, like the people who are giving their products away for a penny at 99% off.

Steve: Do you still have to reveal that you received it for a significant discount if it’s let’s say at a 30% discount?

Jeff: That is a great question, and one that I have argued that you don’t, but technically per Amazon’s rules, any discount that you receive you are supposed to state, because it’s not like a deep discount. It’s just I received this product at a discount, but my argument Steve if you just kind of play with me here is, if you get a coupon to try a pizza company, you are not required to go on Yelp and say I only tried this pizza company because I got a coupon.

Steve: Yeah, exactly which is why I asked you this question, was there was like a grey area here, right.

Jeff: I think there is, I mean there clearly is because Amazon hasn’t defined, and what I like to tell people is understand Amazon’s intent, right? And Amazon’s intent is to maintain the validity of their review system, because that’s a cornerstone and a backbone of their whole ecosystem. And so if you are giving away – Because the other thing is the word excessive, how many products can you give away, and I also think it matters who you are giving the products away to.

So I’ll give you an example if you are giving the products away to somebody like my wife. My wife buys and shops on Amazon, and reviews products on a regular basis, so if you look at her review profile, 70 or 80% of the products that she buys are full price products without a coupon, and then she picks up some items from Snagshout every once in a while to try as well. And if you put that in comparison to a heavy reviewer who is picking up 95% of their products from review sites at discounts that are 90 to 95% off, and everyone of them is a 5 star review, there’s ways in the algorithm to detect and validate it or add a weight to that. How the algorithm works I have no clue.

Steve: That brings me on my next question, how do you seek out the real reviewers, and does Snagshout do anything about that?

Jeff: Yeah, I would say that it depends what you are trying to do and how fast you are trying to do it. So if you have a broad use product, a flashlight, a garlic press right, isn’t that the one everyone likes to use? If you’ve got a general use product, because what’s at our disclaimer just because we mention a product doesn’t mean you should go source it, I got to do that right because that’s what people do. If you got a general use product, then I feel you are okay using a site like Snagshout because you are talking about general use products, and most people are general use people and are using them.

If you have a very niche product, you have a product geared towards camping, or you have a product geared towards having a baby, then if the person who is reviewing your product hasn’t had a baby, and isn’t buying other baby products they are probably not the best person to be reviewing your product. So it’s almost using common sense and I think it’s using pricing right?

So as an example we had somebody on Snagshout who had a baby product, it was a $40 retail value. I like to talk about perceived value, meaning what can you buy that product for on average on Amazon, and the perceived value of this product was around $35, meaning that if you went to page 1, most every product on that page was in the $35 range, and they gave that away on Snagshout for $15.
Somebody who doesn’t have a baby isn’t going to spend $15 just to get a product for review. That is a great way for you to protect yourself and the people who really want to be using your products that will give you real reviews for your products.

Steve: Let me ask you this follow up question then, so do you still recommend giving products for free in return for a review, or is everything leaning more towards like heavily discounting an item today?

Jeff: I think you have to look at – One of the things we’ve learnt from Amazon by watching the– So Amazon has a group called the product review suspension team, and that team is – I normally get their title wrong, but their job is to look through the reviews, and look for inconsistent behavior, so what’s inconsistent behavior? If you are selling a vitamin supplement, and you are giving 5 of your products away every day for free, you are excessive and trying to manipulate the system.

If you are doing a new product launch and you give away 50 of your products for free, because you are trying to get people out there and talking about your products, there are people who could argue that’s manipulation, but that’s also marketing. And that’s how you launch a product, right that’s what you would do if you were launching that product locally.

And if you have a product that has a – If you continue to do that for a long period of time, then you might be manipulating and being excessive, but if you are doing it because it’s a new product and you are trying to get some attention to that product, I don’t believe you are violating the system, I believe that’s exactly what the system is there for.

Steve: If I can interpret your answer, what you are suggesting, and it’s like a grey area, is you want to just think about what Amazon’s interest are in preserving their review algorithm when you are taking action.

Jeff: I think you really want to do that, and you want to look it like what’s the– How do you really need to market your product. So what we recommend is you first start with optimizing your listing, okay so you got to have a rock solid listing, you got to have photos, bullet points, and everything needs to be feature benefit, right? What’s in it for the consumer?

Then after that, you need to get your baseline reviews, so you need to have 10 to 15 reviews so that when somebody lands on your site, on your product, they actually can understand that that product has value to them, and that other people have agreed with that. And so that’s a great way to use Snagshout is get those initial reviews.

Steve: Are these free reviews like complete give away reviews or?

Jeff: I believe you should sell your product for as much as you can get for your product, and so it comes down to if you have a garlic press, you probably need to give it away for next to nothing, but if you have a high perceived value product you should try to get money back for your product and sell it. I know that’s a very vague answer, but I think there’s millions of products on Amazon, there’s 60 million search terms on Amazon or something crazy like that, so it’s hard to say there’s one path that you should do.

Steve: What is your feeling on doing a really mass give away in the begging to launch your product?

Jeff: I would try to use – Mass meaning? Do you have a number in mind?

Steve: Hundreds of thousands, I guess hundreds, let’s do hundreds.

Jeff: I would use external sources for driving that traffic.

Steve: Can you be more specific.

Jeff: Facebook campaign, right so let’s go back to the baby product. Run on a Facebook campaign that’s targeting people who have recently had a baby or have a child under a certain age. I think you are going to be better off to get that kind of volume coming from outside sources than trying to give that many products away. I also believe you should stair step it, so you’ve got your product optimized, you got your initial reviews, the next thing you should do is optimize your sponsored ads, because sponsored ads are essentially legal super URLs.

Because somebody types in the word garlic press, your ad shows up, they buy it, Amazon is connecting the word garlic press to your garlic press, and you just created a super URL. You could run sponsored ads at a loss or at a break even, but you should maximize those. Then you’ll have a deficit, so you’ll know that you are looking for 50 sales a day, you are able to generate 20 sales a day from sponsored ads. Now you can use a tool like Facebook or a tool like Snagshout to generate the missing 30 sales that you have, using coupon and discounting.

Steve: Okay, so what I want, and I don’t know if you can give me a straight answer here, but in an ideal launch, let’s say you had a product that you wanted to launch, what would be your step by step strategy just to get that thing launched?

Jeff: Okay, so let me give you an example that we have documented on our website, so and please don’t go source about – It’s an apple slicer, don’t go source the apple slicer.

Steve: Okay, I think no one is going to do that, but okay – Actually, yeah.

Jeff: It’s kind of funny because one of the things we should have tracked was we should have tracked how many people were selling apple slicers before we started documenting the process, and how do people sell them today, because it clearly has increased. After Amazon made their algorithm updates, we worked with a guy on a product to get it launched with the intent of demonstrating how Snagshout still works without super URLs.

And so we did an apple slicer, and the apple slicer is a very competitive product, it’s a very competitive space; there’s over almost 3,000 people who have a product that ranges for the word apple slicer, according to Scope and other tools. You are looking at estimated sales of 30 to 50 units a day of the product if you are ranking high on page 1, so fairly descent opportunities selling an apple slicer.
We launched our product and when we initially launched our product we gave away 182 products on Snagshout over a 10 day period. So we didn’t go for 30 which is what you mathematically need to rank up at the top, we went for the bottom of page 1, and we gave away 18 a day for 10 days.

Steve: Just for free, right?

Jeff: I think we sold them for a dollar.

Steve: Dollar, okay got it.

Jeff: We were able to generate out of 182 we were able to generate 161 reviews out of 182 giveaways.

Steve: Okay and did those turn out to be verified purchase reviews?

Jeff: Yeah, but obviously things have changed since August, and so we are actually about to run another test to do the exact same thing to kind of see, we constantly are testing the system to see how it works. We have looked at everything within Snapshot to see what percentage are verified and which are not. How many people lose verified reviews and they change to non verified?

Unfortunately there is no primary reason, you will find people with 50% discounts that are not getting verified reviews, and you will find people with 70 or 80% discounts who are getting verified reviews. The only thing that I can think of, and Steve you will probably agree with me, the only thing I can think of is the Amazon algorithm very similar to Google is influx, and so it’s going to take it a while to get through and clean up everything.

Steve: Sure, and I’m sure things are changing everyday over there as well.

Jeff: Right, and like we saw with Panda and Penguin on Google, it went in waves right?

Steve: Yeah.

Jeff: It didn’t just all happen at one time.

Steve: Right, those are very painful waves, if I remember.

Jeff: They were and more painfully than that was if you got put it in the purgatory from one of the waves, it could to take you a year just to be re-indexed to get back out of it.

Steve: Exactly yeah, okay sorry keep going.

Jeff: We gave away the 182 products, and we ranked I think, we got up to number 7 ranking. We then stopped for about a month primarily because our velocity picked up so fast that we needed to get our inventory to catch up, right? Because the last thing you want is to get your velocity moving faster than your inventory turnaround time. Because pulling out of stock is one of the worst thing you can do for your ranking.

Then about 2 months later we started writing more sponsored ad campaigns, and we did another small giveaway on Snapshot. I think we give away 50 units the second time, and that boosted us from the 7th position to the 4th position. We got as high as I think the number 1, we were as high as the number 1 position, I think right now I’m looking and we are in number, spot number 3.

Steve: Okay, so it’s held even though you stopped doing the giveaways?

Jeff: Yeah, and once you get into your spot, you really have to start messing, not messing with, playing with your price and optimizing for velocity and profit. We found that if you lower your price a little bit, you can increase your sales and off to where the profitability still makes sense. And then again once you get into a strong position, you can actually your raise your price and maintain that position while making a higher profit margin.

Steve: Okay, and since we are kind of on the topic, so can you comment a little bit about all the different factors that affect search on Amazon, with respect to this experiment actually.

Jeff: I will caveat this and I’ve said it a couple of times that this is just our opinion, but I think it’s pretty widely accepted amongst most people in the space. Your title, your bullets, your keywords probably have a small piece of it. Your price, your inventory, both your quantity of inventory, your history of inventory and your location of inventory. Let’s kind of break that down, so your quantity of inventory is how much you have on hand, and how long Amazon believes that inventory remains in stock, your history is your demonstration on Amazon that you replenish your products and you replenish them on time.

Amazon, we believe actually gives you– the more inventory you have Amazon gives you credit for that. That kind of makes sense, they don’t want to support somebody who is going to run out of stock, and then there is not more to sell. They want brands that are going to be around for some period of time. Then your location meaning are you doing merchant fulfilled, or are you doing FBA.

Steve: Right.

Jeff: Your photos have a significant value in the search and even more than that they have a significant value in the conversion of those search pages to your listing page, that’s what is going to catch somebody’s attention, and your price. We call those your direct factors, those are all things you can control.

Steve: I’m just curious, have you done the experience where you’ve increased the amount of inventory and saw your rankings rise?

Jeff: What we have seen is that it’s not necessarily about increasing your inventory, right? I don’t want to make a blanket statement and have everybody go out there and just order more products.

Steve: Well you have to have the sales velocity to support the increase in inventory, right?

Jeff: Right, Amazon wants to see– so if you know that your replenishment time, they don’t want to see your inventory dwindling low for a long period of time. So if you are restocking at the right intervals, you are getting credit from Amazon by showing your history. This is not an experiment I have done, but I do know somebody who has done this experiment, and what they do is they maintain their own warehouse where they hold larger supplies of their inventory, and they are constantly shipping to Amazon to replenish inventory based on 30, 60, and 90 days sales projections.

Steve: I was just wondering if this is like a chicken and egg thing. You could be artificially limiting your sales by shipping in less stuff. You see what I’m saying?

Jeff: Yeah, like if you are doing kind of an intro to private label where you are ordering in 100 products, and your reorder is going to be 12 weeks. Yeah, it’s a chicken or egg thing. I do believe the people who bring in larger inventories from the get go to support, can move up the velocity faster, because Amazon doesn’t want to sell your products faster than you have on the inventory.
Steve: Right, exactly.

Jeff: If you have 100 items in inventory and your product on page 1 is going to sell 25 units a day, Amazon is going to just by logic,
Amazon is going to slow you from getting it back because you are going to be on page 1 for 4 days, and then you are gone.

Steve: Yeah, and so that makes total sense. That implies that if you are going to launch something you should have sufficient inventory to not artificially limit yourself. In case it takes off, right?

Jeff: It’s definitely a challenge and part of the risk of building a brand on Amazon. One of the strategies I have seen … I know a seller who projected his inventory and thought that he was ordering 3 months worth of inventory, and then once he started selling he realized he had 9 months of inventory. And obviously there is the opposite side where you thought you ordered 3 months worth of inventory and you ended up with 3 week worth of inventory.

It is a guessing game, but if you are projecting your inventory based on a 3 month approach, I think you are starting okay. Especially if you are importing your products from overseas where it’s going to take you 16 weeks or 12 week to get that turn around, you don’t want to be bringing in a product in and only have 3 week worth of inventory unless you are planning to airship more products in. You are just going to spend all this effort to get ranked, and then you are going to fall off the face of the earth when your product goes out of stock.

Steve: Right, plus doing air shipment is not economical there.

Jeff: No, one strategy I know that a lot of sellers do is though if they see their stock starting to dwindle they might place the order and send 3 weeks’ worth of inventory air, and send the rest via sea. There’s a lot of strategies that can be employed, it’s really a matter of you having a comfort level and it comes down to– in a lot of cases it comes down to the amount of cash that a seller has available for making the investment.

Steve: Sure, right. Hey Jeff I wanted to talk a little bit, just a about reviewing. There is a whole bunch of these private Facebook groups that do reviews. I know that Amazon has been cracking down on these things, and they know who your friends are and they know whether you have any relationships with them, so what is your take on them?

Jeff: It is scary huh?

Steve: Yeah, it is scary, so is your take these days generally to avoid, and how does Snagshout kind of get around this?
Jeff: Yeah, Snagshout has 130,000 reviewers on our platform, so just by the nature of how we release products on our site it kind of spreads them out across more shoppers. We also limit shoppers so that they can’t have– Some of the other review clubs, one shopper might have 25 items at one time, and so by limiting the number of items that a shopper can have, you create an environment where it is shared and is fair across the board.

I think that, I guess ultimately the answer is I don’t know what one is good and what one is bad. The problem that you have with review clubs in general is I think going back to the idea that the same reviewer is potentially reviewing all of the products, and it just
doesn’t look as natural as if you had a larger pull of people who have the potential to do it. If the review club is required– so there are some review clubs out there that are there [inaudible 00:40:24]. We personally believe that is a bad user experience from the aspect that how many merchants are going to pick somebody who’s given a 3 star review to try their product, right?

Steve: Right.

Jeff: We believe Amazon is watching that, we have seen that in suspension letters around product reviews. Amazon has named some of these clubs, I’m not going to speak to that, but as you Google it you can probable figure it out, and a lot of these clubs have changed their policies because of that. We tend to air on the side of our shopper.

The attitude that we take with Snagshout is very simple whenever we develop any products or feature to the site. If Jeff Bezos was to use our site, would he feel we are trying to manipulate the system or violate Amazon’s terms of service. And if we can honestly answer that question that he will not feel that way, then we continue forward and if we honestly answer that question and we are not sure, then we stop.

Steve: It seems like any review club needs some checks and balances to kind of go over the listing, make sure it’s a sound listing, and maybe a solid product to kind of improve the integrity of both parties to prevent any problems from happening, right?

Jeff: Well, I mean what we tell anyone that signs up for Snagshout, the first thing I tell them is if you are not using Feedback Genius you are wasting your money. Why would you not set up a system to automate review solicitation from organic sales, before you start worrying about generating sales and reviews?

Steve: Well plus it’s free to start; it’s like a no brainer right?
Jeff: It’s free to start and it scales economically based on your orders, but it’s the idea that those are the reviews you should be focusing on, and then you should be using a system like Snagshout to help to kind of spur your sales along the way. And I think where sellers start to get themselves on trouble is where they became reliant on a system like Snagshout to generate all of their velocity. And so the success of your products is going to come from your listing, and your ability to convert people from your listing to sales. A tool like Snagshout should be a jumping off point; it should not be a necessity for continued product success.

Steve: Let me ask you …

Jeff: Your product has to stand on its own.

Steve: Sure, and so is getting the initial birthday [ph] reviews, is that just like a onetime thing, or is there something that you should continue to do at certain intervals?

Jeff: Yeah, I mean I think you have to constantly you know, products have life cycles and you have to understand your product’s life cycle, and you have to understand when your product is and is not being used right? So the apple slicer for instance is probably going to be used a lot more in the fall when it’s apple season. I know that sounds silly, but that’s when people are thinking about apples, right?
Think about like is your product a Mother’s day, a Father’s day, a St. Patrick’s day, like what would spur sales for your product, and if you are using Snagshout to boost your sales during a time when your dales are naturally boosted, because the search for that product is there, it makes sense if you are … That is something we recommend.

So you can use us for your initial launch, and then like let’s say for instance for whether to use the apple slicer maybe like 2 or 3 weeks before apple season, I might want to do an extra little bump because I know there is going to be an increase in search volumes on my terms.

Steve: Sure, okay.

Jeff: I think where people get hang up is they are not watching the right data, and so they are trying to use reviews, and review clubs and couponing to make up for other mistakes within their product. And so if you have people coming to your listing, then you have what is called a session within the Amazon data, right?

Then your sales are your conversions, and so what you actually should be looking for is your problem that your sessions aren’t increasing, or that your conversions aren’t increasing. Because you might be increasing your rank on keywords, but you are not converting them into sales. Then your problem is your listing right? Your problem isn’t reviews, you got enough people coming, you are just not getting enough people to convert.

Steve: Yeah, absolutely. I mean you have to take care of all different factors in order to be successful. Jeff, I want to touch on one thing before you go, and this is the notion of sending out the feedback emails like on Feedback Genius. What are your recommendations these days for the number of emails to actually send, because I have heard anecdotes that certain buyers are kind of getting annoyed with the amount of email that’s getting sent to them these days.

Jeff: Yeah, so the way I answer that is every product is different, but if you don’t have a purpose in sending the email, don’t send it. So 2 is probably the number you should shoot for unless you have a good use case for sending more than 2.

Steve: Okay and these 2 are for what purpose?

Jeff: Typically all of your messages should be to enhance the customer’s experience, so it should be part of your product’s life cycle to the customer. It should not be repeating the message that Amazon is already sending, so you don’t need to tell them that their order has been confirmed, they already know that. Let’s say the apple slicer for instance, I can enhance the customer’s experience by delivering a message based on the product being delivered, and I can include a recipe book for my favorite apple, my grandma’s famous apple pie.
I have now given them something, and haven’t really asked for anything in return, and then I can back to them another day or 2 later and say, “How is the apple slicer working for you? Did you have a chance to try my grandma’s pie recipe? If you wouldn’t mind can you leave a review?”

Steve: That’s borderline email marketing, is that a grey area in terms of what you can send a customer through Amazon’s email?

Jeff: Okay, so it’s not, it’s part of the– if it’s part of the product that they are purchasing, it’s not considered email marketing. So if I was to say, “Try my grandma’s recipe, and buy her baking dish.” Now I’m in email marketing, and I have violated Amazon’s terms of service. As long as I’m not talking about anything about buying other products, I’m just talking about the use of my product, it could be.
I always make recommendations, how to clean your product, how to use your product, best recipes for your product, shopping list for you know how to make those recipes. Those are all good, anything that’s saying that if you have this product you should buy this product, though or come check out, you know here is a coupon to try something else that I sell. Those are all violations of Amazon’s terms of service.

Steve: So it sounds like your recommended flow right now is to give some sort of thing in your first email, and then ask for the feedback in a subsequent email.

Jeff: Yeah, so there is a couple of different flows that can work. Again, you got to know your product. So I’ll give you an example, we had a guy who was selling a product, it was a powder, and what happened with his product was his powder settled during shipping, so when you opened up the bag, the top like 30% of the bag was filled with air. A lot of sellers started to think, I’m sorry a lot of shoppers started to think they were getting ripped off.

And so he used Feedback Genius to send a message when the product was being shipped before delivery that just said, “Hey, when you open up your product it settles during shipping, and it’s going to seem like there is a lot of air, but understand the weight is still the weight that you bought.” That reduced his customer service complaints significantly, and then he came back and he followed up with an ask for a review.

If you having a customer service issue, you can use Feedback Genius to actually address the customer service issue. We had somebody else who sold a product that was based on size, and it was not returnable once you opened it. So she sent actually 3 emails, she sent one based on the product being shipped saying, “Don’t forget, here is how to measure properly to know that you got the right one. And if you open it, it is non returnable. She did that same message again based on delivery. And then she wrote a few days after delivery to see how the product was being used.

So how can you improve your customer’s experience through messaging, and that’s a great example. If you have a food product or a kitchen product or a camping product, be a brand to these people. Talk about your product in the lifestyle, and in the framework of how they are going to use it, right? And by giving them information you now create a dialogue and a relationship with them, so that when you are asking for the next piece of it, it’s a natural. I’ll give you one more example, I recently bought a product on Amazon, it was a magic product.
And when I got the email from the guy, it was all about like extra tips. Like if you are having trouble doing the trick do this or try this or — so he was trying to help me understand how to use his product better, which made me not only want to give him a good review, but if I’m going to buy another magic trick I’m going to buy it from this guy, because I know that he is going to help me succeed in trying to do magic.

Steve: So it sounds like what you want to avoid is like repeated feedback request messages, right? I mean you want to always to be giving value to your customer with every send?

Jeff: Absolutely.

Steve: Okay.

Jeff: Yeah.

Steve: Jeff man we’ve been talking for quite a while, and everything that you’ve provided has been very helpful. Where can people find you if they have questions or want to check out your products?

Jeff: Yes, so I’m sure we’ll have a link in the show notes to get to a special offer on Feedback Genius, but we are at feedbackgenius.com, or sellerlabs.com. And I would be happy to — you can always find me on Facebook or as you mentioned I attend a lot of conferences. You are welcome to come up, and say hi and ask questions. I love talking Amazon.

Steve: Yeah, and for all of you listening who are going to be at the Seller’s Summit, Jeff is going to be there also and he is going to be talking as well.

Jeff: Yeah, we are going to get into some of the concepts we talked about in here a little bit more in depth with some examples, and some survey data that we have from real shoppers on what gets them to buy.

Steve: Cool man, well Jeff hey thanks for coming on the show.

Jeff: Great I appreciate it, thanks for having me.

Steve: All right take care.

Hope you enjoyed that episode. Jeff is incredibly knowledgeable about Amazon, and he is got tons of user data to back it up. Not only that, but the tools that Jeff’s company Seller Labs offers are must haves if you plan on selling on Amazon. For example I have been using Feedback Genius for quite a while now, and Snagshout is a great tool for giving your listings a boost with reviews.

For more information about this episode, go to mywifequitherjob.com/episode120. If you enjoyed this episode please got to iTunes and leave me a review. This is by far the best way to support the show and please tell your friends, because the greatest compliment that you can give me is to refer this podcast to someone else either in person or to share it on the web.

Now if you are interested in starting your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to mywifequitherjob.com for more information, sign up right there on the front page, and I’ll send you the course via email immediately. 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.

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119: How To Create A 7 Figure Ecommerce Store In Just 4 Months Selling Coloring Books Online

119: How To Create A 7 Figure Ecommerce Store In Just 4 Months Selling Coloring Books Online

Today, I’m thrilled to have Michael Jackness on the show. Mike is someone who I met on a recent ecommerce mastermind trip and after hearing about his successes, I knew that I had to have him on the show.

Mike runs a bunch of ecommerce websites which include Icewraps.com, CuttingBoard.com, ColorIt.com. And he also runs his own business blog at EcomCrew.com

Anyway Mike is a gold mine of information and what I like about him is that he’s constantly trying new strategies to boost sales. For example, his most recent store ColorIt.com is only 4 months old and is on track for a 7 figure year.

What You’ll Learn

  • The importance of having a premium domain in terms of ranking in the search engines
  • Mike’s strategy for ecommerce SEO.
  • Why dropshipping sucks as a business model
  • How Mike has seamlessly interleaved email marketing with his strategies.
  • How Mike has scaled his business so quickly with Facebook ads

Other Resources And Books

Transcript

Intro: You are listening to the My Wife Quit Her Job podcast, and if you are new here, it’s a show where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now I don’t bring on these famous entrepreneurs to simply celebrate their success, instead I have them take us back to the beginning and delve deeply into the exact strategies they used early on to gain traction for their businesses.

Now if you enjoy this podcast, please leave me a review on iTunes, and if you want to learn how to start your own online business, be sure to sign up for my free 6 day mini course, where I show you how my wife and I managed to make over 100 K in profit in our first year of business. So go to mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email, now onto the show.

Welcome to the mywifequitherjob 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 thrilled to have Michael Jackness on the show. Now Mike is someone who I met on a recent ecommerce mastermind trip, and after hearing about his success, I knew that I had to have him on the show. Now Mike runs a bunch of ecommerce websites, which includes icewraps.com, cuttingboard.com, and colorit.com, and he also runs his own business blog at ecomcrew.com.

Anyway Mike is a goldmine of information about ecommerce, and what I like about him is that he’s constantly trying new strategies to boost sales. So for example his most recent store colorit.com is only 4 months old and is on track for a 7 figure a year already, and with that welcome to the show Mike, how you doing today man?

Jackness: I’m doing great, thank you.

Steve: Give us the quick background for those of us who don’t know who you are or your background about how you got into ecommerce in the first place.

Jackness: It’s an interesting road, and we weren’t really focusing on ecommerce to begin with. We were affiliate marketers and had domains like treadmill.com and cuttingboard.com, and one day just decide that we don’t want to do affiliate marketing anymore, and it’s going by the way of the dodo bird …

Steve: Why was that by the way?

Jackness: Well, I think that if you have an affiliate site like yours, there’s definitely still room for affiliate marketing, sorry. What I’m I saying …

Steve: We shouldn’t have talked so much on the pre interview.

Jackness: I had just eaten strawberry before we got started, and the seed like when I started talking went down … Sorry hold on just for a second.

Steve: Okay.

Jackness: Sorry about that, you probably need to start over the meeting, but or I can just start…

Steve: Just start talking about the affiliate marketing or why not affiliate marketing?

Jackness: Yeah, sorry, let me get started right there. So why not affiliate marketing? We were doing affiliate marketing for years; our background actually was in online poker affiliate marketing. That’s how we got started, and we made a lot of money during online poker affiliate marketing. In 2010, I decided to get out of that business, there was a lot of back story behind that, but just really sick of the industry and wanted to get into more “mainstream affiliate marketing.”

I started doing keyword domain investing, things like treadmill.com was one of the domains we got, but we also got things like graphicdesign.com, onlinedegree.com, and a couple of other, wordpressthemes.com, a couple other really high powered affiliate marketing type related domains or things that we decided we want to do affiliate marketing with.

In 2011, 2012, Penguin and Panda started coming out. The writing was really on the wall that affiliate marketing sites were going to have a very difficult time. Non-affiliate marketing sites like My Wife Quit Her Job I think that there is still a really good place for educational sites and even review sites, but these major head terms, Google is going out of their way to make sure that affiliate sites can no longer rank for things like WordPress themes for instance.

When we bought wordpressthemes.com something like 6 out of the top 10 listings were affiliate marketing sites. Now if you were to do that search, we are on the 3rd page and I think that we’re the highest ranked affiliate marketing site. My favorite book is Who Moved my Cheese. I don’t know if you’ve ever read that book, but it’s basically talks about people hemming and howling and not embracing change.

In our opinion, affiliate marketing was going to start struggling quite merely and our prediction was right. Fast forward 4 years later, and we made a decision, a bold decision of just basically transform all of our sites into a product or service that we can offer directly to the end user, and that’s actually how we got into ecommerce. It wasn’t really by design, it was okay well we have this domain treadmill.com, we have this domain cuttingboard.com, and we think that we can develop that into an ecommerce site, and the first one that we did was treadmill.com.

Steve: Would you say that the domain itself has very little bearing on ranking these days?

Jackness: No, it’s interesting, I get asked that question quite a bit, and I’m of the opinion that it actually makes a big difference. If you have a keyword domain, a premium keyword domain, I think it makes a very big difference. For instance cuttingboard.com ranks number 1 for cutting board and ranks number 1 for cutting boards, and bamboo cutting board and all these different things. We’ve been doing SEO for 12, 13 years now, and I know very well how many links it takes to get to number 1 for related searches, and I can say definitively that we have a fraction of the back links to curttingboard.com than we would have needed to rank number 1 if we had something like mike’s-best-cutting-board.info, or something like that.

We’ve definitely seen that this premium keyword domains are still doing quite well, because Google wants to let brands rank, and if your brand is cutting board, you’re really ranking for your brand and the keyword at the same time. We’ve noticed that also with icewraps.com. Now with colorit.com obviously we went a different direction, we didn’t get adultcoloringbooks.com or coloringbooks.com, and the main reason is because I don’t think that’s a good brand name for coloring books.

You would never want to brand your adult coloring books adult coloring books, it doesn’t make sense, so I thought that colorit is a nice short and easy to remember domain, so that was the reason behind that.

Steve: That’s the main reason for that is because you were trying to establish your own brand where as with Ice Wraps and Cutting Board, are they your own products or other people’s products?

Jackness: So I mean they started out as other people’s products, that’s how Treadmill got its start, and when we bought icewraps.com from another company, they were all other people’s products, and when we developed Cutting Board it was other people’s products, but we’ve gone through an evolution of okay we’re going to start doing ecommerce, and we’ll just … We’ll have a site like treadmill.com and because we’re treadmill.com and pounding on my chest like a gorilla here we’ll rank and we’ll sell a lot off product and we’ll do well.

What we discovered that drop shipping sucks. It’s an awful business to be in. You are relying on others all the time to make you successful, which I don’t like. I like being in control, and then on top of it, we were shipping heavy equipment that doesn’t end up at the end user on time or it ends up damaged or whatever, so that you guys assume less control. So our next step in the evolution of ecommerce was to do icewraps.com and cuttingboard.com with other people’s products that we could at least ship ourselves, and that was great.

We got a lot of control for that and we loved it, but then you start realizing there’s things like pricing issues and you are not really differentiating yourself from the market place, and PPC is really tough and if you are doing any type of advertising campaign for yourself, you are helping your vendors more than you are helping yourself, and your interests just don’t align with … Your business interests are aligned with your partners.

So we started developing our own products for all those brands, and we discovered that just we really like having the control, end to end control of the channel, almost like Apple does with its products.

Steve: Sure. Would you say that … Are you still selling other people’s products today, or is it mostly your on stuff on Ice Wraps and Cutting Board?

Jackness: On Ice Wraps and Cutting Board the majority are still other people’s products. I don’t know that that’s going to change. It may be over time, we’re slowly starting to introduce more and more of other people’s products to our … I’m sorry, our own products to that, to those sites, but I don’t really see us stopping selling other people’s products on those domains. They’re just too valuable as a reseller, but we can definitely get our house brand in there and do quite well.

Steve: Do you run special promotions for your own stuff, or do you favor your own stuff over some of the other brands or is it …

Jackness: We have … We’ve been walking a thin line because we don’t want to take off our manufacturers that we’re working with. We are making good money off those selling other people’s products. We treat it like a CVS does or a Walgreens, you walk in there and they have … They’re bringing the contact solution or whatever. We don’t ever disparage any of the other products that are on there, or even really try to say that ours is better, but we do have at a lower price and the reviews are good and we let people make up their own mind.

Steve: Okay, there’s a number of things I want to talk to you about today. First off as you mentioned you are raking number 1 on the front page for a lot of tough keyword terms like cutting board and ice wraps is a pretty hard to rank for. I want to talk a little bit about your strategy for SEO, and you already mentioned that your domain helps, but obviously that’s not the entire story right?

Jackness: Definitely not the entire story, and if you want to talk about SEO, one thing I want to really make clear here is that we do the [inaudible 00:10:31] these days. To the point where we’re paranoid and probably leave behind opportunity that is still considered white hat, but when you wake up one morning and you find your site delisted or penalized, it’s an awful feeling, and when you have a …

Steve: Did that happen to you?

Jackness: It did, it happened a couple of different times actually, and basically at this point really leant my lesson. The first time like yeah I learnt my lesson I’d do this again, and then you slowly but surely you’re nibbling around the edges of doing grey hat stuff, and then next you are really in the grey hat area. We never really did any black hat stuff, but we were definitely aggressive about getting links or writing thing content, or just writing stuff just to get content up on the internet that would rank.

The stuff worked for quite a while, but now I take the approach of, okay if I was in the Goggle board room, you were with Matt Cutts, the Google spam team, what is it that they are really trying to look for here? What are they really trying to have rank, and at the end of the day, they want to be legitimately the best search engine. When you type in something in the Google the number 1 result, the number 2 result should be the answer to your question.

If they don’t do that, their product ends up being Yahoo or Bing. It’s crappy results, that’s the reason why I don’t use Bing or Yahoo. It’s just the results are awful, so why not be that site, why not do everything that you can to legitimately be that site versus trying to cut corners and get there artificially, so that’s the approach that we take.

Steve: It’s interesting; I’ve recently rewritten some articles on my blog to make them more comprehensive. They were already on the front page, and I was just trying to raise their rankings, and by making their article more comprehensive, it’s actually jumped up about 4 spots for this article that I’m thinking about. I don’t know if that was just a fluke, or whether Google is actually really paying attention.

Jackness: I don’t think it’s a fluke at all, I think that there’s 2 things that you probably noticed. There’s one thing called a freshness update. Google has been pushing articles down that have been stagnant for years, so if it was something that hadn’t been touched in a long time, it could have been a freshness update, but the only thing is Google was like really giving preference to articles that are or what I call skyscraper posts which are basically 3, 4, 5000 words long, and you mentioned ecomcrew off the top of those.

If you are on there, we do that type of thing there. I mean every post we write is a minimum of 2000 words. It’s not a bunch of filler crap, just to get the 2000 words, it’s legitimate content and the idea is that you write something that’s so profound, just answers questions or blows people away in a way that they want to share it with their friends, that’s kind of litmus test that I use.

There’s so many pieces of content that I’ve consumed on the internet that I’ve done in 25 or 50% way through it and been like back, this is awful. That’s not what you want, you want people to read the content, scroll down to the end of it and then want more. They’ll be like, “Wow that was the most amazing thing I ever read.” That’s obviously a high bar to get to, and it’s hard to generate that type of content on a weekly or daily basis, but we end up putting something like that up about every 2 to 4 weeks, and it’s a lot of work, but everything we put up get’s a lot of attention.

We do that same thing on Cutting Board, on Ice Wraps and we’re doing it on ColorIt. For instance on ColorIt, we just wrote several thousand word piece about the benefits of coloring. We have a fulltime copywriter here and she spent about a week writing this article, and doing research and linking out to resources that are like hospitals and researchers and things like that.

The article really answers the question versus just some BS basically. We’ve done the same thing on Ice Wraps, for instance we wrote an article about little league and pitchers and why it’s important to ice your shoulder and your elbow, and it really gets into the technical reasons of why that’s important, and isn’t just a 300 word piece that doesn’t even answer the question. It just says shoulder icewraps are great, you really should buy a shoulder icewrap, we sell lots of shoulder icewraps, you can get a shoulder icewrap, and it just has a keyword stuffed in there a zillion times and doesn’t actually answer anything, and we stay away from that.

Steve: So it’s one thing to put out good content, but then you have to get people to link to you too, so do you have any strategies for that?

Jackness: We do. With the content itself, I mean we actually take … We have lots of strategies. And the first off every industry is different. So anything I’m going to mention here isn’t going to work for everyone. For instance with Treadmill that was one of our biggest challenges ever because that’s not a very interesting business. I mean you are not going to write about treadmills and get people to link to that content. It’s hard to write a fitness article and get people to link to it because it’s just so saturated.

So we did some interesting thing. First off we reached out to a lot of influential people in the industry. We were like okay, what does that actually mean. Who can we get to write for us, who can we actually get to participate in something like this. So what we ended up doing was going to fitness bloggers, because that’s a close enough industry or topic if you will that’s relevant and that’s how Google looks at it its relevancy. It’s relevant to Treadmill because you can train for a marathon on a treadmill and actually quite a few marathon runners train on treadmills in inclement weather, especially if the live in a place like Chicago or something where it’s cold and snowy.

In the winter time they’ll do their training indoors in the winter. So we actually contacted lots of fitness and running blogs and got them to start writing for us on our site. We never sent that spammy email that just basically says like, we are the greatest thing, we’ll pay you, or we’ll trade content with him. We’ve all gotten these awful emails or just immediately go on the spam box.

We basically approached them and say, we are interested in having you write content for our site and we are going to pay you, and make it clear that we don’t want it for free; we are just going to pay you. We start the relationship typically off like that and that way we are not asking for a link, and we are not asking them to do anything except give us content and we’ll pay you. And we were able to get about 10 or 12 influential people in this industry to write for us, and we put their content on our blog.

So we had a benefit of getting good content written on our site that we hoped that they would share for us. That’s basically you are doing it on a hope and a prayer. Obviously it’s going to be pretty high percentage of people that are going to be willing to do it, because if you paid someone you have a relationship with them, then you had an opportunity to talk to them, you’ve actually given them some money after you put the article up and you send it to them and say, “Hey look your article is up, feel free to share it with your community if you want to.” That type of angle.

80% of people are probably going to do that and that gives you more exposure. Then you get them to write a second article if they assume that they are going to work with you, then it’s okay well let’s take it a step further. Let’s get them to write again and then again. Then after like the third article we would say, “Hey look, we want to give you this badge to put on your website that says that you are a post contributor … That was the name of our blog because we call it treadmill post.

Then we got them to put our badge on their site and we would link it to their profile page. So it was very not spammy and every one of those was going to a different place. And that was kind of one of the strategies we took with Treadmill. Then I’m sorry were you going to say something there?

Steve: Yeah, I was going to ask, so what is the incentive of the blogger to write for your site? I mean were you paying them a lot of money?

Jackness: We were paying between like $100 and $150 per article. A fair price basically. They were writing 1500 to 2000 word article that was good content. They were either talking about their training routines, or they were talking about a race that they ran or something like that. It was good content that was on our blog. I mean not something that was going to necessarily directly convert into a transaction for us, but it was getting us links and getting us attention.

Steve: Okay, and then these people, I guess they weren’t thinking about getting traffic from this, right? It was purely for the money?

Jackness: Purely for the money yeah.

Steve: Okay, got it.

Jackness: Another thing that we do when we did this is we had a profile on the article that they wrote about them, and link back to their site. So they felt like that they were getting the attention they deserved. I think that’s really important, and we talked about that in our preposition when we were offering to hire them.

Steve: Okay and then how many of those ended up linking back to you of the people that you guys paid?

Jackness: So about 80%.

Steve: Oh wow.

Jackness: Yeah. We would know usually within the first article if it was going to work or not. We didn’t really ask for a link until about the third or fourth article, but you could tell off the first one, like if you asked them to share it with their social media, and they would be like no we are not going to do that. We are okay thanks for the article, and you just never talk to them again.

Steve: Okay, yes so this is kind of like a long term strategy, right? This probably happens over the course of like weeks or months?

Jackness: Yes to … Even more specifically as far as the SEO strategy goes it’s an 18 to 24 month preposition that we are looking at. We are trying to really get like 1 or 2 quality links per month, and that’s all we really look for. We definitely are and the quality over quantity space and it just slow consistent pressure of getting more links and that really makes a difference. In the beginning you see no results. Your organic traffic like with ColorIt right now for instance it’s only been up for a few months. There is no organic traffic. I’m not spastic about it, because I know that it’s going to take 12 to 24 months to start seeing any results at all. Yeah, I mean it’s a long-term strategy.

Steve: Is this the similar strategy that you’ve taken with Cutting Board and ColorIt as well?

Jackness: It’s not, because it’s a little bit easier industry. Let me tell you just a few more things that we did with Treadmill real quick. Or actually one more specifically because I think this is really important for industries that are hard to SEO for. One of the other things that we did with Treadmill is we came up with this promotion to give people up to a $1000 cash back if they bought a treadmill. If they lost weight after they bought our units. The idea here was like for multi prone approach kind of thing.

So the idea was okay, well first off we are being held a MAP pricing here. We can’t sell this treadmill for less than the next guy. So what’s our value preposition? It was, okay well if you buy our treadmill most likely you are buying it because you want to lose weight. If you lose 100 pounds with our treadmill within x amount of time, we are going to send you 1000 bucks. If you lose I think it was 20 pounds, we’ll send you … I forgot the exact amounts, and I think it was $100 if you lost 20 pounds and if it was 50 it was $500 or something. I forget the exact numbers but it was something along those lines.

It became first of a great ad campaign because it did help convert some of our traffic and people were like okay well I need to lose 20 pounds. If I buy this $1000 treadmill from the treadmill.com versus walmart.com or sportsauthority, treadmill.com is offering a $100 rebate if I lose 20 pounds. We knew that very few people were going to actually fall through with that, these were New Year’s resolutions, or I want to get a beach body.

The reality is that most of our equipment unfortunately became the most expensive clothes hanger they ever bought, but it did help convert traffic but the SEO angle of it was, okay well now we have this really unique promotion that no one had ever done before in the industry at least that we knew off. We had to run it through legal and it cost us a few thousand dollars in legal fees to get the terms and conditions written in a way that complied with all states.

Which is really difficult because there is about 5 states out there that are notorious for coming after you for things like this. So we made sure we had all the bases covered. Once we did that then we contacted more fitness bloggers or newspapers and other media outlets, and this guy created a few links for us. It was just basically like treadmill.com is going to pay you to lose weight. It made for a compelling story, so that was another SEO angle that we took.

Steve: Interesting, so you mentioned earlier that you know exactly how many links it takes to get on the front page, so for something like a cutting board or an ice wraps or a treadmill, what would be your estimate?

Jackness: So for those keyword domains it’s been like 30 to 40, I mean very few. Again it’s just been getting 2 per month for a couple of years is basically what it takes. Now if we had a less keyword domain I think that it would probably take four times that many.

Steve: Four times that many? Wow, okay.

Jackness: That’s just basically what we’ve seen. Now your mileage might vary kind of thing, but we’ve seen … I think it’s going to be about four times harder for us to rank for adult coloring book for instance with colorit.com, than if we had adult coloringbooks.com as our brand, and that’s a long brand name and that’s not really like an actual brand name. So it’s not like a great example, maybe if it was more like mikesicepacks.com versus having icewraps.com, all right it definitely makes it more difficult.

Steve: Interesting, even if it’s just a little word like Mike in front of it, like Mikestreadmills it would make it that much harder, okay.

Jackness: For sure yeah I mean that’s what we’ve seen. Now again there is a lot of controversy about this you get … it’s kind of like talking religion with people, everyone kind of has a different opinion. For sure I can say definitively is what we’ve seen is that ranking for that specific word, whatever your keyword as in the plural doesn’t matter there. So cutting board versus cutting boards we see equal results, but we for sure we are definitely going to weigh less links that we would take if we had less keyword of a domain.

Steve: Okay, so let’s switch gears a little bit because I know that you’ve had a lot of success with ColorIt. I mean you are not getting any search traffic right now you said, right? So the way you’ve been getting traffic to ColorIt has been through Facebook ads, right?

Jackness: Yeah so I mean mostly Facebook ads and social media in general. I mean the only organic traffic we get to ColorIt, is for our brand name, which is actually getting to be higher and higher which makes me feel good that people are typing in our brand name. We are not ranking for any other organic terms.

Steve: Yeah, I mean at the same time the brand’s only like four months old at this point too, right? So I was hoping you could break down some of your Facebook ad strategies specifically for ecommerce, and what you’ve been doing with colorit.com. So what would you say is your best performing Facebook ad camping to date?

Jackness: So by far in a way our best campaigns have been video ads. We first started out with a bunch of static images and they were doing well, but the video ads by far in a way have done the best. We have two different angles that we take with video ads. The first one is my cousin Ericka who is my partner in the business, and we’ve made her the face of the brand, because women are our audience.

We’ve split test this on Facebook and we can’t get a single male to convert on our site. So I mean we know definitively that it’s a female audience. So it doesn’t make sense to have me as the brand on the site. So we’ve used her to do the videos. The first video that we have that’s done really is basically it’s a two minute long video of her just talking into the camera with like our brand name behind it.

I’ll give you a link so you can put this on the show notes; we have it up on YouTube. It’s just basically her talking about the brand, just genuinely sitting down and talking about why ColorIt came to be. There’s a lot of imagery in the video about the hard back covers and the spiral binding, and the artist quality paper and all that type of stuff.

That video has done incredibly well for us, I mean just absolutely incredibly well. It’s the one that sustains having a CPA that makes sense. It started to lose some of its performance, and then we changed the landing page, and then we were just talking about that page before we started recording here today. That’s actually kind of boosted our conversion rate back up again and got our CPA down which is great. That video has done really well for us.

Steve: Can you give us some metrics on like what your click through rate is and … Well I want to talk about targeting a little bit also?

Jackness: Yeah, unfortunately I don’t have it like up in front of me, but I do know that like our CPAE that’s the one number that I’m always looking at the most. Our CPA on that video right now is running about 12 bucks which is right about the level where it makes sense for us to run it. We are always like throttling up our budget to kind of be right there, we are looking to get as many conversions a day as we can.

Steve: And your average order size is a multiple of that or?

Jackness: Yeah, so our average order size was $41, and this is something else we were talking about before the call, but that’s dropped quite a bit right now because we are out of stock on our highest ticket item on the site. So our average order volume … Our value has dropped it has hit the performance of our Facebook ads, and kind of thrown things out of lack for the time being until we get those back in stock.

Steve: Okay, so in terms of targeting now what is your best target? Obviously there is a lot of iteration involved, but in terms of your best targeting group what has that been?

Jackness: Yeah, so the best targeting group is just basically been an audience on Facebook that likes coloring books. Surprisingly enough there is an interest on Facebook that’s called coloring book whatever reason without the ‘S’. It’s like 2.2 million people in the US, and we’ve filtered it out to just females, again because we know that females are our audience, so it’s about 1.8 million people. We’ve been just going through that audience as much as we can right now and we haven’t fully exhausted it yet.

The great thing about that is that we are getting so many customers from these Facebook ads that we’ve now been able to build a look-a-like audience; it’s starting to actually perform fairly well, too. I found … Excuse me, that you need to have probably about 3000 or 4000 people in your converted customer list to use a look-a-like audience to base that off of, because you don’t get real good data off of like 100 people obviously or 500 people.

Yeah that audience has done really well for us, and we split test everything to the nth degree. When we launched a new ad campaign, like the video I was just talking about with Ericka the intro video, we used … We probably have had 50 different iterations of that video up at this point. Where we are using different headlines, different ad copy, actually just found out the other day that you can add images into your little icons or emoticons into your ad copy.

We’ve been testing that stuff now and we just are constantly testing. Split testing landing pages, split testing stacking audiences on top of people that like coloring books. For instance people that like coloring books and Prisma color pencils, which is like the number one pencil company in the industry. Or people that like coloring books and Ellen Degeneres, or one of the ones that we’ve done that’s done really well is that people like coloring books and wine relaxation and meditation, that’s done really well because these are people that have seen like our books.

Steve: So what’s interesting is you’ve said your best converting audience right now is literary just everyone in the US that likes coloring books, right?

Jackness: Yeah, exactly yeah.

Steve: So and then you probably sort by gender and age I would imagine right, because younger people probably don’t like coloring books?

Jackness: Yeah, I mean it’s interesting. I think there’s a lot of people … Younger people that like coloring books, because we can see that by just typing into the box like it really is age empty. For instance it’s like 1.8 million women, but if we filter by 35 to 65 plus it goes down to like 1.2 or something like that.

That’s actually the audience that we target because we found that the really young crowd either isn’t able to afford a $16 coloring book, or they don’t really care about quality and they think it’s something that you kind of discover as you get older. You get more into higher end stuff; you have the money to pay for it.

Steve: Do you ever target based on income level?

Jackness: We did do that and interestingly enough actually, we’ve used Facebook insights. I thought the higher income people would convert better, and it just naturally seemed like the obvious thing. It did awful, and I was like man this doesn’t make any sense. When our look alike audience got big enough that Facebook started showing the income groups, it actually turned out that our bread and butter was actually lower income people, which I still don’t quite get.

What we discovered about our audience is and again because our look alike audiences got big enough for Facebook to share this data. For anyone that’s listening, you can go to Facebook insights, and pick a custom audience and it will tell you all this data about your audience. It will tell you their gender, their age, their income levels, whether they drive a van or a sports car.

It’s pretty crazy the data that you will get on them. One of the things that we discovered is that it’s basically home owners. It’s people that have grand kids, and there’s a couple of other things that are really interesting, but the income level one what I thought was really interesting is people basically in that like 30-75,000 thousand dollar bracket, and not the 75-150,000 dollar bracket which is what I would have guessed.

Steve: Interesting. Let me ask you this. If you were to start, or if you were to teach someone how to start their own Facebook campaign from scratch, how would you have them begin?

Jackness: Yeah, first off it’s important to not give up. Really before you … Obviously it’s not how you begin, but you got to sit yourself down and say, “Look, I’m not going to run one ad and have it under perform and then just give up.” That’s what most people end up doing because your first ads are going to be awful. It’s just the way it’s going to be. You got to get some initial data.

We set up … Basically what we are doing now is we set up at least 4 different images, and we try to have them be very different and we also use four headlines and four ad copies. And we are using a product called AdEspresso to help with that. Basically we were doing it on manually through the Facebook ads editor before, and it just would take a half a day to set all that up and with AdEspresso you can do it in like 20 minutes.

That creates … It will let you do up to 50 variations of an ad, and we typically will push it to its limits. Then we set a budget of at least $10 per day per ad. If it’s 48 ads, we’ll run $480 a day which is obviously quite high. We’ve gotten the confidence to be able to do that. I certainly wouldn’t recommend it to someone getting started to go right for that type of level. I mean maybe you do 12 combinations and you do $120 a day. The reason it’s important to do at least $10 a day per ad is that Facebook just can’t give you good data on $3 a day or $2 a day. You got to get good data. Basically run those ads and give them at least 3 days to run.

Steve: Are you bidding by impressions at this point or conversions?

Jackness: That’s actually a really great question and very important. We optimize for website conversions which for us is a purchase. Obviously if you are trying to get leads you would optimize for getting a lead. Let Facebook do its thing. Every time I try to outsmart Facebook by doing bids and things like this, or trying to just optimize for website clicks, I lost. Facebook just has too much data and they are too good with what they do.

So we optimize for website conversions. I set a $10 a day budget to start with, and I use automatic bidding and let them do their thing. I notice that to start with, the performance is poor and then over the first couple of days magically it’s just improves. It’s been really interesting. We let those ads run and then through either AdEspresso or through ADS Magic if you don’t do use AdEspresso; you can then look at all your demographics.

For instance I was just helping someone today before this call that was doing a legen [ph] campaign. They had hired an agency to help them and they were paying $6 per lead. I was just like, “You are crazy dude. You got to pause that thing and let me just do a test and see what I can do with this.”

Steve: You will only charge him $5 lead, right?

Jackness: I was like I will do it for half. I will go out of the corner and get leads for 3 bucks. [inaudible 00:34:52] take me to your email address, I give you some pizza. Anyway, we ran that for just a couple days, and what we found by letting that data run is that, and again I don’t know this is just interesting because it’s … He’s in a pet space. I don’t want to talk too much about it and break his confidence, but he’s in a pet space. What we found is that immediately within the first 2 days that males were greatly underperforming females by a lot.

What I do then is I set up what I call a refined campaign. I take the images that were performing the best, the ad copy that’s performing the best, and the headline that perform the best, and then stack that on top of the genders that are doing the best if that is an issue. The age groups that are doing the best and interests that are doing the best, and do a refined ad. Now we’ve gotten him down to under a dollar per lead which is still high. I mean we are generating leads for some of the things that we are doing for 17 cents now.

Steve: That’s ridiculously cheap actually.

Jackness: It is. I mean I made a post about this that we were doing 22 cents everyone was flipping out, and we’ve actually cut down up to 17 cents, but it’s all on refinement. We continue to refine our landing page, do AB testing, we use lead pages.net. We’ve actually done 4 different lead pages. The first one bombed. I was like let me try another one. That one did a little better.

You kind of learn about what’s working and what’s not. We do AB testing on every single one of them on the copy, on the button text, on everything until we find what’s working the best, and the one that we have now performs exceedingly well. I’m happy to share that with you as well Steve. We can put that in the show notes so people can see that landing page. It’s done well for us.

Steve: Okay cool.

Jackness: It’s not just the landing page, but it’s also the ad copy. We ran a bunch of different ads and different imagery and different headlines and stuff until we found the one that worked. What seems to work the best is the tip for your audience is always that scarcity. The headline I believe that’s running right now, that’s doing the best is something along the lines of this week only. Get 4 free drawings, or this month only or something along those lines, and that’s the one that’s by far in a way done the best. Wherever you say this is going to end, you got to click on this now otherwise you are going to lose it, that seems to do the best. Yeah we are paying 17 cents a lead.

Steve: Are your best offers tend to be the ones where you are kind of giving something away as opposed to content?

Jackness: Yeah, either way I would say that what we are giving away with the free drawings is content as well. You could argue that. We are doing things like an icewraps for … We are working on getting stuff refined and doing better, but we are doing things like advertising the little leagues or parents that have an interest in little league and say we’ll give you a free report on pitching on ice.

We’ll advertise to tennis fans, to people that like tennis and talk about like how to prevent tennis elbow, and give them a free report. The key here is you just want to get their email address. Off of those, like off the 4 free drawing for instance is the one that we refined the most now. It’s a 13 part series that goes out over 5 weeks.

Steve: Can we just kind of breakdown what goes in some of these sequences like a main gist of your 13 part sequence?

Jackness: Yeah, for sure. The first thing that we’ve done that’s helped the most to get us the most value out of it is it’s 4 free drawings. We’ve actually instead of giving them all four drawings at once; we broke it out over a month. So we send them 1 drawing now per week. The reason that that’s important, there’s, with email marketing, the number one thing that you have to strive for is a high open rate.

You want to also train people to open your emails, because if you just email them once and they get it and they just kind of forget about you, that’s not going to generate sales for you.
Our target is to get a high open rate, because high open rate means a high delivery rate across all email service providers. If your open rate is 5% or 10%, Google and hotmail and outlook and all these different online email service providers will just stick your stuff right into spam. It will never get into anyone’s email box. They’ll go in promotions, they will never get there.

We break it out over a month, and basically we are trying to train people to open our emails. It’s like they want to open and then they look forward to this free thing every week.
The first email we send out actually when they sign up for this 4 free drawing promotion and again I will share the link and anybody wants to sign up for it they can get the whole 13 part series if they’re patient enough and wait for 5 weeks.

The first email actually doesn’t give them anything. It’s an email that says, “Hey, like starting tomorrow we are going to start sending you 1 free drawing a week. Look out for the email tomorrow.” The reason we do that is we know they are going to open up the first email. We are going to have a very high open rate on the first email, incredibly important.

We use it as an opportunity to be like, “Okay here are some frequently asked questions about this promotion.” Why are you giving these drawings away for free, how do I print them? Do they work on windows or Mac? We answer a few FAQs in the email. We just, like I said, we say, “Starting tomorrow, you are going to start getting these free drawings once a week.” That way, the second email has a high open rate as well. Then what we do is we alternate each email … First off we, if they don’t open, the first drawing we send them a reminder. That’s part of the 13 part email series.

The email with the drawing goes out and if they don’t click on it and open it or actually click on the button to download the drawing, they will get another email that says, “Hey don’t forget your drawing,” which is really important. That email gets a high open rate as well because people dismiss emails. We do that as well and Klaviyo allows you to do that. Then what we do is we basically alternate between sending them a free drawing, and then in the middle of the week we send them some promotional thing about our brand, just trying to soften them up a little bit for a sale.

Steve: What’s the frequency that these emails go out?

Jackness: It’s every third or fourth day depending, because there are seven days in a week. You can’t quite do it equally apart, but it’s every 3 or 4 days depending on … So we send them and we just like I said we alternate. It’s a free drawing about the color brand. Another free drawing to check out whether our customers have been doing with our stuff like the social proofs stuff, another free drawing, then they get another about the color brand type email, and it just goes back and forth like that for a month.

Then what we do is if they haven’t purchased by this point. By the way, we get a lot of purchases throughout this funnel. We see the biggest conversion when the free drawings go out. We are lucky. We are in an industry where there’s a direct correlation of, okay I get this drawing, I print it out, I like coloring, I want to go by more of those. Not everyone can do that. You can for instance can’t send someone a free handkerchief or whatever. Get more creative and use content …

Steve: We can send them a craft that uses handkerchiefs and then tell them to go, right?

Jackness: Yeah. Then the last thing that we do is we give them a coupon. If they are at the end of the phase and they haven’t … At the end of that series I should say and they haven’t purchased and we filter it out by that by the way. We don’t send a coupon to people that have purchased. We actually use like a gift card on this promotion. We say, “We hope you enjoyed the 4 free drawings. ColorIt is full of surprises. Something along these lines, we want to give you another surprise. Here’s a five dollar gift card.”

People, I think treat that differently than a five dollar off coupon. In their mind, they now have $5 in cash that they can go spend in our store, and they don’t really think about the fact that there’s nothing for $5 in our store. They got to go spend at least 16 bucks, and then hopefully once we get them to buy something, they become a customer for life. That’s basically the gist of that series.

Steve: Okay, and then once they actually make a purchase; you have another series, right?

Jackness: Yes, and that’s actually, that’s a series that we just … On ColorIt, it just got in place because we were spending all this time on pre-purchase series and trying to get people to become customers, but now that we have a lot of customers and a lot of orders coming through, we put together, I think it’s a ten part series, post purchase. The first email that goes out is basically just a thank you for your order. It’s a personal note from Erica. Then we actually send another email while the package is in transit, and that’s actually done quite well for us as well.

We basically say, “It’s time to get excited.” We want to get people … Again we are training them to open up our emails. Anytime you can send an email out and have a high open rate, we are going to take advantage of that. Anytime we can get our brand in front of them, we want to do that. Surprisingly enough, that email has actually generated quite a bit of business for us. I don’t quite get that one, because people don’t have the product in their hands yet, but for whatever reason it’s still converting traffic for us.

Steve: I’m sorry, what does this email do?

Jackness: It’s just a tiny … The title of the email is time to get excited, and it’s basically … It goes out I think 2 days after the package ships. Maybe it’s one day after the package ships. It’s basically just letting people know the package is on the way. It’s going to be delivered in a few days and it’s time to get excited about the product you are about to receive.

Steve: Interesting, and then there’s a link back to the site and then they go back and buy some more stuff?

Jackness: Yeah, I don’t quite get it. No coupon, or actual offer but yeah, they are going back and buying stuff from that email.

Steve: Okay, and then what about the remaining emails?

Jackness: The next one that we send out is once the item arrives, we use something called after ship. That has a web hook with Klaviyo. We know when the package has been delivered. We actually send out an email the following day, because we don’t want to send out the email until we know that they actually have it in their hands, because it could be sitting on their door steps. We wait until the following day.

We just basically send out an email that says, “How’s your package been delivered, we want to make sure that you are happy,” that type of an email. That email actually has the highest conversion rate of all the emails that we send out in the post purchase row. People once they get the product in their hand and if it’s their first time ordering from us they are like, “Wow, this is really amazing, I want to order more.” It does quite well for us, and I’m actually pulling up Klaviyo just so I can remember here in my head what the next email is, so just give me 1 second to pull that up.

Steve: Sure.

Mike: You can cut out the dead space I guess. Okay, the next email that we send out on the series is a referral program email, and we actually just instituted a referral program for ColorIt. We get all these amazing testimonials coming in. It was like all right well we might as well get them to become ambassadors for us, and give them some motivation monetarily to want to do that. We actually pay referrers 5$ for every customer they send to us which is a lot of money, but it’s significantly less.

I mentioned earlier that we are paying about $12 CPA for some of these Facebook ads. So I find our referral fee is actually quite good for us, and we only pay it once. It’s up for any new customer. We hope that our average life time value of a customer is going to be way higher than what they you order, so paying 5 bucks is really nothing for the lifetime of that customer.

Steve: Do you use a plug-in to do that?

Mike: We do, we use a … It is a Shopify thing called like referrally or something like that. It is doing pretty well. We just launched it. We have got in several hundred affiliates already, and we have got in quite a few orders off of it, and it was something we just launched actually this week or last week, it was like a Monday of this week. It is doing pretty well for a new program.

We have that referral program email, be early in the sequence because we want people while it’s still fresh in their minds and are loving our products to be more up to want to tell others about ColorIt. That goes out 2 days after the purchase, and then on the 4th day we send out an email about social media submissions, so we basically say, “Hey, if you love ColorIt and you are enjoying the product, post at the social media with the hashtag #mycolorit.”

That’s the hashtag that we developed, and basically share your submission or your drawings with the world. This email is generating a bunch of revenue too, and the insulate benefit of that is that we are getting a ton of submissions to that hashtag and we built a landing page around, just to having all these different submissions and they are really pretty.

I’m not really in the coloring myself, but you look at some of these, things that people have done and they are really pretty. They have done a really great job with our artwork. It makes us really proud to see what they have done, and basically we just take that stuff and make it social proof for our future customers that are people that are just landing on our site for the first time. Having that as a part of your conversion re-optimization tactic is really important.

Steve: Okay.

Mike: The next one we send out is 7 days after purchase, now we ask for a testimonial from the customer. This email says basically we will give you a $10 gift card if you send in a testimonial. We just ask … It only needs to be a couple sentences; you take a picture with yourself with 1 of our products and allow us to use it on our website if we want to, and we will send you a $10 gift card.

Overtime we have gotten quite a bit of testimonials from those, and we are also generating more money in sales off of these emails as well. What we really have learned is that just keep sending more email. Never stop sending email, and every one of them is making money and that’s really what we have been doing.

Steve: Is this only for 1st time purchasers?

Mike: Yes, we have only set up for 1st time purchasers right now. Actually the way we have it set up and I’m actually looking at the rules right now, is that if they haven’t made a purchase … If they made a purchase before, but it’s been more than 120 days and this will go back out again. If they are buying for a 2nd time within 4 months then this will not go out a 2nd time.

Because we are new, we haven’t set up … We are going to have emails sequences for frequent buyers, so anyone that has spot more than 3 times or 5 times we will send them a special sequence that says, “Thank you so much for being in our valued customer client,” kind of email, because we are still new, we just haven’t had a chance to set that up yet. We haven’t had enough people that are falling in that bucket.

Steve: Cool.

Mike: Moving on with this email sequence is a few more that we send out. At this point now we go to every week, we don’t want to keep the frequency up to every 3 days, and we don’t want to annoy people. So we send out an email after 14, 21, 28 and 35 days and to quickly review those without spending a bunch of time here. The one that goes out of the 14 days is more about the ColorIt brand, exploring the brand. We tell people we also offer journals and sketch pads, pencils. We are going to have jelly pens soon. People who aren’t aware that we have these other things, then this reminds them.

This email again, just likes every other one in the chain is generating money. The next one is now we go to reminders. A lot of these next emails are reminders, so we do a social media submission reminder. Then we do a referral program reminder, because these are things that are really important to us. Now that we are at the 35 day mark, which is about 5 weeks I should say. We do a monthly special email, and we are constantly running a monthly special and we can have a link in this email to our monthly special page.

We don’t know what the monthly special is going to be because this is a part of the flow, but we know that there will be a monthly special there when they run there, and legitimately those special is different every month. We sit down, a few days before the end of the month and dream up what combination of products we want to give away or sell I should say at a discounted price, and we direct them there. Basically our hope is now that it has been 5 weeks maybe they are now ready to go buy something else again, or be gently reminded about the special, and that’s doing pretty well.

From there we have actually started developing this; we haven’t even implemented it yet. Basically starting at the 2 month mark we have a 4 sequence email trying to go out, and I don’t have the results for this yet, but basically it’s just a discount ladder. If they haven’t purchased in that time frame, let’s give them a coupon, maybe it’s 5% off, if it’s after 3 months it’s 10% off and maybe after 4 or 5 months, if it’s been a lot, so it’s like what do we need to do to get you back, here is a 20% off coupon or whatever it might be. Then if they just don’t buy at that point, we probably remove them from our list.

Steve: Okay, cool. It sounds like you got a lot in place, and there is a lot to be put in place as well.

Mike: Yeah, it can be overwhelming, at first I’m sure I have been rattling off a lot of stuff here, I apologize for being long winded, but there’s obviously quite a bit to it. You just have to start somewhere, right? Write that first email, then write the second email. We basically, we are trying to add at least 2 emails per week, that’s kind of our internal policy here whenever we’ve sat down and set a goal of getting at least 2 more emails written per week as a part of some chain.

We are just slowly adding on to it and the great thing is all the emails that we wrote 3 months ago, they are still going out. This is all automated, so every month we are building the number of emails that we have sent and we are building the revenue that we’ve received from email, every month, month over month it is increasing.

Steve: That’s awesome. I like that slow and steady approach where you just have a goal and overtime you going to have a ton of … Getting a lot of stuff done overtime.

Mike: Yeah, definitely.

Steve: Cool Mike, we have been chatting for quite a while, and I want to be respectful of your time. Where can people find you if they have any questions about what you are doing?

Mike: Like you mentioned before we have an e-commerce specific website called ecomcrew.com. You can hit us up over there on the contact form, or you can contact me directly if you wanted to at mike@terran.com, Terrence or LLC Holding Company doesn’t really mean much of anything. It’s just a site that we have, but either ecomcrew or mike@terran is the best way to get me.

Steve: Awesome, hey Mike thanks for coming on the show. I’m sure the readers, the listeners learned a lot today.

Mike: Yeah, thank you so much, it’s been a pleasure.

Steve: All right man, take care.

Hope you enjoyed that episode. Mike is a good friend of mine who really knows his stuff, and what I like about him is that he is willing to try every marketing tactic very thoroughly and he has an open mind. For more information about this episode go to mywifequitherjob.com/episode119, and if you enjoyed this episode please got to iTunes and leave me a review. This is by far the best way to support the show and please tell your friends, because the greatest compliment that you can give me is to refer this podcast to someone else either in person or to share it on the web.

If you are interested in starting your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to mywifequitherjob.com for more information, sign up right there on the front page, and I will send you the course via email immediately. 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.

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118: How To Transition From Amazon To Your Own Ecommerce Store With Kurt Elster

How To Transition From Amazon To Your Own Ecommerce Store With Kurt Elster

Today, I’m thrilled to have Kurt Elster on the show. Kurt was introduced to me by my good friend Nick Loper who I had back on episode 80 of the podcast. Kurt runs EtherCycle.com where he helps private label sellers launch their own ecommerce websites.

Specifically, he’s a Shopify platform expert who helps Shopify users uncover hotspots in their designs to improve their conversion rate. Anyway, I’m a firm believer you really need to own your own platform in addition to Amazon which is why I brought Kurt on the show today to discuss the transition.

What You’ll Learn

  • How to get traffic to your site.
  • How to create a high converting website
  • The biggest mistake that new store owners make
  • How to transition from Amazon to your own site
  • Kurt’s recommendation on shopping cart platform
  • Whether Kurt recommends working with the spouse.

Other Resources And Books

Transcript

Intro: You are listening to the My Wife Quit Her Job Podcast. And if you are new here, it’s a show where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now I don’t bring on these famous entrepreneurs to simply celebrate their success, instead I have them take us back to the beginning and delve deeply into the exact strategies they used early on to gain traction for their businesses.

Now if you enjoy this podcast please leave me a review on iTunes, and if you want to learn how to start your own online business, be sure to sign up for my free six-day mini course, where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email, now onto the show.

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 thrilled to have Kurt Elster on the show. Now Kurt was introduced to me by my good friend Nick Lopa who I had back on episode 80 of the podcast. And Kurt runs ethercycle.com, where he helps private label sellers launch their own ecommerce websites. Now specifically he is a Shopify platform expert who helps Shopify users uncover hotspots in their designs to improve their conversion rate.

And incidentally I’m a firm believer that you really need to own your own platform in addition to selling on Amazon, which is why I brought Kurt on the show today to kind of discuss the transition from Amazon to your own branded website. And with that welcome to the Kurt, how are you doing today man?

Kurt: I’m doing great thank you for having me, it’s my honor and pleasure.

Steve: So Kurt how did you kind of get into ecommerce, and why did you decide to start a consultancy and specifically a Shopify based on?

Kurt: Sure I mean so — I mean I have been involved in ecommerce in one way or the other over the last decade. I was selling counterfeit t-shirts on eBay in college. I didn’t know enough to know that there was like intellectual property was a thing, and then from there I was product manager for a drop shipper, and then started my own web design agency. And that was its own business learning curve going from generalist web design back to my roots as ecommerce, and then finally niching down to just the Shopify platform.

So I’m biased, I have got a horse in the game, but I really, really love the Shopify platform, because they do so much to foster a community. There is always someone available be it an expert or other store owner who can help you whenever you have a road blocker problem, plus all the great apps and services that integrate with it.

Steve: So just curious, did you start out supporting a whole bunch of different carts?

Kurt: Yeah we actually — so overtime we narrowed down. Originally we were doing like — no we went from like generalist to doing work for creative agency. So I have worked with huge brands like [inaudible 00:03:15]. But at the same time we were part of the Shopify experts program, and we were getting traction there.

So I said well maybe I foolishly said let’s expand by doing other platforms, but none of them were as satisfying as Shopify. And finally about two years ago I said wait why are we doing anything other than the thing we love. And niche down to just Shopify. So even though like as a service person having a niche is great just as an ecommerce having a niche is great.

Steve: Interesting, so was there demand? I’m just trying to get an idea of like the landscape right now. Was there demand for some of the other platforms, or you did you just choose one just for the sake of niching down?

Kurt: I chose it because we were authentically happy with Shopify. Like every time we finished any project we kind of reflect, and we were a small team at the time. We’ve always been three people, five people now, but we kind of reflect on like what — was that project good or bad, how do we feel about it? And it was Shopify was like 99% of the time we are like wow that just felt easy.

And that was what we were, why we chose to stick with it. But no we had worked with BigCommerce of course, LemonStand, Magento; I think are the other ecommerce platforms we used. And they’re good. Yeah there is really no bad one, they have slightly different features. But again with Shopify I think the huge advantage we are getting is that community.

Steve: Okay and then in terms of open source is that still popular at all just based on your experiences?

Kurt: I don’t think nearly as many people are rolling their own anymore just because you get in into such — no it’s probably — its technical that as soon as you — if I’m on Shopify I worry about ecommerce. Versus if I’m on — if I have got an open source thing, now suddenly I’m in the IT business as well, so I need to worry about like setting up my server and keeping things secure and there is all these new problems that get introduced when you go open source. Not that open source is bad.

Steve: So would you say that you can do everything that you want to with a fully hosted platform that you could probably do with open source even though you own like all the code?

Kurt: At this point through all the extensions and services and apps that are out there, that used to be the critic as well. Oh you are limited, I don’t think it’s the case anymore and especially it’s never been the case design wise.

Steve: Sure, of course.

Kurt: Shopify has always said hey you can access to everything design wise, don’t worry about it. And there was kind of a misunderstanding where people were like, oh you can do responsive, what are you talking about. But no, the limitations seem to have worked themselves out.

Steve: Let me ask you that question in a different way. Is there anything that you wish that Shopify for example could do where you felt that you would need more control?

Kurt: That’s a great question. So one of the — well a couple of common feature request, there is no native wholesale solution for Shopify that maybe other more enterprise focused platforms might have. That often is a common request that tying its people, and there is ways around it. I mean my answer is run two stores and one is a sub domain like wholesale dot whatever .com.

So that’s a common request and for people who have a ton of products Shopify doesn’t necessarily do nested categories the way you might like typically think of an ecommerce set up. It’s all individual collections and that could trip people up.

Steve: Any complains on the check out?

Kurt: Well so the number one issue is in the check out that’s the one template you are not allowed of total control over, you are not allowed to mess with. There is a number of workarounds for it, so you can use translations to change labels to whatever you want. And you now could style it to match your form. But I think it’s a very clean checkout, I think it’s whether they say sort of now, I think its inspired by Amazon because you get transitioned from store into this very clean white easy to use check out. I like it a lot, and with qualified traffic it converts very well.

Steve: Okay, and so it just sounds like in general you can do most of what you want with Shopify with the exemption of maybe some major things that owning the code might actually help.

Kurt: Yeah, once until you are out like extreme some kind of like extreme Enterprise level thing with either like a million products or crazy features like, oh I want to build a market place. And there is still waste too, there is always some clever walk around like it never seizes to surprise me the stuff that people manage to come up with. So even if a feature is not native there is some clever guy out there who can do it.

Steve: Okay, and so what I was going to today Kurt was a lot of people are selling on Amazon right now. And it’s really easy to kind of get addicted to Amazon because the money just comes and you don’t have to worry about anything. But in the long run you really need to have your own platform, so from the perspective of an Amazon seller who only sells on Amazon I would like you to kind of walk me through the process. Like let’s say I came to you as a pure Amazon seller, how would you kind of guide to the right way to design my ecommerce store?

Kurt: Sure, well and so if we back up the — I get a lot of people who are — they have established businesses on Amazon. And Amazon is great because it’s a market place, they are delivering the traffic to you. But you don’t own the customers and you are at the whim of Amazon, so when people come to me and they are on Amazon and they want to move to Shopify. Often I’ll say, “Well what’s the impetus for this, why do you want to do it?”

It’s something like well I want to own my own audience, I want to build this relationship and I can’t do it with Amazon. And I have got this single point of failure, like for some reason you upset the Amazon gods. Now you’ve got this single point of failure, this single channel versus if you are on multiple channels Shopify being one of them, you are much more in control and you don’t — like it’s diversification.

Steve: Sure, sure.

Kurt: So I think that’s the reason most people want to make that switch. And it’s not that they want to switch, they run both concurrently, and it works well. But probably the biggest thing that people run into is when they switch to Shopify or rather add that as a channel to their business, is they are not used to getting traffic. Like that’s never had to — with Amazon you are paying this big percentage to them, but they are delivering the traffic to your door. Versus Shopify is like okay now you are on your own, and that’s a hard transition for a lot of people.

Steve: Plus you have to worry about conversion optimization, getting the website looking trustworthy, and all those things as well.

Kurt: Yeah, and I think, probably the biggest problem you run into with setting up an Amazon store on Shopify is that they don’t have that collateral that adds that trust, that adds that confidence, because it’s very much like I have optimized my product title. Amazon people always have great photos, I’ve got a good product description, and I can pick it from some reviews.

Beyond that there is rarely content marketing that’s come along with it for me to use. There is rarely an about page. There is all these other trust indicator pieces of a business that when you are coming purely from Amazon are often missing.

Steve: Let’s start from the beginning then. Let’s say I’m coming to you for the first time, what are some of the thing that you will kind of walk me through, or questions that you might ask me?

Kurt: Number one is I want to know who your audience is. What kind of people are buying your product? Who is it for and why are they buying it? An Amazon seller may or may not know this, but what is fantastic about Amazon are the reviews. I will go through, like when I see a product that has got 1300 reviews, I get excited, because I will start going through those reviews. First thing I could do is I get a great sense of who’s buying it, why they are buying it, because on the reviews they reveal it.

You now know the pain and the problem that you are solving in people’s lives which automatically … I want to start with; my first step is what’s your positioning, so it’s who you sell, like what are you selling to who and why? Ideally is there a unique selling proposition there, some kind of competitive advantage. Often what the Amazon seller tells me is different than what the reviews tell me. I have discovered like people don’t necessarily know what they don’t know, so going through those reviews is enlightening.

Steve: Can you give me an example of when they will be a disconnect there?

Kurt: Sure, I will use, well this isn’t the best example because they work purely on Amazon, but I have a client who sells replacement rubber straps for Rolex watch bands. We thought it was people who wanted to customize their watch, they have got a fancy, “I spend $8,000 on a watch, why not have like 6 straps, and then I can change it out depending on my mood.”

That was our thinking and that makes sense, and then when we started asking people, and we started going … They started selling on Amazon, and I started looking through the reviews. We discovered it was actually a little bit of the opposite. People, yeah they wanted to custom like customize their watch sounded cool, but what really was going on was they spent $8,000 on a watch, and they wanted to wear it all the time without scratching it up. They were saying things like, “Now I can …”

One review was really enlightening, it was a launch, she was, “Yeah, my husband bought me a Rolex, I wear it to work, I’m a nurse, and I have to run my watch through an auto-clave and I got sick of scratching up or messing up the bracelet, so I just use my evers [ph] band.”

It was this incredible thing where it’s like, “Oh my gosh, you have a literal blue collar worker using the straps so they can wear this watch every single day.” That wildly changed how we saw the product. We took the language from those reviews, and then suddenly like you get an SEO benefit and these better selling propositions when you use the language your customers are using in those reviews.

Steve: Interesting, I would imagine there were some people who wanted it just for the fashion as well, right? How did you decide to do that versus people who didn’t want to damage their watch? Did you have two separate pages addressing both audiences, or did you focus on the protective aspects?
Kurt: That’s a good question, and no because the reviews were so overwhelmingly saying things like. “Yeah, now I can go swimming, now I can ride my bike with my Rolex.” It was always about doing some, usually some kind of active sport.

Steve: Okay.

Kurt: We ended up like reshooting customer action photos to include, and reusing that language and saying, “You are protecting your investment.” And using this entirely different language we hadn’t even thought of that was revealed once we had those reviews coming in and we were able to read that.

Steve: I see, let’s say you didn’t have access to these reviews, were there any other ways that you would find to get an idea who your target customer was?

Kurt: Yeah, so a couple of ways. One is, so with Amazon, let’s say you are starting with Amazon, you don’t have your customers email addresses which is a pain, but you do have their phone numbers, so you could drop, if you have had enough of them, you could drop all those phone numbers into a custom audience in Facebook. Facebook will look them up and then using a tool called Audience, to sort of match those phone numbers to actual accounts.
Then using a tool called Audience Insights, it will give you demographic information about the person. It gives you the basic stuff like age and gender, location, but then it gives you all these really fun behavioral data segments, well kind of give you an idea of what the person is like. That can be very helpful.

Steve: Just curious, did you run this process on the watch band company?

Kurt: Yeah, that one was … It wasn’t detailed enough where we got info that didn’t surprise us at all, it was like it’s men and excuse older, like that made sense.

Steve: Sure.

Kurt: But then within the demographic, you have some cute names for some of these demographics, and I think the one that we overwhelmingly have for [inaudible 00:15:35] was, I think it’s called skyboxes and suburbans, that’s their cute name for Yappy.

Steve: Okay, so there is nothing surprising there, and so it sounds like you took all that information and used that in your unique value propositions on the site.

Kurt: Yeah, you want to use … You want to tweak all your language around that. Essentially when you are talking to someone, like your website needs to be talking about the customer and not you. All the language needs to be you not I focused, and then really we want to hold up the mirror, we want to show someone a better version of themselves through our product.

And we could do that when we leverage that language from the reviews where people are saying that these are the phrases people use to describe what they like about it, what they got out of it. When you add that to headlines, taglines, titles, descriptions, all of that, it adds up into a very compelling experience where people will often want to buy.

Steve: A common question I get asked is like for people in Amazon often times they are only selling one product or a bunch of despair products. In this case was it just watch bands, or did they have a huge variety of watch bands?

Kurt: They had both, and what we ended up doing was, you want to separate not by product but by audience. So they were selling like low end replacement straps for whatever watch, and then they had this high end line for Rolexes, so we separated those into two separate brands.

Steve: Okay.

Kurt: It comes down to what the audience says, so if I’m selling, you know for all my products are sporting goods, okay I could probably put that into one Shopify store, but if it’s like, one is yoga mats, and the other thing is a gun cleaner, I’d probably want those, it’s different audiences. You probably want to run those as two separate stores. At the end of the day relevancy is absolutely critical, so that’s what you want to focus on is keeping it as relevant as possible.

If you are in a situation, you are in a tunnel, like you’re kind of shoot, I got 10 products and they are all totally different, well exploit the 80/20 rule, take the two best performing products and make a store for those. If that works out then go to the next one.

Steve: Using this watch band example again, let’s say we have a store selling the high end ones, but let’s say we have only like 4 or 5, do you kind of structure the website differently depending on the number of products that you offer?

Kurt: Yeah, I actually prefer … Stores with fewer products are easier, and not just from a stand point of oh I have to copy and paste these product descriptions, but from the customer stand point. The fewer products you have, you are really presenting the person with fewer decisions, you’ve got a tighter sales funnel, you are really making life easier on the customer and thereby making it easier on yourself to sell.

Steve: In the case of these watch bands, was the website pretty much like a single sales page like format?

Kurt: No, so what we did, the issue we had was rather to increase, the same strap actually fits every Rolex, or like a majority of them, except for some oddballs, but we didn’t tell people that. We instead walked them through this process where we made them pick their watch first, so we said, “Okay, choose which watch you have.” Then it would show you that strap, because buying all these Rolexes would be prohibitively expensive. There was just a mark up in photo-shop.

But we chose the strap on your specific model of watch, so in doing this again that concept of holding up the mirror, like we wildly increased the relevancy of this to the customer and they are able to visualize it on their own watch, and then they are willing to spend 2, $300 on a watch strap.

Steve: Let me ask you this question, let’s say this particular company sold a bunch of different Rolex accessories, how would that change how you would structure the site?

Kurt: I want to make sure, if I’m adding new products to my product mix, I just don’t want to do it because it fits the audience, I want to do it because it fits the audience and compliments what they are already buying. Ideally I would look for stuff that’s up-sales, like this incredibly successful up-sale they had was one day … Everyone who buys the strap obviously has to put it on the watch. You can take it to a jeweler, but you probably you are going to do it yourself.

What they ended up doing was selling private labeling, a very nice little tool kit and it’s offered as an up-sell, and it’s probably like 90% of orders, the person will buy the strap, and the tool to change the strap.

Steve: Interesting.

Kurt: You sort of want to work backwards and look for up-sales to your existing product mix.

Steve: I’m just trying to think right now like if this person, let’s say he specializes in watch accessories of which Rolex brands are only one, and let’s say they sell replacement parts, I’m just trying to get an idea, sometimes it’s a pain in the butt to just open another store, right?

I’m just trying to get an idea of how you would integrate display of products onto a site. Would you choose one of your main sellers, and then target the whole site towards selling that one product, or if you had like let’s say two or three best sellers that were somewhat despaired, but all fall under the umbrella of selling watch accessories, just trying to get an idea of how you would structure the site in that case.

Kurt: That’s a good question. Probably I would look by use case, where at the start I want to present them like here is the pain I’m solving, so let’s say we did, it wasn’t just watch straps, it was like watch straps, watch tools and cases, so then we could sell them like watch winders, watch boxes and watch rolls, like a tool. We’d say, I’d probably present that as like 3 featured images on the home page that say store your watches, maintain your watches, and customize your watches.

Steve: Okay.

Kurt: I’m always doing it by what pain they have.

Steve: Sure, okay and then you would probably just have 3 choices where they could just jump to the category page, and on the category page, you would probably focus on the value proposition message.

Kurt: Yeah, once I’m in there and I would strip away everything else, like they have already self selected, they’ve told me what they are there for, so I don’t want anything else getting in the way. I want to really increase that signal to noise ratio, and then after they’ve made the decision to buy, then maybe I might offer an up-sell, or I might offer a bundle, something like that.

Steve: You’re talking about the category page; you would remove the navigation to the other categories at that point.

Kurt: Well what I see is like, okay so let’s say the collection page or the category page, so from the homepage, we try to ask them what their problem is, so if they say, “Oh, I need to store my watches.” When they click on that, we send them to a collection page deliberately, a paragraph or two about the proposition, about the description, and then our selection of watch boxes or whatever.

Then in Shopify actually I would sort them by bestselling, as one of the nice options. So essentially you have self optimizing category collection pages, because you can always list. It will automatically take the thing that sells the most and push it first in the list.

Steve: Right, okay. In terms of just SEO and content, do you try to include content on all these collection pages? Is that important?

Kurt: Ideally yeah. I mean, is it going to make or break to you? No. Does it going to absolutely increase the chance that someone finds it in a Google organic search or someone links directly to this? Essentially if you add description to a collection or category page, its going from, here is a grid of products to landing page, and that’s how like let’s take everything like a landing page, and really that’s just a content issue.

Steve: I’m just trying to … I’m just wondering how you rationalize having content versus pushing the products further below the fold.

Kurt: I’m still out on how the fold really matters. If I have really compelling relevant content above the fold, I think that’s going to get people to scroll and really that’s kind of a design question. But ideally I’ve never shied away from long sales pages, from more content. It’s never been a problem.

Steve: Do you typically work with people who have just a handful of products versus someone who has like a library of hundreds of products?

Kurt: If someone came to me and said, “I have got hundreds of products and I want to move those to– I want to go from Amazon to Shopify I would say. All right, which 10 do you want to work with? What’s your best seller? Building a store, I mean you are setting yourself up for failure to begin with, like if you are building a store with hundreds of products. It’s really hard definitely moving from, especially moving from a market place to Shopify, I wouldn’t recommend it.

Steve: I mean if they are all related products, would you still try break them apart? Like you know watch example …

Kurt: It really comes down to how, again it’s like if they all fit the same audience, and they solve similar problems then you could make it work.

Steve: Okay, so let’s switch gears a little bit and talk about traffic. I understand you help some of the folks with traffic, so what are some of the first things that you tell these people who are just completely not used to driving their own traffic? What do you recommend?

Kurt: Well so number one is first recognize that. I mean the thing the you’ve been paying for Amazon, the whole time whether you knew it or not is they’re delivering these wallet out ready to buy people to you? Fundamentally if I am on Amazon, I’m probably not even in research mode. I already trust Amazon, I’m there looking for a product, I’m going to add it to a wish list or buy it.

Not only do you already have the traffic, but it’s really qualified traffic, and making that mindset shift to your own store. Well it’s like okay you’ve got to get the traffic and then you have to make them trust you, and then you have to get them to buy you. You’re really moving into this concept of a sales funnel, and that’s something people aren’t used to. The first realization is someone will probably have to visit your store maybe 5 times before they buy, and they don’t know you. They have to trust you.

If I walk to a physical retail store right now, I know fundamentally like there is payroll, and business licenses and leases were signed, there is implicit trust versus your random Shopify store in the interne. If I have never heard of you it’s like the equivalent of a guy in a parking lot, popping his truck and saying you want to buy some t-shirts?

Steve: Right.

Kurt: It’s totally different, so adding those trust indicators.

Steve: Let’s talk about some of the trust indicators, let’s be specific. What are some of the things that you recommend?

Kurt: I think number one is, two things. I think there are really two parts to these trust indicators. Number one is availability, if you have got a toll free number, if you make yourself as available as possible, so a live chat with an actual person manning it, a toll free number, a public address. Those things whether or not people actually choose to reach out to you, we don’t care if they reach out to you or not, just the fact that you’ve made yourself available and professional makes you look trustworthy.

Steve: Do you think a toll free number matters anymore these days?

Kurt: It’s kind of funny; I mean you are right to ask because who pays by the minute anymore? It doesn’t matter, but I think we are still ingrained with this idea that, “Oh toll free numbers means it’s a real business.” And they are so inexpensive with services like Grasshopper, and I’m sure there is half a dozen others. I still recommend it. I think you look better with a toll free number than a local number.

Steve: Okay.

Kurt: I mean the image you are fighting against is you have to assume that when the person comes to your website and hasn’t heard of you, they assume that you are some guy in your mum’s basement, and you have to prove otherwise. I think a toll free number is one of the ways to do that. That availability, that trust is really it’s about risk reversal, spelling out a clear guarantees return policies, that sort of thing helps a lot.

Steve: Okay.

Kurt: I think the big advantage you have that a lot of people pass on, and it’s frustrating for me is be a person not a brand. People relate to people not brands, and when you leave Amazon, that’s one of the great things you get to do now, is you get to be yourself, you get to be an authentic person with an authentic voice. I always recommend people at the very least have an about page that tells your story, has your pictures, says who you are and people can relate to that.

Steve: Okay, what about getting actual traffic. These are all great I guess conversion things that you’ve been mentioning.

Kurt: Yeah, I put all that stuff, everything we’ve talked about probably it falls under conversion for sure.

Steve: Yeah, what about getting the actual people to the website, what are some of your recommendations there?

Kurt: Let’s say, the only guaranteed thing is PPC, is pay per click, and there is no one winner, but I would say absolutely for sure do remarketing. Earlier on I said that someone might have to visit a store 5 times before they buy. Well remarketing is going to help you make that happen. When someone visits the site, they get cookied, and then they’ll see ads for let’s say 30 days about the product they viewed.

Steve: Do you actually run these campaigns for your clients or no?

Kurt: Yes I do.

Steve: Oh you do? Okay, so what has been more like, so do you use Facebook and Google for this?

Kurt: I no longer … I recommend both, but I personally have focused on being a Facebook ads expert. Google is too fast a landscape, I think for anyone to really master Google you have to be doing it full time. I recommend someone else to tackle it. Google product listing ads I think is a phenomenal place to start.

Steve: Can you explain those by the way, just in case some of the listeners don’t know what that is?

Kurt: Okay, so let’s say you search for something on Google, we search for men’s wallet, and then you’ve got the first thing at the top of your search results are those text ads. That’s just a regular traditional Google ad, this text ad, they are really expensive now, they are hard to get to convert. And then, below that are the organic results, which that’s what we think as traditional SEO, and then in the upper right, you’ve got like a picture of the product with the title and the price. Those are Google product listing adds, and that’s just a data feed that your Shopify store provides to Google, and then it will just automatically run ads against it.

They are actually significantly cheaper than running the text ads, and once you’ve got the product listing ad going, really what you’ve done is Google understands your product catalogue which means you can now do what are called dynamic remarketing ads. So let’s say someone goes to your site, looks at a pair of shoes and leaves, well Google knows that’s the last product they looked at, and now an ad with that specific product title price will follow them around the web like a lost dog.

Steve: Just curious, why have you moved away from using Google remarketing?

Kurt: I still recommend it, I just don’t manage it myself anymore.

Steve: You don’t manage it. Okay.

Kurt: Just because it’s tough, I mean it’s genuinely– there are so– when you log in at the Google Ad Words dashboard, there are so many knobs, dials and switches, and it’s updating all the time that it’s tough to get it going, and say like…

Steve: That’s correct; it is quite intimidating for a new user.

Kurt: Yeah, I think it’s intimidating and then for me it was frustrating there like I had set something up and then a month later something breaks. I’m like I got to go fix this, and if you are not absolutely on top of it and I think really like sleeping breathing AdWords every day, that’s just bound to happen.

Steve: You know it’s curious that you said that like, so I run all my own campaigns, and Google like what you haven’t set up it’s a lot more hands off than Facebook in my opinion. I was just curious what your opinions were on that, because Facebook you constantly have to be rotating your creatives and testing new things, whereas AdWords which is like search based, you can pretty much set it and then check up on it every couple of months.

Kurt: That’s a solid point. Yes, I think especially when dealing with Google product listing ads, that’s absolutely true. You set it and then you are good, until it breaks, and ideally usually it shouldn’t for months if it’s set up once correctly. Verses Facebook ads, you get into this problem of ad fatigue, but I think it comes down to having highly relevant customer audiences, and then really reducing the length of time they can run.

So if I set, I could set a window where I say all right I’m only going to show people, assuming I have enough traffic to pull this off, you could build the sales funnel where like a person sees an ad only within 24 hours of visiting your site, and then from 24 to 48 they see a different ad. You could run that out to a week, where you have– they see a different ad everyday for a week, and then if they haven’t bought after that, we can assume they probably weren’t going to begin with, and stop showing them ads.

Steve: Let’s talk about your Facebook ads strategy actually since you seem to run those for clients. Let’s take this watch band example again; can we just talk about how you would structure the campaign?

Kurt: Yeah, absolutely. I think the more segmented you can make it obviously you are going to increase relevancy, but with, and that really comes down it’s like a function of how much traffic you have. But the basic, the most basic sales funnel in Facebook that I would recommend people setting up, has four steps in it. The first is we want to bring people who’ve never heard, we’ll call them anonymous people, people who have never heard of the brand before, and we could do that using a look alike audience.

A look alike audience being we give Facebook, let’s say we have 1000 customer email addresses, and they’ve opted in to our email list. So we give that to Facebook and we could show Facebook will find those people and we could show ads to them if we’d like, or Facebook based on that amazing and kind of creepy behavioral data will target up to let’s say like a million to 2 million people in the same country that look like your customers.

And they buy mailing list form big box retailers and credit card companies, they know everything about you, like if you bought a pregnancy test, they assume okay here’s like parents who are trying to get pregnant, like everything they know it, it’s creepy. But it means we can have very relevant ads, and we can do it on autopilot. So the first one would be ads just introducing people to the what we are doing, to the brand, to the product, to the problem, and getting them to the website.

Steve: What would the creative look like in that case?

Kurt: That’s a good question. We want, generally I’ll try and pick something that’s like an action shot that shows someone using the product, so really hold up the mirror and have that customer avatar out there. And especially because we’ve got it in their news feed, it’s less disruptive and fits into their news feed, and that’s actually they are more likely to check it out and read that headline, read whatever our tagline is.

We just– all we want for them to click through and visit the site, because then we’re going to cookie them, and once they are cookied, we’ll exclude them from that prospect list where they are seeing their first ad, and instead show them ideally probably like a carousel ad, so our 5 they got these sliding carousel ads, they are wonderful. So we show them say our 5…

Steve: Can we back up a little bit, sorry so that first initial ad, like what would be an example of a headline for watches let’s say just off the cuff, to get them to click?

Kurt: Good question, since I’m assuming you are editing this later, let me look it up.

Steve: Okay, yeah.

Kurt: I would literally do like for that and say something like, we may say something as simple as Customize Your Rolex, and then show a photo of a watch on someone’s wrist. What’s nice about Facebook it’s especially organized with Shopify, it does conversation tracking, and it tracks value of sales, you could figure your cost per acquisition.

Let’s say you give it 5 images for 1 ad, it will know which ones are converting, and then start showing that the most. So after a week of running the ad, I will just go back through, turn off the 4 that didn’t convert well or the 4 post converting, keep the top one and then like try like 4 variations on that, and you just keep going like that in a cycle.

Steve: The reason why I asked that question is do you entice them with some useful piece of content for that first ad, like what is the landing page of the carousel?

Kurt: Good question, so it depends on the product. You often will use, will take the product page and make like a really long form version of it. Much like Amazon we’re trying to bust every objection, so I’ll have kind of like a more narrative product description, ideally a video, customer reviews, just like a very, a longer sales pages is going to work better here, or even advertorial content. Maybe like a blog post, an article, something talking about the problem and walking through like this story of the narrative, like here’s how the inventor came up with this problem, and then had a successful kick starter, and you get them involved in the story.

Steve: Okay. You absolutely don’t want to send them like just straight to a product page, right?

Kurt: I think the worst thing you could do is just drop them on the home page or drop them on a traditional product page. You could make it like a very long form sales page will work well, or sometimes collection pages that have a really long description. Like we’ve made 10 collection pages and 2 decent landing pages, but no you are right, I mean just dropping someone on a whatever page and crossing your figures isn’t going to be the best.

Steve: Just curious, do you use incentives to get them to buy right then and there, or is the whole purpose of that first ad just to get them aware of your products?
Kurt: I assume, well I mean if they buy that’s fantastic, but I will generally, I just want to build that awareness. At first it’s worth it just to have I think a longer sales funnel and then I’ll be pushing, I try not to push especially discounts at first. I want to save those to later and not leave money on the table.

Ideally though if you have a lead magnet, like in an ideal world we could do, we introduce them to product via an article, so we’ve got like a 1500 word article with an interesting original story, and then that also probably includes the inventory, really makes it very personal. And then in there at the end we’re still not necessarily going to try and sell them anything, but if we can get them to opt in to a newsletter, now we can show them our Facebook ads, plus get them on an email list, and really rump up those numbers at touch points.

Steve: How do you calculate conversions and the effectiveness of the ad, given that like that first ad really isn’t meant to convert a sale, so do you measure the effectiveness of that ad based on like email opt-ins, how do you do the measurements?

Kurt: Well, in this case you can do it based on page views, you could do it based on opt-ins, but what Facebook does, you could define the attribution window. So if they view that ad, let’s say they click the ad and bought within 7 days, we would count it as a conversion like an assisted conversion, but a conversion nonetheless because the first ad was involved. And ideally like I had put one funnel into a single campaign, so that way I can track the whole thing holistically.

Steve: Okay. We’ve got them to our site, let’s say they haven’t bought yet, but we have cookied them, and then you mentioned the second ad is more of like a carousel ad displaying different versions of the product?

Kurt: Yeah, so let’s say for the second ad I love to do carousel ads, I just they are a little more engaging, and a carousel essentially it’s like 5 tiles, and each one can have a different link and it’s a different photo. And Facebook will reorganize them based on conversation. In there what we do — so if you had like, we could put your top five selling products in that category, or we could do the same product but have each of the tiles be one of the benefits of owning the product. Or we could do it go even broader and do it by category.

We are like all right here is the three categories of products we are selling, something where we just want to sell — we want the person to segment themselves. But if we are only selling one product yeah you just do five benefits of the products and a carousel ad, and that’s where we might — at this point we would send them to the product page, or an extended version of the product page.

Steve: Okay, and then still any incentives to buy at this point or?

Kurt: Not yet, no at this point we probably want to talk about a lot of times like the content or using those ads, or the landing page both are reviews. I always go, at this point once they are aware of it I just need to convince them with social proof; I think it’s the best way to go about it. We’ll do a lot of like quotes from customers and testimonials and reviews. And if we’ve got like big blogs or magazines that have reviewed the product, we want to include those logos and quotes as trust indicators in the ads or in the landing page. At that point…

Steve: So once gain this is like a separate landing page again, right?

Kurt: Yes, yeah we can either do — usually what it is, is a product template that we’ve made, that’s in an ideal world. I think you could get away — we’ve absolutely done this with a regular product page so long as it’s got a lot of content on it. And at that point we just — our goal then, so in our first our intent was get them interested. And now with this our intent is just get them to add it to the cart, and if they buy that’s fantastic, but if they don’t and they’ve add it to the cart we can actually segment them again.

At this point I’m just going to show them an ad that links them back to slash cart, and say something like your cart’s waiting for you, we saved it. And then we want to get into a risk reversal where we will talk about return policies and satisfaction guarantees. And this is the first time that I might introduce, if it makes sense for the brand that I would introduce a discount code.

Steve: Okay, and just curious how often do you rotate these ads, like what do you let the frequency get up to?

Kurt: So on Facebook we’ll do — like for that first ad we would set it to daily — we wanted to go for daily impressions for reach. And the worst it’s going to do is show them each one person one ad per day, supposedly what Facebook should do for us. And if I have got five ads in there, then I could show them essentially five different — I could show them five different ads for one business week which is that should be more than enough.

Steve: So that first add really you’re not even doing anything for conversation, it’s really just straight impressions, then maybe clicks?

Kurt: No, the first ad is just straight up like I don’t want that hard sale, I just want these people to opt-in to my funnel is how I look at it.

Steve: Okay, and for your best converting campaigns like what is like a typical cost per acquisition, let’s take this watch example.

Kurt: So this is the one issue with doing the sales funnel the way I have suggested it is you have to have the margin on the product that can support this. So if you’ve got a very inexpensive product with a very slim margin PPC is already going to be a problem, but doing these long Facebook campaigns is going to be tough.

And especially you can still do like the remarketing, you could probably still do it, it’s just that step one of getting new people into the sales funnel, that’s where you are spending a lot of money. But presently in my campaigns I’m shooting to get my cost per acquisition under $10, off top of my head the last couple I have worked on I have been in like probably $5 to $9 range.

Steve: That’s actually pretty good.

Kurt: Yeah, it works; it sounds a little crazy in that far — like a lot of people brace off that idea of like well the first ad we don’t actually expect to sell anybody anything. But when you make it part of this longer experience, it works well plus we are then — our third ad is that cart abandonment.

So people who just happen to visit the site for other means, they are still going to see those cart abandonment ads. And then afterward we can segment recent purchase service into an up sale campaign, where we try and sell them additional products. When you add all that together that’s when it really drives the cost per acquisition down.

Steve: So in your cost per acquisition calculations you are kind of including email also it sounds like?

Kurt: Yeah, in my ideal universe those are the two channels you want. You need some — I love Facebook for the segmentation. And then email works phenomenally well for turning people into brand evangelists. Like typically we’ll look at email as a thing that starts the moment they buy, because I want this very — I want to increase lifetime value of a customer. And again this is where we really give in to the advantage that you’ve lost with when you are on Amazon. Like the person buys from you and then they are gone, and you could follow up for customer service and that’s about it, versus…

Steve: I know for me I have problems like kind of tracking email conversions versus Facebook conversations. Even though I might have like just like a separate list or tag just for people who sign up through Facebook. It’s not, like I have to go out of my way to calculate that. Is that something that you do or?

Kurt: The only way around it, I don’t unless it’s like until you are spending — I mean it really depends on how much you are spending. But the solution to that is through UTM tagging, adding — just adding core strings so you could separate out who is buying from where.

Steve: So for all your emails like every link in your email is — okay so you tag it.

Kurt: Yeah, and the issue is because you are right, if someone like got an abandoned cart email and click through that email and bought let’s say you use I like Klaviyo for email, so Shopify because it integrates the best.

That might like that for sure will take credit and say, oh yeah this abandoned cart email earned $300. But then if they had clicked any of my ads in the last 7 days Facebook is going to say, oh they fall on the attribution window and they clicked our ad. And it’s going to take credit too, and it’s like oh you…

Steve: Yeah, it gets all like a little hairy at that point.

Kurt: But then the question is like well would the abandoned cart email have worked had they not seen the Facebook ad. So you get into — and it’s really, it’s hard to know like I mean you start getting to questions of human psychology and behavior.

Steve: Sure, sure, sure. I was just wondering of you had…

Kurt: Like at some point you are just like you could dive so deep that things start to get crazy.

Steve: Cool, Kurt hey we’ve been chatting for quite a while now. I also wanted to give you an opportunity to kind of talk about some of the other web properties that you have, and where people can find you.

Kurt: Sure, probably the easiest thing Google my name kurtelster.com. Sign up for my newsletter and I run my own podcast, the Unofficial Shopify Podcast, we talk about stuff like this once a week, and I send that out as an email to my list. Or if you are looking to DIY, DIY store of ecommerce bootcamp.com is a book on the topic that’s essential, a knowledge transfer to get all these thoughts out of my head into you. Or if you have an existing store and are just looking for ways to optimize my video series called ecommerce X weekly.

Steve: Cool man, hey good thanks a lot for coming on the show, it’s always interesting to see how other people run their ads and how they design their sites. And I think that the listeners will find your insights very useful.

Kurt: Yeah, I hope so. If anyone has questions that’s why sign up for my list and reply to it and I always — people who reply to my list I always make sure to answer.

Steve: Cool man, well Kurt thanks for coming on the show.

Kurt: Yeah, my pleasure.

Steve: All right, take care.

Kurt: You too.

Steve: Hope you enjoyed that episode. If you are only selling online primarily on third party market places like Amazon, you really need to own your own web property. And I hope Kurt’s traffic strategies are useful for you going forward.

For more information about this episode, go to mywifequitherjob.com/episode118. And if you enjoyed this episode please go to iTunes and leave me a review. It is by far the best way to support the show, and please tell your friends because the greatest compliment that you can give me is to refer this podcast to someone else either in person or to share it on the web.

If you are interested in starting your own online business, be sure to sign up for my free 6 day mini-course where I show you how my wife and I managed to make over 100K in profit in our first year of business. Go to mywifequitherjob.com for more information, sign up right there on the front page and I will send you the free course via e-mail immediately. 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.

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Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

117: How To Create A 20M Dollar Company With Only 2 Employees Selling Vacuum Filters With Chad Rubin

How To Make 20 Million Per Year With Only 2 Employees Selling Physical Products Online With Chad Rubin

Today I have Chad Rubin with me on the show. Chad is an ecommerce veteran who has been selling online for quite some time. He’s the founder of Crucial Vacuum which is a company that is worth 20 million dollars with only 2 employees.

He’s also the creator of Skubana which is software that will pretty much manage your entire ecommerce operation.

What You’ll Learn

  • How Chad got into ecommerce and why he decided to sell vacuum filters.
  • The challenges of selling on his own site.
  • How he exponentially grew his business by leveraging other marketplaces.
  • How he established a recognizable brand.
  • Why he decided to outsource his warehouse
  • His best traffic sources for his website

Other Resources And Books

Transcript

Intro: You are listening to the My Wife Quit her Job Podcast. And if you are new here, it’s a show where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now I don’t bring on these famous entrepreneurs simply to celebrate their success, instead I have them take us back to the beginning and delve deeply into the exact strategies they used early on to gain traction for their businesses.

Now if you enjoy this podcast please leave me a review on iTunes, and if you want to learn how to start your own online business be sure to sign up for my free six-day mini course, where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email, now onto the show.

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 have Chad Rubin with me on the show. Now Chad is an ecommerce veteran who has been selling online for quite some time now. He is the founder of Crucial Vacuum which is a company that’s actually worth $20 million, but he only has 2 employees which is pretty impressive. He is also the creator of Skubana, which is software that will pretty much manage your entire ecommerce operation. It’s been a long time, Chad and I had been communicating via email, but I finally was able to get him on the show and with that welcome to the show Chad, how are you doing today man?

Chad: I’m doing great, thanks for having me on.

Steve: Tell us the back story for Crucial Vacuum because like me who sells handkerchiefs, I think vacuum stuff is pretty random also, how did you get into this industry?

Chad: Yeah, completely non sexy niche. So my parents when I was growing up, I used to work in my father’s vacuum store. So he repaired vacuums, he sold vacuums, I was the under paid child. I would be working for him and I saw them struggle through the years and thought to myself I’m never going to be an entrepreneur, because if this is what an entrepreneur is like, I don’t want to do it.

So I decided to work for the man I went to college, I was first generation college grad. I went to Umass Amherst and went on to Wall Street right after college. So I majored in finance which was a deficiency my parents had. Then I got fired from the Street in 2009, early 2009 I was covering internet stocks. So I was giving advice to hedge funds and social investors to buy, sell, hold, Amazon and eBay and all other different internet stocks.

And my parents had a vacuum store; they were going out of business, so I said, “Mum, dad you guys need to be on the internet.” And they said son no one is going to buy vacuum parts on the internet. And I was like, I wouldn’t be too sure about that, and I started my own direct to consumer vacuum company called Crucial Vacuum, selling replacement parts and accessories direct consumer.

Steve: Was your parent’s store like the source of your products, or were you working together?

Chad: No, we weren’t working together. So initially I actually — I took their products and I listed it on a store front called Volusion, a really bad store front, but it was all that was available at the time. And then I also listed their products on Amazon. And when I went to go buy them from the distributor and sell them, I couldn’t get them at that same price.

Steve: Wow okay.

Chad: Because I was buying for 20 and selling for 24, I thought to myself wait a minute, this thing is made of like plastic and paper, why does it cost $20 and why can’t I make money on it? Why is there no margin? I started– really this was before direct consumer was the in vogue or the cool thing to do.

Steve: Okay.

Chad: So before Bobobos or Warby Parker or Dollar Shave Club, like the direct consumer game erupted yeah.

Steve: So for your parents though they were selling these same filters and such right, were their margins that low as well?

Chad: Well they had a brick and motor store, and they are located in a Wal-Mart shopping center. If you think about where do you buy a back TV, you buy either Target, Wal-Mart or you buy it on Amazon. So it wasn’t really a need to have a brick and motor like sell Mom and Pop store anymore. Well so my parents, their store was struggling to exist, and nobody was really shopping in a Mom and Pop vacuum store to buy their vacuum anymore. When was the last time you bought a vacuum at a Mom and Pop store? Likely you would probably go to Amazon or you go to Wal-Mart or you go to Target.

Steve: That’s true yes.

Chad: So they were struggling and like they just didn’t — they didn’t want any piece of the internet game. And I saw an opportunity to go direct to consumer, nobody was doing it, and the market was ripe. And I think there is a lot of naysayers in my life, they were like wait a minute, so your parents own a vacuum store, they were struggling and you think that you could actually make money doing this and be successful? And I was like yeah, I think there is a massive opportunity that nobody has conquered yet.

Steve: Okay so you noticed the margins were pretty low, and so I guess you just went straight to manufacturer?

Chad: Yeah, so the margins were low and I started sourcing products in Asia kind of– well initially I went on Alibaba and I started looking at — I compiled the spreadsheet. I had all these factories, I started sending them samples and comparing prices. And the goal of course is to get as close to the manufacturer as you can get. So there is trading companies out there, there are agencies, but I started building relationships and really started weeding out different factories in the process. It was based on price; it was based on the time to get the product, the lead time, the price and just I would ask them questions, like a great question is this– so I mean a simple question I started — I asked early on in the game is who do you sell to?

So if they tell me who they sell to I already know there is a trust factor. They tell me what they sell to the person, or hey here is the catalogue or here is the invoices we sell to the– that we give. Here is the invoices from this company that buys from us in United States. I immediately know that they are not the most trustworthy company to buy from. Well I’ll get like pictures of the factory and make sure they are a factory. I was really starting to build a relationship and Skype with them.

Steve: Did you ever have to fly over there at all, or you just everything would be on Skype and email.

Chad: Oh yeah, flying over there is fantastic. So you spend time with– like going to KTV to karaoke with the factory manager, it’s probably the best thing you can do in business. It’s like the ROI is tremendous.

Steve: Okay, we never did the karaoke thing, but we did go to dinner and lunch with our vendors and you are right. The quality of our stuff drastically improved after we did that. Cool, so okay so you got your vendors and so you started creating your own stuff, and then did you sell in your own website in the beginning or?

Chad: I did a mix, I did — so I started off on Volusion. Before Volusion I was using FrontPage, but Volusion…

Steve: Hilarious, okay.

Chad: Yeah, I guess I’m dating myself now, but Volusion I started playing around on Amazon and noticed that I would be just competing — when I was re-selling I was just competing for the buy box. And I didn’t really see an added strategy there. I just thought I was like — I was playing musical shares on Amazon with different sellers for different listings. I really wasn’t interested in that game.

So right out of the gate I literally immediately built a brand, and I always viewed selling on ecommerce like playing monopoly. You want to be on every part of the board to win, and that’s the flow I’ve always used. Now I sell online now, and I’m on 15 different channels.

Steve: Okay and so what was your first channel? You said Volusion, how did you drive traffic to your Volusion site in the beginning?

Chad: Volusion was a lot of AdWords, so I bought my first — so I started really small, I always started scrappy. I bought my first min, minimum requirement from the factory was one filter and I loaded that up on Google AdWords and I sold that right away. Then I did a couple of cases, and then I did a pallet and I did 2 pallets. I started with Volusion on Google AdWords.

Steve: Okay, and how much was your ad spend in the beginning?

Chad: That’s a great question. I was tracking at the time; I don’t remember what it is or what it was now.

Steve: Are you guys using AdWords still today?

Chad: Of course yeah, we do a lot of Google AdWords; product listing ads of course has taken over from text ads.

Steve: So in terms of your ads spend, do you do Facebook ads as well like what’s your — like what do you spend your ad dollars?

Chad: Ad dollars is really on Google AdWords, just on sponsored ads, now Amazon has something called Amazon spon [ph] like did plus I believe, where you can bid on certain keywords which is fantastic. But if you think about it with social media nobody really wants to go on Facebook to see a deal for a filter.

Steve: Yes, that’s why I was asking yeah.

Chad: So and I read Gary Vienna charts book back in the day, [inaudible 00:09:48] which I think set my perspective correct on social media. You just have to pick the appropriate channel. So for us like people who go to Twitter, and they yell about their vacuum all day long. Those are great opportunities for us because they are like, “Oh my vacuum smells, oh it stinks, or it doesn’t pick up anything,” and those are ripe opportunities to go in and talk to the customers.

Steve: So that’s interesting, so how do you find these complaints? You just do searches on Twitter or?
Chad: Yeah, you can search for vacuum sucks, vacuum cleaner, of course now we got like I mentioned before when we were chatting before the call, I’ve moved into a lot of new products. So I have moved into vacuums, coffee, air purifications, humidification, marijuana filters, pool filters, you name it, like we are just nailing every vertical possible, repeating that same success.

Steve: So back to Twitter, so it sounds like — I’m just trying to get an idea of what your main channels are. So you said AdWords which is a large portion. And then let’s not talk about Amazon yet, we’ll get to there in a little bit. And then you have Twitter, does that mean you have just like someone full time monitoring these Twitter channels or?

Chad: No, we just — I think we — Okay so if I have to break it down it would be Google AdWords, Fixya, which is like a repair site where people go on to ask repair questions. So we come across as a thought leader. We do a lot, we did a great job with YouTube videos, and YouTube videos ranked really well on Google, so it’s like free …

Steve: So videos like how to replace your filter and that sort of thing or?

Chad: Yeah, the whole bay. Yeah, with very keyword dense titles, playful videos and conversions are fantastic.

Steve: Interesting, so how do you get the person from the YouTube video to your site? Is the link underneath the video or a call to action with video?

Chad: Yeah, so the link is underneath the video. We did a couple of videos where the link is actually in the video itself. So it’s just like anything else. Like we are trying to provide value to people, and when they see that you are a thought leader and you are a fun company and they respect you, they are going to want to buy from you.

Steve: Okay and did you — have you …

Chad: So it’s no different on YouTube.

Steve: Have you run any YouTube ads or is it just straight organic?

Chad: Straight up organic, no YouTube ads.

Steve: Okay, and the way you got those videos to kind of rank was just through keyword research?

Chad: Well, no one’s doing it. So we do keyword research, we obviously already manufacture the part and we just, we invested in all the equipment. And we started just doing — we also had an actress come in and then we had an internal employee do it. So we just had fun with it, we bought the vacuums, we tested the filters, we threw them around, we catch the bloopers and we — and flew them in the video.

Steve: Kind of like the Will It Blend videos right, so to speak?

Chad: I don’t think I’ve seen those.

Steve: Oh well it’s just like shove an iPad in a blender and it blends.

Chad: Oh really.

Steve: You haven’t seen those?

Chad: No.

Steve: Okay like they shove like random things into a blender, they sell blenders obviously, and those videos started going viral because they were blending like all sorts of random stuff.

Chad: That’s cool.

Steve: Okay, so we got YouTube, any other channels that we haven’t talked about?

Chad: Affiliate marketing.

Steve: Oh okay, let’s talk about that. So do you use a standard network like ShareASale or?

Chad: Yeah, so we use ShareASale.

Steve: Okay.

Chad: And it comes back for a vacuum — like no one really wants to promote vacuum filters on their blog.

Steve: Yeah, exactly okay.

Chad: So but the interesting thing is that when you think kind of one step or move from what you sell, so for handkerchiefs I think about like Chivalry, right? So I would approach an affiliate blogger and say, “Hey like you are writing a blog on Chivalry or something, somewhere there and like I do handkerchiefs, so why don’t we integrate the two together?” So with vacuum filters it’s when I think about vacuum filters I think about two things. I think about mothers who are nesting, and they are having children at their home and they are concerned that children are going to like lick up dust bunnies, or I think about allergy sufferers.

Steve: Okay.

Chad: So you approach this like mummy bloggers, the allergy sufferers, and it’s a great network and niche to focus on.

Steve: So for your affiliate program, it’s actually quite a bit of work, because I run a small affiliate program and I noticed that you end up with just like a couple of good ones and then you end up with a bunch of crappy ones. Was there a lot of work involved in doing the outreach?

Chad: There is a ton of work on affiliate marketing, it’s not like you build it, you store it up and people will join.

Steve: Yeah exactly.

Chad: Like if you look at who is probably in your affiliate program right now, it’s likely like these deal sites like RetailMeNot who you are probably giving 5% affiliate commissions to, and if you lower them to a half a percent they’ll be fine with it.

Steve: So I was just curious how you got your affiliates. Like do you have like a dedicated person running your affiliate program or?

Chad: Well yeah, I mean we have people that are multi-faceted that are — I mean look I only have two people at Crucial now.

Steve: Yeah I know that.

Chad: So I do a lot of outsourcing too. I want to mention I do a lot of outsourcing on top of it, but higher value activities are kept in house, things that I don’t want to outsource. So on the affiliate program, like have you ever signed up to — do you use ShareASale?

Steve: I am an affiliate on ShareASale, I don’t — I’m not the like the store that runs an affiliate program on ShareASale.

Chad: So you are part of the network, right?

Steve: Correct, yes.

Chad: So that’s great. Actually you are on the other side of the equation which is fantastic, because now you can actually start looking at all of the competitors or all of the other affiliates in your space, and what are they doing and you can look at how much they want as a commission. There is a lot of research you can do on the other side on the back end, not as a merchant. So if you hit it from both sides.

Steve: I was just curious like what it takes to build up an affiliate program from scratch.

Chad: To build it from scratch, well it takes a lot of outreach, that’s …

Steve: Was that something that you outsourced? Like you only have two guys right, and then …

Chad: Well I didn’t always have two guys, so let’s back it up.

Steve: Okay all right, okay.

Chad: I did not always have two people at Crucial. I used to have 15 warehouse employees, maybe a little more and roughly about 10 clerical workers.

Steve: Okay, and so back then you probably had one of them do outreach for a while, okay.

Chad: Oh yeah, there has been a lot of work and there is a lot of cross pollination. So the people that used to be at Crucial that are awesome employees, I’ve now put on to Skubana to help me steer all that business.

Steve: I see, okay, interesting. So how are you able to go from what is it — it sounded like 30 people down to just two then?

Chad: So I would say the first thing is that I outsourced my warehouse to what’s called a third party logistics company, a 3PL.

Steve: Okay which one are you using, just curious?

Chad: One in New Jersey and I’m happy to — if anybody wants to contact me after this they can. You can reach me @chadskubana, also — so I did that. That took care of whatever, 15 employees, so I’d have to deal with managing certain individuals at a different economic status, or people that were smoking weed in the back of my warehouse or slipping like Irish whiskey into their coffee.

Steve: Okay, these things really happen I gather? Okay.

Chad: Yeah they do, there is a lot of things that happen, a lot of interesting things that happened.
But you know that was my core competency right. I was never trained to run a warehouse; I was trained, like for me I just — I thrive on the thrill of building businesses. So to me that was not focusing on what I was good at.

Steve: Were you using FBA at all?

Chad: Yeah, of course yeah we would bring the containers into the warehouse, and I would even be in the back once in a while labelling products. I’d put on the Beatles, my father-in-law would come in and prep FBA stuff and warning labels and suffocation labels on the packages too, like it just wasn’t good use of my time or his time or anybody’s time.

Steve: So can you comment on why you wouldn’t just send all your stuff to Amazon and fulfil from there versus going a 3PL and Amazon?

Chad: Because firstly Amazon is like a gateway drug, and they’ve made it really easy to sell in their platform but they have also made it hard to ever leave. So multi-channels fulfilment through Amazon is very expensive, and I never believe in a one channel strategy. That was never ever my intention to build — like there is a lot of sellers out there, and I was just at the Crossbar show and they have built channels. I call them channels.

They have built channels, they don’t build businesses, so they just are focused on FBA, that’s the only thing that they do, but for me there is a diversification strategy. I come from Wall Street, I always thought to myself they’ll never invest in a stock that has one customer. Hell no, there is too much risk. So why would I ever invest — why would I ever just invest everything, all my eggs in one basket on Amazon.com?

Steve: Okay, so you probably ship everything then to your 3PL, and then from there you ship stuff to Amazon?

Chad: Yeah we do a mix. So we’ll do, everything comes to the 3PL, they unload the containers and then I’ll do some stuff to FBA in the US, I’ll do some stuff to Canada. I have a 3PL in Ireland, and then we have obviously inventory here for our off channel sales.

Steve: Okay, so that sounds like you got rid of like more than half of your employees?

Chad: Yeah roughly, and then — I then kind of this opportunity with Skubana fell in lap. So I’ve automated, I took care of another seven employees with technology.

Steve: Okay, let’s talk a little — I’m sure the listeners don’t know what Skubana is. So you want to just give brief intro and how that came about?

Chad: Brief intro would be it is a software to manage everything after the checkout. We sit in the center of a market place or shopping cart and the customer, and we do everything in the middle to run your entire business. So any way or just quickly any way you fulfil like printing shipping labels, drop shipping, 3PL connectivity, multichannel fulfilment, FBA etc. Inventory, purchase orders, vendor management and analytics, and we do it all in one unified place, so you don’t need to use unbundled fragmented apps to run your business.

Steve: So while you had all of your employees you were silently creating this system on the side?

Chad: Actually it all happened at the same time. So obviously like there is a very rich history here, right? Like that’s what business is all about. You go through the struggle and the negatives become opportunities over time. Anything that’s painful becomes an opportunity. So I got rid of my warehouse. I had a lot of warehouse issues, warehouse employee issues. We got rid of that and at the same time I was unloading my warehouse. I couldn’t find technology to run my business.

So there is a lot of entry level software that’s out there, but I do a lot of order volume. I do about 60,000 orders a month. So for me I’m an enterprise seller, but there is these fragmented software that exist out there, entry level software that exist out there, but nothing that could actually run my business. I tried a lot of software, there is a lot of noise, and it’s kind of like — it’s all into — it’s like getting into a car and realizing there is no engine.

So I lost a lot of money, I lost a lot of hair and time using these shitty solutions. So and of course you can go with a different solution and they cost a lot of money. There is an implementation fee, there is custom development and there is channel advisor that takes a percentage of the revenue, and I’m really against percentage of revenue. So I decided — I just wrote an email to a bunch of buddies, I said, “Guys who can help me find an enterprise developer here in the United States to help me build what I think is the next generation e-commerce operations platform?”

And I found D.J. Kunovac to found the business with me. He came to my warehouse as I was getting rid of it. So he expected, he used to come to my warehouse and he thought it was going to be like Amazon with cranes and like robots. And my warehouse was a freaking mess, it was a jungle. And he was like there’s got to be something else out there, and we tested all these solutions and they all sucked, so we decided to build our own. So this all happened kind of at the same time and just, the opportunity was just too good to pass up on.

Steve: Okay, and so were you kind of debating whether to go with this software versus a 3PL, or were you going 3PL all the way?

Chad: So 3PL was happening no matter what. It was like my wife; she was like, “Chad you need to do something about this warehouse. It’s like it’s coming down to the wire here, and you need to get rid of this warehouse. It’s causing so much aggravation.” So the warehouse was already on its way out, but in the mean time I was using a shipping software, ShipStation to just gather all my orders.

And then from all my channels and I was still missing some channels, and then I have to export the orders to the 3PL. And then I would have to import them into ShipStation, but I would have to import Amazon-UPS, Amazon-FedEx, Amazon-USPS, and then all the other channels. And I had a full time employee just doing that. And yeah so that’s kind of how everything evolved, and that’s how we have 3PL out of the box, 3PL connectivity now for any market place seller with Skubana.

Steve: So you keep mentioning all these different channels that you sell on. So what are some of these channels outside of Amazon in your own site?

Chad: So to break it down Amazon does 40% of product searches, 40%. That means that there’s 60% that’s happening off of Amazon. So a lot of sellers are like well is there life off Amazon, and I’m always like look man the barrier is worth the squeeze, right. 60% of searches are happening off Amazon today. That means you are missing 60% of searches.

So I like to focus on Amazon, I think it’s a great channel, but the second channel I think that is fantastic if you are looking to migrate off of Amazon is building your own website, and leveraging product listing ads with Google. So Amazon off channel, Google which is your own website, you can do Sears, Newegg, Rakuten, eBay, I do all the international properties; Overstock, Wayfair. I think I got most of them.

Steve: Okay and then so managing all those is a pain in the butt and that’s why you needed to develop this software?

Chad: Well, I think managing a business just even if you are just selling on Amazon it’s actually a pain. But yeah so if you are a multi market place, multi warehouse, and you have different fulfilment methods, and you want to accelerate and automate your business, you need to have a software in place, like it’s just not scalable.

Steve: Just curious what is the percentage breakdown for sales for your own site?

Chad: So I would say that Amazon used to do 100% of my sales, I’ve managed to get it down to 60%. So I think that’s a good number. I think that’s a good goal for people to aim from a 100 to 90 to 60. I’d like to get it down to about 50%. If you think about Amazon it’s just massive and they are becoming more and more massive. They are a monopoly.

Steve: Yeah for sure. Okay and then so the other channels plus your site kind of represent 40% then?

Chad: Yeah, but my second biggest channel is my own site.

Steve: Okay, that was important to know. Yeah I was going to ask about — because I think I read some interview that you did where you basically started on Amazon right; for the most part?

Chad: Yeah, I mean there was Amazon Volusion; I’d mix it up a little bit. But I saw a lot of power in Amazon, I kind of used Amazon as a feeder system to build my own stuff and invest a lot more money and time into that.

Steve: Would you say that most of your customers are consumers or businesses?

Chad: Consumers for sure.

Steve: Consumers for sure. Okay so let’s talk about how you reach these consumers and how you get them to keep coming back for more right. Filters– some of the stuff that you sell is consumables, right?

Chad: It’s all consumables.

Steve: Okay and so what — do you do a lot of email marketing? Like how do you get people come back?

Chad: So we have subscription on our site which was not easy to develop. So it’s subscribed and saved to a degree. So you subscribe …

Steve: Okay, how is that structured?

Chad: It’s structured, you subscribe, you can pick how many months you want to go out and you get 5% upon check out for subscribing. So that’s one way. All of our packaging is driving traffic to our site. We do email marketing; we do have automated drip marketing to our customers with filter reminders to their emails.

Steve: The reason why I’m asking is inherently what you are selling isn’t that sexy, right? As you stated earlier. So these emails, I’m just kind of curious like do people open these emails like for filter reminders and stuff about vacuums equipment?

Chad: So I don’t send people — I’m not like sending them like an info-graphic on vacuum filters right?

Steve: Right.

Chad: I’m literally just– they have a need and I’m solving their need. So you are supposed to change your vacuum filter every six months. So if we email them with a reminder that says, “Hey you purchased from us, it’s about time to change your filter,” like I’m just trying to take a product that’s not very smart at all and make it smarter. So just helping customers change their filter is important, because they need to change it.

It’s either they received our filter in the mail and open up their calendar on Gmail and put in their calendar. but most of them, 99% of them aren’t doing that. So we are just sending them a reminder, and so we have those types of campaigns. We also have win back series of you leave our — if you leave our site it’s likely, and you only halfway went through the checkout, it’s likely you are going to get an email with a deal that says, “Hey by the way …

Steve: Okay, the reason why I’m asking these questions Chad is because I can’t even remember the last time I changed my vacuum filter. It’s like not something that I think about.

Chad: Do you know what kind of vacuum you have?

Steve: I have a Dyson.

Chad: Okay, so every Dyson has two filters in it. And do you vacuum though?

Steve: That’s even a better question. Yeah well we vacuum, yeah.

Chad: Okay I hear a “We” so it’s likely that you are probably one step or move from the vacuum if I had to guess?

Steve: Sure.

Chad: So and likely your clean ladies or whoever is doing is not telling you to change it. So yeah I feel like I built a pretty successful business. I promise you that people in the world, in the United States particularly with — essentially the vacuum penetration rate is higher than internet rate. People are changing…

Steve: No, I believe you, it’s very hilarious though. This makes it more interesting to me because you’ve taken something that’s relatively not sexy, and you’ve made a lot of money doing it, right? So in that respect it makes it a lot more interesting to me.

Chad: I love unsexy businesses. But the thing is that and I think I was mentioning this earlier is that we’ve taken the same success and I’ve moved, like it feels like vacuum, selling vacuum filters online isn’t the most fulfilling.

Steve: Sure.

Chad: But building a business is really fulfilling for me. But like I wanted to move in a direction that would take what I’m passionate about, and then combine it with what I know. So I moved into coffee filter. I love coffee. I’m a huge coffee enthusiast. So I kind of try to like spice it up a little bit, and made things exciting by adding things that I’m interested in into our portfolio.

Steve: Okay, but this is on a separate side obviously.

Chad: So that’s a really good question too. You are asking very good questions though, I’m liking it. So when I started Crucial Vacuum it was a very — my vision, I didn’t like think, like I guess my suggestion to people listening to this would be if you are starting a brand you got to think big.
So when I started Crucial Vacuum I had this myopic vision. It was going to take me six years to disrupt the vacuum space. But I did it in such a short amount of time, and I was always looking behind me to see who is copying me or who is– because I thought I only have like a six month window. So now I mean if you ask me if I would move to vacuum filters now I would say hell no, because there is a lot of imitators in the space.

Steve: Sure.

Chad: Then I was like let me move into the next thing. Okay I need to create another brand which means I need to have another social media strategy, I need to have another LLC, just another layer. So I started Crucial Air which was for air purification, humidification. And then I started Crucial Coffee, and then I decided I was like you know what, why don’t I just create one brand to house it all in one place? So I’m now — we’ve already launched it, but we haven’t launched our site yet. It’s called Think Crucial which is essentially everything that’s replaceable for the home, that’s what we want to sell.

Steve: I see, so if you were to start all over again you would have just started this Think Crucial brand?

Chad: Think Crucial would have been it, yeah.

Steve: Okay, and so how are you going to — are you just going to move everything over and do redirects? Like how is it going to work?

Chad: So I think that’s one of the scariest thing for ecommerce people is re-platform because I’ve done it once already. So I went from Volusion to Magento, and now I actually just downgraded from Magento Enterprise to Community. So I have three properties on Magento and my other property, now I Think Crucial is being built on Shopify.

So right now I’m really just getting unique — I’m building unique content. Really, really thoughtful like I’m putting a lot of money into this venture, but thoughtful content that’s going to end up super, super well with a beautiful sleek design, it’s intuitive, it’s beautiful, it’s going to be powerful. So we are really just building, we are building right now. It’s actually almost done.

Steve: Okay, can we talk about your shopping cart choices real quick? You said you were on Enterprise, Magento Enterprise and then you moved down to Community which I found that the support for community isn’t all that great in my experience at least. Maybe you have a different experience. It seems like they put a lot of their effort on Enterprise and the Community was kind of buggy the last time I used it.

Chad: When was the last time you used it?

Steve: It was probably a year and a half ago, two years ago.

Chad: So look Magento is buggy whether you are on Community or not, it doesn’t really matter. It’s written PHP and it’s really — I mean people have built careers around 15 bugs on Magento. So what I would suggest is finding a good developer, but I don’t even think that — I think Magento is a platform of the past if you want my honest opinion. And right now you’ve got really two choices in the shopping cart world. They are both SAS and it’s either Shopify or BigCommerce. It’s Coke or Pepsi right now. So those are the two platforms I would say are the winners in the space.

Steve: So you are moving all of your stuff off of Magento then?

Chad: I am not moving yet right. Right now I have finished building, I’m almost done building the shopping cart, and making it beautiful, but I have not made the decision if I want to redirect right now. I said to myself …

Steve: That’s a huge decision.

Chad: Yes, and it keeps me up at night, so I’m like you know what, why don’t I leave it right now and let’s just see how my site can do on its own. There is no rush, there is no rush.

Steve: Sure. That’s interesting because you’ve kind of done a 180, I think I read some other interview with you where you are really pushing Magento and maybe this was a couple of years ago.

Chad: So I mean like the thing was is that when I left Volusion, Volusion was like burning cash. And I had so much traffic coming to my site that they literally turned off my site overnight, and they said it was D-Dos attack. So I had to re-platform, I said okay never again am I going to a SAS platform where someone can do that to me. I want to own my own store.

So I started hosting my own store from Magento on a server, and I thought that was the direction for me. But now there is like really great technology out there that is disrupting Magento, which is why Magento tried to come out with Magento 2.0, eBay just spun off Magento. So it’s just right now I mean Shopify raised a billion dollars, and they are really focusing on adding features and making their platform number one.

Steve: Okay, and so you’ve found that your feature set of your shopping cart has been falling behind, and that’s why you’ve kind of been looking to fully hosted carts?

Chad: Well, so like if you were to do a side by side comparison between crucialvacuum.com and Think Crucial which is not live yet but will be, you’d see the difference right away in the check out, the seamless checkout, how quick it is, how responsive it is. It’s like a completely different feel. It’s like next generation e-commerce versus I’ll grow ecommerce.

Steve: Okay, all right let’s switch gears a little bit and kind of talk about branding, because I know you talk a lot about establishing your own brand. We are talking filters in this case. So what were some of the things that you did to kind of establish your brand? So like let’s say I want to replace a filter on my vacuum, and from what I understand most people think of your brand these days, right? So how did you make that happen?

Chad: How did I make that happen? So it takes time. So the success you see right now is not an overnight success. We’ve invested a lot in — and we are always evolving. Like we are never staying constant, we are never just existing. That would be my recommendation. I mean that’s always what we are doing. Like I’m ready — I just moved to Magento like maybe four years ago, and I’m already looking at the next platform and the next thing and the next product and the next everything.

We are constantly looking at changing things up a bit, whether it’s our messaging inside of our packaging or it’s our email marketing blast. Like we are constantly having weekly planning meetings, going through what is the narrative that we want our customer to have about our business.

Steve: So what is that narrative? Like what is your value preposition?

Chad: So the value prop is first of all we are free shipping free returns no matter what. Like all day long 24/7. Our phone number is right on our page. 80% and if we are just looking at the vacuum filters 80% of our filters are washable and reusable. We plant a tree for every 1000 filters sold, not that that really moves the needle that much, but it’s just our signature gesture.

Steve: Sure.

Chad: But yeah I mean I think free shipping, free returns, having somebody to answer the phone, an expert to walk you through replacing your vacuum filter on the phone is a classic differentiator. Like you can’t call up Amazon and be like, “Hey I bought this vacuum filter from you, how do I put it in?”

Steve: Right.

Chad: They are not going to help; they are not going to walk you through that. So it’s focusing on like, so when we do these videos for example they are hosted on our own website, they are not on Amazon. So it’s adding more value, more unique content to your own site because when people go to Amazon they are going to a vending machine, do you want paper or plastic. But when you are coming to Crucial you are coming to us because we’re experts, and we’re going to be there. We got your back, and our phone number is right there.

Steve: Do you find that a lot of your phone calls are how to related phone calls?

Chad: I think there is a good portion of them that are definitely how to phone calls, but there is also a good portion and they are like, “Hey I don’t know how to check out online, I’m not like internet savvy. Let me just place this order on the phone.” And then we’ll say, “Oh fantastic, you are on the phone? Perfect where are you from? Where do you live?

Oh you are replacing your vacuum filter? Cool, well you know what while you are replacing your filter you have another filter on there, and by the way since you are touching your slimy vacuum why don’t you replace your vacuum belt.” So there is a lot of like up selling, there is a lot of magic that goes on behind the scenes to like build that relationship with the customer.

Steve: So for your Amazon sales though do you try to steer some of those customers over to your site as well?

Chad: No, that’s against Amazon’s terms of service.

Steve: Okay, so let me ask you this, when people look on Amazon, are they typing in Crucial Filters?

Chad: Yeah, I mean if you actually were to go to Amazon and type in CRU into their search, I’m pretty sure you are going to see Crucial vacuum pop up. So it’s an index, it’s like an indexed word that Amazon is serving to people that are typing in, or trying to recognize what they are typing to help them with their search query.

Steve: Are you selling to Amazon as a vendor or FBA?

Chad: I sell to Amazon as a vendor and I sell on Amazon, so I sell on the 1P, which is as a vendor and sell 3P, I sell on Amazon.

Steve: Can we talk a little about some of the pros and cons of doing that?

Chad: Yeah, absolutely.

Steve: Okay, so, I have had other people on the show who are vendors for Amazon, and they were always conflicted, right? They were conflicted at Amazon, like if you didn’t agree to sell to them, they just find someone else, and then your ranking through existing products are lower. So, what was going on through your head when you were approached?

Chad: So firstly, I had been suspended on Amazon, and I have been suspended twice, so I sell replacement filters to feed brands and if Dicing [ph] complains to Amazon, which probably it does; I don’t know, probably close to a billion dollars with Amazon maybe more, I have no idea.

If Dicing says,”Hey, these guys Crucial Vacuum are making replacement filters and they’re knock offs of ours, take care of them,” Amazon in India is not going to think twice about it and do something about it, right? So, we’ve had like complaints before and I went away with my wife, we were on vacation. We were going on our way to Greece and my account was suspended, and I was freaking out.

Steve: That sucks.

Chad: It sucked really bad, because I was like finally taking a break and my mind was preoccupied, it was painful. So, by that point I was never again am I going to be so tied to Amazon that they can take everything away in seconds. So, that was– so in my mind I was like, “How am I going to diversify?”
So yeah, I condone multiple market places which I have done, but also I can start building a relationship with Amazon and sell two times since I’m the brand owner. And they have to approach you, but luckily I have really nice relationships in the Amazon world that I was able to get in with the entire management team there. So that was what was going in for me, so I gave them a handful of excuse and I used it as a hedge.

Steve: Now that makes sense. With the idea that if you’re selling to them as a vendor you’re probably not going to be suspended based on product alone.

Chad: No, you can always get suspended, but the idea is and Amazon can make it themselves; which they are doing with Amazon basics, but the idea here is that I have someone to talk to in Amazon, that’s not in India and 3P and 1P are kind of like the congress and the senate, like they are meant to compete with each other. They are kind of like a check and balance, so if God forbid something happened to one, I have a hedge, I have a back-up.

Steve: Okay, that makes sense. So, I was just, when we were chatting before this interview, you were talking about some pretty killer growth numbers like double digits year after year. How have you managed to do that? Was it introducing more products, or just selling in more market places over the years?

Chad: I think it’s a combo, the combo of both so going deeper in our product price, going to different categories, thinking outside of the filter space, and going on other market places and going internationally.

Steve: Okay, let’s talk about international. Was that kind of scary, did you do that early on or?

Chad: Actually I think it’s still early on, most sellers are like, they think that the US is where it is at, and there is a lot of things happening internationally and nobody is really focusing on.

Steve: Okay, and so was that something you did right away then, with your business or?

Chad: I was always thinking international, but I think I have been getting more heavy in our approach probably in the last two years or so, really thinking about how to sell overseas because there is different expectations, there is different fulfilment rates.

Steve: Taxes, yeah.

Chad: I mean there are taxes, there is a lot that goes into it, different languages, different brands are in the US versus in the UK or Germany for that matter, but…
Steve: I guess what I was trying to get at was, is international like your biggest place of growth right now?

Chad: The biggest place of growth right now is coming from all over, I would say that they’re posting higher growth numbers because there is a smaller part of my business, so there is a lot more room for growth there, but I was recently reading a Reddit, someone on the Amazon community just had a Reddit. They asked him, “If you were to do it all over again, would you start in the US or would you start intentionally?”

And he wrote, “I would start in the US, there’s not really a whole lot going on, the international doesn’t excite me right now.” And I actually commented in the post and I was like, “That’s crazy, if I was to start right now, actually I would start where the pack is going and there’s so much happening internationally, like you don’t really need to play with the heap in the United States, you can literally have a whole market to yourself internationally where nobody is focusing on, because it’s hard, because it’s harder.

Steve: It’s harder for someone in the US; presumably it’s not hard for somebody who resides in that country, right?

Chad: So, the second biggest channel internationally for Amazon is Amazon Germany. People actually think it’s the UK, it is Germany. So, is it that much hard to take your product, to take it and translate it on Fiverr, or one of these other translation services, and to post it on Germany and to get your product FBA there, or to– I found a warehouse in Europe that has been helping me significantly, but it’s not so hard, right? It’s just you are faced with…

Steve: It is just leg work.

Chad: Yeah, it’s just leg work, it’s just business, it’s just obstacles and there are challenges and you overcome them.

Steve: So, let me ask you this, a lot of the listeners of this podcast are people who are just kind of trying to get into ecommerce, and so for these people who are kind of starting out, what would be your advice on how to just kind of gradually grow into a thing Crucial.

Chad: Well, hopefully there are no other vacuum filter companies that are listening right now. Come up with their own thing, but to grow into, when you are starting, you need to have the proper foundation, for sure and I think a lot of sellers focus on the top-line without thinking about how is this going to scale. So, it’s not like building a house, but realizing there is no foundation, you build it on sewage. Now that works in New Jersey…

Steve: You are from New York, right?

Chad: Actually, one of my offices is in New Jersey, but it’s not built on sewerage, so I have an office in New York, office in New Jersey. So, I would say building a proper foundation, so getting your infrastructure set up correctly and professionalized from the onset. So, for me I probably wouldn’t start again ever, in my doing my own pick and park for my FBA prep ever.

I would immediately outsource that activity. I would have the right technology to automate and run my business, one that actually can take me multi-channel, so if you’re going to invest in a software, you don’t want to invest in a software that’s may give you a glass ceiling, or be what I call, a one trip pony, because it limits…

Steve: It’s hard to predict though early on, but I guess you just have to go with what you think is the best at the time.

Chad: Well, is it hard to predict that you are going to want to expand to other channels? I mean if you really want this to be a serious endeavour, you have to treat it as one.

Steve: Yeah, that’s kind of hard to do for some people though, right? Because if some of the enterprise stuff or some of the better stuff, cost a lot more on a monthly basis, I guess you’d have to be willing to put a lot more money upfront to invest in that then, right?

Chad: Well, luckily Skubana starting price is 500, so…

Steve: See, I led you right there.

Chad: So, the thing is, actually when I started Skubana I had this dream of democratizing ecommerce, so I did not want to leave any fellows behind, but what I quickly realized was that there are entry level software for people that are just casual sellers, that don’t see this as ever becoming a full time thing, that are there for them, to help them. But, if you really are serious about growing your business, you got to get into the right technology from the onset, it’s an investment.

It’s like investing in a stock, and so enrol like if you’re going into the gym, you have different choices when you are at the gym, you can go to Equinox since you are in New York City or you can go to wherever, some sort of cheap fitness club yeah, Gold or Retro or Barleys. So you have choices, but you can choose to– first of all you have to go to the gym, that’s half the battle.

Steve: That’s the hardest part, yeah.

Chad: That’s half the battle, but also if you really want to up the game you can go to a serious gym, so I guess I call Skubana like the Ferrari of operation software. It’s really a one stop shop. It’s really meant for high value merchants, but we’ve kept it a low price point to allow other people to enter in. So now people can access, and so a lot of our customers are top 200 Amazon sellers, but now for the first time ever, smaller sellers have access to what the one percent only had.

Steve: Okay and just be to clear; let’s say I’m selling in all these channels like Sears, EBay, Amazon, Wayfair, Skubana just manages all that, and all the inventory as well. Is that accurate?

Chad: Inventory, yeah any way you want to fulfil whether you add it through EPR or you print a shipping label, so we take care of– like there is no ERP system out there that combines shipping with ERP, we do that, so you don’t need a ship station or another shipping software at all. So, any way you fulfil, but the nice thing, the huge differentiator, that’s the word, so it’s commodity shipping, inventory, purchase orders, but by unifying everything together, you now have data, business intelligence that you have never seen before. Sellers know more about their car than they know about their own business, and our software changes that in a drastic way.

Steve: Because all the analytics across everything is stored in your platform.

Chad: Everything is stored, so you literally have every touch point after that person checks out, including all the hidden FBA fees as well. All that stuff is coming into our software and being sucked in, and now on the analytical section, you push the button and boom! You can see every street you have, which one is profitable, which one is not profitable, which channel you’re not profitable on, what’s dragging down your profitability. It’s really the holy grail of what we do.

Steve: Okay, cool and if there is a platform that you don’t support, you guys will code that up or?

Chad: We have an API ,we support the major market places, but we have an API, so we can communicate with any platform that has another API, but back to your question, so it’s A Foundation, B I think thinking about what your core competences are, and having a– everyone has a to do list, but I encourage everyone to have a don’t do list, like things you don’t want to be doing, and to make sure you find somebody to do that what’s their core-competency.

Steve: Right, it makes a lot of sense. Chad, we’ve been talking for quite a while. Where can people find you, and get in contact with you, or if they are interested in Skubana?

Chad: So scubana.com, you can email me if you have questions at chadscubana.com. I’ve really become more of an educator and helping sellers. E-commerce Renegade is my new property that I just launched, so I’m really trying…

Steve: Is that a blog?

Chad: It’s a– I’m doing videos; I have a book coming out. I’m really trying to cut through a lot of the noise in the Amazon group, and not just Amazon, just ecommerce space in general. People are taking suggestions from people who haven’t been there and done that, and they’re leading them down the wrong path, so I’m coming in to change it up and to remove the noise. So yeah, so I’m launching that so you can find me on E-commerce Renegade, you can sign up for a newsletter where I drop a lot of golden nuggets and things that I think are going to change the way you do business.

Steve: Sounds good Chad, thanks a lot for coming on the show man, it was good.

Chad: Thanks for having me.

Steve: All right, take care.

Chad: All right.

Steve. Hope you enjoyed that episode, Chad really knows his stuff and his entrepreneurial path is kind of what I want to be going forward. Run a successful ecommerce store, understand the problems that ecommerce store owners face, and then write software to solve their problems.

For more information about this episode go to mywifequitherjob.com/episode117, and if you enjoyed this episode, please go to iTunes and leave me a review. This is by the far the best way to support the show, and please tell you friends because the greatest compliment you can give me is to refer this podcast to someone else either in person or to share it on the web.

Now, if you’re interested in starting your own online business, be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100 k in profit in our first year of business. So go to mywifequitherjob.com for more information, sign up right there on the front page and I will send you the course via email immediately. 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.

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Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

116: How To Rank Any Website In Search With Brian Dean Of Backlinko

How To Rank Any Website In Search With Brian Dean Of Backlinko

Today, I’m thrilled to have Brian Dean on the show. Brian runs the incredibly awesome site Backlinko.com where he teaches others how to get their sites ranked in search.

And unlike other SEO gurus out there who make ridiculous claims, Brian totally walks the talk. He’s got an amazing array of articles (and by array I mean 30 or so) that go into incredible depth and he ranks for super competitive keyword terms on the front page of search.

For example, just now, I typed in “how to generate backlinks” and guess who popped up? Now I actually have never met Brian in person. And usually I don’t interview people I don’t know personally but Brian is so awesome that I knew I had to have him on.

What You’ll Learn

  • Why Brian decided to start a blog about SEO
  • Brian’s main strategy when ranking a site in search.
  • Where Brian promotes his content.
  • Brian’s view on removing bad links and using the disavow tool.
  • What’s working in terms of search engine optimization today

Other Resources And Books

Transcript

Intro: You are listening to the My Wife Quit her Job Podcast. And if you are new here, it’s a show where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now I don’t bring on these famous entrepreneurs to simply celebrate their success, instead I have them take us back to the beginning and delve deeply into the exact strategies they used early on to gain traction for their businesses.

Now if you enjoy this podcast please leave me a review on iTunes, and if you want to learn how to start your own online business be sure to sign up for my free six-day mini course, where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email. Now on to the show.

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 thrilled to have Brian Dean on the show. Now Brian runs the incredibly awesome site backlincko.com, where he teaches others how to get their sites ranked in search. Unlike other SEO gurus out there who kind of make ridiculous claims, Brain actually walks the talk. He’s got an amazing array of articles and by array I mean like 30 or so that go into incredible depth, and by incredible I mean these posts are ridiculous. He ranks for super competitive keyword terms on the front page of search.

For example, just now I typed in how to generate back links and guess who popped up in the top 3? Now I’ve actually never met Brian, but we were introduced by our mutual friend Divesh. Usually I don’t interview people I don’t actually know personally, but Brian is so awesome that I knew I had to have him on. With that, welcome to the show Brian, how are you doing today man?

Brian: I’m well. Thanks for having me Steve.

Steve: It’s funny, I actually meant to interview you last week, but we ended up just chatting for like an entire hour, and we had to reschedule this whole thing.

Brian: Yeah I know, but it was good because we got to know each other and then now we can just jump right in.

Steve: Now I can actually ask you the more difficult questions that I probably wouldn’t have asked you before.

Brian: Right.

Steve: A bunch of people in the audience probably know who you are already. If you wouldn’t mind just giving a brief intro about how you got started online, and the history behind Backlinko, that would be awesome.

Brian: I got to started online in 2008. I had just quit graduate school because I didn’t really like it, and I wanted to get a job. Unfortunately I quit in 2008 and this was right when the financial crisis was happening. Unfortunately because of that, I couldn’t find a job. I was leaving in my parent’s basement. I had no job, no money, no nothing. I think because I had so much free time, I came up with my first business idea. So I was like, wow I actually have an idea for a business.

Basically what it was, was sort of a search engine, but instead of typing in a keyword and getting 10 blue links, you type in a keyword and you’d get the answer to your question. For example, if you typed in something like how many calories are in an apple, it would just say 293 or whatever. I studied nutrition in school, and that’s what I wanted to make the search engine, a nutrition search engine where you just get your answers. This is basically what Google has now with knowledge graph. And to show you how naïve I was like Google just came out with this like 2 years ago, the biggest most valuable company in the world, just 2008 and I thought I could come out with it, do the same thing. Obviously it wasn’t going to happen.

So anyway, at this point I was still pretty naïve and thought I could do it. I went to a bookstore and I just grabbed my first business book off the shelf that I saw, because I knew nothing about starting a business, called the 4 Hour Work Week which is obviously very famous now. It was like a mind-blowing experience to read that book. It was crazy. It totally changed the direction of my life. Basically in between 2008 and 2013 from when I started Backlinko, I did a combination of things like freelance writing, affiliate marketing, a lot of black hat SEO, and I sort of learned the hard way from a lot of failures, how not to do SEO.

In 2012, that summer, I put the pieces together and finally created a site that ranked well and was way high, and it was a real branded site and made legitimate money. At that point I was really into white SEO. I had sort of dabbled in, in the past, but I never really had success. I always end up going to broadcast stuff. And it was my first time white hat SEO was working. I was like, this is cool. Let me learn more about it.

When I went to read more about white hat SEO, I couldn’t really find anything. Everything was all, things like create great content and you get links, and just basically create great content and phrase a million different ways. I wanted some good, actionable stuff and I couldn’t find it. I decided to create Backlinko basically to create the blog that I wanted to read. That’s why I started it.

Steve: It’s interesting though. Did you have luck with the black hat stuff in the past?

Brian: I had mixed results. I had some luck, but it never lasted long. I was really late on all the trends. Like whatever trend was happening, by the time I heard about it, I got in and it lost like a month. Whatever kind of loophole worked for a while, people were gaming it, the word finally spread, I heard about it and got in at the wrong time. Kind of like the stock market. By the time you hear of stock that you should invest in the stock, it’s probably too late. It’s the same thing with me and black hat SEO.

Steve: So just curious, those other sites that you used black hat on, are they still around or did they get killed by like the different algorithm changes?

Brian: They got killed. I had– I built over 200 sites during that time.

Steve: Holy crap, wow!

Brian: And they are all gone I think. I don’t even know, maybe not. But I haven’t checked.

Steve: That’s like one a week.

Brian: It was pretty prolific. At one point, I had like 150 active sites going. That was in 2010 and Google Panda wiped that one out. That was like one day all gone.

Steve: Oh my goodness. That’s crazy. Why SEO of all the possible topics that you could have written about because you are going up against like Mars [ph], Search Engine Land and some of the big guys and yet you outrank them today.

Brian: Well I think it did– I didn’t go into Backlinko thinking like I’m going to beat these guys because like you said, I’m one guy, running this blog on my home office. Mars for example has 200 employees. It’s like, wow, how could I ever compete with these guys. I didn’t really go in as I’m going to go head to head with Mars and all these guys. Instead I decided to focus on one little thing that I could write about better than they could, which at the time when I first started Backlinko I wrote all about link building. That was the one topic that I really focused on. Everything was about link building; the site was about link building.

That way I was remembered for one thing, and that was my differentiator. That’s really what made me different than other blogs because like I said, they did a good job with some things but when it came to link building, they were really lucking. I come in and fill that need. I didn’t think today that for a lot of these terms, a lot of these topics, I’ll also be competing with them outside of link building, but when I first started, I decided to focus on that one thing.

Steve: Let me ask you this, so you got Backlinko and it actually ranks for a lot of keywords related to search. Do you feel like now that if you wanted to expand into different topics now that it will be difficult on that particular blog?

Brian: That’s a really good question Steve. I think that it’s not that I’ve dabbled in it, so for example I actually see [inaudible 00:08:00] someone is on my door.

Steve: Okay, you want to go grab it?

Brian: Yeah.

Steve: If you are listening to this at six minutes 50 seconds, edit this whole section out because someone is at the door.

Brian: Steve, sorry about that. I do everything, put the phone on silent all that stuff, but that’s the one thing I don’t know how to shut off. All right, so I think– oh my god, hold on a sec. I don’t know what the person wants. What is that honey? No I looked them in already.

Brian: Steve? Sorry dude, I don’t what’s going on, someone keeps ringing my door bell, I’m getting like ding dong ditch over here.

Steve: You are a popular guy man.

Brian: I guess so, I think actually it happened kind of during the questions, so I think you just ask the question, right?

Steve: Yeah, so we were just talking about whether you could expand beyond back linking and SEO with your current blog, or we just start from there.

Brian: Okay so I’m going to just…

Steve: Yeah just start talking.

Brian: Okay, well Steve I actually have dabbled in this and tested it. And recently or no it wasn’t recent, it’s about a year ago, I started writing about conversion optimization. It was something that I was really interested in because SEO is great, but I also wanted to convert these people. And I realized I didn’t have a lot of knowledge about conversion optimization, especially when it came to conversions for blogs, so basically building your email list.

And I just started to test a bunch of different strategies and write about what I was experimenting with on the blog. And in terms of reception because there is a lot of overlap with people who are interested in SEO are usually also interested in building their email list, it was very well received and I do rank for some competitive key words in that space like list building.

Google doesn’t really care if you branch out into other topics. Of course for your core competency on your site I think from what I have seen you definitely rank better for the keywords that are more closely related. But if you created a single page that’s outside of your niche a little bit, and it’s really well received and has those signals that Google wants to see, they don’t really care what the rest of your site is about. That page is going to provide a good user experience for their users, so they are going to show it to a lot of people.

Steve: And do you plan expanding the number of posts on your blog to significantly higher than what you have right now?

Brian: Not really, so I mean I’m obviously going to expand it as I publish more stuff. But I don’t have a plan to switch to some like a weekly schedule or anything like that, because this really viewer post, but in depth has worked a lot better for me, so I’m just going to stick with that.

Steve: Yeah I mean just for all of you guys listening out there, Brian’s post, he doesn’t have a whole lot of them, but each one is like equivalent to like 10 blog posts in terms of depth. So that’s how he’s been able to just kill it in the white hat SEO world. So I want to get this question out of the way first, because a lot of — I have been approached by SEO agencies, a lot of my students get approached by these guys. What is your opinion on having someone else do SEO? Just curious what your opinion is?

Brian: My opinion is don’t do it, because it’s a mine field, it’s literally like a mine field. Like you can get to the other end okay, but the chances are very slim.

Steve: Yeah and I have a couple of stories to share too, like I have had buddies who’ve used outside SEO agencies and they worked in a short term, but then once Google changed the rankings their site basically tanked. And you never really know exactly what they are doing.

Brian: Exactly and if you don’t understand SEO, even if they show you everything they are doing you don’t know whether it’s good, bad or in between. So I think even if you are going to hire someone I recommend trying to do a series out that way. If you do hire someone down the road you can say, okay they are doing a good job, they are doing a bad job and you can separate the leaf from the chaff.

But if you’ve never done SEO and you are just like I don’t want to learn it, I don’t have time I’m too busy, I’m just going hire someone, it’s a recipe for disaster, because unfortunately most — not most, 90% plus of SEO agencies are just bad in the sense they’ll actually do more harm than good. There is about 7% or 8% that will give you a short term boost, but they won’t do enough to make it worth your time, energy, and money that you are giving them.

Because the agency models basically they don’t want to give you too good results in the first month, because then you are going to expect that for the next few months. If they double your traffic on month one, you are going to be like, wow this is amazing these guys are great. And they can’t follow that up with all the other months. So what they do is they purposely will kind of drip value so that you are increasing your traffic 10% month every month instead of getting a huge boost. That’s like 7% or 8% will do that which is good, it’s better than getting hurt, but it’s not really what you are looking for. And about 3% in my experience will care and they’ll actually do a really good work for you, so and yeah.

Steve: You used to work for one, right?

Brian: I used to run an agency.

Steve: Run it okay, yeah okay. So I’m just curious like can an agency really take the time and depth necessarily to produce awesome content that will actually get your site ranked? Like I can’t imagine an SEO agency writing the post that you’ve been writing.

Brian: It’s a good question, I have seen it done, but like I said it’s the 3% of the whole group that can do that, because what it takes is basically is a couple of things. One you need an expert onboard, so for example you run ecommerce site that sells some sort of high end coffee. You might be really knowledgeable about coffee, so the agency will actually have to work with you to extract your knowledge about coffee to create a piece of content about coffee that’s going be really unique, and it’s going to bring a lot of value.

If they just try to do it in house and use second hand sources and information it’s possible they can create something great, but it’s very unlikely. So you either need to have the knowledge or have them work with someone where they can hire an expert to consult with them on every piece of content. Because like you said one of the reasons people tend to enjoy the blog posts at Backlinko is because they are written someone who does a lot of SEO. I do SEO all the time. So I can write about that.

If I all of a sudden try to write about health and fitness, I know little bit about it, I eat healthy and exercise, but no means an expert, and I would have a hard time writing something that would stand out. It would just be like another blog post that will get lost in the sea. And if I hire an agency that wasn’t going to work with the expert, they are not experts, that’s type of content they’ll produce. So you definitely want an agency that’s going to be like, look we are going to work together and create something awesome, or we are going to hire an expert to create something awesome.

Steve: Yeah, and that doesn’t sound inexpensive either, right?

Brian: No, it’s definitely not cheap, so that’s the thing for everybody. I mean the agency is expensive for them. It’s not only do they need to get this expert on board which isn’t achieved. They need to hire someone to extract the knowledge from you if you are the expert or get an expert, then they need to write something amazing, edit it, sometimes have a costume designed, promote it, it’s really expensive for them to even do with their stuff. Plus they need to make money, right? So their margins need to make sense.

So I think for a good SEO agency to even talk, to even get a meeting with them, it’s only at least $3000 a month. And that’s just like the base, I mean that’s if you want to think out like one great piece of content a month, and they promote — create and promote it for you.

Steve: Okay, yeah that actually probably puts it out of the reach of a lot of small business owners I would imagine.

Brian: It definitely and that’s why I recommend doing it yourself because the problem is that three grand also is going to the 97% most of the time. That’s just you find the 3% that’s great, you can do well with the three grand assuming you have it to spend, but if you don’t definitely do it yourself. And even if you do I recommend doing SEO yourself.

So here is something I have sort of changed my mind over the years, I used to be like yeah agencies are good, they definitely come with their risk, but they know what they are doing. They know SEO and most small business owners just don’t have time to learn SEO. I have since changed that stance, I have just seen so many hurt stories of people who just hire agencies and have a bad experience. I mean it’s literally three out of 100 that say this worked out well. So that’s why I recommend doing it yourself even if you don’t have time.

Steve: So can we talk about what is and what is not working in terms of search engine optimization today. It sounds like you’ve done black hat and white hat, so it would be interesting to hear what you had to say?

Brian: Well you know what it’s funny Steve, I would say in April 2012 is when Google rolled out their penguin update. And that update basically targeted sites that had– that used manipulative link building. Basically people that used exact match anchor texts. So if you had a ecommerce product category page that sold coffee mugs, you would want to get all the anchor texts in every link saying coffee mugs, and that was really good for SEO.

And actually I just ran the biggest search engine ranking study ever of a million Google search results. And we found that the anchor texts still helps with SEO. So having that exact match anchor text still can boost your rankings. The problem is if you do it in a manipulative way, or you do it on purpose you can get penalized by the Google penguin update. I would say from that day forward SEO changed very little.

After that it’s pretty much all about creating the best resource that you can create, and getting links to that resource. For an ecommerce site it’s a little bit different, because very few people are going to link to product and category pages. I do have strategies for doing that, but for the most part with e-commerce sites what I recommend is they create an awesome piece of content and promote it, get links to it and then use that authority to funnel to their products and category pages and get those to rank.

That strategy works really, really well and it’s underutilized by ecommerce sites because most of them if you look at them they are just 100% product and category pages. And just no reason anyone would run a link to something like that unless you use some stuff we can talk about the moving method which is what I use for product and category page link building.

But even then you can only get a couple, this is not happening on a mass scale. So that’s why I recommend that piece of content and that’s basically what it comes down to in terms of what’s working is getting a lot of links to your site from really high quality sources just like it was back in the day. The only thing that changed in that 2012 was the links have to legit, they can’t be built in the sense like you can’t build profile links or blog comments or article direct to your links, all that stuff doesn’t work anymore. So it’s really hard to build links now, it’s tricky even if you have a great piece of content but if you don’t its next to impossible.

Steve: So let’s say you get a back link, do you even try to get your anchor text in there since you said it still works?

Brian: No, it’s not worth the risk. If I get it, the difference is when I get one I say great. Like I know that’s going to help me. But if I don’t get it, I just say I think it’s not — it’s better to look natural than to have anchor texts that’s really over optimized.

Steve: Okay, and so I would imagine then that you don’t really pay attention that much anymore about the links that you get, like how they kind of structure the link, right?

Brian: No, because they are more or less naturally, either someone links to me just spontaneously or I reach out to someone on email and say, you have this page that lists resources, I have good one, do you want to add it? That’s really over simplified, but that’s basically how outreach goes, and they add my link. And I don’t ask them to anchor texts or put it anywhere, I just recommend the resource and they put it in on the page however they feel like. And over time you’ll get some anchor texts in there that’s exact match, and overall look natural because it is.

Steve: Okay and so let’s talk a little bit about just in the context of ecommerce once again. So it sounds like your strategy is to write articles that kind of rank and build up your domain strength, and then that kind of just pushes the tide for all of your product and category pages naturally on your ecommerce store?

Brian: Exactly Steve, there is a little bit more strategy involved, but that’s the basic gist. But it’s not really articles because for ecommerce site it’s really difficult to get those links directly to products and category pages. So you have to create these ridiculously awesome guides, that’s what’s going to generate enough links that — the domain authority increase where you can rank on domain authority alone.

That’s basically how Amazon ranks, if you look at Amazon and you go — almost any keyword in Amazon and you grab one of their product pages that are ranking and you put it into a tool to look at how many links are pointed to the page, it’s almost always zero, almost always zero. But they are always ranking right for everything, annoyingly enough they are always there and it’s because of domain authority. But instead of just posting the resource, another extra step I recommend is to internally link from that resource to your product and category pages.

And here is where you can use exact match anchor texts it’s okay because of the internal. So if you have this category page for coffee mugs, that’s where you can have a resource, it’s like 50 things you never know about coffee. Inside that resource you can link back to your — whatever you mentioned like coffee mugs, just put a nice link back to your category page. That will send users directly to that category page, and it will boost the rankings for that category page and the product pages. Assuming you have all the other factors Google looks at, but that’s the most important one.

Steve: I actually take that a step further and I actually put a physical add to cart buttons on my content pages.

Brian: Wow, that’s cool so you close from the content?

Steve: I try to close, hey so I’m curious actually. So a lot of these fully hosted shopping carts, I don’t know if you are familiar with them like Shopify or BigCommerce. They basically if you run your own separate blog they force you to put on a different sub domain. So it sounds like this whole domain strength doesn’t work as well in that context right, you want everything in the same domain, right?

Brian: That’s true so yeah, sub domain is not ideal for that reason, because I mean Google is much smarter than it used to be. So I think they understand that the sub domain is part of the site and they treat it not like a sub folder. But it’s not which is a forward slash, so like if you had mywifequitherjob.com/blog is better than blog.myquitherjob.com. So I think now they are getting so sophisticated that sub domains are treated similar to sub folders.

But they are not really there yet because they are in a lot of ways usually some separate entity, that’s why they exist. Besides www, and that’s why people make them is because they are so different than the rest of the site, they need their own sub domain, that’s why people use them. So actually it does signify to Google and people that this is something that’s really different. So from an SEO standpoint Goggle views them the same way.

So it’s definitely not a deal, it’s something that’s a bit frustrating with Shopify because to create really nice looking content that’s awesome you need WordPress, there is no way around it. So at some level you need to install WordPress. If you have to do it on a blog self domain, it’s better than not doing it at all. If you can somehow hack Shopify or Magento or whatever you use into making the content look great, then go right ahead, I have seen it done, but it’s tricky. So that’s why WordPress is great because it’s out of the box, you can do a ton cool stuff to it, easy to optimize all that stuff that you can’t really do with a lot of the big ecommerce solutions.

Steve: Okay and so let’s talk about just ranking an ecommerce site or ranking an article. Like you’ve gone over several strategies on your blog that I have read through, but for the people who are listening what is like your – it’s still all about back links for most part, right?

Brian: Yeah, I mean well really it’s all about keyword research to start. So we’ve put the cart ahead of the horse a little bit because…

Steve: Okay, yeah let’s start from the basics yeah.

Brian: Okay yeah I mean link building is everything because the problem is even if you do all your keyword research right; you optimize your pages perfectly, if you don’t have links you are not going to rank. On the other hand if your keyword research is just okay, the optimization is so, so and you get a ton of great links, you can still rank. It’s like this old SEO saying, most SEO problems can be solved by getting more links. So that’s like technical SEO problems, on page SEO problems.

I think people shouldn’t rely on links to solve their problems, but the point is that it’s so powerful that it can help you overcome any deficiencies you have in other areas. So basically SEO comes down to three things. There is keyword research, there is on page SEO, and there is link building. And there is a fourth thing that’s becoming more important which is user experience signals, which we can talk about later which directly impacts ecommerce sites.

So keyword research is basically find the keywords as you all probably know that people search for. It’s an art and a science, it’s pretty — it’s almost as tricky as link building. And with ecommerce sites it’s especially important, because you need to know not only what products are people searching for and what volumes, but also things like the commercial intent, the domain authority, the competition, all that stuff, it’s important.

Steve: Well, let’s talk about that a little bit because you kind of tackled back linking for your blog which is a super competitive keyword, right? So what were your thoughts about going for that particular set of keywords I suppose to something that might be easy to rank for?

Brian: Well, at first I went for the easier keywords, so I think when you are starting out and you don’t have a lot of domain authority and other signals like Google may look at like your brand, how big your brand is online. That’s when you definitely want to go with this the longer tail keywords or less competitive key words, because it’s better to be number three for a long tail keyword than number 12 for a really competitive keyword. Because number 12 is basically number 80, it’s the same.

So when I first started I went over these kinds of longer tail keywords, and as the site built up authority I was able to tackle these more competitive keywords. And that’s basically the strategy that I also recommend that ecommerce sites and blogs do. So if you have a product that could be called a few different things or category that could be called a few different things, I do recommend going with the less competitive version if you are just starting out. If you have some domain authority already ranking for stuff, that’s when you can switch in to something more competitive stuff and see how it goes. You can always switch back later.

Steve: What tools do you use to determine keyword competitiveness?

Brian: I just use the moss bar [ph], so using the mass bar you can see the page authority and domain authority of the competition on the first page. And that pretty much tells you all I need to do; especially when it comes to ecommerce you can pretty much throw out page authority, because most of the pages will have hardly any, it’s a domain authority game.

Now that being said if you are somehow able to get a lot of page authority, it’s a competitive advantage for you. You can get that by getting links directly to the page or using that funnel link technique that I talked about earlier. That way you are the only guy in the first page with a lot of page authority, and that’s an advantage for you. But for most part I look at the domain authority as like how hard is this keyword going to be.

Steve: Let’s say you have no domain authority whatsoever, you are just starting out, what are some good guidelines for keywords that you should go for like in terms of number of searches and what you see on the mass bar?

Brian: That’s a good question; it’s hard to get specific numbers because every niche is really different. So for something like a B to B company, or let’s say even like something life insurance. Life insurance keyword that’s really profitable could get 100 searches a month, because every lead is worth a lot of money and every customer is worth a lot of money. On the other hand something like pillows probably gets a ton searches, but your margins on a pillow probably aren’t going to be that great.

So it’s hard to be like it needs to have like this many searches and the competition needs to be domain authority of this, it’s just impossible to say. Basically when you are first starting out…

Steve: Well, let’s just take a pillow example though — for example yeah.

Brian: Okay, in general the lower the better when you are first starting. If you could find the keyword in the pillow space that’s getting like any searches and has any commercial and it’s done in the sense that there’s AdWords advertisers bidding on that keyword which is a sign people buy when they search for it, then I go for that key word. If you find that it’s even a little bit competitive, I’ll try and stay away.

Steve: Do you have like a low threshold for the number of searches that even makes it worth your while at all?

Brian: No, especially for — and today because now Google is basically able to understand the intent behind their keywords. If you target a key word that say only gets 20 searches a month, you may say, well that’s not really worth it, but not only will you rank for those 20 searches, but you might also rank for several other keywords that are related because Google is smart now.

For example if you have like black throw pillow, that used to be considered a separate keyword than like throw pillows that are black. Now Google pretty much consider those the same keywords. If black throw pillows only get 20, you can also rank for this other keyword like throw pillows that are black that might be 10, another one that might be 30, another one will be a 50, and then all of a sudden can add up.

It also depends on the commercial intent of that keyword and how well if fits with your ecommerce site. If you sell pillows and you guys are like amazing at creating pillows and selling pillows, 100 visitors a month directly to a product page, someone who’s basically got their credit card in their hands, I wouldn’t shy away from a keyword like that. It may not seem like a lot, but it can convert really well for you.

Steve: What about in terms of using synonyms for your products in like the title tags or your H1 tags?

Brian: You can definitely do that stuff for on page. For the title tag I do recommend just going with the exact keyword as your targeting. Google will kind of take the synonyms from there; you don’t really need to do it. In terms of the on page stuff, yeah, that’s definitely a great place to use synonyms, and in the content especially in the H1 as a way to reinforce what the topic of the page is about in a way that’s not being spammy in trying like keyword stuff.

Steve: And what’s your view on just like category pages. Typically category pages on ecommerce store is just listings of products. Do you recommend some content in there also or it doesn’t matter?

Brian: I do, I definitely do because it doesn’t matter if you are Amazon, if you are the Amazons of the world or the Best Buys or the Zapples. But if you are just trying to have on your ecommerce site that can be a competitive advantage for you because most of these big commerce sites have too many category pages to even think about writing content for it. It can be an advantage for you to actually put some content on every category page. The flip side of that is that the point of getting — embedding the content is to get higher rankings which is to get more traffic, which is to get more customers.

And a lot of times putting content above before this is the last thing you want to do, because that’s actually going to hurt your conversions. You have to also kind of balance the two things. That’s why I do recommend putting content below the fold about that category. If you have the pillows, black pillows, on the bottom you have a little blurb about black pillows or something you put in a couch [inaudible 00:33:14]. That will help Google understand the topic of that page a little bit better.

Steve: Interesting. Okay, do you recommend like hiding half of the content with like JavaScript?

Brian: No.

Steve: No, okay. It sounds like if I can just summarize you, you want to just start out with easier to rank keywords even if they have lesser amounts of searches. And just kind of gradually build your way up to some of the more competitive stuff once your site starts getting more domain strength.

Brian: Exactly, and you start ranking for stuff. The domain strength, domain authority is a way to measure domain strength using Moss’s tools. It’s a great number; it’s usually pretty reflective of how well you rank. But it’s not an official Google number. You can have a domain authority of 100 out of 100 and not rank for anything. The most important thing is, is that number going up, but more importantly are you ranking for stuff. Are you getting organic searches that are around the keywords that you are targeting, are your pages high priority pages, are you are building lists, are you getting more traffic?

That’s shows that Google is starting to recognize your size, starting to show you to the users. Then after that happens for a while and you start having good success with those keywords, then you can start moving onto the more competitive stuff. But I wouldn’t just be like looking at this semi arbitrary number versus the number that matters, which is like how many people from Google are coming to your site.

Steve: Okay, I’m going to link to that article that you recently wrote about what’s working and what’s not. But it seems like from that article for the listeners who haven’t read it yet; long form content is what’s working the best these days, right?

Brian: Definitely.

Steve: What are your recommendations? So any post on ecommerce site should just go into great depth on whatever the topic is about?

Brian: Yeah, I do recommend that.

Steve: Okay, so for an ecommerce product though, it almost seems like some of the choices might be limited. Is it okay to start writing kind of tangentially about what you are selling?

Brian: That’s a really good question. It’s tough one, yeah you are right. Product pages are tricky, because the point of the content is to make the sale, not really educate as an SEO. Fortunately there are ways that you can do both with the product page. Now, one is to give more information about the product right off the bat. I feel like a lot of sites do this well and some don’t. If you go and you want to buy a pair of shoes, all the information you really want above the fold is like the size, and how it looks right and the price. You don’t really care much about it.

But for other products like a laptop, you want actually more content above the fold describing what its features are, why it’s different, not just a list of how it compares to other laptops, but really like what’s the deal with this laptop. Like why is this laptop around. Like is this Samsung the gaming laptop is for hardcore video gamers, because it has a really great graphics card and fast processor and all the stuff. That’s really good content for the user but also for Google. Then as you get below the fold which is usually what people are trying to learn more about the product, they are not going to buy right then if they scroll past that.

That’s where you can educate them and that’s where you can provide user reviews as a great way to add content to a page. You can add more information, you can add reviews from around the web as long it’s not duplicate content. You can write maybe some quotes that other people have said along with your own commentary. There’s a lot of opportunities with product pages, but the key is to know where to put it to not hurt conversations. Generally that’s just like with categories pages, that’s below the fold.

Steve: So it sounds like you are advertising like you are advocating the Amazon model, right? To have bullet points like right at the top and then in the add the cart button. At the way bottom there’s the description where you can get more in depth information about what you are buying.

Brian: Exactly, and I think Amazon does it pretty well. The only issue is like I mentioned is that for some products like a laptop, I would appreciate actually more information above the fold and they don’t always do a good job with that, or books. They are also don’t do a good job with that, just usually a blurb and then you have to scroll down to learn more.

A lot of times, maybe not for a laptop, but for some products where there’s some impulse buying, you can actually convert them right then and there. But you need to give them enough information to do that. And it’s also good for SEO.

Steve: It sounds like though that the long form content that’s basically how you’ve been able to get Backlinko to rank is really more fit for like a blog, right?

Brian: Definitely, but for product pages you can apply some of those principles and turn your 200 word product page into a 800 word product page for example.

Steve: Okay, but in the grand scheme of things, the product pages and the category pages are going to be harder to rank. And your overall strategy should be to put out really comprehensive post on a blog and link them over to your product and category pages.

Brian: Exactly.

Steve: Okay. All right, let’s talk about back linking which is your specialty. How does one –like what’s your best strategy today for getting natural back links. Let’s say if you run an ecommerce site.

Brian: It’s actually the same for an ecommerce site or a blog or a service based business. The first step is to create something on your site that’s worth linking to. That’s number one. So a lot of people– this is a mistake, I made one when I first started. I would try to get links and I didn’t have anything that was worth linking to, and of course I didn’t have a lot of success. So I emailed people, and say, “Hey will you link to me please, because I have this great article,” that wasn’t really that great compared to what was out there.

I think the first step is to create something on your site that’s worth linking to. I have a lot of students in my course that run ecommerce sites or work for ecommerce sites, and that’s how they’ve had success lately is creating great resource that’s like best in the world on that topic. Emailing people, and the right people and asking them to link which we can talk about more details in that. And then getting links to that page and funneling that authority to those product and category pages. That’s basically the step by step that works really well enough for ecommerce.

Steve: Okay, let’s talk about the outreach part, because I get emails like that almost every day and I don’t link out to anybody no matter how good the resource is usually, unless I know the person.

Brian: Yeah, that’s– luckily not everyone is like that or else…

Steve: Like I would link to your stuff because I know you, but if it’s just someone random approaching me, like I wouldn’t even consider it.

Brian: Yeah, there’s definitely two ways to overcome that problem. One is to actually build the relationship with the person or the people in your industry that aren’t direct competitors, which they are — in every industry there’s plenty of people that aren’t competing, that are for example bloggers that write about your topic. So if you have a site about coffee or ecommerce that sells coffee stuff, there’s tons of blogs about health, and there is coffee [inaudible 00:40:01] blogs and all that stuff that you can get foodie blogs, that you can get in touch with and build relationships with.

Then when you do down the road ask for a link, or a lot of times you don’t even have to if they like you enough, you can get the link pretty easily. The other is just to go the numbers game approach which is fortunately there are enough people that aren’t as picky about handing out links, assuming the resource is amazing. There are enough people locally like that. That’s how I build most of the links to Backlinko when I first started. I didn’t build relationships with everybody, it wasn’t impossible. I built relationships with the people that I thought were cool and doing cool stuff, and I got some links that way. But I also got links just from emailing a ton of people and saying, “Hey you have this page that links out to great resources, I have a great resource here.”

The key is really to make it a natural fit and find a way where your link adds value. For example, if I go to mywifequitherjob.com, and I look at one of your blog posts, and I’m like this is a great blog post that has a lot of comments, it has a lot of links, it should be perfect for my link. And I ask you to add my link to your blog post; you are going to be really reluctant to do it. It doesn’t really make sense for you to go back to an old blog post and find a place for my link and add it, even if the resource is great. The key is really to find pages where they exist to link out.

For example, resource pages, there’s tons of these. These are pages where the point of the page is to curate content that’s really good, and they link out to other content. That’s the whole point of the page. When you email them basically say, “Hey you have this list of resources, I have a resource that’s really good, you might want to consider it.” It makes a lot more sense and they are much more likely to do that, because that page exists for that exact reason. You are actually helping them by sending them your content because your link adds value to that page and makes it a better resource, because it curates another piece of great content.

Steve: I see, so on Google do you actually search for like resource pages?

Brian: Yes exactly. So there’s search terms you can use like, your topic in quotes plus resources plus useful resources plus helpful resources. They bring up these exact pages. They are in SEO main step because these pages have been around for like since the web started. People have been curating content, because right away when the web got big like there’s just so much content. People are like, well we have to find out — find the best of it and put it one place.

Even more now today, there’s so much more content even though search engines can solve some of the problems, people do want hand curated content. Content curation is really big for that reason is because there is so much, they want experts to be like, okay, here’s the best stuff about this, here’s the best stuff about this, here’s the best stuff about this. These pages are all over the place in every industry. If you reach out to them with an amazing resource and you ask them in a non pushy away, a lot of times you get your links.

Steve: Can you give me an example of a non pushy way of asking for a link?

Brian: No problem, so say you found — you have a great guide on your blog. You just published about 50 things in about coffee. And you find a coffee related resource page, actual real one that recently went down on my course that some post in the Facebook group was about tea. So they had a tea resource and there was some tea resource page. And they reached out to the lady who ran it and they were just like, “Hey I know you run this resource page about the best tea resources online, I just published this thing about tea, do you want to check it out?”

So by not even asking for the link right away, you are respecting them. You are not pushing anything, you are not throwing your content in the face, you are just saying, do you want to see it. That way, I like to do that because if they say yes, you can send it and if they ignore you, you can move on. And you never even ask them to do anything. If they say yes, then you send them the resource, they look at it and a lot of times naturally, they’ll put two and two together, like, wow okay he sent me this resource after looking at my resource page, maybe I should add it. That way, it’s kind of like inception. Like they thought they thought of it. You know what I mean? I don’t know if you saw the movie.

Steve: Interesting, watched the — I did today, awesome.

Brian: It’s kind of like inception, like they thought it was their idea. On the other hand, you can be a little bit more direct and say something like, “If you would add it to your page, it would make my day. I’d be thrilled if you added it to your page,” something like that if you feel like the message won’t get across that way. I’ve found both approaches work. You will be surprised how many people think of it themselves, but when in doubt you can always ask.

As long as you ask like that, you didn’t really push anything, you basically left it up to them, respected their decision yes or no. And you didn’t go, hey, you never had him before, add this fizzy content, can I have a link. There’s a little bit more of a back and forth and then you are leaving it up to them up saying, “Hey if you wouldn’t mind, if you would add it to your page, I’d be thrilled.” So it feels like their decision and there’s nothing pushy going on.

Steve: Just curious, what are your percentages when doing it to a cold person like the way you’ve done versus just building the relationship first?

Brian: If you’re really good at it like you have enough resource that’s really amazing which I think a lot of people underestimate how like crazy good it has to be for people to want to link to something. Because when I first started Backlinko, my first couple posts weren’t very good. Actually a lot of my earlier posts were really bad, but in my mind, they were great. When I showed them to people and try to build links, they would be like this is pretty good, but not really worthy of my page. In so many words they would say something like that.

That’s when I learned you really have to step it up for this sort of link building to work, which is the only link building basically that exists that works. You need to go and step it up. So I had to learn the hard way like really step up the content game. Even if you have like the best resource on that topic in the world period, like not just you saying it because you wrote it, but like really people think that. And you find exactly the right people, that’s a perfect fit. That resource page is exactly about your topic. You wrote about coffee, this is about coffee.

Then you find the person’s email, you find their correct email address and you email them the exact time they are going — they are likely to open it which is a whole another game. People that do a lot of link building, they focus on like when the email goes out to when they are awake more likely to open the emails [inaudible 00:46:27]. You don’t have to worry about that, it doesn’t make a big difference. We’re saying even if everything is done right, you are looking at about 11%, 10% conversion.

Steve: That’s actually not bad.

Brian: Yeah, and everything that goes that isn’t perfect after that chips down the percent. But if you just like blast, you don’t even worry about the page, if it’s decent fit, it’s about tea, and your thing is about coffee, and you think you have the right person, but you just send it to the contact form. You didn’t use their name, all that stuff; you can still get like 2-3%. But obviously the more you do in terms of the work beforehand to get to know the person and get to know everything, it’s going to be a lot higher. You can definitely get to 10%.

Steve: Okay, what about some other ways of getting your content out there. Do you use like social media, Reddit [inaudible 00:47:11], do you pay for ads?

Brian: I’ve experimented that stuff, but I haven’t had a ton of success with it. I think like anything in marketing, you kind of have to be good at it for it work, and I’m not good at it. I never really had a lot of success. The most– the best I did for content promotion is just building your email list. Because then every time you publish a post, you can email X amount of people however many you have in your list and they are going to open it. And that’s what even ecommerce sites a lot of times; they build the list that’s specific to their blog. Maybe these people will buy from them, maybe not.

The point is they are on the email list and you can send it to them. You can get really, really quickly potentially if your email is big, thousands of people to your content in an hour. And they’ll usually take it and spread the word, because they are committed and interested in you and your topic. So there’s no need to even promote your stuff, because even if you spend a lot of money on Facebook ads, just the numbers of people that are actually click on the post and go to your site compared to an email list is insane.

Steve: Sure.

Brian: You’d have to spend like a couple of grand per post just to get as many people clicking. Those people aren’t going to be as engaged as someone who’s on your email list. So for me the biggest thing I did for content promotion is like get my email list used to hearing from me especially about blog posts, and also writing the blog posts, writing the newsletter emails in a way that gets them enticed to click through and read the blog post. And then when they are there, it’s the content job to convert them, at times they’ll write comments and sharing and all that stuff.

Steve: Let’s talk a little bit about just user behavior in terms of factoring into the search rankings. Are there any particular things that you do with your blog post to kind of keep them on your site long? First of all what are the factors, and then what do you do to promote them?

Brian: So it’s basically two factors. Like I mentioned Steve, there’s the keyword research and then there’s on page SEO optimization. Which is basically just have your keywords a couple times in a page and like you had mentioned using synonyms intelligently in places like your H1.

Steve: I meant like the user behavior.

Brian: No I know, I’m just saying, then there’s link building. Even if you just do those two things you are going got be good. But there’s this fourth user experience signals that Google is using more often. It’s becoming more and more important because it’s a great way for Google to determine if a piece of content is quality.

All this stuff that they are looking at with links and keywords and on page; Google’s job is basically saying this person is searching for this thing, we want to show them the best result for this search. How can we do that? What’s the best page? If you can make their job easier, they are going to rank you. If you can be the answer to that question, they are going to show you. That’s the real secret to SEO. Now, well there’s other ways of using that to do this now.

For example user experience signals, the number one is the click through rate of your result in Google organic search. So if someone is searching for like searches for black throw pillows and you rank number one, and no one is clicking on result, they are all clicking on two, three, and four, usually everyone clicks on number one. Google will say this page must not be a good fit for this keyword; we are going to drop it.

On the other hand if you are ranking number seven and you are getting a lot of clicks more than the typical number seven result, Google will say, hey people are really — they want to find this number seven result, why is it number seven? We need to make it easier for people to find, and they’ll give you a boost.

Steve: Does that imply that you should write your titles in a clickability sort of way?

Brian: It does imply that, and in fact I’m not going to imply, I’m going to say you should do it. So it doesn’t have to be the buzz fees style like and what happens next will blow your mind sort of thing, especially for ecommerce so it doesn’t make sense. But even things like an ecommerce title tag like say 25% can really dramatically increase your organic click through rate.

And if you are in doubt and want to put in your title tag or description tag, you can just get the AdWords ads around that keyword. That usually tells you everything you need to know, because those guys know from back and sideways what gets clicked on. And you could just take the elements that make sense for your page and put them in your title and description tag and you’ll usually get more clicks.

That’s a big one yeah, that one is used – I’ve seen case studies where it can make the difference between ranking seven and one, and I have my own experiences and experiments where I’ve ranked for keywords that just didn’t make sense. So for example, I had a page about a year ago that was ranking, targeting the keyword high quality back – no, yeah high quality back links, and the tile was how to get high quality back links. And because the page got a bunch of links from the links I was building, it started to rank for all sorts of stuff, not just back link related key words. It also ranked in the top 10 for the keyword how to get high.

Steve: Yes, I think I saw — you wrote about this I remember, yeah.

Brian: Yeah, I wrote a newsletter, wrote the same as email ones. And of course people that clicked on that result were like what is this? I mean I cannot and they would click the back button, people were searching for how to get high. And even though I was building more links, all the signals that Google wants to see like especially more links to that page, it dropped like a stone for the keyword how to get high.

It went from six to 12 to like 33 and 35; I think it’s on the fourth page now. And from my target keyword high quality back links is number one. So Google basically just based on that one user experience signal which was how long people spend on the page and the click through rate, they dropped it. So we don’t really talk about spending time on the page, that’s the other thing, it’s when someone clicks in your result how long do they spend there.

If they spend a long time on that page even if they hit their back button which is technically known as a bounce, you are still in good shape because it says, hey that person was reading, they spent some time there, maybe they got what they wanted and they hit their back button. But if they click on the result and hit back right away, that’s a clear sign that this isn’t a good fit. Despite all the other 200 signals a year, that one signal is enough to really show them this isn’t a good fit and they’ll drop you.

And that’s what happened with the keyword how to get high is that I ranked for that for a while. People were clicking on it probably less often than usual, because it said something about back links instead of the other keywords that you would expect to be around that keyword. And then when people did click on it they left really quickly, and Google dropped me. So that’s another thing you definitely want to keep in mind for product and category pages, but also for content pages is to really maximize the clicks you get, and then the people that stay on your site.

If you can do that, it’s a huge competitive advantage to be on the first page, because you don’t need as many links to rank and you compete against some of the big guys. In fact that’s one of the reasons that for a lot of keywords I can outrank these bigger brands, because they ignore these signals. They have all the other stuff in their favor, they have domain authority that’s way higher than me, they have page authority that’s way higher than me. They have brands that are huge that Google recognizes as big brands, and I’m this one man shop. And one of the reasons I’m able to do that is because I really focus on getting clicks on my result and getting people to stay there. Which is basically a lot of it is no real tricks, a big part of it is providing value so people want to stay.

But there is also things you can do like copy writing to keep people on your page, so compelling writing, so they’ll continue scrolling down the page, so basically they don’t get bored. If you could do those things you can have a huge competitive advantage over the people that traditionally you wouldn’t have a chance against.

Steve: Does that imply then that you should put in some sort of like podcast or video content on there to keep them on the page longer?

Brian: I’ve seen mixed results from videos, because the problem with videos is that it’s a big commitment for someone to watch. And a lot of times when they are searching Goggle they are not searching for videos or they would be searching on YouTube. So when they land on a blog post and they see a video, I’ve actually seen it hurt time on site. Because what happens is people start watching the video, they weren’t in like a video mood, and they’ll just hit the back button when the video gets displayed. They won’t stop the video and keep reading. On the other hand I have seen other people use it and have great success with it, especially with videos above the fold.

So a lot of people have the videos straight away, so they see it and they are like, wow, okay so this is a video and they can just scroll down and read the rest of the content or watch the video right away. That’s something I haven’t done, usually I have tested it like kind of half way down, put a video there and I haven’t seen that work. So it’s definitely very specific to like a million different variables, but I’ve seen people have great success with adding video for that exact reason.

Steve: How much work do you put behind your meta descriptions?

Brian: I put quite a bit just to optimize that click through rate.

Steve: Okay, and so you make it kind of the description sound really enticing for someone to click?

Brian: Exactly, so the never way of doing that it’s like AdWords ads for that keyword. Those people have really tested it to depth. So I just say okay so for example I had this post about list building that I didn’t have a good ton of description tag, my click through rate is really bad. And I was on the first page, but you know your page doesn’t have good user experience signals when it hits the first page and drops back to the second. Like if you go from like 8 to 12 or 13, then back to 8 and back to 13.

Now a lot of times I could just be like Google turned their dials on the algorithm, but I’ve also found a lot of times it’s because it’s just not a good fit for that keyword and they are trying to — they are kind of testing it out see how it performs at number 8, number 9 whatever, and then putting it back. I noticed that was happening with this particular post about list building.

So when I looked at the actual result in Google it was a mess. Like the title tag was cut off, it had too many characters in it, so it got cut off. And the description tag I didn’t put a description tag, so Google just pulled a random text out of my content, and just looked terrible. So I decided to strategically add content to my title and description tag that would get clicks. And I noticed that even though my content was about list building, and I know and you know that’s about building an email list, I dint have the words email list anywhere, it didn’t have the word email in the title or description tag in almost every AdWords I did. So I made sure to include the word email list in the description tag. I also noticed to use the words like build and grow and I didn’t use that.

So I threw those words in there. And I also just put words that I know people just loved to click on which is anything that’s going to promise fast results. So if you can say it works quickly, today, step by step, all those things that make things sound really fast, you can put — you’ll get a better click through rate. So I put these are strategies you can use today, so people understand this, it doesn’t sound like esoteric. Have a great newsletter and people will hear about it and they’ll sign up for your list, so like a real strategies you can use.

And when I did that my click through rate went up by a lot, and now it’s in the top five for my target keyword. Of course I build links and all that stuff, it’s not the only reason, but it definitely helped.

Steve: There is always this fine line between putting keywords in your title tags versus making it really clickable, can you comment a little bit on that?

Brian: Yeah it’s tough, honestly it’s an art. Because basically it gives you this constraint that you have to put your keyword in there, but you also have to write a title that’s compelling. The best marketers that do SEO really well can do both. But it’s definitely tricky, because in some keywords it doesn’t even make sense to write something good. A lot of times that’s where you just want to throw the keyword out of the window and write a title that make sense.

Steve: Interesting yeah, because when you said like keywords like step by step or quickly, I mean those stick a valuable characters in your title tag, right?

Brian: Definitely and that’s why a lot of times you can do all this stuff in your description tag. So you can have your title tag just — if you have a title that already has your keyword in it, that’s like for example this link building post, I don’t think I — I think it’s exactly the same as it was. It was cut off so I just cut it down so it fit within the limits, but it didn’t add any of this AdWords stuff to it, it was just as the title was and description is where I added all that stuff. But luckily the title was already compelling, it was designed to get clicks already from people tweeting it out on social media and stuff like that, it was designed to get clicks. So it’s just a matter of cleaning it up so it fit within the character limit.

The description tag was sort of just like didn’t make any sense, so I could do whatever and that’s why you put it in there. It’s definitely a tricky thing especially the title tag if you don’t have a lot of real estate there; you want your key word there. You probably want something else just to describe what the topic is, what you are writing about. And then you also may not have room for all this other stuff, and that’s where a description tag can come in handy.

Steve: Okay, this is actually something that I do not do very well. I should probably go back and re-write a lot of my description tags for all of my posts and make them more clickable actually.

Brian: Yeah, I can help you with that, it’s really especially helpful if you are on the first page because that’s where Google can get a lot of data to see how many people are clicking on it, and if they are — yeah and how long they stay. But especially how long they are clicking on it, how often they are clicking on it. And if you are on the first page they’re saying they get tons of data. If you are on the third page they don’t really know how many people are clicking on your result. But for those first page keywords, the ones you are already kind of like 9, 8, 7, I’ve seen that make a massive difference.

Steve: Awesome Brian, hey we’ve been chatting for almost an hour now, I didn’t even realize, the time kind of flew. I want to be respectful of your time, where can they find you, do you have any product offerings that can help people with SEO, just tell me where they can reach you?

Brian: Okay cool, so the best place to get more helpful actionable tips about SEOs is to head over to my site backlinko.com, and sign up for the newsletter. That’s where you get updates about new blog posts, but also exclusive strategies and case studies.

Steve: Awesome, and just a quick warning if you end up going to backlinko.com, you’ll probably stay there for a couple of hours just based on the content that Brian puts out there. So and his general mind tricks work, because I’m actually going to link to his blog even though he didn’t explicitly ask me to, so his techniques work.

Brian: Inception technique, it was your idea Steve.

Steve: Well, I like how you had these terms like that you use that are memorable. Like skyscraper technique or moving man technique, so this is like a new one, inception technique yeah.

Brian: Yeah, it’s a new one.

Steve: Cool man, well thanks a lot for coming on the show, it was a pleasure.

Brian: Sure, thanks for having me Steve.

Steve: All right take care.

Hope you enjoyed that episode, there are actually a lot of people out there who think SEO is dead, and it’s definitely not dead. You just can’t game the system anymore, and it’s to your advantage to follow Brian’s techniques, to get a source of free traffic in the long run. I know for our store SEO makes up about 30% of our sales.

For more information about this episode go to mywifequitherjob.com/episode116, and if you enjoyed this episode please go to iTunes and leave me a review. It is by far the best way to support the show, and please tell your friends because the greatest compliment that you can give me is to refer this podcast to someone else either in person or to share it on the web.

If you are interested in starting your own online business, be sure to sign up for my free 6 day mini-course where I show you how my wife and I managed to make over 100K in profit in our first year of business. Go to mywifequitherjob.com for more information, sign up right there on the front page, and I will send you the course via e-mail immediately. 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.

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Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

115: How Ankur Created Teachable, An Easy To Use Platform To Create And Sell Online Courses

How Ankur Created Teachable, An Easy To Use Platform To Create And Sell Online Courses

Today, I’m really happy to have Ankur Nagpal on the show. I met Ankur after being introduced to him by my buddy Jeff Rose who recently started his own online course.

Anyway Ankur runs the company Teachable.com which is a platform that allows you to create your own digital courses online without any technical hassles whatsoever.

If you’re into ecommerce, you can think of them like a Shopify or a Big Commerce except for digital courses. Anyway, since I make a lot of money off of selling digital courses online, I thought that I’d bring in Ankur today to talk about the digital course landscape and why he created Teachable. Enjoy!

What You’ll Learn

  • How Teachable works and what it does.
  • How Ankur came up with the idea for this platform.
  • What Teachable offers that the other platforms do not.
  • How Ankur developed his unique value proposition.
  • How Ankur generates recurring revenue.
  • How he got his early customers
  • How he markets his business.

Other Resources And Books

Transcript

Intro: You are listening to the My Wife Quit her Job Podcast. And if you are new here, it’s a show where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now I don’t bring on these famous entrepreneurs to simply celebrate their success, instead I have them take us back to the beginning and delve deeply into the exact strategies they used early on to gain traction for their businesses.

Now if you enjoy this podcast please leave me a review on iTunes, and if you want to learn how to start your own online business be sure to sign up for my free six-day mini course, where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email, now onto the show.

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 happy to have Ankur Nagpal on the show. Now I met Ankur after being introduced to him by my buddy Jeff Ross who recently started his own online course. Anyway Ankur runs the company teachable which is a platform that allows you to create your own digital courses online without any technical hustles whatsoever.

If you are into ecommerce you can kind of think of them like a Shopify or a Bigcommerce. Anyway since I make a lot of money off of selling digital courses online, I thought it would be interesting to bring in Ankur today to talk about the digital course landscape, and why he created teachable. And with that welcome to the show Ankur, how are you doing today man?

Ankur: Thanks man, I’m really excited to be here.

Steve: Yes so give us the quick background story regarding teachable and how you decided to get started with this, because it is a pretty competitive market.

Ankur: Yes, so it’s funny. I started this literally as a project for myself. I was doing a little bit of teaching on Udemy. For people that aren’t familiar, Udemy is a market place for online courses. I started doing a little bit of teaching on Udemy about two years ago and I liked a lot what I saw with Udemy, like I liked how easy it was to create a course that looked good.

It kind of made me believe in the power of online education, and how this could be something we could all do five years from now. What I didn’t like is as a teacher I had no control at all, like I couldn’t control the branding, I couldn’t get paid on my own terms. Every time I worked hard to bring a student to my Udemy course they would cross over to another course. So there is a lot of stuff I didn’t like.

So I ended up creating, at the time it was not called teachable, it was Fedora. But I ended up creating this platform to sell my own online course with my buddy Conrad, to create some platform just for ourselves. So it’s something that we did for ourselves first, and a few weeks into it we were like, okay if you find it useful chances are other people will find it useful too.

So it kind of organically evolved into a company which is something that I think is really funny because a lot of people talk about, oh I want to start a startup, I want to build this. For us it was almost incidental, it was just like a side project that then kind of became something much bigger.

Steve: Did you code that up from scratch then?

Ankur: Sadly I did, I say sadly because I’m a terrible, terrible developer. But it was enough to kind of validate the idea as soon as later in the year we ended up kind of becoming a real company and hiring developers. The first thing they did was throw out every line of code I wrote.

Steve: So just curious what year was this?

Ankur: So this was in the fall of 2013, fall of 2013 is when we started this, we kind of we incorporated it in May 2014 and that’s sort of when we became a real company.

Steve: So here is the thing, so I started my class in 2011 and there were still a whole bunch of plugins out there. So I’m just curious why did you decide to create your own platform as opposed to for example using WordPress and a membership plug-in?

Ankur: I hate WordPress man, what can I say.

Steve: Oh you do, okay.

Ankur: Honestly I looked into it right, and it seemed like WordPress plug-ins is where the market was today, but that’s not where the market is going to be five years from now. We want it to almost set the path for what is to come, and we looked deeply into a WordPress plug-in, we just found there is too many interdependencies we could not control.

It was definitely the path of least resistance. Like if you wanted to get set up quickly, WordPress plug-ins were the most logical choice. But thinking in a longer term time frame like thinking three years from now, five years from now, it was just never going to be where we wanted it to be.

So that’s why we made the decision like it is more painful, but let’s do this the right way, let’s remove all dependencies as you probably know with WordPress there is a lot of kind of madness trying to balance different plug-ins with each other. And like just hoping it doesn’t all go belly up, we wanted to make it just stupid, stupid simple, and didn’t want to — and that’s why we chose not to use WordPress.

Steve: Just curious so what were some of the things that were missing that you found?

Ankur: With word – honestly the…

Steve: Without the WordPress or any other platform?

Ankur: Just the fact that you couldn’t have one solution right, even the best WordPress plug-ins might need you to have a shopping cart, they might need you to have a video hosting platform. They might need you to have an email client. Like there are some people and granted these are– this is not the majority of users, but we have a substantial percentage of our users that only use Teachable. That means they don’t even use MailChimp, they often use anything for email delivery. So we wanted to provide something that of course we can plug in to more advanced tools as per needed, but it should be self contained if necessary.

So right from video hosting, payment processing, it’s a fully self search solution for someone that literally starts to use one tool, upload all their stuff and go. Which was not possible on WordPress, on WordPress there is MMS plug-ins, there is membership site plug-ins, there is a lot of different plug-ins that have parts of this functionality. But even then they generally have dependencies on using video for video hosting and just other tools.

Steve: Sure, no that totally makes sense, so does that imply that you guys do email marketing also then on your platform?

Ankur: We do it; we do the minimum viable version. What that means is you can’t do any automation without plugging into an automation provider. But you can do one off email marketing pretty easily, like you can easily say, hey I want to send a coupon to anyone that bought one course, not bought another, and is not logged in five days. You can do that super easily, you just can’t automate it.

Steve: Okay got it, okay and so how did you know that there was actually demand for this platform, because in 2013 still there was probably like a half a dozen plug-ins for WordPress, a bunch o other fully hosted platforms, so how did you kind of know that?

Ankur: Honestly, honestly this what’s funny is like we didn’t. The real truth is we got super lucky, we were being very reactive, we were taking what the market gave us. And the truth is what the market gave us for the first six to 12 months was mostly just Udemy and other market place instructors.

So it’s not people that even heard of WordPress or ever used a WordPress plug-in, or early on it was almost entirely people on Udemy, or Skillshare, or other platforms that had, had success, but realized that they were also being held back by Udemy, or being held back by Skillshare because they didn’t own their audience.

So our early audience was just people using kind of a self hosted — going self hosted route for the first time ever. I think the point at which we raised our seed round just yeah May 2014 about half the people — we had about half of Udemy’s top 20 instructors at the time. And that was all for a real attraction just like people on these other platforms that wanted to run their own business and own their own audience.

Steve: So does that imply that — so I’m just curious how did you get those people, did you poach those somehow, or did you take their class and contact them? Okay.

Ankur: So again I think we got so fortunate, I look back, what happened about a few weeks after we launched this platform and I hit up a few people, being like hey you want to try us out? No one replied like people just didn’t care at all. But then Udemy changed their revenue share structure midway through.

I don’t know if you remember this, there is a point and I want to say October and November 2013 where Udemy said, hey guys we’ve been paying you 70% so far, but guess what, we changed our mind you are now only going to get 50%. And that pissed a lot of people off. I think what all — and the other part that really pissed a lot of people off was not the fact that their revenue share was being reduced, the way Udemy tried to spin it with as a positive for them, it’s like guys you don’t know why this is better for you, and that just made people feel insulted.

And it just created this exodus of teachers or instructors that wanted to look for an alternative, and guess what we just happened to be there. So that was one of the very significant points early on when this wasn’t a company, this was my side project to kind of get us our first wave of instructors just disgruntled teachers from Udemy who just felt slighted by the system. Who felt that we’ve invested in building our business on this platform, but you just changed the terms right under us, that was the first realization that, okay I need to do this my own way.

Steve: How did you get these people?

Ankur: So it started off slowly. It started off with people that had never replied to my email starting to reply. But what happened is Udemy instructors always self congregate online, it might be Facebook groups that have discussion forums. Word started to spread that hey three of the top 10 instructors whatever are using us. And then it was all inbound. Our system was so bad then, for the first six months you couldn’t even sign up directly you had to email me and I had to create an account for you.

Steve: Okay. So you– it sounds like your strategy was to get the top guys who would then spread the word for you.

Ankur: Yup, and even then it was small. In the first, after 6 months, we maybe had 15 to 20 people making money every month. It was still tiny.

Steve: I’m just curious what the outreach kind of looked like. You would take their class and then reach out that way, or how did you get even amongst these people to actually email.

Ankur: Lots of different things. One was yes outreach wherever we could find an email address, we would reach out to them directly. The second thing was obviously inbound from people seeing what other teachers are doing, and the third thing is because they self congregated in Facebook groups which was not possible at the time, but by very targeted advertising to all Udemy instructors. There was just like– I mean we probably couldn’t spend more than literally $5 a day because it was such a small audience, but everyone who was in that small audience found out about us.

Steve: Interesting. Let’s talk about that. You targeted a Facebook ad to just like a handful of people and groups?

Ankur: Yup, which worked so well. It’s super sad that Facebook now has made it completely illegal. But yeah with $5 a day we could reach everyone we wanted to.

Steve: Can you just kind of describe that ad and like what the copy was like just…

Ankur: Yup, basically I think, I’m trying to think of what these ad copy was. It was predicated around the idea of like in very direct response like “Hey you know post your Udemy course here to control your audience.” That was– it was super, it was just super targeted and it was amazing because we were spending five bucks a day, and we tried to see like okay, can we spend 10 dollars a day, but there was no difference. Like at five dollars a day we were hitting absolutely everyone in our target group.

Steve: Interesting. Once you got those top guys, did you do anything special then like any special deals with them to kind of influence them to spread the word, or did it happen organically.

Ankur: We just went out of our way to be amazing to them. For instance for a lot of people, I personally uploaded all of their course content. They would literally just send me like access for their course. I would manually download everything, re-upload it to ours because we were small, and we did this kind of stuff.

We just went above and beyond in just being incredibly responsive. I’m using the word we out of habit, at this point it was me. I was sales, I was customers support, I was developing, I was product. It was a one person– it was a one person shop that pretended to be this entire company.

Steve: Interesting, so you didn’t have your partner at that time.

Ankur: Conrad was my, so he and I were teaching together and he went on to become the first customer. Our relationship, he eventually joined the company full time, but only after funding. For the first nine months, our relationship was primarily of a customer and service provider.

Steve: Okay, interesting, then he just joined on. Actually before we go too much, I’m very curious why you decided to get funding as opposed to just continuing on. It sounded like you were tagging along in the beginning just fine.

Ankur: Yup. I think there was a point where I actually realized, for the first few months I was never sure like is this a real business or is this my side project? As soon as it became abundantly clear that this was a real business, we had to hire developers, we had to do things to make– because as I mentioned earlier, the code I wrote was terrible. I’m not an engineer. We had to hire real developers, get a team in place and that cost a lot of money.

We could have tried to bootstrap it because we were making some money from what I remember. I was not paying myself anything. When we raised money we were making I don’t know 5, 6K a month. It was just so painful to kind of– we actually could have hired contactor and help with that and eventually try to grow that up. But the fact is after a few meetings, we were offered money at terms that were completely reasonable. Bear in mind this was early 2014 when the fundraising market was about as good as it’s ever been.

Steve: I see. So did you hire people after funding or before funding?

Ankur: After funding.

Steve: Okay, got it.

Ankur: It was the right balance where before funding. But before funding we still had enough traction that this was more than an idea. Because I remember at the time we’d– the month before we raised the money, we processed close to 50 grand in core sales that month which bigger picture is nothing. For a seed company, it’s like okay, these guys still– there’s still some kind of dollars entering their account every single month.

Steve: Yeah, so basically that translates into the five or six K, right?

Ankur: Yup, correct.

Steve: You guys, okay. I’m just curious, how much upfront investment did it take for you guys to launch Teachable or Fedora I guess.

Ankur: Honestly, it’s a rounding error outside the fact that I didn’t pay myself anything. I don’t know I would have probably– on the assumption that I’m not paying myself and my time as working on it I would guess I don’t know, a thousand dollars. Nothing really– it was just the value of my time.

Steve: Wow, so this really was like a small scale project from the beginning. You literally were just trying to use it for yourself.

Ankur: Yeah, I had no idea this would become what it is today which is what’s super cool, because I just get annoyed with the Silicon Valley narrative of people that always wanted to build an education company. No, things happen and as they evolve your thinking evolves and then you finally crystallize the vision for the company.

Steve: Just curious, did they approach you, or did you go out specifically looking for funding.

Ankur: I went out specifically looking for funding.

Steve: Okay, and at what point, this was at your 50,000…

Ankur: In monthly sales. This was, I went out in May is when I think I went, I made the trip to San Francisco, May 2014 and we closed mostly around during 4th of July weekend is when– by 4th July weekend we had closed it around.

Steve: Just curious, how many customers did you have when you asked for funding, and how many do you have now?

Ankur: So in terms of– then it was interesting because people couldn’t pay for a plan. I guess we’ll define our customers by the percentage of– by the number people making money every month which at the time was mid ten, so I would say 40, somewhere in that range.

Steve: Wow, that’s not a whole lot. Okay.

Ankur: And right now we are at about 2000 paying customers. In addition we have some customers in the free plan that still pay our transaction fee, excluding them we are at about 2000.

Steve: Okay, and then I’m just curious how things had changed once you got the funding and then how do you market your business now?

Ankur: So for the first six months it was painful, because we were in technical debt. I had built this version of Fedora at the time that worked, but no other developer could be productive on it. As soon as we hired real developers is like we have to discard this now. Then, that was very painful because our customers are still using a version while our development team was building it from ground up.

From about July till December was an incredibly probably the most frustrating time in the history of the company, because yes we were marketing it, but there was no active work being done on the software we’re marketing. Our marketing was good and we still kept revenues growing slowly, very slowly but it was just frustrating because the entire team was working at something else. Most of 2014 kind of went in that. It was only starting in 2015 that we really started growing.

I want to say the end of 2014 we probably– we had gotten to making few hundred thousand dollars in monthly sales, but it was just driven by a couple of strong customers. We were still as the company making 15 to 25K a month. Starting 2015 is when things started growing. We finally rolled out this new version that was substantially better, and we actually had an active development team working on it.

Steve: Just curious, what was– so after you got your first couple of Udemy people to talk about you and word of mouth, what are some of the other advertising methods that you used?

Ankur: We never, we still like to date have not figured out how to spend money to grow, which is kind of our big project for 2016. Word of mouth was the big thing. The other thing was basically people would use us to sell courses. Their students would come to the site, some of their students in turn would be like, oh powered by Teachable, or powered by Fedora, come to our homepage and then sign up again.

There’s an inherent kind of very small organic loop inside the product that were done really well. Then we also did a lot of like unscalable kind of outreach. I’ll give you a couple of examples. One is we went to Ryan Holiday who had a book launch, and we convinced him to put it– and we built an online– we helped him build an online course version off his book and ended up mailing out over a thousand copies of his book to anyone that bought the course.

We would go to people on YouTube with a large audience saying “Hey can we kind of re-factor your YouTube videos and make it into an online course?” We did a lot of these kind of very unsustainable outreach type of things to convince people who already have an audience to start selling courses. Very soon that we found all of those efforts kind of were rendered not– were rendered kind of useless relative to just the organic that started picking up.

Oh, another thing we did is we partnered with Y Combinator, they had a how to start a startup class. We hosted a version on Fedora and that in turn drove many thousands of students signed up. So it created a small trickle back effect for people like, oh what technology powers this, and then them signing up for the product.

Steve: You actually went out to I guess influencers and you offered to create a course for them based on the content that they had already put out.

Ankur: Yup. We also went to, even though it didn’t work out, we would literally go to conferences, and, “Hey can we take your conference and package it into an online course?” The other thing we did that worked out amazingly well is we had an automated import from Udemy button. That was a technological thing. So technological thing and that just helped us grow so fast. Well, because in the past what would happen is if someone’s interested in coming on board from Udemy it would take them days, maybe weeks to re-upload everything. This is a one click solution. They just pulled all your content over.

Steve: Wait, so Udemy lets you export everything in a nice format?

Ankur: I mean we had to be a little bit creative.

Steve: I mean are you scraping them or?

Ankur: Basically people entered their credentials then authorized us to act as their agent. So we effectively automate the process of downloading everything and re-uploading it to our server.

Steve: I see, yeah that’s ingenious. That was a huge driver then I would imagine.

Ankur: That was a huge driver. That was a definite very, very big driver. It helped a lot, it didn’t help with acquisition because it didn’t help us get new people, but it helped us activate people really fast.

Steve: Well, yeah, if I’m on Udemy and you are trying to get me into your platform, it has to be really awesome for me to go through the painstaking of transitioning, but with this one push button thing I might actually hedge my bed and sell on both platforms.

Ankur: Yup. And we always had a free plan too which made it easy for people to try us.

Steve: Let’s talk a little bit about that because I’m kind of curious. I was just looking at how you do your pricing. How did you decide– so first of all what are you pricing plans and how did you decide on those plans in first place.

Ankur: Yup. So right now we have a free plan where we charge 10% plus a dollar of every sale. Then we have three plans. Basic at $29 a month, professional at $99 a month and our kind of high volume plan at $299 a month. Each of them have varying transaction fees, the $299 a month having no transaction fees at all. In terms of how we came up with our pricing plans, I will be the first to admit like dude we don’t know.

We’ve literally– we modeled our original pricing plan a lot based on what Shopify had kind of their tiers, since then they’ve updated it. Right now one of my grievances is I think we are long overdue, some kind of intelligent test on our pricing. Like I’m not 100% happy with our pricing as it stands right now. I’m not sure which direction we’ll go in, so chances are when someone is listening to this our pricing might a little bit different. Whenever we do it we will obviously grandfather everyone in.

There’s a couple of things that concern me about our pricing right now as it stands. One of them is I think our free plan is almost too good to the duty that one of our biggest reasons, well our biggest reason for churn right now is people dropping down to our free plan, could use indefinitely. I also feel like, we also have a few people sensitive about the transactions fees on the $99 plan because they feel like $99 is still enough, I want to give up marginal kind of share which we get, but the other side is we also have a lot of fixed cost because we pay for unlimited hosting and video band.

Steve: And the video too, yeah.

Ankur: Unlimited band which is some people are technically losing money. There’s a lot of kind of weirdness on our pricing, but we decided very early on to try and keep it simple, so have people not worry about bandwidth, have people not worry about hosting. Don’t worry about number of students. We have no traditional limits. So no limits on students, courses, hosting, bandwidth whatever. That’s all unlimited in every single plan including the free plan.

Steve: Just curious what are the break even points from the free plan to the next highest plan?

Ankur: So, it depends on how much your average course price point is because the free plan is a dollar plus 10% on every sale. While in general a few hundred dollars and the basic plan makes sense. The basic plan is also where you get a custom domain. For most people for $29 bucks a month like it’s just worth it to have your own domain name.

Steve: I see, otherwise it’s what? Just something.teachable.com?

Ankur: Yup. The professional plan breakeven is about couple of a thousand dollars, a little less actually a few hundred dollars and the high volume breakeven point is $4,000.

Steve: So here’s kind of a complicated question that just popped up into my head. You mentioned that Udemy pissed a lot of people off when they switched around the pricing. Couldn’t that essentially happen with your platform as well? We were just talking about pricing and how things might change.

Ankur: The reason that wouldn’t happen with our platform is we would always grandfather people in. When I say we’ll change our pricing, it would apply to people moving forward. Anyone who signs up before we change the pricing will always the choice of do I want the old pricing or the new pricing. No one is going to have their pricing changed. They will always have their original pricing. It’s more of what we do for people who come after.

Steve: What kind of influenced your decision? We chatted earlier but Udemy is like a market place. If you put something on Udemy they’ll find customers for you, but on your platform it’s not like that, right? What specifically kind of influenced your decision to do it that way because it seems like you could drive some customers to other people courses, right?

Ankur: Yup. The primary reason was the fact that as I said, we were teaching at Udemy and we didn’t want our customers to be driven to other people’s courses. Our goal is to allow people to make that choice. Technically every Teachable school comes with an inbuilt affiliate program. We do have people cross marketing courses, except now it’s something to think about versus something that happens automatically.

Steve: I see, I see. So I might not want like my customers to know that there’s a competing product out there. That’s kind of your rationale.

Ankur: Yup. And there’s well if you are building a premium brand selling a premium course, like you want it to be your brand. You don’t want them to be destructed with– like if you are selling a thousand dollar product and they see a five dollar product next to it, in the market place that might not be the best.

Steve: No, no that totally makes sense. So in Teachable when you have your own domain, no one even sees anything about Teachable at all, right?

Ankur: Correct.

Steve: Okay.

Ankur: Yeah, Teachable does not have– any of the students we have no rights over them. We are just a technology provider. We can’t contact your students. We don’t even own the data. You own that data.

Steve: You mentioned these problems on the free plan people dropping out on the free plan not wanting to pay, can you just kind of comment on what your distribution looks like between free and paid?

Ankur: Right now in terms of the active customers, we have about a little over 5000 active customers. Off that, about– and we have like 2000 paying customers. Of course we have a segment of paying customers that are not monthly active, but in general on any given month about 75% of our active customers are not paying.

Across the entire lifetime of Teachable accounts created, there have been about 45,000 accounts created of which 2000 are paying us right now and about 2400 to 2500 have paid us at any given point. In general we convert about, hopefully we’re converting about 7% of people from free to paid.

Steve: So 2000, does that include like the free guys who’re actually selling stuff?

Ankur: That does not include them.

Steve: Okay, so 2000 on the monthly plans.

Ankur: Monthly or annual.

Steve: Okay so the remaining 3000 are just people that might occasionally sell something.

Ankur: Or they could be people in the process of setting stuff up. We also have a customer segment. It’s not super common, but from people that have no intention of ever charging money for their course, and also don’t care about a custom domain, for them they effectively have unlimited everything for free.

Steve: Yeah, except they have to pay a dollar, right?

Ankur: Yeah, but if you don’t want to sell anything, you don’t have to pay anything. If a course is given away free right now, you pay zero.

Steve: Okay, but meanwhile they are sucking up your video bandwidth, right?

Ankur: Exactly.

Steve: Okay, so how is that sustainable in the long run?

Ankur: For now we just kind of let it be as the cost of doing business, but that’s what we are thinking about. Basically what it comes down to is we are not profitable on a per customer basis, but we are still profitable across the entire spectrum of customers, but yeah, so right now for instance, and it’s slowly starting to happen. Right now we don’t know, we’re spending $7000 a month on video bandwidth, and that’s already because our marginal bandwidth cost has become super cheap.

Still we’ll see how that goes up or down as a percentage of our monthly recurring and then decide what to do. For now, a lot of people do stay, just the fact they don’t even think about it is worth so much more than even if they were paying for what they were using. Just a fact it’s one less thing to think about.

Steve: Here’s something interesting. I offer a free course with my class, and it’s driven via email mainly, but you are saying that I could take this course, package it nicely in Teachable and offer for free and not have to pay anything?

Ankur: Correct. If you want to put it in your own brand and stuff, then you can do it on the basic plan, but that’s it.

Steve: That’s sounds very appealing.

Ankur: Yeah, and there’s a lot of people that do that. Bigger picture, I want more of that to happen. Like, as I said, we are venture bat. We are the only venture bat company in this space. If we lose a little bit of money because too many people use us, because our bandwidth costs are free, I think that’s a long-term battle, we are okay with it.

We are okay if we are marginally unprofitable on some customers, but say you– for instance you are a great example, imagine new users for your free course, I bet you someone in fact more than one person in your course is already targeted towards people wanting to make a side income. Some will be like, “Steve this is in Teachable, that’s kind of cool, I wonder if I should use Teachable and we’ll get paying customers through that.

Steve: How do you quantify those people?

Ankur: We have ads [inaudible 00:30:23] we have no great metrics on it right now.

Steve: Okay, so let me ask you this question, how many people who are on your free thing eventually go on to paying?

Ankur: Right now that is more of the bigger improvements is it used to be about 2, 2.5 % but of late we have gone up to about 7 %. We would love to get it to 10.

Steve: So what are specific things that you are doing to encourage that to happen?

Ankur: The biggest thing we have done so far is a weekly webinar where we kind of go over exactly what the platform entails and generally end with a time sensitive offer to upgrade to appeal to a paid tier.

Steve: Okay, so how do you get the word out? You just e-mail people?

Ankur: Yup, these are people already in our funnel, so this is someone after…

Steve: Oh, I see.

Ankur: Just to our own free users.

Steve: Okay, so you this weekly and…

Ankur: Yup.

Steve: Is it the same exact webinar each time?

Ankur: Yup, it is slightly customized based on what the questions are because the first 40 minutes are like “Hey here” – it’s just a technical walkthrough, it’s not content based. It’s all technical like here’s how you set things up, this is what you do and then the last 20 minutes content is different based on where people got stuck or what specific questions they have, but it’s the same template. We occasionally experiment with what the offer to upgrade now is, and that’s not– there we always try different things, but it’s all around the same presentation.

Steve: Is this a human giving it or is it a recording?

Ankur: Human.

Steve: Human, okay because there is Q&A I would imagine at the end.

Ankur: Yup, and I mean we could do an automated thing, but it’s so high leverage, the leverage on this is we convert 2% more people than normal or whatever, from a lifetime value perspective it’s worth having someone do it– doing it themselves.

Steve: Interesting, I am just curious what your conversion rate is for a webinar to upgrade people?

Ankur: It’s like it’s dropped now and we are trying to figure out why, but we would at one point get almost a third of people to convert.

Steve: That’s amazing, okay.

Ankur: Yeah, it was bizarre but then again you’ve also to remember this is a webinar at a $29 price point at its base level.

Steve: Sure, but it’s recurring.

Ankur: Yup, it’s recurring. Our conversion rates are incredibly high and then there is a lot of people kind of the marketing space that would say, “Don’t do a webinar for a $29 price point,” but for us one it’s recurring and two it’s also gets people activated and gets people excited.

Steve: I imagine your lifetime value on those guys is at least like $300 or something, right?

Ankur: It’s a little bit under…

Steve: Little bit under okay.

Ankur: Then again, that’s lifetime value as measured by monthly billings only, does not include the transaction fee.

Steve: Sure, which is the huge chuck, right?

Ankur: We don’t have a good blended LTV number yet.

Steve: Okay, so let us talk about– we talked about churn like 20 minutes ago, so what are some things that you do to kind of reduce churn?

Ankur: Honestly not enough, like now our best bets to reduce churn are one, provide value, two try and identify what makes people less likely to churn. So far the biggest take away is as soon as people have their first sale, they become absurdly less likely to churn, which follows common sense.

Steve: Sure, sure.

Ankur: So internally we are trying to see what can we do to take people to their first sale as first as possible. So we are trying to surface the right information at the right time. One of the challenges that we are struggling with is there is still a lot of people that don’t succeed at getting to their first sale. I guess it’s true, I’m sure you have seen the same thing with people trying the e-commerce stores as well.

Steve: Absolutely, yes.

Ankur: So that is something that we are struggling with, if you have any suggestions let me know.

Steve: We have an e-mail sequence that kind of walks people through, and I know a bunch of other course people that use intercom.io.

Ankur: Yup.

Steve: Like triggered e-mails, are you guys doing any of that stuff?

Ankur: We used to use Intercom, we just move to HubSpot. We have the right e-mail automation set up, obviously it can always be better, but yeah that’s one of the challenges we are having is like we are investing a lot into education, but we’ve personally found a higher ROI from finding people that do education well, and partnering with them. For instance, anyone in [inaudible 00:34:25] online courses program gets a few months at Teachable. Mariah of course has a signature course on launching course. Partner with people that are doing that training and giving them the software and kind of figuring out how we get paid on the back end has traditionally led to better outcomes because there’s people that are just so laser focused on the training that they are just going to do a better job than we can because our focus is going to be on the product.

Steve: So how do you convince these big guys like the [inaudible 00:34:54] to actually use your platform in the first place?

Ankur: Honestly there is a [inaudible 00:34:58] it’s actually pretty easy; I think we have the best technology and most people that do their due diligence land up there as a logical conclusion. The only people that don’t are those that want a really large kick back, or they want something in addition to the best product for their students, but at the risk of sounding super arrogant it’s not been very hard, it’s often very hard.

Steve: Because they don’t want to deal with any– but I would imagine those guys already probably have something that has been working for a long time.

Ankur: Most people are immensely frustrated though with whatever solution they have set up right now which is the other interesting thing that’s it’s not been that hard to get people to switch. No one wants to switch on a random day of the month, but whenever they are launching a new product I found that people are surprisingly open to switch especially if you ingrate with their current marketing set up. Most of them are pretty set on how they do their marketing, they don’t really– they are not set on what tool they use for fulfillment yet. They are still not 100% convinced.

Steve: Just curious then, what is your kind of on boarding process like? Let’s say I have signed up, do you kind of hand hold me through everything?

Ankur: No, in general for us to be a successful company, as I said we have 2000 paying customers, we try and add about 100 paying customers a week. We don’t have the skill to on board everyone personally. So we try and do as much in-product as possible so everything from kind of contextual pop ups and videos trying to make it as absurdly simple to set up a course as possible. With that said that’s our biggest challenge and will continue to our biggest challenge is how do we do that.

We also offer something; we are experimenting with offering something called [inaudible 00:36:42] on boarding where anyone on a professional plan gets a 2 hour on boarding session. What’s interesting is that it is largely peer to peer. We are trying to identify people that are suited to use our platform and paying them to conduct these sessions. It’s something we used to ourselves in-house and just got like stupidly unscalable.

Steve: Sure.

Ankur: So we are trying to see if we can do this in a scalable way. The jury is allowed, I’m not sure how it will turn out, but if it works out well it’s going to be super promising, because then we can theoretically start offering this to more and more people, and it is the community kind of providing these on boarding sessions.

Steve: Just curious, for a company your size, how do you distribute the resources versus ease of on boarding, versus like a conversion script like the Udemy to your platform, versus just getting more customers. How big is your company?

Ankur: Absolutely, we are 16 people right now.

Steve: Okay.

Ankur: Our growth and marketing team is 6 people, our operations team is 4 people, and our product team is 6 people. Operation support is owned by operations, all growth related activities. Since we don’t have a sales team, it’s right now shared between operations and kind of our growth/marketing team, and 6 people on product.

In terms of how we would like to scale the company moving forward, I think we always want to maintain a similar kind of ratio, and we are going to be probably looking to hire about 2 positions a month for the next 3 to 6 months.

Steve: That is crazy, okay.

Ankur: Yeah, right now it can be argued we are not deploying our capital efficiently, because we’re– we raised 2 million dollars, we still have well over 1 million dollars in the bank and on a per month bases we are– on a good month we are losing less than 20 to 30K, we are almost at brake even with a ton of capital right now, and potentially there is a little bit more. We have room to spend money faster; we just haven’t found smart ways of doing so yet.

Steve: Yes, so on the market, what have you tried? So you mentioned Facebook ads, and those worked out for you, before they didn’t allow you to target groups, what else? Have you tried Adwords?

Ankur: Influencer marketing has been huge, so going to people’s audiences, doing webinars has been massive.

Steve: What’s your pitch for that? Like what’s…

Ankur: We have a webinar that converts roughly on—I mean it’s actually crazy, we’ve actually had times when it’s converted at close to 100 dollars in attendee, but in general it converts about 50 bucks in attendee. Including one time when we had a 6 figure webinar, which was super fun.

Steve: Is this like an affiliate arrangement with the audience?

Ankur: Yeah, it’s an affiliate arrangement, so basically for instance, with Mariah Coz from Femtrepreneur. We had a six figure webinar where she brought me to her audience. We ended up selling a year of software as well as some kind of content from her; we split that 50-50. So it’s a tried and tested webinar that we have done plenty of times, it just works; it’s almost kind of an elite pages play book that works really well.

That’s something we try and do about anywhere from 2 to 5 times a month. The biggest thing for me over the course of the next couple of months is removing myself as a limiting factor, because until now all of these events I do myself which is just not sustainable. The other thing that has worked really well is we had a summit last November where we sold 500 annual plans over a 2 week period, which was super fun.

Steve: Nice, how did that work? So you just had your own conference or?

Ankur: Effectively an online conference brought in a bunch of people we really respect in the online course space, they all taught a free– they offered a free workshop. At the end of the summit we had an offer where each of these people that taught a free workshop gave a piece of premium content to the offers. The overall offer is that if you bought a year of Teachable, you got a piece of premium content from each of these 8 people.

So it was actually an amazing offer too, because for a lot of that just the training itself is worth thousands of dollars, but with an annual plan of Teachable you get all of that included.

Steve: And the people contributing the content, they would get an a affiliate cut of whatever you sell?

Ankur: They would get an affiliate cut to their audience.

Steve: Okay right.

Ankur: If we drove the sale, we pay them a small bounty just for being on the webinar or whatever, but in general they got a real 50% commission of everything that they sold as well as– most of these workshops like the good ones, we got like 700, 800 people live. One of them over a 1000 people live, so it also really helped enhance– it helped grow their audience pretty considerably too.

Steve: That is pretty ingenious. What about the YouTubers, have you had any luck with those guys?

Ankur: Not as much luck as we would like.

Steve: Okay.

Ankur: The big challenge seems to be they want it to be completely done as a service, they want it to be done for them, and we are effectively a self serve platform. So anyone listening, I think there is a big business opportunity if you are willing to work with these YouTubers and do the work for them.

That’s literally the only thing, they are happy to experiment, they are happy to send traffic and a few of them are succeeding, but at large they want you to take care of everything. They are like “I want to send content and tell me where to link, and you do all the work,” which doesn’t work for our model, but it could well work with an intermediary kind of acting in between us.

Steve: Is there like famebit.com is a sponsor of this show, and they provide you guys with– people with access to influencers.

Ankur: Nice.

Steve: Just curious if you– do you guys use any services for anything like that, or is it just all outreach and legwork?

Ankur: It’s all outreach and legwork, also what helps is like the space that influencers want in general are incredibly nice and helpful people, and once you know– it’s a small world at the end of the day. So it has not proved to be especially challenging.

Steve: It just so happens that online course are exploding right now, so it sounds like it’s a really good time for a service like yours.

Ankur: My bet and I could be wrong is like this is still so early in terms of what online courses will become. It seems like exploding now, but my overall kind of bigger bet– maybe you disagree because a lot of what you talk about is predicated on selling physical items, but I think 5 years from now or ten years from now more people are going to be selling information in some from online rather than physical products.

Steve: I believe that.

Ankur: That’s kind of the big bet, big long term bet behind this company that, it’s like we were facilitating the sales information and that is only going to keep growing, and the number of self supported entrepreneurs that sell information for a living will only keep growing.

Steve: Can you just kind of comment along those lines about some of the bigger guys out there, and kind of how you guys are each targeting something different. Like Udemy, Coursera, Lynda.

Ankur: Absolutely. So, Udemy I think is going to be very successful, I don’t agree with their way of doing business because you they have effectively built you know they came out of foreign education, they are like the place to go to get commoditized like $10 courses on any topic.

Steve: Yeah, exactly.

Ankur: I still think they are going to be very successful, because they are solving a problem we are not, which is if you are a student that wants to learn– like if a student wants to learn X topic, we do not help that at all, our platform is not for students. Udemy has cut a nice little niche for themselves kind of being the skill based version to get cheap thrills and like buy 10 courses, watch one, but that’s still a big market and it’s still something they’ll be successful with.

Coursera has gone the interesting route of taking college level courses, so Coursera is different from Udemy because Coursera is very academic focused, not really focused on skill based stuff and making that accessible to everyone, and that’s what we try to monetize at, it’s again a completely different kind of field to play in.

Lynda.com is interesting because I guess Pluralsight and Lynda are about– I can talk about them together, because they are both doing effectively the same thing where you build a really large content library, so you have a content company and then you sell it. Most of Lynda’s business and Pluralsight is driven by enterprise sales versus– they are a sales driven company rather than a marketing driven company.

Steve: Interesting.

Ankur: It is interesting because, personally in the data we’ve seen whenever people are selling courses monthly to consumers; it’s really, really hard. Almost always they churn through consumers too fast. Lynda and Prularsight are the only companies I know that are successfully selling courses on a monthly model, and it is because they are selling to enterprises and larger companies where if you sell to someone on a monthly contract, chances are that will never expire.

When people sell month courses monthly from what I’ve seen, so no payment plans but this course is $10 a month indefinitely, you are better– the data just doesn’t back out, you’re better off generally charging a lump sum upfront or doing payment plans the traditional way.

Steve: That’s an interesting model because once they have one of these customers, it seems like the money isn’t that big of a factor either right, it just keeps coming.

Ankur: And we’re not pricing, it absolutely is not, like Lynda has many 7 figure annual contracts and they even have 8 figure annual contracts.

Steve: Interesting, what about Skillshare?

Ankur: Skillshare is interesting. I think they have definitely missed a couple of tricks in the book, because they first started off as offline classes that were doing really well. Then they moved to online classes except the online classes were less than an hour long, and sold for $120. They would sell one off classes. That created a little bit of early success, one of my friends [inaudible 00:46:32] was a top selling Skillshare instructor.

But what happened there was the same thing as Udemy is all the top guys stated kind of going their own way. Then Skillshare decided, “Okay let’s just try the Netflix model,” where it’s like I don’t know $8, $9 for all of these courses. I’m personally pessimistic on that, but we’ll see how it plays out. I do know for a fact just based on traffic according to any estimate we have, we are substantially bigger than Skillshare, and bigger picture you know, we are not that big .

Steve: Yeah, in the grand scheme of things, because they are also still young.

Ankur: Yup, so yeah, so I think I don’t personally with a lot of decisions Skillshare has made, and I would have made them differently, but I also don’t know what they know.

Steve: Okay, hey Ankur this is really enlightening. I actually did not know that much about just the entire landscape even though I sell my own digital course. Thanks a lot for coming on the show and being so open with your numbers and everything.

Ankur: Yes, it’s been a blast.

Steve: I’m sure everyone is going to find this valuable.

Ankur: Yup, it’s been a blast. It will be fun to see how this year turns out. Thank you so much for having me, and for anyone listening at all. I would love– I just love if more people started creating courses, because I’m such a believer in the future of online education.

Steve: Where can they find you Akur in your platform?

Ankur: Platform is at teachable.com, the best way of finding me is probably on Twitter, I’m at twitter.com/ankurnagpal.

Steve: You’re a Cal [ph] grad right? Is that…

Ankur: Yes, sir, class of 2010.

Steve: So, I wouldn’t hold that against him guys, but yeah, all right. Take care.

Ankur: Have a good one Steve.

Steve: Hope you enjoyed that episode. When I developed my course way back in 2011, platforms like Teachable actually were not available, but similar to e-commerce, putting up a course for sale today is actually a whole lot easier, so there is no excuse not to give it a try.

For more information about this episode, go to my mywifequitherjob.com/episode 115. If you enjoyed this episode please go to iTunes and leave me a review. It is by far the best way to support the show, and please tell your friends because the greatest compliment that you can give me is to refer this podcast to someone else either in person or to share it on the web.

If you are interested in starting your own online business, be sure to sign up for my free 6 day mini-course where I show you how my wife and I managed to make over 100K in profit in our first year of business. Go to mywifequitherjob.com for more information, sign up right there on the front page, and I’ll send you the course via e-mail immediately. 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.

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114: The Right Way To Outsource And Scale Your Business With Chris Ducker

The Right Way To Outsource And Scale Your Business With Chris Ducker

Today I’m happy to have my buddy Chris Ducker on the show. Chris is someone who I met at FinCon a few years back and we got a chance to hang out while we were there. If you don’t know Chris, he is the CEO of VirtualStaffFinder.com where he helps business owners get matched up with virtual help.

He’s also the author of the popular book Virtual Freedom. In fact, as many of you probably know from mywifequitherjob.com, the blog portion of my online business doubled in the past year and I was able to hit $700,000 in revenue for 2015.

But now I need help to take some stuff off of my plate. Anyway, I was on the can the other day reading Chris’ book and I was I like, why am I reading this when I can just talk to the real thing?

What You’ll Learn

  • How Chris got his first few customers.
  • How many VAs he employs himself.
  • The early challenges with his business.
  • His leading source of customer acquisition.
  • How his business model works.
  • How he reduces churn.
  • What sets his service apart from competing services.
  • The right way to hire virtual help

Other Resources And Books

Transcript

Intro: You are listening to the My Wife Quit her Job Podcast. And if you are new here, it’s a show where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now I don’t bring on these famous entrepreneurs to simply celebrate their success, instead I have them take us back to the beginning and delve deeply into the exact strategies they used early on to gain traction for their businesses.

Now if you enjoy this podcast please leave me a review on iTunes, and if you want to learn how to start your own online business be sure to sign up for my free six-day mini course, where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email, now onto the show.

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 happy to have my buddy Chris Ducker on the show. Now Chris is someone who I met at FinCon a couple of years back, and we actually got a chance to hangout while we were there. And if you don’t know Chris he is the CEO of Virtual Staff Finder, where he helps business owners to get matched up with virtual help.

And he is also the author of the popular book Virtual Freedom which instantly right now is probably being displayed in my bathroom also known as the library. And in fact many of you know from mywifequitherjob.com the blog portion of my online business doubled in the past year and I was able to hit 700K in revenue for 2015.

But now I need help to take some stuff off of my plate. Anyways I was on the can the other day reading Chris’s book and I was like why the hell am I reading this book when I can just talk to the real thing. And with that welcome to the show Chris, how are you doing today man?

Ducker: I’m good to be here man, that’s a unique introduction. I have probably done over 300 podcast interviews now, that’s probably one of the more unique ones.

Steve: So I figured I know you and you can take jokes, so I figured what the hell, right?

Ducker: Absolutely I mean if you are going use the can for anything other than what we usually use it for, why not pick up a good book, and read it when you are there as well, right?

Steve: Dude it’s an honor man, it’s an honor to be there I’m telling you.

Ducker: How are you doing brother, how’s everything going with the fam and — I mean obviously the business looks like it’s doing great, how’s everything going with the family?

Steve: The fam is good, my daughter she is selling girls scout cookies right now, so I may hit you up a little bit later. I don’t know how I’m going to get them to you in the Philippines but…

Ducker: You’ll have to send them by FedEx otherwise it will never get here.

Steve: Or I’ll just eat your portion.

Ducker: They’ll seize them, ask them — yeah you can do that too.

Steve: All right Chris everyone out there who doesn’t know you, give us a brief intro of how you founded Virtual Staff Finder, and what you are up to today?

Ducker: Well you know the core things man, I’m just the sales guy. I haven’t sort of given myself any kind of delusions and grandeur on that. I’m a sales and marketing guy originally from London. I came over to the Philippines in 2000, and started my first business over here in 2000 and [inaudible 00:03:31] looking at now 2004. 12 years in as an entrepreneur and there is several businesses under the umbrella.

We employ around 450 full time employees at our three floor facility here in Cebu in the Philippines. One side of the business is a corporate call center working with corporations, many of whom are in the US, but we also are sort of elsewhere in the world as well.

And then there is Virtual Staff Finder where we really focus in on like you said match making busy entrepreneurs with virtual assistance here in the Philippines. And then obviously we have youpreneur.com which is my online mastermind community as well as all the other stuff that I do with the events and everything as well. So it’s all good firm, keep yourself busy.

Steve: I didn’t know about the call centre, is that for like companies that handle like tech support and stuff?

Ducker: Yeah tech support, customer support, we do car abandonment; we do a lot of outbound lead generation. We are one of the very few midsized call centers here in the Philippines that truly specialize in outbound lead generation work and appointment setting.

One of the reasons for that is because of my background in the telesales game. So yeah it’s tough to do that, you’ve got to know how to train people and look after people in that kind of environment from a commission perspective and all rest of it. So we are one of the very few people that can do it properly and we’ve doing it for a long time now.

Steve: So like my business I sell linens, so if I were to — want to hit up like event planners and wedding planners I could use your service and have them do the outreach for me, is that kind of how it works?

Ducker: That’s exactly how it works; I mean as long as you had a big enough requirements we could potentially do it for you. We don’t work with very small businesses because honestly it’s very hard to — this business is all about volume. Volume [inaudible 00:05:27] that’s what it comes down to. So we have a minimum of 10 full time employees required to work with customers, and so we work with a lot of internet firms, a lot of insurance, a lot of education, a lot of travel and hospitality and that sort of type of thing.

Steve: Interesting, so a lot of the people who are listening are actually from overseas, some of them are from China, Hong Kong, and Thailand, a lot of they come up to me and they say hey, it’s really hard to start a business here. There is not a whole lot of ecommerce profits to be made, and here you are starting what I consider a really tough business to start, right? How did you get started early on with Virtual Staff Finder?

Ducker: Well we decided very early on, when I say we I mean myself and my wife. It’s funny how behind it all — or to the side of every successful man there is always a beautiful woman, isn’t that funny, isn’t that how it works?

Steve: That’s true.

Ducker: It’s true it works well, but no I mean we decided early on that if we were going to be living in the Philippines and we wanted to have a lifestyle that we craved that we should do two things. Number one we should truly maximize the potential or the talent of the Pilipino, because they are very, very talented workers, hard workers, really loyal workers, very God fearing, trustworthy etcetera.

So we said that we must get to the point of truly capitalizing on that from a manpower perspective. But secondly we also understood that the local market here in the Philippines is not the most buoyant in the world, it’s very tough to make money if you are selling stuff whatever it is to the local market. So we decided very early on that we were going to utilize the manpower and the strength of that and focus on getting clients and customers outside of the country.

Over a period of time it just developed into the businesses that we’ve created now. Virtual Staff Finder specifically actually came out of a blog comment. So I’m always a big advocate of saying you are going to listen to your audience, and I wrote a blog post back in 2010. I think it was August 2010 where I was talking about working with virtual assistants to help market your business. This guy replied his name is Michael. I remember him because I pulled out the comment and used it in presentations as a specific example of listening to your audience and what it can lead to.

His name is Michael; he had a Johnny bravo at the top in each which I thought was great. And he said I have read the forum, I work, we’ve got a lot of work with VA’s, I tried working with a couple, it’s been a complete disaster. Chris if I’m going to have you as a source that I can trust, that I can genuinely trust to be able to find me good quality VA’s, hey I would pay for that, and four weeks later we launched Virtual Staff Finder.

Steve: So you threw it together in four weeks?

Ducker: Yes, I mean we are blessed to the point where we already had a business up and running locally. We already had the infrastructure, obviously we had the staff to be able to get this out as an MVP and look at it and try it out, and send some — I already had a bit of a following online with my email or rather with my blog and my podcast, there was a bit of an email list there.

So we did it, we just did the MVP, the minimal viable product option; we slammed up a very crud looking website. I mean as I look back on it now I’m probably ashamed, but you do what you got to do. You get it out we validated it, it was very competitively priced, since it has gone up by about 70% in terms of — over the period of time obviously. But yeah I mean we are now five and a bit years in, and we’ve helped over 4000 I think the counts is over…

Steve: It’s crazy man.

Ducker: It’s just over 4000 people, insane.

Steve: So you said you had infrastructure already, what business was that for?

Ducker: Well, it was for the call centre, we had the facility, right? We had the facility up and running, we had the staff onboard already. We had web developer onboard, we had a designer onboard. So it wasn’t like I had to go out and find all these people then work with these people, and then try and release something all in a short space of time. A lot of the leg work had already been done so to speak.

Steve: Okay, so you got your first few customers then I guess based on your blog audience, is that accurate?

Ducker: Yes, correct.

Steve: Okay. Now I’m just curious about the call centre, like when you first started that, how did you get your first customers for that business?

Ducker: Well, I had actually been in the call centre business for a while as a consultant. I was working with pretty large US companies, some of them logo brands like you would know them, which I can’t mention because of nondisclosure and everything. I mean big firms. I was basically working with them as a very, very well paid consultant on the ground here in the Philippines helping them set up call centre facilities.

And so I knew all the local industries, I knew everybody I needed to know. I had all the connections I needed to have. That was kind of how I got involved with that industry. Although at first I was more than happy to just work on the three north projects here and there, and make a good sizable chunk in change for helping people set things up.

The catalyst for me to be able to break away from that was when I was doing consultancy work for a company over in Miami, not in the call centre world, actually in the infomercial world. I have been over in Miami for about a month working with this guy. And he was pretty much my exclusive client at the time. Lovely guy man, like super cool dude to hang out with, multi, multi millionaire, very successful entrepreneur, full seats at the hit games, VIP super bowl ticket, the whole [inaudible 00:11:41].

He booked me up. But when it came to work, he was the biggest pain in the butt micromanaging payment. I mean just the worst I’ve ever worked for. That was really the catalyst. I was on the way back from Miami on an airplane, I said I’m done, and I dropped him an email and let him know that I was going to be breaking the loose, and that was when we set up the business.

Steve: For me at least, your name is like synonymous with virtual staff and outsourcing. It’s kind of interesting how you built that up. Was that based on your blog or? How did you get your name out there, because a lot of the people who listen, they are kind of afraid of being able to actually get the customers in, but you somehow and even though you are in the Philippines and a lot of your customers are in the US for example, you’ve managed to get your word out. What strategy did you use to do that?

Ducker: What I started doing was in January 2010. I started blogging about my own struggles as an entrepreneur, and how I had burned out at the end of 2009, and I was on this year long mission to become what I was calling a virtual CEO by the end of 2010. So I started writing blog posts, I started doing monthly reports on what I was doing each month, month by month to remove myself from the business.

People liked that window. They liked the window and to other people’s world. You bring a room of a thousand people together, they will be way more voyeurs in there than will be exervisionists [ph]. People liked what I was doing. They subscribed to my email list. They listened to the podcast, they commented on the blog, and I just started building up these relationships over the period of the first six months or so.

A lot of those people, they are still clients of mine today. They are still blog readers, they are still in the mastermind communities, they are still ordering conversion stuff. All I really did, I wish there was a magic pill that I could say you could go out and buy and pop, but it’s not that simple. I mean, I related with really just focus on my content and creating relationships. I think relationships are– this is the single most important thing in the business hands down, and not just relations with customers, but also with vendors and suppliers and prospects and your team and everything else.

Steve: You didn’t use any other avenues like advertising, pay per click advertising, Facebook, nothing like that.

Ducker: Nothing.

Steve: It was just straight blog outreach, email list, podcast.

Ducker: Blog, podcast, lots of social media. By the end of 2010, because of what I had done to remove myself from the business utilizing virtual stuff, I had like you say, I’d sort of build up this bit of a brand as the VA guy. It was good timing. The 4 Hour Work Week was still rolling along really nicely in 2010, and people were taking the whole kind of virtual business and everything. It was just good timing from my perspective. It’s been great; I mean we’ve launched a successful business. I got a book deal out of it from Virtual Freedom. It’s been great. It’s been great.

Steve: If you were to start all over again, would you employ the same strategy today, because there’s a lot of bloggers today. It’s kind of little more saturated.

Ducker: Sure. I would. I would employ the same strategy. But what I would do is I would niche down as far as I possibly could. I see a lot of bloggers starting new blogs or starting new podcasts or starting a new YouTube channel, or a new periscope show or whatever the case maybe, a lot of new content creators come along every day.

It is tough. It’s tougher now to stand out quickly in that broader scope. But I think if you niche down as far as you possibly can with whatever market you are trying to attract, you can get the same results. You might be a smaller crowd, but the conversion on this will always be higher than if you were trying to have a global reach.

Steve: Let’s talk about platforms real quick. Blogging versus podcasting, I know you usually do a lot of periscopes; I actually had to turn you off because you kept like buzzing my phone. You do it really often.

Ducker: I was periscoping everyday last year. I went for a round six months where I was periscoping Monday to Friday last year. Going to the last quarter, I took a bit of a break and I’ve been stagnating once a week or something. However that being said tomorrow, literally, I start back with two shows a week format on a Tuesday and a Wednesday every week at 9 pm eastern time.

It will be a 30 minute show but it’s, we are going a little pro with this. We are going a little pro and really focusing in on repurposing the content properly and trying to make it a little bit more interactive and a little bit more pro and everything. It’s going to be interesting to see how it comes together.

See, periscope is all about platforms. Blogging is great, podcasting is great, YouTube videos, everything is great. Don’t get me wrong. You got to do a little bit of everything, but I believe that you should zoom in on those two or three things that you feel bring the most benefit to you, your brand your business. For periscope for me, it just, I fell in love with it immediately. After my first blog cost I knew that this was a platform that I was going to spend time on because number one, I have no problems ad living. I’m happy to ad live.

Steve: Yeah, you are good at that. I mean that’s a talent that you have for sure.

Ducker: Thank you and it’s not something that has come very easily. It is something I’ve worked on, but now I feel really confident ad living whether be on a periscope for a podcast, or even live on stage in front of an audience. Number one, I don’t want ad living. Number two, I have a bit of an ego, right. I built a personal brand. That’s what I do. I do my businesses based around me, my vibe, what I’m all about, my expertise, my message and how I want to serve others. So I’ve got a personal brand.

Anybody with a personal brand is going to do well on periscope, because it’s those p to p connections that you create with your audience, those people to people connections that are just so valuable. And then number three, man, it’s just so freaking easy dude. It’s just so easy. You don’t have to sit and write a 2000 word blog post for four hours. You don’t have to worry about editing a tone of video or audio content, you just click broadcast and you talk, and you interact and then you finish your broadcast and you are done.

Steve: You mentioned you are going to go pro with this, what exactly did you mean by that?

Ducker: The additional lights in the back drop and micing up on the phone and using a higher quality phone and generally spending a little bit more time putting together the show content, and understand we are also going to be recording all of this in HD as well off camera.

You see those cool videos of like DJs in their radio shows and stuff like that, they are being spydom almost. They are not physically looking into that camera, but they are focusing on other things whether it’ll be the mic or another camera in the room or whatever. It’s going to be that kind of fly on the wall sort of type of recording, where we are then going to repurpose that, put it on the YouTube channel, slam it up on the blog for weekly content and [inaudible 00:19:25] as well. So go a little bit more pro.

Steve: Let’s talk about repurposing. So you are just going to take that exact video and then you are going to put it on YouTube?

Ducker: We’ll edit a little bit. When you do a periscope, there’s, inevitably 2 or 3 minutes of BSing right at the beginning, where you’re kind of welcoming people and you are getting people left out, and you are asking people to share. There’s many people in areas you can before you get into the hardcore content. That’s sort of stuff we won’t repurpose. It’s pointless. There’s no value there really. It’s purely for the live audience. That will be edited out.

But you know, there’s other things that we can do post recording that you can’t do yet on periscope, like having text flash up on the screen with a call to action for example. And in that ground music that we want to maybe add or a nice video bumper at the beginning and the end or that sort of type of thing, a few things will be happening in the post.

Where as a scope show itself will probably last around 30 to maybe 35 minutes or so, we’ll probably end up finishing up with like a 12 or a 15 minute version which will be edited down, which will then be like I said up on YouTube and on the blog as well. And we might end up actually turning it into a video or podcast as well at some point, but it’s still early based on that decision. I really thought like you know, we work so hard man, and you know what I’m talking about from a blogging perspective, that’s the toughest kind of content to create because you have to type. It’s very unfluid for a lot of people.

Steve: Dude, the writing is the worst.

Ducker: Yeah, right. If there’s anything we can do to repurpose our content, anything we can do, not only reselling ourselves better, but we are serving our audience better as well. I think it’s very important to keep that in mind no matter what type of content you are creating.

Steve: You mentioned you are going to put it on the blog, does that imply that you are having it transcribed?

Ducker: That’s a possibility. When I said that I mean the video more than anything else, but we will probably, I don’t know whether we will transcribe, but we will do some kind of a show note type of recap I think, a handful of paragraphs, something like that.

Steve: Okay, and then, so the reason why I’m asking all these question because I don’t know if you follow Shailyn Johnson?

Ducker: Of course I know Shailyn, yes.

Steve: But what she does is she does her periscope which turns into a YouTube video. She has it transcribed, and then formatted nicely for a blog post and she also takes out audio and turns it into a podcast as well.

Ducker: Yeah, very, very important to repurpose that, all of them one piece of content. I love it.

Steve: Exactly. I would imagine that she uses VAs for all of these things as you do.

Ducker: I know she does because she’s got them from me. I mean, she hasn’t got her entire team from me; a lot of the team, almost all of that team is based in the US. I know for a fact that she’s got at least two VAs from me. One of them actually lives right here in Cebu. I’ve met her.

Steve: I see, so you are kind of doing, I don’t know who came out with the first, but you are doing a similar thing. You are taking one piece of content and just splitting it as many places as you possibly can.

Ducker: Yeah, I mean, I’ve been doing this for a while. This is not new. I’ve been doing this for a while. What is new, and you can go up to my YouTube channel right now and see scope recordings from four, five, six months ago literally. What I’m doing now is really honestly I’m taking it way more seriously. That’s what it comes down to.

Steve: Okay, just more polished basically.

Ducker: Yes, more polished, more serious in terms of the prep work of the content and that sort of type of thing.

Steve: Okay, and I was just curious, and I’m going to be asking this questions later on, but what is like the going rate for a VA to do all this work that you are talking about for repurposing?

Ducker: Well you got to be careful because there are different types of VAs with different roles. You can’t and you should not hire one person to edit video, edit podcast, run your blog, run your social media, run your kind of– that’s not one person, that’s three, or four people. The analogy I like to use is when you build a house. When you build a house, you have an architect designer, then you hire a head contractor, and that head contractor is there to ultimately oversee the building off the property.

But he will then subcontract the planning, the electrical work, the roofing, the bricks laying, the plaster and everything else that goes along with that. You wouldn’t have a plumber put your electrics in, it will be a catastrophe. Therefore you wouldn’t have a web developer trying to run your calendar and vice versa. You got to be very careful with how you hire people. You’re going to hire for the roles and not for the task, that’s what I always say.

Steve: Let’s break down the task that you have and see– I remember in your book you mentioned that everyone should have a general VA, a general purpose VA, what is the role of that general purpose VA then?

Ducker: That person is really there to help you on a day to day basis with the running of your online business, really focusing with online tasks. This is actually the biggest huddle. A lot of people struggle right here at the beginning, because you’ve got to let go of what you’ve been doing and in your own mind, you’ve probably been doing it absolutely just fine. The fact is should you be doing some of these tasks still as somebody who wants to build a business, that’s the big question.

So, I look at things such as managing my email and filtering my email. I get about 200 emails a day. By the time I’m actually getting to my inbox, for the first time each morning and around, usually around 9 am, my VA Mitchell has been up since 7 cleaning out my inbox for me. So those 200 emails have dropped down to around 30. I only check email once a day. I only go in and check email first thing in the morning.

My business is not going to implode if I don’t check email every three hours like some people do. Day to day organizational work with my team is done by a slack, so I don’t get destructed in the inbox. The email management is just one thing. Mitchell will go in first thing in the morning and she will reply to anything that she can with canned responses. We get a lot of enquiries, a lot of questions covering the same things. These canned responses I personally written so they are getting a personal reply but just not personally sent from me.

A lot of canned responses, a lot of– we follow the three click rule, when you open up an email you do one of three things. With A, reply or forward it. You either B delete it, or you either C, you go ahead and authorize it for later years. We have a rule in our business that you only open an email once. Once you open an email, you’ve got to do one of those three things. It’s the only way to stay super productive. You cannot put your to do list in your inbox. Don’t do that. It’s stupid.

Steve: That’s what I do Chris. I actually– you are going to kill me for this, but I have 26,000 unopened emails in my inbox right now.

Ducker: How many?

Steve: 26,000.

Ducker: Okay, I’m going to give you the biggest tip and the easiest tip for you to follow if you follow it. Declare email bankruptcy. Delete the whole bloody lot and start over again with a few select rules and processes like the three click rule for example, and your email hell will not come back to you, I guarantee it.

Steve: Let’s talk about your VA. How would I go about getting a VA that will go through my emails like yours?

Ducker: Well, I mean obviously understand that nobody is going to come out of the box perfect for you even if it’s like the right kind of skills set, the right kind of experience, the right kind of mindset and attitude to you and what you are all about, they never worked for you before. They don’t know how you want things done. Hiring a VA is not a magic pill. You’ve got to have your processes in place, you’ve got to make sure that you spend a little bit of time on boarding them and training them up so that they know what you want, and how you want things done, and at that point you start stepping back.

These general VAs do a lot more than just manage email. They can handle management of your autoresponders, like Aweber and Mail Chimp for example. They can manage your calendar. They can keep your drop box organized. They can upload videos and audio files for you. They can do small amounts of transcription. I don’t suggest that you spend too much time on getting them to do that because they are not transcriptionists. They can be very slow, but a 2 minute YouTube video, not a problem. That will take them probably 30, 40 minutes or whatever it is because it’s not what they do.

They can prepare simple PowerPoint or keynote presentations for you. They can manage your blog, so keeping plug-ins up to date. Help draft blog posts for you off the content you provide them in say a word format, they can then go ahead and take that, stick it into WordPress, embed some images, embed some call to action, put in some links, that sort of stuff. Real time saving life creating tasks, and that’s why I love the GDA so, so much.

Steve: So I’m a big believer in outsourcing, but I’m a little hesitant just about outsourcing to the Philippines. What are some of the main differences between getting someone over there versus an American? Under what circumstances would you choose one over the other?

Ducker: I don’t think there’s any differences. I don’t think there’s any difference for anyone based anywhere in the world. I believe that we are at a time as entrepreneurs where we can truly capitalize on the global economy. I mean this is [inaudible 00:29:31] at its finest. You are no longer constrained by geographical areas.

For me it’s not a matter of necessarily hiring somebody in the Philippines over the US or vice versa, it’s about hiring the right person for that role, for that job, for that project, for that task. My web designer for example is based in Australia. My web developer is in Slovenia.

Steve: Interesting okay, how did you find those guys?

Ducker: I found them through a combination of online searches; mutual contacts and people that I know, like always look to hire people through your extended network first and foremost. Because after our own opinions we’re way more likely to believe the opinions of the people that we know, love, and trust. That’s the reason social media is so damn good; all right for recommendation and referrals, some things like that. We try to find something through your network regardless of how small or big it is.

Then you can go to websites like Upwork or Freelancer. If you’re just looking for quick tasks to be done 99 Designs is where you want to go for anything graphic wise, don’t waste your time going anywhere else, it might be a little bit more expensive but you’re going to have such a massive collection of designers you can potentially work with, all of them with different levels of varying experience, and it’s just going to be just so much easy for you to find somebody to truly do the work you need done.

If you don’t want to have to go through the hustle of posting job descriptions, going through all of the arc rotations to come your way, getting on the phone and interviewing all these people, and doing all the additional work involved you come to some like the Virtual Staff Finder, and we do it all for you, and then we’ll present 3 final candidates after we’ve done our IQ tests, after we done background check, work through down referral checks and all the rest of it. We’ll present you with the 3 best people, you get on the Skype, and then you view them 15 minutes, pop and boom, hire the one you like the most.

Steve: The intention here is to hire them like for a consistence basis right like a full on employee of your business? Okay.

Ducker: Yeah, Virtual Staff Finder only works with full time requirements. We’re not the place to come and find somebody to design 100 social media images for you, or to find somebody to change certain content on your optic landing page or something like that. They are run off tasks or projects, that’s where you go to places like upwork.com, freelancer.com. If you’re looking to bring somebody on fulltime as part of your team, virtualstafffinder.com is where you want to go.

Steve: By fulltime you mean just consistent work, not necessary 40 hours a week work, right?

Ducker: No, exactly. I mean 40 hours is kind of classified as fulltime position, but if you’ve only got 20 hours worth of work for them on a weekly basis, but you’re happy to pay them a fulltime wage which is on average a 1/3 of what you will pay domestically, then everyone is a winner. The average starting salary of a general virtual assistant here in the Philippines is around anything between $600 to $800 for the month…

Steve: That is crazy.

Ducker: Yes it is. Now it is going up with every passing in, it goes up obviously the rate of inflation is what it is. 5 years ago that number was 400 to 500 dollars, so it is going up, but so is the experience level of the Filipino over the years as well. You can quit easily find somebody with a couple of years of really good quality, online work and experience under their belt for 700 bucks a month.

Steve: That sounds really attractive because like I’m just looking at my business right now, and I work fulltime still, and I’m doing my blog and ecommerce store course and all that stuff. I think I just haven’t really experienced what the possibilities are in, just even talking you about email. Email is like a huge time suck for me, if I can just outsource that, that would be like major relieve for me.

Ducker: The reminder that is not what I will class as a simple outsource task. That is something that needs to be created, that you need serious processes in place. Real step by step stuff, and you can’t just turn it over one day and then be free of it the next. You need to work on that VA, you need to fine tune processes, you need to see what works and what doesn’t work, and you need to expect them to screw up because the going is not simple.

Once they screw up a couple of times and learn by those mistakes that they make and things like that, but ultimately if you got 26,000 already emails in your inbox, the chances are you’re only paying attention to the ones that you want to pay attention to that you know you need to pay attention to.

Steve: Absolutely.

Ducker: The others can only be managed by a VA, and I’ll tell you right now the 26,000 there is probably stuff in there right now that has missed your eye balls that are everything from business opportunities to speaking opportunities to affiliate partnership and JV opportunities. You’re probably sitting on a spring fold area, you’re probably sitting on like 100 grand in your inbox, and it could be even higher.

But no, but that’s the whole reality of it. I mean, how much work do we do via email every day? Everybody is on email. It’s the first thing that we check every day. It’s the first thing we check every day. The chances are you probably lost out a little bit of business because you are not on top of it. And that’s another reason why you should be on top of it.

Steve: Let’s talk about low hanging fruit. I mean, email is obviously going to be more involved, but what are some simple things that everyone should outsource in your opinion?

Ducker: Social media. Social media is a massive time suck. I hate Facebook. I think Facebook is evil. I wouldn’t trust Mark Zuckerberg as far as I can throw the guy. I’m sure he’s a lovely guy in real life. Honestly just social in general is a big time suck. I’m not necessarily talking about the interaction side of things, but what I am talking about is the publication of your content on social media.

For example, I don’t work Fridays. I haven’t worked a Friday for three and a half years and my wife is very happy for it. I work Monday to Thursday from around 8 in the morning through to around 4 o’clock in the afternoon. That’s my working time. That’s it. On Thursday after lunch time, one of my other VAs Marie, she will come to me with 10 Facebook status updates. They’re just very simply in a word document and she sends them through to me on slack. I open them up and I tweak any wording that I want to tweak, and then I send it back to her.

These status updates are things like just plain images to links that hold content to links to upcoming podcast content for example, maybe there’s a YouTube video, maybe there’s somebody else’s eBook I want to promote, or whatever the case maybe. 10 status update, Monday to Friday, 2 updates each day. That’s it. What happens is once they are approved, Marie goes in through our business page on Facebook, and she will schedule those out for the coming week. I don’t have to worry about it.

Steve: What is Marie’s contact information?

Ducker: That is 100% classified.

Steve: It’s a deal. The rate you said is $800; I will give her 2,000 and see what happens.

Ducker: I mean, these are people that are– I want to clarify, these are people that have been with me for a while now, okay? But it doesn’t mean that you can’t find somebody to help you with this stuff. Twitter, meetedgar.com, one of the best pieces of Twitter auto generation or whatever you want to call it out there. We use Meet Edgar. We love it. I gave the task to one of my VAs about six months ago to go through my Google analytics, and to pick out my top 20 blog posts, my top 20 podcasts episodes, and my top 20 video embedded blog posts as well, so something with my YouTube videos on there.

She picked them around, and then we wrote tweets for them. Then, she scheduled them all into different categories inside of Meet Edgar and every day, six or seven of those get tweeted out automatically on my account. My blog traffic has increased by almost 30% in six months, because I’m driving traffic back to my older archived content. Again, talking about repurposing, we work so hard on our content, why are we publishing it, promoting it for a week or two max, and then forgetting about it? I’m sure there’s content in your archive from 2 years ago that is incredibly helpful and incredibly ever green. You should be promoting that content Steve.

Steve: I’m a big fan of Meet Edgar as well. I use it. In fact when you mentioned social media VA, Meet Edgar has essentially replaced that position.

Ducker: To a certain degree you’re right yes, you are absolutely right. But the thing with Meet Edgar is the time consuming part is inputting all the updates. It’s inputting all the tweets, inputting all the updates. I don’t have time for that. I pay someone else to do that for me.

Steve: Yeah, yeah, I actually sucked it up and did that for all of my blog posts podcasts and everything because I saw it like a onetime thing, but yeah. So you haven’t answered the question yet for me. How do I get one of these and how long is it going to take, and how much is it going to cost me. You mentioned 800 to 1000 general VA, low hanging fruit is social media, what else?

Ducker: Man, managing your blog, managing your calendar, setting up podcast interviews, filtering your blog comments, getting rid of spam, doing research for blog posts and podcasts episodes. Booking hotels and your flights from when you travel to events, all that sort of stuff.

Steve: It’s interesting when we booked this podcast interview; I think I got you directly, didn’t I?

Ducker: Yeah, because we are buddies. You sent me an email and said, hey, I want you on my podcast. And I said hey, let’s do it. But the usual process will be that you will go to chrisducker.com/contact. There’s a link on there, if you want to interview Chris, click here. You click there; it takes you to a separate page, a little form you’re going to fill out.

Then you fill out the form and that goes to one of my VAs. We have a number of different criteria that we need to match for me to take time out of my schedule to become the guest on somebody’s show. Simple things like you are going to have a minimum of 50 episodes. You’ve got to have X amount of people following you on Twitter and all this sort of stuff.

Because, look, the way I accept podcast interviews is this, if I already have a good relationship with that person, regardless of how many episodes they’ve got, regardless of how many followers they’ve got, I’ll do the show, because relationships are more important than anything. But if I don’t know you from [inaudible 00:41:06], if I have no idea who you are and you are just another podcast host, that you feel like I can bring value to your audience, I’m pretty thankful for that.

But unless you have a certain number in that audience, unless you have a certain reach with that audience, I cannot put 40 minutes or so of my time to one side for you based on somebody else coming to me who does have the following, who does have the audience. I’ve got to go to where the audience is.

Some people might see that as little pig headed. I just see that as being extremely time valued focus. I only do 3 podcast interviews a week. So it’s 12 a month I do. They’re booked out now right all the way to the end of quarter two. I’m doing just fine with this system, and it’s something we’ve been following for a while and it worked very well. Again, you come to me directly, we’ve already got a relationship with each other, and I say yes right away because relationships are more important than anything.

Steve: Of course I threatened to expose that photo I have of you.

Ducker: Yes, you did that too.

Steve: I did that too, that helps guys if anyone is listening out there. Actually I’m the same way and in fact I think I have a whole bunch of podcast interview requests buried in that 26,000 somewhere. Like if I don’t recognize…

Ducker: Yeah, and some of them are probably for big show this week if you can. I want to try and do my best to make you feel as bad as possible man.

Steve: You already sold me on Maria; I just need to get her digits now. All right, let’s switch gears a little bit, talk about You Preneur. What’s up with that because I feel you just recently rebranded that or at least relatively recently, or it used to be just chrisducker.com.

Ducker: Yeah, I mean, chrisducker.com kind of reshaped and reformed as a personal brand show, or just a hub really in the middle of 2012. I started to do a lot of these one day mastermind events as always travelling around the world.

Steve: Yeah, we’ve heard of it.

Ducker: Well, myself in part one where we had the one day business breakthrough event. I actually was doing ones on my own for a few years even before we impacted that for the first time. It would be me and sort of 10 or 11 people in a conference room in a hotel or whatever co-working space or whatever. We would sit and it was very high level, very intimate business discussions.

I would charge royally for a sit at that table up which was $1000 a day and I would always sell out and I’ve done them in– I mean everywhere, London, LA, New York, I’ve done one in Miami, I’ve done one in Melbourne, I’ve done one in Sydney, I’ve done one in Frankfurt, allover. I’ve been travelling and speaking. I’ll just set another day on the trip and do one of these. It’s my way to be able to build those P to P relationships even further, make a little bit of money, and help people.

There was two things that were coming out of these masterminds that obviously over and over and over again. Number one, nobody’s got monopoly on good ideas, zero, nobody. You put a group of entrepreneurs in one room, someone somewhere is going to drop a value bomb on you and vice versa that you’ve never had before. It’s very important to surround yourself with the right people, like minded people, people get, you know what I mean.

The second thing that I saw was that even though at first people were a little shy and a little meek and a little slow to work, by the end of the day, it was like they’ve known each other their whole life, and they were helping each other solve problems. They were switching phone numbers and becoming accountability partners, and they will be doing all this other really exciting business stuff. They were no longer lonely in their pursuits as an entrepreneur.

It is a very lonely journey sometimes. That’s what I saw, nobody got monopoly on good ideas and we were killing ultimately entrepreneurial loneliness by putting these events on. It was July 4, I remember like it was yesterday, it was July 4, 2014, I was in San Diego at [inaudible 00:45:07] having a water balloon fight with our children as you do on July 4th. That was the day where I pelted April Flynn in the face with water. Pat got it on video and decided to turn it into slow mode.

Steve: I need to see that video, okay.

Ducker: I’m happy that he’s never launched it publicly, because I would be hated instantly by flynnatic child there. Let me tell you something, she got me back good and proper. She got me back good. After that whole kind of shenanigans and back home, we went in and the kids heard that we were coming down from the sugar lashes and the ladies were chatting in the living room. Pat and I made a cup of coffee and went to his office.

And we were sitting down and he said something what do you want to do for the next ten years? What’s your deal? What are you all about? Within an hour or so, the idea of You Preneur was basically born. This is what I really enjoyed doing. I enjoy helping business owners that want to be able to build business based around their personal brands, solo preneurs, creators, speakers, authors, coaches, consultants, experts, bloggers, podcasters, people that are building businesses around them and what they stand for and those that they want to serve, that’s what I want to do for the next 10 years.

That’s when the idea of an online community was born. I never even given one [inaudible 00:46:33] to that point to run a membership community. It was born right there in Pat’s office. It shows you how long we were planning it. That was July 4th 2014, we launched September 1, 2015.

Steve: Sept 1st?

Ducker: Yeah. But a good amount of planning in there. We did it right, we launched right and it’s become very successful very quickly.

Steve: Would you say that Virtual Staff Finder and your other businesses are kind of playing second fiddle? Like you are more passionate about this aspect of your business over what you’ve already created?

Ducker: I mean I’m passionate about all my businesses. I’m just smart in the way that I’ve set them up. I’ve processized them as much as I possibly could. I’ve hired people to come in and ultimately run them for me, so I can go on to the next project. I must say that youpreneur.com for me right now is my focus, it would be my focus for quite some time, and it’s honestly something that I have very long term aspirations for.

Steve: So on that note, for people out there who are trying to get started as a solo preneur, what is the best piece of advice that you can give them on how you get started?

Ducker: You got to be you. That’s it. That’s honestly it. You got to be you all the time. Don’t hide behind any smoking mirrors, don’t hide behind another voice, don’t try and be something that you are not just because you think that’s what society wants from you or what your clients want from you. Be you all the time. And understand when you do that, something very, very magical happens. I mean that. That’s the right word to use. Something magical happens when you are you all the time from a business perspective.

Number one, you attract the absolute best of your tribe into your life. You attract the absolute best members of your audience into your life. They become friends, they become clients, they become your raving fans. Number two at exactly the same time, you are repelling away the people that will bring you down, that will waste your time, that will never spend any money with you let alone share a piece of your content. What you are doing, and the analogy that I use is that you are marketing like a magnet. You are attracting the best and you are repelling the rest at exactly the same time. That is absolute gold. Just be you, be you all the time.

Steve: That’s great advice Chris. I would also add that just pick one platform and just focus on that until you’ve mastered it before branching out to a whole bunch of other things.

Ducker: Hey man, totally agreed.

Steve: All right, dude, Chris. It was a pleasure having you on the show.

Ducker: My pleasure.

Steve: Next time I’m in the bathroom, I will be thinking about you. Yeah, I will probably be hitting you up for some virtual staff. Our conversation really kind of got me excited about the whole thing.

Ducker: Good well I’m glad. You should be excited. It’s really where the true business growth that every entrepreneur is aspiring to achieve. I explain what really happens is when you start really truly delegating is when you stop being a micromanager, when you stop drinking your own coolaid, and understand ultimately that there are people out there that can do things just as well as you if not sometimes even better than you. They are waiting to help you build and run and support your business and you are a fool if you don’t go and chase them down.

Steve: Awesome. All right Chris, you call me a fool, so I guess it’s time to sign out.

Ducker: What a great way to end the show.

Steve: All right dude, take care.

Ducker: Thank you man.

Steve: Hope you enjoyed that episode. I’m getting a lot better about outsourcing but mainly only tasks that I already know and understand how to do pretty thoroughly. If any of you are feeling swamped or burned out, I highly recommend that you go and pick up Chris’ book as it actually helped us with hiring our physical employees as well.

For more information about this episode go to mywifequiteherjob.com/episode114, and if you enjoyed this episode please go to iTunes and leave me a review. It’s by far the best way to support the show and please tell your friends, because the greatest compliment that you can give me is to refer this podcast to someone else either in person or to share it on the web.

Now if you’re interested in starting your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business, so go to mywifequiteherjob.com for more information, sign up right there on the front page and I’ll send you the course right via email immediately. 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.

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113: How Andrew Warner Created Mixergy And The Secrets Behind His Successful Show

How Andrew Warner Created Mixergy And The Secrets Behind His Successful Show

Today I have my buddy Andrew Warner on the show. I met Andrew at an entrepreneurial mastermind in San Francisco last year run by John Corcoran.

And then he had me on his show Mixergy where he grilled me, asked me all sorts of tough questions, made me uncomfortable and basically tried to make me cry.

Fortunately, I held it together and now it’s payback time. Anyway, I’m really excited to have him on the show because while he does a ton of interviewing of other entrepreneurs, he rarely gets interviewed himself. Enjoy!

What You’ll Learn

  • If Andrew were to start Mixergy all over today, what would he do differently?
  • How Andrew marketed Mixergy early on
  • How Andrew got his first listeners
  • The traffic sources that Andrew focused on
  • Andrew’s business model for his interviews and how he morphed it into courses.
  • The revenue breakdown between sponsors, mixergy platinum and courses
  • Andrew’s paid ads strategy

Other Resources And Books

Transcript

Intro: You are listening to the My Wife Quit her Job Podcast. And if you are new here, it’s a show where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now I don’t bring on these famous entrepreneurs to simply celebrate their success, instead I have them take us back to the beginning and delve deeply into the exact strategies they used early on to gain traction for their businesses.

Now if you enjoy this podcast please leave me a review on iTunes, and if you want to learn how to start your own online business, be sure to sign up for my free six-day mini course, where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email, now onto the show.

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 have my buddy Andrew Warner on the show. Now I met Andrew at the entrepreneurial mastermind in San Francisco last year. I don’t know if it was last year, run by John Corcoran. Then he had me on his show Mixergy where he kind of grilled me, asked me all sorts of tough questions, made me uncomfortable and basically tried to make me cry.

Fortunately I held it together, but now it’s payback time Andrew. So I’m really excited to have Andrew on the show because he does a tone of interviewing of other people, but he actually rarely gets interviewed himself. With that I want to welcome the Howard Stan of entrepreneurial interviewing, Andrew Warner. How are you doing man?

Andrew: Good, did I really ask you stuff like who you slept with? Is that where the Howard Stan stuff comes from?

Steve: You know what’s funny is I forwarded that interview to a bunch of friends and they were like, “Wow Andrew really grilled you in the beginning.” He was really trying to crack you is what they felt. I didn’t actually really notice it, because I’m kind of used to your style. You tried to ask questions that are a little bit more uncomfortable I feel, right, on purpose, right?

Andrew: I want to get really personal. I want to get to know the person, but I do sometimes, I wonder if sometimes I walk over the line because Alex from WP curve is a guy who lives locally and I asked him to do an interview, and he wouldn’t do an interview with me. Then, I asked him why we hadn’t gotten together more and over dinner he said to me, “You asked me really personal questions, and I don’t like to talk about this stuff.” I said what? “You asked me who I slept with first, like who I lost my virginity to.” I realized all right maybe I wasn’t fully paying attention to how sensitive he was to that stuff, and I thought maybe he was okay with it.
I’ve been more cautious lately. The reason I want to know that stuff is I feel like we are shaped by more than just our drive. I think our drive is incredibly important, but I feel like what drives us, where the drive comes from is personal issues, like how long did it take you to lose your virginity, or were you a dock in high school? Were you like me where at first I will say I wasn’t a dock in high school, but second I grew up in a city where everybody was freaking rich. Of course that is the direction you want to go to.

Steve: It’s interesting. I mean, I tend not to go on to anything personal. I’m more like interested in like the how-to-gets sort of thing, but you are right. The psychological aspects do come into play. I’m sure we’ll find out some of the reasons why you did what you did. Let’s start with that actually. You first business Bradford and Reed, it did 38 million in revenue, then you sold off for a pretty decent payoff, right?
Andrew: We did okay. What we did is we sold it off in pieces, and yeah it wasn’t as great as I hoped it would be, but it was good, the bigger the … Yeah.

Steve: Well I mean the point was you started Mixergy; you already had a pretty decent windfall of money at that point, right?

Andrew: Yeah, I did well.

Steve: Yeah, so most people would take something like that happening and just kind of relax a little bit, but then you decided to start Mixergy and so kind of what was going on in your head at that time?

Andrew: You know I did want to relax. For a while there I didn’t want to do anything else for the rest of my life. I really enjoyed reading. I love reading anyway, so I had a lot of time to read. I enjoy that. I really enjoyed the coffee that I got when I lived in Venice Beach. It wasn’t especially good coffee, but maybe because I had no care in the world it was a great walk two blocks in the sun to go get my morning coffee. I didn’t think I ever want to work again. You really could live pretty decently in parts of the world. I was living in Venice and I could live there for maybe forever unless I screwed up somehow.

Steve: So why did you start Mixergy then? Did you start getting bored or is that …?

Andrew: At some point I saw myself start to inch back into business. I saw myself saying, putting posts up on Craigslist saying I want to just coach people for free. If you are interested just let me know, and I will get on a call with you. I started just inching my way towards it a little at a time, like an alcoholic who would say, you know just one drink after dinner with friends is okay. Just one drink on my own to go to sleep is fine. And then go and then you get got caught back in it. So that’s what happened.

Steve: So the money wasn’t really the intention then?

Andrew: No, for the most part it wasn’t, but at the same time I remember saying, I got a dog and I remember saying I should name the dog Billy to remind me that I’d like to be a billionaire. There must have still been some of that financial drive.

Steve: Okay, interesting. I don’t think Mixergy is going to take you to billionaire status, or maybe it would along the way I guess. Okay, you were again bored, you had this itch, you started Mixergy, what– so your purpose really was it to meet people or was it to make money?

Andrew: My purpose initially with Mixergy was to create a movement. I thought all right, I did business, the next thing after that is you just live your ideas behind. The people who I admired, Andrew Carnegie is the guy who I named myself after out of very weird fine names I said I needed a better name. I said I really admire Andrew Carnegie. I read about him for years. I took his name. Then I said, one of the things I learned about him was he built up his business and then he wrote a bunch of books that I was moved by.

He left– beyond the books that he wrote himself, he didn’t write that many books, but beyond the books he wrote himself, he also inspired other books because of the philosophy that he put out there. I thought that’s the path I would like to follow in my life too. I would like to make some money, and then I would like to live a legacy and books I don’t think are the ultimate answer, because they kind of disappear in a world of lots of books. I’ll start a movement and I started it, but I was never clear about what the movement was about. It kind of fizzled out. Then I said, all right this thing fizzled out, I’m a little more humble now. Why don’t I learn more? I think the best way for me to learn is to bring on people who I admire, ask them questions and just get the things that I’m curious about answered.

Steve: I’ve actually been a fan of your work for sometime even in the early days I think when you were just audio only, then you kind of evolved to video and now you are doing courses, communities, masterminds. There’s a lot of people who’ve kind of tried to follow in your footsteps, and I don’t really think that a whole lot of people have actually achieved the same level of success.

What I kind of like to cover today is, I don’t know if you listen to a podcast, just like a tone of interview shows, my show is like an interview show. If you were to start Mixergy all of over again, in today’s age, when everything is kind of saturated, how would you go about doing that?

Andrew: I wouldn’t pick start ups as the topic. I think I went too broad. I think I needed to be a lot more targeted. If it was about how to build a business, then maybe what I would do is say this is me over the next year going to work together with everyone listening on a framework based on the interviews that I’m doing. And I’ll just keep reporting back on what I learn. It’s a podcast about creating a framework for starting a business.

I’d even get tired of that what kind of business I wanted to start, what kind of framework we were looking for. I would do it because I wanted to have ultimately a movement and a framework that comes from that. If I was doing it for money the way that other people are, I would pick a much narrower topic and obsess on that. I think the idea of just start ups is just way too broad. Then if you think about it, it is.

Steve: It is.

Andrew: What am I selling to this audience of people? Some of these people have businesses already. Some don’t. Because they are just listening to other entrepreneurs tell their stories, that appeals to people who have big companies and also people who are just starting out. Some of them are really into marketing, others have people who do that and don’t care about marketing. Some people are really into a software, some of them just don’t have any software experience. Some of them are coaters. There’s not any one group of people in there that is highly represented and that needs one thing.

If I would start over, I might say to myself, I’m going to focus on just let’s just build something out there, community. It’s going to be a podcast about how to build communities online and using specific kinds of tools. I’m only going to interview people who host communities, and I’m only going to reach an audience of people who want to start their own communities. Then there’s a natural product that you can start creating from that. People who need communities start to need things like maybe a course on how to create a community, or how to get people to talk more in the communities, or how to hire people to run those communities.

Steve: So I’m just curious then, with Mixergy, have you kind of gone that route a little bit with the people that you interview, or is it still just anyone who has a business who’s successful?

Andrew: I feel like– I was just talking to someone on my team today about how we are going way too broad. We are allowing too many different kinds of people on. We should narrow more. I don’t think that we could narrow down to one specific thing like community leaders at this point. I think it’s too far.
What we need to do instead is having done over a thousand interviews, do a better job of curating, so that if what you are into is just educational products, you should find just interviews that relate to that and just the courses on the site that relate to that. Almost not see or know that the others exists, almost.

Steve: Actually what is your curation process like, just curious?

Andrew: What we do now is we have two different ways to do it. One is called tagging or standard tagging. We have a team that helps tag up the old posts. It’s hard because in an interview, I could be talking to someone about how he started both a software company and then how he moved to an information company. It’s very hard. We would tag it as both info product and software company, which would make it hard.

Steve: Then like in terms of getting new people on, how are you screening people?

Andrew: That we have gotten really good. I will say just the other way that we are curating the content on the site is we’ve also created collections and now anyone can create their own collections, and those collections will be public. So if for example you wanted to start an ecommerce collection, we would allow you to easily create an ecommerce collection for yourself and you could share it with other people if you wanted.

For us, the way that we do it is we started out by writing out the steps that it takes to book someone on the site, and then created this flow for it in software called Pipedrive. Each one of our, we had at the time five steps to booking a guest, you know you find a guest, you find their email address, you invite them to do a pre interview, you invite them to do the interview and then you do the interview.

We had those laid out in columns in Pipedrive and then anytime we had a suggestion for a guest, we would lay them in, we would put that guest in the first column, and then we just keep moving them through a process. Very much like a sales team would. If you operate in a really good sales environment, they would have a multistep process for closing a sale. Find your prospects, turn them into interested clients, then sell them etcetera.

Steve: This wouldn’t be something that you would do early on, like when you are first starting out.

Andrew: Oh, I will tell you what I do when I started. I would ask my friends to do interviews if I knew that they were good fit. Then in the interview itself, I would say to them who else do you know that I should be interviewing. At first people would say, well I know Donald Trump. You should have Donald Trump on.

Then I changed my language and you could hear in the other interviews me saying, “Who do you know well, like a well enough that you can contact and you admire that you think I should be doing an interview with?” Then they tell me and I’d invite them. Again, that goes back to old sales techniques, that a salesman would close a deal and then soon after say, who else do you think should be buying this? I interviewed Sky Hal Elrod who used to close tones of…

Steve: Is that the Miracle Morning guy?

Andrew: Yeah, right. He used to be an ex salesman. I asked him how did you become a top night salesman where you just go into people’s home and sell them at night? He said every sales man would ask for referral, so I had this sheet that had 20 lines on it that were blank.

The assumption was we were going to have 20 different people that you were going to recommend for me. And I’d say who do you know that I should be asking and talking to about these knives, and then he said, and he filled out this list of 20 referrals with them. The fact that it was a page with 20 gave people the sense that they have to come up with 20.

Steve: So you had that side of the equation down, but how did you actually get the listeners. Was just kind of natural, or did it gain traction all the way.

Andrew: The best way to get listeners is to have guests who have big names, or guests who are in the news. I’m looking at your list, who are some of the biggest people that you have on here?

Steve: Good question. Let’s see I have had Noah Kagan, Emmy Porterfield. I mean these are just friends.

Andrew: Yup, so Noah Kagan would be good. You can ask him then to tweet afterwards and ask him to post it on Facebook. Ideally he might even promote it to his mailing list and say here, this is the story of how I build up my business. But there are people who are even bigger names than that who draw in a much bigger crowd. Like, Barbara Corcoran for me. There was a period there where she was doing interviews and I had her on. Actually John Corcoran is her friend, no relations.

Steve: They are not, yeah, okay, I was about to say they are not related, are they?

Andrew: He is the one who introduced me. But she’s a much bigger name. I feel like the bigger names are the ones that bring in the biggest audiences. I used to spend a lot of personal time doing it, and I never created a system for how to get the bigger names on. One of the things I’m doing this year is I’m working with someone on the team who can own that, and start going after the bigger names for us.

Steve: Interesting, but you have to have to actually have something established in order to get the bigger name, right?

Andrew: Yes, that’s not hard. You don’t necessarily have something established. I didn’t have something established when I asked Tim Feriss to do an interview for example.

Steve: Okay.

Andrew: What I did in the early days was, I went to Mashable and said, “If I get Tim Feriss to come do an interview with me, can I write a post for you about his seven tips for working four hours a week or something?” And he said yeah, because he’s a good name for them and so I go to Tim and I say Tim, can I do an interview with you, it will also be the next update for Mashable.

Steve: On Mashable, okay.

Andrew: And so there are people who have huge followings. I’ve actually seen the e-mails that Product Hunt, if you look at them, they have really big names for their podcast, so I went to Eric’s office and I talked to him about interviewing. I told him– I gave him some tips. I gave him some feedback on his process, I told him it worked for me and then I said, “Can I see how you get guests on?” He has guys like Tony Robinson; he has huge venture capitalists on. I saw the email he sends out; it’s– do you want a reach?

Then he has a number of people that he has in his audience and then he says, “Here is the site, you want to come on and do an interview?” He has huge audience. Product Hunt is huge, and so people say yeah, so you may not when you are starting out have a huge audience, but if you can partner up with someone who does and create an interview for them or accept their blog post based on an original interview, they’ll be open to having you do it.

Steve: How did you get Barbara Corcoran?

Andrew: It was just John. That’s another great thing that helps us. John is an incredible friend for doing that.

Steve: Yeah. One thing I’ve noticed, and the reason I started my podcast wasn’t for money. It was just to reach out and meet people, and then the money just naturally comes in, like people want to sponsor you and what not, and so is John someone– actually how did you meet John?

Andrew: I have no idea.

Steve: I don’t either actually.

Andrew: I have no idea. I think he was in the audience; I know he was in the audience. I know that he was a member of the sayeed [ph] I think that must be how it was, but then I think we’d discovered that we were in the same city, and so I invited him over for a branch at my house. He and his wise came over, then his son popped in and that helped us connect.

Steve: Okay, and so outside of just getting big names, did you do any advertising or some …

Andrew: No.

Steve: No advertising? Any other sources of traffic?

Andrew: Oh wait, I’m looking at my inbox to see who else is referring me to people and suddenly John is inviting me, here’s one of John’s great technique’s.

Steve: Okay.

Andrew: It says, “Do you want to get together with me and Zvi Band of Contactually for dinner?” He’s coming to town. He’s done this before. So then I say yes, and then he goes to the next three people and says, “Do you want to come to dinner with Andrew from Mixergy, Zvi from Contactually and me?” And yeah, then you end up in this great group of people who are all getting together for dinner. It takes some effort, he’s good that way.

Steve: You know what’s funny about that is, sorry to interrupt, but yeah, so with my conference, when I was trying to get speakers, I started out with one guy. I did the same thing as John did, and then once you have like critical mass, like getting the last speaker is a lot easier than getting the first couple.

Andrew: Yeah, and the cool thing is that he’s saying to me, this guy is only going to be in town for this one day or for a short period of time, so now I’ve got some deadline that I have to jump on.

Steve: Yeah, a sense of urgency.

Andrew: I can’t say it right.

Steve: That guy is genius.

Andrew: He’s good. Actually, there’s nothing in here that is brand new. He’s not creating anything that wasn’t in the Never are you Alone or other books. What’s impressive about him is that he does it, that he actually uses it, and I’m finding that a lot of the ideas are really out there. I can talk all day about how to find get great guests; I can talk all day about how to build an audience.

Ideas are out there, but most people don’t end up using it, and using it consistently and improving them to small degrees that most people won’t even know exist, until it actually works. I can tell you, our booking process was a standard salesman booking process. We laid out our steps for booking guests, we started putting a lot of people at the top of our funnel, we kept adjusting the way that we ask people to come and do interviews, we kept adjusting the way we found peoples email addresses. It was a small twist and nobody would ever discover. That nobody would ever pay attention to, that made all the difference for us.

Steve: Such as? You can’t make a statement like that without revealing something,.

Andrew: I’ll give you a really good example. We had to start this five step process that I described earlier, and we still were losing people, so we wanted to see where we are losing people? It turns out we would ask them if they want to do an interview, and then they wouldn’t respond and that’s where we stopped, so I added a sixth column to our steps. One is, ask them to do a pre interview.

Then if they don’t respond, the next step is, send a reminder. That little thing made a huge difference. It got us from, I forget the exact numbers, but it was something like 20% of people would say yes to doing interviews to suddenly 60% said yes, because the follow up email almost makes them feel a little guilty for not responding to the first one, so it has an outsize performance.

It delivers outsized performance, so that’s really big. We then did the same thing for people who did a pre interview with people on the team, with Jeremy Wise, so the mastermind that you did. They did a pre interview, then they wouldn’t book the interview because stuff comes up in life, so we had a reminder calling them to that. Suddenly, our numbers improved even more.

Steve: Wouldn’t it be more effective to cut out all the steps and just have just one step instead of the three or four or five that you have?

Andrew: No. I’d love to cut out more steps, but I can’t cut out steps like the pre-interview for example. You don’t do pre-interview with me, I feel like that’s one of the best parts of doing a Mixergy interview. For example, I just interviewed a founder, Graham Cochrane, he runs the Recording Revolution. He’s doing six hundred thousand…

Steve: What’s with all these Cochrane people? Yeah sorry, go on.

Andrew: Yeah right? It’s interesting, he spells his name differently– and he had the story where, usually when I ask people what did you do before you started your business, there’s some exciting thing that they did. He was talking about how he worked for three years at Rosetta Stone, and the more that Jeremy was talking the more– he got the story, but I don’t think that’s interesting, that’s completely left out of our interview.

I don’t think that’s interesting, it’s completely out of it. There is one thing that he didn’t mention until much later in the conversation with Jeremy, because you can see even before the interview when I brought it up to him, I could see that he was a little embarrassed about it. He was on food stamps. He’s a proud guy, Christian guy, feels like he has a responsibility of his family. He didn’t want to go on food stamps. His wife urged him to do it and he did it back then.

He’s not especially proud of it. That came out at the second to last or third to last question that we asked him. I made that the focal point of the intro, how a guy who…

Steve: Oh my goodness, okay.

Andrew: So now there’s a hook, and so the pre interview process is where we discover that. Where I neglect things that people think are really interesting, and where I hit on stuff that really is going to be fascinating.

Steve: Was he uncomfortable that you revealed that or …

Andrew: I wasn’t sure and what I did was I test the waters before the interview starts, and I also know what am I going to ask him before the interview. I wanted to see, did you go on food stamps after you started the business, so that maybe the business led to that, right? I checked it out and then I looked at him because we were on camera, to see how uncomfortable was he about that, and I saw he was okay and if not I would have had a way of getting him to feel more comfortable with it.

Steve: I see, interesting. From what you’re telling me here is that Mixergy just kind of took of on its own.

Andrew: No.

Steve: Okay, all right, so you didn’t pay for any advertising, you got great guests, so what’s the missing link here?

Andrew: The guests are where we get our audience. We are paying for advertising now. We tested a few different ways last year, 2015 … for advertising to get people to listen to the podcast specifically is something that…

Steve: Actually I just saw a Facebook ad where you were advertising your Barbara Corcoran interview essentially.

Andrew: Yeah.

Steve: And so how do you quantify the return on that? It’s just landing straight on an interview, right?

Andrew: I actually don’t know how you can quantify podcast listeners. I’ve seen people do things like by cheap clicks. They go to their sites, auto play their audio and then they get it counted as a listener. And that you can actually quantify because advertisers are paying per listener now, and if you can get your clicks cheap enough, then you could increase your numbers and then hopefully you said something that would get that person to also listen again in the future.

Steve: Is that your goal? Like what’s your Facebook ad goal? Is it a newsletter sign up, a listen or…?

Andrew: A subscriber, so I’ve never really paid much attention to the podcast audience, not enough. We’ve done podcasting; I’ve been podcasting for years, since 2008. I didn’t pay much attention to it. Then last hear, 2015, this guy [inaudible 00:24:26] said, “Andrew, can I sell ads for you because I think can do a better job than you’re doing,” and then I said, I think am going to stop selling ads because I don’t care about that revenue, I don’t care about it and it’s a distraction.

He said I think there’s more here. So I said okay, do what you want. I don’t even want to know what you do because you know me well enough that you know not to pick bad advertisers, and you know how I work, I’m very systemized. You create the system, so he did. Then his ads were selling for– I was hardly selling them frankly, for like a 1000 bucks a month, he’s doing 50,000 a month.

Steve: Really?

Andrew: 30,000 a month.

Steve: Wow.

Andrew: I don’t know the exact numbers. Somewhere like that, yeah. He slowly ratcheted up the numbers to make sure that we were worth it.

Steve: This is just from your podcast.

Andrew: Just for the podcast.

Steve: Outside of Mixergy, Mixergy is the podcast, right?

Andrew: Mixergy is just on the podcast. Advertisers get a link on the site, don’t quote me on the exact numbers there, but I’m not too far off. I want to be as accurate as possible, but I don’t know the numbers exactly, and he just took it and he went with it. Throughout the year, he kept saying now I’m bringing you new money. I said yeah, because you’re excited, he goes yeah, he goes, so can we grow the podcast audience and I said “Yeah, what do you have?”

Then I’d vet his ideas, I feel are a little too much, or I’d interfere a little too much, and I finally, at the beginning of this year, he and I went out to work together in person at the Fairmont hotel which I like working in. And I said, “You know I trust you, you’ve gotten me here. What if we take,” I forget the number but I think it was like 20,000 a month, “Can you do– how much is it going to cost?” I think I started with 5,000 and he ratcheted me up too like he did to the advertisers to 20,000 a month in advertising.

He said, “I think I could grow it for you,” and I knew that if I was going to ask him, how are you going to measure the results? I knew the response wasn’t going to be something that was especially helpful for me, so I just said, I don’t even want to know. Tell me what you need from me and just go do it. He needed a couple from things from me, and I couldn’t even respond on those because I’m so overbooked.

He wanted to know, he had a list of questions for me about who the Mixergy audience is and so on. I said I don’t have time to even respond to that. He said, “Okay, I know you well enough. I could respond to it myself,” and he went on and bought the ads. He didn’t even show me the Barbara Corcoran ad. I had sensed that’s who he’s going for.

Steve: Okay. Can we talk about your revenue breakdown? I don’t need specific numbers, but I’ve always been curious. You mentioned there’s sponsorship revenue, there’s the membership, and then you have courses and what not. And you just mentioned that you are thinking about dropping sponsors?

Andrew: I was, at the beginning of last year.

Steve: Okay. Well, does that imply then that, that wasn’t really a major revenue source or you thought it was interfering with…

Andrew: It was horrible, and frankly I also wasn’t also running it well because I never thought the podcast ads would do well. I just couldn’t imagine it. You think about it, how many times have I listened to a podcast where I remember the sponsor name at the end of the podcast? Hardly ever.

I never remember them. I’d like say close to never. In order for the podcast go even get credit, the listener has to remember that they heard it, remember that they heard it on this specific podcast, and then remember the code, so I just didn’t think anyone would do that, but they are doing it.

Steve: They are.

Andrew: They are doing it, so that’s why you never, hardly ever heard me mention a discount code within the interviews. If an advertiser said, here’s the discount code, I’d say I don’t think you should give a discount code. Why give people two things to remember, just give me your name, and sometimes I’d like do it, but grudgingly and I didn’t care about it, they didn’t care about it.

Steve: By the way, when you are talking about podcast right now, you’re talking about just everything, right? Like the Mixergy interview.

Andrew: Yeah.

Steve: Okay.

Andrew: Here’s the thing. Everyone thinks that me reading the video, the video counts, videos chuck [ph] now, it’s not worth anything, really. For revenue, it’s not worth anything.

Steve: Interesting, the Mixergy premium memberships?

Andrew: Oh no. Premium members do listen to it, but as far as ad revenue, as far as viewership, it’s just insignificant, because no one goes to websites anymore to watch content. You go to YouTube if you’re going to watch videos, right? And we don’t put our stuff on You Tube because it’s for members only.

Steve: Of course.

Andrew: Right? So if you want to look at pictures, you go to [inaudible 00:28:38] you go to Reddit. You don’t go to some guy’s website where it’s going to be interesting, right? There was a period where you might go to failblog.org and watch it there. Nobody does that, right? You’re just going to go to Reddit and you’re going to find it there, so platforms are where it’s at. Mixergy is not a platform on its own.

People aren’t coming to watch videos on our site. This is something search would help me realize, podcast is big because podcast is on iTunes platform, and so that does well. So when we sell ads, our advertisers sometimes get excited about being in this video interview, we have to tell them look, you’ll be there, but it’s the audio that’s really going to give you the big bang. They want the links to their sponsorship on the page.

Steve: Sure.

Andrew: We do that, but in reality it doesn’t really matter much because people aren’t coming over and clicking. I would always have some link to it, but not the long descriptions that we have because someone could forget. Who did Andrew mention, I know he mentioned some hosting company, I know he mentioned some developer company, who was it? And they want to go over to the page and click on it, but they are not coming to the site, they are not coming to watch the videos.

Steve: Has that eaten into your membership revenue then? Because your podcasts are free, right? It’s the same interview.

Andrew: It’s the same interview and then a few days later it goes in behind the pay wall.

Steve: You take it off the feed for the podcasts?

Andrew: Yeah.

Steve: Okay, I see, and when did you come to this realization, just last year?

Andrew: Frankly too late, it was end of last year beginning of this year, the day that [inaudible 00:30:12] and I sat together at the Fairmount. I like him because he keeps pushing me to think differently. I like crazy people like him, because he always has some crazy new direction and so he says what if you just kill all the video? Why kill all the video? And we started talking about it, because he is just throwing stuff out there to see what happens. And we looked the numbers for the videos and they were insignificant compared to podcast, and then that made me realize wait, what if people aren’t going to the video anymore? And maybe the video is destructing them making them think that it’s only a video site.

Then I emailed our developer and I said, can you take down the video for everyone who is not a member and see if anyone complains. I learned that from David Cowen the founder of [text stars] [ph] the investor. He said, if you want to know if a future really matters to users kill it, and then see if they complain.

If they complain you can always bring it back, if they don’t then you realize it doesn’t really matter that much to them. So I killed it, no one complained and then I had second thoughts about it, so I said Michael deemphasized it just put audio first video second, but no one is coming to websites anymore.

Steve: Here is the thing like we are talking to each other and usually I don’t turn on video for these interviews, but we have video on. You don’t think that the ability to see a person’s face matters in an interview?

Andrew: I never did, but I know that there is an audience for it. I’m just saying that if you really want to build an audience for people watching an interview, you are better off putting your stuff just on YouTube. I don’t want that, I find that — I pick the platform that I want which is podcasting, and that’s where I want the new audience to come from, and then videos available for members.

Steve: So percentage wise then would you say that your podcast has over taken your membership revenue?

Andrew: No, so what happens is people will discover — people used to discover me by going to mixergy.com, and watching a video there. And then seeing that I also have a membership site and signing up. Now the way they discover me is by going into the podcast, and they go to the iTunes store or something, they discover the podcast and then they sign up. And then they get into my world and then they come to the site to see who I am.

Steve: And then did they watch the video on your site at that point, like do the premium members watch the video?

Andrew: Premium members do watch the videos, and then the course is a video based still. So what happens is you get the interviews for a few weeks for free, if you are happy with them and you want more you can come back to the site and pay for membership and get access to all the older interviews.

And when you pay for that it as part of your monthly membership you also get access to all these courses. And the courses will teach you things like how to get traffic to your site, how to grow sales, how to automate your marketing, and the whole thing is taught by real entrepreneurs they turn on their screen etcetera.

Steve: Can we talk about how you evolved the courses, because it wasn’t something you added until what two or three years ago or something like that?

Andrew: Somewhere around there.

Steve: So how did you get the idea and it just at the time it seemed kind of random, but it’s clearly working, right?

Andrew: Yeah, I did know that people don’t pay — people pay for results, they don’t pay for just entertainment. So I kind of had a sense that that’s also where I want to play in delivering some kind of result, and I wanted to be in education because that’s the stage of my life where I am, but I wasn’t sure where to generate money from it.

And I was much more excited about selling to my audience than selling ads. I finally just admitted I didn’t know what to do and I did this thing called testing Tuesdays, where I wrote a post where I said every Tuesday I’m going to try selling you something until I figure out what to do.

And I did guides because I thought that was number one, I thought guides for sure. I did an online webinar with someone I think Mel Kegan was the guy who jumped in with me on that, I did a bunch of different things to see what worked best. The courses were the one that did the best. So I stuck with that, and at first I sold them all individually so I said each course sold individually and if you have a membership since I already built my membership to sell the older interviews. If you have membership you get it for free.

And dude I spent so long not just me my team even longer than me hooking up each one of these courses into a process that would let you buy them individually or buy them with a membership. Then I finally just got so tired of doing it both, and putting my people through so much work to sell them both ways that I said, all right, let’s kill it, let’s just go for membership and just go with all in our membership which is what we did.

Steve: How do you reduce churn on your memberships, like how long do people stay usually?

Andrew: That’s a good question; I’m finally now starting to get a handle on churn, let me see if I can tell you. A few things that we do, we increased prices recently…

Steve: Yeah I noticed, yeah.

Andrew: And I think that’s helpful for churn reduction because, maybe not. Churn is 7.4% right now, and that’s high for us, I don’t know why we suddenly have higher churn. It could be because we got more members recently, and maybe there different kinds of members.

Steve: You get people to stay basically by constantly releasing new courses, is that…?

Andrew: Yeah the introduction of new courses is the reason they stay, though I’ll be honest with you. I know that people know that if they cancel today they could always come back tomorrow and get whatever course was added in between the time they left and cancel. Or if they cancel today they could come back in three weeks or three months and get all the courses.

So that’s an issue, one of the things that I have been thinking is people have been wanting more of a community, and so I’m thinking the community could help to channel a lot. But I’m still trying to figure out where it is, I have seen other people, other membership sites numbers, our churn has been better than theirs which is really reassuring. I used to think that anything above 2% is awful, but it’s not true. I see 10% is standard, 20% not unusual for monthly memberships, education based.

Steve: I think it depends on — oh education based, okay. Have you talked to [inaudible 00:36:15] I was just curios what his — I forgot to ask him this question on our last interview.

Andrew: No, I wonder what it is.

Steve: Do you do any on boarding like…?

Andrew: We do, we should be even better about it yeah.

Steve: Okay, and one thing I also want to ask you is you got a lot of stuff going on Mixergy premium, the dojo, I don’t know if that’s still going on…

Andrew: That’s part of Mixergy premium.

Steve: You had an interview course is that part of Mixergy premium now too?

Andrew: No, so I did have an interview course that was part of premium, I said I’m going to teach; I’m going to have all these entrepreneurs teach what they do best. I’ll teach one thing that I’m really good at. And I know I had to do interviews, and had to start an interview business, so I’ll add and I did. I did an hour long version of that and it was really popular.

And I kept — when my wife gave birth, I kept getting emails from people asking me questions about how to do interviews, and I realized because I had some distance and I wasn’t at work that there is so much, there is so many request like this that I should just create a course on it, and so that’s what I did. A bigger, fuller course much more expensive, much more time commitment, much more engagement.

Steve: And I’m just curious, I imagine a lot of these people they are interviewing other entrepreneurs and what not also, how have they been doing since it’s a lot more saturated now.

Andrew: Some do really well, some don’t do as well. I don’t have numbers on it and I frankly I should, because that’s the way I should be measuring my success. Sorry?

Steve: Do you have any example of someone who has done really well?

Andrew: Yeah Tucker Max, he loved the course, he went through the course, he was trying to at the time create a business that mentored authors essentially. He said all these are really bright, but they are too busy working and don’t have enough time to write books. Meanwhile there are all these guys, these knuckleheads, that’s my word for it, who don’t know anything, who write these freaking books, where they sound like experts because they have all the time in the world to write their books, and all the time in the world to promote themselves.

So Tucker said I think I should turn these other guys, these experts into authors and he needed to know how to interview them, and how to have a team of people interview them in a way that lets him create these books. So he took the course, and he is really into the question process, he built it. He created a company called book in a box; if you talk to him you’ll see that he is a big reader.

And he showed me some books that he read to help him to figure out how to ask questions, how to interview, and some of them are good, but he said the course was the best thing that he had taken, the best place that he did learn to do it.

Steve: He was a rock star to begin with so right, even before he took your class?

Andrew: But his people weren’t, he didn’t know how to get his people who were just total off the street people to ask questions. But I see what you are getting at, who’s built a business based on this? Right, we had other examples that we put online, and you are right I don’t have any others that just come to mind right now. I wish we did a pre interview; I would have spent some time looking it up.

Steve: Maybe I need to add that — see I still work full time and I don’t have time to do pre interviews but…

Andrew: You should do the pre interviews. I used to think I had to do the pre interview, here is a problem with me doing the pre interview, and I did it for a long time. People would tell me things and then in the interview they would assume that they already told me, and I would be bored by it, so they shouldn’t spend too long, and so they would stop their best stories. The ones that I was most excited about, because I remember being excited which means that they remember me having heard it before.

Steve: Interesting I would think that doing the pre interview takes away the spontaneity a little bit so to speak? I don’t know if they had to tell the same story twice even if it’s not to the same person…
Andrew: I think people could use a little bit of practice when they are telling their best stories because if they are really excited about it they lose their place. They get too excited and too caught up in the moment of telling it.

Steve: I was actually looking through your portfolio products, and it seems like you are almost like in an exploration type of mode so to speak. I mean you have a whole bunch of stuff, your True Mind program. There is something I think I just got an email back today right that is closing the doors. You’ve been running Mixergy for a long time now, and I was just kind of curios what direction you are taking moving forward, and we kind of talked about this a little bit before this interview started.

Andrew: I am, you are right, I feel like I am the least clear that I have ever been all of a sudden this year. Usually at the beginning of the year I’ll sit down and I’ll journal out where I want my year to go, and 2016 is the first time I really couldn’t do that, I’m not sure, I’m not sure.

Steve: What is this True Mind program about; I mean you sounded really excited about it when you were talking about the pre interview, right?

Andrew: I am, here is what I noticed that people who are listening to my interviews, who go on to build incredible companies, none of them come to mind right now, but you’ll hear them in the interview say, that they listened to Mixergy while they were building their companies. Actually one guy is the founder of any park. The guy was listening to my interviews when he was in Japan, got really into them came back to San Francisco not too far from where I am. And decided he wanted to be in tech, because he didn’t have anywhere to live, didn’t have any entrance here, he slept in a van outside of Taco Bell.

Finally before he was due to get out of the country he said I need to meet some people here, he went to a tech conference, this strap conference from tech ranch. He couldn’t get in because he didn’t have a ticket, they are like $2000 or $3000 tickets, he didn’t have that kind of money. So he walked over to the receptionist and said, look I speak Japanese, you guys probably are going to have Japanese people in here who need a translator, I’ll be your in house translator if you let me in, they let him in the conference.

And he never needed to translate for anyone, but he did get to meet Paul Graham, he said to Paul Graham you told people who listen to your work that they should be coming to San Francisco, I’m here now what do I do, you at least listen to my pitch idea? Paul Graham said okay, listened to his speech idea, and founded his company and today any park is doing incredibly well creating parks for companies to give to their employees.

And I intentionally within my interviews say Mixergy fan whenever I remember to when there is someone who is a fan who is listening from the early days, and if you Google it you’ll see that there are tons of people who’ve listened at the time. That’s the first like thing that I want to do, but you are right it’s not enough. Oh right so there are people like them, I promise when I talk to my audience I see people who are incredibly successful like them who aren’t well known, who won’t do interviews, but I also see people who don’t go anywhere, who are just freaking stuck.

And the difference between the two of them isn’t intelligence. The people who are stuck are often brighter than the people who are going further. They are like really good developers, really sharp, they work hard. And what I realized was what was holding them back is the same thing that used to hold me back, the sense that they are not ready, the sense that its meant for other people, the sense that this inner critic. And they would talk to me about it in private, and I recognized it myself that I had that too. I said we need to deal with that.

And I tried doing it in the interviews and my interviewees wouldn’t talk about it publicly, they talk about if
you’re over scotch, but not publicly. I said let’s all work together on dealing with this inner critic. And we did, and it was just like me and a bunch of premium members who didn’t have to pay anything extra to talk to me and work with me, and I did a ton of work with them on this.

We realized it’s not just the critic, it’s this part of our minds that we all the counters everything we want to do, I’m not sitting here to do an interview with you, and there is part of me that says I’m not going to be interesting enough. I’m not directly a good fit for his audience, what if he asks me a question that makes me look bad, right? That’s counter mind that if I start to notice it you’ll see me drift of in conversation. You’ll see me not fully engaged with you; you’ll see me hold back, you’ll see me like break as soon as you ask me a tough question.

It is just there, it counters everything we do, someone who is listening to us right now who wants to start a business like you is going to think oh that’s not me; I don’t have a wife who is supportive. I don’t know anything; all the good ideas were taken etcetera. Or maybe this guy is actually, maybe Steve is actually cheating me or using me, so I don’t want to even listen to him, and it’s a counter mind, we all have it.
We also have this other part of us, this true mind. For me in this interview it’s I just want to get to know

Steve, because if I get an hour with you then you and I don’t get to spend much time together, right? It’s good for me if I get to help you out it’s a win because you are going to help me out at some point of my life, you are going to help me think through something, or I don’t know what, maybe you’ll throw a link in something a few years from now that will help me right?

So that’s something I just want to do a good job for you. There is another part of me that says maybe I want to meet someone in this — through this interview that’s going to be helpful for me. Maybe I can actually help somebody and change their lives the way that I wanted to when I was in Venice beach feeling like I’m not living up to my potential, right? That’s a true mind. That’s the part that we want to spend more time thinking about, more time experiencing, more time expressing, and that’s the difference that I noticed.

When you see someone who is building a great company, someone like [inaudible 00:45:18] who walks into a conference and says I know Japanese. That’s not coming from a guy who is obsessed with his counter mind which says you don’t even know, you have an accent, he has an accent. That’s not coming from a guy who was listening to his counter mind which would say, everybody wants to come in here for free, they are not giving you a free ticket, right? He’s expressing his true mind. Now, how do we do that more often? How do we get to focus on that more often?

That’s something that I got really passionate about and started talking about a couple of years ago, and then I created a course for it, and you can see people with their [inaudible 00:45:52] way of remembering what it’s about, you can see people with their beads, you can see people who views them, who’ve gotten results from them, who’re sharing it with their friends and getting results with their friends for it. When I told you before the interview started there’s a part of me that just wants to stop everything on Mixergy and just focus on True Mind, it’s because of the responses that I get from that.

I spoke at a conference and one of the volunteers at the conference came up to me and talked to me afterwards, and I didn’t realize that I made an impact with her on this whole True Mind thing. I gave her a set of beads and I moved on and … I just said here it is and you know the process– oh, I gave everyone at the conference beads, actually now that I think of it, but I don’t know if I had to give her a specific extra set because she was a volunteer, but I gave her a set of beads so she can use this process with them, and she emailed me at the end of last year to say how helpful this whole thing has been for her.

I didn’t know what she was going through, but she emailed me to say that she was going through a bunch of stuff, and this helped her focus on what she wanted and helped her get results in the part of her life that mattered to her. It took me a long time to get that kind of response from Mixergy. It took me a long time to get someone who cared that much about Mixergy, so that’s why I’m thinking maybe True Mind is what I should be spending more time on.

Steve: You know what’s interesting about what you’re saying is for me at least; I do get imposter syndrome sometimes, but am more concerned about not understanding what to do. I feel like once I understand what to do like I have all the confidence in the world.

Andrew: Give me an example.

Steve: For example, if I wanted to learn how to run Facebook ads for example, and I was not confident because I don’t know how to use it at all, once I gain the knowledge and actually execute on my own platform, I would feel comfortable teaching it, so to speak, or I’d feel comfortable running someone else’s campaign.

Andrew: I get that. The challenge is that, how do you get to a place where you know it well enough that you can actually do it for someone else? For most people, they wouldn’t even get started, because in their heads they’ll think Facebook is already done, everyone who’s doing it is doing it. In their heads, there’s someone who is listening to us who’s thinking, there’s someone who’s already better than me at this.

The world doesn’t need me especially if I’m starting at zero, why should I start anywhere, right? That counter mind is going to keep them from even starting. I’d also suggest to you that if you are waiting to know everything, then that’s also you giving in. Not necessarily you, but if a person is waiting to know everything that’s also giving in to their counter minds. I can’t possibly know everything going into every interview.

If I wait to know everything, then I’m not ever even going to do the interview. I get on call sometimes with customers who are upset. I can’t possibly know how to respond to everyone who’s upset. There was a part of me when I was younger which said, you have to read a book on how to handle disgruntled customers, you have to have some experience working for someone else who teaches you how to handle disgruntled customers, and then you can handle your own disgruntled customers, right?

Then you know, there’s always like one extra thing I had to do, there’s always one other book. I remember when I was growing up and I wanted to sell– to shovel snow for my neighbours for like 20 bucks, and whenever they would say no, I remembered thinking, I have to read The Art of the Deal because I don’t know how to negotiate with them and get them to say yes. Like that book was magically going to sell before me, so I read The Art of the Deal and then I said, I have another book that I need to read before I can really turn these people around.

Steve: I hear you.

Andrew: When all I should have done was had the confidence to say, really? Are you really going to spend some time going and shovelling your snow, or just being okay with it and moved on to the next person? It’s the counter mind that keeps us from starting; it’s also the counter mind that always shows us that we don’t have enough.

Steve: I get that a lot, since I teach a class. People come up to me and they’ll ask me a question that they know the answer to, and they just want me to say yes, I agree, and then they proceed. Is that kind of similar to what you are talking about?

Andrew: Yeah right, they need that blessing. They need somebody to say it’s okay. There are so many people going to business school just so they could have that piece of paper that says that they know business, and then they are going to be so, so disappointed when they leave and someone is going to ask them a question, and saying I’m a business school student isn’t enough, or they won’t remember it from business school, or it wouldn’t have been taught and covered in business school.

Steve: It will be interesting to see how your course unfolds; this is the first time you are running it, right?

Andrew: Oh no, I’ve actually stopped doing it because I kept going back to Mixergy and the only thing that brought me back is the graduates, the people who’ve been through it keep saying what’re you going to do with it next, what’re you going to do with it next. And so I still said I’m not sure to them, and then I have a team of people now who say we are going to help you keep producing new stuff, and new stuff that you care about that’s like my ideas, not me promoting someone else on my interviews.

And I said all right, here’s the next thing we are going to do. We are going to launch True Mind. It’s going to happen in January, and we are going to start it off and I said, “I think that January is a little overdone,” they said. “Yeah, but we’ll take care of it,” and so they organized it.

Steve: Now that’s cool.

Andrew: Yeah.

Steve: Just curious, is everything that you are doing, is this like your calling? Like is it enough for you? Because I know last time we had talked, I told you that I need something technical in my life to keep me going. Is the stuff that you’re doing right now with Mixergy, True Mind and your other projects; is it what you are meant to do?

Andrew: I think I wanted to do better, but I wanted to be this. I don’t want to do anything else. I don’t want to start a software company, I don’t want to retire, I don’t want to do anything. I want to do this, but better. Like, more people should be moved by the True Mind process and semi-results. I should be expressing it even better than I am today.

Mixergy needs to be a lot clear as a platform, as a place to learn. You should be clear about what you are going to learn on Mixergy. You shouldn’t, you the person who just, you’re interviewing me, you looked it up. You should know more about what we are selling on Mixergy, what are those courses, right? And you couldn’t clearly say right now, because I think we need to do a better job of expressing that to you.

Steve: I think the main reason is you just have a huge breath of stuff. Like just courses on like every subject practically in your library, right?

Andrew: Yeah.

Steve: So in my mind at least it’s unclear whether I should take the course from you, or I should go and find someone who just specializes in that …

Andrew: You actually would get a specialist, someone who is specialized in that. If it comes to presentations for example, a lot of entrepreneurs need to give presentations to their internal team, they want to do webinars because they hear webinars sell well, they want to speak at conferences because they know they get to meet other conference speakers, they get to meet an audience, they want to know how to do this.

Well, there are courses where you can go and take on how to give presentations. It will cost like five, six, ten, twenty thousand dollars depending on where you do it, and whether it’s in person or not, right? Or you come to Mixergy, Nancy Duarte is the woman who taught [inaudible 00:52:53] how to create the inconvenient truth PowerPoint movie that became an Oscar nominee, maybe even won an Oscar, I don’t know, I don’t remember. She’s the one who teaches the biggest people in business how to give presentations.

She did a course on Mixergy where she teaches presentation skills. Why would she teach it on Mixergy if she is also available to do it somewhere else, and why would you come to Mixergy to take that course as opposed to going to her in person thing. I think that most people need 20% of the material that will help them give the right webinar that will help them give the right presentation. That they can actually use and then decide whether they want the other 80%, and for most for people, they may not even want the other 80%, right?

So you come in, you take a course with Nancy Duarte, she teaches you presentation skills and if you want, you use it and you are good to go. If you like her style and you want more from her, she has an in person course. She has a team actually; she’s now a huge company that will teach it to you through in person classes, there are people who’ll actually create your presentation for you if you want to do that.

The same thing with Neil Patel. He teaches how to get traffic because he knows we have a big audience; they can learn from him. For most people, they could sign up for these multi thousand dollar programs that last weeks and weeks and weeks. Most people don’t want that. They want the 20% that they could use right away and get some results before they do more, and the thing that I had as an interviewer on Mixergy is, I had an audience, so if you are teaching a course, if you are Neil Patel, you are not coming in to an audience of zero where I, Andrew is saying to you, come and teach my people, but you’re saying Andrew has got this big audience, many of them are already paying him.

If they are going to paying him to watch me, many of them are going to come and pay to watch my stuff too, because they have already proven that they care enough and they are willing to pay, and I also have a bigger audience that I email every week. 70 plus thousand people that are saying, “Neil Patel is an expert on how to get traffic, he’s teaching this on Mixergy. If you have a premium membership, you can watch it. If you don’t, you can sign up. Even if they don’t sign up, in their heads, 70 plus thousand entrepreneurs now know Neil Patel is a business person. That’s the model. I need to do a better job of expressing it 100%.

Steve: Here’s the funny story on my end. I’ve in the past, given my course out to people for free. Just, these might be like friends or people who just want to learn, who know me, and everyone who I have given the class to for free has never done anything for it, and the people that I heavily discounted for, they end up doing something about it. Just the act of paying money, a lot of money has made them take action, so I was just wondering, for you, you get an all you can eat once you pay the lump sum, right? I was just wondering if that actually prevents people from taking action.

Andrew: I think in many cases it’s okay to not take action. I’m all right with someone saying, I have a membership to Mixergy, I’ve checked out Neil Patel’s stuff. It turns out it’s not for me. It turns out that really his whole attitude makes sense. I’ve learnt it, I’ve internalized it, I understand it, I’m not going to do it, but it’s good for me to know how other people are doing things. It’s okay for somebody to go watch Nancy Duarte’s course and say; I actually don’t want to give a presentation. I’m never going to do this.

My belief is that if it’s short enough and we do about an hour, they’ll watch it to the end and I’m seeing the numbers that they do watch it to the end. My belief is that, some part of it is going to stay with you. You might listen to Nancy’s Duarte’s presentation and see that she shows you how those speeches that have resonated with people for years, have these highs and lows and highs and lows and it’s an intentional process.

When you give your next presentation whether you know it or not, that’s now part of your knowledge and you are going to adjust your stuff, your style so that you can do it, so that you can have a high and then a low, a high and a low, especially if she’s convinced you that it makes sense. If she hasn’t, then why spend even more money to take a bigger course?

Steve: That makes sense; I can see it from both sides. Hey Andrew, we’ve actually been chatting for almost an hour now. I didn’t even realize that the time went so quick. I want to be respectful of your time. If anybody wants to get a hold of your latest projects, where can they find you?

Andrew: The best thing to do is go subscribe to Mixergy’s podcasts because then you get everything, all the interviews for free when they come out. You don’t have to buy anything, you don’t have to be a member, you get all the latest interviews for free. It’s in the iTunes store and if you don’t subscribe now, then whatever is free now will eventually be, tomorrow will be prepaid members only.

Steve: Behind the pay wall, yeah. Cool man. Hey, thanks for coming on the show, I really appreciate your time.

Andrew: You bet. Thanks and I love what you are doing. I’m glad to be on here.

Steve: Thanks man.

Hope you enjoyed that episode, Andrew’s success with Mixergy was actually one of the main reasons I decided to start my own interview based podcast, and even though we have different styles, I’ve learned a lot from him.
For more information about this episode go to mywifequiteherjob.com/episode113, and if you enjoyed this episode please go to iTunes and leave me a review. It’s by far the best way to support the show and please tell your friends, because the greatest compliment that you can give me is to refer this podcast to someone else either in person or to share it on the web.

Now if you’re interested in starting your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business. So go to mywifequiteherjob.com for more information, sign up right there on the front page, and I’ll send you the course via email immediately. 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.

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Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!