Bernie Thompson with me on the show. Now Bernie runs an eight figure Amazon business called Plugable where he sells electronic equipment which is quite possibly the most competitive and the most cut throat niche that you can possibly go into on Amazon.

He also runs a popular Amazon software service called Efficient Era which allows you to match up your product feedback directly to a specific customer on Amazon. Now I actually use this software and as far as I know it is the only software out there that allows you to do this. In any case Bernie is an amazing guy, and enjoy the interview.

But before we begin I want to give a quick shout out to Klaviyo who is a sponsor of the show. Now I’m super excited about Klaviyo because they are the email marketing platform that I use for my ecommerce store, and I depend on Klaviyo for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another provider. Well Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here’s why it’s so powerful.

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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 lucky to have Bernie Thompson on the show. Now Bernie runs an eight figure business called plugable.com which is a company that sells USB and Bluetooth devices online. So first off those of you who have followed me for a long time know that I generally advice against going into the electronics business.

Not only is there the threat of your products going obsolete but the quality assurance and the [inaudible 00:04:03] required can be very daunting as well. And then you couple that with the fact that China can produce electronic knock offs fairly quickly makes it even tougher as well.

Anyway Bernie has managed to create an incredibly successful Amazon business selling USB and Bluetooth devices, and what’s cool is that his company is global. Plugable sells its products in many different countries all over the world. What’s also cool is that he built all of his own tools in-house to manage his Amazon business, and then he decided to take those tools public and his company is called Efficient Era.

Now I’ve actually already started using these tools myself to manage the feedback for my shop and they are really powerful. Anyway the reason why I have Bernie on the show today is to talk about how to be successful selling electronics on Amazon and the exact processes and tools he uses to make money. And with that welcome to the show Bernie, how are you doing today?
Bernie: Great to see you, great to talk to you.

Steve: Yeah so Bernie I know that from your background you used to be a software engineer, how did you go from software engineer to ecommerce?

Bernie: Yeah I was a software engineer, actually kind of like you Steve I was a low level kind of guy, so I worked on the device driver layer, so all these hardware devices that we use every day, they have a bunch of software that interfaces between that device and the operating system and that’s what I used to work on and I used to then manage the USB and Bluetooth teams at Microsoft, and that led to creating this USB and Bluetooth devices business.

Steve: So why electronics of all things?

Bernie: Yeah I think interestingly Plugable is electronics company first and then Amazon seller second, so it really was because we had to go on building a better device company that when I started Plugable in 2009, the experience buying things like USB and Bluetooth peripherals was pretty dismal. They seemed to work most of the time but when they didn’t work you had horrible information and horrible call center style of support.

So we wanted to go direct using all of these new capabilities that were coming with Amazon and FBA and the ability potentially to sell globally, and do kind of that information and support in a much different, more customer centric online way with fast feedback loops and doing the right things for customers and getting rewarded with good reviews.

So yes Plugable was an electronics business, design is electronics business first and really selling on Amazon was secondary. We really wanted to solve issues that were out there for all the USB and Bluetooth device companies that they really were providing poor support call center style. We saw the opportunity to do it online with better information and a more customer centric approach using all the new tools that were coming in the form of Amazon and the Amazon FBA and it’s worked out pretty well.

Steve: So here is the thing, I looked at some of the products on the Plugable website, so for example you sell like a USB hub, but if I go out there is like – I would say there’s hundreds if not even thousands of those out there. So how did you come up with which particular electronic products to sell, and I guess what was the first product that you launched?

Bernie: The first product we launched actually was trying to take some off the shelf hardware and use it in a different way. We took USB docking stations which were new in 2009, and were turning them into USB thin clients, and I actually because I’m a software engineer I actually did a bunch of unique work in Linux to make that possible. So we did a unique product as our first product and as it turns out it failed.

Steve: Okay and why did it fail?

Bernie: It failed because the USB thin client market never took off. Around the same time you started having less and less expensive Windows laptops and tablets, you started having Chrome books a few years in, and so the benefits that you got from taking a single computer and connecting a bunch of thin clients and turning that one computer into many, you’re really looking at mostly a cost benefit there, and that cost benefit people were getting in different ways so just having their PCs being cheaper.

Steve: So when you decided to sell this product – I guess what I’m trying to get at is like what is your process for figuring out or making sure that a product doesn’t fail when you bring it to market?

Bernie: Yeah, when I first started I thought we would be a single product company. As it turns out that product failed and I faced the choice of, well do I stick with this and keep trying harder in this USB thin client market or do I go wider, and I made the decision to go wider. So at that point it really kind of switched from a mindset of we’re a thin client company to I’ve got to launch a bunch of products in the hopes that one or two of those will be successful. I kind of thought it might be like a five to one ratio or something like that, so almost like a VC mindset.

As it turns out in the early years 2009, 2010, 2011 it actually was more like one out of every two was successful, it was a very high hit rate, and we can talk about maybe why that was. And then over the years that has varied a lot starting in 2012, 2013 a huge influx of sellers often from mainland China where most electronic factories are located, and our hit rate went down significantly.

Also at that time you started having the review gaming which we never participated in, so we really had a lot of head wins against us because our competitors were launching products and having hundreds of reviews within a few weeks, whereas we took months to get hundreds of reviews.

That was a huge disadvantage that we suffered, so recently our hit rate has actually been going up because we’ve continued to refine our processes and now Amazon has cramped down on the fake reviews. So it’s not as good as it was in the early years but we’re probably talking about like a one out of every four products is a hit.

Steve: Okay and just to be clear do you design all of your own stuff in-house or you don’t do any sort of private labeling or white labeling of products that are existing, right?

Bernie: We do the full [inaudible 00:10:44] from basically products that already exist and bringing the model of the Plugable brand to actually getting involved with a little bit of low level PCB design and other things, but most of our products fall in the middle where we kind of do ground up research.

We know what chip sets are coming out from the IC makers and we go out and seek factories that are experienced using those chip sets, and we put in our FQs and try to get them to build a product that uses the chip sets that we’re looking for and has the features that we want.

Steve: Interesting, so do they perform all of the testing and everything for you then?

Bernie: Yeah we do a lot of testing but really it’s mostly kind of from the user perspective and high level testing, so our factory partners are heavily involved with the low level testing also.

Steve: I see so in terms of like schematic design and all that stuff, that’s all handled by your designer?

Bernie: Yes.

Steve: And are most of your products created over in Asia?

Bernie: Yes, the original designs come from all around the world. Most of the designs originally come from the chip set makers; the IC makers from the reference designs and so just as an example of a lot of our products use chips from a company called DisplayLink which is a USB graphics company.

They are located in Cambridge England, so a lot of the original reference designs are coming out of Cambridge and then they get picked up by the factories, they modify them to fit a form factor or adjust the cast or adjust our request for features and that’s how the low level design gets done.

Steve: So to do what you guys do requires some amount of technical knowledge is that accurate?

Bernie: Yeah, I think you said earlier in the call you generally recommend against electronics. Yeah I mean there’s a lot of barriers here, I’ve worked at — and even though I’m a software guy I’ve worked at two chip companies, a chip graphics chip company called S3 in the 1990s.

Steve: Yeah I remember those guys.

Bernie: I worked at DisplayLink themselves, I was a VP at DisplayLink. So I’ve been able to use this knowledge of how these chip companies work and how the supply chain works to not just be a passive actor, but actually to be an active participant in all these choices that ultimately end up determining whether the product is a quality and whether the product is differentiated from other products that are out there in the market.

Steve: Okay and so I’m just curious to achieve your revenues how many product skews do you have and what country are the majority of your sales coming from?

Bernie: So we have over 100 products at this point, we have about 110 and by far our leading market is the US. US is greater than all of our other geographies combined although all the other geographies are growing and they are fairly healthy too.

Steve: And in terms of skews you mentioned you had like a one in four hit rate, what do you do with the three that fail, do you just kind of discontinue them right away?

Bernie: No we don’t discontinue them right away, I mean because we’re doing products that are unique in many cases, will have unique aspects, we’re dealing with relatively large MOQs, minimum order quantities usually 1000 or 3000 at least and so it takes some time. When we do have something that’s not a hit frankly we’re stuck with the inventory for quite a bit of time usually a year or two.

So what we’re trying to do over that year or two is basically try again and again different communication strategies, different emphasis on the feature aspects of the product to try to find a strategy in terms of how we’re marketing or what

we’re saying in our marketing to get that product to take off. It’s funny it’s a lot like starting a campfire or something, sometimes you get a situation where it just fails to light with the few attempts and then just for some reason on the fourth or fifth attempt it lights and that happens with products too.

Steve: Okay and then when did you actually decide to expand overseas to other countries?

Bernie: It was actually pretty early on. When you’re doing unique products that you’re investing a lot in ahead of time, any market that you’re not in is a missed opportunity. You’re giving oxygen to your competitors by giving them a market that you’re not competing with them in. So we try hard to be as aggressive as we can be to reach every market around the world, although that said we tend to focus on Amazon. So we focus most on the markets that Amazon covers but we do also try to reach the other ones.

Steve: Okay so I want to talk a little bit about your product selection process without getting technical at all. What is your main criteria when you decide to bring something to the market, what is your process and what price point and margins do you like to see?

Bernie: I think we do with electronics where the Plugable brand we’re connecting this with that, so the number one issue is compatibility, are we able to make a very broad statement that if you have an HDMI monitor that this product will connect your laptop to it or whatever. Very often in electronics it’s not so simple, the compatibility story is inherently complex.

Maybe let’s say the product is a DisplayLink graphics product and the drivers on Mac just aren’t that good or the operating system support for DisplayLink is not that good. So we spend a lot of time trying to create a product with the maximum compatibility possible, and then whatever is left just is a limitation. We work really hard to try to communicate that accurately and upfront to the consumer so that they know what will work and what won’t.

Steve: So I imagine you have several competitors on Amazon, right?

Bernie: Yeah many, I mean literally it’s electronics so we literally have hundreds of competitors.

Steve: And so how do you stand out?

Bernie: We try to get the little details of compatibility right, and sometimes that’s firmware thing, sometimes that’s a tweet to the hardware, and then we try to get the expectations setting right. Often we have an advantage there because all of our staff is here in the US where actually I used to work in Microsoft here in Washington, and so we got some great technical people around. So we’re able to describe the product more precisely and so we don’t have people for whom the product is not going to work buy it and then write a negative review.

So in addition to compatibility issue it’s features. We’re trying to make sure that when we look at all the products in the market out there that we’ve made at least a few choices that move the feature bar forward. Although we don’t focus on price as much as some other people, we want to make sure that at the feature level we’re on that the price is competitive. So there’s really a lot of market research that goes into every product before we launch it.

Steve: I’m sure.

Bernie: Then if we think we have that right mix of features, compatibility, and price that we’re able to produce something
competitive, then it’s a matter of really doing kind of all of our execution right in terms of selling on Amazon and doing ecommerce so that we can drive the Amazon fly wheel and push that product up in search results through proving to Amazon that when people glance at the product they choose to click on it, when they click on it they choose to buy it, and when they buy it they have a good experience.

Steve: And I’m just kind of curious what the margins – can you kind of give us an idea what the margins are like for electronics?

Bernie: Yeah the margins are really tight for electronics. If you’re able to net out after everything a 5 or 10% that’s probably considered norm.

Steve: Wow, okay I didn’t realize it was that low.

Bernie: Yeah that’s after everything, support and everything.

Steve: Sure of course yeah, and in terms of the time frame from inception to getting a product ready to go to sell what is like a time frame for a typical product of yours.

Bernie: We try to make it as short as possible. When you’re producing custom product that is being manufactured in Mainland China there is just inherently some fairly long latency, some long delays. Even on a product that is settled that we’re just doing a reorder the delay is anywhere between two to four months depending on chip set availability.

So for a new product it can be as long as nine months but we try to get it down to maybe four months or so on a new product.

Steve: Okay and then typically like what’s like a minimum investment for like the first purchase?

Bernie: It depends on the cost of the product.

Steve: Of course.

Bernie: We sell products that are $200 docking stations and we sell products that are $10 cables. So if you kind of multiply out a wholesale cost on that by 1,000 or 3,000 units plus the bunch of time invested, you’re usually talking about a minimum of tens of thousands of dollars on a new product.

Steve: Okay, all right so let’s switch gears away from the actual product design, because I’m pretty sure like the actual product development is probably a little too technical for anyone who is listening even though I would be personally interested in all that stuff.

Bernie: Right yeah you have all the background for this.

Steve: Like trying hard not to ask you those questions right now. All right so you got your product, you’ve sent it over to Amazon, so what is your strategy for getting it visible on Amazon. So let’s start from the beginning like it’s got no reviews, what is your strategy for launch?

Bernie: You know it’s so tough – even when we started and certainly now here in 2017 if you launch a product on Amazon it could be the best product in the world at the best price, and it will sit there at the bottom of search results and no one will buy the damn thing, so strategies are absolutely necessary.

So let’s talk in terms of the funnel because I think that thinking of a funnel is the correct way to think about this. So our first challenge is to get anybody to go look at the product at all regardless of what their reaction will be to it. And so our strategies for doing that are number one is content marketing. Every product has a story, every product has a reason for existing, every product has problems that it’s solving.

There are people out there who are having those problems, who are having those frustrations who if they were aware that there was a solution they would be excited about it, so our job is to reach them, this is marketing. The only thing that’s changed about marketing is video is so much easier now because we can use tools like posting videos on YouTube and posting videos on Facebook and we can use targeted marketing on Amazon, on Facebook, on Twitter, on Google honing in on the searches and the keywords and the interests of customers.

So our first job is to break our product down into what are the problems it solves, what are the customers who would be interested in that kind of problem and solution and then what are the keywords that are relevant to them and what’s the content that would be compelling for them, often the videos, sometimes blog posts, sometimes maybe a cross post or an article on another site and creating hat content.

Steve: So you’re creating content and I think in the case of Plugable you guys do a lot of how to type of videos, or feature videos?

Bernie: Correct.

Steve: Okay.

Bernie: It’s kind of interesting, with electronics it’s hard but there’s a lot to talk about because there’s a lot of how to and a lot of interesting new things that is sometimes possible with technology, so yeah so we use all of those excuses to create some – tend to create some compelling content.

Steve: So you have the content but how do you get people to actually look at it?

Bernie: So a lot of it is patience, that building an audience takes a lot of time, there are so many gigantic problems with ecommerce, we talked about how you launch a product on Amazon and it sits at the bottom of search results and nobody finds it. That is true for your content too; until you’re able to build up an audience, it can be frustrating. You can have a very compelling video sitting out there on YouTube and no one will go view it.

So a lot of it is really about pushing a snowball down hill and having the patience to have that snowball build in size. Today Plugable has over 8,000 YouTube subscribers and we have several million video views on YouTube. It took eight years to get to those numbers, and so there is a bit of that is that planning and setting aside your time and your budget to give yourself enough time to have that snowball build some size and become self reinforcing in the end. Your past content is in a sense creating the audience that is going to be viewing your future content.

Steve: So I’d like you to take me back to your first successful product like when you had nothing, and were you doing content well before the launch of the product?

Bernie: Yeah we had the content strategy from day one, so if I would look back at the plugable.com site right now I could find blog posts from the fall of 2009. At that point we figured we were trying to reach the most dedicated possible audience for our products, so we focused on very tactical blog posts that would really get a core group of people very excited about what we were doing.

I also was speaking at conferences about the product and I was trying to reach that same sort of audience. So I guess there is a lesson there in terms of being realistic about what audience is likely to be excited about you, and even though ultimately you want to reach a wider audience, first focus where you’re strongest and establish some momentum and some credibility where you’re strongest and then kind of build on that and expand on that.

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Okay so you advice anyone who is launching a brand new product from complete scratch to start thinking about their audience and start producing content for that audience?

Bernie: Yeah I would say so. There’s strategies that don’t involve content marketing and certainly actually there’s a lot of successful Amazon businesses that don’t do content marketing. But I think that there is a fragility to that, that the content marketing because it is a snowball that rolls down a hill and grows, it creates a more sustainable momentum for your brand and your products that even though it’s sometimes painful to get that rolling to start with, ultimately it’s what can build a strong, large and sustainable business.

Steve: So in terms of the sales of your first successful product then, was it Amazon customers that were browsing the marketplace, or were they people that you were driving either through email or your content to buy that Amazon product?

Bernie: So on the first product which was a unique USB thin client product, it was mostly us driving people to Amazon and I think even the terms that people would think to search for if they were looking for such a product weren’t very clear. And then as we expanded our product line, we went into very well understood commodity areas like USB hubs and USB keyboards and mice and USB graphics adaptors.

In those areas there was an existing body of people on Amazon already searching for those products, and then we just needed to focus on coming up high for those searches that were already happening.

Steve: Okay so essentially kind of using your terminology like the fly wheel going, right?

Bernie: Exactly, so we talked about kind of filling the top of the funnel with content marketing. So then the next step – and this is somewhat what’s unique about Amazon and powerful about Amazon is Amazon is really using and looking at using all the metrics about your products. Amazon’s philosophy is very customer centric, they want customers to have great experiences on Amazon, and they want to help that to happen through data.

So they want to reward products on Amazon that when somebody is driven to the Amazon site for whatever reason or searches on the Amazon site there is a product that they are attracted enough to click on. Then when they click on it that there is a high percentage of the time that they buy that product, and then when they buy that product that there is a high percentage of the time that they a have a good customer experience.

So Amazon is literally taking those metrics, those conversion metrics for your product and feeding that back into the search results. So it is a fairly beneficial kind of feedback loop of if you do right by customers on Amazon, Amazon will reward you with a higher position in search, and so a lot of the focus of our business has been on making sure that that customer centric feedback loop is spinning the Amazon fly wheel and driving sales.

The final part of it is that when that feedback loop is working and you’re getting pushed up in search, well that results in more sales which results in more statistics which reinforces that hey this product is a good product that is increasing its sales. So that’s how you kind of get this fly wheel effected, and in fact if you can push your product up in the Amazon search to where it is one of the top sellers and people are having good experiences with it, it’s very self reinforcing and it’s actually hard for competitors to knock that product out of that position except by slowly growing there with a better product and better experiences for customers.

Steve: So can we talk about some of your specific processes that you use for Plugable to kind of push this fly wheel and get a positive feedback loop going?

Bernie: Yeah absolutely, so a lot of the really successful sellers who started earlier on the Amazon platform and I have met a bunch of them – it’s interesting a lot of us were software developers, and part of the reason why that happened was Amazon provides a lot of tools for sellers, but they don’t do all of the essential things.

So a big part of making sure that the feedback loop goes well and that the fly wheel is spun is identifying all loop wings in all these things that happen on Amazon where communication with the customer or being very fast to respond to things that are happening with Amazon will help produce better experiences.

So one of the early things that I did in 2010 was begin developing software that for example every time an order shipped from Amazon FBA I would send out an email to the customer that had a bunch of helpful support information, and also establish a rapport with the customer and said that after you have a chance to use the product for a while we’d love to have a product review with your experiences.

So at this point here in 2017 is great because there is actually a lot of services that will do that for you, you don’t need to develop software for it, and we’ve actually now taken all the software that we developed for Plugable and made that available on efficientera.com, so we’re one of those services too. So that was the key thing is establishing contact with the customer.

Steve: Can we talk about your email flow like how many emails are you sending out?

Bernie: Yeah so we’ve had a philosophy from day one that we don’t want to annoy customers by sending them multiple emails, so it was actually interesting when we created Efficient Era and took our internal system and offered it to others because other competitor tools allow you to send multiple emails for a single order.

So we went ahead and did that in Efficient Era, but Plugable still to this day does not use it. We send out a single email that is more about customer service than it is about asking for a review, and we send it out when the item ships so that the email will arrive right before the product does, that’s how Plugable does it.

We have a heavy support component with all of our products because we’re connecting this with that and when something goes wrong, it can get complex about why is something not working. So customer support is a huge part of how we can mitigate negative reviews or avoid negative reviews and encourage positive reviews through good experiences.

Steve: So from what I understand then you are not actually sending out a review link in this email then?

Bernie: We do actually send out review link but we qualify it with after you’ve had a chance to use the product for a few weeks.

Steve: Interesting okay.

Bernie: Yeah it’s an interesting middle ground. I know a lot of our competitors would break those two up, they might send a support email when the product first ships and then send a review request email a few weeks later and our system supports that, but I know we still are sticking to this thing of it’s not in the customer’s interest to receive multiple emails per order and we don’t want to be annoying, so yeah it’s interesting.

Steve: So they actually have to remember to go back to that email then to leave a review, is that right?

Bernie: Yeah that’s right yeah.

Steve: Okay, I know for electronics because one of my friends sells electronics that often times they are quick to a negative review if something doesn’t work.

Bernie: Yes.

Steve: And so when you’re dealing with them on the phone – you have phone support, right?

Bernie: We actually don’t, we only are online support, and that’s one of the reasons why we send that email because we want to say in that email, you can contact us by email just reply to this mail to contact us.

Steve: Okay do you ever – like once a successful support email has been sent out do you send them a review link then?

Bernie: Yeah we may or just generally encourage it, because we do want to treat every customer service incident as an opportunity to avoid a negative review and if we’re able to provide a really positive experience or better experience than maybe they’ve had before we get an opportunity for a positive review.

Steve: Okay, I’m just curious so how do you deal with negative reviews like what is your strategy?

Bernie: Our strategy is just simply to treat them as a customer service incident. I think in electronics that is a little easier to take that philosophy because usually they just have a simple goal of getting two things to work together, and so either that’s working or it’s not. So when somebody writes a negative review and that’s one of the things that is tough that Amazon kind of makes it tough for you, a negative review is usually just kind of a request for help in a sense.

They’ve had a bad experience and at least in our world a lot of times they could have had a good experience if we had had an opportunity to help them. They often jumped to a negative review before they even contacted us for service, but Amazon doesn’t really provide a good way to contact the customer, really the only mechanism you have is to post a comment on their review.

Unfortunately the reviewer is often not notified that that comment is there, and it’s really not an appropriate place to have a customer service interaction where you have to exchange information back and forth. So one of the things our tool does is it digs through all of your orders as a seller and all of the reviews and is able to do a buyer review matching so that when you have an Amazon verified purchase that came from your seller account, we’re actually able to send you an email and we do when you get a negative review, and it has the Amazon order number that that review came from.

So now once you have that you can just take that link to seller central and contact the customer. So we get that notification for every single negative review that happens on any of the Amazon geographies around the world and those go straight into our customer service ticketing system, and we just try to help the customer and turn that situation around.

Steve: So how do you get them to kind of retract their review?

Bernie: Well we’re not pushy about it; in fact Amazon terms are clear that you can’t be pushy about it. We focus first on just trying to – whatever was in the review that caused them to have a bad experience, our focus is very clearly just on trying to solve that problem. Then once we’ve solved that problem we will often say something like, oh that’s great, it’s working now, if you have a chance to update your review we’d really appreciate it, or something like that or if you have a chance to write the full experiences up in review we’d really appreciate it.

We really leave it at that and we don’t do follow up mails, we don’t do pesters, and I think in most cases the person who is angry and created that negative review because they were having a good experience in most cases they are so happy to have that problem solved that they’re really in a mindset at that moment that they do want to have that be reflected in the reviews. So we get a really good response rate even on that light and very customer oriented guidance.

Steve: And incidentally for everyone listening out there, this is actually the main reason why I’m on Efficient Era, the fact that you can actually find out who left the review and then contact them directly is actually a huge boost for customer service, because when I think about how I run my own business like we contact customers who are unhappy right away, and the sooner you do it actually the better because they start fuming and it builds up over time.

Bernie: Yeah and we’re able to get that email to you as a seller that there was a negative review and what order it came from in less than 24 hours from when the review was posted, and then on the Plugable side when we are the users of that ourselves we try to get back to the customer within 24 hours of getting notified. So basically in a relatively short period of time the customer gets contacted back with an apology and an offer to help.

Steve: Okay so it sounds like the way you run Plugable is with a strong focus on customer service, right?

Bernie: Yes.

Steve: Are there any other things that you have done to accelerate your Amazon sales?

Bernie: Well there is a lot of – the main event for interacting with a customer is the post order email and then responding to reviews. There is also a bunch of other smaller but important events. For example one is Amazon will send you an email when you receive a return or question from customers. Very often customers will tend to not write a negative review until they have the money back and then they’ll write a negative review.

So you have a time window there to also treat that as a customer service incident and offer to help solve whatever problem is leading to that return request, so that’s another thing that Efficient Era does is it captures those events and turns those into customer service requests for you.
Steve: Have you had success like turning around a return request?
Bernie: Yeah absolutely, and it’s sometimes in the form of they haven’t actually sent the product in yet and we’re able to get the product working. Other times it’s just simply – well if it’s a product that the reviews are really critical to us right now like let’s say it only has a few reviews, we might actually do something like, well we‘re sorry you had a bad experience, we really want to understand what went wrong here, we’re actually going to send you a free unit and work with you to get that working just so we can understand what happened here.

And of course that’s very much in the customer’s interest, the customer is getting the return and the refund of the product and they are getting the product they originally tried to get working. That happens in our space, sometimes compatibility is complicated and we really are in the dark about why something is going wrong and in a sense that customer is helping us to understand something that may also impact other customers, so in our minds between the review and between learning it’s worth it to us to work with this customer and try to figure out what went wrong.

Steve: I see and then by doing that I would image no negative review is ever left when you’re just giving away units, right?

Bernie: Yeah if the person hasn’t submitted a negative review yet, they want to see how it all resolves. I mean if they have your engagement, very few customers are going to write a negative review while it seems like you’re honestly trying to help them, because it might work out still. There are some people who are just in a negative frame of mind that they’re going to write a negative review no matter what, but that’s the minority of customers.

Steve: And in terms of just boosting your sales, do you guys ever use like discounts or lightening deals or anything along those lines?

Bernie: We do, not heavily though, a lot of our competitors in electronics use like deals and best deals very heavily. We have more of kind of an everyday low pricing and fixed margin model for our products, so if we’re doing a lightening deal we’re probably losing money on each unit. So especially now as of this fall Amazon has moved to a system where lightening deals have to come from an approved list that Amazon reflects back to you, and each lightening deal has a cost associated with it, $150 currently.

There is only a limited number of circumstances for us where lightening deals make sense, so actually it’s really not our primary means of getting the fly wheel started on Amazon.

Steve: Okay and how do you guys manage inventory like how do you know how much product to order, do you systems in place for that.

Bernie: We do, they are actually not part of our Efficient Era tools right now; they might be in the future. There are actually today a massive number of spreadsheets with a lot of scripting between them, so we basically have a custom in-house inventory system that tells us that current run rates, how many weeks of stock do we have left, because it’s hard.

We’re trying to steer a ship that a decision we make today has its impact three or four months from now because basically if we order one product from our suppliers today, it can be that long until we receive it. So it really feels like you’re steering an ocean liner at times, and it’s very hard to make those forward looking decisions, so we have a lot of analysis around that.

Steve: What about tracking your revenues and like your inventory like when Amazon loses some stuff, how do you manage all that stuff?

Bernie: The Efficient Era tools do have a functionality in that area, we basically have time series graphs that allow you in aggregate for your whole account and for each product to be able to see the graph of your sales and your inventory over time so that you can see when inventory has been dropping when you’re making that decision about whether to place a purchase order.

Amazon is kind of good about giving you data in numeric form for right now, but sometimes that data is deceptive. You might have had just in the last week or two this massive sales spike and then you think – and so you’re looking at your stock you’re going, oh no I’m down to five weeks of sales, but if you look at it in a historical context you might realize that that’s way off the normal trend for this product and I need to be careful and wait for a few more weeks of sales data to confirm the new trend.

So we try to use that historical perspective on our sales and our inventory levels to make better decisions.

Steve: Okay and I have to ask this question, I noticed on your site that all links point to Amazon. Is there any reason why you don’t take orders on your own site?

Bernie: Yeah it’s a tough decision because it’s scary to be so dependent on Amazon and even though we’re an electronics company first and an Amazon seller second we are very dependent on Amazon, and it’s because we’re so good at Amazon, we focused on that and Amazon has really been eating everybody else’s lunch.

That said we’ve tried every other ecommerce service, we’re really on Jet, we sell on Wal-Mart, we sell on eBay but basically if you’re trying to do your own sales on your own ecommerce site, the fly wheel has a lot of resistance. Yes you can build a brand and get people to think about your brand first before they buy a product and come to your site, but boy is that hard. Unless you’re a GoPro or you’re a Dell, chances are you’re going to have a very hard time getting that particular fly wheel spinning. More likely people are going to buy past your site and head directly to Amazon and start searching in.

So our philosophy has been to be really stuck about that, that there is too much friction on the fly wheel for us to have people think of Plugable first, so we’re going to focus on driving those sales to Amazon and pushing Amazon fly wheel for our products.

Steve: So in terms of your content marketing efforts, are you gathering customer data, email addresses and that sort of thing?

Bernie: We do a bit; we’re actually not heavily into that and again our philosophy of not pestering customers. We don’t actually have email marketing that goes out other than if people kind of very proactively subscribe to our blog with their email address, yeah so we have not used cold email marketing actually at all.

Steve: Okay interesting and do you do any paid advertising?

Bernie: We do lots of paid advertising and it’s very focused on that breakdown we were talking about earlier of customer segments, why they will buy the product, what they’re searching on, and we spend that marketing money on a mix of Amazon, and Facebook and Google and really a lot of online channels so that when people are searching for something, that our product is a solution for that, that we’re trying to get our product up in front of them.

Steve: So what’s the plan moving forward, I understand that Plugable uses Efficient Era for all of their processes, like you’re eating your own dog food essentially?

Bernie: Exactly.

Steve: And so what is the future, like are you focusing efforts on Efficient Era, are you focusing efforts on Plugable, what is the game plan going forward?

Bernie: So all the tools that are in Efficient Era were originally created just internally for ourselves, in fact let me not — I personally did most of the tools in the early years and then started having to build a team as the tools got more and more complicated. So kind of hit the point where wow this is a huge competitive advantage for us, but if we just keep it to ourselves, we’re investing all this money for just one Amazon business when these tools would be useful for many and we could kind of amortize the costs, pretty large costs of developing these tools across a lot of businesses.

So we made the decision to spread it out and give up our competitive advantage and offer it to other people. And so now at this point they’re really independent businesses, it’s kind of nice because we have a big in-house customer Plugable who helps guide the feature set and make sure that it’s really relevant and that it’s solving problems for Plugable, and that it works every day without fail.

Then on the Efficient Era side we now have over 200 companies that are using it and they are getting all the benefits from it, and we’re able to kind of amortize our cost of keeping the software moving forward across all those businesses.

Steve: Yeah I mean there is a lot of annoying things about selling on Amazon; like I just looked at my listing the other day and I noticed that Amazon inserted a bullet point for me.

Bernie: Yeah.

Steve: Stuff like that happens; does your software monitor that tuff too?

Bernie: It does, those features are actually just coming out right now.
Steve: Oh they are okay.

Bernie: We have a listing monitoring notification service, so we’ll send you emails if any of the key fields of your listing change, we’re calling the Amazon APIs and also looking at the page and notifying you of discrepancies and changes.

We’re also doing a lot of stuff now with sales notifications where if any of your products hit a new record sales for this week we’ll notify you about that, because that might also be interesting or factor your decisions with purchase orders.

So yeah all of those things where Amazon’s own seller central tools are not doing it for you, we’re trying to automate as much of that as possible.

Steve: Cool Bernie, hey I appreciate your time for coming on the podcast today and just giving us a glimpse into what it’s like to sell electronics online. If anyone has any questions for you or maybe just want to check out your tools, where can they find you?

Bernie: Just email me at Bernie@efficientera.com and of course visit efficientera.com, we’ve got a lot of content up there.

Steve: Cool, well hey Bernie thanks a lot for coming on the show, I really appreciate your time.

Bernie: Oh appreciated Steve, thank you, bye.

Steve: All right, take care.

Hope you enjoyed that episode. Bernie is actually one of the few people I know who has been able to make a profit selling electronics, and I love the fact that he developed his own software Efficient Era to help his own Amazon business. So definitely go check out Efficient Era to manage your feedback if you end up selling on Amazon. For more information about this episode, go to mywifequitherjob.com/episode157.

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

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

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

It’s a super random product and the reason why I’m having her on the show is to talk about Amazon exclusives, and how she’s managed to create all of these amazing connections within Amazon while launching a successful product made in the USA. Also I want to apologize upfront for the audio quality on this one. I ended up upgrading Skype just before the call which was a huge mistake. The audio is still passable but if it bothers you, you can always find the transcript on my site at mywifequitherjob.com.

Anyway before we begin I want to give a quick shout out to Klaviyo who is a sponsor of the show. Now I’m always excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on Klaviyo for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another provider. Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here’s why it is so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought which makes it extremely powerful. So let’s say I want to send an email to everyone who purchased a blue handkerchief in the last week, piece of cake. Let’s say I want to set up a special autoresponder sequence to my customers depending on what they purchased, easy peasy, and there’s full revenue tracking on every single email.

Klaviyo is the most powerful email platform that I’ve ever used and you can try them for free at mywifequitherjob.com/Klaviyo, once again that’s mywifequitherjob.com/Klaviyo.
I also want to give a quick shout out to Privy who is also a sponsor of the show. Now what’s cool is I also use and rely on Privy for both my blog and my online store. Now what does Privy do? Privy is an email list growth platform, and they actually manage all of my email capture forms, and in fact I use Privy hand in hand with Klaviyo.

Now there is a bunch of companies out there that will manage your email capture forms, but here is why I like and chose Privy. Privy is easily the most powerful platform that I’ve ever used, and you can trigger sign up forms based on any primer that you desire. So for example let’s say you offer free shipping for orders over 100 bucks on your store, well you can tell Privy to flash a popup when the customer has $90 in their shopping cart to urge them to insert one more item.

Here’s another cool use case, if someone has item A in their shopping cart, I can easily tell Privy to display a special coupon code for that item or to display a related item or offer. In terms of email capture, I’m showing different email lead magnets depending on what product a customer is browsing on our shop.

So bottom line Privy allows me to turn visitors into email subscribers, which I then feed to Klaviyo to close the sale. So head on over to Privy.com/steve and try it for free, and if you decide that you need the more advanced features, use coupon code MWQHJ for 15% off. Once again that’s privy.com, P-R-I-V-Y.com/steve, now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so 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 someone really special on the show, Chris Boerner. Now I met Chris at Ecommerce Fuel conference in Savannah, Georgia about a month ago and I’m really glad that we met. She’s got an amazing story and she runs a successful business called cielopillholders.com where she sells premium key chain pill fobs.

She’s done exceptionally well on Amazon, she’s extremely well connected with the Amazon community and she has a lot of experience with the platform. In fact she’s been featured in several videos on the Amazon website including a full blown documentary about her story that is going to come out later this year. And with that welcome to the show Chris, how are you doing today?

Chris: I’m doing so great, thanks for having me Steve; I’m excited to be here.

Steve: Yeah and you got a great story, so I want you to definitely tell us how did you get into ecommerce and what made you decide to sell pill holders?

Chris: It’s so random, when I tell people I sell pill holders I get these looks like they just don’t have a clue what I’m talking about and I can understand why. My background is in corporate strategy and brand management.

So I worked for Starbucks for a number of years doing a number of different roles there, and didn’t work for me anymore and that scared the crap out of me because I thought I was going to do it forever and I loved it and I was good at it, and then it just didn’t feel right. So I left and when I left…

Steve: What didn’t feel right about it, I’m just curious because I just quit myself?

Chris: Oh my gosh, congratulations. I was feeling like I wasn’t making a difference in a way that was meaningful to me, that was probably the biggest part and so when I left I actually didn’t know what I was going to do next. My husband Mike is incredibly supportive and let me leave a really great job so that I can have some breathing room to just try to figure out what it was going to be. When I talked about my job at Starbucks to him, I described it as dead, every minute was just jam packed with information and intensity and I needed to just get away from that just to even have a minute to think about what I could do and what I could be excited about, because I wasn’t feeling very excited anymore.

So I left, I was up to two things. I wanted more flexibility in my life, we were down the road going to have a family and now we do with two very little kids and I knew that that was hopefully going to happen someday and so I want more flexibility, and I wanted to connect with people and I wanted to connect with customers in a way that I had when I was a barrister at Starbucks.

I used to be that person handing over the coffee and I loved that moment when I got to say have a good day and make someone smile, and so I really missed that connection. I laugh a little bit when I say it but it’s kind of true, I felt a power point presentations away from the customer at Starbucks, So then I left, to more flexibility and connecting with customer and no idea what that actually meant.

Steve: So in terms of coming up with the actual idea for pill holders, how did that come about because it is like a random product to someone who just hears about it, right?

Chris: Yeah it’s very random, so I started like many of your listeners I would guess, I read the 4-Hour Work Week and the idea of automation really resonated with me and so it sounded kind of like something I wanted to try. I had a lot of experience with business and with building brands, and I thought, uh I could do this, but what’s the thing, I don’t have anything to sell.

So literally one day I was lying in bed a couple of days after I read this book and I was racking my brain and I started thinking about what consumer goods am I part of, what products do I use in my life, and you know what’s really different from everyone else brand. So I was diagnosed with an autoimmune condition called [inaudible 00:07:14] when I was 14 years old, and I’ve taken medicine every couple of hours since I had the diagnosis for 20 years now I’ve been taking medicine.

And so I was lying in bed, I started to think about gosh I take pills and I have a pretty nice pill holder that my dad gave me that it’s been a very important part of my life and lying there thinking everyone who takes medicine must have a nice pill holder and they must be a totally developed category. So that next morning thinking that there wasn’t a whole bunch to this idea, but I searched on Amazon and I searched on Google for a nice pill holder, a quality pill holder, a designer pill holder and there was nothing.

There was like actual total like based on the category for high end premium pill holders, so I decided to give it a try and here we are a couple of years later.

Steve: So you pretty much came up with a product just by brainstorming, did you run the numbers, like was there significant demand for just pill holders, if there was a high end component to it?

Chris: Yeah. Well my hypothesis was – so first I started with just pill holder category in general, like it was clear that there is tons of demand for pill holders out there, because there’s 1000 products from the market that are just junk. And I was digging up some keyword searches and quantified that a little bit, and then I really started to think about that culture that we’re living in and how much it’s changing with how pills and perception means you’ve had a life and I don’t just mean prescription or [inaudible 00:08:39].

Steve: Okay I was like where are you going with this, because then…

Chris: I know like this is not coming up quite how I meant it, but anyway seriously who doesn’t have Ibuprofen [inaudible 00:08:50] in their purse or in their pocket, everyone’s got a vitamin or a supplement. And so I started to think about the expectations that consumers have today, and especially if you’ve got 18 baby boomer population that cares about quality and that cares about nice stuff.

It blew my mind that there wasn’t a product out there already doing it. So I looked at it pill holders as a functional accessory like jewelry, like watches or eye glasses, that was the vision that I had for Cielo Pill Holders.

Steve: Okay and so you basically decided to target the high end, really high quality jewelry like pill holders?

Chris: That’s right.

Steve: So can you talk about how you went from your idea to actually getting a manufacturer?

Chris: Yeah so I was very interested – let me say the most important thing in my brand was quality, and so the way that translated to my product was that I needed to be really, really involved in the manufacturing and the production and the design and ongoing quality control. So from the very beginning I really believed that made in USA was going to be something that mattered to Cielo Pill Holders, and I believed it also mattered to my customers in ways beyond just the quality of the pill holder they were buying from me.

So I started out with a belief that made in USA was the direction I wanted to go, and so pretty quickly actually I found on eBay a couple of products that were a little better than what was in the market and they were good enough for me to test the idea that people would pay more for a better quality pill holder. So I bought some pill holders off of eBay, and then I built my own website and I really tested the marketing messages around made in US that are quality and started to see will people buy this product.

Steve: How did you do those tests?

Chris: I spent about six weeks just building the website and getting some product photography done so that it really was a high quality proposition, and so launched the site and had this great idea that somehow miraculously everyone in the world is going to know that now there are high quality pill holders available and I was going to show out immediately. It turned out I didn’t because nobody cared about Cielo Pill Holders.

So it was within the first couple of weeks of launching my business with very little traffic on my own website that I started to realize Amazon or meeting my customers where they were already buying to be a really interesting and quick way to test. So I launched on Amazon within a month of turning on Cielo Pill Holders.

Steve: Okay I was just curious, the ones that you bought on eBay were those made in the USA?

Chris: They were, yup they were.

Steve: Okay and so when you sold those did you contact the same manufacturer who made those, like how did you find the manufacturer?

Chris: Again I started out with them, but they didn’t really have the capabilities, the really the partnership mentality that I was looking for, so went to the web and I went to ThomasNet, but I also just did a Google search for high quality machine shops. So I had figured out what type of manufacturing I needed to make my own pill holders, and lo and behold in the Seattle area we had a lot of machine shops because there is a really strong aerospace factory there and machine shops and CMC machines to fly a lot of aerospace parts.

So I went to Google and I looked up high quality machine shops, and I found one that actually had a website that was beautiful and that talked about their commitment to the customer and their commitment to quality, and those sentiments were really what I wanted my brand to stand for and so it felt right that I could look for a partner that cared about the same stuff.

So I called him up and I remember sitting outside Safeway, the first time I talked to him I was in my car and I told him I wanted to make pill holders, would you be interested, and I’m sure he must have thought I was crazy to the multimillion dollar business since I was [inaudible 00:12:48] and huge companies. But he said yeah I’d be willing to talk to you and I said, great can I come back to meet you tomorrow.

I went up to his shop and we sat down and talked about it and I remember when I left after that first meeting he said, I think you’re going to be my biggest customer.

Steve: No way, okay.

Chris: And he believed it, he said I think you’re going to be my biggest customer, he said I totally get it and I want to help you figure it out. From then on he just then became a partner and really figuring out how to build it efficiently and in ways that my customers would love the product.

Steve: So you didn’t have any experience with manufacturing at all?

Chris: Not directly, from working at Starbucks I had seen manufacturing and I had managed the process of getting things made, but I didn’t know a lot about manufacturing on my own no, ever so much.

Steve: So in terms of just like designing the actual pill holder, did you use any card sulphur [ph] or was that all your partner?

Chris: He did that for me, so I told him what I wanted and then he designed it, and then I had sort of a few products that I started with, and then my vision really was that there was a really designed for elements to this like jewelry beyond what me or a manufacturer could come up with, and so I engaged a pretty incredible product designer.

She, her name is Flora Handler, she’s out of New York and she’s worked with brands like Carrie and Tom Ford and a few great premium brands, and I could not believe it when I called her and she got the concept too and she was really excited to work on the project.

Steve: Would you say that people agreed to work on this was because of your story or what did you tell these people?

Chris: I think I painted a picture of the opportunity, it was like tens of millions of people take medicine, they have to keep it with them and all there is junk to put it in. So it seemed so clear to me and them as I just told them about it that there was room in the market for this high end product, so they were excited to be part of it.

Steve: With your machine shop partner what was the arrangement like early on, like he wasn’t a partner from the beginning?

Chris: No he wasn’t but he acted like one. I mean I was really, I was just buying products from him but he spent time with me well beyond what the volume of my orders wanted. I think that he saw the potential of what it could be, and so he and my designer and I actually spent a lot of time working together on my more fashion for design for product.

In fact I remember I started the business in June of 2013 and it was August when I started working with Flora Handler my designer. I always remember sitting in my manufacturer’s bed of his pick up track outside of his facility and we had had our stone sitting in the middle of us, and we were on speaker with Laura who is New York and we were starting to talk about the briefs and the project for really making jewelry like pill holders.

Steve: What was the initial investment, I’m just curious like when you first got started?

Chris: Maybe $1000.

Steve: $1000, wow okay and so he was willing to design the pill holder for you at a such a small quantity for you?

Chris: He was yup and it’s really fortunate in the manufacturing process that I use because the upside and downside there is not a ton of efficiency that comes from scale, but there is also not a ton in the way of total cost either, it’s all done on computer, you’re not dealing with molds and such.

Steve: So is manufacturing a pro – so here is a single individual hand making these?

Chris: No, he has a number of machines in his shop and I’ve grown since then in my supply chain, so he has 20 or 30 people who work for him in his shop.

Steve: Okay and then you brought on this designer and you just cold called her?

Chris: It’s the one connection. I never knew the power of a network until I left the place where I worked at Starbucks. It turned out I knew a lot of people that were excited to help out.

Steve: Okay and these were just connections you made through your corporate job?

Chris: Yeah that has been pretty valuable in the product.

Steve: I know you told me that you decided to go made in the USA right off the bat, but I’m just curious did you do any research on the nature and just to see how much this potential would be.

Chris: I did, I definitely did, I wanted some mixture, it was smart business decision besides just a feel good decision, and so I through a different connection had someone was a sourcing agent in China that I worked with to just got quotes to get me a rough ball pack on what I was giving up, and it’s definitely no surprise there is a cost advantage, but I built a model that supported the higher made in US cost.

Man I can’t even tell you the value being turntable value that’s brought to me with the flexibility in partnership I have with my supplier and being able to iterate quickly and bringing the products to market fast and deal with quality control right away. I would have lost my mind if I didn’t have someone in the US; I talk to my supplier almost every day.

Steve: Just curious percentage wise what are we talking about here?

Chris: It’s probably 50% keeper.

Steve: Wow. Okay so but you again you had to work very closely with your manufacturer to make slight tweaks all along the way, right which wouldn’t have…

Chris: Yeah.

Steve: Okay.

Chris: No definitely not and even scale as the product is continuing in its life cycle even my top sellers are making refinements along the way, but my manufacturer is really quick to respond to and get what I’m trying to do.

Steve: Okay so let’s talk about sales now, so you launched a site, you didn’t get any traffic to it and so you decided to launch on Amazon. How did you actually launch your product on Amazon?

Chris: One afternoon right before the 4th of July, I looked up can an individual sell on Amazon and found out that I could and I was sort of shocked by that, and so I went through their seller central support system and I set up my product and I turned it on, and that was the extent of my launch.

Steve: No giveaways, no ads, you just…

Chris: Never actually up until the last year I’ve just started doing fancy products I guess in the last year and a half, but no I was pretty naïve, I just turned it on and that was it. And then I went on vacation and found that I was selling some pill holders, this my cool little seller app tells me how I’m doing.

Steve: Which I’m sure you were not checking at all on vacation?

Chris: No, no definitely and I still don’t check it every ten seconds [inaudible 00:19:42]. My husband and I like to shout out numbers to each other as we get excited, but we were living the dream.

Steve: You product just naturally takes off, so how – so just walk me through this, like how did you start getting featured on videos, your documentary and all that stuff, just walk me through that?

Chris: All right, so let me think of the timeline here. So July of 2013 I launched on Amazon and then…

Steve: Specifically how does a Chinese guy get on a documentary?

Chris: Yeah how do we make it happen? So much of it I think is who you know and chance. Well let me just not say who you know, but it’s just like being open to what can happen, I think that’s a better way of saying that. So since I started there’s never a Cielo pill holder, if I listed for you the 28 things that have happened that seemed so coincidental, you would just go there is absolutely no way that, this is not possible. And yet somehow things are suddenly working when you’re on the right path, I really, really, really believe that.

Amazon and my partnership with them has been probably one of the biggest examples that the series of so called coincidences like holy crap they just, they work and there has to be, and you look in hindsight and you’re like of course that is the way I went. That was theoretically how the Amazon relationship got as strong as it did for me. I guess I’m naturally a person, I just love to meet people, and I love to connect. The Amazon relationship started for me in the peak section at a Home Depot, because I was going to pick my kitchen and I started talking to a girl there because we both had little tiny babies and we started to chat.

She and I hit it off and she said you know I’m having this barbecue; you and your husband should come next weekend. So here is a friend, a person I met at Home Depot and I went to barbecue at her house and she said I want you to meet my friend, he works at Amazon, I think you guys have a lot to talk about. And lo and behold it was his last week there and Amazon had just launched the exclusives program, so this was June of 2015, just a year ago.

It was his last week with Amazon and I talked to him and he said, oh my gosh this product, I think it’s just right, let me email my friend who is in charge of the exclusives program, I think you should do it. So that was a Saturday and on Monday I had an email from the head of Amazon exclusives saying, would you like to join our program, and I’d had a conversation with a pretty big buck retailer in order to partner with Amazon and I think I was the 26th brand that they brought into the exclusives program and it’s now into the many hundreds.
So that was the fortuitous, random, you can’t meet it at Home Depot that lands me on Amazon.

Steve: Lets’ talk about Amazon exclusive, so first of all for the people out there what is it and why did you decide to not go with the big bucks retailer and go with Amazon?

Chris: So Amazon exclusives is awesome, it is perfect if you’re a brand that is really just trying to get off the ground, or if you’re a brand that is bringing a lot of new products to market and wants to get traction fast for them. So the intent behind Amazon exclusives is that Amazon is curating these interesting core products and brands that they can introduce their customers to, and exclusives is actually a store front within Amazon.com, so it’s amazon.com/exclusives.

That really show case all of these brands, and so as a business or brand owner what you give them is exclusivity for starting a six months is the initial commitment you make to them where you’re only going to sell on your own website, so that’s okay and you’re going to sell on amazon.com, and you also pay them a little bit more in fees, so a few more points in fees on your product assortment.

So what made that worth it to me was the additional marketing and merchandising that they give you, it’s incredible for they’re constantly every month refreshing different collections of products that they are featuring for their community, and so you have a chance every month and I’m sure I was being featured right now as a stock in to [inaudible 00:24:05] for example.

Every month your products can be show cased in these different tech gadgets or a gift for him, a gift for her, whatever areas to focus on.
Amazon gives it home page extra marketing, there is access to deals which was a lot more valuable but for other lightening deals where [inaudible 00:24:26] you can do deals a lot more if you’re selling through the exclusives team.

Steve: Can you do a [inaudible 00:24:31] more of their restrictions.

Chris: There are the same restrictions that you have with the frequency of them and so on, but the fees are waived, so now that they started targeting for lightening deals you don’t pay fees on them in the exclusives program, that’s all rolled into what you pay them upfront. They also give you A plus content that you can put on all your product pages, so that’s really a place to show case your brand story, and you can upload videos which isn’t something that just a normal Amazon seller can do.

Steve: Can you [inaudible 00:25:02] A plus content just in case someone doesn’t know what that is?

Chris: Yeah so A plus content is if you scroll through a product listing down to the bottom of the page, and if you looked at one of mine, my frame single chamber pill holder product is probably a good example of it, it’ll show you where you can just tell, there is like extra space to put a picture, then put up copy and put videos and your logo and really use that space to tell more of a story about your brand so you are not just a picture and a price with a couple of bullets. So it helps people really engage with you beyond just a typical Amazon experience.

Steve: I just want to take a moment to thank ReferralCandy for being a sponsor of the show. Now for any ecommerce store word of mouth is huge, and when a customer is super happy with their purchase they will tell all of their friends. Now what if there was a way to amplify word of mouth about your company, what if there was a way to reward referrals for your business? This is where ReferralCandy shines, with just a couple of clicks of the mouse you could add a referral program to your ecommerce store and reward your customers for telling their friends about your shop.

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And the best part is that ReferralCandy is a set it and forget it service, requires no technical setup and they are giving My Wife Quit Her Job listeners 50 bucks to try them out if you go to promo.referralcandy.com/steve. Once again that’s promo.referralcandy.com/steve to get a $50 credit to try the service. Now back to the show.

Just curious, what is the conversion rate increase from having that A plus content versus not having it?

Chris: I wish I knew, there are so many variables that have changed over time that I don’t actually have a good answer to that. I believe it works though.

Steve: I’m sure it does and I’m sure a lot of…

Chris: I sure want to know.

Steve: I’m sure a lot of people have been curious how some of these listings are so full whereas other listings are just like flat out text, so this is how you do it.

Chris: That’s exactly how you do it, and if you’re not privy to this program I think through AMS you can buy, there is a way you can pay for that extra content if you’re not part of exclusive.

Steve: Right it’s like thousands of dollars I think, right?

Chris: Yes it is, it’s thousands of dollars, yes so and then so many other things that come that are less concrete I guess but can just happen because of the visibility you have on the exclusives platform is PR opportunities. So the Amazon PR team is really interested in what’s going on with third party sellers, and what a third party seller which now make up half of Amazon sales.

The third party sellers with some of the most visibility are on the exclusives program and so when they get a pitch from a reporter or they’re pitched in a story and want to illustrate it with follow up commentary, they call up sellers from the exclusives program. So I think I’ve had some pretty unusual results but I’ve been featured in Forbes, Small Business Journal put in an article about Cielo this week, been on the front page of the Seattle Times. I was in an Amazon fulfillment center on Cyber Monday last year which was awesome, and I ended up in 13 local news segments that day, incredible.

Steve: Do you know what these effects of all those press releases are in sales by any chance, like did you notice any…

Chris: Sales, yes, yes, yes and then they just keep growing.

Steve: So which press release actually had the largest effect, was it your magazine mentions, your newspaper mentions?

Chris: It was the newspaper, so actually it was the local TV where I was able to talk about the product by far, and so I think there a whole bunch of factors that go into that was also Cyber Monday. So people were in a gifting share mind and my product was being featured as a highly giftable stock in [inaudible 00:29:23] item. But I think – go ahead.

Steve: I was going to say in terms of visibility on the Amazon website, it’s not limited to just the exclusives section, they…

Chris: Oh no, no and in fact I should also mention that when you submit your products every month for consideration for different marketing opportunities, the Amazon exclusives team is taking that internally and they are looking at what are the broader promotions within Amazon that are going on, and can we take Cielo pill holders for example and promote them more broadly on Amazon.

So last year they did 12 days of gifting promotion, Amazon exclusives did and they were able to promote that on amazon.com mobile home page, so Cielo had a day last year and Cielo was on amazon.com’s mobile home page.

Steve: Like the front page?

Chris: Yeah like I just drove down, aha once you got to the 12 days of gifting pack it was insane, it was awesome.

Steve: Okay, all right so anything you left out about this awesome exclusives program, it sounds incredible? My next question would be naturally how you get in?

Chris: So the way you get in is pretty easy actually, they have an application process right on their exclusives home page, so amazon.com/exclusives and you can get in right there. I also, I know a bunch of people and I’m always excited to talk to new entrepreneurs and people too, so feel free to send me an email if you have any questions about it.

Steve: Are they really restrictive on who they let in, like I would imagine like you are special because you have this really awesome story and then your product really ties into your background. Is that what they look for or do they just accept a lot of people?

Chris: I think it’s kind of a mix, they are looking for great stories to tell and that is their top priority is to bring really great products and with stories behind them to their customers, and I think they’re trying to balance that with how they also grow the program quickly and maintain the integrity of it.

Steve: Okay and then so today how many people are in the exclusives program, do you happen to know?

Chris: I actually don’t know, it was a few hundred a few months ago I think.

Steve: Okay, so a relatively small number of sellers are getting…

Chris: Yeah.

Steve: Which clearly means that they have a very exclusive criteria to select who they want?

Chris: Yes, definitely.

Steve: What would you say – sorry go on.

Chris: I’ll just add one more thing. One really great benefit has been that I have been invited to strategic seller conferences which clearly I would never be part of as just little tiny Cielo Pill Holders without a connection to exclusives. So exclusives often gets to invite some of its sellers to the bigger top seller conferences that Amazon hosts, so I’ve been there with top, top Amazon sellers and learnt so much from people in Amazon.

Steve: Care to share any of those things that you’ve learnt

Chris: Nothing specific comes to mind right now, I’m sorry.

Steve: It’s okay. Well let me ask you this, what would you say are some disadvantages of doing the exclusives program?

Chris: Well I think that there is a right time in a brands life for the exclusives program, so I think it’s really, really great as you’re just starting to grow. I talked with some people who are close to the program and the idea isn’t that you’re in the exclusives program forever, eventually you should outgrow it. So I think that I’m at the point right now where I’m starting to think about what’s the right distribution strategy for, me and is it staying exclusive with Amazon forever, probably not.

And so I think figuring out the right timing in your life cycle is probably a really important thing to consider.

Steve: So for a launch vehicle, that’s generally when you recommend getting in?

Chris: Yeah I think it’s great for a launch especially now that incentivized reviews have gone away, because I didn’t mention one other part of the program is they’re constantly featuring new products, and there’s a whole new “Look what’s new” in exclusives section. So every time you add a new product, you are automatically on the feet to get show cased there, so you’re getting extra visibility for new products.

Then this is also a group where they are beta testing a lot of the new Amazon programs, and so I know there has been a lot of talk about what are they going to do with the early reviewer program, and I think that with probably some of the exclusives people are getting the chance to try out before maybe the general seller population.

Steve: I see, so I would imagine as part of the exclusives program, you really don’t need to do much marketing it sounds like, right?

Chris: No.

Steve: Like giveaways, even sponsored ads, you mentioned you’ve just started buying them?

Chris: I do and they do great, so it’s not really – all the things that work on Amazon just work even better when you’re part of the exclusives program. It’s like you have this tale win
from the exclusives program that’s just getting you going even faster, and then from there sponsored products and whatever extra marketing you do and giveaways and all of that just rumps up that fly wheel even faster, that’s the word they use all the time internally, the fly wheel.

Steve: When you launch a new product then, do you still just list it or do you do anything special?

Chris: I have been a little bit lazy because of – I’m going to blaming it on having two babies these last two years, but mostly I just listed, and I probably could be doing a heck of a lot more.

Steve: Okay, another question I want to ask and it might be obvious but do you make the majority of your sales on Amazon, like is your site generating sales right now?

Chris: The majority of my sales probably 85% are on Amazon.

Steve: Okay and here’s a question I want to ask you, because you’re part of the exclusives program and you have some internal contacts over there, do you feel a lot more secure putting more of your eggs in Amazon’s basket, like are you immune to like the copy cats and getting your listings suspended and that sort of thing?

Chris: No, I’m not immune to it. I have advocates to help me through when it happens and it has happened, it happened recently and even with really great advocacy and great connections it’s not an overnight step even for me and so that actually scares the heck out of me, so what would it be like if I didn’t have those connections.
And so I’ve seen competition has increased significantly in the pill holder category including the cost to buy product over the last six months or so, and so that’s actually a big part of what really pushed me to think about diversification as well.

Steve: Do you think that has anything to do with being a part of the exclusives program, or do you think it’s just people using Jungle Scout and finding your product?

Chris: I think it’s probably more just the Jungle Scout stuff, because it’s Chinese knock offs.

Steve: So let me ask you this, they can probably undercut you on price, and they are probably not domestically realistic, right?

Chris: No and that’s another thing that they’re really good about in the exclusives program is obviously you’re part of brand registry, but if anyone hijacks your listing they’ll take it down immediately, you just have to email and tell them it’s gone.

Steve: Okay, so we’re talking about copy cats right now that have separate listings, right?

Chris: Yeah.

Steve: So let me ask you this, a lot of sales have to do with price, so how are you emphasizing your listing and still making sales even though your product might be like 30 or 40% more expensive?

Chris: I rely a lot on my imagery to communicate quality and that’s probably besides price the second biggest thing you’ve got there, and so I’m nervous about it to be totally honest, and I’m thinking a lot about innovation and patentable innovation as where I can get my sustainable growth from. The rip off from my core products have been pretty intense.

Steve: And I would imagine that these rip offs look pretty close, right, they’re just…

Chris: Oh they look identical, in fact they look so identical that they steal my images and my bullets and I’m still working on getting those taken down.

Steve: That’s terrible, that’s terrible.

Chris: And the quality is actually pretty good too which is the worst part in my mind.

Steve: Oh my gosh, okay. So you mentioned wanting to go beyond the exclusives program, have you considered going into like retail outlets then, other retail outlets?

Chris: Yeah, I’ve been thinking a lot about what the right path will be if I expand beyond exclusives and online and I do think it’s more wholesale. I think high and independent pharmacy
makes a lot of sense for Cielo, and so that’s an area that I’m very interested in learning more about, but I do think there could be a really strong wholesale business and that’s probably my next attraction.

Steve: One thing I did want to talk to you about as well is you’ve kind of created this philanthropic community around your product as well, how has that contributed to sales and what has that done for your business?

Chris: It’s been awesome. I mean it’s a pill holder but it’s a lot more than that in my mind, and what I mean by that is health is so personal, and matters so much, and so I hope these pill holders are creating an experience for people that’s better than anything else they’ve experienced with pill holders out there. It’s coming to people who have – they have chronic conditions and being sick isn’t the best part of their lives, and I want to help them make it better.

So beyond just the product, I wanted to create a business that mattered and actually helps people, and so I with my autoimmune condition I still pin it back to that with the way I try to really make a difference in terms of choosing, make a difference that is true. I partnered with this incredible organization, generally a research institute, I couldn’t believe it when I found out they were in Seattle.

I was looking at campaigns all around the world that I could work with and they happened to be in my own backyard quite literally, and so they are a leader in global autoimmune disease research and I have been so fortunate to work with them. I’ve been through their facilities and worked with their scientists and spoke at their events and I give money to them, but more than that I’ve just connected with them and they’ve connected me to their patients, and I’ve just met some wonderful people and I know it’s actually making a difference for them.

Steve: So in terms of this, is this something that’s prominent on your Amazon listing as well that you give money to this organization?

Chris: It is, yeah it’s one of my bullets on the key, my five bullets and then it’s also in my A plus content.

Steve: Okay and so that probably all ties in, like that value prop is probably pretty strong that someone may want to pay the extra money for?

Chris: That’s the hope, made in the USA, philanthropic, beautiful and of course great quality.

Steve: And so going forward you mentioned that you’re a little bit nervous about all these knock offs that are coming out, so what are specific things that you are now doing to get more
sales in your own website?

Chris: I’m actually really focused on building an ecommerce business through my own site. It’s funny; you know we met at an Ecommerce Fuel event a couple of weeks ago. I felt like such a novice there because I’ve a great Amazon business, but I feel like I don’t have a clue about building my own website.
So one of my strategic task for this coming year is really to build a strong ecommerce business off of the Amazon, so I’m actually right now migrating off of exclusives on to Shopify so that I have an introduction platform in place that can help with that, and then I really think Facebook ads are going to be a place that I can find the right customers to a pretty specific niche product.

Steve: Yes.

Chris: So once I get the migration done I’m going to focus on Facebook and I think I’m going to focus on really specific groups like I have products geared for people who have had heart attacks. So that’s a really narrow group and I’ll probably try to find them on Facebook and they’ll be some of my testing.

Steve: Okay and then what were some of your key takeaways, like what are your top three things that you’re going to do to take yourself off of Amazon and establish your business, so you mentioned Facebook ads, what else?

Chris: Well I’ll take diversification with the hotel platform is probably the biggest number two, number one for me, so looking at hotel opportunities, number two building my site through Facebook ads, and also I think this is equally as big but a little bit longer term play is this product is something that I can mention is personal, it’s about health and I have done nothing to really raise awareness and promote it and create advocates in the community of people who have chronic conditions, so huge plans for outreach and advocacy to really start to create loyal brand followers.

Recently I was combing Amazon data, it’s 15% repeat customers, and that’s just off of Amazon from people who like the product. So imagine if I can get people that actually know the whole story to start to talk about it and care about it, I think the opportunity is huge.

Steve: That will be cool. One thing I did want to ask you, you mentioned you wanted to branch out into wholesale, that implies that you’re going to be off the exclusives program, right?

Chris: If I go that route, I think that that’s a someday thing, it’s not an immediate thing, so this is more like my long term strategic plan.

Steve: Okay and then in terms of this document that’s coming out, first of what is that coming out and is it going to be like plastered all over the Amazon website?

Chris: I don’t know, that’s such a great question. So Amazon, they’ve just been really excited about my story, I don’t remember if I told you this or not but I’m actually in an ad campaign for Amazon right now in Europe. I think I’m on the side of a bus and maybe some bill board.

Steve: Oh my gosh, that’s crazy.

Chris: They did a photo shoot at my house and I got some great images I get to use, but they did do this video which was not – we filmed it actually a year ago almost to the day, I can’t believe it and we shot six locations, inside my manufacturer’s, inside my high school, kind of like the life story of Chris Boerner that culminates in hero. I don’t know exactly what they’re going to do with it, I got an update recently that it’s very much still under way and they’re getting close to wrapping it.

So I know they’ve invested a lot of time in it and they want to really show case to really tell a story, so my guess is they’re going to promote it maybe someday I’ll be on the Amazon home page, I’d be all right with that.

Steve: That is awesome, well I’ll be looking out for it, and Chris thanks a lot for coming on the show. If anyone wants more information about exclusives or more about your story, where
can they find you?

Chris: You can send me an email, chris@cielopillholders.com. Thank you so much Steve.

Steve: Thanks a lot, it was great hearing your story, and it was a pleasure meeting you a month ago, it was awesome

Chris: I agree.

Steve: All right take care.

Chris: You too.

Hope you enjoyed that episode. Chris has an amazing story and it also goes to show that you don’t necessary have to be importing your goods from China in order to succeed with good margins. For more information about this episode, go to mywifequitherjob.com/episode153.

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

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

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

Now there is a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in ecommerce stores. Now Privy is easily the most powerful platform that I’ve ever used, and you can trigger sign up forms based on any primer that you desire. So for example let’s say you offer free shipping for orders over 100 bucks, well you can tell Privy to flash a popup when the customer has $90 in their shopping cart to urge them to insert one more item into their cart.

Here’s another cool use case, if someone has item A in their shopping cart, I can easily tell Privy to display a unique and special coupon code for that item or display a related item or offer. In terms of email capture, right now I’m showing a different email lead magnet depending on what product a customer is browsing in our shop.

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

I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. Now I’m also blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my ecommerce store, and I actually depend on Klaviyo for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another provider. Well Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is so powerful.

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

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

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

Steve: Welcome to the My Wife Quit Her Job Podcast, today I’m doing another solo episode, and I’m here to discuss the number one reason why you need to be expanding beyond Amazon, beyond eBay, beyond Etsy and one of a third party market place that you happen to be using. I’m going to show you six simple ways to make recurring revenue off of your existing customers which is really something that you can’t do if you’re relying on some of these third party market places, so let’s talk about that for a moment.

In general it is much easier to sell to an existing customer than it is to go out and find a brand new one. They know your brand, they trust you, they like you, and most importantly they’ve already spent money with you, so they’re willing to open their wallets. According to the small business administration, it is 65% easier to convert an existing customer than it is to find a brand new one, and from personal experience I think it’s actually way more than that. It is way easier to convert an existing customer than it is to find a new one.

Just as an example, over the holidays email marketing which is to our existing customers account for over 21% of our revenues, a little under a third of our business are from repeat customers like event planners, hotels, small airlines, etc. All of our pay per click ads like Facebook ads, Google ads to our existing audiences have a ridiculously high ROI, something that like five or 6X return on ad spend.

So if you aren’t doing so already, you really need to be paying more attention to your existing customer base rather than devoting all of your resources to finding new customers out there because it’s a lot more expensive to acquire a brand new customer. And just a quick note, everything that I am going to be talking about today you can’t do on Amazon, you can’t do on eBay, you can’t do on Etsy, because you don’t have customer emails, you can’t easily retarget your customers and bring them back.

If you run ads to like an Amazon listing for example, you have zero conversion information. Now you can try to use Amazon affiliate links for links in your third party ads like Facebook or Google, but technically that’s actually against Amazon terms of service. You are not supposed to be driving affiliate revenue to your own listings online.

So bottom line if you are relying on third party market places like Amazon, you’re actually missing out on a ton of sales. And here’s a funny statistic, for 2016 Amazon accounted for 15% of retail sales which basically means that there is 85% of business out there that is actually off Amazon, that’s actually another reason why you need to get off there as well.
The other thing you also need to remember is that there is very little or no brand recognition on Amazon. So whatever your business that you’re getting now off the Amazon, it could actually disappear tomorrow, and I always like to reference this conversation that I had with my mum last year.

My mum still to this day thinks that when you are shopping at Amazon, you’re actually buying on Amazon, and when I told her that we actually sold on Amazon, she was shocked because this entire time, she thought that Amazon just had every single product under the sun, and if my mum thinks that, chances are there is a lot more people out there that think the exact same way.

All right so let’s switch gears a little bit and talk about some specific tactics on how to sell more to your existing customers. This first one may not apply to all businesses, but for my ecommerce store, we actually surprisingly attract a lot of business customers, and I was actually pretty shocked when I first discovered this. You might be surprised too with your business if you take the time to look.

So the first step is to export all of your customers and all of your transactions to a spreadsheet. A lot of shopping carts like Shopify or BigCommerce allow you to do this right off the bat. If you’re using Klaviyo for your email marketing provider, you don’t even need to do this step because all the transactions it is built in to Klaviyo already.

The next step is to flag customers who buy an abnormally large quantity of your goods. For example let’s say you’re using Klaviyo, I can create a segment of people who have purchased more than three dozen napkins. I’m choosing napkins in my example here because most people who buy napkins from us, they buy one dozen or at most two dozens for their own personal use.

But in general anyone who is going to be buying three dozen or more, chances are those people are either running an event or they are running some sort of business. So these are the customers that I want to single out, the people who have a lot of purchasing power. You also want to scan the emails that you’re filtering out for your customers for signs of a business. So for example we found our first airline customer this way, in the email address was actually the name of the airline, and I recognized this airline name and instantly I knew it was a business customer.

So you’re looking for business customers here, and once you have this list, pick up the phone and call them up. So let’s say I was calling that airline, I would say something like, “Thank you for your order, I just wanted to verify your deadline to make sure we get these linens to you on time.” Then once you have established a conversation, then you want to probe more into their business and establish a relationship.

Mention that you want to be their single point of contact for future orders, and if you have any further questions, feel free to reach out to me directly. Here is my number, call me any time you have any needs, I’ll make sure your linens get to the destination on time, and boom instantly you have large consistent orders for life assuming that business has needs for recurring purchases.

This actually works really well, we’ve gotten a lot of our larger customers this way, it’s amazing what picking up the phone does for business. Now contrast that if you’re buying on Amazon for example, sometimes people like a little bit of hand holding, so all of the event planners who are our customers, sometimes they have last minute requests, they need their stuff delivered on time, and they need that single point of contact to make sure that stuff gets there on time, and as you know for weddings timing is very crucial. That’s’ why it’s important to pick up the phone and actually call these customers on line.

I just want to take a moment to thank ReferralCandy for being a sponsor of the show. Now for any ecommerce store word of mouth is huge, and when a customer is super happy with their purchase they will tell all of their friends. What if there was a way to amplify word of mouth about your company, what if there was a way to reward referrals for your business? This is where ReferralCandy shines, with just a couple of clicks of the mouse you could add a referral program to your ecommerce store and reward your customers for telling their friends about your shop.

And this tactic works wonders; in fact it’s not uncommon to get a ridiculous return on your investment. So for example Greats Footwear, who is a ReferralCandy customer, is seeing a 20X ROI. Referral word of mouth marketing is also useful for building up your social media presence as well, because referrals share with their friends on Facebook and Twitter.

And the best part is that ReferralCandy is a set it and forget it service, requires no technical setup and they are giving My Wife Quit Her Job listeners 50 bucks to try them out if you go to promo.referralcandy.com/steve. Once again that’s promo.referralcandy.com/steve to get a $50 credit to try the service. Now back to the show.

So that’s how you get more business customers. The next step you need to do is to look on that same spreadsheet and isolate out all of your repeat customers online. These people don’t necessarily buy in huge quantities from you, but they buy on a consistent basis. So here is the thing, we’ve targeted the wedding industry for such a long time that we actually didn’t realize that we actually had a repeat customer base, after all unless someone gets divorced, they aren’t coming back to buy more wedding linens.

For years I thought all of our customers were actually one offs, but you can’t actually know unless you look. So once again take your spreadsheet, isolate all the people who have purchased more than once and what you want to do is once you have that list, you want to run special promotions and ads to these people because the conversion rate is going to be sky high. Push them to buy more items, email these customers more often because they are already a customer, they buy more than once, it doesn’t hurt to email them more often and treat them like loyalty.

We actually have this one customer believe it or not who has purchased over 150 times from our store which is crazy. I’ve also met a bunch of people that frequently collect handkerchiefs; I had no idea that there are people out there like this. There are also people out there that use handkerchiefs to decorate their house or for various arts and crafts.

Once you have these two lists, the business customers and the repeat customers, you can leverage the power of Facebook to scale your business by creating look alike audiences. So once again if you don’t have your email addresses and you are relying on Amazon and Etsy for this, you can’t do any of these things.

Now just a recap if you guys aren’t familiar with Facebook ads, a look alike audience is when Facebook goes out and finds people that are within 99% of the people that you’ve uploaded to Facebook. So for example I can email my entire customer list of emails to Facebook, and they’ll find people that are within 99% of the same demographic. These are going to be 100% brand new customers that haven’t bought and are very highly likely to buy from you.

Leveraging look alike audience incidentally is how a lot of companies scale and it works really well. So for example, I recently took my repeat customer list and generated an audience of 2 million people on Facebook that are 99% the same demographic to sell to within ten minute’s time. Right now I’m actually running a free plus shipping offer to two different look alike audiences, and they are converting quite well, because I’m relying on Facebook to find similar customers than the ones that I’ve already had.

Very powerful and once again you can’t do this unless you have an email list. Once you have your customer base, you can easily cross sell them additional products as well. So once again if you go through your spreadsheet and look through your product mix, and you’ll probably find products that are very complimentary to each other. Find people who have purchased item A but have not bought a complimentary item B.

Here is just a quick example from our store. If someone bought dinner napkins from our store, there is a high likelihood that they may want to buy place mats or cocktail napkins, so why not isolate these customers, send them an email, and then show them place mats or cocktail napkins. Why not run an ad to people who only purchase napkins and run them ad to get them to buy cocktail napkins or place mats.

If someone bought a hankie, they might need a box, so why not reach out and see if we can up sell them a box. The customer at this point, they’ve already purchased from you, they trust you, they are willing to open their wallets, they’ve spent money with you and they would easily buy from you again, the friction is gone at that point. That’s another way to leverage your existing customers.
Now you guys are probably listening to this cross selling and all these techniques, and it might sound a little bit tedious to you, but the way I do it, it’s actually fully automated. Once again I use Klaviyo and they are incidentally a sponsor of this podcast. If you’re interested in starting up for free, you can go to mywifequitherjob.com/Klaviyo, but with Klaviyo you can simply create a segment of people who purchased dinner napkins but not cocktail napkins.

They’ll amass all the emails of people who exactly fit those characteristics, and then at that point you can send them emails directly, or you can export these audiences over to Facebook at a click of a button and instantly run Facebook ads to these people. This is very powerful and once again this is fully automated, I don’t really need to do anything about this.
As I mentioned before, the number one problem with our store is that there aren’t enough people getting divorced in this country. I like to see the divorce rate go to up to over 90%, now just kidding but as I mentioned before wedding customers are our primary customers and they aren’t coming back. So what is a way to get these wedding customers to actually come back? Well you can’t really get them to come back, but you can get them to refer their friends.

Here’s how it works, after a purchase you can provide your customer with an additional coupon or a gift card if they refer a friend, and then as a double bonus you could actually give that friend a discount on their next purchase as well. So it’s a win-win, and once again there is an easy way to do this by using a service like ReferralCandy who once again is a sponsor of the show, promo.referralcandy.com/steve if you’re interested in signing up.

This is an easy to just facilitate referrals, because as you’ll discover as you are running your online store, word of mouth is going to be pretty huge, and anything you can do amplify this word of mouth is going to work really well.

So once again if all of these other options that I’ve mentioned so far are tedious as well, well fine, just take your customer list and blast them an email with a coupon or a promotion. Once again you can’t do this on Amazon or eBay or Etsy, because you don’t have the list you can’t blast them an email, but if you’re really lazy and you just want to get some instant business, just send them out an email with a coupon code and it works like game busters.

Here’s the thing I’ve noticed about coupons in general, a lot of times people end up spending the same amount as they were planning to spend regardless of the coupon amount, because they feel like they’re getting something for nothing already, and sometimes they actually even end up spending more than they were planning on spending. But here is the thing about discounts, you don’t want to send the discount to someone who would have purchased anyway, and you don’t want to give a higher discount than it’s necessary to actually get someone to buy.

So here’s what you can do to segment your customers and incidentally this is what I do for mine. So if no one has purchased in two months, I give them a very small coupon. If they’ve purchased in the past and they haven’t purchased in two and a half months, I give them a larger coupon. If they haven’t bought in three months, I give them an even larger coupon, because if they haven’t bought from us in three months, chances are they aren’t coming back anyway, so this is kind of like a last digit effort to get them to come back.

If they bought recently I don’t send them anything, although the people who are repeat customers and very loyal customers, I’ll often send them special promotions just to make them feel better for being a loyal customer. So this is how I run my promotions so that I don’t overspend or over discount anything online.

So here is the thing about your customer list, it is an endless source of repeat business and allows you to lay a foundation for your revenue, and if you think about it this way, having repeat customer is like running a SaaS business. It’s similar to SaaS for software because it’s recurring revenue. Once again if you’re only selling on Amazon, Etsy or eBay then you can’t take advantage of this, you don’t have emails.

You can’t contact your customers, you can’t run good external ads like Facebook ads because you won’t have the conversion data, you have no idea whether a customer is converting or not. You won’t have brand equity, grandmas all over the nation will think that they are shopping at Amazon and not from you, you’re not going to have any brand equity, you can’t establish a foundation for your business.
I’m not saying that you should stop selling on Amazon, Amazon is great for cash flow but you need to start laying a foundation for your business, because your business on Amazon could disappear at any time, people are not going to be loyal to you, Amazon can ban you at any time, there is going to be another listing for your exact same product at half the price, and obviously some people will buy that listing and save yours.

So really the only way to future proof your business is to establish your own brand, your own customer list, and it provides a foundation for your business because those people are going to be buying from you again, again and again.

All right, so I hope you guys found this valuable, just now I’m going to take a peak on Facebook live to see if there are any questions I can answer. Hope you enjoyed that episode, hopefully I demonstrated to you how crucial it is to own your own customers and your own platform. And if you’re relying on Amazon or any other marketplace for that matter as your only source of revenue, then you’re missing out. For more information about this episode, go to mywifequitherjob.com/episode152.

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

I also want to thank privy.com for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers, therefore email capture, exit intent, and site targeting tools to make it supper simple as well. I like Privy because it is so powerful and you can basically trigger custom pop ups for any primer that is closely tied to your ecommerce store. And if you want to give it a try it is free, so head on over to privy.com/steve. That’s privy.com/steve.

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