Steve: You are listening to the My Wife Quit her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not with their businesses. I’m Steve Chou, and today we’re talking with Rachel Holland, who was introduced to me by a good friend. Now Rachel runs survivingthestores.com, and the reason why I want her on is to discuss the ins and outs of network marketing.

In other news I wonder that you know that tickets for the 2017 Sellers Summit are now on sale at sellerssummit.com. Now what is the Sellers Summit? It is the conference that I hold every single year that specifically targets ecommerce entrepreneurs selling physical products online. Unlike other events that focus on inspirational stories and high level BS, mine is a curriculum based conference, where you will leave with practical and actionable strategies specifically for an ecommerce business.

In fact every speaker I invite is deep in the trenches of their ecommerce business, entrepreneurs who are importing large quantities of physical goods, and not some high level guys who are overseeing their companies at 50,000 feet. The other thing I can assure you is that the Sellers Summit will be small and intimate. Last year we cut off ticket sales at around 100 people, so this event will sell out quickly, once again that’s sellerssummit.com, so go check it out.

And if you want to learn how to start your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business, so go to my wifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email. Now onto the show.

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

Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m really happy to have Rachel Holland on the show. Now Rachel was someone who I was introduced to by Tony Anderson, and she is killing it in the network marketing space. Now Rachel runs the popular site survivingthestores.com, where she teaches others how to save money and live healthy on a budget.

She and her husband Ryan run the site together and have turned it into a huge resource. Anyway up until this point I have not heard anyone doing network marketing before on the podcast, and I’m just really curious how it works. With that welcome to the show Rachel, how are you doing today?

Rachel: Thank you so much Steve, I’m glad to be on the show with you, I am doing great today.

Steve: That’s good to know, there are just so many questions that I have for you about this space, but let’s just start from the very beginning, how did you come up with the idea for Surviving the Stores, and how did it move into the network marketing space?

Rachel: That’s a great question, so back in 2008 I was a stay at home mom and my husband was working outside the home, and as everyone knows the economy tanked and we were just really, really struggling to meet our budget every month. Gas prices started to rise and it just killed us. So we looked at our budget and we said, okay where can we cut back, what can we do, and we didn’t have people, we didn’t drive a lot and there weren’t a lot of places that we could cut back.

Where we saw that we could cut back was in our grocery budgeting because we were just spending crazy amounts. So I actually started Surviving the Stores as a way to keep myself accountable in grocery budgeting. It has moved from that through the years to end up being a full time income for our family starting in 2010, 2011 and I was able to use that blog as well to launch a network marketing business even though I had no intention of doing that at all. I was actually pretty against network marketing in general.

Steve: Okay, I’m just curious, are you friends with Ellen Chase because that grocery budgeting stuff is like [inaudible 00:04:17] early too?

Rachel: Yes, Ellen and I are very good friends, I love Ellen.

Steve: Okay and so did you start Surviving the Stores to make money in the beginning or was it just a way to document everything?

Rachel: Not at all, it was very much just a way to document everything.

Steve: Interesting, so how did it gain traction?

Rachel: You know the news media printed up in our local Dallas Fort worth area, and then it ended up being on a segment with Good morning America…

Steve: Oh my goodness, okay.

Rachel: It took off from there, and people found out about the site and grew that way.

Steve: Did you do anything to get those media mentions?

Rachel: I did not, I mean I know there are classes now at blogging conferences about how to get in the media, but no, but he ended up just finding me.

Steve: Okay wow, that’s incredible, okay. So how did Surviving the Stores and not talking about the network marketing stuff just yet, how does Surviving the Stores make money?

Rachel: We make money through several ways, the first one being through just general CPM ads, and so and all possible clicks, so Google Adsense or just in ads that when you make money off of impressions to your site, so take photos to really generate a good income. You have to have a lot of traffic to your site. That’s always been a very significant way that we have made money, but also through affiliate links.

Since we were a deal site for so long, we would find good deals, and then we would have affiliate links that we would – let’s say Kohl’s [ph] had a good deal online, then we would have an affiliate link over to Kohl’s and say here is how you get this at the best price, so we would make money that way as well. As you can imagine, the fourth quarter was always our best quarter for that for sure.

Steve: So this is all physical product affiliate links?

Rachel: For the most part, yes.

Steve: Okay, because I know you told me earlier prior to this interview that you had grown this blog to six figures without the network marketing stuff, and so this is mostly affiliate and ad revenue?

Rachel: Yes. I never did a lot of sponsored posts, that wasn’t something that I – I wanted to blog because once I did start making money blogging, I wanted to be on my own schedule, on my own timetable and so I know a lot of bloggers also make money through sponsored posts and that was not something that we really did often.

Steve: Okay, and in terms of finding these deals, like how would you find them?

Rachel: Research, lots of research. There are deal forums out there where people get on and search for deals and post deals that they have found, and then others get on and search for it. So basically as the deal blogger, I would get on and look through to see which ones were the best ones, because it’s just a mess I these forums, it’s an absolute mess. So you get on and you search for what the best deals are, and then you can post them as a blog post in your blog.

Steve: Interesting, so it’s a manual process, it’s not automated?

Rachel: Absolutely, it was completely manual.

Steve: Oh wow, so what is the typical affiliate cut then for like Kohl’s you mentioned for example?

Rachel: It depends, it depends, anywhere from – there are some affiliates where I’m not going to name any names, but some of them are at 1%.

Steve: Wow okay.

Rachel: You know what, surprisingly those don’t get posted that often on blogs, but then anywhere up to 4, 8, 10%, and then if you work with other bloggers as an affiliate for example you mentioned Ellen Chase. She has several different programs that you can be an affiliate for, and so she pays a much larger percentage than say Kohl’s or Best Buy or any of those.

Steve: So would you say that your audience were people that did not have a lot of money?

Rachel: You know it’s really surprising because there were some who were in that same place that I was where they just were struggling to make ends meet, but then it’s very interesting because a lot of the people who are looking for deals and who are looking for coupons, they have very good, very established salaries. They are just not trying to make ends meet, but they know how to be smart with their money and save.

Steve: Okay and in terms of – outside those major media mentions that you got, what were some other ways that you got traffic to your site?

Rachel: Networking, absolutely networking with other bloggers.

Steve: Like face to face?

Rachel: Yes, blogging conferences, lots of blogging conferences, just networking with people, doing projects with other bloggers where you post about them and they post about you, or you do a series together. I did a series with Tony, actually a few series with Tony over the years, then just think of like that where you are – it’s a reciprocal thing you just, you help them by sending your traffic to them and they help you by sending their traffic to you, and it’s just a great relationship.

Steve: Interesting, so when you start out though and you have nothing, like how would you approach someone with a lot more traffic than yourself?

Rachel: That’s a great question.

Steve: Just curious.

Rachel: Just build a relationship with them, for me it was meeting people in person and talking to them, getting to know them, learning about their site. In a lot of ways very similar to what you do with network marketing asking them a lot of questions, learning about what they’re doing, their passion behind blogging, why they’re doing what they’re doing, what their blog is about, what they want their readers to come away from their blog feeling, or just getting to know them, really developing those relationships.

Steve: So you could not have gotten your blog to where it is without these face to face in person relationships that you built over time?

Rachel: No way, there is absolutely no way.

Steve: Okay and so I know prior to this interview we chatted about how you’ve gone away from being a deal site and you’ve moved over to network
marketing. Can you describe that transition?

Rachel: Yes, so I was actually pretty against network marketing for a long time, all of the stereotypes that you hear about network marketing, those were things that I believed because I had experienced it back in college. When I was in college I was a freshman in college and I was looking for a job to make just some extra income and I looked in the paper, the classified ads, that’s before you would just look online or on Monster. I looked at the classified ads and there was an ad that said make your own hours, unlimited income potential, call for an interview, must be a self starter.

I said, yes absolutely, that sounds like me, I can do that. So I called and they said, oh we have an interview spot open and they brought me in, I even took a little test on the computer and they brought me back into the back room and said, you seem like you would be a great fit for our company, all you have to do is buy this starter kit, it’s commission only. And so I was then ready to start selling the best knives ever.

Steve: Was it Cutco?

Rachel: Yeah, it was Cutco, I wasn’t willing to mention the brand, but yes it was Cutco.

Steve: The reason why I ask is my friend used to sell those knives when I was younger, yeah.

Rachel: They are great knives, I mean their scissors really do cut through a pinning and I don’t know of any other scissors that will cut, they are great scissors. But I lasted about two weeks in the company and it was when they told me to talk to my family and friends while I was brand new in a college town, I didn’t know anyone. And they said, well here you can have the records of anyone who had bought previously and I could go to their house, or I ask them if I could come to their house and clean their knives, and then while I was there I could show them the new product catalog.

I did that and then I thought, you know this probably isn’t the best idea for me as an 18 year old college freshman going to people’s house asking them if I can clean their knives. I ended up saying this is a bad gig, this is not something that I want to do, I never want to sell anything ever again, I am done. That’s where I ended off and so for me it wasn’t just a seamless transition into network marketing.

Steve: Can we define what network marketing is, I’m pretty sure a lot of people out there listening don’t even know what it is?

Rachel: Yeah so network marketing and there are all kinds of wrong definitions out there, but really network marketing is a way to create a residue income that not only can last through your lifetime, but I know with the company that I’m a part of we can actually will our business to our children and they can continue to receive that residue income, but a way to receive a residue income through sharing about a product that you love, and then you believe other people will love. So I would say in a nutshell that’s a good definition of how it works.

Steve: So to summarize what you just said, you sell something or you have people that are selling on your behalf and you take a cut of what they sell, and they can recruit their own sellers as well, is that how it works?

Rachel: That’s correct and the way that I like to share with people is I talk a lot about sharing because really that’s what it is. Whenever I’ve tried to sell it doesn’t work out so well, just sharing about what I’m doing and if you’re passionate about it, people will be asking you how do I get this, what do I do?

Steve: Interesting, okay. And so you mentioned synergy before, you were talking about how transitioned from Cutco and then you had a bad experience there, but then what changed your mind about – you’re doing essential oils now, is that correct?

Rachel: Yes, that’s correct.

Steve: Okay, so how did that transition take place?

Rachel: Well I ended up getting – I was researching essential oils and I had settled on where I wanted to get essential oils from. I had always – you’ll see lots of posts dating back to almost the beginning of Surviving the Stores on natural remedies. That was something I was already interested in; I wanted to get started with essential oils. So I researched several different companies then ended up deciding on one specific company.
I knew that I wanted to get started with them but just for the essential oils. I had no interest at all in doing the business in any way and I even told the person that I signed up through. I said my plate is already full, I’m blogging full time, I do not want to end up with marketing again, so I just want to get these products.

So for a year I stuck to that and for a year I just got the products, but because they have been so beneficial for our family and because it fits so well with the blog, I started blogging about them, I started sharing on Facebook my experiences and how they were benefiting our family. So people either from the blog or from friends on Facebook would message me saying, okay tell me more, I want to sign up.

Steve: Interesting, so actually can you just describe what essential oils are for just the people who are listening who might not know what that is?

Rachel: Absolutely, so essential oils are plant extracts and they are essentially the life blood of plant, they are what go through the plant, they give the plant its smell, they do amazing things for the plant, and I believe that they are what God created to work with our bodies, to help our bodies do what they’re supposed to do.

Steve: Okay, and so it’s mainly for medicinal purposes?

Rachel: Health and wellness.

Steve: Health and wellness, okay and so you started writing about the essential oils on your blog and then people started becoming interested in what you were talking about, and they wanted to buy their own, is that how this all started?

Rachel: Yes, exactly.

Steve: And then you hadn’t signed up or anything to sell these things, did it just fall into your lap then?

Rachel: Well so one of the things that’s great about certain companies and this is true for the company that I’m with, whenever you get a starter kit with this company, you are not required ever to sell anything, but you do have the ability to share and get a referral check from the company essentially.

So we call them a thank you check, so you get a certain amount whenever somebody else purchases a starter kit through your link, it’s like an affiliate link. You can earn through that, through sharing with other people and they purchase, and then you get a bonus or a commission off of that.

Steve: This is different than the cut of the sale; this is just a flat commission?

Rachel: For their initial kit yes, it’s a flat commission.

Steve: Can we talk a little bit about what this starter kit is, like you’ve mentioned it a couple of times but I’m not sure what goes inside of that?

Rachel: Inside this starter kit for essential oils there are 11 of the most popular, most used essential oils, because really the world of essential oils can be very overwhelming and anyone who has dabbled in it can say, oh my goodness there are so many things out there. So what the company that I work with which is called Young Living Essential Oils has done is they have put together a kit that has the most popular essential oils, the ones that people would be using every single day.

Steve: Okay but if you want to buy a certain set, like do you have to buy the starter kit or can you buy the individual oils that you want?

Rachel: You can buy the individual oils as a retail customer, so there are two different things that people can do when they sign up, they can either be a retail customer and they pay a 24% mark up, or they can become a wholesale member by buying a starter kit and then they get a 24% discount forever, and they also get that ability to share with others and earn that commission if they choose to do that.

Steve: I see, so how much does this starter kit cost?

Rachel: It costs $160 which is absolutely incredible for starting a business. If somebody does go into that saying yes I want to start an essential oils business, for $160 they can, which is an incredible price.

Steve: And if I were to just buy like a few bottles of the oils that I wanted to, like how much is each individually, you said that starter kit has 11 you said?

Rachel: Yes, it really depends. So you can get certain oils for $5 and then there are oils that are almost $200, so for example rose oil. Rose is just extremely delicate and expensive to distil the oils out of the rose plant, so it really depends on the oil itself.

Steve: Does that rose oil come with the starter kit though?

Rachel: It does not, but there are some frankincense stuff and frankincense is an extremely amazing and much more expensive oil. So everything in the starter kit, if you were to buy it all separately, it would be over $350, so the starter kit is actually just a really good deal in and of itself for getting started for the essential oils.

Steve: I see and it sounds like it gives you like – it’s like a variety pack for example if you’re just starting out it makes sense to get that regardless?

Rachel: Exactly.

Steve: Okay and so now you have the starter kit and you’re using these oils yourself, so how did you transition and how did it work in terms of selling these oils?

Rachel: What I did was I created a few Facebook groups and really Facebook groups have changed the game for network marketing. I mean it just really has because even 10, 15 years ago, or five years ago network marketing was done over the phone and that was it, and through emails, emails, snail mail, over the phone.

Facebook groups have changed the game because I created, one of the first things I did when I started the business was create a few Facebook groups, and I have for example a Facebook group that’s specifically just for education where people can ask questions about essential oils and how to use them on their family, on their kids, on their pets, all of that, and then another group specifically for those who are interested in learning more about the business.

And so in a sense I created like a little bit of a funnel system through Facebook groups which has been really neat and fun to do, and that’s one of the things that I learned through blogging was how to do that. So not only do I have that through email but also in a sense through these Facebook groups.

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How did you build the Facebook group?

Rachel: Just on Facebook there is a little thing that says group…

Steve: Oh sorry, I meant how do you build members, like how do you add a whole bunch of members?

Rachel: Once somebody signs up, I email them and get their email address that they have, and most people, the majority of people have a Facebook account. So I email them and I get their email address that they use for Facebook, and you can add people to the group with their email address.

Steve: So this starts from your blog it sounds like then, right?

Rachel: Either from my blog or people that I know personally, either way. I’ve built both ways; I have several people that I know personally and then blog readers as well.

Steve: So would you say you got most of your downstream people through personal relationships or through your blog?

Rachel: Personal relationships for me.

Steve: Interesting, so can you describe how that works, how can you get critical mass doing things that way?

Rachel: Because everybody knows people, so I have a certain number of people that I know, but then each of those people has a different sphere of people that they know, and then each of those people has a different sphere of people that they know. So everybody has their group and so let’s say I end up signing someone up and they get their starter kit, they love the oils; they are interested in the business. And I say it in that order, because whenever somebody tells me okay I want to get a starter kit because I’m interested in the business, I kind of back up a little bit, because I want them to truly love the products first before they jump into the business side.

So once somebody does that, let’s say I enroll somebody who decide that they love the oils and they do want to get started in the business, and if their network is also a large network, then that means that my team and their team grows more quickly, they want to sign someone up who has a smaller network. Really that’s a big part of why it’s called network marketing or relationship marketing.

Steve: Okay and how do the economics work, like let’s say you sign someone up, like what is your cut and what is their cut?

Rachel: So if I sign someone up, and it really varies from company to company. Every company is going to have a different compensation plan, and that’s one of the things that I tell people whenever they say they are interested in a network marketing business. I tell them to look at the compensation plan, look at the income disclosure, every network marketing company is required to have an income disclosure up there at least I think every couple of years.

So take a look at that and see if these are the incomes that you are comfortable with, so every company does it differently. The way that Young Living works which is the company that I’m with is that I earn a commission when somebody buys the starter kit and that commission is $50, and then there is a bonus during their first three months for what they buy during their first three months, and then you get just general commissions depending on the level that they are on after that.

So starting in month four you get just regular commissions. The thing about essential oils and really any consumable product, because I would highly recommend for those who are considering network marketing to make sure that it’s a consumable product that you love, that you use daily, that you would use whether or not you are making money, because other people will do the same. So there are – I mean over 90% of the people on my team are not building a business, they are buying these products because they need them every single day.

So I just want to commit to anyone who is considering this that that I think would be a very crucial thing in deciding which company that you go with.

Steve: Interesting, so for the first three months you get a commission of what your person consumes and then afterwards like if they…

Rachel: You still get a percentage.

Steve: You still get a percentage, but then if they go on and sell starter kits, you also get a cut of that as well, is that correct?

Rachel: Correct.

Steve: And how does that work, like what are the economics like there?

Rachel: Again it varies from company to company. If I enroll someone and then they enroll someone else, I also get a percentage from that enrollment, and then up to a certain level. So all network marketing companies will have let’s say either five levels or six levels that you get paid on. Really there is so much in here, different network marketing companies even have completely different commission chapters like some will do uni level commissions, others will do a binary system which is just kind of I don’t understand that level.

Steve: How do your levels work, like I guess I don’t understand how that works, what does it mean to be in a level?

Rachel: So let’s say I sign up four people and they are on my level one, and then let’s say each of those people sign up four people, then each of those people will be on my level 2.

Steve: I see, okay.

Rachel: And then if those people sign up people, they would be on my level 3.

Steve: Got it, got it, okay so your level one people then I guess what commission do you get off of them with your current company?

Rachel: With my current company after those initial three months it is 8%.

Steve: 8% okay and then the level 2 guys what is the cut, it’s a smaller cut I would imagine, right?

Rachel: Yes 5%.

Steve: Okay and then it just trickles down?

Rachel: And then four, four, four, correct.

Steve: Okay and then how many levels can you have, infinite levels?

Rachel: Well so this is where you get into the tricky parts ins and outs of the compensation plans, so there is uni level commissions, and then with our company we also do generation commissions which is when you get to a certain rank, you get an extra percentage off of your team, the what is going on within your team.

Steve: Okay this is fascinating, so what is that, like I didn’t quite understand what you just said actually. So after a certain point you get extra commissions?

Rachel: Correct, so in my company for example whenever you reach the rank of silver, you get an extra, well that’s called a generation commission off of everyone, off of the entire volume of your down line.

Steve: Oh my goodness okay.

Rachel: And then whenever people under you get to higher ranks like so let’s say somebody under you gets to silver, then you get an even larger amount of commission, so what’s really, really fun about it is that it benefits me for other people to grow…

Steve: To do better.

Rachel: Or to even just to pass me, like it’s wonderful to watch, and I get to be a part of other people having these financial successes and residual income for the rest of their lives.

Steve: What does it take to achieve silver like you mention like these different levels, how do you achieve that?

Rachel: With our company to achieve silver you have to have to have a certain group volume which is just overall sales essentially in the group. And then you have to have two people on your level one, on your first level who also have a certain amount of group volume. It will vary from company to company and I see people all the time getting to that silver rank within a year. At silver rank the average income is $1,700 a month.

Steve: Wow, okay and can you give me an idea of what volume is required to hit silver?

Rachel: 10,000.

Steve: 10,000 okay a month or?

Rachel: A month yes

Steve: A month, okay, and just for clarification what level are you at right now I’m just curious?

Rachel: I’m at the diamond level.

Steve: And then what are the advertised incomes for that level?

Rachel: That income disclosure says that the income for diamonds would be 20,000 to 50,000 per month.

Steve: That’s amazing, okay, and so even though – like even if you just stop doing this altogether, you would still get that income from month to month?

Rachel: So we essentially did that.

Steve: Okay.

Rachel: Last fall we had this crazy idea to pack all of our things in storage and buy an RV and travel the East Coast in RV. It was an amazing experience, I mean just incredible, we got to go to DC and Williamsburg and [inaudible 00:32:25]. It was so much fun, and I thought that I would be able to work more on the road, but I was not, we were just busy the entire time.

I was still diamond during those months, I still made those pay checks during those three months, and three months was as long as we lasted and we said get us out of this thing and into an apartment. We wanted to do a year but no, that was not going to happen with four kids.

Steve: So is there any maintenance that you have to do then?

Rachel: There is, it really just depends on what you want to do, so I still teach classes because I love to, I love helping people get started, so I still teach classes, I have weekly calls for my business builders. Any of the people on my team who are interested in building a business, I have a weekly call with them where I share with them just something encouraging to help them, and then we do a question and answer time every week so they can bring me their questions and we just talk through those things and brainstorm together.

And then in the Facebook groups I post often, different whatever the specials are that month or different things for business, but then I also for people who are interested in the business, I’ve put together a two week boot camp to help them get jump started. It’s actually called the jump start boot camp to help them just start their business, to know here are the things exactly what you need to do to get started on the right foot in a network marketing business, and specifically in this network marketing business.

Steve: I was just going to ask because if your downstream people don’t make any money, you don’t make any money either, right?

Rachel: Exactly, and that’s the beauty of it, me being successful means that so many people on my team are successful, and there are multiple people on my team who are making six figures as well.

Steve: Okay wow, so in terms of your Facebook groups, it sounds like that’s where you do the majority of your marketing, why not just your blog and email, why is Facebook groups better than just like an email marketing list?

Rachel: Because I love getting to know the people, I mean I’ve built friends through this, through Facebook groups. Everyone is on Facebook constantly, I mean we’re always on our phone; I mean people even eat dinner on their phone scrolling through Facebook. It gives them a notification when someone posts in the group, they see it through their feed, it’s an easy way for people to ask questions, and also it’s way that I don’t have to personally answer everyone’s questions.

So I’m not getting all of the emails, somebody can ask in this Facebook group and then there are other people who can get on and answer those questions instead of me being the one that has to answer all of those questions.

Steve: Interesting, okay, and so I think I’m starting to understand how this works now. So getting them to just buy the starter pack is just like the beginning of the journey, right?

Rachel: Exactly.

Steve: And so the way to thrive in this business is you really have to put in the work to get to know everyone and teach them how to sell the stuff
themselves, is that accurate?

Rachel: Yes and there are systems like for example the boot camp. I run it through a system where it automatically posts on Facebook, and I run the boot camp also through a Facebook group, that jump start boot camp. So there are definitely systems in place that can help you, a lot of people use a scheduling software like HootSuite or something to schedule posts in their Facebook group.

There are so many different systems that I learned as a blogger that have come in handy during building a network marketing company, but yes getting to know the people is such a huge part of that and it’s one of my favorite parts, I love that.

Steve: Are these boot camps that you run, are they free or do you charge for them?

Rachel: I do not charge, no not at all. I can’t imagine myself ever charging for my team members to go through a boot camp to do something that yes benefits them but also benefits me. And I know that there are some network marketers out there who do that, who will have people sign up and say, now for only 3.99 you can buy my system to show you how to be successful in this. That’s just not me; I don’t want to do that.

Steve: So whenever you refer to your team members, are these like your level ones and your level twos?

Rachel: And level 20s and level 50s and anyone who is on my team anywhere, it does not matter where. I am a part of helping them get their answers.

Steve: Here is a question I had, so let’s say you get to like level – like your 20s for example, is it much harder for your level 20s to make money?

Rachel: No, not at all, I’m someone’s level 20. There is a good friend of mine who is actually at the highest level of the company, she’s also a former blogger, her name is Alyssa Francis. She’s at the highest level of the company which is loyal crown diamond, and the loyal crown diamond income is 100,000 plus per month so she is there. She is there, she signed up a year before me, and the person right above her is actually still just a silver, so those who are on your team can rank up faster than you, it really just depends on what you do.

Steve: The reason why I asked that question is because there is a cut that happens at each level, but pretty soon doesn’t that exceed 100%?

Rachel: It does not because there are some cut offs down there.

Steve: Oh okay where people don’t make any money if there is a sale or?

Rachel: This is where you get in to the really complicated ins and outs of the compensation plan, but yes eventually there is a time where there are some people may be on your level 13 or level 30 or something like that where you would not make anything off of what they bought, but if you are at a certain rank no matter what if I am a diamond I’m going to be making on average 20,000 to 50,000 per month.

Steve: And that’s from – so that number, like what determines where that range you lie on the diamond plan for example?

Rachel: A lot of it is determined on how many leaders you have on your team, so for example a leader would be considered silver and up with Young Living, so a lot of that is determined by how many silvers you have. Some of that is determined by how many people are in your levels one through five, but I would say the biggest portion of that is going to be determined by how many leaders you have under you, those other people who have reached silver.

Steve: Interesting because you mentioned that other example with your friend who was the ultra diamond or whatever rank that was, the person above her was just silver, like how is that possible?

Rachel: Because she didn’t do what needed to be done to get to the higher rank, so it’s not like everybody above me is a higher rank than me at all.

Steve: Interesting okay, so what does it take — so you mentioned with silver you needed to have multiple silvers under you, right?

Rachel: To get a silver you have to have two groups, essentially groups we call them legs, two groups under us that have an overall volume of 4,000 per month.

Steve: 4,000 okay and then what’s the rank right after silver?

Rachel: Right after silver is gold.

Steve: And then what does it take to become gold?

Rachel: To become gold you have to have an overall volume of 35,000 per month and then you have to have three legs under you, three groups under you that each has 6,000 of volume.

Steve: I see okay, so that one silver person probably just had that major leg which was your friend?

Rachel: Right and then another smaller leg and that was it, she never worked on creating those other legs.

Steve: I see okay, so going forward with your business right now, you mentioned that you had the opportunity to go on this really cool RV trip. So going forward like what – do you have incentive to continue to sign on new people?

Rachel: Absolutely and I would say even more than money. It is because I have seen these oils change people’s lives, and that truly is my incentive is that I want to get these oils into more people’s hands, because they are what were created to work with our bodies.

Steve: Okay interesting and so even today you continue to blog about these oils, you continue to run your groups and your boot camps, and at this point what would it take for you to reach that next level past diamond?

Rachel: At this point what it will take, so I have all of my legs in place for the next level, it is just a volume thing right now, so it is just gaining more volume, helping more people learn how to share and sharing with their friends in their network.

Steve: Interesting, so is it in your best interest then to give special treatment to your legs?

Rachel: As opposed to?

Steve: As opposed to just random people like focusing more on the people who are actually on your team, does that make sense?

Rachel: Sure yes, so one of the things about network marketing is that whenever somebody buys a starter kit, let’s say within Young Living, they are automatically a part of a team somewhere. So that way everybody is able to be helped by someone, so my responsibility within the company is to help those who are a part of my team.

Steve: Okay.

Rachel: And not that I don’t help overall, I mean I love talking to others and brainstorming with other leaders who are not a part of my team or even not a part of my up line, that is so much fun, I love doing that. I love having what’s called those cross line relationships; they are not your up line or your down line.

Steve: Okay I think I’m kind of understanding how this all works now, so the way you build your business is you ensure that the people under you are successful, and then you get these bonuses which push you up to the high bend as opposed to signing up as many level ones as you possibly can.

Rachel: Exactly, yes.

Steve: Okay that’s an interesting business model oaky. You mentioned earlier that it’s in your best interest to sell some sort of consumable and I don’t know, you probably don’t even remember this, but how does Cutco work, like most of the times when you buy certain knives you’re done, right?

Rachel: Right oh yes. I could use some more knives, actually I still have my set, but it’s been goodness almost 20 years since I bought my first set. So you’ll see those big ticket items where they are pretty expensive like the vacuum cleaners, I mean how often do you need a Cabby vacuum cleaner, or do you even need one, do you even need a $2,000 vacuum, I don’t know.
So a lot of people have that in their head, you know the people that come around to their door and say, hey I just want – I’ll shampoo one room of your carpet for free. A lot of people have that in their head, but yeah it’s just such a different experience now.

Steve: Okay and then I had a couple of more questions relating to oils, and so going forward, like your friend who is at the highest level, is she doing the same things you are?

Rachel: She is absolutely; she is still very involved with supporting people, because she wants to see as many people succeed in this as well.

Steve: Okay, and is she at the highest level?

Rachel: She is yes.

Steve: She is okay, and so really it sounds to me at least that you don’t go into something like network marketing unless you’re a true believer of the product?

Rachel: Yes, and I have had people join my team before who were just interested in the money and I tell you what that it faded very quickly, because they were not passionate about the product. So now that is just something that I tell people upfront that the business will not work unless you are truly passionate about the product.

Steve: How often do you actually go in person and have like parties so to speak, or is it all done online at this point?

Rachel: It depends, there were different seasons for me, there were times where I was doing in person things a lot. We are in an apartment right now and while we’re building a house, and so right now it doesn’t work out super well for me to have in person classes at my house, but I’ll do webinars and then when we move I will certainly have events at my house, but just because I love it.
I was at a retreat this past weekend, it was actually the silver retreat for everyone who had reached silver in the company, they invite them to Salt Lake City and you go see the lavender farm and everything, and there was a loyal crown diamond, again that’s the top level on the company. We spoke from the stage and she never taught one single class, she completely built online and got from – bought her starter kit to get to the highest level of the company in 18 months.

Steve: Wow.

Rachel: And that’s without teaching a single class and building all online, so it really can be whatever fits with you and with your personality and what you have time for, what you want to do.

Steve: Have you ever bought ads for any of the stuff or through your blog, like how did you get people to read the essential oils articles on your blog?

Rachel: I had a pretty good email list for my blog, and so that was definitely a part of it. We did run some Facebook ads, that helped back when Facebook would actually show your posts to people. That was good because we had a pretty, we had over 50,000 fans on Facebook and so that was great.
Then Pinterest, I would say by far Pinterest was the main traffic generator and sign up generator to our posts, so people would see a post on how do I use essential oils, or essential oils for a healthy immune system, or essential oils for a healthy respiratory system. So they would click on that post, come and read about it, and then decide to sign up to get a starter kit from there.

Steve: And to sign up is just a link that leads to some landing page where you can put in a credit card, right?

Rachel: Exactly.

Steve: And so for all these people who are listening who are interested in getting into this, what are some of your recommendations?

Rachel: To get into Young Living specifically, of course my recommendation would be to come to survingthestores.com…

Steve: Yes sure, of course.

Rachel: And click on the essential oils tab, and I would love to help you get started, but really I recommend whatever company you end up choosing
because I really do think that everyone should have some kind of residual income, and whatever that is, whether that would be investment properties or whether that’s network marketing, but to really develop some kind of residual income, to do your research before jumping into a company. Can I just say one little quick thing about residual income?

Steve: Yes, absolutely.

Rachel: With our blog, with Surviving the Stores, I thought that we had found residual income. There was one post that we had that we ranked really high in Google for, and we were making $1,000 per day off of that post, and I thought oh my goodness this is it, is this really going to happen? Well Google changed their algorithm, and we ended up on page two, and now we’re making about $5 a day on that same post.

And so the things that I thought were residual income ended up not being residual income, and so I love that this, that network marketing really can be true residual income for people and that’s what it has been for us. It allowed us to take those three months off last fall and so on, and I would say ask if you’re interested in a network marketing company, ask if it is something that if your income can be given to your children, if it can be willed because with Young Living the income is willable. That was huge for us; I love that part about our company.

Steve: Would you say that a blog is necessary or helpful?

Rachel: No not at all. It can be helpful for growing more quickly, but I have plenty of people who are making solid incomes and on their way to making a solid income just from teaching classes and sharing in person with their network. But I would say that whatever avenue somebody uses to grow their networking marketing business, they have to have a network.

And so whether that network is online, whether that network is at work and mums at the soccer field or wherever that network is, there has to be a network, there is a reason that it’s called network marketing. And so if somebody just wants to stay inside and not build any kind of network at all, then they are not going to be successful in network marketing, but there are many different ways to expand that network of people.

Steve: Okay, hey Rachel I learnt a lot today. If anyone out there has any questions for you where can they find you online?

Rachel: They can find me through survivingthestores.com. My Instagram is @Racheleholland, on Facebook I am Rachel Holland and again you’ll see Surviving the Stores, you’ll see Young Living. I also have another website called howtohomeschoolforfree.com, just because we’re also a home schooling family, and I put free resources that we find for home schooling. So any of those places you can find me there.

Steve: Is there a contact form on those sites where they can actually reach you directly?

Rachel: Yes there is on both of the websites, yes.

Steve: Awesome and are you on Twitter as well.

Rachel: I am on Twitter, it is survivingstores.

Steve: Survivingstores, awesome. Hey Rachel, really appreciate your time; all of this stuff is fascinating to me, because I haven’t had anyone on the show doing network marketing before, so I appreciate it.

Rachel: Thank you so much for having me; this has been so much fun.

Steve: Thanks a lot for coming on, take care.

Rachel: Thanks Steve, you too, bye.

Steve: Hope you enjoyed that episode. I’ve always been skeptical of network marketing and MOM, and it was actually good to hear from someone who is actually making significant money from that business model. For more information about this episode, go to mywifequitherjob.com/episode145.
And just a reminder that tickets for the 2017 Sellers Summit are now on sale at sellersummit.com, the conference that I hold every year that specifically targets ecommerce entrepreneurs selling physical products online. The event will be small and intimate, and I promise you that the speakers will focus on actionable strategies to improve your ecommerce business and not any high level BS. So head on over to sellersummit.com, and check it out.

And once again if you are interested in starting your own online business, head on over to mywifequitherjob.com, and sign up for my free six day mini course on how to start a profitable online store. Sign up right there on the front page, and I’ll send you the course via email immediately. Thanks for listening.

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

Steve: Welcome back to another episode of the My Wife Quit her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not with their businesses.

I’m Steve Chou, and today we are talking with my buddy Kevin Stecko, the founder of 80stees.com. Now in this episode you’ll learn the keys to running a successful e-commerce store selling t-shirts online.

Now before we begin I want to give a shout out to sitelock.com for being a sponsor of the show. Now if you owned a brick and mortar business, you’d secure it, right? Alarms, cameras, the whole deal, and as an online business you may not think about security as much, but you should, because your customers are. And did you know that one third of consumers hesitate to purchase online due to security concerns. Protect your business and your customers with SiteLock website security.

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If you want to learn how to start your own online business, be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business. So go to Mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email. Now onto the show.

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

Steve: Welcome to the My Wife Quit Her Job podcast, today I’m thrilled to have Kevin Stecko on the show. Now Kevin is someone who I met at e-commerce mastermind retreat early in the year, and as luck would have it I got stuck on a skid lift with the guy and we were forced to chat.

Anyways Kevin runs an awesome site called 80stees.com, where he sells t-shirts from the 80s. And I was actually on the site the other day, and it brought back memories of when I was younger. I used to watch Robotech when I was a kid, and just out of whim I decided to search for Robotech t-shirts, and I was pleasantly surprised to find them there, so how cool is that?

However when I pointed out to my wife that I was going to pick these t-shirts, I’m going to wear them, she started shaking her head. Anyways Kevin is one of these very few t-shirt vendors or store owners that I know who have doing this for a very long time.

And if you remember back in episode 122 when I had Derek Pankaew talk about his t-shirt business on Teespring, well Kevin’s business model is entirely different, and in my opinion is a lot more sustainable. And with that welcome to the show Kevin, how are you doing today man?

Kevin: I’m doing great, thanks for having me Steve, and I think we have to change the name to my wife is now allowed to give me clothing advice instead of my wife quit her job.

Steve: Actually I was also looking for this t-shirt, there is like this like obscure cartoon I used to watch when I was a kid, it was called Pandemonium. It only had like 10 episodes total. If I had a t-shirt like that I would totally wear that.

Kevin: Pandemonium, I’ll have to check it out, but it doesn’t even ring a bell for me.

Steve: You probably don’t even remember that cartoon; it only lasted one season, a bunch of [inaudible 00:03:30].

Kevin: I think you might have mentioned that on the skid lift.

Steve: Oh still talking about that ha, yeah. So Kev, I’m curious how did you come up with selling t-shirts, it’s like a really hard saturated business model?

Kevin: Right, well actually when I started it was not at all, so it kind of goes back to my college days. There was this little, I guess you might call it a hedge shop in a back alley that I used to walk by to go to class, and they would always have these boot leg t-shirts in the window.

I actually didn’t even know what boot leg meant at the time, but he had a hellion t-shirt and I was like that’s me, I’m getting it. So I wore it around campus and because everyone else at school also sees the same store all the time, no one ever asked me about it or thought it was special in any way.

But when I went home for the summer, I went to the amusement park and like 6 different people came up to me and asked me where I got it, and this was in 1999, summer of 1999. At that point I just had this kind of an idea, and I graduated in December of 99, and basically took a deal with this guy to buy in bulk from him.

I wasn’t even really getting a good deal, but I know I used to make a [inaudible 00:04:50], then I went to Penn State and tried to indoctrinate all of the students in to their software, he gave us free copies of like office to full suite, and so I was able to use Frontpage to create a website.

Steve: And did you sell that initial lot right away?

Kevin: Yeah, and it really wasn’t that many, I mean I had really no money except for just whatever I was able to make part time, so I might have had like 20 shirts that I bought, I think I was paying 13 each. So it wasn’t even cheap, and basically those sold out really quick, yeah.

Steve: So Frontpage didn’t have e-commerce features back then, right? How were you collecting money, just curious?

Kevin: The very first version of the site, it was like eBay in its infancy but less convenient. Basically people would fill out a form that I would get emailed to me, then I would send them instructions on how to mail me a check.

Steve: Oh wow okay, amazing and you sold 20 t-shirts. Were those t-shirts boot legged?

Kevin: They were, and like I said at the time I didn’t know, and they even had low trade mark thing that would indicate that they weren’t, but as I got into the business further I found out there are companies – those were pretty well known Bootlegger.

Steve: Okay, so how did that evolve into 80stees?

Kevin: So my email – I’m sorry my eBay username was 80stees, because it was him and he showed and then I bought like transformers and thunder cuts. I was just basically like well I want to have sort of a theme here, and I was totally an 80s kid, and that basically was like well I’ll do what I loved as a kid as a theme for the tees.

So I launched on eBay, and then had like a not even a real domain name, it was 80stees.hypermark.com, there was a free Frontpage host, and then March of 2000 I registered the domain 80stees.

Steve: Okay, and then what was your first platform then?

Kevin: So it was literally Frontpage, and then it kind of evolved. There was a gold rush in late 1990s for all these free software services, and one of them was an ecommerce platform called bigstep.com.
And so I had the most hacked together thing you could imagine which was using my Frontpage site which ranked well for search terms, and then I would link to this BigStep cart, then I would link back to the Frontpage site. So it was literally like going cross domain from one site to another, but it ended up working, we sold pretty well on there.

Steve: Interesting, so what are you on today?

Kevin: Today we’re on Shopify.

Steve: Okay, and so was it from BigStep to Shopify or there was a bunch of carts in between there?

Kevin: Yeah there was some carts in between. There was something called Storefront 5.0.

Steve: Oh my goodness, okay.

Kevin: And that was dot SP platform, and we ended up actually using that for a long time and modifying it extremely to the point where you wouldn’t recognize it, and then we actually got hacked when we were on that platform. I then switched to a company which due to a legal agreement I’m not allowed to mention, because they completely underperformed, under delivered, and then from there we were on Shopify.

Steve: Okay, just so you guys know who listening out there, Kevin has been doing this for a long time. I would say almost 20 years.

Kevin: Yeah, I’m getting close.

Steve: Something like that.

Kevin: I mean 1999.

Steve: 16years, 17 years yeah. So I’m just a little curious about your t-shirt business, so do you stock your t-shirts, or do you print them on demand.

Kevin: We stock.

Steve: You stock, okay. So that actually opens up a can of worms, so first of all why did you decide to stock that versus just printing on demand with I guess this – I don’t know [inaudible 00:08:53]?

Kevin: Okay yeah so at the time really I was selling licensed t-shirts and I wanted to do it the legit way. So there were a few companies, I think there was only a company like Slapon or something like that that were doing heat [ph] transfers, but for the most part you had to go the sole screening out.

There was no such thing as like a direct government print, so it was pretty much based on — the business model was based on what I had to do in order to offer licensed products.

Steve: I see, so you can’t — I know there is places at the mall where you pick what you want on the show, and then they just press it on right in front of you.

Kevin: Yeah, those are almost guaranteed boot legs.

Steve: Oh really?

Kevin: Yeah, if it was a license product…

Steve: Like if it’s like a sports team?

Kevin: Oh yeah 100%. And the reason that is, is because these are [inaudible 00:09:48] wants complete control of the final product, and if they sell an officially licensed heat transfer, you could put it on whenever, and they lose complete control at that point.

Steve: Interesting wow, so in the mall, so they can get away with it, so does that imply that it’s not really policed that heavily or?

Kevin: Yeah, I think that if they’re getting real with it either it’s generic enough that’s it’s actually not infringing or yeah they’re just not – they haven’t been caught.

Steve: Okay, so does that imply – so everything that you sell today is all licensed, right?

Kevin: Yeah, I mean it’s like 99.9%, there’s a few things that just didn’t need a license.

Steve: Okay, and so by having this license it implies that you can’t print your own t-shirts, like you have to actually just buy them the
way they are?

Kevin: It’s we either buy from companies that have the license or we obtain our own license. So if we had our own license, then yeah we could do print on demand, that’s a model that could work, but to obtain all the…

Steve: Okay can we talk about all…

Kevin: Oh sorry, go.

Steve: No, no finish your sentence.

Kevin: I was going to say to obtain all those licenses though for one company would be extremely expensive.

Steve: Yeah, I was just going to ask that, so what’s the process for obtaining a license, how much does it cost and what are the terms of a deal?

Kevin: It all depends in terms of the costs, so like if you’re talking Star Wars, like which would be the big banner industry, you’re talking hundreds of thousands of dollars that you would have to guarantee and potentially even hundreds of thousands that you would have to pay upfront towards the guarantee.

Steve: No way, because you guys sell a bunch of Star Wars shirts and they are all licensed, so does that imply that you’re paying six figures?

Kevin: No, that implies we buy from companies that have done that.

Steve: Okay, all right got, got it, okay.

Kevin: So we use some control on that aspect, but the good news is we do move a significant volume, so we have vendors that work with us to get us exclusive designs, and so really it’s actually beneficial for us now to have a license in a lot of ways, we don’t have any of that in this sort of overhead.

Steve: Do you have any licenses where you have like full rights to print stuff?

Kevin: Yeah, we do, and there is really no such thing as full rights, so every design has to be concept approved by the brand, and then they have to sample approvals and production approvals. You’re still limited to what they’re going to say is okay, it’s like you wouldn’t be able to put on like a swear word on a transformer shirt or something like that.

Steve: Right, okay that makes sense.

Kevin: In terms of what the shirt shows a typical license deal is you have a time which will just be the length of time that you’re allowed to sell a product. You have the properties, which just clearly defines what properties are on the case like we have Hasbro license, so it defines like transformers 1980 style guide type thing.

So like I couldn’t make the new movies that come out t-shirts, I can only do the 1980 stuff. It also defines the loyalty percentage, the payment terms on that and the territory, so like United States, UK, online, that type of thing.

Steve: What does the loyalty look like?

Kevin: Typically it’s 10%, but it can be higher. I know like NFL was notorious for having a pretty high loyalty. It all depends on…

Steve: Sure, I was just trying to get a range, so 10 to something percent. Is there an upfront fee also?

Kevin: Yeah, it’s not a separate fee from the loyalty, but what it is, is it’s a guarantee towards the loyalty, so like if it’s say that I said I was going to pay – I was guaranteeing at a cost to you or said I’ll pay $10,000 in loyalty. Some companies in order to take you seriously might want to all that 10,000 upfront.

Steve: I see.

Kevin: But then after you pay that off, so let’s say you had a really good first year and you sold $100,000 worth of stuff at a 10% loyalty, so that whole first year you’re not actually sending them a check. You’re just banking that money you’ve already paid them, and doing the accounting later, okay well we owe you $3000 loyalties this quarter, but we already paid you 10, so now we owe you 7.

Steve: I see, so everything is negotiable it sounds like?

Kevin: Yeah, it all depends too on the property. The bigger the property the less negotiating room and the knowledge of the structure is going to be. Throughout we do have a Robotech license actually.

Steve: Sweet.

Kevin: Those guys are – it’s a fairly less structured deal compared to others, and I think that’s primarily because that’s their only property, and they don’t have like a huge team, whereas Hasbro is a public company, and they’ve got a huge licensing team and so everything works a certain way.

Steve: So over there contracts are too expensive like Star Wars you mentioned you buy the t-shirts from a vendor who has a license, and what are the margins on something like that like when you buy shirts from someone else?

Kevin: Well it depends, so if we’re buying like small runs where maybe they’re using the DTG method, the margins, well I mean I guess…

Steve: So what does DTG stand for?

Kevin: DTG is direct to garment, so it’s like literally like an Intel printer for t-shirts, and a new mess in Teesprings for like – Teespring originally was also screened and there always like a fairly high minimum, and now they actually spot the DTG model, so you can really sell one t-shirt via Teespring with that DTG method.

But yeah, so I mean we try to maintain margins of about 60%, but that can get better for instance let’s say we’re able to buy 600 pieces or 1200 pieces, then we start getting a little bit of discount on our products.

Steve: Okay and then you have to stock all these?

Kevin: Yeah we try to avoid the pain of stocking to an extent with the crowd fund model that is very similar to what Teespring does which is basically it’s a fancy pre-order.

Steve: So how do you make the decision on whether to stock something, whether to license something or whether to crowd fund something?

Kevin: Okay, so these are a little different things, so we pretty much bring everything in the stock to ship eventually. So I guess if we take it one piece at a time – if I were to say how do I start the licensing? It would really be a situation where it’s either a huge strategic advantage for us to license it, because no one else is going to do what we’re going to do with it, or going to be able to do it.
So like for instance Robotech, no one else had a Robotech license at the time, and it just made a whole lot of sense for us to be deep placed to go for Robotech t-shirts even though it’s a fairly small fun base.

Steve: Got it.

Kevin: Now Hasbro, I got the license in 2007 and now it’s because at the time our vendor for transformers t-shirts was letting the license expire, and there wasn’t anyone else who was going to pick it up immediately, and as you might imagine for a company called 80stees that’s also had a cartoon t-shirts we needed transformers t-shirts.

Steve: Yeah for sure.

Kevin: So that was a situation where I was I’ll find – I’m really looking at potentially not having a huge important part of my catalogue.

Steve: Okay, and when you have the license, you’re printing these shirts on demand. Do you do those in Asia or do you those in-house?

Kevin: We don’t do a whole lot of on demand; we’re just actually just starting to work with a partner company now. We do domestic printing for all of our stuff though.

Steve: And the reason for that is just control?

Kevin: Yeah, by the time you’d get something printed in China and bring it over, I don’t think it’s that – it’s going to be that big of a cost savings based on freight and everything. It’s just so relatively inexpensive.

Steve: Okay, so I think can we talk a little bit about this crowd funding that you do?

Kevin: Sure, of course.

Steve: How does it work?

Kevin: Okay so yeah we were inspired by all these guys that were showing up on Facebook, and saying, “Hey there is three days left and we have to hit a minimum of 60 shirts or this design won’t get printed,” and that was literally pioneered by Teespring. The reason that they did it that way is because of the print minimums, so they wre only doing self screening and literally it wasn’t worth any one’s time or money to take an order for five t-shirts.

So these sellers had to get a minimum quantity, and so they built their page to basically become a campaign for a certain amount of shirts or a minimum amount of shirts for a limited time. It just had all these nice social signals to it where people kind of feel part of something; it’s similar to kick starter in a way, right?

Steve: Sure, yeah, yeah.

Kevin: You’re part of something bigger than just buying a product, and having the time limited is always nice because that gives the urgency. I love the book the Psychology of Persuasion.

Steve: Yeah, Cialdini.

Kevin: Yeah exactly, it basically in one ecommerce page you hit quite a few where he talks about are the most persuasive things to do for selling. So we’ve said well we can do this type of thing, and what we do is we put the design up, we set a minimum, we set a time limit, and then as we watch for people to take a chance, because literally we might not make it if we don’t hit a minimum, we give them a discount for placing the order during that time period.

Steve: Okay, so literally is a kick starter pretty much?

Kevin: Yeah.

Steve: And this is all hosted on your site?

Kevin: Yes.

Steve: Okay is that a large percentage of your business?

Kevin: No, I mean, I guess it is in terms of the number of products like we have thousands of products but only 20 to 40 on crowd for any given time. So I guess like those 20 to 40 do make up a decent number of sales relative to the size of the catalog entirely.

Steve: How do you decide what to crowd fund?

Kevin: You know it’s really just most new products nowadays. I have learnt that products that I think are awesome aren’t always awesome, and sometimes products that I don’t think are awesome, people think are awesome. So it’s just been a situation where well we put it put there and see how it works, and we really minimize our inventory risk that way.

Steve: Let’s talk about that a little bit, because there is obviously even if you’re just selling transformers, there is a like a bajillion varieties of transformer t-shirts, right? So how do you test to see which ones are going to sell, do you just buy a bunch and then just sell them out there?

Kevin: Yeah, I mean we always have like a hypothesis of we need new transformer shirts, so what character haven’t we not done in a while or what are we missing? And then we make the design, we get it approved and then we put it out there, and then literally the crowd tells us whether it’s good or not.

Steve: How much is like your first run during a test?

Kevin: You mean how many do we have to order or how many do I have to print?

Steve: Yeah how many do you order, so not talking about crowd funding for a second, like let’s say you just put up a shirt on your site, how many do you order for that initial run just for testing purposes?

Kevin: Well just in a more [inaudible 00:21:49] process we do in this crowd funding model, but…

Steve: Oh I see, okay.

Kevin: So if we just list the product without a crowd fund, chances are we can buy it direct to garment and we literally might only buy like 1 or two pieces of each size, and chances are we’ve pre-sold it before we even got it.

Steve: I see okay, so you do it in a way that it’s very little upfront monetary risk?

Kevin: Yeah and we might say, like let’s say we have a design that we sold, I don’t know we might have set a minimum of 30 pieces because we want to at least know that it works and maybe our pre minimum was 144 pieces, but let’s say like it was a home run and we sold 300 of them or 600 of them or something like that.

At that point then now we start thinking, well do we want to get a little more aggressive with how many we order to hit a price discount from our vendor. So it’s literally every single product is a decision unto itself as to how many we’re going to buy.

Steve: What is considered a dud versus a home run?

Kevin: It kind of depends on the property, I guess a dud transformer shirt might be like 20 sales and then a…

Steve: Within like a month you mean or?

Kevin: Yeah, and then a dud of like chips which is a new license one of our vendors just got and we have no idea if we will sell any, like so literally we probably have to sell zero to give up on that entirely. Part of the reason for that too is because we don’t have that fan base to email out and say, “Hey you bought this other chip shirt,” so you have to start from somewhere, so like that’s which we had a bit of the audience over time.

Steve: So yeah, let’s talk about advertising next, because in your case it doesn’t sound too bad to advertise, but in general marketing t-shirts can be really difficult because competition is so tough. So what are the channels that work the best for you?

Kevin: Yeah I mean it can be brutal. Pretty much we spend our money on email marketing, on Google AdWords and Bing to arrest matters as you said and on Facebook.

Steve: Okay, and so can we talk a little about each. So if you are on AdWords, are you doing Google shopping, are you doing just regular AdWords?

Kevin: Yeah so our AdWords are in a bit in a state of flax right now, but I mean shopping is one of the budget.

Steve: Okay and do you – how do you run your shopping campaign? Do you just list all of your products on shopping and then…

Kevin: Yeah, that’s historically – I think we may be pull some stuff based on inventory availability, so that’s one of the problems of stocking products is you might end up with like your most popular sizes out of stock at a point in time. So I think we might pull some stuff out like that, but we’re actually working with a new vendor, and we’re going to try and really tweak the shopping out. I’ll be honest with you we haven’t been doing it very well, and just from looking at the competition they aren’t doing it well either.

Steve: Okay, but it’s mainly been shopping, do you guys do any display ads for Google or?

Kevin: We tried in the past with very limited success.

Steve: Okay, yeah that one tends to be a lot harder. I would think that Facebook would work really well for you, like I would be like your prime customer if I wasn’t married.

Kevin: Oh man the namesake of the blog stop sale, oh my goodness. Yeah Facebook is pretty good for us; we spend quite a bit of effort trying to stay up to date. It literally changes weekly as to what the strategies and tactics are, and I think…

Steve: Can we talk about one that has worked for you?

Kevin: I’m sorry what’s that?

Steve: Can we just talk about a Facebook campaign that has worked for you in the past?

Kevin: Yeah, let me think of one specifically, yeah a specific campaign that has worked for us. Well I guess I can talk about maybe a more general, because that’s kind of our secret sauce is we’re not putting all of our eggs in one basket, where a lot of times it’s spending a few dollars a day advertising like the crowd funds, and just really being – how do I say this, like not passive but the opposite of aggressive with our bidding.

So like we’re going to – and budgeting, so we’re going to say, okay maybe we’re only going to spend 10, 20 bucks a day advertising as our daily budget for a particular product. That way we can – I guess the way we’re doing is we’re not – how am I going to say this, it’s kind of hard to describe I guess.

But by being more conservative with our bids, we’re getting hopefully the crème of the cup, and the most targeted people, because we’re not saying Facebook we want you to spend a whole lot of money. We’re saying, hey we want you spend just a little bit of money, and here is our awesome prospect that we describe for your targeting and everything, and then hopefully they give us the crème of the cup that way.

Steve: So that implies that you are bidding by click then?

Kevin: I usually do CPM a little bit

Steve: Interesting, okay because then you can’t really control your bid, right?

Kevin: Yeah, we control it via the budget more so.

Steve: The budget, okay. And do you typically only run ads for crowd funding campaigns?

Kevin: Yeah, that’s the majority of it just because we do have those social signals on the pages there, but we haven’t tried to do some more collection based ads just because we really want to spread ourselves around the entire catalog as opposed to just in the new products.

Steve: Because I would imagine that’s like a lot of ads that you would have to manage, right?

Kevin: It is yeah, so that’s definitely one of the things that we spend some time on like we think a lot about creating imagery and everything in terms of when we create a product. We’re always creating like a Facebook image at the same time.

Steve: Okay, and then the landing page is just a page to join the crowd funding campaign?

Kevin: Yeah exactly, it’s just a product page, sorry about that phone Steve, that won’t happen again.

Steve: No it’s okay, it’ll get edited out. Interesting, okay so you have a bunch of these campaigns that just lead to a product page. Traditionally the way we have gone on Facebook as well because we take them to like a content landing page, where we either thoroughly describe our value proposition or do a freebie of some sort, but it sounds like you’ve had really good luck sending people directly to a product?

Kevin: Yeah, and sometimes we don’t though, that’s – we kill our crowd funding products pretty frequently, so this is like the – our model is get it out there and see if it works, and then if it doesn’t let’s move on right away to something else. So it allows us to experiment, so yeah I mean there’s times when something just absolutely doesn’t work.

And even though we might say we’re going to crowd fund it for 30 days, like if a couple of days have gone by, we spend a little bit of money on Facebook or we emailed it out to the customer base and they haven’t responded, we’ll just tell the few people that have ordered or maybe even no one has ordered, we’ll just say like, sorry this one had no traction, it was not going to hit the minimum, so we killed it now rather than have this like walking dead products on the site for 30 days.

Steve: Okay, so let’s switch gears, you just mentioned email, do you have like your email list like segmented out by TV shows, and cartoons and what not?

Kevin: Yeah we use Klaviyo. So there is all of our purchase history there, and we actually recently completed uploading old transactions in the Klaviyo. So now we actually can — if you ordered from us three years ago, and you ordered us a Spiderman shirt, then we can specifically target you based on that.

Steve: Okay, and so whenever you release a new shirt let’s say it’s like a Spiderman shirt, you’ll just email everyone who has purchased a Spiderman shirt in the past?

Kevin: Yeah, we try to keep it pretty relevant. We do send out blasts just probably like every other ecommerce company. But those would be less targeted more broad as opposed to like yeah the Spiderman example would be, hey — the subject line would probably say something about Spiderman, and they would specifically be for that product.

Steve: So how much of your email marketing is automated versus broadcast?

Kevin: Well it’s kind of like there is a mix between — so it’s not really broadcast whenever we do the Spiderman one, but it’s not automated either. So it’s like a segmented broadcast I guess you might want to describe it.

Steve: Sure yeah that’s what I meant. So do you send those out — so outside of sending those out when you have a new product, do you have like a monthly broadcast that you do?

Kevin: It’s weekly, we try to do at least one yeah.

Steve: Okay what does one of those email sound like?

Kevin: A lot of times they are based on a forum and it just looks the same. And it’s just an overview of all of the crowd funds that we’ve released. But then every once in a while if we have a special offer or a discount that’s what we’ll post, but basically we don’t email out like, hey don’t forget about us random generic emails. There is always some kind of offer in the email.

Steve: Okay interesting, so most of your campaigns are not automated then? Like when someone purchases like a he-men t-shirt, they don’t have like a he-men specific sequence?

Kevin: No, that’s really good idea though.

Steve: Oh gosh that’s interesting, yeah true it is.

Kevin: It’s awesome, it would take us forever to build, but I can see some value there.

Steve: Or like your best ones like your Star Wars shirts or something like that. Yeah people would eat that stuff up I would think. So do you do any Pinterest work?

Kevin: We do, and I have never been able to get Pinterest to work consistently. I have had occasional blips of success where I get excited.

Steve: Okay.

Kevin: I have never been able to keep it running.

Steve: Okay. So I was just — part of what I do whenever I interview someone is I do the ACM [ph] rush, and I go through their site and see what’s going on. And you guys rank really well in Google for a lot of really hard keyword terms which is pretty amazing. And I know you guys have been around for a long time, but is there anything specific that you do to rank for these keywords?

Kevin: Yeah, I think it all started out way back when I lost with Frontpage. And…

Steve: So is that the tip for everyone use Frontpage?

Kevin: Well maybe the tip is I have no idea what you are doing with the database, because I didn’t. So my page is entirely folder based, and it was entirely hand generated html. And well with data Frontpage of course. But so what I had to do was I had to categorize these pages, so I knew how to find them easily. So I ended up creating like a folder in Frontpage that was 80s cartoons.

And then where do I put the transformer shirts, so I put the transformers page and I used cartoon folder. And then on the transformers page is where all these specific transformer shirts end up, but what it ended up was human readable file structure. And I think that was probably one of the biggest things is that the file structure look great, whereas everyone else that was trying to have like a database driven site, their URLs just look like the gobbledygook.

And obviously nowadays no one looks like that anymore right, like that’s in the past. But I just feel like by having such a strong start at it, we’ve just managed to continue on the same pace. And I’ll be honest with you I don’t do a leak of what most people might call SEO work. Like I don’t pay anyone to build links, I don’t do outreach for links.

And in fact I get really confused when I even think about doing that kind of stuff, because when I think of where can I get a link I can’t even think about of a place worthwhile because most of the blogs like their links disappear over time. And like everything is on social media nowadays.

Steve: I’m going to have to disagree with you there Kevin, because I was looking at your link profile. It seems like you guys have done some contests that have gotten some pretty good links, do you guys still do those?

Kevin: No, when was that?

Steve: I don’t know, I was just looking at it. There were some really high domain strength sites that were linking to your site, because you had done some sort of giveaway or something like that.

Kevin: It’s possible that I mean that might have been something way back when – but I’ll be honest I don’t think it moved the needle.

Steve: Okay and you haven’t done any of that stuff since?

Kevin: No, contests just get your people who want to join contests.

Steve: No but there was the link from that site that was pretty…

Kevin: Yeah I get what you’re saying; yeah there is some value there.

Steve: So if you were to — so of all those traffic sources that we just talked about, what would you say would be your top source, would it be SEO?

Kevin: Yeah, I mean that’s definitely the majority of it. And that’s a little confusing now since Google hasn’t shared as many other keywords. And since we do have quite a bit of brand build up over time, so there are a lot people that literally just use the URL part of typing the 80stees, and is that technically a search? I guess so, but it’s really then just trying to get to us.

Steve: Yeah I mean you guys have really established your brand at this point. From what it looks like you do get a lot of typing traffic for 80stees which is pretty awesome?

Kevin: Yes.

Steve: How do you deal with like inventory and all the sizes? Like you have like eight sizes, the same type for every shirt, it sounds like a nightmare.

Kevin: It is a nightmare. Yes straight up it is a nightmare, and that’s something that we are always working on trying to figure out how to do it better. The crowd funds are something that we try and kind of project like if during the crowd fund we sold a certain ratio of smalls, mediums, large, extra large, we are probably just try and project that same ratio into the future when we do place a print around the order. But you always end up having some kind of other stocks, so it’s just impossible to avoid if you keep stock.

Steve: So how do you manage that? Do you have any special strategies for getting rid of the sizes that are unwanted and that sort of thing or?

Kevin: We’re not too great at that, no actually. What we’ve been doing lately is if the product is something we like we will actually launch a re-crowd fund of it. So we might have say smalls and five XL on stock or whatever. And but we’ll still launch a crowd fund to hit a goal number which will allow us to sell all the sizes as well as give us a nice head start on our primal run.

Steve: Interesting okay. Yeah that just sounds like it can get out of hand real quick unless you have like a really good backend to maintain inventory and projections and that sort of thing. Do you guys use any software, or is it all homegrown?

Kevin: We are using an auto management system that I would not recommend to anyone I suppose, so I won’t mention it. But I think I would probably say the same thing about most auto management systems from what I have heard in different forums and stuff. But yeah we do have a lot of homegrown software that we’ve built, and it’s constantly in development and trying to make our job easier.

Steve: Okay and in terms of vendors like let’s say someone else wants to sell t-shirts and not necessarily 80stees. Like where do you start when you want to find someone to sell your t-shirts?

Kevin: Yeah I mean if you are talking like something that basically you are saying like you want to be a buyer of other people’s products and not do your own development at all, probably go to like Magic Apparel Trade Show in Las Vegas.

Steve: Interesting okay. Like if I wanted to sell like NCWA T-shirts, is that like a huge can of worms?

Kevin: You just have to find the right vendor that will work with you. The hard thing is going to be that like with sports stuff especially it’s all channel separated, so like you probably can’t just go buy NFL shirts if you want to sell them. You might have to have like a shoes store or some — there is going to be some level of authentic business that you already have in order for someone to even sell to you.

Steve: Okay I see, and so like the larger the organization the more red tape you have to go through?

Kevin: Yeah and really what it comes down to is the more the higher percentage of revenue that a business makes from apparel or licensed products in general the tougher it’s going to be.

Steve: Okay, do you find yourself moving more towards like the print on demand model where you don’t have to carry the inventory, you just go to the vendor and say, I want a print like five shirts, so whenever you make a sale?

Kevin: Yeah that’s — a lot of our vendors are going that route. So we are trying to work with them and do that more and more. The great thing about that model is there are no inventory. The terrible thing about that model it’s really not scalable, and it stinks at Christmas time, right? Because it’s great to say well I don’t have any inventory, but then on December 15th you have to stop taking orders, because you’ve literally exhausted your capability just shipping time.

Whereas on December I’m not sure what day Christmas is this year, but like the last shipping day possible to go next day before Christmas most of my inventory would be available for sale, and could get there.

Steve: Is there any quality difference between silk screen versus the printing — the different printing methods?

Kevin: Yeah for sure. Silk screen is definitely the best. But the other print methods do have some advantages in terms of like the color blending and everything you can do is a lot easier with that model, but those prints tend not to last as well. One thing you can — if you hit the right design though you could purposefully just dress it. So if it washes out a little bit then it might actually even be okay.

Steve: So do people copy your stuff?

Kevin: Yeah, I mean it definitely happens on – so Bootleggers do it. They’ll sell on Teespring, it happens on Amazon, there is I’m sure you’ve heard of all the Chinese counterfeiters on Amazon, and we are definitely starting…

Steve: Start with Chinese people, yeah. So but well can you do anything about it?

Kevin: On Amazon I suppose you could, but it’s like Wykamol, it would be a pointless game to play. And if it’s something that we’ve made for one of our licenses we will ask them to send us cease and desist, but it’s even a little bit tricky for us, because we can come up with our own unique transformers design, but we don’t actually own the rights, so it’s not like I can really police that I have to get Hasbro to do that for us.

Steve: Okay, I’m just curious because it seems like I can go on your site and I’ll see a shirt for like 18 bucks, but then hey I’m walking through the mall and I’ll see something for like 10 bucks right. And so do you even bother trying to fight those things, or you just run your business?

Kevin: Yeah, I just pretty much run the business. We are such a small cog in this machine that we don’t have the resources to do that.

Steve: Okay, and then this brand that you’ve built up, is there anything special that you’ve done over the years to instill the fact that 80stees is the place that you need to go for t-shirts?

Kevin: I mean I think it’s really just the concentrated collection of it. I mean you can find a lot of products that we sell other places like Amazon or Target or whatever, but you are not going to find as many at a physical store for sure. Like as many wrestler wrestling shirts or transformer shirts. And if you go on Amazon you might find that, but they are just not concentrating at that niche level like we are. So it would be a little bit harder to navigate at the very least.

Steve: Actually that was my next question; do you guys sell on Amazon at all?

Kevin: We do sell a little bit on Amazon; it’s not a focal point for us due to all the counterfeiters who will come from an unnamed country.

Steve: Plus they charge a lot of fees, right? Is it generally pretty profitable to be selling on Amazon, like if you could, let’s say there were no copy cats?

Kevin: Yes, so we do merchant fulfilled to avoid the FBA fee as well as tax implications, but that 15% definitely takes a huge cut.

Steve: Oh yeah for sure okay. So yeah, so it doesn’t sound like Amazon would be that great of a channel regardless, because of just the nature of how many fees that they take.

Kevin: Yeah, I have competitors though that I mean they do all the Amazon things that you need to do to be successful. They are investigating which products have the best seller ranks and they are doing the FBA. And I feel like they are spending $10 in inventory to make a dollar after the end of the transaction. But I guess they are doing enough transactions that they think it’s worthwhile and since the FBA model have low overhead they can justify that. So I wouldn’t say it’s impossible to make it work, because these companies probably would have gone out of business by now.

Steve: Sure, sure.

Kevin: But it’s just not for us.

Steve: Is there room for creativity in the t-shirts that you have? Like are you allowed to modify designs for your t-shirts? Like can I stick like [inaudible 00:44:49] on a t-shirt and make him say something funny?

Kevin: Yeah to an extent. So we can be creative, and then we have to get it approved. So it’s — we do run in some of that where we think we have an awesome idea, and it just doesn’t fit like the brand. They are like well this is — they are literally called like off brand, this is off the brand message, so we can’t do this.

Steve: Okay, what’s funny about this is I get a lot of emails from people who actually want to sell t-shirts or some sort of printed shirt. Do you have any just advice for those people on just getting started in the t-shirt business?

Kevin: Just getting started. I mean honestly if I wasn’t — if I didn’t already have the resources and stuff that I have, I would pick a different industry, and apply my knowledge there. It just so happens that we are making it work because of the head start. But yeah I would say the thing to do would be to have a [inaudible 00:45:48] of your brand as opposed to like be the prevue of funny graphics shirts right? Because that’s just — there is a million of them.

Steve: That sounds like a nightmare.

Kevin: Yeah exactly.

Steve: I mean I like your niche because 80stees, I actually did some searches for 80stees on Google just to see what the other — what your competition was like. And it seems like you have the largest collection, from what I could tell at least.

Kevin: Yeah I mean we definitely try to be that way too, and we literally look at it like we have to have coverage of a specific category. So like with super Mario we’ve got to have the super Mario two and the super Mario three shirts, because those were also released in the 80s that type of thing.

Steve: Yeah for sure. Cool man, well that’s really interesting. I always wonder how business owners in pretty competitive industries manage to make it work. And it sounds like you found like a really good niche that’s really profitable that you’ve made it work. So thanks for your insights Kev. If anyone can find you who wants to ask you any more questions about the t-shirt business, or if they want to buy some 80stees, where can they find you?

Kevin: Well the domain starts at 80stees for the actual site. And then I’m going to have a site up at Kevinstecko.com if anyone wants to just personally get in touch with me.

Steve: Cool, I actually did not know about that site, I’ll have to check it out.

Kevin: It doesn’t exist as of the time we are talking, but it will.

Steve: Okay all right, it will be up by the time I publish this?

Kevin: Yes.

Steve: Cool well thanks Kev, thanks for coming to the show man, I really appreciate it.

Kevin: All right man, thanks Steve, take care, bye, bye.

Steve: All right, take care.

Hope you enjoyed that episode. If you remember I had another guest on the show Derek Pankaew to talk about his t-shirt business, and it’s just interesting to compare Kevin stories with his, because they operate completely differently.

For more information about this episode, go to mywifequitherjob.com/episode139. Once again I want to thank sitelock.com for sponsoring this episode. If you have an e-commerce store, go there right now, and find out how long it takes to load. Does it take more than five seconds? If so did you know that 60% of consumers only wait up to five seconds before bouncing from a site, never making a purchase?

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And once again if you are interested in starting your own online business head on over to mywifequitherjob.com, sign up for my free six day mini course on how to start a profitable online store. Sign up right there on the front page, and I’ll send you the course via email immediately. Thanks for listening

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

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

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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 have Mike Brown on the show. Now Mike is someone who I was introduced to through Tommie Walker who runs the Shopify Plus blog. Normally I don’t actually interview referrals who I haven’t met, but Mike has an amazing story.

He runs the popular coffee brand Death Wish Coffee, which even has its own Wiki page which I found out while I was doing my research. His company has been featured in countless publications, and he even had an ad in a super bowl which is pretty cool.

Normally I wouldn’t necessarily advise anyone to go into the coffee business, because it is extremely competitive and quite saturated, but Mike made it work with a very unique value proposition. With that welcome to the show Mike, how are you doing today man?

Mike: I am great, thanks for having me here.

Steve: Yeah, so I did a bunch of research on you prior to this interview, but please give us the quick background story, and tell us about Death Wish Coffee, how you got started in the coffee business.

Mike: I was a [inaudible 00:03:03] right out of college, and I worked for the city of New York in the controller’s office, and I realized real quick that wasn’t for me really. I got to study forensic behind a desk all day look inside like bank accounts, so I just took time off. I tried to figure out what I wanted to do and I’ll hang out of coffee shops a lot. I sat there, I decided, hey maybe I’ll try and start my own coffee shop.

Steve: Just randomly or?

Mike: Yeah right away, I wanted to learn about business, learn how to run a business, and the coffee business seemed pretty simple, just making coffee and sell it to customers that walked in.

Steve: So this is a brick and mortar coffee shop, right?

Mike: Right, a brick and mortar coffee shop. I tried to start a couple; it didn’t really work out so well. Then I finally found a company, I found a guy that wanted to sell his coffee shop, this is in 2008 when everything was kind of turning sour for everyone.

I got a decent deal on it, but at the same time it’s not a great time to go on business by yourself, so I started losing money head over face. I learnt that running a business wasn’t as simple as putting products on the shelf and hoping people will walk in.

Steve: Was this because your coffee shop was just like every other coffee shop, and was it like the rent that was pretty much dominating your costs?

Mike: Yes, certainly a grey area, but yeah the rent was high. Actually the employees, that the cost employs it, that was always the highest expense on my books just keeping people behind the counter, and yeah it was like every other coffee shop. I mean we tried to differentiate ourselves a bit by offering fair trade organic products, and some local products, but I don’t think that was enough really.

Steve: Were you selling online at the time or no?

Mike: No, not at this time, it was just solely brick and mortar. I kind of made the big mistake of when customers came in and gave me a suggestion, I pretty much took everyone’s suggestion, I put on the menu. After a couple of years I had this menu that was like four pages long. Buying inventory was a nightmare, and just keeping stock was a nightmare and things would go bad.

It was a big mess throughout; I realized I was going to lose money. It took me long to figure out how to run the business and what decisions I should make to make the business a little bit more profitable.

Steve: At the time it wasn’t called Death Wish Coffee either, right?

Mike: No, it wasn’t, it was called Saratoga Coffee Traders. It still exists in Saratoga Springs New York. The menu is a lot smaller now; really kind of learned to kind of focus on our best products.

Steve: How did that evolve into Death Wish then?

Mike: As I was struggling with making ends meet, I started doing whatever I could to learn more about business, to learn more about making money so I could keep the coffee shop always open. I started reading a lot of books about selling online, and that really caught my interest. I had an idea for this coffee by customers actually coming all the day, and every day and ask for my strongest cup of coffee.

I was always like do I give the dark rose or do I give them the coffee that the most caffeine, which sometimes isn’t the dark rose. When I knew what they were looking for, the taste, but they also wanted the caffeine as well. I put together a dark rose to have a lot of caffeine, and put our scary label on it. I sat down one day after work and made up this website, and I called it Death Wish Coffee.

Steve: What was the website, was this your own personal ecommerce store at the time?

Mike: Yeah it was. It was deathwishcoffee.com, it still is today. It looks a lot different now than it did when I first made it.

Steve: Sure, what platform you were on, just curious?

Mike: I was on Weebly.

Steve: Weebly, okay wow, and then what is it on now?

Mike: Now it’s on Shopify.

Steve: Shopify, okay of course dah, tell me about that.

Mike: I put these websites together, and I made the logo myself and put some software I got at Staples. I had the coffee, I knew what the coffee was going to be, and I knew what– I had the logo online. I didn’t actually have a product at the time put together. It wasn’t until I think a few weeks later when someone actually went on my website and bought the first bag.

I was like okay crap, now I need to put these products together, so I went back to Staples, I got some stickers, I got a coffee bag. I put together the beans out of my coffee shop and I blended them together the way I’ve been testing and I sent it out, and I got a good review. From there I sold a couple more.

Steve: How did that first customer find you, just curious?

Mike: On Facebook ad.

Steve: Oh you were running ads to a site when you didn’t even have a product?

Mike: Exactly yeah. I really wanted just to test it out first to see if it would sell. I did some testing on the product search. I had the product, but actually I didn’t have the packaging or anything, does that make sense?

Steve: Yeah, yeah of course. Okay, so you had already developed this really strong blend of coffee.

Mike: Mm-hmm.

Steve: And you were actually probably serving it in your shop?

Mike: Yeah, I was testing it out on my customers in the coffee shop, and they were loving it.

Steve: Okay, so you run Facebook– can describe what that first Facebook ad looked like?

Mike: It was a sword and cross bones, and I believe it said something along the lines of do you like strong coffee, click here pretty much.

Steve: And it just led to your site, you only had one product on the site?

Mike: Yeah just one product and actually still we don’t have many products. We just focus on our signature brand, our Death Wish Coffee. We do have 2 other brands, Walhalla Java and Belvolene [ph] coffee, but our focus is very more of I don’t know, I guess I want to say a separate basic, they are like a separate project off of the Death Wish Coffee

Steve: Okay and I actually looked around for strong coffee and there weren’t a whole– I mean there is a lot of people who sell coffee, but I couldn’t find a lot of people that specialize in the strongest coffee. Would you say that that’s the main reason why you’re standing out?

Mike: I think so, yeah, because at the time when my customers were asking me for strong coffee, I went on Google, and I was like, hey if I could find I’m the strongest coffee out there, and amaze my customers with it one morning, they are going to think I’m great, and consider even coming to my coffee shop.

When I goggled there was nothing, at the time there really wasn’t any strong coffees available. And the ones that were available they weren’t — I have had them before, and they weren’t that great. So that was the light bulb that went off. I was like; okay I can make this and sell it online.

Steve: So you have your site now and you are driving Facebook ads to it. Meanwhile you are still running your brick and mortar coffee shop, right?

Mike: Right.

Steve: So when did this shift happen and how did it happen?

Mike: So the shift happened when I decided to really focus on — I won’t even say focus, really good consistent on marketing like my new coffee brand. Actually one of my barristers was quitting and I’m like — she said, I’m like what are you going to do? And she goes like, well I don’t have real shares, I don’t want to be behind the counter being a barrister any longer.

And I said, well I got this new coffee project I’m working on; it’s an online coffee company. I’ve got a couple of sales; I’ve got some good reviews I think it can really take off if I really put some focus on it. So if you wanted to just work on the computer every day, and just post on social media, pay attention to the Facebook ads, pay attention to the different social platforms and kind of get a conversation going, I think that would be valuable.

And once she started doing that, that’s when it started to take off. When we started working on it every single day and actually I wrote out a template for her. I’m like here is a template, just a letter. Send it out to influencers, people online that have a lot of followers, or they have a good blog, or that have a good following, and see if they want to review this coffee and…

Steve: Can you talk about what was in that letter or template?

Mike: Yeah, of course I have it somewhere, but actually I know I’ll look it for now. But yes said something along the lines of we’re big fans of what you do. We have this great product; it’s got a lot of great reviews. Our audience is growing and we would like to see if you would like to try our products and possibly write a review. If so we’ll share the review with our audience.

Steve: So these were coffee blogs?

Mike: No actually, never really focused on coffee blogs. We focus more on blogs that had cool innovative products like one of the blogs…

Steve: What was your biggest here, what was your biggest feature at the time like your first early feature?

Mike: Well a blog called Cool Material…

Steve: Cool Material, okay.

Mike: Yeah they wrote a nice piece on us, and then…

Steve: And you pitched your coffee as like the world’s strongest coffee?

Mike: Yeah, we pitched it as the strongest coffee and I’m trying to remember exactly how this went, it’s a few years ago now. And it’s funny after Cool Material wrote about us, all these bloggers and news reporters, I feel like they all follow each other in some way.

So once one big blogger wrote, and I think it was a Cool Material blogger who wrote this blog piece. We started getting phone calls from other bloggers and other news reporters. And then in March of 2013 Good Morning America called, and were like, hey we read about your coffee online, we want to come up to your coffee shop and shoot a report…

Steve: Wait you didn’t do anything for that one, it was just — they just came to you out of the blue because of these blog mentions?

Mike: Exactly, yeah they came to me out of blue, they were like, they called me at 10 am, and I’m about three hours north of New York City where they are out of. And yeah they called me at 10 am and they are there by 4 pm, so I hardly had any time to prepare. And the next morning they actually opened their show drinking my coffee, and gave us glowing reviews and they said how much they loved it.

And then right after that, sales kind of took off right off almost to the point where it’s detrimental to my business, because we were selling a very small amount at that time, maybe 10 pounds a day. And all of a sudden we had thousands and thousands of pounds of coffee that we needed to fulfill. We didn’t have enough bags, we didn’t have enough coffee, we didn’t have enough labels.

I didn’t have enough staff; it was just me and my barrister, my former barrister. So I actually called customers out of the store to help me fulfill as much as I could, like place the orders for more coffee or more bags. It took me 30 days to fulfill some of these orders. I ended up refunding half the money. But what I did do throughout the entire time, I mean even though I got kicked off — I was selling on Amazon at this time too.

I got kicked off of Amazon; I got kicked off in eBay. But even though it took me 30 days to fulfill some orders and I had to give a lot of the money back, I always kept on good terms with the customer, and I was able to capture their information. So I was able to build my mailing list by about probably 30,000 people at this time. So even though the first six…

Steve: Okay hold on, so before the Good Morning America you already had 30,000 subscribers prior to the Good Morning America?

Mike: No, I probably had 20, but I think I gained another 30 right after.

Steve: Okay, so let’s back up then. So how did you get these 20,000 subscribers?

Mike: So one of the — from day one I’ve always had an email opt-in on my website, and I’ve always run campaigns to get people to opt-in to my mailing list.

Steve: These are Facebook ads?

Mike: Yeah mostly Facebook ads, I might have messed around with Google ads at the time. But yeah I was just trying driving people to our capture page, lead capture page. I think I was even…

Steve: So what were you giving away?

Mike: I think I was giving away free samples at the time of the coffee. That worked well, I mean it turned out to be kind of expensive, I mean it probably cost me about $2 for the coffee, and then another two bucks to send it out. So it just cost me four bucks a lead.

So I wasn’t making any money from the coffee, I was kind of investing just about every dollar of sales back into the business. But it’s working, it’s build there a good list and as that list grew I saw my revenue rising.

Steve: Okay that’s really interesting. So you started your list very early on giving away free coffee samples, that sounds really expensive. That’s like $80,000 worth of free samples?

Mike: Yeah, I mean I’m sure they weren’t all free samples, I’m sure some were like organic, that does sound like a lot at that time especially because I was broke.

Steve: Yeah, I’m sure this is overtime but yeah.

Mike: Yeah, that’s over a couple of years.

Steve: Okay so you would drive Facebook ad over to a landing page where you gave out a free sample. And then you would send it out, people would try it, and they would come back for sales. So I’m just curious how did you correlate the sales from those people back to your store?

Mike: I don’t think I understand the question. How did I correlate — how did I track that?

Steve: Yeah, how did you track it?

Mike: I don’t think I did at the time, I wasn’t tracking. But I was seeing growth on my mailing list, and I was — we would offer pretty much a deal just about every week, or we had some type of free giveaway, every week. So we sent out a newsletter. We could see as our list grew the revenue also increased, and we still do that today.

Steve: Who do you guys use for email provider?

Mike: Right now — we were using MailChimp back then, now we are using — I’m sorry we were using Constant Contact back then, we are using MailChimp now.

Steve: Okay and you mentioned that you got kicked off of Amazon, presumably you were doing merchant fulfilled then?

Mike: Oh yeah, yeah I was doing merchant fulfilled. Actually I was doing FBA, but then as my inventory ran out, I didn’t want the sales to stop, so I switched to merchant fulfilled, which wasn’t a great idea. But it took a little bit of time for me to get back on both platforms. Actually eBay was a lot of harder to get back on than Amazon believe it or not.

Steve: Really? Okay so when you get banned what happens? Like so Amazon banned you obviously because you couldn’t fulfill your orders and you had to cancel a bunch, right? So how did you appeal?

Mike: Right, you just write them letters, just call them up, talk to them. We had to put a plan in place. Pretty much draw up a plan that says why will this never happen again. Pretty much I just told them I’m just going to keep on FBA, and I’m not going to switch it back over to fulfillment by seller all the time, but on inventory and they record that.

Steve: Okay and in terms of when you first got started, did Amazon come first or eBay come first, or did your own site come first?

Mike: My own site came first. But if I had to do it over again I would recommend testing out the product on Amazon or eBay first before…

Steve: Okay and so when did you actually start selling on Amazon then, shortly after?

Mike: It is relatively shortly after. I don’t remember exactly but I started in 2000 — end of 2011, I was probably selling on Amazon in 2000. No, I was definitely selling on Amazon in 2012 because I got one of those, I think they sent them out to everyone at the time. But there was one of those cards that said you are a top Amazon seller in 2012 or top holiday seller. I was so thrilled, and then everyone I know now is like yeah I got one of those too.

Steve: Yeah, but you were one of the early ones. So would it be fair to say that your Amazon sales were exceeding your own website sales in the beginning or?

Mike: They were about…

Steve: They were about equal?

Mike: They were about equal. I think the website was a little bit more just because I had that email list, and that’s a lot — I drove a lot of business that way.

Steve: Okay, let’s talk about your email list real quick. So did you have autoresponders, or were you just sending out deals on like a weekly basis?

Mike: I did set up an autorespond program; basically if someone signed up from my list they got a welcome letter, and then a couple like a week later they got a discount probably in the week. I think pretty minimum and it wasn’t based on any — it wasn’t really based on anything. They were getting them whether they bought something or not, you know what I mean?

I think now ours is a little more dynamic where if they don’t purchase, then they’ll get a reminder something like that. It’s sort of more complicated right now, but yeah back then it was pretty just — I think there was like three or four emails in the autorespond chain.

Steve: So I was just — was most of your business derived from email, would it be fair to say early on?

Mike: I would say possibly, I think most of it was derived from influencers writing blog posts about us. We were really able to really crash it early on, because people were reviewing our products and giving us great reviews online.

Steve: Okay so the influence — in terms of finding those influencers was it just basic outreach, did you use any services to do that?

Mike: Yes basic outreach, I would go on make a list of people I saw on like Twitter, Facebook just in news articles. I would go to like BuzzFeed, and I would like find their authors that go to New York Times, Huffington Post.

Basically anyone I could find, I would write — and don’t get me wrong most probably about 90%-95% of people wouldn’t respond at all or would say no. But between like 2% and 5% would respond and only a couple would say yes, and it really only takes a couple of people to say yes for it to have a big impact.

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So I’m just curious you mentioned early on that you didn’t really target coffee blogs. Is it because you were just looking for much larger publications, like what was the rationale for that?

Mike: I feel like coffee blogs at the time and even now they are more focused on really high — they are focused on a different type of coffee, I guess the specialty coffee, the third way of coffee, the high — I don’t know. A lot of specialty coffee is in the market right now. They are like the opposite of what our coffee is.

They try to get like the sweet floral and fruity notes out of the coffee bean where that’s not my coffee. My coffee is like the high caffeinated, you taste it and it wakes you up immediately. And I actually use Robusta beans in my blends. And Robusta beans are looked down upon in the coffee industry for probably the last 20 years. It’s just recently that they are coming around now.

I think it’s because there is such good quality of Robusta beans coming into the market right now. That there is actually Robusta coffee that isn’t even considered a specialty coffee by the SCAA, and only Arabica beans are. So the fact that I was using Robusta beans in my blends I avoided the coffee brands…

Steve: I think I understand where you are getting at, like there is similar things with wine, right? Yeah okay cool. So let’s — okay so how did the super bowl ad thing happen? So you have an email following at this point, you’ve been on Good Morning America. How did the super bowl ad thing come into play because that was huge, right?

Mike: Yeah, this is a giant. In 2014, let’s see 2013 I watched GoldieBlox; it was a company that made engineering toys almost like legos for girls. And I watched them when the super bowl commercial threw into its small business begin competition. And I was like — I saw that and I was like, wow if I could win that with this business, it would be the biggest splash ever of a cool product.

I think it’s the best product in the world, I know I’m biased, but I think it’s amazing, and I think everyone else would too. And in 2015 last year in June they decided to run it again. I saw I had come across my Facebook news feed, and I got my team around me.

Actually a lot of my team that stay with me now are the same people I pulled out of my coffee shop back in 2013 to help me fulfill the orders. But I pulled those guys around, and I hear they are in this competition again. We have a decent online following now, I think we can make a run at this, and they are like yeah let’s give it a shot and…

Steve: So what was involved in entering the contest?

Mike: Entering the contest wasn’t too bad. We had to make a profile like online profile, and join their social network called Own It which is a social network for entrepreneurs. It’s actually really cool and helpful, you should check it out if you are entrepreneurs. And we had to make — I guess two activities such as take pictures of my team, make a video, answer a bunch of questions, take some interesting surveys, and basically make an online profile that when people went to it, they would want to vote for your company.

And it was all about entrepreneurship and who embodies entrepreneurship better than I guess the rest. And it actually would have come — the companies that came down too at the end, they are all amazing companies. And it was almost like a big vote off towards the end where there was 10 finalists, and we all had to see who could get — drive the most people to our voting link to get votes for…

Steve: So let’s talk about that a little bit. So you obviously used your email list for that, but how did you — because I imagine every company at this point has huge followings right, I would imagine?

Mike: Oh yeah, one of the companies Chivies they make short reports. I mean they have a following like millions of followers on Facebook and Instagram, and yeah they have a giant following. We thought they were going to be — were going to run away with it. And as it turned out they didn’t make it into the final three with us.

There was us, there was [inaudible 00:27:57] a brick and motor store actually out of Buffalo in New York, they were in the top three as well. They hardly had a social following at all. They had a few good YouTube videos, but they just had the support of the community around them, around Buffalo and New York. And they had such a loyal following in their community that they were able to just drive consistent votes every single day.

Steve: How did you guys do it?

Mike: So we tried everything, everything, everything, but I’ll tell you what I think works. We weren’t able to see the actual vote count or keep track along the way. So we were able to kind of get an idea of what was going on by looking at Facebook shares on everyone’s voting links. So we could see each person’s voting link and through Facebook we could see how many shares each of those got.

So we kind of used that as a gauge there. We were doing bad in the beginning, and it wasn’t so we just used the strategies that we use to build the business to reach out to influencers…

Steve: Interesting okay.

Mike: So we used Zack Wild, we actually do coffee for – he’s got millions of followers online. We were able to work with him and his Facebook account, and his social media account to push our leading link to his fans.

Steve: Well was there any incentive for him to do that, or was he just doing you a favor?

Mike: No there was incentive for him because we do sell, I’ll probably call it Walhalla Java which is for him and inspired by him, and actually he has all the branding rights on it. So he gets the royalty from that. So if we wanted, it was going to be good for him, and it has been great for him.

Steve: Okay.

Mike: Also Lisa Kelly from Ice Road Truckers, and the whole Ice Road Truckers crew, they helped us out of time and…

Steve: These are like major TV shows right, I mean Ice Road Truckers…

Mike: Yeah.

Steve: Yeah okay. How did you hookup with them?

Mike: Somebody on my team had a good relationship with their manager, or developed a good relationship with their manager. And yeah we started talking and they helped us out pretty much out of the kindness of their heart, there really wasn’t much in it for them. I mean we sent them coffee when they wanted, and we sent them sweat shirts and t-shirts and stuff, but they helped us out at the time, they are really good people.

Steve: So it sounds like a lot of what made Death Wish Coffee successful was like the people relationships that you developed in the outreach if you were to just choose one thing that voted you guys to the top, is that accurate or?

Mike: Yeah, that’s very accurate yeah. And I think right now when I think to have this win as we have some like crazy loyal fans who are amazing, and they are like huge brand ambassadors. They go above and beyond for us and not only voting, but they start their own campaigns and even get their own social campaigns going to try to get people to vote for us.

Steve: How did you get those fans? Was there anything special that you did to get those raving fans?

Mike: I think it was cool like logo cool brand identity, that’s part of it. But also we have pretty much of a no bullshit policy here where our number one value is customer satisfaction. If the customer isn’t satisfied they get their money back right away, and we’ll go over the top to make sure they are satisfied.

So not only that, our customers are always happy one, and we always try to over deliver and under promise. So everything we do we try to just kind of go above and beyond so when a customer gets the product they feel like they are taken care of. And we follow up with them afterwards to make sure they are happy, if they are not they get their money back.

It’s those things that we hear day to day; hey companies don’t do this anymore. They don’t really care about the customers, but you guys do. Like I have a customer service team, there is three of them right now, and that’s all they do all day is they not only reach out to the negative reviews. They reach out to every positive review, every question, every — yeah they are amazing.

Steve: Actually what I was trying to get out was are you guys actually putting out content also that people are consuming that really makes them huge fans, or is it really just about the product itself?

Mike: We put out some content, not enough I don’t think, but we would go over things to put out content. Our customers put out a lot of content which is even better…

Steve: Interesting.

Mike: Yeah they make content nonstop, and there is always — I always see my Google alerts newsfeed like a new piece of content, or a new video that one of our customers created on YouTube or something. And yeah those are…

Steve: So what do they talk about in this content — like if they put out a video, are they are just raving about your product?

Mike: Yeah they are really raving about it, or they are doing some type of challenge with our product like eating coffee grinds, yeah it sucks. Sometimes it’s like irresponsible stuff like how much of this coffee can I drink before, or really like makes me sick or something. I don’t know so they do crazy stuff sometimes. Most of the time it’s just they drink this coffee, and I don’t know like a rainbow shoots out their butt and they fly over the clouds. I don’t know they make some crazy stuff.

Steve: Okay and this is probably just the tribute effect that you have the strongest — you are known as the strongest coffee out there, right? So that kind of sparks off all these interesting pieces of content that people produce?

Mike: Yeah, absolutely.

Steve: Okay, so let’s talk post super bowl. So you get this ad, how do you prepare for it, and how much did your sales spike as a result of it?

Mike: So we found out in late November that we had won the competition. And we were super thrilled, but they were like okay now we really need to focus because how much coffee are we going to sell? Can our website handle this, can we produce enough, can we — there was all these questions. Is customer service going to get overwhelmed? We don’t want to get kicked off of Amazon again.

Since we got kicked off of Amazon in 2013, I had worked to make the business as scalable as possible. So we started working with fulfillment centers. So we didn’t fulfill our own products anymore, we had fulfillment centers do that. So we had to contact our fulfillment center, let them know. I actually made a list of every part of my business that would be affected by an increase in traffic, and came up with a worst case scenario, best case scenario, and probable scenario, and different steps to take at each one.

Steve: Okay, what was the actual scenario and — like first of all what was the increase in sales?

Mike: So the increase in sales once the commercial went live — and actually went live about two weeks before. They released the commercial on CBS This Morning — I think it’s CBS This Morning. Yeah they released commercial two instances before on CBS This Morning, and right from there we saw initial spike in sales.

Steve: Are we talking like 10X, 20X, 100X?

Mike: I think it’s probably about 10X to 15X on that day. But the day of the actual super bowl we did about 25 times of what we typically do on a day.

Steve: That’s crazy okay, and so at this point had you changed your website over from Weebly to Shopify or?

Mike: Yes, yes, yes, we were at Shopify at this time. We called them up, they had a team of 12 just waiting to see what happens when the commercial went live, and to handle any problems. We were able to follow the stats online through our…

Steve: And then you guys had enough coffee, because you had 4 months to prepare for this?

Mike: Yeah, we had to reach out to third party rosters to help us with the roasting process and packaging. But yeah we were able to get enough coffee everywhere our inventory channels where we didn’t run out. At the time of those commercials we had 125,000 people hit our website at the same time.

Steve: That’s crazy.

Mike: Yeah, it didn’t crash, it stayed up. That was a big — we celebrated for that. And then…

Steve: You– sorry go on.

Mike: Then after that sales were so good for — I mean it’s still good right now. They leveled off right around four or five times than they were before super bowl, so I have a business now that’s pretty big. It’s pretty big compared to where it was just a year ago today.

Steve: So wow okay, so the super bowl ad – you had already prepared for by using a fulfillment house. And were you using that fulfillment house prior to winning the contest, or were you still fulfilling everything yourself?

Mike: Yeah, but prior to the contest we were using the fulfillment center. We started using that at the beginning of– probably in the middle of 2014.

Steve: But you guys still have to pack up the coffee right, or were you still doing that yourself?

Mike: Yes.

Steve: Okay.

Mike: Yeah we package the coffee here, we put it in the case packs, and we send it down to our fulfillment center. From there the individual orders come in, and they ship it directly to the consumer.

Steve: So do you have a huge team then to do this packing at your own facility?

Mike: No, not a huge team. A year ago we had six — there were six of us. And now there is 14 of us. And on the production side there are– let me see, there is about seven.

Steve: Okay, I’m just trying to think like if you are getting like 100X sales or 25X sales during that stretch, I guess you had time to prepare, right? So you probably stock piled a bunch of stuff?

Mike: Yeah, we had time to prepare and at that time we were actually working with two third party rosters who were helping us roast and pack. Now we started to bring all that back in-house, we have invested in new equipment, two packaging machines, a new grinder, and we made some improvements on our roaster too.

Steve: Okay, and so a post super bowl like has your strategy changed at all?

Mike: We focused a lot of — a little bit. We’ve been focusing a lot on making those onetime purchasers regular purchasers. We want to get our frequency up, our products sometimes can come across as gimmicky, or I don’t know. I’ve heard some people figure as something you’ll find in Spencer’s and it’s really good coffee, and we really want to focus on getting those repeat purchases.

Steve: So how do you do that?

Mike: Well we started; we put a subscription platform in place.

Steve: Okay nice.

Mike: Yeah both on our website and on Amazon. And that’s a great route to — just in about a year I think we are up to like 6000 subscribers with…

Steve: How does that work? So they pay upfront for like a whole year, or they pay monthly?

Mike: Oh they pay monthly right. They just put in their payment information, and they get charged monthly at a discounted rate. And it just gets automatically shipped to the house, so they don’t have to worry about ordering coffee every month, it just shows up.

Steve: Okay, that’s very nice. And then for the other people who aren’t on the subscription plan are you just sending out emails to get them to join the subscription. Like what’s your strategy for acquiring subscription customers?

Mike: Yeah we have actually – it’s actually not released yet. But other than the discount there is a subscriber only deals that they can get on merchandised ads on exclusive releases that’s only available to them. And we would let our customers know through our mailing list…

Steve: Okay and then all this stuff is all done through Shopify, through some sort of add on?

Mike: Right, yes all done through Shopify apps. [inaudible 00:39:50] is a good company we work with and we have a good relationship with them. And they really do pretty much what we want most of the time, it’s fantastic.

Steve: Are you guys still running Facebook ads and Google ads?

Mike: Yeah. We still find that’s our best — I mean in my opinion that’s — I can’t quote the number here, I think Facebook ads have the best return on investment, other than maybe a super bowl commercial.

Steve: Yeah, other than a super bowl commercial. Real quick though on your Facebook ads like who you are targeting just curious. Like you are obviously targeting people that reach your website, but in terms of new customers how are you getting them?

Mike: We do look alike audiences. We do sometimes even competitor look like audiences, sometimes we do — we are always trying different things out.

Steve: What’s worked the best?

Mike: I mean re-targeting probably is the best, but yeah I mean other than re-targeting I guess look a likes or friends of our customers.

Steve: I’m just curious like when you are running these ads, are you still running them directly to your shop, or are you running them to content pages?

Mike: Right now I do them direct to our shop unless there is a specific goal we have in mind. If we are trying to build a mailing list we can send them two piece of content. But at this exact moment in time I think we are running — I think it’s some retargeting. Or somebody goes inside a product and they don’t buy it, they get retargeted with that product and there are news feeds somewhere.

Steve: I’m just curious are you still giving out free samples, or did you just stop doing that long ago?

Mike: Well actually we stopped doing that yeah. I mean we do it at events and stuff now when we go out like physically to events around the country, but yeah not online. We do have a free or we do have 100% money back guaranteed. If somebody is not completely satisfied with the product, I tell them, “Hey if you just want to try it, just buy it and if you don’t like it let us know, we’ll give you your money back,” it’s not a the big deal on our part. If you are trying the product we like to think that you are trying it to buy it anyway, so there is really no risk.

Steve: I’m just wondering how your Facebook ads have kind of evolved, like in the beginning you were trying to get leads by giving away free coffee. Like how has that evolved, is your brand name good enough now that you just put out an ad and link into your shop and people just buy?

Mike: I think it’s funny though, it’s changed a lot, because I don’t do it anymore and so…

Steve: Okay, so I’m asking all these specific questions around the campaigns, okay.

Mike: Cane a guy that works with me on my team. He handles our Facebook ads and most of our advertising. And we work with a consultant who works with us to try different things out and try to optimize it, so we have the most return on investment.

Steve: Okay, are you guys still doing Google ads or no?

Mike: Not as much, a little bit, but no not as much, they got really expensive.

Steve: Yeah, because I would imagine like coffee keywords is just ridiculous I would imagine.

Mike: Yeah they are ridiculous, and it turns out we ended up — yeah it just seemed like a lot of keywords we were targeting weren’t working out as planned, and like some of them got expensive so – a little bit on the fence. Like for a while we were targeting like our own branded keywords. I mean that seemed to be doing well but…

Steve: You would probably write number one for those anyways but yeah.

Mike: Exactly so it’s always like am I just throwing money away here or not?

Steve: So let me ask you this, so I mean a lot has happened over the years. And if you were to start a coffee business from scratch today, like what advice would you give? Because it is still a saturated niche, so how would you have done things differently, and what things would you have done the same?

Mike: You definitely want to stand out. So I won’t do that the same. I probably would have done more testing in markets that are already setup before I went ahead and created my own website.

Steve: So what does that mean exactly?

Mike: I mean the first thing I did when I started my brand is I went and I spent money to build the website. I didn’t spend a lot of money, because I did it myself, but there was still money like signing up for the Weebly platform. I could have just made the product and put it on Amazon, and done the same thing, and it wouldn’t have cost me anything.

Steve: Okay.

Mike: Definitely I would have started the mailing list like I did, maybe focus on that even a little bit more. I think that’s — I think there is still tons of value there even with the changes that Gmail and I think will be happening in the future, where people will be able to kind of get ads out of their news — out of their email. But I still find there is tons of value there, I might focus a little more on Google ads in the beginning, I think they are so worthwhile at the time.

Steve: What type of ads like AdWords or Google shopping or what type specifically?

Mike: I was using Google AdWords back then.

Steve: AdWords, okay.

Mike: I think we are doing more Google shopping now, but I can’t seem to get results I want with that so…

Steve: Interesting, okay.

Mike: Yeah it just requires more work, a little more work on it.

Steve: So influencer marketing would still be your number one?

Mike: Oh yeah anything free. The free step I think is the best. We do influencer marketing, yeah that’s by far the best. What are some of the free — I had a whole — there is this book actually out there, it’s by Jim Cockrum, it’s called 101 Free Marketing — Online Free Marketing Lessons or something.

It’s by Jim Cockrum. I actually went through that book about six times, and everything I tried in that book was knocking out a product, and it didn’t cost any money. So I mean the return on investment there was surreal.

Steve: Amazing okay, so you didn’t really have to compensate these influencers that much outside of giving product away?

Mike: Yeah no I didn’t pay them anything, I was just kind of showing a new product, giving them some content that they were looking for at the time. I think that the game might have changed a little bit now I think influencer marketing is more of a popular term than it was back in 2012.

Steve: Sure oh yeah definitely. So in terms of — I imagine you were getting back links this whole time also right whenever you got published?

Mike: Yeah, I never focused on SEO or back links. I mean I’ve kind of started to look into it more now, but at the time I was just kind of focusing on my product, my customers. The content I was putting out there wasn’t like — there was no strategy behind it. I was just doing what I thought was best for my customers.

Steve: So is search like a significant portion of your sales, or not so much mostly social influencers and that sort of thing?

Mike: Well we get a lot of traffic from search definitely now, and we just started working with an SEO Company to help us learn how live it more now. They’ll hopefully sign to it because a lot of the content we have is great content, it’s just not like optimized for anything.

Steve: Okay cool man. Well it sounds good, the subscription thing is going to be huge I would imagine. Because then yeah you got this customer, and they are just paying you every month for life.

Mike: Right, the trick there is to get them to stay on, and to continually provide more value month and month out, so that’s been a challenge for us. As many subscribers as we have there is been good amount that’s dropped off, just because all the value must not have been there. So we are revisiting that, and we are putting together a pretty cool platform where they are able to get a lot more for less money.

Steve: And I would imagine once people try your product and it’s really strong, they can’t really go to any other coffee brand after that, right?

Mike: That’s what I hear.

Steve: Because your stuff is like crack.

Mike: That’s all I drink.

Steve: Cool Mike, I have had you on the show for over 40 minutes, and I want to be respectful of your time. Where can people find you, and where can they actually try some of your coffee?

Mike: So if you are located in upstate New York, that’s where I am from, all the New York and Connecticut area, or you just moved in to over 100 price choppers. If you are not in upstate New York, but anywhere else in the world you can go to Amazon, or usually you can just type in coffee, we are usually the number one two or three coffee on Amazon just about every single day. And you could also look through deathwishcofee.com, and signup for our mailing list, you’ll get tons of free stuff with every order.

Steve: That’s awesome mike, well hey I really appreciate you coming on the show, it was great.

Mike: Yeah thank you so much, thanks for having me.

Steve: All right, take care.

Mike: Bye, bye.

Steve: Hope you enjoyed hearing about Mike’s incredible story. And here is the important take away; if you are going to go into a competitive niche like coffee, you better have a strong value proposition. And the reason mike succeeded was because his coffee was the strongest.

For more information about this episode, go to mywifequitherjob.com/episode133. Once again I want to thank sitelock.com for sponsoring this episode. If you run your own hosted online store or any website for that matter that handles monetary transactions, then you should definitely give SiteLock a look. They can also help your site with site speed issues as well, and did you know that ecommerce sites that take longer than 5 seconds to load often shed customers.

Now SiteLock offers a service called TrueSpeed which is a content delivery network that can increase download speeds by up to 50%. So go ahead and check out SiteLock today at sitelock.com/mywifequitherjob. Once again that’s sitelock.com/mywifequitherjob.

Once again if you are interested in starting your own online business, head on over to mywifequitherjob.com, and sign up for my free 6 day mini course, where I teach you how to start your own profitable online store. So go to mywifequitherjob.com, sign up right there on the front page, and I will send you the course via email immediately. Thanks for listening.

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