Audio

042: How Jordan Guiterrez Started A Million Dollar Medical Equipment Business At Age 17

Jordan Gutierrez

When I was 17 years old, I was more worried about getting good grades and meeting girls than starting a business. But Jordan started Laleo.com at the young age of 17 and turned it into a 7 figure business.

What’s even more impressive is that Jordan is now the COO of Wishpond.com which is a very successful Internet marketing company that competes directly with businesses like LeadPages.

He’s a really sharp guy and there’s lots to be learned from both his attitude and his experiences. Enjoy!

What You’ll Learn

  • How Jordan guided customers from EBay back to his site in the beginning
  • How to compete against Amazon
  • How Jordan got people to buy books even after Google launched Google books
  • Jordan’s strategy for expanding word of mouth
  • Jordan’s Alibaba strategy
  • How to use gamification to grow a business
  • Jordan’s Facebook strategy
  • Jordan’s philosophy on going to college and working a day job versus starting a business

Sponsors

Other Resources And Books

Transcript

Steve: You are listening to the My Wife Quit Her Job Podcast, where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now this isn’t one of those podcasts where we bring on famous entrepreneurs simply to celebrate their success. Instead I’ll 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 enter my podcast contest where I’m giving away free one on one business consultations every single month. For more information go to www.mywifequitherjob.com/contest, and if you are interested in starting our own online business, be sure to sign up for my free six day mini course where I’ll show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com for more information.

Now before I begin, I just want to give a quick shout out to this episodes sponsor 99designs. Now originally I wasn’t going to take any sponsors at all, but 99designs caught my eye because I suck at design. And in fact when I first started my online store back in 2007, the design for my website was terrible and I had absolutely no idea who to turn to. Now fast forward to today, 99designs is a site where you can provide a description of anything that you want designed whether it be as logo, a web page, a t-shirt pretty much anything and have dozens of designers compete to deliver you the best design possible. And by best I mean that you get to choose your favorite design among dozens of submissions from a pool of over 315,000 designers. So if you are design challenged like I am, I highly recommend that you go over to 99designs.com/mywifequit.

And if you use that link and tell them that Steve from mywifequitherjob.com referred you, your design listing will be bolded, highlighted, given a prominent back ground, and featured before all regular listings so that your request stands out among all of the designers. And in fact this special offer is worth 99 dollars. So if you need a logo, website, t-shirt, business card or anything designed, go to www.99designs.com/mywifequit. Now on to the show.

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

Welcome to the My Wife Quit Her Job podcast. Today we are going to be talking to Jordan Gutierrez who is one of the younger entrepreneurs that I’ve actually ever heard on the show. Now Jordan started his business at the age of 17 that grew into a million dollar plus business. Now Jordan exports medical books and supplies throughout Mexico and other parts of Latin America. His company is called Laleo.com and is the Amazon.com for medical equipment in Latin America, and in fact his path has a lot of parallels to the way Amazon.com got started. And today his company is the largest distributor for medical books and medical equipment in Latin America.

Now what’s cool about Jordan is that he ran this company while still being a full time student, and today actually he is the COO of Wishpond.com which helps customers create high converting landing pages, contests and promotions, and you know Jordan`s really got an interesting story because I know when I was 17 I was more worried about girls and getting into college than starting a business, but Jordan is clearly a special guy and with that welcome to the show Jordan. How are you doing today man?

Jordan: Good. I`m good how are you?

Steve: Good, I`m doing really good. So, let`s talk about Laleo.com first you know, how did you come up with this idea and what exactly do you sell?

Jordan: Well, everything started back in 2007. I was 17 at the time, I actually went back to– I moved to Canada when I was 15, so every summer, every break I would go back to Mexico and just try to do something. I was three or four years old, I always got involved in businesses. My first business was– I start selling candies to my friends and then I actually hire my friends to sell candies for me. And then they actually got together and because I was paying them like nothing like two cents per hour, or something like that, they asked for a raise so I have to fire them.

So even since I was like three years old, I have had to be able to strikes and unions and you know fighting with your friends you know. At the end everything ended up really well because, they forgave me and you know they are still my friends, but I’ve always been interested in business and you know making money. Since the moment I moved to Canada I always wanted to do, you know online business because in a way it was the only job I was allowed to do when I was in Canada.

Steve: Okay.

Jordan: So, I tried a lot of things; affiliate markets, selling stuff on eBay. I`m actually a You Tube partner; I teach chess on You Tube and I get like $5 everyday or something like that.

Steve: I`m sorry you pitch what?

Jordan: I teach chess.

Steve: Chess, okay got it. Okay.

Jordan: So I just show you how to play chess and I– good moves and stuff like that. So I try everything and in that specific day I was in Mexico. It was summer and I bought a coffee machine, like a big coffee machine, and then I went to a sub way, I plugged the coffee machine into the public electricity and start selling coffee in the streets. Just you know it was kind of weird because, you wouldn’t see that in the states or Canada, but in Mexico you are just like you know right now it makes sense.

Steve: Okay.

Jordan: And then I was selling coffee and I noticed that I was in an area that was full of builders and they had a different accent, like they speak Spanish, but they have a different accents from different cities. And I asked them why are you doing– what are you doing here? Why are you here? And they were saying that they would come all over Mexico just to get medical books and medical equipment and then they would go back to their home community. I was like why don’t you buy them online? This is 2007, so it wasn’t as easy to buy stuff online as now.

Steve: Okay.

Jordan: And they were like– well there is no way to buy them online. There was something called MercadoLibre, which is Mexican eBay. So that’s the only thing around. I was like okay this is cool, so I actually exited my coffee business making and I sold my coffee machine for like 400 bucks. And with that money actually went to a book store and I bought a couple of books you know I asked for what are the most popular books. I bought them and I put them on eBay. You know to…

Steve: On the real eBay, or on the Mexican eBay?

Jordan: Mexican eBay like…

Steve: Okay got it. Okay.

Jordan: And I actually sold them relatively fast. So, I was like okay this is interesting, this is good business. I bought a couple of more books, I sold them online and I’m like this is cool. So then after that I decided to learn a little bit of html to actually create my own website.

Steve: Okay.

Steve: But, learning html and creating a full website ecommerce is a huge– is completely different, right?

Steve: Right, yeah.

Jordan: In 2007 to 2009 well yeah, the beginning of 2009 I was actually learning how to do everything, how to you know ship books, how to you know do the business. I was also a full time student. In 2009, I actually hired a guy to create my website in osCommerce.

Steve: Okay yeah. That’s actually what I started out with yeah.

Jordan: Yeah, like osCommerce back then was huge. And that was the only you know, the only software that I actually knew back then. So I hired this guy who was a police officer, he decided that he didn’t want to be a police officer, so he started making websites.

Steve: Okay.

Jordan: He didn’t know any coding like he just– he is always [inaudible 07:44] and then there you go.

Steve: Sure.

Jordan: So we got him. I set of the books. I start selling online. I`m sorry I didn’t start selling online; I just set up the website in 2008 and then just start building trust. So it’s like I start telling all my MercadoLibre and eBay customers that I was actually selling directly now. So I started sending them there, I start putting the prices. I start selling some eBooks– some books and little by little I start growing.

Steve: This is your eBay business?

Jordan: Yeah. The eBay business because now we had a website right?

Steve: Okay, right.

Jordan: So I started sending people to the website, when we started growing, I started doing a lot of online marketing. I started reinvesting all the money on adwords, then Facebook, you know all the social media, all the newsletters like optimize everything. I would literally go everyday to the website and look at the website, and just keep optimizing, keep optimizing, keep optimizing and then after a while it`s like it started getting real.

Steve: Let`s take a step back real quick actually. Let`s go into each one of those points. So, while you were selling on eBay, how you did actually get people back to your online store?

Jordan: Well I had to cheat, right?

Steve: Okay.

Jordan: Back then it was really– they didn’t want to give you information.

Steve: Right.

Jordan: Every the time I would ship a book I would put a, you know a label with the eBook. I would put actually the name of the bookstore and I would try to email them. Most of the email that I used was the name of my book store– sorry of the website. So it was like Libreleo.com.mx@gmail.com. So they would actually see the full domain. So– it was kind of like not in the– not the approved way to send the users from eBay, because they want them to keep– buying from eBay.

Steve: Sure.

Jordan: But you know a kind of a sneaky way.

Steve: Well actually because when you communicate over eBay, actually the email addresses don’t get shared at all right?

Jordan: Yeah, and also like Mexican eBay is worse, like they would hide. If you put numbers they would hide the numbers. So it`s kind of like– it was hard, but at the end of the day I find ways to actually do it. Like again when you ship the book…

Steve: Mm-huh.

Jordan: A lot of advertising and I would say, hey you know if you buy on eBay it’s like 700 dollars– sorry 70 dollars. If you buy it on my website it`s like 60 dollars, and so I start pushing people from eBay and you know the thing I didn’t like it about eBay is like, I was really-really careful with my reputation and then, I think one day it was something stupid. Like I sent an email and it went to spam and then I got a zero star review, and I was like crying and like I`m never going to sell on eBay again. So it`s like after that I just said, okay let’s do this and just I`m going to go full time on my website…

Steve: So you got one negative review and you decided not to sell on eBay again?

Jordan: Well not one negative review like, I was actually taking care of everything. Like okay everything has to be able to support. We have to have the best support ever. We have to be really-really-really 100% like extremely good at support. You see in a Facebook review you see like ranking is like 4.9, so it`s got like 99% positive reviews at the start. So we were like super-super crazy with support, and then like all of a sudden you get a negative review you go sound like really bad mistake or something. It`s like– I was like literally crying. I was like super obsessed with my website. And when I got a bad review, I was like it`s not possible like, it`s not possible.

Steve: I have been there before, but yeah go on.

Jordan: It`s really-really frustrating, so after that I was like no more eBay. Everything is going to be in our own environment with our own terms, and we have to optimize everything and just make it really really nice and easy for users to buy from us, right?

Steve: Okay, yeah.

Jordan: So after that it was like keep optimizing, when we get start getting sales, then keep trying, trying, trying…

Steve: So how did you get your early sales actually, was that– was it from adwords?

Jordan: We started getting– you know we have a small user base report from Mexican eBay.

Steve: Okay.

Jordan: What we did is we started not sell– like we didn’t sell directly from the website at the start.

Steve: Okay.

Jordan: At first we actually– you actually had to call us to place the order, right?

Steve: Okay.

Jordan: So that actually started building a little bit of more traction, more traction and we actually took– the website was up in 2008 I believe. It took us to 2009, like May 2009 to start selling. So during that time I was actually looking for ways to make money and to actually start getting traffic, right?

Steve: Mm-huh, okay.

Jordan: I really had no idea how to do it. I tried like a lot of things from buying traffic to start paying doctors to put our banner in their website…

Steve: What are some of the things that you tried and tell me whether they succeeded or failed?

Jordan: Facebook, Google ads back worked really-really well. Right now it’s getting super expensive and is not as profitable as before. One of the things we did is– there were a lot of websites that offer free eBooks– free eBooks, right?

Steve: Mm-huh.

Jordan: Those are like shady web sites right. So, what I actually did is actually talked to those guys and offered them some money if they put our banners there.

Steve: Okay.

Jordan: So you know, we understood that piracy was going to be there forever. So like okay instead of trying to just defeat them and like send them nasty letters, let`s just work with them and you know hopefully people who go there, they go there because they don’t have access to the physical book. If we give them access, then they are going to start buying directly from us right? And we optimize a lot for SEO and the other thing that helped us a lot was Facebook.

Steve: Okay, how did you run your Facebook campaigns?

Jordan: Everything started in– we actually started doing ads in 2009– Facebook, but you know again back then it was huge. Nobody knew Facebook as a business, everybody knew Facebook as a user platform not as a business platform.

Steve: Okay

Jordan: The CPC was extremely cheap. One of the things we did is– what I see Facebook is if your community in the case of doctors, the community of doctors, right?

Steve: Okay.

Jordan: Your lifestyle is around doctors. If you are a doctor your friends are going to be doctors, the friends of your friends are going to be doctors, so everything is around medicine right.

Steve: Sure.

Jordan: There is one thing that keeps people together. So the idea is to find these people, these communities exist and bring them to it to the website. The one of the things we did is– you know from Facebook, is I send them to the website was really easy, we need to give them incentive. So for instance one of the things we did is you know Google eBooks– Google books, back then like my business partner was super scared because of Goggle books, he was like Goggle is already offering the books for free, we are going to be like completely screwed and it`s like…

Steve: Right.

Jordan: If Goggle is already offering the books for free that’s great for us, like let`s get the book and put it directly in our website. So every doctor would come and will actually read the product base and actually he has the entire Goggle books there.

Steve: So, I`m sorry, so you listed the Goggle books on your own website, is that what you did?

Jordan: Yeah.

Steve: Got it.

Jordan: Back then it was like why would you give them free eBook of the book you are trying to sell for hundreds of dollars on your website? But for me it’s like we actually want to bring everybody to our website, and then if you want to buy, then they are going to buy right. We even put a lot of publishers, small publishers to actually put their books on Google books because you know like we wanted all the traffic to go our website.

Steve: Okay.

Jordan: So, that was the first one. The other one that we did is we worked really-really hard on targeting. Like our email subscription newsletter.

Steve: Okay, how did you run that, can you give us some more details on that?

Jordan: Yeah so when you subscribe, instead of saying hey you can actually– like all these things are kind of like standard right now. Back then was like impressive. One of the things we did is when you signed up for our website; we would ask you okay you want to subscribe to the newsletter.

Steve: Sure.

Jordan: And then when you subscribe, we would ask you what is your medical field of interest? So we had like 36 different medical fields of interest, right. So if you are pediatrician or a dentist or a general doctor or anesthesiologist or whatever you are, you would actually have your own news letter. And every time we have a book or a new cluster of new books or products related to medicine or anesthesiology or pediatrics or anything…

Steve: Mm-huh.

Jordan: We would send you an email. So the emails were like completely extremely tailored for you. So it`s kind of like if you– if study with [inaudible 15:53] you don’t care what a dentist reads right. So we actually try to be as specific as possible?

Steve: Okay, so how did you do that? Did you use an email provider or was this something home grown?

Jordan: Yeah we started doing– I tried to go there myself, but I couldn’t.

Steve: Okay.

Jordan: When I had I used MailChimp.

Steve: MailChimp okay. So how did you segment everything, did you use the API or because the standard interphase is a little clunky, right?

Jordan: Yeah I just asked him, so it`s like [Inaudible] [00:16:17] and they say at first they would have to write like I don’t know, I`m a student but then at the end I just create a form and then they put their students and then I just exported the list to MailChimp, right.

Steve: Got it. I see, so as part of the sign up form that are pulled down, so then that’s how you segmented your list, is that…

Jordan: Yeah, yeah.

Steve: Okay got it. Okay.

Jordan: Little by little we sell like– download an Excel spreadsheet and just offload it to MailChimp and then– because they could type whatever they want; I have to actually clean all the database. So it`s kind of like a database of 500 people and I have to clean it.

Steve: Got it okay, I understand so you segmented it manually, so you created a different list then– okay got it, all right.

Jordan: Right now it’s a little different because we have engineers and everything. Everything is [inaudible 17:05] automation, right.

Steve: Mm-huh.

Jordan: So based on what you read, based on the books visit, then it’s like okay this guy is interested in these books and then we actually send emails automatically.

Steve: Okay and how do you send emails today, what platforms do you use today?

Jordan: We have our own platform.

Steve: Okay, its custom, home grown.

Jordan: Yeah.

Steve: Okay got it. How did you run you Facebook campaigns, I`m just a little curios?

Jordan: In the Facebook campaign the first thing we did is– I don’t know if you remember a company called Woot?

Steve: Woot, yes off course, they are still around I think.

Jordan: Yeah but they are not– back then they were like a little bit larger. Before we had like deal of the days we had this company that offer you one day, they would give you a really good price on one product. So what we did is we set up something called a special Thursday, so every Thursday we would have a price of a really popular book at our cost, like we would not make any money, like we would actually lose money on that product that day.

Steve: Okay.

Jordan: And basically we would get all the emails and we would send a blast email and then on Facebook we would put adds everywhere on Facebook and a lot of ads on our normal website. So it’s like everywhere you are going to see this is special day. Like this product is like 40% off like it’s a price, like you need to buy it. And it is like super implosive; I’m based on going viral. So that’s like we use Facebook to attract people to actually see the special Thursday, and then people will start buying and start sharing like crazy.

Steve: Okay.

Jordan: Like yeah. Usually we would– one example there is one book. Normally we would sell like 500 in one year. If we do it this way we would sell 100 in one day.

Steve: Okay. And then did you get their information because they purchased something or did you gather the emails and leads of the people that didn’t buy anything as well?

Jordan: Well mostly people who sign up right. Like even if they don’t buy it on that day we will actually– next time were going to have a larger list. Right, next time we’re going to have a larger list. The only thing that we started doing is we started, like again this is 2010, so people didn’t understand how this worked. We had on the special Thursday what we did with Facebook was, you click on the ad, we started putting Facebook ads and the ad would say hey this is special promotion that is like crazy, it’s only available for fans. And then you have to like to like it, right.

Steve: Oh yeah. They recently took that away right, I think it’s ending soon.

Jordan: They are going to take it away in like three months. But like back then and I wrote, like which one is going like based on like sweepstakes and stuff like that. Sweepstake for Facebook is a lot of that. Like you are going to enter the sweepstake you have to like us.

Steve: Right.

Jordan: I run back then normally, tabs on Facebook were used for starting and ligating and stuff like that, it wasn’t even HTML, it was Facebook marco. So it was like people were like impressed by that and you know we started growing our fans like crazy. You know back then, fans mattered way more than now.

Steve: Right, I guess.

Jordan: Most of the fans put senior posts right?

Steve: Right.

Jordan: So that was the first one. The other one that we did is we started doing a lot of things that were– again like a little bit cliché now, but like back then was like super crazy. Like a lot of viral things right. Like we would say okay during the welcome, first welcome, every time Mexico scores, we would give free shipping for the next four hours.

Steve: Okay.

Jordan: One of the things we did is like okay Mexico wins the world cup, we’re going to give 50% of the entire you know the entire book store, for a week or something.

Steve: That’s pretty safe bet though, right.

Jordan: Well it was– we actually have to buy insurance for that one. Like…

Steve: Oh you did, okay.

Jordan: It’s like okay Mexico wins the world cup your company goes out of business so. You are like okay, it’s pretty safe bet, but like it’s better safe than sorry, right.

Steve: Sure.

Jordan: So you know things like that. We also have the– what’s the name of this, the fan of the week. So you go to a website or Facebook and you take a picture with a– we started selling like USBs, like doctor USBs. If you go to our website, to our fan page right now, you are going to see the header is going to be a USB of a doctor.

Steve: Okay.

Jordan: So we started selling those, like people love them. And then we would say okay if you are the fan of the week, you take a picture of that doctor in a nice, you know in a nice picture, or like a nice setting or something and the picture that has the most votes is going to win like 50 bucks of which compray [phonetic] of leLaleo credit every week.

Steve: Okay. So in a way your strategy was kind of based on contests and promotions to kind of make the company go viral, is that essential.

Jordan: Not just on promotions, but the key here is because doctors are really a cluster segment. In like okay if you get one and you are one, then he’s going to tell all his friends. So he’s going to be– really-really-really flood the market. Right, like if you get in you are going to get the entire– all the doctors, all their friends and stuff like that.

Steve: Got it, got it.

Jordan: So our idea is not about contest. Yeah contest play a big part on it, but our main idea is like okay we need to impress them. We need to show them we have a super fast product, the best service, like a service that is never seen in Mexico before. Like Mexico is not a country that is you know, all it done the tourist destination is not like a country where service is super important but it’s like okay, there’s this company, this new company these days called Sapples [phonetic].

Steve: Yes.

Jordan: We need to copy everything they do. So you can’t like- I was also super obsessed with Sapple so the service, the customer’s service. Like it’s not new anymore, but like back then again it was going like oh Sapples. So we have to do like everything to make it like super fast. Like sometimes we just upgrade them for free, sometimes we put– you know upgrade the shipping cost for free. Sometimes we just put like free doctor stuff. Or like sometimes we say hey you know today is your birthday here free shipping, or like get some credit just today because of your birthday, happy birthday.

So more than contest it’s just to impress them, to make them feel like well this company, it’s amazing. Right, to start building a link, and once the link is built, it’s going to be really easy for them to go out and start telling their friends that we are great, right. Facebook allows– and Facebook and tweeter allows to actually do that you know. Another example we do is, we have the designers and our designers do is take hike raids [phonetic], timeline photos. Timeline images are amazing. And you know one of them is like you know not all super heroes need a costume right. And there is like a picture of a doctor, a superhero doctor.

Steve: Okay.

Jordan: and we’re like hey guys do you want to put these as your timeline image? You know feel free to put it. A lot of people like a lot of people use that and put them as their profile picture. And the profile picture has the Laleo logo.

Steve: Got it. Okay.

Jordan: This time they like are getting really-really in touch, really-really built that, really link strongly with them. That was the main goal, my main goal.

Steve: Okay. So if we can take a step back, how did you actually source the products to be sold, like where did you get them from?

Jordan: Well at first I actually, I would– you know people would buy them, then I would buy it. Well I have someone in Mexico who would buy it for me and then ship it. By then leo-Laleo was still growing-growing-growing and there was a part that we would actually be like we have to find a buyer that will supply us with the books. So we find these books, so I say okay.

We have the technology like it was really– relatively all book stores they didn’t have websites or anything. So we actually partnered together and say okay, you are going to supply me the books and costs and I’m going to give you equity, and there were like sure. Like we already have no idea, we are not going to get into the online marketing or anything like that, so that’s fine. So we give you the books and cost, we ship them for you and then you know we are partners. And then at the end of the day they actually– we grew together a lot and we became one.

Steve: So this book store is in Mexico?

Jordan: Yeah, it’s in Mexico.

Steve: So where did they get the books from? Are these American books or are these…

Jordan: Well we have– you know the publishers are American, Spanish, Europeans. They actually buy them, like they were established, relatively established book stores, right.

Steve: Okay.

Jordan: We could buy them directly to them from the source. And then– they are like drop shipping, right.

Steve: Yeah that was the model that you took right. So you partner with the book store, you handle the entire online component, and whenever you got an order you told the book store to ship it and then you guys gave them profit sharing or some sort of equity arrangement.

Jordan: Yeah.

Steve: Right, okay.

Jordan: But you know little by little we actually start merging more, so then we have the same offices and then we– right now we are the same.

Steve: Okay, so you merged together, got it.

Jordan: Yeah and it’s actually pretty good because you know there was a point that I need someone I could trust to be in Mexico. And if we have a partner– well if I had a partner in Mexico I could actually– all the bills there they could do it right.

Steve: Right.

Jordan: That would be just carry each other’s technology, marketing, no recharge. So like you know finding good books, finding new books, finding new products, finding all that other stuff right. The thing that I dint know about is books right. So like I didn’t know you know which is a good book, or which one is not going to sell and stuff like that.

Steve: Right.

Jordan: So I needed the help there. So I think having a partner that actually knows the product and you actually know the business side, it was a really good idea.

Steve: So is– with Amazon in the picture and other companies, how has that affected your company over the years. So you sell books as well as medical equipment is that correct.

Jordan: Boos, medical equipment then we have our own eBook platform, so we developed our own new platform.

Steve: Like a Kindle type of thing you mean, like a platform meaning?

Jordan: More like a bling flick. More like the eBook platform right.

Steve: Like a file format?

Jordan: Yeah file format and you can– it’s online all these, so you down load the eBook, it’s in your computer; it’s in your iPhone, it’s…

Steve: Okay right, but its encrypted in your own encryption format basically.

Jordan: Yeah, but it’s more for– it’s not for reading, because our books aren’t for doctor’s right. Everything is more about like studying and like– it’s more around– like if you read a novel, you just read a novel then you toss it away.

Steve: Right.

Jordan: It’s more consulting book. So it’s…

Steve: Like a reference book?

Jordan: Yeah it’s more as a reference platform than a normal platform.

Steve: So search is very important.

Jordan: Search is very important yeah. We have to index the entire book, we have to index our cluster books, so yeah.

Steve: Okay.

Jordan: So it’s actually important yeah.

Steve: Okay. So does Amazon offer these books as well?

Jordan: No.

Steve: They do not, okay.

Jordan: Well they offer the Kindle versions right, but this is more– it’s not about nature, it’s more about education, right, so it’s a little different. In case of Amazon, like we realize that the only way we can beat Amazon and all these big companies is if we actually– well right now we are like the– by far the larger distributor of medical books and medical equipment in Mexico. But it’s like you find a segment of the market that Amazon wouldn’t– won’t be able to compete. And then just focus 100% in that segment and then impress them. Like we want to make it really-really clear that we are the best option by far.

Like there’s– we love them, there’s a link with them, we stand behind them right. Like one of the examples is like, there was some political problem with doctors in Mexico. There were– you know they are like some case of negligence and stuff like that and you know, doctors were complaining and like fighting and stuff like that. So of course we have to stand behind the doctors and like completely be– you know be with them, and started supporting the course. You know they go to, you know to a protest we have to go to a protest, and like be 100% with them.

Steve: Got it.

Jordan: And like actually you are part of their life style right. Being a doctor means that you are actually going to buy books from Laleo and make a little bit from Laleo. It’s part of being a doctor. And at the same time we have to be part of the doctor’s community. So…

Steve: Okay, but in terms of just the product itself, your books have an advantage over the Amazon versions because your format allows for very quick searching of certain medical aspects that a doctor might want to look at, is that correct?

Jordan: Well the platform– platform wise we are more– again like Kindle is black and white, it’s more for reading novels and stuff like that. The platform allows you to highlight like more highlighting.

Steve: Got it, like for studying based features as well, okay.

Jordan: In the physical books we have way larger collection of books than anybody else, better price, yeah. Like you don’t– doctors don’t go to Amazon to buy medical equipment, they go directly to us.

Steve: So does that imply that you have to scan in all the books into your format before you listen.

Jordan: We actually get them directly from the source.

Steve: Okay, so they have– is your format proprietary?

Jordan: No.

Steve: It’s not okay, all right.

Jordan: It’s using a lot of open source.

Steve: Got it. Okay I understand now okay. So will this model work in the US then. Are you planning on expanding?

Jordan: The goal of our business is to provide medical professionals in the third world, access to technologies and tools only available in the first world right. So having said that, if we expand we would actually use the same model to Latin America and then to developing countries, right. We don’t want to expand it to Canada. Like Canada and the states in the very self, we’d rather actually– you know the beauty of what we offer is like we offer– we are a company that, I think we would be able to compete against any ecommerce in the states like in technology and innovation and all that other stuff.

But we are only focusing on the market that is completely neglected by everybody else, right. So our goal is to keep our sales in the you know developing countries and help those communities and help those doctors and give them tools. And the other day if you fix access to helker [phonetic] tools in the developing countries, you are going to make money right.

Steve: Right, okay. And then Amazon probably won’t even bother because the market is too small to begin with, is that accurate?

Jordan: The market is too small and then…

Steve: Okay.

Jordan: Yeah like I never– I really, honestly don’t care about the competitors, like yeah of course it’s good to have around you know to look at them, but everything is about your client.

Steve: Okay. And in terms of distance inventory, because you carry physical goods too. So how do you kind of manage, how much, how many books to actually carry and stuff. Do you guys have a warehouse?

Jordan: Yeah, right now we have a lot. Like yeah a big warehouse yeah.

Steve: Okay, and so the inventory management, all of that. Are you kind of actively involved in managing that, or how does it work? I’m just curious.

Jordan: The physical goods, that’s actually the partner I have in Mexico right. So down like the shipping part and the managing of the books, I don’t manage that.

Steve: Okay.

Jordan: I actually– the only thing I’m actually involved is buying and selling stuff. I’m importing stuff from china and the states.

Steve: Okay.

Jordan: There’s like special maker equipment or makers who we want to bring.

Steve: Okay.

Jordan: From china and states, then I would have to do all the retail.

Steve: So can we just talk about that process briefly. So how do you find vendors in china?

Jordan: There’s a website called Alibaba.

Steve: Okay, so you use Alibaba, okay.

Jordan: Alibaba, and the states I just Google them. And you know.

Steve: And how has your luck been using Alibaba, so what is your strategy.

Jordan: Find a good price, ask for a small sample and then if the sample is good, you start buying more and then just build a long relationship.

Steve: Okay and do you ever go over there to visit or is it just all over Skype or email.

Jordan: Everything is Skype.

Steve: Okay.

Jordan: Honestly it can turn out even dangerous, like– but again first you ask for a sample, you get the sample and then you start asking for more and more and then you start getting like large orders right. So if you do something it’s like okay it’s going to be really hard. Like it’s– I kind of like propose I make it a long sale cycle, so you know they just want to skawer [phonetic] or something, they just want something quick right. They would never bother to actually you know have a long sale cycle for like five…

Steve: Sure. I’m just curious, since you sell medical equipment; doesn’t that make things a lot more complicated?

Jordan: Yeah. The medical equipment part is like super-super hard to bring anywhere. You know shipping medical equipment to other countries is also really-really complex, you have to you know, follow different countries laws and like different countries– yeah it’s really complicated.

Steve: Okay, and then that’s kind of some of the things that you deal with.

Jordan: Yeah.

Steve: Do you have any stories where things went bad while you were trying to import.

Jordan: On the import side no, but like mostly the technology side, yeah.

Steve: Okay. Give me an example.

Jordan: I’m not a medical right, I have to code. So I remember when I was I school I went in for some drinks, I went back home. I started coding and there’s like I’m super tired, super drunk, so like okay finished coding, closed my computer and go to sleep. Like I’m sleeping and like 5a.m. I start getting calls. Now what do you want, calls-calls-calls. I see my phone is like ten you know missed calls and it’s like what do you want, it’s like well the entire website is down. What happened? It’s like; oh I go to my website and then like completely braking because of my code right.

Then like I finally actually realized that okay that is actually more important than just me trying to– you know it’s not a project. Like there’s a lot of people that depend on me, so I kind of like stop drinking and stop partying and like that day I got like way more mature for my age. Like I was like 20 or something that day. I said okay I should really focus on this.

Steve: Okay.

Jordan: The other one is I was actually super efficient with my grades right. I wanted to get my GPA in Canada is from zero to 4.5.

Steve: Okay.

Jordan: So I said I want to get three, which is kind of like decent, it’s kind of like 80%. So I did all the math and like okay this semester I need to get this-this-this. I was kind of like, it’s going to be perfect for a three. My last final exam, everything is set up, I just need to get like 70% on this exam and then you know everything is going to be fine. I’m going to be done with the school and like to focus on something else. So two days before the exam I was like okay, let’s just start preparing for the exam. I don’t want to focus on Laleo right now. And then all of a sudden I have a call. Like they call me from Mexico and they say, hey Jordan why do we have a picture of Shakira on the home page? And it’s like– you know Shakira, right.

Steve: Yeah of course, yes.

Jordan: I don’t have a picture of Shakira on the home page. And then I go to the website and there’s a picture of Shakira on the home page. And it’s not even my home page. Like someone actually got into the website, hacked the website and started redirecting all the traffic to a picture of Shakira.

Steve: Okay.

Jordan: So I was like for the next day I just code and like try to find the problem. I had no idea what’s going on. I was like crying. I was yelling calling people like I’m super desperate. And then I finally fixed the bug, fixed the error like you now bash the product. And then the day of my exam I was like completely dead, I just like write the exam, you know hand it out and I failed the exam. So my GPA ended up being like 2.999.

Steve: Okay if we can just sag-way back to Leleo for a little bit. Today what are all the different traffic sources that come to your website and what are like the top three sources?

Jordan: Well kind of like every business, Facebook, Google, and SEO.

Steve: Okay.

Jordan: As I mentioned before we actually have– we connect through either social media or doctors in Mexico.

Steve: Right, okay.

Jordan: And that’s also a good one, a good source of traffic.

Steve: So do you have your own Facebook group or is it just a fan page?

Jordan: Well we have our own fan page group that we actually coded, right. It’s a make sure I have Reddit it. It’s like education website. So I can give you the website. It’s AN…

Steve: You can tag– you can give it to me afterwards and I’ll just post a link to it. So you created a Reddit group as well?

Jordan: It’s not a Reddit. It’s kind of like a place where people just upload on medical cases.

Steve: Okay.

Jordan: People discuss medical cases and if you upload a lot of medical cases you get points and stuff like that.

Steve: Okay, so this is like gamefication of your website.

Jordan: Gamefication of a permanent website, yeah.

Steve: Okay and this is all custom coded I would imagine right?

Jordan: Yeah. So basically again our idea is to actually get the medical community into a website and to use our product for free, and then if they are interested they can actually buy from us, right. One of the things we actually do is, and this is one — it plays a significance source of referral traffic. But it’s also pretty cool like the things that they do there– we have a case of a doctor that have a patient and they didn’t know what’s the problem with the patient, like the patient had a lot of little dots on his arm and he had no idea what was going on. And the reason and they actually found the reason through my website…

Steve: I see.

Jordan: Another doctor come and say okay the problem is he’s a farmer like the problem with being a farmer is you have to carry grains with your arm, right? He was actually carrying the grains with his arms and the pesticides were actually affecting his arm. He actually saved the– cured the doctor because of– cured the patient because of the…

Steve: So your site is also like kind of like a Web MD type thing then.

Jordan: It’s a little more informal because it’s for you know…

Steve: Okay.

Jordan: Doctors giving– it’s a little less informal.

Steve: Sure, sure, right.

Jordan: It’s not a patient asking for a doctor opinion; it’s more like community of doctors just talking to each other…

Steve: Like a forum kind of, right?

Jordan: Yeah like a forum yeah.

Steve: Okay.

Jordan: Like a forum based on you know usually the algorithm for body…

Steve: Okay.

Jordan: And the questions that’s really popular is going to go up, then you can actually send private messages and like you get points if you are– you know you can follow people, you get points if you responded.

Steve: Got it.

Jordan: One actually tried to do it best and you know answer the questions like it’s kind of like educational website or doctor.

Steve: So at what point in the lifestyle– life cycle of your store can you actually pull something like this off, right? So for example in order to create a forum of some sort you need to have the traffic to back it up, right.

Jordan: We didn’t have the traffic, we actually used– for that one to get that up, we actually used Facebook.

Steve: Okay.

Jordan: We didn’t our traffic, so we didn’t use– well again back then it was super impressive, 2011.

Steve: It’s still pretty impressive Jordan come on.

Jordan: Well, it’s not you know, it’s not like right now let’s say we have 100,000 likes on Facebook and it’s gone yeah, okay that’s good but it’s not like wow. Like back then I remember in 2009 we have like 15000 plants and people were like that’s crazy, like that’s insane.

Steve: In the doctor community 100,000 likes is still a lot right? Because the doctor…

Jordan: You know you can– it’s not that hard to see how a website has you know 15,000 likes anymore.

Steve: Sure.

Jordan: So it’s good, but not that good but like we did in 2011 is we fully integrated with Facebook, right?

Steve: Okay.

Jordan: So, if you wanted to log in to product, then you have to connect to Facebook.

Steve: I see.

Jordan: And you know it goes to your feed and you can actually start sharing with Facebook and every time you put a question, they would actually share in your wall, and then every time you get a reward you would share on your wall. And then we started doing a lot of advertising on Facebook. So the way we would advertise on Facebook is we put the question and then if you want to answer the question then you have to go to the website. And people– there are ads that we actually run that are not sales heap, but they are actually based on engagement and you know engaging. And during engaging they actually do much better than Google ads, right? What I see the difference with Facebook and Google ads is like Google ads is you have the intend, you want something, like just sell me something.

Steve: Right.

Jordan: Facebook what you do is like an introduction through your products. So it’s kind of “hey guys, check this out this is cool,” and you don’t try to sell them anything, you just put it there and then they see you, they see your brand, they see what you’re doing, they see what you represent and then they’re going to go back and buy. So basically what we notice is the revenue from Facebook wasn’t that strong.

Steve: Okay.

Jordan: But what Facebook did was, when we used to run a lot of ads from Facebook, the searches on Google for our website would increase.

Steve: Interesting so was there was this just a co-relation or did you have evidence?

Jordan: Yeah yeah, there was very strong co-relation, right?

Steve: Okay.

Jordan: Basically what happened is like people who see you there, they would play with you, they would go through websites you know check you out and then you would go on Google then search for you.

Steve: I see, so did you try to grab their email address at all with your Facebook ads, or was it purely informational?

Jordan: We actually try to get them to sign up right? Because of the nature of the business right now, you know I would really encourage people to enter the email address, but because it’s an e-commerce, and then really specialized ecommerce, we need way more information than email address, right? We would need to ask for the– the email address by its own is useless because we actually need to know who you are, what products you want.

Steve: Right right, okay for you yes. Okay.

Jordan: But if I wasn’t more general, I would totally use that Facebook, I would totally go for the email. We actually tried to implement the log in and sign up with email only, and then based on what you search, we will actually create a profile, but that’s still in the making.

Steve: Okay and one other question that I had for you which is kind of unique to you. I get this question a lot on my blog, and the question is what advice would you give for young people? What’s your take on going to college versus taking a year off and starting a business?

Jordan: It really depends, like if you get a job like if you go to college there’s two ways you can actually do it. If you study something that is going to get you a job then you are going to end up with a job and that’s about it, right? Maybe you should go to college if you want to study like to become an accountant or something that, go university get a degree and then get a normal job. But you actually want to go into entrepreneurship a job– education like college education is not going to help you that much. Like if you’re going to go into entrepreneurship and you still want to go to college, go and do something that you enjoy doing rather than you know something that is going to get you a job. Like the moment you get a job that is like nice and high paying and you know professional is the moment you’re going to kill then entrepreneurship spirit.

Steve: Okay I would tend to agree yeah okay. So you’re basically saying that if you really want to start a business and you want to go to college you pick a major that you really want to study as opposed to picking a major that is just for the purpose of finding a high paying job?

Jordan: Yeah.

Steve: Is that accurate? Okay

Jordan: Computer science is always good.

Steve: Yes computer science is always very good.

Jordan: Yeah but like the only thing is like the cool thing– well probably the bad thing of starting like something that is not going to get you a job is that after you get your degree you won’t get a job, right?

Steve: Yes.

Jordan: So you’re going to like force yourself to actually go on you know become an entrepreneur or get a really crappy job, so you better– you’re like super motivated and you start a business or you just end up on star bucks, right?

Steve: Yes.

Jordan: So you know one of the main problems I have which well honestly I don’t think is a problem, but I’m not employable unless you actually employ me kind of like a start up that is moving really first and is doing everything, you won’t be able to get a job, right. Like I’m an entrepreneur, I know how to code, I have a label that is kind of like I know how to really code but I wouldn’t get a job as an engineer.

Steve: Sure.

Jordan: Same with design, probably marketing I’m a little bit better, but you know basically as an entrepreneur you have to know everything about everything, right?

Steve: Right, jack of all trades.

Jordan: Yeah, yeah you have to know it as a level that is well my threshold is say okay, you have to know everything about everything and you can actually know who’s good and who’s bad you know at that.

Steve: Right, yes I agree with that, okay. And so you mentioned that you are an entrepreneur, so how did you end up at Wish pond as the COO.

Jordan: Well, I told you I needed to get a job.

Steve: But the listeners did not hear that story, so…

Jordan: Oh yeah. So basically I finished my degree in economics and then I actually in Canada and the main problem was I needed to get a job to stay in Canada. So I had like a lot of awards, I won to Canadian grove throughout the year and you know a bunch of rewards, but then I have to get a job in Canada. So that was like [inaudible 00:44:46] I was like applying for like really crappy jobs in Star bucks, and like stuff like that that actually you know just have a job and say that I’m working and I could stay in Canada.

But then I went to this company that I have an interview, a chat with the CEO and she actually just hired me on the spot, because I was like super driven and super excited, and like I was showing him all the stuff that I did from the website and all these that I did for my company, and you know he hired me and I was really clear and say you know his name is Ali. You know Ali I’m probably going to spend 70% of my time on my website and 30% of my time you know on the job. And so yeey sure whatever, and then he like little by little in a sneaky way he started like pushing me, pushing me and then like from 37 it went up to like 35% on Wish pond and 75 on Laleo and then like 60-40 and then 50-50 and right now most of my time is on Wish pond.

Steve: Okay, but Laleo is still doing very well, right?

Jordan: yeah, yeah it still but it doesn’t grow as first as the startup anymore.

Steve: Sure.

Jordan: We’ve got you know wish upon growth is you know 20% month over month. Laleo is kind of like [Inaudible] [00:45:57] now is like 12% yearly, so it’s like Marco. Marco itself is like a normal business kind of growth.

Steve: Right.

Jordan: But still, it’s pretty solid right now.

Steve: Yeah okay cool, so any advice for would be entrepreneurs out there who want to just actually sell goods online?

Jordan: Don’t raise money.

Steve: That’s what this podcast is all about, not raising money.

Jordan: Yeah raising money is– find partners you know try to star gain profit, but yeah don’t raise money. The most important thing that for some reason businesses and technology companies tend to forget is that profit is important; it’s really really-really-really weird that people think that you don’t need to be profitable to actually be successful. A lot of people go with the Instagram model, like yeah you know we can become the next Facebook, the next school, we shouldn’t worry about money, we just have to grow a real base. For me that’s kind of like betting, right like you are actually not building a business, you’re putting everything on the rent…

Steve: Sure.

Jordan: One bet, right? Like even if you actually make it, it’s going to be based on luck right? My suggestion is you shouldn’t try to aim for a business that is going to make you know a million dollar business like 100,000 dollar business. And then once you get there, once you’re profitable, what you should do is just get profit, invest everything on the money and the scale, and then more profit scale-scale-scale-scale, right? So you shouldn’t try to scale a product that is not even highly value based right? Be profitable first and then expand, pretty simple, but you know in this crazy world people seem to forget you need profit.

Steve: Yeah, and based on your story you kind of validated your product earlier on eBay, right?

Jordan: Yeah and I didn’t know what MBP was back then, but yeah I did a lot of MBps. I’m like oh this makes money, it’s like sure just do it. And I never thought, oh let’s bring all the doctors here and let’s give them free– I don’t know, free stethoscopes, and then hopefully one day they will find a way to make money out of them no-no-no. It’s like since day one we were actually making money.

Steve: And so today let’s say you want to sell another product, what would be some avenues where you would try to validate your product?

Jordan: I would create a landing page.

Steve: Using Wish pond?

Jordan: Using Wish pond? I mean the cool thing about businesses right now is that it’s really cheap to start a business, right?

Steve: Aha.

Jordan: If you want to start an ecommerce back then I would have to hire someone to do it. I would’ve spent like even in Mexico standards, it was like $800 which is like a little money, maybe US would be way more, but right now you can just go to like I don’t know what platform you usually use like [inaudible 00:48:38].

Steve: Okay.

Jordan: I would probably use Shopify and just you know set up a test business for $19 a month, see if the market is there, spend like two three 400 dollars to see whether there is some sales based on interest and…

Steve: What would you do, would you drive traffic with adwords, Facebook, what would you do?

Jordan: I would try to do a lot of things like a little bit of adwords, a little bit of Facebook. I would try to write a quick eBook and do some market automation to see where they come back, look at Reddix [phonetic], look at monetization all that stuff. At the end of the day I think it’s more– it’s kind of like a mixture of a blessing and a curse. They’re sometimes driven and sometimes they’re blindly driven, so if a product is not working don’t say “oh maybe it’s not working,” because of you know you spend over $100 and you have no sales, no traction, no nothing. Maybe try to get another one like there is no shame of failing, you try something it doesn’t work, I don’t think there’s a problem, you move on and you keep trying, right?

Steve: Sure.

Jordan: It doesn’t work okay, it doesn’t matter, I’m going to try to keep pushing it, I keep pushing it and still it doesn’t work, and keep pushing it and put more money on it and then like just slippery slope. Just find something, spend a little time and do sort of promising, try to be impartial and just keep doing it, right? Don’t get like– it’s not very– you shouldn’t be a scared of like making mistakes and taking the wrong decisions and make wrong businesses, right?

Steve: Sure.

Jordan: The problem is like when you make a mistake and you don’t want to admit it and use want to keep pushing, that’s when you’re going to have a lot of issues.

Steve: Okay and so in terms of your own personal limit, how do you know when to stop?

Jordan: Well I told you before Laleo I had like a lot of different small businesses, and most of them failed. And you know I actually learnt a lot about them, like I have a gaming website like flash games and make like 50 cents a day, I spend a lot of money on that, well a lot of money as a 17 year old kid, right?

Steve: Sure.

Jordan: Like $200 or $300, I felt like okay no shame; I actually learnt how to code with that. I also have a website if you visit Mexico City we would actually give you like a personalized tour for you– super cheap for like $100 or something like that. You put some money on it, make some money without adsence– again it didn’t work. I bought a lot of his clips from eBay just you know You Tube website, affiliate marketing, pyramid schemes like everything, right?

Steve: Okay.

Jordan: Like try for a few months if it doesn’t work, then okay whatever. I didn’t even say oh I feel like it just it doesn’t work, same thing at Wish pond, right? Like when we started Wish pond we went like a local search product, so we have an app that you can search for an iPad, and it will tell you where you can buy an iPad around you.

Steve: Okay.

Jordan: Which kind of it was a little backwards because everything is moving online, and we say oh no-no you can actually do it, you should actually search on your phone go buy an iPad instead of buying a normal phone. So it’s kind of a little backwards, so it’s kind of like we quickly decided that that doesn’t work and we moved. Then Facebook stores, Facebook stores are like super lame, and people don’t buy on Facebook and we just say okay this isn’t working, let’s move. And you know keep moving, keep moving, keep moving like there’s no shame and your recent approach doesn’t work. And then we actually did well with contest and just again this is good but like what else can we do? I mean contests are like super strong, but like we keep trying, keep trying, keep trying and I think we actually have problem that is bidding a lot of value to a lot of users right?

Steve: Absolutely.

Jordan: That’s when you say okay, let’s keep pushing here, say with Laleo, when I started selling books and started making money and you know started diversifying and people liking and like there is some connection and people kind of like we love what you are and you are changing something, it’s like okay maybe there is something here and I should actually put more time and effort here, right?

Steve: Right.

Jordan: It’s really obvious, like you actually see it when it happens.

Steve: Okay.

Jordan: Yeah I think my biggest advice is if you fail just drop it, don’t be scared of failing just be scared of failing and not admitting that you failed, like just keep trying to do something if it doesn’t work.

Steve: Okay, hey Jordan I want to be respectful of your time here, we’ve already been talking for quite a while. If any of the listeners out there want to get a hold of you or ask you some questions, where can they find you?

Jordan: Well my Twitter handle is Jordantk; you can make a follow me there.

Steve: Okay, great all right Jordan, well thanks a lot for your time. I learned a lot and I still find it really amazing that you started all this at age 17, so thanks for coming on the show.

Jordan: No problem.

Steve: All right take care.

Hope you enjoyed that episode, guys like Jordan really make me feel like a slacker to be quite frank. After all I didn’t start my online business until I was well into my 30’s and here is Jordan starting his at age 17. Now I find his story truly amazing and it’s incredible that he’s now the COO of an incredible internet marketing software company called Wish pond.

For more information about this episode, go to mywifequitherjob.com/episode42. Once again I just wanted to thank 99designs for sponsoring this episode, I know a lot of you listening are waiting on the sidelines and trying to get the courage to start your own online business. I also know a lot of you out there run your own business already and know that your website design could be better. Designing a website or a logo is not intimidating anymore thanks to 99 designs, where you can get over 300,000 designers to compete for your design. All you’ve got to do is list your project on their site and within 48 hours you’ll get dozens of design submissions to choose from and from there you can ask for slight tweaks and changes until you are a 100% satisfied with the results. And the best part is that the price is very reasonable and there’s a 100% satisfaction guarantee.

Plus by using the 99designs.com/mywifequit link and telling them that Steve from mywifequitherjob.com referred you, your design listing will be bolded, highlighted, and given a prominent background and featured before all regular listings so your request stands out among all of the designers. So head over to 99designs.com/mywifequit and get something designed right now. Finally if you enjoyed listening to this podcast please go to iTunes and leave me a review. When you write me a review it not only makes me feel proud, but it helps keep this podcast up in the ranks so other people can use this information, find the show more easily and get awesome business advice from my guests.

It’s also the best way to support the show and please tell your friends because the greatest compliment you can give me is to provide a referral to someone else either in person or to share it on the web. And as an added incentive I’m always giving away free business consults to one lucky winner every single month. For more information go to mywifequitherjob.com/contest. And if you are interested in starting your own online business be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over a 100k in profit in our first year of business. Go to www.mywifequitherjob.com for more information and thanks for listening.

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

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Transcript

You are listening to the My Wife Quit Her Job podcast, where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now this isn’t one of these podcasts where we bring on 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 enter my podcast contest where I am giving away free one-on-one business consultations every single month. For more information, go to www.mywifequitherjob.com/contest. And if you are interested in starting your own online business, be sure to sign up for my free 6 day mini-course where I show you how my wife and I managed to make over 100,000 k in profit in our first year of business. Go to www.mywifequitherjob.com for more information.

Now before I begin, I just want to give a quick shout out to this episodes sponsor 99 designs. Now originally I wasn’t going to take on any sponsors at all, but 99 designs caught my eye because I suck at design. And in fact when I first started my online store back in 2007, the design for my website was terrible and I had absolutely no idea who to turn to. Now fast forward to today 99 designs is a site where you can provide a description of anything that you want designed whether it be a logo, a webpage, a t-shirt, pretty much anything and have dozens of designers compete to deliver you the best design possible. And by best I mean that you get to choose your favorite design among dozens of submissions from a pool of over 315,000 designers.

So if you are design challenged like I am, I highly recommend that you go over to 99designs.com/mywifequit and if you use that link and tell them that Steve from mywifequitherjob.com referred you, your design listing will be bolded, highlighted, given a prominent background, and featured before all regular listings so that your request stands out among all of the designers. And in fact this special offer is worth 99 dollars. So if you need a logo, website, t-shirt, business card, or anything designed go to www.99designs.com/mywifequit. Now on to the show.

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

Steve: Welcome to the My Wife Quit Her Job podcast. Today I’m thrilled to have my buddy Pat Flynn on the show. Now if you don’t know who Pat Flynn is, you’ve probably been hiding under a rock. Either that or you went to Stanford and you don’t associate yourself with people that went to CAL. Now I know that for myself I tried my hardest to dislike Pat, but you know what the guy is just so damn likeable that I couldn’t help myself. Anyway Pat runs the popular blog, smartpassiveincome.com. And what’s interesting about Pat is that he’s done many different things when it comes to making money online.

Now last month he brought in almost 84,000 dollars from various sources such as affiliate marketing, iPhone apps, eBook sales software sales, and podcast, sponsorships, you name it and he’s done it. And I especially like about the guy, is that he is a family man. He is the proud father of two very cute kids and he’s actually got some great child care tips. Now did you know that if your child has the hiccups, all you have to do is take a piece of a napkin, lick it and then stick it on your child’s fore head. Yeah I didn’t know that either and I can’t wait to use that tip. Anyway pat is someone who I truly respect and we can all learn a whole lot from him so with that welcome to the show Pat.

Pat: Thank you for having me and go bears and the– you know I drank coffee right before this out of my CAL mug to just you know, celebrate this awesome moment. But no, like staying with you Steve like you know you being from Stanford, I was like ah ah, but you know I got to know you I think on last year and you are awesome. So you know colleges aside you know we are good friends, I’m happy to be here. Now the whole napkin thing people are probably like, what! What does that mean and…

Steve: It’s random.

Pat: Like quick story, when my son was born, you know we were at grandma’s house one time and grandma and grandpa were there and my son got the hiccups. And we were like “Oh it’s okay you know he has the– kids get the hiccups you know we read all about it, we heard from our friends.” And then grandpa was like “No, take a piece of napkin, wet it and put it on the fore head.” And we were like “what!” And then he did it, and then like after ten minutes he stopped hiccupping. And he’s like see it worked, and I’m like no he just stopped hiccupping.

And then the morph on his story was one time he got the hiccups again, so it’s like a month later. And then grandma put a napkin on his fore head and– because he was hiccupping. And he wouldn’t stop. He just kept going. And then grandpa comes down the stairs and he’s like. Well he said “what’s wrong?” “Keoni is hiccupping.” “You have it on wrong.” He moved it, seriously like a centimeter to the right and then he stopped hiccupping. We were like, man that’s just whatever. But you know they are old school Filipino traditional people and that’s kind of a big deal, and we let them have those little moments. So it’s kind of fun, but yeah I’m a family man at heart for sure, I know you are as well and happy to be here to talk about business with everybody.

Steve: Yeah you know, I know a lot of people in the audience probably know who you are already. But if you wouldn’t mind jus giving a very-very brief intro about how you got all started with the whole online thing, what your blog is all about, that would be awesome.

Pat: Yeah I mean I didn’t know that I was going to be here, like you know 10 years ago if you asked me what I was going to be doing, I would have say I would be a project manager at an architectural firm. I went to CAL and got a BA in architecture and things were going really well. I got a job coming out of college and it was probably my– it was like my dream job. Everything was going well, I was climbing the corporate ladder, I was the youngest person to be promoted to job captain in my firm. You know making decent salary at the time and then all of a sudden summer of 2008 comes along, and I get notice that I’m going to get laid off in a few months.

The economy was bad at that time and I just hoped that they would keep me because I was trying so hard, and I was doing a lot more things than I was asked of. But you know I got called into the office and told that I was going to get let go which was a really tough moment in my life. You know I had worked so hard, I went to school for five years and you know done all this stuff, dedicated and really committed to this industry and it was kicking me out.

Luckily, and what got me online was actually to help me pass an exam called the LEAD exam which stands for leadership and energy in environmental designs, a very niched exam that architects and designers and people in that industry take. I was having trouble passing that exam, so I created a website to help myself pass, so I could keep track of my notes and you know study my notes online while travelling, and also share with a couple of co-workers who were also studying for the exam. And so I passed before I got notice I was going to get laid off, then I got notice that I was getting laid off and then I discovered podcasts.

I listened to one podcast called ‘internet business mastery’ hosted by Jeremy and Jason. And on that show I heard one particular episode from a guy named Cornelius who was one of the guests who was talking about how he was making six figures a year teaching people how to pass the project management exam, the PM exam. And that’s when the light bulb went off for me and I said, hey I have this website that has helped a few of my co-workers and it’s helped me pass this exam. Maybe there is a way that I can turn this into a resource that can help people. May be there’s some way I could get paid for it too.

Well the first thing I did was I put a tool on the site, an analytical tool on the site to see how much traffic I was eventually going to get, or to see if there’s any at all and to my surprise there was literally thousands of people visiting that site every single day, and I had absolutely no idea. I still don’t even know how long it’s going for because I didn’t need an analytical tool before this point. And so I took a lot of action at that point. I ended up writing a study guide, an eBook and selling that on the site. I then launched an audio guide to go along with it. And I sort of became known as the quote expert in this space.

And even though I didn’t get 100% on the exam, and even though I didn’t consider myself an expert, I was considered an expert by everybody else out there who was studying because I had all this material on the site. And Google was pushing it up to the top of keywords that people were searching. So I launched my book in October of 2008, and this is again a study guide. An e-book completely all electronic including the delivery process was all automated. And that was something that I picked up from Tim Ferriss in “The 4 Hour Work Week.”. That first month I had made almost $8000, 7908.55 that I did and it looked big.

And that was just incredibly life changing. That was like three months worth– well you know three or four months worth of architecture income in just a month. And it was– the most incredible part about it was you know like I would wake up the next morning and there’d be sales. That was just so eye opening for me, that’s when I created smartpassiveincome.com. Just to– I just wanted to share with the world all the amazing stuff that has happened. All the stuff I discovered after getting laid off, so that people wouldn’t have to go through that sort of– so I could just share a thing and people could discover it before having to go you know through something like a lay off.

And ever since then, beginning October 2008 I’ve just been blogging and I started podcasting, I have a YouTube channel as well. Just showing as much information as I can to help people create a side income, quit their jobs, whatever it is they want to do online. I give them the sort of load down on how that happens in a very authentic, transparent way because I not only talk about what works, I talk a lot about what doesn’t work and I try everything. I sort of consider myself the crash test. I mean I’m in a very unique and blessed position to be able to try things out and report on how it works and how it doesn’t. And even if it doesn’t work, it’s always a good lesson and learning experience for everybody else who is following along.

And that’s why now, now I’m doing public speaking and getting on stage talking about this stuff. I’ve been approached by publishers and you know it’s just insane, the journey I’ve been on. I’m so-so blessed and thankful. And you know I found that the- you know if we’re going to be talking about business today the best business model I found in this sort of– I just stumbled upon the art by accident was just, give as much as you can and provide solutions for people who need it. And when you can do that, when you can serve your audience, I feel like your earnings are a byproduct of how well you do that.

Steve: Absolutely and were going to get into all of that and you know like I mentioned in your intro, you’ve tried a ton of different business ideas when it comes to making money online, and that’s actually something I really admire about you. You’ve got an open mind, you’re creative as hell, well you know for a cow guy and you take action. Now my audience is primarily composed of people who are kind of very interested in making money online. My personal specialty is ecommerce, blogging, and info products. And you have experience in just about everything else, so I think between the two of us we should have almost everything covered I would imagine.

Pat: I think so.

Steve: Yeah.

Pat: Yeah.

Steve: Yeah. So here’s what I thought we would do today. You know I often get asked what the best business model is in terms of making money. And that’s actually a very broad and far reaching statement, there’s a lot of primaries involved, but I think it would be very interesting to get your personal take in all the various business models today. So sound good?

Pat: Sounds good and you are right. That question is definitely you know far reaching. I mean what is best to you. I think what is best is going to be different for everybody, so that’s why it’s cool; we’re going to be talking about all these different things. For those of you listening you might be able to discover one that sort of fits you. And what fits one person might not fit another, so you know the cool thing is there are all these options available. So just listen, see what sort of resonates with you and then you could sort of go from there and learn about that.

Steve: And keep in mind that Pat has hands on experience with all of these different business models. So you know it’s not like he is teaching based on something that he’s read. He’s actually gone and done these things. So let’s start with affiliate marketing. Now last month you made over 55,000 affiliate marketing alone. Now for me I do okay with affiliate marketing, but your marketing skills are incredible, so here’s my question. Let’s say you had to start over from complete scratch. You just got laid off from your architecture firm. Would affiliate marketing be a go to strategy in the beginning and if so, how would you have gone up building this revenue stream?

Pat: I think it would be part of a go to strategy at the beginning. I mean the cool thing about affiliate marketing is that you are able to provide solutions for people without having to create those solutions yourself. Because you get you know the way it works is you get a commission every time you sell somebody else’s product. And the cool thing is there are people out there who have problems, there are people out there who are building solutions that you could be the person to connect those two you and you could generate an income.

The most important part about this, the reason why it works so well for me is because you know I work on primarily building a key and real relationship with those in my audience. So I know exactly what their problems, pains, and issues are. So I know exactly what solutions to provide whether I create those solutions myself or use affiliate marketing to provide the solutions from other people. But also you know in affiliate marketing, it’s easy technically to do.

Right it’s easy to find a product, you can go on Amazon right now and find a product and become an Amazon associate which is their fancy name for an affiliate. And then you can just send people through a particular link and every time people purchase you get 5-8% or whatever the case may be. Some industries they pay higher depending on what the product is, some 50, sometimes 100% actually. They give you 100% commission because they know you are going to get that lead in and then they are going to be able to sell even more things down the road. So you know you can make good money that way. It’s good and easy technically, but to do it right and have it become a part of a long term business model is very difficult.

And that’s why I focus primarily on the relationships because when you can focus on the relationship, the ability to recommend something and actually have people take action on it is much easier. You know it’s like if you– anybody you have a great relationship with, a friend or a family member, if you have a great relationship with them, if you tell them about something that’s cool, they are going to take your recommendation. There’s very little selling involved.

But if you don’t have a relationship and you’ve probably you know those of you listening, you might be subscribed to some e-mail lists for example where they are not focused on building a relationship, they are focusing on the best copy writers, all the incredible sales tactics out there, stuff that I don’t know or I don’t do those things very well. So I let the relationship take control of where the transactions happen. And I also let the results from these products work as well. So another big thing that I do is make sure that any product that I recommend to my audience is a product that I have used, and a product that I know is going to help. And I also treat that product as if it were my own. I talk about it like it was my own; I provide support for it like it was my own.

Steve: I did not know that aspect; you actually answer questions about the products that you refer?

Pat: Absolutely, like why wouldn’t you do that because people who have questions, like if you open up the fact that you could answer questions; A it shows that you care about this product and you know that it’s helpful. But B the people who actually email you or ask questions about it, they are hot leads, they are thinking about getting it. And if you can provide them the answers and show them that A you know, and B that it’s the right fit for them, then of course they are going to get it.

Steve: Okay.

Pat: And also you’ve given them something as far as value and they are going to give you something back in return, and you know the cool thing about affiliate marketing is it doesn’t cost any extra for the customer to get, you know for you to get a commission too. So you know in terms of overall strategy, it’s a great strategy because it’s rather you know it can be done rather quickly as far as finding the right products. But building the audience is going to take a little bit of time, but if you do build the audience, even if the audience is small, you know I would implement affiliate marketing in your business right from the start if possible.

Steve: So let’s talk about the building audience part. So would you just start a blog, if you want to start affiliate marketing?

Pat: I think the first thing I would start doing is researching a market and trying to find a niche with a problem that I can solve. Whether I know the solutions for that audience already like I did with smart passive income, you know I started building an audience over time with my own experience. Or something like green exam county, which is just basically a resource of information that’s there to help people pass a certain exam, or you know be able to you know really knock out a certain pain that people have. I think that’s the best thing to do is if there’s a pain out there, if you know people need help with something, and if you can provide that solution for them and make it easy and convenient, then they’re going to like who you are, they are going to resonate with you, and take your recommendations and potentially buy products from you.

Blogging is a great way to do that. It’s a great platform for building an audience, but there are other ways of doing it too. For example a podcast, a lot of businesses have started on iTunes, the internet. There’s this mastery guys, they didn’t start with a blog, they started with a podcast. They had a blog to sort of become the place where the RSS feed lives and you know all that stuff, but they weren’t focused on creating blog content or getting subscribers for their blog. They are focused on their podcast meeting me. And that’s one way to do it. People like [Inaudible] [00:16:59].

You know they have primarily a video strategy and they are sort of bloggers, and that’s how you know– whatever the platform may be pick one that resonates with you the most, and makes it sort of comfortable for you to work on. For me it was blogging because I wasn’t comfortable with my voice, I wasn’t comfortable with putting my face on camera at first, so it made sense to start with that. But I since brunched out and sort of tried all the different ways, and actually they’ve all combined to become this big brand that I have now which is really cool.

But in terms of building an audience you know the most important thing to realize is you don’t have to serve everybody. You know I was on [Inaudible] [00:17:33] and he asked me a great question. Kind of threw me of a little bit, but it was a great question. And I was quite proud of my answer too because it was off the cuff, but he had asked me you know because he knows I have all of these different sites and little niches like Food Truckr niche, security guards site and Green Exam Academy, lead exam site. He’s like “pat, those are all great, but how are you helping the most people, you know why won’t you do something like you know– why don’t you create the next excel something that everybody uses, why don’t you change the world that way.” And I was like, well you know what, like I might not be able to change the entire world, but I am changing some people’s worlds. And those worlds are those little niches that I am targeting.

And the real thing to think about and the saying that I say over and over again is you know the riches are in the niches. And if you can become an expert at one thing, when people talk about that one topic in a conversation, you want to be the person, the ultimate resource that always pops up in conversation. And you don’t actually have to have that big of an audience to make a huge difference in your life. I’d recommend everybody to read an article by Kevin Kelly called 1000 true fans. The idea behind that is you only need a 1000 people. A 1000 people out of this world of six point how many billion to just become a true fan of you and what you do and what you provide. A 1000, Imagine a 1000 people paying you a 100 dollars a year for something. That’s six figures right there.

Steve: Yeah that’s– you know when you break things down like that, it makes it much more obtainable. So what sort of strategies would you suggest just to get that first thousand subscribers?

Pat: Well I mean I think you know the research is really important. It’s like that saying by George Washington,” if you give him six hours to cut down a tree, he’ll spend the first four hours sharpening his axe. Like the research is really-really key there. And so trying to find that market you know actually going out and not just– you don’t want to create a blog about a topic that you think is something that’s going to be useful to people. You want to know that it’s going to be useful for people, so you want to validate it. If there’s competition out there, that’s good.

Don’t start a blog because nobody else is doing it. Start a blog that you know you’re going to be able to provide better information that people who are out there are already providing. Because the fact that there’s competition means that there’s a market out there. And you’ll be able to discover by looking at all the competition where the holes are.

Find out what people are talking about on those blogs or for those products or whatever it is that you at are selling. What’s missing, what is missing from the customer experience? Become a customer yourself or be a reader yourself and see what is lacking and then come in and provide everything else that’s missing. And that is your advantage of coming in late in the game. Quite a people feel like they are behind, but you actually have an advantage because a lot of people are stuck in their own ways or the old ways of doing things. And you can come in with a fresh look and you might think that you have a disadvantage, but you have an advantage coming in late.

Steve: Okay, so let’s say the content is all there. Let’s say you’ve done your research, you’re writing about stuff that isn’t covered in any another blog, and you are standing out. So how do you get that initial burst of traffic?

Pat: Well you want to connect with other key members. Like I have just talked about you know discovering who your competitors are. They aren’t actually your competitors; they are people that you want to become friends with. That you want to network with and just try and help as much as possible, and have them help you as well. Because I think the idea here, if you are going to come in here fresh with all this information, but you want other people to know that you have a different take, a different angle on it, something to add to what they already have that allows you to do things like guest posts or guest video posts, or to record guest posts on interviews for those particular people who have and share the same target audience as you, that’s a great strategy.

You know the more you write of course and the more you publish and at least if you are conscious about that basic SEO, Search Engine Optimization, overtime those articles are going to be found in Google as well. And you know just making sure that they are great articles that when people come across, they can’t help but share it. You know those types of things, but I think the most important thing you know people always ask me, what’s the 80-20 of traffic building? It’s honestly getting to know everybody else out there who has your target audience too, and building a real true relationship. Just like you and I Steve, like you are sharing my stuff now and I’m sharing– I’ve shared your stuff before on online blog and you know Derrick Hopper from Social Triggers.

He got really big really quickly by providing value for people like myself and Chris Brogan and other huge names, by actually coming on and sharing convergence advice for us. Actually things that worked and actually we saw results from. I couldn’t help but share that, and actually promote him, and you know he and I have been best friends ever since. And so, you know, things like that will go on a very-very-very long way.

Steve: So how do you know when to approach these people, and how do you actually approach people who are just so much higher on you in terms of the hierarchy?

Pat: Well you can do what you can to just get on their radar at first. You don’t want to obviously send a cold in and then be like “hey what’s up I am a new guy in your niche, and I’m going to beat you,” like you don’t want to say things like that obviously. So the cool thing to do is to just hit them up on twitter, say that you are a fan, that you like what they do and you are also talking about and are interested in the same topics. You know don’t act or ask for anything, at least not at first and do what you can. If there’s anything that’s missing on their site or something that’s wrong or like an error or you know a page is broken or something. Those small things will go a long way in people– just sorts of understanding who you are and to remember you.

You might even you know mention them every once in a while on your own site, see those track back links, re-tweet their stuff every once in a while. Like the people that I know who follow my blog, I’ve gotten to know them very well through what they have done for me, and I can’t help but do things back for them as well. A video is also good too. Anybody who sends me a video I can’t help but watch that, like I feel bad if I don’t watch it, because people have taken the time. And even though it’s probably quicker than actually sending an email, there’s just something about the video that you know I know it makes an impact on me now but I say that and everybody is going to probably send me a video.

Steve: I was just thinking the same thing.

Pat: But no I’m just being honest though, it works, and that’s how you can sort of build a relationship with people out there, and I think you know, and you and I know this, going to conferences. There’s just something about meeting people in person that really makes a big difference. I mean I have met a lot of colleagues, people who have become you know JB partners with me at conferences. You know when in between sessions in the hallways or even at the networking events at night. You know you just get to know each other and you know you never know who you might click with until you go out there and you know just start talking to people. So I think that’s really cool.

One thing I forgot to mention as far as traffic I think this– and this was a big mistake I made in the beginning was I didn’t focus on building my email list. I didn’t start with Green Exam Academy, my lead exam site until about a year after I started selling my book. I didn’t even create a list of customers, which sucked because when I started to create new products I had– I didn’t have anybody but that day’s blog readers to sell to. I could have made much more money, and actually provided more value and serve my audience better by collecting a list and being able to share these new things that would help people if I had built that list. Same thing for Smart Passive Income, my blog started in October 2008; I didn’t start an email list until January 2010, almost a year and a half later, because I didn’t realize exactly how important it was, and it was such huge mistake.

And the reason I bring it up in terms of traffic building is because even if you have like a hundred people on your list, I mean imagine getting a room with a hundred people in it. That’s actually a lot of people you know and you might not think that 100 people is a lot, but that is actually a lot of people. And if you were to provide value for them and that gives you an opportunity to connect with each and every one of them. Again another advantage of being small and starting out and they are going to become big fans. They are going to notice that they are going to get more attention from you than some of the bigger guys because you don’t have a big audience yet. And they’ll be fans for life at that point if you could provide value for them.

And not only that when you come up with a new post or some new resources, something you share it with your email list. What happens is people come to that post not because of how easy it is to implement sharing, or to sort of encourage sharing through social sharing buttons and things like that. People who come from your email list to your blog; nothing gives you more traffic than your email list seriously.

This is something that I have recently found out too because I haven’t been using my email list as much. But when you come out with a new post, send an email about it, people come over and they share it. And what happens when people share it, new people discover it, new people come on your list, and the next time you come up with a post, more people are coming back to your post. And then you are sharing it more. And then it just becomes this growing sort of cycle that just takes off. And you know at first you are not going to see huge numbers coming from that particular strategy, but it just rows exponentially, especially if you continue to provide great value and awesome epic content.

Steve: So you’ve given us a lot of tips just now so– but you know what I found that happens is a lot of people just get overwhelmed with the whole bunch of different things coming at them all at once. So let’s say you were just to start from scratch. What are like two things that you would just focus on from the very beginning?

Pat: Okay, two things I would focus on and try to do is I would say okay if I’m just starting out completely from scratch before anything in terms of research, I want to talk to 25 people in one industry. Pick an industry whatever it is; get on the phone with those people if you can. Pick something in small business. The reason I say start with that is because those people you know obviously have things that they do every day that they can potentially find– they potentially need a solution for. Those are people that have money of course and there are several instances of that type of business around the US as well. So you’d be able to get more and gather more data from those people.

But I would just try to discover, you know have a real conversations with them. Say “Hey I’m this person, I’m looking at providing solutions for people in your industry, I’m just curious like what are some of things that you have to do every day that you hate.” You know and just start to sort of– it’s called like idea hunting, or data mining, try idea mining. Try to get deep into really what the pains, problems, and issues of these people are. And once you talk to a few people, at the end of the talk like it could be hard to get on the phone. I mean where is the phone; we don’t even use the phone any more. Which is why I think it’s cool to do it now. Because now a lot of people are getting these types of calls, so you give them a stand out.

And then once you start to find these sorts of patterns and these things that you could create a solution for, pick one. Pick one problem and see what you can do to provide a solution for it. Whether that’s a piece of software and typically in small business it would be a piece of software that would help them. Just pick one, one problem. Again, focus on one thing and create a minimum viable product for it, the MVP.

This is sort of startup lingo now we are talking about. And this is something that is just the first iteration that solves that one problem in a very simple way. But because it solves that problem the people who you have spoken to and the people in that niche are going to be really thankful for it. But then you could work with those people to make it even better, to add features to it, and work with them. And you know I actually had a guy named Danni Maxwell in episode 46 of the Smart passive income podcast. He talked about this very topic and even gave us examples of people doing these kinds of things. And I even had a person come on later, I forget what episode but a guy called Carol Mendiola who talked about actually listening to that episode. Putting this into action he quit his job at Tesla to do work full time now online as a result of this sort of strategy.

And the reason I mention this is because software to me is really interesting now. It’s something I’m doing right now; I just came up with my first software product. And it’s really fun. It’s really cool. And I like the idea of you know the cool thing about software too, even though it’s a little bit more difficult because you are going to have to spend a little more money upfront to find a developer and to do all this research and stuff. The cool thing is you know when people buy your solution, they get it right then and there, and they are able to use it. And if it’s something that they need over and over again, you can potentially– you have people pay a recurring income for it every month you know.

Steve: Yeah you know I was actually going to get to that. I mean we are still talking about affiliate marketing, but you know since you started talking about software. I know in the past and you know I have a technical background, so creating an iPhone app or a piece of software has kind of always been on the back of my mind. So let’s talk about iPhone apps first because you haven’t actually talked about that in quite a while.

Pat: Yeah it’s been a while because the markets been pretty crazy. So I have an app company actually, an iPhone app company that was started actually right after I started my blog. I was just so like stopped about doing things online; I’m like let’s do everything. And so my buddy and I we heard a story about a guy called Joe Comb [phonetic] who had made like 40 million dollars with this one application.

Steve: Iphone or is it something like that.

Pat: Yes exactly, and you’re like what! That’s like so dumb but awesome at the same time like maybe we could just experiment with this and see what happens. So we ended up creating a company for iPhone specifically, and we hired out all the development which was an interesting process. I mean we wouldn’t have been able to do it any other way, but we got really excited and ended up hiring the first developer at the lowest price possible, which ended up costing us a lot more money and a lot more time. So it was a big learning experience later down the road, we decided to actually spend time screening the people who wanted to work on our projects and things like that. We had used elands.com at the time, the company did really well, I mean we were making upwards of 20-25000 dollars a month with about 10 applications when we first started, but when we first started there was only about 50-100,000 apps in iTunes. Now there’s…

Steve: Yeah.

Pat: Quite more and the app environment has changed. All of our apps that were very successful before sort of just fallen down and out of the radar and you know it’s a lot harder now. And I think, if you want to succeed in apps now, especially on the iPhone you build a niched app, build an app for a particular community that like I said earlier consumer fashion just completely solves a particular problem, or because what we were doing is we were creating similar apps to iPhone. Not forwarding apps, but entertainment apps that we would hope go viral and people would pick up.

And some of them went sort of semi viral, but when you can be the number one app for a specific type of group of people, that’s when you’re in the money especially for a long run, because then sell more apps or create more apps for that same group and you’ll be able to get feedback from the people who are already customers, and you know serve them just completely serve them. I had a guy who I interviewed– his name is Mike Dunin. He is the one who built an app called speech with Milo, Milo is a mouse character, and their apps would do speech therapy for kids essentially.

Steve: Wow, okay.

Pat: And they were making 30,000 dollars a month from that.

Steve: Right, well that actually solves a real problem; it’s not an entertainment app.

Pat: Right.

Steve: So I can, can kind of see how that would work, but overall how do you feel about the viability of kind of this business model, and I’m just curious how come you haven’t created any more apps since then?

Pat: You know to be honest I’ve just had more things to focus on, so many other things to focus on.

Steve: Okay.

Pat: You know that’s why. My business partner as well he has another company that he works with, and we just haven’t had the time to really go deep into the market research and try to find the niche and that whole thing. And we were just kind of– it was built experimentally and we have other things going on. So that’s why we haven’t really put much focus into it, but currently I’m putting a lot of focus into software specifically a word press plug in that is actually a podcast player as well.

Steve: Yes, let’s talk about that, so let’s talk about this podcast player. I actually took a look at it and it’s actually pretty incredible. So let’s talk about the effort and the monetary investment, and everything that it took to get launched.

Pat: Yeah, so it’s interesting because I came up with another podcast about five months ago called ask Pat, and this was a five day a week podcast where I take a voicemail question from the audience and answer it five days a week– a different question five days a week. And I asked my team, we need a player or something that can make it easier to find new episodes, because these are sort of shorter episodes and I wanted people to be able to quickly scroll through all the episodes to see which ones might be relevant to them at the time. All those like cue type situation, and so we developed– we actually have a UX guy named Dustin who is awesome. He is our user experience guy, and we asked him to create a sort of a podcast player that would accomplish these goals for us and look good and integrate well on the site for me.

And if you go to ask Pat.com right now, you’ll see it right there being used right now and it’s great. It’s the fanciest player out there, does a lot more things than just play, and after all that came out, I had about 50 or 100 emails come in and say Pat like I want that player, where can I get it? I’m like sorry guys, it’s custom, sorry guys it’s custom, custom. I was like wow this is cool, like people want my thing, but it’s mine nobody can have it. And then I was like wait, people were telling me essentially that they would pay for this. So you know a light bulb went off, and so we decided to put some effort into taking this sort of custom code, and turning it into a WordPress plug-in for easy distribution.

And we just launched it last month finally after about two months of development. And you know putting all, making it easy to customize and things like that and making it easy to use, you know use a short code and just make it real easy for people who pick it up. We also had to do extensive testing on different themes and things like that. So monetary speaking in terms of investment you know a little bit of money was put into just creating that thing in the first place, I would say about 5000 dollars.

Steve: Okay.

Pat: Before turning it into a plug in. That was just for me, and then turning it into a plug in I would say maybe another $10,000 of time.

Steve: Okay.

Pat: Because I wanted– I have a developer and he’s spent a lot of time on it in the testing of it. Actually it’s took most time because I knew, and I talked to a lot of people when getting into this software thing especially WordPress plug-in. I had talked to people like Michael Dunlop who did– not mountain monster, that site…

Steve: No, he’s got something domination, purpose domination.

Pat: Purpose domination, thank you. And then I talked to Glenn Alsop who did opt-in skin. And a bunch of people, and they were like Pat, make sure your customer service team is on par because you’re going to get people who have compatibility issues and all these stuff, and I was like how bad can it be really and they were like it’s bad, just be ready for it. And so we spent even more time making sure the customer service experience was good. We had talked to other people while it was being developed to see what their initial thoughts were about it, and which was great for validation and making quick little changes of things that were not obvious to us, but obvious to other people who were outside which was good.

And we launched it last month, we decided to launch with a beta team or beta group meaning we’re going to limit the numbers of licenses for it. And the reason for that was because we wanted to make sure that again our customer service team could handle it. Because even though we tested it extensively, we knew there were going to be bugs and there were, but we are also very honest upfront with the people “hey you guys are going to join a beta group, 250 licenses only,” which does create some sort of scarcity which is good. People– if there’s scarcity involved there are going to be inclined to make a quicker decision and buy, but we were also very honest “hey guys there might be bugs,” and there were and that sort of sassy expectation upfront.

And I think what’s cool about it is it makes people feel like they are part of the process too. When people become part of the beta group, they know that they have an influence on the direction of where this particular piece of software is going, and actually where it is now based on where it was last month, it’s just– it’s not completely overhaul, but a lot of new features were added, a lot of compatibility issues were taken care of, a lot of bugs squashed, and it’s so much better now because we just launched to 250 people. And we are about to re-launch it again, actually we launched it again today exclusively for Johnny Dumas’s community, paradise you know his…

Steve: Podcast in paradise, yeah.

Pat: It went really-really well, and so it’s selling extremely well. I keep getting emails from people saying when are you going to open this to the public, it’s great. So we are sort of working with people to add new features, and it’s really cool because there’s nothing like it out there in the market which is great, but more than that I think people who are a part of it now feel like they have influence. Which is the whole part of– this is the whole theme strutted model. I’m actually “The lean startup” by Eric which is a fantastic book to read whether you are doing software or not, it’s a great strategy.

I mean that same lean strategy when creating info products and things like that, membership sites you know working with a small beta group to do group consulting or group coaching. Those– validating it with a small group, but then having that small group influence where it goes. You can then reopen it and it’s much better, is so much better than just putting everything into it at first, having them not use all those things, and having spent money to put it out there. Plus you can get out there now instead of waiting till later.

Steve: You know I had a quick question, when you were talking about iPhone apps you mentioned that you picked the cheapest developer and everything and everything was a disaster. How did you change– how did you find a developer for the software project and was that whole development cycle smooth?

Pat: The development cycle was fairly smooth or relatively smooth.

Steve: Okay.

Pat: There is always going to be hiccups and things like that, and I think you just have to expect that. I mean it’s good to have a date– you know a launch date and then sort of rewind from there again. This is when you want the task force to come out before that when we want to be able to see the Photoshop version of it, like all that stuff is really important. But it’s not going to always be on schedule, it’s just good to expect that, but you know if you work with somebody for like I think we paid 1000 dollars for an app that was the first one. And they said it was going to be done in three weeks, it actually ended up taking 4000 dollars and three months.

Steve: Okay.

Pat: That as opposed to working with a great developer you know there was only a week or two delay in the actual time of everything, and just the quality of it is much better.

Steve: And so this particular developer, so you’re not a technical guy right Pat?

Pat: Not really, no.

Steve: So how do you convey how you want it to work to a developer being non technical?

Pat: Yeah, great question. Whether you’re doing iPhone apps, creating a membership site or putting themes on your site, or work on a piece of software, fantastic question, wire frame it. That means actually draw it out, and you don’t have to be an artist, you can just sketch it out. But actually have it drawn out in every single part of it sort of, and then that was another mistake and probably partly our fault in the beginning, why my first iPhone apps did poorly as far as that experience of developer because we were just like, hey in an email we are like we want to do this, this and this and it should be like this,” and then we got the first version and we are like this isn’t what we were thinking about. But then we looked at it, we’re like “oh, okay it actually does what we said, but that’s not how we meant it,” let’s get more detailed this time. And then even then the next iteration was like oh no, no, no that’s not what we meant, but you know they did it, they just misinterpreted it.

And so the best thing to do is draw it out you know what does every part of that screen look like? And then where does that button go? What does it look when people land on that? What does the action look like? Get really detailed with it and it’s going to take time, but what is going to happen when you that, when you wire frame whatever that piece of software is that you want or whatever the design of your website looks like, when you begin to wire frame it, you get to understand exactly what happens, and what the user experiences is like. And you get to think about all the different pieces that you might not have thought about when you were just explaining it to somebody in an email. It’s going to save you so much time down the road even though there’s that time investment upfront, because the developer will have no questions, there will be no issues as far as what things you will do when a person does what.

Steve: That is very good advice. I was just curious what you were going to say because as a kind of like a developer, kind of a hardware designer myself, like we always spend an enormous amount on specifications. And I was just curious what it was from a non technical perspective on how that works, and yeah absolutely everything you said makes perfect sense. You want to specifically specify every single aspect of your app, so that’s there is no misunderstandings about what you wanted it to do.

Pat: Right.

Steve: So..

Pat: Right, right.

Steve: So you know we still have another couple of business models to cover here. I want to talk about your niche sites.

Pat: Sure.

Steve: A while back you kind of became famous for your Niche Site Duel and that’s when you created security guard training. And then today you started foodtruckr.com, a niche site about catering to the food trucking community. Can you talk a little bit about the business model there, and what kind of the end goal is with that site, and how are you going to make money with that?

Pat: Yeah, I mean niche sites are similar to what we are talking about, but they are created in a more scientific way I guess you can say, based mostly primarily of off keyword research. So the idea is to build the site that you know is going to serve people based on what people are looking for in Google. And you can use tools like the Google keyword planner just free if you set up for adwords, you won’t have to pay for anything, you can just use that keyword on adwords. There are other tools like long tail pro, there’s another one called market samurai.

There’s a bunch of other ones out there, but they will essentially tell you know how many people are searching for different keywords, and then you can discover from there which keywords are more competitive or not, meaning is there room for some new site to come on the first 10 spots of the first page of Google, or do you feel like you would be able to create something better than what exists. And if so, then you have the potential to create a site about that. Now that’s just one component, that’s just the research part of it and a scientific way of approaching that research, but there’s also the idea of building the site and creating content for that site.

So you know it’s interesting because you could find a great keyword, but it may not be something that you’re very interested in. So for a while my strategy was to just build sites based off of these keywords, and even though it might not be a topic I know much about, I’d go and find out what that information is to help. Some people hire writers and just don’t even care about what content is on there. They just hire writers that seem to know what they are talking about. That’s not what I did, I found out what the added information was. So the first experiment which was done in 2010, I did keyword research and I found a keyword security guard training, which was relatively highly searched for in Google. It was searched for per month I think it’s 6400 times per month.

Steve: Okay.

Pat: And then the keyword competitiveness, it wasn’t very competitive and doing more research I found that there wasn’t very many sites talking about security guard training, or doing it in a very organized way. So I knew that there was sort of this hole that I could fill, but in terms of what content to put on the site, and doing even more research I found that every state in the US has a different set of requirements, or sort of things that a person has to do to become an official security guard in that state. It’s different in every state, and at first I was like “oh man this sucks, like this is going to take me forever,” but then I realized “wow maybe this is why there isn’t a site out there because it’s actually a little bit of work.” And what I ended up doing was was calling security guard companies in each of those states. Actually I did like the first 20 and just asking, “Hey I’m interested in becoming a security guard. What do I need to do in your state in order to do that?”

And so I was just getting that information directly from who I would normally need to go to if I was actually going to become a security guard in that state. And so I got the exact right information. I just easily organized it online, shared some links to you know government sites for those states if they were relevant, and then moved on to the next one. And when I got to about 20 my site ended up becoming number one in Google for that particular keyword security guard training, and then the traffic started coming in, and people started finding me not just on the home page, but all the content that I wrote for those 20 states, people ended up finding me through just a long tail keywords that I had written in those particular articles.

And again, I think I had an advantage not knowing anything about it, because I put myself in the shoes of somebody who would actually use this site, somebody who is a complete beginner, and I can talk in beginner terms. You know there is this whole idea of the curse of knowledge, if you know something it’s hard to know what it’s not like to know that thing anymore. So it’s hard to teach sometimes because of that, but because I was coming in fresh, it was easy for me to sort of know what it was like to come in fresh, because I was coming in fresh, and just reporting on everything that I was learning along the way. And then when I got to 20, I actually made a mistake of just stopping. I was like yeah, I got to number one in Google, I’m done. And the site started to make money through adsense actually. I had ad sense on there the moment I had traffic coming in which is some code…

Steve: Okay.

Pat: You can put on your site serves as ads for Google and companies you pay auctions to get served on sites that are rolling to that keyword, and I was making about 800-2000 dollars a month at that point and it was great. And then I was like “wow maybe I should finish the rest of the states.” So that’s when I actually hired somebody, and I was like “hey you need to call these states, and then write articles that look like this one,” the ones I had already written. And I paid somebody an evening it was about 1000 bucks to do that. So talking about 1000 dollars or one month worth of that sites income already and re-investing in my business, and then they filled out the rest of the articles. So I had all 50 states, and then I had that same person actually call all 50 states again to discover what it would take to become an armed security guard, so someone who actually carries a firearm.

Steve: Sure.

Pat: Because that was sort of the second highest search for keyword was armed security guard training. So I wanted articles for every state, so then now I have over 100 articles on the site, and the site has been number one in Google for almost four years now, and it’s making about 2500-3500 dollars a month purely on auto pilot, I don’t touch it at all.

Steve: And so in regards– I remember that Niche Site Duel, and a lot of the tactics that you use to get that to rank kind of no longer apply, and so how do you feel about– do you feel that Google is kind of effectively making niche sites a little bit less desirable to start today?

Pat: I think– you know that’s a great question sort of talks about the part I left out is to help it gets to number one on Google, it’s just not the content I wrote which did help because it was good unique content– stuff people were searching for, but I implemented a lot of back linking strategies. So back linking is a way for Google to understand what sites are important linking to particular keywords. So Steve if you were to link to my site that would be a back link from you to me and vice versa if I link to you, you would have a back link from my site, and that sort of counts as a vote in Google’s eyes, sort of like somebody vouching for your site. So I was using strategies like creating articles and putting them up on articles directories and linking back to my site. Google was very-very young in terms of how that worked and what actually counted as a vote.

Now it’s only links that come from relevant sites and you know those strategies actually do still work, but they are also more easily found by Google, and I wouldn’t risk that anymore. That’s why foodtruckr.com is sort of my new experiment that I started last year, where I am serving the food truck industry, again based of off keyword. And then I’m doing all I can to research and create content for this industry, and I actually fell in love with this industry ever since doing research because they are amazing people. People on food trucks– they work like 18 hours a day to serve food, and it’s amazing you know they have such– like they have an amazing entrepreneurial spirit. So anyway the strategy here though is just to stay connected with everybody in my audience, and to have them you know subscribe you know I have an email list now about 3500 food truck owners…

Steve: Okay.

Pat: Who are following the blog which is cool. I also have a podcast that goes along with it. And again creating an extremely high quality content that is relevant to them now that they are also asking for information about, and doing what I can to find and research that information as well so…

Steve: Okay.

Pat: Focusing mostly on that and not doing any sort of forced back linking and you know it took a little bit longer, but I am sitting number one or number two for Google for a lot of relevant keywords like how to start a food truck, how awesome is that.

Steve: Nice, okay.

Pat: Food truck business plan and actually in terms of my fixation, I just experimented. I just put out on some site a couple months ago to see what would happen. That’s not the primary strategy here, but I was able to generate 100 bucks just in 10 minutes of putting quote up there which is pretty cool. So 100 bucks a month now, but we are actually launching a book this month.

Steve: Wow.

Pat: We’re launching a book, so we spent a lot of time putting the book together and that has actually a sort of supped up version of a combination of posts that have been written for food truck and that’s going to be sold on the site, and we’ll see how it goes, but we already have an interest list of people who are interested in the book of 150 people.

Steve: Nice, that is very important.

Pat: Yeah, it’s definitely getting to email list, we start from the beginning this time. And it should be pretty cool, the book is not going to be on Amazon, it’s going to be one that we’re selling directly from the site, because we have already built that audience and we’re going for profitability. Amazon is great for you know getting exposure and taking advantage of their ranking system and things like that, but we built an audience already which is great. We have about 3000 Facebook fans. The site’s doing really good, it has become what I want it to be which is sort of the ultimate resource for food truck owners, it just– it’s just taking more time.

Steve: Sure.

Pat: But it is reflecting exactly what smart passive income did, and what [inaudible 00:50:10] did. Both of those sites took about a year and a half until it really started to make a dent in terms of income, and this one we’re at about almost an year now. And so we’ll take some time, and I really do believe in it, and the content is great, so I know it’s going to work in the end.

Steve: You know I was just about to comment that it seems like you’ve taken kind of the authority blog approach to your food trucker site, whereas security guard info, or security guard HQ was more like kind of more like the– you know you target a niche, try to just get to rank. It sounds like you’re going the more traditional route with content– really great content, building an audience, and then selling to that audience. Is that accurate?

Pat: Yes, yes absolutely, and because of the research we did, I mean this book is only one of several like several dozen business opportunities in this particular niche from software. I mean imagine creating a software that would allow food truck owners to discover you know what their inventory is like, or where to go to get the best produce, or what’s the most fresh, and what’s in season, or the nearest mechanic. Because one thing we found out was actually food truck owners– their food trucks break down all the time. That was one thing that almost every food truck owner we had talked to said, and we were like wow what if we could make your life easier in terms of what if your truck breaks down, whether it’s like a– maybe it’s an iPad app that goes over the most common issues for trucks, or you know connecting people with the nearest mechanic or something like that, they would pay for that. And it is just a matter of me and my team you know…

Steve: Right, putting it together.

Pat: Putting it together, yeah.

Steve: Hey, so Pat I want to be respectful of your time. We’ve already been talking for 50 minutes, but I did want to just kind of go through everything we’ve talked about here. And what I want you to comment about specifically is revenue velocity, meaning how much time you think it would take if you follow all the steps that you just outlined to make significant income to perhaps replace someone’s fulltime income you know for all the different aspects. And what you would actually do if you were to start all over, you just got laid off, and you kind of want to replace your income right away, what would you kind of go for?

Pat: Sure let me answer your last question first…

Steve: Okay.

Pat: Which is if I got laid off what would I do to make income the fastest? And what would I do first? I believe the best answer is some sort of consultation or freelancing. Freelancing is the best way to go, and even though that’s not necessarily creating online business where you’re creating a product that can be sold while you’re sleeping. It’s the best way to get online, it’s the best way to meet and connect people in a particular niche and serve them and get paid for your services upfront. I mean the people you meet through sharing your skills and selling your skills out there, I mean there are people out there who know that they can’t do everything, and if there is something that you have that they don’t want to do or can’t do you know they are willing to pay you for that.

And then that might help you start to build your audience in terms of you know the specialty skill that you have, and potentially create products or help other people who want to freelance in this particular situation as well. I mean there is a lot of possibilities that come on with freelancing, but it takes time to create an audience, it takes time to create these products, and that’s what’s cool about affiliate marketing is you don’t have to create the products, but you have to know about them at least which takes time. But consulting or freelancing is definitely a great way to go especially– you know it’s something you could do on the side too while you have a job as well.

Steve: Absolutely.

Pat: And then your other question in terms of revenue velocity and how long it would take, again it depends on what business model you have. The freelancing route would be the quickest I think, but in terms of building on that business using maybe software or something, I say that might take up to six months in terms of actually doing the proper research, and you know that’s something that’s going to take a little bit of investment. So you want to make sure you do it right and have the proper research and development team and that’s going to take some money as well.

In terms of building an audience, the blog or podcast or a YouTube channel for example and then serving that audience, that can take some time as well, I mean months perhaps. The niche site authority site route will take months, perhaps years. Well, I mean it’s not going to happen overnight, I think that’s key thing to realize. As long as you work at it, you chip away; put an hour in everyday, that’s what’s going to get you there for sure. And again what’s going to help you get your revenue even faster is more quickly understanding what those issues are, and more quickly understanding how to provide solutions for those problems in your particular niche.

Steve: Okay, you know I just wanted to comment on your answer. I would say that probably out of all the things we talked about, building an audience whether it be through a podcast or a blog will take you know more than a couple of months I would say right, at least a year or a year and a half maybe.

Pat: Yeah, it depends on how much time you have, how much you hustle, what the niche you chose to work in you know and there is a little bit of luck involved there as well. But I think in terms of what can give you the most long term success, once you build that audience say for example you have an email list of 1000 people all interested in deep sea fishing. You know they’ve subscribed to you because you give the best deep sea fishing advice; you have that list forever, right? You could take it anywhere with you, you can provide them with products or if your site breaks down you’ll be able to start a new site anywhere else and you have that group of 1000 people to you know who you’ve specialized to serve. And once you have that, you’re in for the long haul for sure.

Steve: You know when you started Green Exam Academy, was that a pretty quick process to get your stuff out there or?

Pat: You know I had created the site while I was still working, and I was studying for that exam, that took about a year.

Steve: Okay.

Pat: So I had that set for a year, but during that time I was getting found in Google, and again I didn’t even know because I had talked to people who purchased my e-book, and they are like “hey I’ve been reading you for like over a year,” and some people actually bought the book even though they didn’t need to, they already passed the exam and they were like Pat I just wanted to buy the book because you helped me out so much a year ago when I passed exam. I was like really, I didn’t even know people were using this a year ago. So like and that was just me not knowing what I was doing exactly, but I was very-very fortunate to get laid off, so I can then put my attention into this and see what the possibilities were. But it did take about a year and a half from the moment I created that site and started producing content for it, to the moment I started making money from it, about a year and a half.

Steve: Okay, yeah I just don’t want to spread kind of this misconception that you can get started up and in just a couple of months in any of these respective areas of online businesses, so everything takes time, you’ve got to put in the effort, it’s a gradual process with a lot of long term gain potential. You know my last question for you, I noticed that you haven’t tried selling physical products, and that’s probably the only thing that you haven’t tried yet, is that correct?

Pat: That is correct although it is something that is definitely on my mind. I believe and I’ve debated about this but once food trucker has sort of set and good and you know doing its thing, I might want to give ecommerce a try, and so definitely I’ll be contacting you and look to have you come on the show at some point to talk and get strategies about that.

Steve: Right, sounds good Pat. So hey if anyone wants to get a hold of you, what’s the best way besides sending you a video.

Pat: Wish you didn’t remind me that one.

Steve: Yeah my bet.

Pat: No, that’s cool. Smartpassiveincome.com is where you should go, and you can also find me on Twitter @Patflynn, and then everything else I have going on is sort of connected to that response.

Steve: All right, it sounds good Pat. Well, it was a pleasure having you on the show, and thanks a lot for coming on.

Pat: Thanks for having me, and thanks everybody.

Steve: All right take care.

Well there you have it and I hope you enjoyed that episode. Now Pat’s been on many different podcasts prior to this one, but I think this is the first time that he has compared and contrasted all the different online business models, and hopefully out of all the ways to make money online that we discussed you can find one that really suits your personality. And remember there is really no right or wrong answer, you simply have to pick a business model and take action.

For more information about this episode, go to mywifequitherjob.com/episode41. And once again I just wanted to thank 99designs for sponsoring this episode. I know a lot of you listening are waiting on the sidelines and trying to get the courage to start your own online business. I also know a lot of you out there run your business already and know that your website design could be better. Now designing a website is not that intimidating anymore thanks to 99 designs, where you can get over 300,000 designers to compete for your design. All you’ve got to do is list your design on their site and within 48 hours you will get dozens of design submissions to choose from and from there you can ask for slight tweaks and changes until you are a 100% satisfied with the results. And the best part is that the price is very reasonable and there’s a 100% satisfaction guarantee.

Plus by using the 99designs.com/mywifequit link and telling them that Steve from mywifequitherjob.com referred you, your design listing will be bolded, highlighted, and given a prominent background and featured before all regular listings, so that your request stands out among all the designers. So head over to 99designs.com/mywifequit and get something designed right now. And finally if you enjoyed listening to this episode, please go to iTunes and leave me a review. When you write me a review, it not only makes me feel proud, but it helps keep this podcast up in the ranks so other people can use this info and find the show more easily, and get awesome business advice. It’s also the best way to support the show and please tell your friends because the greatest compliment you can give me is to provide a referral to someone else either in person or to share it on the web.

And as an added incentive I’m always giving away free business consults to one lucky winner every single month. For more information, go to mywifequitherjob.com/contest. And if you are interested in starting your own online business, be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over a 100k in profit in our first year of business. Go to www.mywifequitherjob.com for more information, and thanks for listening.

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

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040: How Keith Walker Disrupted The Movie Theater Industry With an iPad And Raspberry Pi

Keith Walker Matt Sconce

As a big movie buff, I’ve always wondered how the movie industry works and how movie theaters manage stay in business. As it turns out, movie theaters have been on the decline for the past several years thanks to DVDs and services like Netflix.

That is why Keith Walker and his partner Matt Sconce decided to completely disrupt the entire industry with their site MovieHeroes.com. Their technology allows movie theaters to instantly adopt an all you can eat Netflix type of business model to maximize profit.

And their results have been staggering. The theaters that have adopted MovieHeroes.com technology generate many times the revenue of an average theater and their company is causing ripples across the entire movie theater industry.

The best part is that they are using cheap off the shelf technology to do so. Don’t miss this interview!

What You’ll Learn

  • How Keith got the idea to completely disrupt the movie theater industry
  • How the movie theater industry works
  • The economics behind running a movie theater
  • Why the Netflix model for a physical movie theater works amazingly well
  • What is a raspberry pi and what you can do with it
  • Why the movie studios were unhappy with the Netflix all you can eat model in the beginning
  • The inexpensive technology that Keith used to create a subscription based theater with RF id technology

Sponsors

Other Resources And Books

Transcript

You are listening to the my wife quit her job podcast where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now this isn’t one of those podcasts where we bring on famous entrepreneurs simply to celebrate their success. Instead I’ll 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 enter my podcast contest where I’m giving away free one on one business consultations every single month. For more information go to www.mywifequitherjob.com/contest. And if you are interested in starting our own online business, be sure to sign up for my free six day mini course where I’ll show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com for more information.

Now before I begin, I just want to give a quick shout out to this episodes sponsor 99designs. Now originally I wasn’t going to take on any sponsors at all, but 99designs caught my eye because I suck at design. And in fact when I first started my online store back in 2007, the design for my website was terrible, and I had absolutely no idea who to turn to. Now fast forward to the day, 99designs is a site where you can provide a description of anything that you want designed whether it be as logo, a web page a t-shirt, pretty much anything and have dozens of designers compete to deliver you the best design possible. And by best I mean that you get to choose your favorite design among dozens of submissions from a pool of over 315,000 designers.

So if you are design challenged like I am, I highly recommend that you go over to 99designs.com/mywifequit. And if you use that job and you tell them that Steve from mywifequitherjob.com referred you, your design listing will be bolded, highlighted, given a prominent back ground and featured before all regular listings so that your request stands out among all of the designers. And in fact this special offer is worth 99 dollars. So if you need a logo, website, t-shirt, business card or anything designed go to www.99designs.com/mywifequit. Now on to the show.

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

Steve: Welcome to the my wife quit her job podcast. Today I have Keith walker on the show. Now Keith is the cousin of one of my co-workers at my day job, and he’s got a great story. And I don’t know about you, but where I live, the movie theatres close by to where I live are pretty much a shell of their former selves. Now once upon a time, you had to get to a movie theatre almost two hours early on opening night for a very popular movie, but these days you can kind off just waltz right in at show time.

And what I’m trying to say here is the theatres where I live are pretty much not crowded anymore, and the movie theatre industry in my opinion in itself at least where I live is kind of slowly dying in my opinion. Now Keith actually noticed the exact same thing with the movie theatres in his area, so he started movieheroes.com, came up with a noble plan to save them all, and he invented a nice piece of technology to go along with it in the process that is now actually licensing to other movie theatres. And with that very cryptic intro, I want to welcome to the show Keith. How’s the going Keith?

Keith: It’s going great.

Steve: So give us a quick background story. I purposely didn’t reveal your technology or what you did in the intro, but tell us about your business, how you got started with movie heroes, how you turn this into both a technology and an ecommerce business on the side.

Keith: Cool, yeah absolutely. So the story– there’s definitely a couple of sides to the story, but basically what happened is I’m a software engineer. I was living in San Francisco, working at clout, and I got word from some of my friends that the theatre in my home town had closed down. And this is a theatre that I loved going to as a kid, had all these great memories, and so did my friends who had contacted me. And we realized that you know the town was in mourning that we were losing this wonderful place that everybody enjoyed, but it just wasn’t making it, like you said the attendance wasn’t up, and the owners of the theatre had just decided that it was –they need to close their doors.

They were facing the need to upgrade to digital projectors, and some other costs. And so one of my high school friends had the idea. He was living in the town of Oakhurst where I grew up at the time, had the idea like hey, you know all these other entertainment based products have moved to a subscription model, and why hasn’t the movies theatre industry moved to that model. And so he called up myself and another friend, and he was like hey what do you guys think about this. We thought it was a great idea and we sort of launched into seeing if we could generate some interest in the town to pay a flat fee and watch among other movies.

Steve: And so with that I imagine it’s a lot more complicated than you just described, right. So let’s go into a little more of a broader sense. How does a movie theatre work exactly, how does the economics work?

Keith: Yeah that’s a really good question and you know I learned– I dint know much at all about how this space worked until starting into this, and it’s pretty interesting. So if you look at– well let’s see, so the relationship between a movie theatre and a movie studio is somehow interesting. When you walk into a theatre and you buy let’s say a 10 dollar ticket, the bulk of that money goes straight to the studio that made the movie, and the theatre keeps a percent. So on a– for a really popular movie on opening weekend it might be 80%, so.

Steve: Wow, okay.

Keith: Eight dollars go straight to Sony pictures or to Warner brothers or 20 Century Fox, and then you keep a couple dollars. And you know if you look at the 10K financial reports of large theatre chains where they really separate out their revenue from their expenses, they will show that on the actual movie exhibiting side, they are operating at a loss because you can imagine what that two you know that 20% of that ticket– you really can’t afford to operate the exhibit side of the business, so most movie theatres make their money off of concessions sales.

Steve: Okay.

Keith: I would say movie theatres make– that’s where they make their money

Steve: Okay. Wow, okay so just two dollars out of the ticket. So that’s– yeah everything is concessions, and you got to make rent, and then you have got to pay the people who run the projectors, then you got to pay for the capital equipment, right?

Keith: Absolutely, yeah.

Steve: Okay, so in going to a subscription based model then, what are the some of the things that you need to take care of in order just kind of satisfy the movie studios themselves.

Keith: Yeah, so you know one thing, we thought about this you know we are like, we talked to the party owners and you know one of the issues that they saw was the business isn’t very consistent. And another really interesting thing about the movie industry you know something that really surprised me to see is you know we looked at the finances from that theatre and we– I just swatted [phonetic] their ticket revenue for the year, and it was so insanely seasonal in bulk it was just amazing. So during the summer they were doing very well you know making a pretty good amount of money, and then September was about a quarter of what July was. So we are not taking about like a 10% variability or even like 50%. We are talking a factor of four…

Steve: Wow, okay.

Keith: Between months, and so we found that this theatre particular always operated at a loss for a number of months in through the year, and they made a decent profit during December, and so two times in a year during like the holidays and during the summer. And since then you know now that we still get into this later, but we’ve spoken at a number of theatre owner conferences and talked to hundreds of theatre owners, and this is the norm. Theatres operate at a loss for– through September and then through the spring and they make their money and bank it during the summer.

And so what we really thought was like hey with a membership model, we’re going to provide a lot more consistency, and that’s kind off what we are going for. A consistent bedrock income from your membership dues that are collected monthly in auto renewing and all that, and then that’s going to help with the expenses and then that was kind of the direction we are going. We– what we thought we would do just to kind of not create too many waves is we would still pay the studios in the same way, so basically we would be buying the ticket for the studios.

Steve: Okay.

Keith: For the members to give to the studio, so we thought the studios would just be like, oh cool this, you know from the interface between the theatre and the studio from our perspective didn’t change much, and we thought they’d all be like oh cool that’s fine, and we assumed that attendance would go up and we talked to the studio representatives. So we talked to them and said, hey we’re on to this thing, we think that attendance will go up and everybody wins. So I’m sort of yeah there’s definitely two sagas to the story at least two if not three. So one is before we wanted to take over and like kind of save this theater, we wanted to– we had a certain number of members that we needed to have before we’re going to take over operating the theatre, so we had a goal.

Steve: Okay.

Keith: But then…

Steve: How did you come up with that goal?

Keith: We came up with the goal just from looking at what the finances or what the expenses were and what the…

Steve: Breaking even point kind of.

Keith: Just the breaking even point. And we are going to share a little pass at breaking even point, just so we are somewhere comfortable.

Steve: Okay.

Keith: And yeah just projecting what we thought the attendance was going to be, so there’s a lot of questions, but yeah we came for members 3000.

Steve: Okay.

Keith: You know 3000 members, populous from the town is– the area is roughly 15,000 people so…

Steve: Okay, so that’s actually a significant percentage of the town, right.

Keith: Yeah.

Steve: Okay.

Keith: Totally is.

Steve: Okay.

Keith: So you know we’ll totally– I’m sure we’ll get into you know how you went about doing that, but the second piece of it was after we signed up all those people, we didn’t realize this was going to happen, but an article ran at LA times about what we did and we hadn’t opened the doors yet, and we got a call from the senior vice president of distribution from Sony pictures and she had read about what we were doing and was like hey you know this is different than what we are used to. And anyhow they you know they were like we do ticket stuff. So basically what we found out is that the studios in general were not super happy about what we are doing, and at first they were not– they wouldn’t give us their product.

Steve: Okay. Why would they care as long as you are paying for the tickets of the people that are coming in?

Keith: They cared for a couple of reasons. One is I think that it’s just– it was very different.

Steve: Okay.

Keith: Just you know change is a little bit scary and just you know they’ve been doing the ticket mall for 100 years, and that’s what everybody has done. More specifically there also has been a long history of independent theatres misreporting the attendance since the biggest expense to a theatre is– the biggest expense to the theatre is that paying the studios you know if they’re struggling you know they kind of default or together would misreport a number. So that’s happened a lot in the past…

Steve: Okay.

Keith: There’s a history of that, and so from their perspective the incentives were different now because now you are not collecting money once someone walks in the door. So would lessen even now less incentivized to accurately track or report that information

Steve: Okay, so they were worried about fraud essentially?

Keith: That’s correct yeah.

Steve: Okay, all right and just to back up a little bit regarding the way that a movie theater actually gets the movies, do they have to pay an upfront cost and then the ticket prices, or is it just straight ticket price.

Keith: Yeah that’s a great question, so it varies a little bit between movies and between studios, it’s actually pretty complicated. You– for each movie you actually negotiate a percentage with the studios and we actually hire someone to do that for us– most of the others do. But by and large the deals are a percentage of ticket sales only, there’s not typically an upfront fee. There may be an upfront guarantee, but if you bring in like a block buster movie and only five people watch it, and let’s say your terms work out so you pay five dollars per person that views it, you’re only going to pay them 25 dollars, said and done.

Steve: Okay, all right. So there’s a strong incentive for them to get an accurate head count for people who actually buy tickets then?

Keith: Precisely, yes.

Steve: Okay, and then the other question that I had was what sort of – so I noticed that theatres always are playing some of the movies that aren’t as popular. So as a theatre can you always get the blockbusters or do you kind of have to pay the price and why would you– what’s the incentive for you to show a bad movie at your theatre?

Keith: Okay, yeah that’s a great question. Yeah you know when– before I got into this business I didn’t really realize how it works, but you know the studios do have, they have– they are the sole source of their product, and their products are– the consumers know exactly what they want and they’re going to want a product. And it’s extremely important that we can show every major block buster movie and the studios know this and they are not afraid to use that information to either actually pull products or to just require us to do certain things in order to get a blockbuster movie. So if The Hobbit– the next film of The Hobbit’s coming out and there’s– by the same studio there’s a less popular movie between now and then, they may say hey you know if you want to show The Hobbit on the opening night, we are going to need you to show this film for three weeks.

Steve: Okay.

Keith: Yeah and another thing that will happen is we often can’t necessarily– we have to for every single movie we open pretty much if it’s a blockbuster movie, we will require to keep it for a number of weeks. And even if it’s not doing as well and a brand new movie has come out by a different studio, we may be required to keep that movie for a third week or the like so.

Steve: I see, even though you know this other movie is going to make you a lot more money.

Keith: That’s correct yeah.

Steve: But you can, can’t you just move it to kind of like this little this teeny tiny theatre with like 20 seats in it?

Keith: Absolutely, yes you can do that. And so we’re– you know so we own and operate one location. We have five screens, so we’re pretty limited on the amount that we can do that, but one of our screens is definitely a lot smaller and that’s kind of– that’s where the movies go. It’s the last place that they end up showing yeah.

Steve: Okay, so okay let’s go back to what you were talking about before then. So how did you convince Sony that your business model was good, and that you weren’t going to commit fraud?

Keith: Oh yeah. So Sony was actually awesome. Sony worked with us, they weren’t– they didn’t just say hey we won’t work with you or hey this is different, we are not used to this so we don’t– we won’t just move forward with this. They were able to articulate the reasons why, and to work with us and to have ongoing conversation with us about what we were trying to do, which was amazing

Steve: Okay.

Keith: And we’re really appreciative of that. And so we added– we started adding a number of different auto mechanisms and as we did, more and more studios came on board. So well Sony was kind of the first one to say hey I don’t know about this, this is different. They were actually one of the latter studios to come on board so– but while they were kind of helping us and we were talking with the other studios, we actually had three studios come on board. So we actually opened our doors with just three studios. We have 23 now, there are seven major studios, but we opened with only a limited amount of product because we could only show from those three studios.

But the specific mechanisms are– well the biggest one that something different that hasn’t really been done before is we have infrared camera system in auditoriums that take a picture 20 minutes into the movie, and they take an infrared picture and it’s archived and associated with that exact showing and we keep it. It’s archived for 10 years and we make it accessible to the studio whose picture was playing at the time.

Steve: Okay, so that implies that at any point in time they can just do a quick audit of what’s going on in your theatre.

Keith: Absolutely yes, they can– so we set it up so they could actually see a live video feed while their picture is playing, and the industry is amazing. I mean I did not understand all this, but they– the studios all have auditors that come out, and they just travel around, they get some are local, some travel around and they go into a movie and some are anonymous, some aren’t, but they’ll just do a count. And it’s a way to really make sure and to keep the– all the theatres accountable and make sure that we are reporting properly, so we don’t know when that’s going to happen. So they do that. And so what we’re essentially doing is we’re allowing them to do that for every single show if they choose to, and they can go back in time if at some point in time you know something is suspicious, they can go back and say, okay over all time you know this…

Steve: So is this something they ask for, or did you just kind of come up with this because I would imagine most theatre owners are not tech savvy, they wouldn’t be able to come up with an infrared system, right?

Keith: Yeah, so you know it was– it definitely came about talking with Sony and we had– I don’t remember if it actually came up. If that was actually– that specific thing was brought up by Sony, but were contacted by someone who read the article in the LA times, and they said, hey I have worked in this industry for a very long time and I know how this works, and I know that this is going to be a sticking point for them. And it was actually like a gentle man who just sort of sent us an email and said hey you guys should really consider doing a camera audit system because it’s something that I know having been in the industry that the people– the studios had wanted forever, but nobody had really– no theatre wanted to do it, and so it had never been implemented. So it sort of came from an outside source, but we had internally we had the know how to kind of build out that system and so we did and that’s you know that was definitely one of the– that’s the biggest I think single block in getting the studios on board yeah.

Steve: Okay, and then so I want to get into all that in a little bit, but I just want to talk a little bit about how you got those first 3000 ticket sales. So what did it take? So this theater is out of business, you decide that you want to do kind of like a Netflix sort of model for your theatre, how do you actually convince one fifth of the population that they need to actually sign up for one of these subscriptions? How did you do that?

Keith: Okay, that’s a really good question and I do have to make a huge shout out to Matt Scorns who is my cofounder and this is really– he is the marketing genius behind all of this. So you know I definitely worked a lot on the technology side and we worked through a ton of really interesting things that we will talk about and…

Steve: Actually before you even go– talk about how you did it, can you talk about what the process is like for someone who is actually signing on first, and then let’s get into how you actually sold the tickets.

Keith: Yeah, okay so the process is, there’s a website movieheroes.com and they just go on to that website and fill out a little bit information and they sign up for the membership, basically provide their credit card information. We do require that you sign up with a credit card and it’s automatically renewing monthly, it’s 19.95 a month for an individual. For– to add another adult so do like a partner plan, it’s $15 to add someone else to the plan, and then children, 12 and under are $10. So you sign up online and then at that point we had made the promise that we weren’t going to charge anyone unless we open the doors and unless we hit the goal, so it’s a kind of zero risk thing. Now that we’re operating, someone signs up online, they can sign up in person or online, they come in and they get a membership card and that sort of thing so.

Steve: Okay, and so once they get to hear they just show the card and they can just go right in?

Keith: Yap, they swipe it over RFID sensor and they put a ticket and move on in and yeah.

Steve: So how do you, how did you come up with those prices I’m just curious. So 20 bucks the average ticket price these days is over 10 bucks right, so you just estimate that people would watch less than two times per month or this was…

Keith: Yeah, so our process was really around– it was an optimization problem where we were like really trying to look at– yeah I have an engineering background, but I’ve also done quite a bit of– I worked kind of in a finance position when I was at Lockingbird [phonetic] for a little while. I did a rotation there, so kind off in the spreadsheets too, so I built a little financial model that could take into account what our expected total costs were. So the overhead cost plus all the marginal costs at various levels of attendance.

So what we did is we had that model, but what we kind– we kind of independently did a kind of a little price elasticity estimation, so what we did is we said the three of us can work on the startup idea at the time all went off on our own and asked people, hey if it was $10 would you sign up for a month, if it was 30 dollars, if it was 40. So we built a little percentage of convergence, so we started with you know, if it was free we all want say– if it was free all the way up to I think we did $50, and then we sort of averaged all that.

Steve: How did you get the data, sorry did you send out surveys or…?

Keith: No we just– it was super simple, it’s just like our personal estimation plus like we went out and asked like 10 people or you know just like asked our family and friends who live in the town like hey what would you pay, what would you pay? How much would you pay? And then just flogged that in and really it’s like you know obviously the zero dollar won, we operate in a loss, but at you know some point less percentage of people signed up that they would pay more, so it was an optimization arrived you know all three of us separately and together we arrived at $20 was our estimation of the likely most profitable figure.

Steve: Okay and then you mentioned earlier and I’m sure this is– it varies across all movies, but you said in a blockbuster you know 80% of the ticket sales goes to the theatre, I mean not the theatre but to the movie studio.

Keith: Yeah.

Steve: And so given that a ticket price is 10, that’s like eight bucks right?

Keith: Yeah.

Steve: So 20 bucks, that’s something like two and a half tickets then?

Keith: Right.

Steve: Per person?

Keith: Yeah, so I used that number, you know that number actually it’s– it goes up to– I haven’t actually seen a movie that did this, but I hear movies that are 90% have been 90% in the past.

Steve: Okay.

Keith: Our average is a bit lower though because what happens that’s the first week and the second week is you know it might be– let’s say that a blockbuster opens at we’ll just say 70%, the next week is probably going to be 60% and then at 50% so…

Steve: I see.

Keith: As you know you can set up a contract for a movie like that or flat. We intend to do more flat, percentages one doesn’t vary week to week because we try to keep a movie for a short amount of time, so we try to keep them for two weeks, but anyhow it works out to be often closer to 60%.

Steve: Okay.

Keith: If you pick a movie a few weeks out like, three weeks out you can often get it for 35% so…

Steve: Got it, okay.

Keith: Yeah.

Steve: Okay, and so now you had this ecommerce side up where people could sign up, get their cards, how do you get the word out about that side?

Keith: Okay so there was– we had access to the theatre itself which is nice, and so what we did is we put on the mackee [phonetic] outside of the theatre and we said we really kind of taking cues from Apple and the way that they’ve got a lot of free marketing from being a little bit cryptic and letting the rumors– the rumor mill run and people just kind of, curiosity get peaked. So we posted on the side of the building– there is a way to save the theatre, you will find out soon and posted that all over Facebook, started a Facebook page called ‘save the met’ the Met is the name the name of the theatre.

Steve: Okay.

Keith: And this was Matt’s doing, Matt Scorns and so we really tried to not let anybody know what was going on, but really peak peoples curiosity. And so let that run for a while even while we were in the background kind of trying to build up all of this and…

Steve: I’m sorry, so this movie theatre is part of a plaza or a mall.

Keith: Yes it is part of a shopping centre.

Steve: Okay, so there foot traffic and then they’ll see these signs on how to save the theatre.

Keith: Yes and its right on [Inaudible] [00:25:39] little mountain town right at the entrance to Semi National Park. It’s on the corner of the two highways that come to the town, so there’s a lot of foot traffic and there’s a lot of you know it’s on the side of a building so people that drive buy can see it.

Steve: Okay, and in terms of your Facebook page, how did you actually get people to like it and become fans?

Keith: So that was really just– there was an existing Facebook page from the theatre, so..

Steve: Okay.

Keith: We put something there to direct people over to this other page to– it’s like, I think it was actually a group, a group to save the theatre.

Steve: Okay.

Keith: And also Matt’s very plugged in the community and really just spread it on through all channels. I wasn’t living in Oakers [phonetic] at the time. We all– it really spread, it’s kind of viral, people– the whole town was like in mourning. It was the cover of the newspaper that the theatre closed. You know it’s definitely one of the really big things to do up here. It’s a small town. You know the population that we marketed to is actually seven towns, they’re all around in the area. They are all pretty spread out, but…

Steve: Okay.

Keith: You know right here. Right in Oakers you know everyone was– it was the talk of the town.

Steve: Okay got it okay, so there was an active interest in these people that they were actually losing something that was very dear to them, like a major entertainment aspect of their town essentially.

Keith: Right.

Steve: Okay.

Keith: Because the closest theater is in Fresno which is like a 50 minute drive away and you know a lot of the people that live up here, they live up here because they like the mountains and they don’t really necessarily enjoy going to Fresno. So to them it was like oh! Man we’re kind of getting sort of cut off from the rest of the world in some ways by not having that content here.

Steve: Okay and so you did Facebook and then you had signs out in front of the theatre, what else did you do?

Keith: So we made a video, we recorded a video that sort of explained what we wanted to do, and pretty concisely and talked about who we were you know that we grew up in the town and that what our backgrounds were that sort of kind of as a way to educate that we were capable to pull out what we were trying to do.

Steve: Okay.

Keith: And a way to just say we were trustworthy because we are here, we are part of the community. My parents own a business in town, Matt’s dad is a teacher of a high school. We both grew up in the community and all that, so we had a nice concise video that…

Steve: Okay.

Keith: Would resonate well with people. Then the other two big things, we did a direct mail campaign.

Steve: Interesting, okay so how does that work out?

Keith: So we just did– we made a flier that we could do– we got a bulk mail permit and we just did drop mail the flier to every single household in actually all those seven towns. We did, it was 22000 homes I think that we sent that flier to.

Steve: How does that work? How much does it cost?

Keith: It was, I’m trying to remember. So it was the bulk mail and when I say a bulk mail there was no labeling. So it’s much less expensive than a stamp, I think it might be 11 cents or something for the mailing part.

Steve: Okay.

Keith: And then we had local– we had a printer here in town whose one of the friend that helped– we started this with his parents own a printing company, and so they helped us out with that. So I think all tolled was maybe $6000.

Steve: Okay, not too much actually.

Keith: Yeah.

Steve: Okay.

Keith: And what was fun is I sold the car recently, and I had cash from selling that car and so I took you know sold the car started a company kind of thing. So that– two places; one went to I kind of got the guy and had a couple of cars lining up, went to two things; one is I took some of my cash and actually start the corporation like $800 of fees to do that, and then the other rest of the cash went to print and mail ads, so something good and symbolically but it was kind of.

Steve: Did you guys do any sort of paid advertising at all like Facebook or Google or anything like that?

Keith: So we did– we definitely did promote it, so when we posted things about what was going on, we promoted those posts on Facebook.

Steve: On Facebook, okay.

Keith: Correct yeah, we got a lot of traction on Facebook for sure.

Steve: Okay, and that was probably a large drive up to the sign up to your tickets. Did you actually have the break down or…?

Keith: Of like how many people came through Facebook?

Steve: Through Facebook, versus actually buying it at the theatre, versus the direct mail campaign. How do you measure direct mail campaign actually?

Keith: Yeah you know actually I– we– there’s probably, we thought of kind of ways of doing that where you have a different URL and that versus other things. And at this early phase we didn’t kind of do the hard work to be very good scientific about measuring things, we kind of just went all out on all of us.

Steve: Okay sure.

Keith: I don’t really– I could speculate what I think came from where…

Steve: yeah, that’s fine.

Keith: But I don’t have the hard numbers on that, it was definitely as we moved along and trying to get our 3000 member we definitely started measuring things a lot more.

Steve: I’m just trying to get an idea of the effectiveness of each style of marketing, so any ball park that you have or gut feel that you have.

Keith: Okay.

Steve: Would be helpful I think.

Keith: Okay, well I will say this, so we did we did a second direct mail campaign while we’re pretty far along. So we gave ourselves 30 days to– we’d negotiate with all the parties involved and we wanted– the current owners of the theatre we basically told them “hey can you hold off on closing theater and selling off things,” and if this works we’ll take over your liabilities and we’ll operate the theatre. So we gave ourselves just 30 days, and during that time you know the day– I’m really going to have trouble picking up a good number because we had…

Steve: It’s okay.

Keith: We had the front page of the news paper plus we released some Facebook plus the direct mail, but what I will say is we did another direct mail campaign probably 20 days in because we were– we still had 1000 to go you know and we only had 10 more days and things were slowing. And we saw almost zero, it was like 50 more sign ups, then it was like a very small bump from hitting all the households a second time. So whether we were saturated or what, we really felt like we didn’t get a ton out of that, but you know having the multiple touch points I think showed that we were serious, and kind of ensured that the tech savvy versus and the non tech savvy gap.

Steve: Okay, and so did you guys do any Google stuff or Bing or anything like that, just mainly Facebook and direct mail?

Keith: Yeah, Facebook, direct mail, cover of the newspaper in town definitely helped. We did a lot of– and again this is something that really only works when you have a single geographical location be applicable. We did– the youth in the town was greatly mobilized and that organized all this, so we had a lot of junior high and high school kids dress up like super heroes, and like stand on the corners of the streets with signs that say like save the theatre and you know that got a lot of coverage too because of that, and we also set up tables at the grocery stores and we had laptops there and iPads and people could sign up as they walked in.

Steve: Okay.

Keith: Yeah.

Steve: That’s cool.

Keith: There was definitely a ground campaign.

Steve: Okay.

Keith: That went on too.

Steve: Okay, so let’s switch gears a little bit because I want to talk about what I think is really cool about your business which is everything that you put together to enable this sort of Netflix style of movie theater viewing. You’ve taken that and you’ve actually created a technology that you can actually license out to other theaters, so how did you go about doing that, and what did you get actually? How does it work?

Keith: Okay, yeah well, so from the start you know I mentioned before this kind of like two perspectives to the story, and one is definitely we really wanted to save our hometown theater and it was something that was a huge motivation. We also from the start saw as an opportunity to test out a new business model and we didn’t really know how successful this new business model would be or not. And it was– it’s been very successful in ways we didn’t anticipate and just to expand on that a little bit, our members watch movies at a rate six times of national average.

Steve: Wow.

Keith: And the attendance to this theatre is three times what it used to be.

Steve: Okay and then I would imagine that the concessions have gone up three Xs as a result of this too, right? Which is the bread and butter of the theatre.

Keith: Exactly and…

Steve: Okay.

Keith: Sort of this is something– it’s so interesting because the– it seems like a fairly trivial change, changing the nature the way I which a consumer pays for a product and so a change from pay per view to unlimited flap payment seems very trivial, but there’s so many things that follow from it. So one is that six times attendance, but also there’s people buy a lot more concessions. So not only are we selling three times as much, we are selling more than three times as much because people buy– each individual person that comes in buys more than they used to, and we believe that that’s because people are used to spending a decent amount of money when they come to the theater, and they didn’t pay for the ticket at that time you know it’s a suncky kind as it cost in the past, and so they feel like they didn’t buy anything so they might as well buy something. So the people that used to buy popcorn now buy popcorn and a soda, and the people that used to not buy anything now buy popcorn.

Steve: I can see that because you’ve already– you’re not paying any money at some cash, you probably forgot about it.

Keith: Yeah.

Steve: And it’s like you’re going for free, you may as well buy something.

Keith: Yeah.

Steve: Okay, cool.

Keith: And so you know the end and total version of the six times the national average is people tell us that they used to have this conversation in their head and say, okay what are the movies I’m going to actually experience properly in the movie theatre and right when it comes out, and what are those three movies for the summer? Or two movies for the summer, or four movies for the year, and the rest they just have this assumption that “oh I’m just going to wait and I’m just going to watch it on my small screen at home,” and they tell us that they now no longer ask themselves that question. And now every single movie that comes out if they think it might be interesting, they think they might like it, they come and try it, and if they don’t like it they can walk out and they don’t feel guilty because they didn’t spend any money.

Steve: I would think the same way. I always wait for stuff to go out on video actually, but if I had this membership I would probably go to the movies a lot more. Yeah totally, I can totally relate to that.

Keith: Yeah, so it’s been pretty profound, the benefits have definitely been profound.

Steve: Okay, so let’s talk about the stuff that you’re licensing to other theatres. How do you reach out to other theatres, and how do you advertise that part of your business?

Keith: Yeah, so I said that because what we realize is it’s such a benefit. So it worked out so well that we realized that this is definitely something that could work well at other locations.

Steve: Okay.

Keith: And so we were– we got noticed a bit because there’s this service called the rain track which is this site that theatres report their ticket revenues– their ticket revenue to, and other theatres have access to this. So this is somewhat public knowledge how well a theatre is doing, and our theatre tripling its attendance is a really big deal for theatres in the California, in this region, we’re the highest growth.

Steve: Wow, okay in all of California?

Keith: Yeah in the region, it’s called– we’re not actually considering the San Francisco region all of the way over so if somebody, so yeah…

Steve: Okay.

Keith: But it’s a vast region.

Steve: Wow, awesome.

Keith: Yeah, and so we got noticed by you know studios were very happy about that, but we were asked to speak at a conference, National Association of Theatre Owners Conference about what we were doing because we were doing something different and it has proven to be successful. And that was a regional conference and then later we were– we spoke at a much larger conference, which is the same association’s national, actually it’s an international conference. So we’ve been speaking about what we’re doing, and that’s the main way that we’ve gotten in contact with other theatres. And so what we have is we have packaged basically a complete system from what we’ve learned that we’ll convert a theater from a ticket theatre to a membership model theatre.

Steve: Okay.

Keith: And that system includes the technology we have, so there’s a new point of sale system supports all of RFID cards and has the system we talked about before.

Steve: Is that a piece of hardware then?

Keith: Yeah, so there’s….

Steve: Okay.

Keith: There’s– it’s actually come to two components to each point of sales station, there’s an iPad the employee operates, and then there’s– we do still take cash so everybody’s credit card is linked to their little nifty movie heroes RFID card, so they can just you know just buy the concessions, and if they have friends with them they can buy tickets for their friends, that’s another privilege of being a member. But that’s…

Steve: Very clever.

Keith: Yeah.

Steve: Okay.

Keith: It’s kind of like you’re in a cruise or something where you sort of you know.

Steve: Yes.

Keith: That payment method just go up and get more popcorn, walk up there, you don’t have to bring out– you actually don’t have to get your wallet– get the card out of your wallet because it’s RFID, so we can actually read it by proximity if you’re within.

Steve: That’s dangerous.

Keith: Yeah, it is.

Steve: Nice, clever okay.

Keith: Yeah so that is how that we also– so it’s a complete like just point of sale station or cash draw and all that, so we have actually developed that sort of from the ground up, we have a piece of hardware that, that hardware plugs in to an iPad, comes together and makes a specific station.

Steve: So basically it’s just an iPad with a sensor and you probably coded something, an app to handle all this stuff, is that accurate?

Keith: That’s correct.

Steve: Okay and then did they get the website component also?

Keith: Yeah, so they get sort of a theatre management tool that has a lot of back office stuff for doing reporting for your– it reports to all these, the studios and to the screen track service I talked about. So just some of the things that theatre need to maintain, to manage a theatre and also the financial side, so reports to go to your book keeping software, that sort of thing.

Steve: Was that written from the ground up, or is it based on a platform?

Keith: That was actually for better or worse all this has been written from the ground up.

Steve: Okay.

Keith: And the reasons behind that are really because we wanted something very specific and sort of it’s kind of funny because looking back it’s like because of the software background– because of my software background it was something that we could do. And so that’s the approach that we did, and we sort of looked briefly into other systems and they didn’t have the membership component, they didn’t have the RFID component and some of the things we had, so instead of trying to modify– getting and modifying one of those platforms, we sort of…

Steve: Okay.

Keith: Started from the ground up, but so we also get that camera auto system that I talked about and they get some really awesome marketing material that they run on screen that helps them through the transition from a ticket model to a membership model because it is a rather large conceptual shift.

Steve: Yes.

Keith: That you need to get people warmed up to a little bit.

Steve: So do you actually sell the hardware or do you tell them to buy the hardware component and you supply the software that runs.

Keith: So we actually, we provide the hardware.

Steve: Okay you provide the hardware, okay.

Keith: And so it’s a revenue share because what we’re doing would typically be classified as a franchise, so learned a lot about franchise law and all that, but we actually didn’t want to be classified as a franchise. So you know for various reasons, but– so what we are is– it’s kind of a franchise, so we do programming. So the theatres that are operating with our systems, it’s they maintain their name, but they’re powered by movie heroes is sort of the co-branding.

Steve: Nice, okay.

Keith: And it’s like a– basically it’s kind of like a credit card processing feed. So we actually– the membership dues and actually all the concession sales– that money flows kind of through us, so we orchestrate that and we take a fee off the top of their gross revenue for the theatre and we remit to them the remainder.

Steve: Wow.

Keith: So there’s no like accounts receivable and they just get you know after we take our fee off the top which is in the same way that a lot of credit card processing companies work.

Steve: Okay.

Keith: That’s how we operate, and we charge nothing upfront and we don’t charge them for the hardware. So they are basically licensing the entire system from us including the hardware.

Steve: I see, okay wait, so all the money flows through you and then you pay them?

Keith: Yeah.

Steve: That’s how– wow that’s incredible, okay.

Keith: The reason why– that’s actually the reason why I’m missing some technicalities, but so in order to be classified as a franchise you need just like a three prompt test, and one is that there is a trade mark involved that either is required to be used or can be used if you offer a system and that system is super easy to find and lastly if you charge a fee. If you do all three of those things and you are a franchise and you have to go through a pretty lengthy registration process with the federal government and with each state to be registered as a franchise.

Steve: Okay.

Keith: So we actually don’t charge a fee because it’s not technically a fee because there’s never the payment never flows from the theatre operator to us.

Steve: I see, okay.

Keith: The bureau collects money from the customers, and then remits a portion to the theatre operator.

Steve: Okay.

Keith: And so their money never flows in the direction towards us, it flows from customers to them.

Steve: Well that’s kind of dangerous. If I were to own a theatre and then all the money from all concessions– I imagine you don’t pay out right away either, right? Maybe at the end of the month or something?

Keith: We pay– it’s a rolling– we pay every day. It’s like a two day loaning window.

Steve: Okay, that’s not too bad.

Keith: So they’re getting it right away, yeah.

Steve: Okay, I was going to say because then you could actually invest that money on the float also.

Keith: Oh yeah, it’s actually so we use stripe as…

Steve: Okay.

Keith: Our processor and they allow us– we’re using them as a clearing house, so the money basically goes to stripe, it never hits our bank accounts either. The bulk of money because we actually orchestrate through stripe. The software says, oh go charge the member this much, oh take this portion of that money and give it to the theatre operator or take this portion and give it to media heroes. So it never lands on our books, it never lands on– the whole doesn’t land on their books, it’s actually kind of split payment from the customer.

Steve: Right, this is all very cool and what I really like about it is it’s all from like off the shelf component so to speak, right?

Keith: Yeah.

Steve: Straight to handle all the pre-payment processing, you have iPads and then sensors and that sort of thing to handle the RFID. Everything is much more doable today, like if this is like 10 years ago, this was a lot harder.

Keith: Oh man if it was 10 years ago this would be so much harder. The other amazing piece of technology that we’re using, and we’re using actually all over the place, I know I could rave about this forever, but we use Raspberry Pis.

Steve: Really, that’s incre– yes I am, that’s incredible. I’m sure my audience isn’t, but Raspberry Pi is– how much is it, like 25 bucks, 35 bucks?

Keith: 35, yeah.

Steve: 35 bucks and it’s essentially like a computer on this tiny board that has an arm on it, right? I think.

Keith: Yeah.

Steve: And it just– you can do a lot of stuff with it, program it, tell it to do whatever you want.

Keith: Right.

Steve: So what do you do with Raspberry Pis?

Keith: So, yeah I like to think of Raspberry Pi as being– it’s kind of like an iPhone with a similar process with an iPhone. It’s a complete computer for $35, and so it’s almost standalone entity. And so all of our register stations have a Raspberry Pi, and that’s the piece that all the sensors plug into. So there’s a credit card reader that plugs into it, there’s RFID reader that plugs into it, the cash drawer plugs into it, ticket printer, receipt printer, all these plug in to Raspberry Pi and that what services that little hardware that’s right there. And then the Raspberry Pi and iPad talk to each other.

Steve: That’s awesome.

Keith: And it’s $35, I mean it’s amazing. So the original version of the software that I wrote when we first opened was written on a PC, and so we had this big clunky PC sitting at each register station, and this was like expensive for on one, two it was hard to maintain because windows– we were running on windows and we were constantly having some issues with that and updating it and all that.

So it was like hey an iPad plus a Raspberry Pi is an extremely inexpensive solution and it is way more maintainable because it was Linux, I mean I can update all these Raspberry Pis, we have all these locations from my laptop sitting at a coffee shop you know in a second, it’s amazing. So absolutely love the Raspberry Pi, and it is such an important component and you know you mentioned that all these are kind off the shelve things and so true, and I was thinking about that before we got a call here, it’s about like there is– so many things are accessible to the individual person that didn’t use to be including like yeah stripe and all of our stuff runs on Amazon servers, and it’s like stuff that there was no upfront investment, it’s like all pay you go kind of stuff.

Steve: That is awesome, that yeah. I’ve always wanted to play with one of those Raspberry Pis, I don’t want to bore the listeners, but may be afterwards I…

Keith: I’ll say one of the places we are using them, we are also using them for the cameras. So the cameras are actually a Raspberry Pi, it’s sitting up there in the auditorium and we have– there’s a Raspberry Pi, [Inaudible] [00:47:11] camera allows you to pick up infrared light, there’s no infrared filter on any of them. So our cameras as well– our original version again wasn’t Raspberry Pi, but we have a second version of our audit system that runs on Raspberry Pi. So we run the theatre basically show up like you know the last theatre we did there’s– it’s a six range, so we show up with 12 Raspberry Pis.

Steve: That’s awesome.

Keith: We just start installing.

Steve: I imagine you built a case for them too; it’s just a bare board when it comes, right?

Keith: Yeah.

Steve: Okay.

Keith: So we had a couple off the shelve cases, but even that it’s like we found a case that you know for the ones that’s register station ones we don’t need the camera. So there’s a case for without camera, it’s five dollars I think, and then one with the camera there’s a different case that supports the pi and the camera in one enclosure, so pick those up. So it’s been amazing how we just piece together these components and it’s like hey we have something important.

Steve: That’s awesome and it’s really super cheap too, that’s amazing.

Keith: Yeah.

Steve: So how do you guys plan on expanding, is this going to go nationwide or are you just focusing on California at the present time?

Keith: This is actually we– Monday, just this week we launched a campaign to save a theatre that’s in Maryland.

Steve: That’s my hometown.

Keith: Oh no way, this is…

Steve: My homestead actually, yeah.

Keith: Frostburg, Maryland.

Steve: Okay yeah, I’m not from there.

Keith: That’d be cool.

Steve: Okay.

Keith: So we’re in the process right now, we just launched the campaign and there in the same exact situation that we were in– that Matt was in, so we have, we only operate the Max cinema, the other locations we have three other locations that are using our system. They– we don’t own and operate those, we have licensing our systems to them.

Steve: Okay.

Keith: But this one, it closed and the owners walked away. So if this campaign is successful we’re trying to get 2000 people to sign up in a town of 10,000, in a county of 70,000 trying to get 2000 people to sign up. If they do we’re going to take over, we’re going to actually own and operate. So the second location that we own and operate, so from expansion perspective there’s really a kind of too prompt approach here. One is by licensing the system; two is by owning and operating.

Steve: That’s incredible and then since you’re taking over distressed theatres, there’s really no upfront cost, right. You just kind of assume the liabilities and then run it.

Keith: That’s correct, yep.

Steve: Awesome, hey so how did you get into all this entrepreneurship, are you really into like business, do you read a lot of business books, did you have a favorite book or anything like that or…?

Keith: Oh man, let’s see. So I worked in aerospace for a long time, I loved the product, it was awesome. There was a couple of things that I sort of got frustrated with working in that industry, one is sort of the rigidity of it and the bureaucracy, and it’s like systems are just complicated such that they required that. And I just sort of realized that I really wanted to do something a little more free and where my individual contribution had a more significance on the outcome. And so I really started looking at hey I think I would be happier and enjoy doing entrepreneurial things more, and so I started sort of developing a skill set that I thought would help me out with that, and started learning web stuff because I was doing more scientific computing at the time.

And then I thought that it would be kind of good to go experience the startup world a little bit and I joined Clout, and that was an amazing experience, I had a great-great time there and learned a lot and was able to contribute a lot there, it was really fun. But yeah I definitely, I do read a number of books. I was thinking about business books, The Lean Startup is one that I think was quite influential in this space here because we really wanted– you know before we actually assumed any liabilities at all, we were able to just– you know I spent a few nights building up this little website where people could sign up, and it was super low risk initially.

Steve: Were you just gathering emails at this point, or there was money exchanging hands at that point?

Keith: At that point it was– we wanted to make sure that it was a real offering and not just a yeah. So it was more the real offering, no– we were getting credit cards, but we weren’t getting any– we weren’t charging anyone, because we were pretty…

Steve: Got it, so you were just collecting them on– customers on stripe essentially, right?

Keith: Precisely. We promised that if we reached our goal we would charge everyone, so in some ways this is like a variant of like an Indiegogo or you know a site like that works like hey if we reach this goal…

Steve: Yeah, like a kick starter.

Keith: It’s a kick starter, but with a brick and mortar component and with a– you’re signing up for a recurring monthly charge not a one time charge variant.

Steve: Got it. Okay, awesome Keith, I don’t want to take up too much of your time. We’ve been talking for like 50 minutes already. Where can people find you online if they have questions, and how can people get a hold of you if they own a theatre or they want to figure out or learn more about movie heroes and what you guys are all about.

Keith: Yeah, you can definitely go check us out at movieheroes.com and you can email me directly at kieth@movieheroes.com.

Steve: Well, awesome Keith. I for one learned a lot, I had no idea how movie theatres worked and the economics behind it all. So I sincerely thank you for coming on the show, and I think the listeners will find this very interesting.

Keith: Cool, well thank you.

Steve: All right, then thanks.

Keith: All right.

Steve: Here are my key take away points in this episode. The cost of building hardware and software these days is practically zero, and with just an iPad and a $35 board called a Raspberry Pi, Keith and his partner Matt have truly disrupted an entire industry. Now granted Keith and Matt are exceptionally intelligent people, but this just goes to show that starting a business today is really about initiative and drive, and there’s real no excuse not to try. It doesn’t cost a whole lot of money to get started, and you can begin immediately.

For more information about this episode go to mywifequitherjob.com/episode40 and once again I just want to thank 99designs for sponsoring this episode. I know a lot of you listening are waiting on the sidelines and trying to get the courage to start your own online business. And I also know a lot of you guys out there are already running your business and know that your website design could be better. Now designing a website or getting any sort of graphical design help is not intimidating anymore thanks to 99 designs, where you can get over 300,000 designers to compete for your design. All you’ve got to do is list your design on their site, and within 48 hours you will get dozens of design submissions to choose from and from there you can ask for slight tweaks and changes until you are a 100% satisfied with the results. And the best part is that the price is very reasonable and there’s a 100% satisfaction guarantee.

Plus by using the 99designs.com/mywifequit link and telling them that Steve from mywifequitherjob.com referred you, your design listing will be bolded, highlighted, given a prominent background and featured before all regular listings, so that your request stands out among all the designers. So head over to 99designs.com/mywifequit and get something designed right now. And then finally if you enjoyed listening to this episode please go to iTunes and leave me a review. When you write me a review it not only makes me feel proud, but it helps keep this podcast up in the ranks so other people can use this information, find the show easily, and get awesome business advice from my guests. It’s also the best way to support the show and please tell your friends because the greatest compliment that you can give me is to provide a referral to someone else either in person or to share it on the web.

And as an added incentive, I’m always giving away free business consults to one lucky winner every single month. For more information go to mywifequitherjob.com/contest. And if you are interested in starting your own online business be sure to sign up for my free six day mini course, where I show you how my wife and I managed to make over a 100k in profit in our first year of business. Go to www.mywifequitherjob.com for more information, and thanks for listening.

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.

I Need Your Help

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Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

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

039: How To Run A 6 Figure Mommy Blog While Homeschooling 7 Kids With Toni Anderson

Toni Anderson

Today I’m thrilled to have Toni Anderson on the show. Toni and I met at the World Domination Summit last year and she’s one of my favorite mommy bloggers of all time. I always love talking to Toni because every time I talk to her, I realize how much of a cake walk my life really is.

Toni runs the ridiculously popular blog, TheHappyHousewife.com, where she blogs about how to better manage your household. And here’s the kicker. The woman has 7 kids and she homeschools all of them. In addition to the blog, she also runs a conference and she consults on the side.

In short, her time management skills and drive are amazing and we can learn a lot about how she manages her time. Enjoy the show!

What You’ll Learn

  • How Toni got the attention of Oliver North
  • How Toni convinces you to sign up for her newsletter
  • How to start a blog while homeschooling 7 kids
  • Tips on time management
  • Toni’s early strategy to gain traffic
  • How to use Google Groups to boost your blog
  • How Toni pitches other bloggers for guest posts
  • How to use Pinterest effectively
  • The importance of having an email list
  • How Toni makes money with her site
  • The right way to run sponsored campaigns
  • How to get sponsored campaigns for your blog
  • How long it took to make money with her blog
  • CPM networks vs Adsense and why you need to use DFP

Sponsors

Other Resources And Books

Transcript

Steve: You are listening to the my wife quit her job podcast, where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now this isn’t one of those podcasts where we bring on 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 enter my podcast contest where I’m giving away free one on one business consultations every single month. For more information go to www.mywifequitherjob.com/contest. And if you are interested in starting your own online business, be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com for more information.

Now before I begin, I just wanted to give a quick shout out to this episodes sponsor 99 designs. Now originally I wasn’t going to take any sponsors at all but 99 designs caught my eye, because I suck at design. And in fact when I first started my online store back in 2007 the design for my website was terrible, and I had absolutely no idea who to turn to. Now fast forward to today 99 designs is a site where you can provide a description of anything that you want designed whether it be a logo, a webpage, a t-shirt, pretty much anything, and have dozens of designers compete to deliver you the best design possible. And by best I mean you get to choose your favorite design among dozens of submissions from a pool of over 315,000 designers.

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Welcome to the my wife quit her job podcast where. We will teach you how to create a business that suites your lifestyle so you can spend more time with your family and focus on doing the things that you love. Here’s your host Steve Chou.

Steve: Welcome to the my wife quit her job podcast. Today I have a very special guest on the show Toni Anderson. Now Toni runs a popular blog thehappyhousewife.com where she’s created an incredible resource that teachers others how to better manage their homes. She also runs Digital CoLab which is a conference that caters to web professionals who want to expand their online businesses. But here’s the kicker, the woman has seven kids, her husband is in the military and he’s not around all that often and she home schools all of her kids.

Now is that ridiculous or what, and she does all of this while running a six figure blog, a conference and she also consults on the side. Now I had the pleasure of meeting Toni in person at the World domination summit a couple of months ago, and I’ve got a couple of confessions to make. So when I first met her, I half expected to meet a frazzled, beaten down, disheveled and ungroomed woman who is a little out of shape. Now that’s actually how I picture someone who has been worn down over the years from the rigors of taking care of seven kids.

Now my wife and I have problems with just two, so I can’t even imagine having seven. But much to my surprise, Toni looked great and she was in shape too and she was down to earth, calm, composed, and very easy to talk to. And in fact I randomly went up to her when she was in the middle of talking to someone else, rudely interrupted her conversation and said “hey are you Toni Anderson?” And at the time I didn’t think anything of it, but she was probably thinking to herself “who is this crazy Chinese guy coming up to me?” So anyways I’m looking at my inbox right now and I’m seeing a couple of emails from people complaining that they don’t have enough time to start their own businesses. So after listening to this interview you will never ever be able to complain that you don’t have enough time ever again, and with that welcome to the show Toni, how’s it going today?

Toni: It’s great, how are you?

Steve: I’m very good. So give us the quick background story and tell us how you came up with the idea the happy house wife.

Toni: All right, so I started blogging in 2006. My husband was deployed to Iraq and because of the computer systems there he couldn’t get like the Yahoo and the AOL account emails. So because we couldn’t communicate via email, I started a blog just to basically write him a letter every day. And it was you know, it was a public site but of course no one was reading it but ham or so I thought, and one day I got an email from someone who claimed to be Oliver North’s publicists, and I had written a post, it was around 4th of July and I had written a post sort of a letter to my husband thanking him for his military service.

Somehow, someone in Oliver North’s team stumbled upon it, read it, loved it and wanted to re-publish it in his newsletter and of course having not a lot of experience in this area I kind of deleted the email, it was like “yeah whatever” I’ll also send you my social security number, my bank account, move on. And a couple of days later, I got another email and I think on the third email I realized this was legitimate and they did want to republish my article. So that was my first realization that it wasn’t just my husband reading this site, and perhaps this was a little bigger than you know what I thought it was. I was a reader of blogs– actually I was J.D. Roth that would get registered in front of the first blogs that I read. I read a couple you know mom type blogs, and so I knew that they were out there, but I didn’t really understand that this could be something about a business.

So I kept up with this first blog for– well my husband was deployed and then once he came back he was actually injured during deployment and we spent about 18 months with him in rehab kind of wondering if he was able to work again. He wasn’t able to drive or get himself to therapy, and so I started doing all that. And realizing that we were just one income family that we were like what are we going to do if he can’t work anymore? And he didn’t have enough seniority in the military to retire. So they were talking about like a medical discharge, which is basically where they try not to give you a lot of money, and I realized that I needed to figure out what I could do to start working, but yeah we still had six kids you know. So I thought I can’t really like put them all in day care because that’s too expensive.

So my blog had kind of just be going along, it was very personal and I realized I needed to stop that and start something that was less personal, and more just about life and how to manage your home, because when I got married I couldn’t cook a hotdog. So I kind of learned it all as I went along, and I thought hey if I didn’t know there’s probably a lot of people like me out there that go through the same struggles, and being a military family you know not living close to my own family. So I had to kind of learn it without the help of parent’s, grandparent’s kind of thing.

So I launched the happy housewife in 2008 fully expecting it to be a business. I thought you know dreaming that it would support our family one day– not really knowing how to get there or having any idea how to monetize the blog, but realizing that I thought at some point I could get there. And so I launched in 2008– he actually ended up getting better and going back on full duty, and you know so the pressure was off to sort of make it a business right away, but over the years obviously it has grown into being its own little online empire, but yeah that’s where we started

Steve: The happy housewife– was this your original blog where you were writing personal messages to your husband?

Toni: No…

Steve: Oh, okay.

Toni: I had my kids’ names on the first blog and I knew enough about the internet to know that I didn’t want my kids’ names or real specific information about our family…

Steve: Okay.

Toni: On a blog that I was intending for a lot of people to read. So I pulled most of the old content, and I think there were a few posts that I kept on there and changed the name and everything and launched on a WordPress site.

Steve: Okay. And the reason why I ask this is because I’ve been on your site and there’s actually this really long 30 page article I would say which I spent you know 30 minutes reading a couple of weeks ago, and it’s really personal and it’s got a lot of juicy stuff. It’s was almost like reading a romance novel. Not that I read those by the way for those listening…

Toni: Right.

Steve: But very interesting stuff. So is the rest of your– like I haven’t gone through your blog you know over the years, but is a lot of that that personal, or?

Toni: No, that would be the most personal. I actually wrote that story– I went to a blog conference– I think it was 2009 and when I started my site the whole goal was to make it personal and not like I’m your friend and I want to help you, but not personal and that you’re going to hear stories about how my kid takes off the diaper and eats the poop kind of thing, right?

Steve: Right.

Toni: So I wanted it to be relatable but not personable. But I went to this blog conference and someone talked about the importance of sharing your story, and of course I bought into it because who doesn’t buy into those talks right? I thought I actually have a pretty interesting story. And so I sat on the plane and wrote for two and a half hours of just starting from the very beginning– well when I met my husband and…

Steve: Okay.

Toni: You know kind of hit publish and went to bed sort of thing and of course woke up the next day to people flipping out. I can’t believe you did this or I did the same thing or I did it, it didn’t work, or people that are like, hey I think I know your husband from high school because that sounds a lot like him, and I’ve been reading your blog for a year. So it sort of just got a life of its own and I don’t do a very good job of updating it because it’s it is hard for me to put a lot of personal stuff out there, and obviously my goal in writing that is the only person I ever want to look like a dog is myself. I don’t want anyone, my family or people that I care about to feel that I’m saying anything about them that won’t be well received. So it’s– and you know– but of course your life isn’t really like that, so it’s hard to write it and make everybody else look really good, because then not always but you know.

Steve: I’ll have to link that story up because as soon as I read it, I was reading it and I was like “oh, my God this is really juicy.” And so I pulled my wife over, and what’s hilarious is at the very end you had this little nugget like, if you want to hear the rest of this story you better sign up for my newsletter, I’m like “oh! Man, this is like…”

Toni: And that’s how I grew my subscriber base.

Steve: Yes, very clever and that is how I became a member of the happyhousewife.com.

Toni: That’s right, that’s right and I get hate mail regularly because it’s not finished. You know I get like the email with like the title of that email is in all caps and it’s like, “YOU NEED TO FINISH!!!!” I’m like you want to come babysit for me so that I can finish it. So yeah, it’s a work In progress, plus I’m not dead yet, so the story can’t end, so come on.

Steve: Yeah, but you’re a lot more successful now. So maybe it’s a little less interesting I guess. But, so let’s talk about, okay when you first started happy house– this is 2008, how many kids did you have at the time?

Toni: Six, only six.

Steve: Only six? All right, so how does one find the time to blog with six kids?

Toni: You know it’s something and this is what I tell a lot of people because obviously I work in a space where we help bloggers, but if you’re not passionate about it, you’re not willing to put in those you know 2a.m. sessions to get it done…

Steve: Okay.

Toni: And so you know for me it was about– this was an outlet. This is where I could put all my recipes fun online and my laundry tips and all these things that, it’s like being a housewife I’m just going to say it it’s pretty monotonous, like it’s not fun to do. I don’t care what anybody tells you, it’s not fun to do laundry, it’s not fun to fold sheets, I don’t care how good you are at it. But to me it was fun to find out clever ways of doing it, and then sharing it with other people. So for me it really helped to break up what I felt like it was sort of a boring job at– with it day to day. Like obviously raising kids is far from boring, but things like you know cleaning your house and all that stuff you know not super exciting, and so I felt like it was a way for me to get it all out there, and talk about it you know exchange ideas with people.

Steve: What about the home school part of it, didn’t that take up most of the day?

Toni: Yes it did, and it should– shouldn’t it? Yeah so home schooling and you know when I started I always say my kids were little; they weren’t really little, I think my oldest was 13 when I started.

Steve: Okay.

Toni: You know home schooling doesn’t take up 9 and 10 hours of your day, if you’re doing it well. So you know we would home school in the morning, and then you know until the early afternoon, and then the kids would just play and do things. It’s one of those things that I would– while they’re reading lunch, I would sign on and check things and approve comments and do all that stuff, and then– and you know blogging has gotten a lot different from when I started. When I started you basically had a blog, and I think Twitter had just started, but you know people weren’t on it like they’re today and there wasn’t a Pinterest that you had to focus on you know Facebook wasn’t really used by brands. So as the internet social networking has grown, I think people’s time online has grown a lot too, because you didn’t have to do all this stuff that I think when I started in 2008, you know you weren’t spending five hours a day on a Pinterest strategy.

Steve: Okay.

Toni: You were just writing content you know.

Steve: Right, actually you know that’s a good segway to the next topic that I want to talk about. So, let’s start with the very beginning first of all, what was your early strategy to kind of obtain traffic?

Toni: So I was in the old school approach, probably you were in this too; I don’t know when you started.

Steve: 2009 actually, so around the same time.

Toni: Yeah, so commenting on other sites, doing– getting links you know, so either submitting guest posts to bigger bloggers, participating in like the linking parties. I did a lot of guest blogging, so that was a big one for me was you know hitting up some of the bigger bloggers in sort of the home management, lifestyle type space and then I created a blogging network. I think I’m not sure when I did this, I think it was about six months in, and I just realized that there were several bloggers that we seem to always be commenting on each other’s post and that sort of thing. And I think we’re at that point, I think Facebook, and I basically emailed ten bloggers and I said “hey would you like to start a group?” And you know kind of like a mastermind group, but I didn’t know that’s what it was at the time and you know basically share ideas, promote each other, and work to grow each other’s sites together. And you know almost everybody that started in that group is now a full time income blogger.

Steve: Wow, so can you just talk about how this group was run?

Toni: Yeah, so we used– I think it was Google groups– was that what it was called?

Steve: Yeah, I think so yeah, basically that’s email based right?

Toni: Yeah, so you get a digest, you could get it– you can get like single emails or get it through digest. So we basically used that as set up and we just– I think when we started it was pretty formal and I actually would– since I was probably the most experienced blogger in the group, I would send out little like weekly lessons, like challenges like “hey let’s this week, let’s try to like work on back linking, or this week let’s try to work on email marketing” or something like that. And so probably for the first like nine months, it was pretty formal like each week being a lesson or a challenge, and then after that my site grew pretty significantly after my first year, and I just didn’t have time to look– because this was a big chunk of our time was participating in this group, and I didn’t have time to be as formal.

So then it became of more you know “hey can you all share this post for me?” Or “can you comment or can you go do this” and you know hey back when linkings were really big you know, and you wanted to be the first person to link up at 9a.m. if someone was like in the west coast. You know the east coast would link up the west coasters blog form and things like that. So that’s when it became, as we got farther on and now we don’t really do it at all, we’ve all kind of gone different directions, but we’re still friends. So it worked out pretty well.

Steve: That’s pretty cool, so would that be a good strategy today if you’re starting all over again?

Toni: I definitely think getting in a group is a great strategy. I don’t– you know I feel like the guest posting– I think it still has value, I don’t think it has value like it used to you know, obviously commentings– I think commenting is a great way to get someone’s attention if you’re a frequent reader. I know I know my frequent readers, I know the people that comment on my site. I interact with them usually on every platform. So if they were a growing blogger, I would probably put them on my radar to promote them you know…

Steve: Okay.

Toni: Based on opportunities. So I think there’s still that, but it takes a lot of time. So I don’t know if the time verses value is as good as it used to be.

Steve: Okay.

Toni: But I definitely feel like getting in a group, honestly if it’s just to bounce ideas of each other, I think it’s worth it as long as you give as much as you’re getting.

Steve: Okay and then what was your strategy for approaching some of the larger blogs in the beginning to guest post on?

Toni: You know I just– I would– obviously there are blogs that I would read or were familiar with, and so I would usually pitch them an idea of something that was really relevant to what they were already talking about. So if it was a frugal site you know, I was like “hey, can I write a post about how clock saved us all this money?” You know something like that, so it would be something that they maybe hadn’t talked about to the depth that I could write about it.

Steve: Okay.

Toni: So, you know I did some research and I think that’s really important is I think we all get these pitches from who knows India whatever, trying to submit guest posts for links and you know obviously as bloggers we tend to delete almost everything like that when it comes in. So I think when you’re crafting a pitch to a bigger blog or that you make sure that you’ve really done your research on their site, you know what they talk about and you can add a lot of value to what they’re doing. Because I mean even people like Problogger will take guest posts from people that do a good job in pitching him right, and are creating that relevant content for a site.

Steve: Yeah sure of course. And then today you know you mentioned Pinterest, but are there any particular traffic sources that you kind of focus on today, with all the different social media that’s out there?

Toni: Yes, so I actually have an assistant that does Pinterest for me, that’s one of her main jobs, and so she’s become my Pinterest expert. And when we started I was on Pinterest and I actually– when I started I had an idea that it would be really cool to create these home school boards based on themes, and so you know a theme of like oceans and a theme of pirates or whatever you know, and then basically create unit studies which is something you do on homeschooling around those themes and basically use Pinterest to create a curriculum to put on my site, but then drive back to Pinterest and then drive back to my site. So sort of this circular traffic plan which actually worked pretty well, but it became overwhelming to keep creating sort of these themed studies because we weren’t actually doing them all.

Steve: Okay.

Toni: And so, I had a I had a girl that actually worked for me last year who really worked on honing those boards down and creating that content for me, and then she ended up leaving in the Christmas time not for any reason, that then she just didn’t want to work anymore, and so my other VA now manages my Pinterest exclusively. And from doing things like ransom groups where you know your growing depends so much on content from other people every week and they are pinning your content…

Steve: I see.

Toni: You know really studying like going back on old posts and making them more Pinterest friendly either by changing the images or you know I’ll get an email from her telling me to retake a picture on a recipe because it was made in 2008 and that’s when you didn’t put in pictures with the recipes, right? So you know just creating– taking out that old content because I have so much on my site and really repurposing it so it can’t be pinned on Pinterest and get a lot of new eyeballs on it.

Steve: So how did you become a part of these groups, like how do you find them?

Toni: You know a lot of them from Digital CoLab.

Steve: Okay your conference, okay.

Toni: Yeah.

Steve: We’ll talk about that later

Toni: Yeah, so I think it’s really all about networking and connecting with people and not being afraid to sort of hop in and build those relationships. I think a lot of bloggers are really introverted, and so they’re very-very comfortable behind their computer, but don’t put them in a conference, don’t have them socialize, because they’re not great at really like the networking skills that I feel like are important like in any business that you would own. So for me it’s important, like if I’m in an event I’m not around hanging out with the people that I know, but most of the time I want to meet people that I don’t know to figure out if there’s a way we can work together, because the internet’s huge, right so..

Steve: Right.

Toni: To me it’s like why would I spend half as much money it takes to get to an event if I’m not going to– just to see my friends. I mean we could just meet somewhere in the middle. So to me it’s really about getting out of your comfort zone, meeting new people and then finding people that are similar enough to you to where you’ll be able to share their content authentically like your readers wouldn’t be turned off, but different enough to where– because I mean a lot of us have similar readership you know bases. So it’s the same people that are always sharing, then it’s the same readers that are always seeing everything. So trying to find a few people that you might not know very well, and maybe just slightly outside of your niche, but same type of demographic to work with is really helpful too.

Steve: Like kind of random Chinese people at conferences, that sort of thing?

Toni: That’s my goal.

Steve: Okay, that’s what I thought.

Toni: Yeah, I’m too [Inaudible] [00:21:19] too now, so…

Steve: Yeah we all know who that other Asian is.

Toni: We won’t say his name.

Steve: We won’t say his name.

Toni: Right.

Steve: So that’s cool then, so okay so you’re starting to get all this traffic from Pinterest, what else you got– so there’s search, there’s Pinterest– are you do a lot with Facebook at all?

Toni: You know Facebook for me was really big a couple of years ago, and then I was in the group where Facebook just fell of the map. So which you know to me that’s one of the biggest– never put all your eggs in one basket, right? So I feel like one of the reasons why– I mean I think the reasons why I’ve had a more successful site, in my niche I got in early, I was one of the first people in. Whoever tells you that getting in early doesn’t matter is a liar, it does. There’s a real advantage to that because you have more experience in the space and then I think two is like every year we kind of on something different with the sites. So I think our first or second year, we really focused on our email list which nobody was really focusing on email list…

Steve: Okay.

Toni: In my niche early on. So we did that and then the next year I think it was 2010 was our big year to focus on Facebook. I think I started the year with like 2,000 Facebook fans and ended the year with like 22,000 fans.

Steve: Okay, nice.

Toni: And did things like you know free eBook for fans and you know better content and really like spend a lot of time figuring out what my Facebook folks wanted. And so it did drive a lot of traffic to my site, but at the same time we were still working on SEO, we were still building our email list and we were still doing these other things to grow traffic from other sources, and obviously just that the traffic of people coming back to your site everyday because they like you and they want to read what you have to say, that’s really important too.

Steve: So, with Facebook you did what sounds like just giveaways– a bunch of giveaways and that sort of thing to build your fan base.

Toni: I didn’t really– well I did freebies, so I would…

Steve: Freebies, sure?

Toni: Write an e-book and then give it– you had to be– like my page and then once you liked the page it unlocked the book, and you could download it.

Steve: Is there a plug in that you use for that?

Toni: You know I haven’t done it in several years. What I remember we coded it into Facebook, it was just a code you dropped in.

Steve: Okay and then when you mention that you were doing email marketing, could you be a little more specific. So let’s say you get someone sign up, what do you do after that?

Toni: So I’m not– well I don’t do it anymore, so that’s why we’re having you.

Steve: Oh me, oh okay, right on, okay just curious, okay

Toni: We’ve done lots of things. We’ve experimented with, if you’re an email subscriber then we did a monthly newsletter with completely premium content. So nothing will appear on the site, so we did that for about an year and a half. We saw really great results initially, but then it sort of– it was almost like the excitement wore off and I don’t know if maybe they didn’t feel like the content was up to par, or if they were just they didn’t want that other email in their inbox.

Steve: Okay.

Toni: So initially it helped and then we felt like it kind of stagnated. So we stopped doing it at the beginning of this year mainly because it took a lot of time and it cost me a lot of money to do it, and I wasn’t getting the investment back, yeah. So we’ve done that, we’ve done– for me it’s more like the email subscribers get premium content, they would get coupons or discounts that I wouldn’t put on the site so…

Steve: Okay.

Toni: We would work with advertisers too, they would actually pay for placement in the newsletter but then they would also be able to get like an exclusive deal. And usually that worked well with the home school part of thing, because it’s not super expensive for those companies and most of those companies are like you know mom and pop type of stores. So we’ve done things like that, you know things like– one of the things that we did early on was that since my site has like six different kind of sub topics, we allowed people to subscribe only to the subtopics that they wanted to hear about.

So if they didn’t home school they would never have to hear anything about home schooling because they not choose to subscribe to that section. So that was something we did before and a lot of people do that now. We did that pretty early on and that was something I felt like was important because my site did cover a pretty big variety of things, and I knew that I had– my home school base is not very big, and so I felt those people out there that never ever want to hear about home schooling, they don’t want to feel like that’s important to them you know whatever it’s fine, but they want my recipes, so they can only get my recipes and that’s fine too. And that was a big– that was actually a big boost for me is segmenting those email lists because you know I find that and also it’s great to research to find out what my readers really wanted because I realized people were really coming to my site for the food.

Steve: So curious are you on Aweber, what do you use for your email list?

Toni: I use Feedlets.

Steve: Feedlets okay, so is it really easy to segment with that tool, I’ve actually never used it?

Toni: It didn’t seem easy.

Steve: Okay.

Toni: I have to be honest, it didn’t seem easy.

Steve: So did you have someone like in the beginning for your first email you just say “hey are you interested in these categories?” And then that instantly just segments them to different lists, is that how it works kind of?

Toni: Actually when they go to subscribe page they choose there.

Steve: Got it, okay that makes sense that makes sense, yeah. And I was going to ask you also because it all kind of ties together, what is the business model and how does the happy housewife make money exactly? So you got all this traffic, how do you convert to dollars?

Toni: So part of my biggest source of revenue is either like influencer marketing, brand spokesman, sponsored campaigns.

Steve: Okay.

Toni: So I work a lot with brands either doing things– and one of the things that’s nice about a site like mine is that it actually puts you in that expert category. So I’ve become like an expert home economic person whatever, so I’ve done a lot of work with brands where I don’t even write anything about them on my own site, but I do things for them on their sites which pays really well. So things like interviews for magazines or TV, quote the brands. So you basically get paid to do these articles and then you actually– it’s kind of cool because you’re not even marking the waters of your own brand because it’s completely off your site, but then I have done things…

Steve: Interesting, okay.

Toni: And so I’ve done that with like the [Inaudible] [00:26:45] board and OxiClean and Arm and Hammer and several like pretty big craft.

Steve: As the model for the– like OxiClean for example is it like a commercial or…

Toni: Yeah, they just put all my kids… so I worked for their print last year. So I did– I think I did one or two posts on my own site, but I most– So I did interview I think with Women’s day ladies home journal. And it was all about stain tips and things like that, so I would create articles for OxiClean and then they would pitch those out to you know the different publications and I was the expert. So they could use my brand as being the expert mom, expert cleaning tip lady to then leverage their products in these articles.

Steve: Okay, so they were leveraging your audience right, because your audience knows you and as a result they`ll follow that brand that you are pitching kind off, okay. And then they find you just naturally through the blog. Is that how they…

Toni: Yeah, yeah and you know a lot of it is just– a lot of it is definitely having traffic and being out there in social media and being at events and meeting the right people, you know meeting those marketing and PR folks that go to a lot of the blogging conferences. And then a lot of it is just creating really great content. So one of the things for me that I think is really important is that when you do work on a brand campaign, a lot of bloggers I know you know they write a pretty crappy post and then burry it, right. So they put it up– they are kind of embarrassed if they did the sponsored campaign for a brand that they weren’t really sure about, and then they bury it under like seven posts, which to me that says that you don’t really want to work with the brand and so for me I`ve really tried when I work with brands is to do the– make the pictures phenomenal, like those pictures are Pinterest worthy and you know I`m going to give them a little extra promotion on social media.

One of the girls I was talking with last weekend and was talking about– she actually allocates part of her budget on sponsored post to actually boost Facebook posts for the brand when she puts them on the site. So she is doing some paid marketing for them as part of her compensation. So, I think that’s big, it’s just doing really quality work when you get into it, so that the brands– because the brands know if you do things on time and you submit everything you are supposed to and you are easy to work with, they will come back to you over and over and over again. And it`s actually like in the food space, they pay pretty well, so you can easily just have a full time income off of working with the brands.

Steve: So can you just give us an idea, so it sounds like a lot of work actually what you just kind of described, and so can you give us an idea what the compensation looks like for one of your sponsored gigs for example and what is– what do you have to do as part of that gig?

Toni: So if you were just doing a simple sponsored post, so it’s one post let`s just say it was a recipe creation. So they are going to say, hey we have this and actually I`m doing one in the next couple of weeks with something called [Jeep weeps] [phonetic], and it`s like they are small, small flavor.

Steve: Okay.

Toni: So creating a recipe with that, with the jeep weeps and then put up the post, you’ll promote on social media and that’s basically all you have to do.

Steve: Okay.

Toni: So the compensation for something like that and I obviously can’t say what this compensation is because I`m under non disclosure, but you know would be anywhere for a decent size blog you are looking at between 500 and 1000 dollars.

Steve: Okay and what about something much more involved where you are like the spokesperson on that other person’s site or something like that?

Toni: Yeah, so that’s between like five and ten grand.

Steve: Wow, okay.

Toni: So I mean it definitely works, and I try to break it up into like an hourly wage. So for me personally I don’t want to make less than 100 dollars an hour in anything that I do.

Steve: Okay.

Toni: So, or it’s not worth it for me because I can pass and figure out another way to make 100 dollars an hour.

Steve: Mm-huh.

Toni: So I usually take you know if a brand approaches me or really anyone approaches me and says “hey I have a project for you,” I really kind of factor in how much time it’s going to take, and if I can’t hit that 100 dollars an hour unless it– I mean if it`s Walt Disney world, I will work for free. I`ve said that many times I will work for free for Disney tickets, but for most other things you know obviously being a yoghurt doesn’t pay your mortgage. So you know getting fairly compensated is pretty important, and so for me and you know for me 100 dollars an hour is what I feel I`m earning that at this point and where I am. For some people it’s a lot more and for some people if you are just starting out– I mean, I think even if you just a brand new blogger, your time is still worth something. So even if you have a very small readership, don’t do things for free for people because all these companies have budgets to pay you.

Steve: Okay.

Toni: So even if it`s 25 bucks because you know three months into blogging, charge 25 bucks, charge something because you`ve got to start setting your worth at some level. So I think that’s really important, and I think most of the bloggers that are about my age in blogging years, we all did really stupid free stuff initially. Right, we would blog for…

Steve: Absolutely.

Toni: You know you are looking back and you are like, oh my Gosh I can’t believe I was excited when they sent me a lunch box you know. So we`ve all done it, so you know I`m not sitting here and saying, oh you guys shouldn’t do this. I just think about your time and your time is valuable and your time is valuable, and if you think yourself , if I`m going to do this post and it`s going to take me two hours and they are going to pay me 50 bucks can I make 50 bucks in an hour doing something else?

Steve: Mm-huh.

Toni: So maybe it’s like working on Facebook strategy or doing something on Pinterest or you are networking or writing a guest posts, maybe you can, maybe you can’t. And so consider that whenever you are– to me you need to consider that whenever you are deciding what you need to take because obviously everyone’s time is limited, and so you have to make decisions. To me I make decisions based on what my time is worth and what I think I`m going to get in return.

Steve: So let say you are really small, how do you actually get on the radar of some of these brands? Do you approach them or do you wait for them to approach you? How do you go about getting these sponsorships?

Toni: Honestly I know a lot of people don’t– they are not on twitter any more, but twitter is a great place to connect with the brands. They are all on twitter.

Steve: Okay.

Toni: You know several campaigns that I`ve had are because I absolutely organically not trying to get anything you know, one time– we’re a big family– we love butter, and so I`m all about butter.

Steve: Who doesn’t like butter?

Toni: Who doesn’t like butter, butter and bacon– those are my two favorite brands, right?

Steve: Nice, yes.

Toni: It’s a win-win. So I tweeted out something about butter one day like I think I went to the– I think I was at the commissary and of course when I go to the commissary, I`m going to buy like 25 pounds of butter because we got a big family. So I think I tweeted a picture of like all this butter or something like that and the challenge butter people were like, we love you, you are so awesome, you are tweeting out pictures of our butter. Well, ended up that I got a couple opportunities with them down the road because I was on their radar, and I wasn’t trying to get a challenge butter contract. I just– we love the butter. And so I think that those brands that you authentically like and you know I would say engage them on twitter, connect with PR people on LinkedIn.

I mean if you meet people at a conference, think old school like get a business card, write something that you remember about them on the back of the card and then get on their LinkedIn, send them a request and add that little fact like great to meet you, so happy that we both love pinnacolada you know whatever it is, do some networking like that because in the brand space because as a consultant I work as a brand, and I find bloggers and you are dealing with thousands of bloggers that all look exactly the same to you, right? From an aerial perspective, so if you are the pinnacolada blogger, I remember you, you know.

Steve: I see.

Toni: Yeah.

Steve: Okay, if you are the Chinese blogger, then you remember me.

Toni: Exactly, exactly.

Steve: So what is the approximate time line, like obviously you didn’t start making money and getting sponsorships when you first started? How long did it take actually for your blog to kind of gain some traction?

Toni: I think I actually found when I was cleaning out my desk a couple of months ago, I found my first cheque from Blogger the ad network.

Steve: Mm-huh.

Toni: It was about 11 months in, so that was probably my first you know I think it was like 97 dollars or something. So it was probably a full year before I made any money and then I probably made like 15 bucks here and there, but nothing significant.

Steve: Right.

Toni: And then it was really probably about 18 months when I realized that it was definitely like a part time you know if I had a job I probably could have quit it sort of income.

Steve: So you mentioned sponsorships, I forgot to ask you about some of the other income sources. So you just mentioned bloggers, so that’s CPM advertising, right?

Toni: Yep and that you know those are great obviously all these studies are showing that CPM ad networks are kind of, they are sinking because people are just blind to those adds now on the side line, and they don’t click and they don’t have very effective, but that being said all those networks still exist and you can still– especially if you have something like DFP set up where your adds are rotating based on your CPM model, you are still going to– if you have significant traffic, that’s a great way to earn pretty big chunk of change.

Steve: So just for the benefit of the listeners DFP is Goggles platform which allows a whole bunch of different advertisers to kind of bid for that slot on your site, and usually it will only display whichever advertiser is bidding the most, so you make the most amount of money.

Toni: Yes and I would say if your traffic is anywhere between like 150 plus thousand page views a month, I would get that set up because you can make some significant– you`ll see everyone that I have talked to– and I`m actually getting it set up on my site this month. Everyone that I have talked too is, I`ve heard my income has tripled, my income has doubled from just CPM network income has doubled or tripled just within a month or two of getting it set up.

Steve: Wow! So what CPMs could you expect to see in your space?

Toni: You know it really depends on who– obviously like if you are with federated media that’s really sort of elite network, and so you are going to see three to five dollar CPMs. Some of the other ones like burst and I think it`s called server, it used to be legit, but they changed their name. They are still in the dollar, dollar fifty range. You know most of the time you can set up floor, so when you set up floor they are going to show an add that’s not less than a certain CPM and that’s– I recommend that because you can always back that with adsense– most of these networks. So that’s important too because you don’t want to have them– because they are going to sell as much of remnants space on your site as they can if you don’t have that set. So they are going to be selling the 20 cents CPMs.

Steve: Okay. And so the fact that you have just mentioned that you back those with adsense, does that imply that adsense is the lowest paying?

Toni: For my site it is. For people in other niches that’s not the case, but I have found for my site adsense has not performed terribly well. So I would say you just have to test your own site to know what is performing.

Steve: Okay, and then have you tried any of the other ones. Any of the other CPC type of ad networks like media net and trying to think– I don’t run CPM adds anymore, so I actually kind of out of that space.

Toni: I think we tried them a couple of years ago. We did use media net I think for a very short period of time. It just– I think if you don’t have something automated set up, unless you have and also time manage that and track it, it’s probably not worth it.

Steve: Okay, what does it take to get on federated media’s radar screen?

Toni: I don’t know, talk to Erin.

Steve: Oh, Erin yes. Just had her on the show the podcast will be published shortly.

Toni: Yeah so, Yeah I think you have there’s definitely a traffic, but they are really looking for diverse, they are trying– they really pride themselves in having like we have all these different bloggers from all these different niches and these high end people and these home decor and DIY folks, so I think it’s just a matter of getting lucky and then you know having the right site with the right traffic at the right time.

Steve: Okay, and then today if you look at your blog at a very high level, where does most of your traffic come from, like what are the primary traffic sources?

Toni: So the primary traffic sources for my site today would be Pinterest and SEO.

Steve: Okay, and then Facebook and twitter are on there, but not quite a large percentage?

Toni: No, yeah Facebook has definitely dwindled, I still get a lot of links so I get a lot of referrals from other sites you know and that’s another reason– you know honestly I think it really boils down to for most people it`s just creating really great content, because the better your content the more likely people with link to you, write about you, talk about you, talk to you, share your stuff and really everyone says content is king, content is king, but it`s really true. Anyone can just slop, put slop up there, I mean it’s just– anyone can buy post and you know I have writers that write for my site too, and we actually sometimes we’ll buy articles as well if we need to fill certain topics, but the most part putting that great content out there is really invaluable for readers, and that’s what they want. They are used to you and whatever your voice is, and it`s all these like cliché terms and stuff, but it’s actually pretty true.

Steve: So you know one thing about your blog that is pretty unique in my mind is that you have kind of completely outsourced the entire operation, right?

Toni: Yes. As I say you got be you, but I outsource everything.

Steve: So yeah, my question is your personality in my opinion is a large part of your blog after spending 30 minutes reading your life story. So how do you kind of manage to outsource the writing and still kind of remain kind of personal with your site?

Toni: You know, I try to still write occasionally.

Steve: Okay.

Toni: For me it was actually all based on a conversation I had with Jay Ross several years ago about when do you know when it`s is time to sell your site, and I just– I wasn’t burned out, but I felt like I could get there pretty quickly and because I mean when you start blogging and when you start– you have to be willing to put in 12 hours a day unpaid. And honestly I say it`s a great business. It’s a very hard business to start, but it`s great because it doesn’t require any capital upfront. So if you don’t have any money, blogging is good way to start, but you have to have a business plan and everything else. But you have to be willing to do that, and for me I was tired of doing that, I was tired of outing in you know I was tired of every waking moment being about my site.

And so for me I talked to J.D. I felt like I think I need to figure out how to stop this and we had this conversation and then I realized that I didn’t really have to stop, I just needed to replace me. And so I actually picked my writers from my readers. So people that knew me well and knew my voice, and so people that wanted to be a part of the same theme that I had. And so that’s one of the reasons why I think it worked really well, because I didn’t just go, put an ad on the internet and get writers. I actually got writers from my readers, and I think that made a big difference for my site.

Steve: So are they paid or do they kind of write articles so that they can kind of get some exposure to their own sites?

Toni: They are paid.

Steve: Okay they are paid, okay. And how many writers do you have?

Toni: I think we have about 10 now. We used to have 24, but we scaled down at beginning of this year, just because I felt like there is too much content on the internet right now. So I felt like I didn’t want to be part of that anymore, so I thought how much can one person even if I’m a super fan, how much can I read of one site? And I felt we were just churning out a lot of content, and it didn’t feel– it didn’t have the right feel anymore for me. So we cut back at the beginning of the year, so I think we are down to about 10 writers.

Steve: Which is still quite a bit actually in my opinion?

Toni: Yes it is, when you basically go in half I mean it was a big change.

Steve: So you know for my blog at least I used to have two writers and I actually got rid of them because I kind of felt like goggle was kind of rewarding those posts with a lot more engagement and exposure, and so what I found was my guest writers weren’t getting as much social love I guess, and as a result those articles weren’t doing as well so I just got rid of everyone, I just write once a week now. So my question to you is you post still a lot of content on your site, so what kind of your take on just post quantity in general? Do you need to be posting as often as you do, and what advice would you give someone who is blogging today in terms of quantity?

Toni: I think sometimes it depends on the topic, so obviously if you are a deal blogger you have to be putting out a ton of content.

Steve: Okay.

Toni: Like if you are a home décor or DIY blogger, if you are a food blogger, I think if you’re in your space as sort of the business blogging type thing, you can absolutely get away with one post a week. As long as it’s a nice meaty content type post, right. Where there is actionable items because really if you are teaching people how to refurnish a dining room table in a post and you actually expect people to refurnish the dining room table, they are not going to back the next day to then figure out how to install a window, right? They are going to spend three weeks refurnishing the dining room table before they are ready for more of you.

And same thing with like a business site, if you are teaching them how to you know do some– like the email finals I watched your FinCon talk. If you want people to actually implement some of those things that you are telling them, that’s going to take them a while. They are not going to be able to like sit down in their computer and in an hour and half, have everything finished and tomorrow they want their next job. So I think, when you are writing that kind of stuff recipes, I think you can go once or twice in a week and be absolutely fine, and still drive a lot of content based on everything else that is on your site.

Steve: Okay, and so given what you`ve just said then, with your ten writers what are they writing– like how are they split up to write on write on different topics?

Toni: So each writer is assigned in a niche, so I have writers that only write home school for me. So I have a couple– like Coleen my 740 square foot bungalow house lady, she only writes home school topics for me.

Steve: Okay.

Toni: So she writes once a month, one home school article. I have bloggers that only do recipes and so I have a girl right now, I think she is paleo vegan– I don’t know she is something, but writes– it’s very-very popular whatever it is, but she writes one recipe a month, and for me I found that by keeping the writers in these niches, they become very popular. So my recipe writer who does these paleo recipes, every one of her recipes goes viral, I mean it gets pinned 800 times and gets shared 500 times on Facebook because people have become her fan on the site. So I`ve actually noticed the opposite but I think that’s partially because they stay very focused on topic and she only puts out one recipe a month for me.

Steve: And does she have her own blog as well?

Toni: She does.

Steve: She does, okay. And is she allowed to link back to her blog from your blog?

Toni: Yes.

Steve: Okay.

Toni: With limits.

Steve: With limits.

Toni: Yeah.

Steve: Okay, now that you have kind of freed up your time since you are not running your blog full time anymore, what do you spend your time– what are you working on these days? Do you get to read at all, do you read business books and that sort of thing, what do you do for fun?

Toni: I don’t have any fun.

Steve: Besides going to conferences and just hanging out.

Toni: I buy and sell houses for fun in my free time– no I actually I`m a big remodeler. I do love to destroy houses and build them back up, so that is kind of what I do for fun and then I actually for the past two and a half years I’ve worked for a company called savings.com. And at first I worked with them really closely on their grocery initiative. They did a big grocery– they developed a grocery app and…

Steve: Great name by the way. That app has an awesome name.

Toni: So can I say it?

Steve: Yeah go ahead.

Toni: Favado, I know I can’t say anything else about that. So I helped him with that and then last year I was asked to help them develop like an influencing marketing network. So for the past year I’ve worked pretty exclusively running their sponsored campaign program, which for me I love because that means that I– that’s really been my bread and butter as a blogger. I love working with brands and it’s been really fun to work on the opposite side, and actually we do everything from doing the creative elements to the campaigns to creating the marketing and creative ideas from graphics to twitter parties and everything else, to then you know actually executing the campaign through the blogger networks, which is you know I`m going to have to brag just a little tiny bit, but you know we started from nothing and we`ve got 700 bloggers in our network. I think we`ve done 38 campaigns so far in nine months, so it’s you know it’s definitely growing, but it`s been really fun to me.

And someone asked the other day why would you want to work for a company when you’ve been an entrepreneur your whole career, and I said honestly one of the coolest things about working on this is that I get to use other people’s money to execute my ideas. So for me it`s been really fun because I don’t– it doesn’t feel like work because it`s something I`ve doing for years and I love it, and so to be able to build something from the ground up is pretty fun.

Steve: So you are just a consultant, you are not an employee there.

Toni: I`m just a consultant yep.

Steve: That’s great, do ever take your own blog and you know use your money to buy sponsor campaign for happy house wife or…

Toni: I have not, but I have thought about it, I actually have thought about it. No and I actually don’t participate in their sponsored campaign just because it will be a little bit of a conflict of interest. But yeah that’s what I’ve worked on for the past couple of years and that’s been– to me that has been something fun and different, and I’ve never worked in a corporate setting all those all those are just startups really, but it`s been a fun learning experience. For me I feel like I’ve learned a lot about business in the process which to me has been an asset for my own site and just making decisions for my own site as well.

Steve: Cool and then I also wanted you to mention what Digital CoLab is all about. Unfortunately I was not able to make it this past year, but what it that conference all about that you run.

Toni: So this is a conference that we run for people who work in the digital space. So obviously geared towards people who have websites or blogs, but we’ve worked with people who have online stores, people who just you know have a brick and mortar store and they want to figure out how to work online and increase their social presence. So basically we talk about everything from social strategies, Pinterest, to contract negotiation, to you know taxes and accounting to time management. So basically we try to cover a lot of the things that I think as entrepreneurs we all struggle with.

So I think taxes is always one that people have questions about, because you never know what you have to claim, what’s okay, who is this person going to be an employer or contractor, how does that work? You know things like that to you know Chris Tucker was at our event and he gave some great talks just on like time management and you know sort of blending the business family life, and how to make that work and how do you keep your– how do you prevent your business from taking over your life and finding that like great spot where you can be very successful, but also still have a life outside of your job, which I think is something entrepreneurs really struggle with and you know you it`s really– it`s sad you see marriages fall apart over this and all sorts of things, and families disintegrate and that’s not I think anybody’s goal when they start out.

But you just become consumed with your business, and so it think it`s important to talk about and it`s cool to get in a space with a bunch of people that are kind of doing the same thing even though we are all talking about different stuff. Because we all face a lot of the same challenges everyday as far as our business goes, and someone who is probably in a corporate setting doesn’t really understand exactly what we are doing. So it`s kind of a neat thing to just get it together and you know talk about AV testing you know, things like that.

Steve: You know if people want to find out more about this conference and kind of get in touch with you, where can they find more information?

Toni: So they can go to digitalcolab.com, and you can contact us through the site. We haven’t figured out exactly what we are doing next year. This year we had a pretty small event, it was 100 people and we loved the smallness of it, we felt like it allowed for a lot of like one on one sessions and very like eight on one type small group settings which we feel like in this business is the most effective.

You know those key notes are great for like encouraging you and getting you all exited, but at the end of the day it`s when you can sit down with two or three people and learn. Have your computer there and like open the computer and set it up right then and there you know, get out your Goggle analytics and set up your tracking and do all those things that most people aren’t going to take the time to do after they live an event. So we`ll do something next year, but we don’t know the scale of it, it`s probably going to be small like this year where people can get a lot of that one on one time and actually we don’t want people to go home with a long list, we want them to actually get it done at the event.

Steve: Cool, that’s pretty awesome. I tend to like smaller events as well yeah in my opinion. But hey Toni thanks a lot for coming on the show. I want to be respectful of your time and we’ve already been talking for 50 minutes. So thanks a lot for coming on the show, and it was really great meeting you on the conference.

Toni: Yeah, thanks for coming up to me.

Steve: Thanks for not shooing me away. All right, take care Toni.

Toni: Thank you.

Steve: Hope you enjoyed that episode, so here is my take away. The next time I feel like I have no time to do anything, the next time I feel like my kids are uncontrollable, the next time I feel like my life is just too hectic, I`m going to think about Toni because the fact that she is able to home school seven kids while running a six figure business, a conference and a consulting gig on the side is just ridiculously amazing. And after listening to this episode you have no more excuses ever. I don’t want to hear any more excuses coming out of anyone’s mouth.

For more information about this episode go to my wife quit her job.com/episode38, and once again I just want to thank 99designs for sponsoring this episode. I know a lot of you listening are waiting on the sidelines and trying to get the courage to start your own online business. I also know a lot of you out there run your own businesses already and know you website design could be better.

Designing a website is not that intimidating anymore thanks to 99 designs where you can get over 300,000 designers to compete for your design. All you got to do is list your design on their site and within 48 hours you will get dozens of designs submissions to chose from, and from there you can ask for slight tweaks and changes until you are 100% satisfied with the results. And the best part is that the price is very reasonable and there’s 100% satisfaction guarantee. Plus by using the 99designs.com/mywifequit link and telling them that Steve from mywifequitherjob.com referred you, your design listing will be bolded, highlighted, given a prominent background and featured before all the regular listings, so your request stands out among all the rest of the designers. So head over to 99designs.com/mywifequit and get something designed right now.

And finally if you enjoyed listening to this episode please got to iTunes and leave me a review. When you write me a review it not only makes me feel proud, but it helps keep this podcast up in the ranks so other people can use this info, find the show more easily and get awesome business advice. It’s also the best way to support the show and please tell your friends because the greatest complement that you can give me is to provide a referral to someone else either in person or to share it on the web. And as an added incentive, I`m also giving away free business consults to one lucky winner every single month. For more information about the contest go to mywifequitherjob.com/contest. And if you are interested in starting your own online business, be sure to sign up for my free six day mini course, where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com for more information and thanks for listening.

Thanks for listening to the my wife quit her job podcast, where we are giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.mywifequitherjob.com.

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Ready To Get Serious About Starting An Online Business?


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

038: How Sam Franklin Created A 7 Figure Digital Stationery Company From His College Dorm

Sam Franklin

Today I have the honor of interviewing Sam Franklin, the founder of Greenvelope.com. What’s cool about Sam is that he started his digital stationery company while still in college and he bootstrapped his entire business by working odd jobs.

And here’s the thing. When he first started out, he did not know a thing about graphic design. He did not know a thing about websites or ecommerce. In fact, he learned most of his skills through sheer hustle and by taking online training classes on Lynda.com.

Sam’s story just goes to show that if you have the desire, you can learn how to do anything and start a seven figure business when you have no money or experience. Enjoy the interview!

What You’ll Learn

  • How Sam came up with the idea for his business
  • How Sam bootstrapped his business early on
  • Why Sam decided not to use a standard platform for his site
  • How Sam developed a site without any technical knowledge
  • How Sam found the time to start his business while in school
  • How Sam found designers for his virtual stationery early on
  • How Sam designed his early cards by himself without any prior knowledge
  • How Sam generated sales early on with his site
  • How Sam leveraged Facebook to drive traffic back to his site
  • How Sam minimizes customer support with his small staff of people
  • How long it took for Greenvelope to start making money
  • The most efficient way to design a website as a non-designer

Sponsors

Other Resources And Books

Transcript

You are listening to the my wife quit her job pod cast where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now this isn’t one of those podcasts where we bring on famous entrepreneurs simply to celebrate their success. Instead I have them take us 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 enter my podcast contest where I`m giving free one on one business consultations every single month. For more information go to www.mywifequitherjob.com/contest. And if you are interested in starting your own online business, be sure to sign up for my free six day mini course, where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com for more information.

Now before I begin I just want to give a quick shout out to this episode’s sponsor 99 designs. Now originally I wasn`t going to take any sponsors at all, but 99 designs caught my eye because I suck at design. And in fact when I first started my online store back in 2007, the design for my website was terrible, and I had absolutely no idea who to turn to. Now fast forward to today, 99 designs is a site where you can provide a description of anything that you want designed whether it be a logo, a web page, a T shirt, pretty much anything and have dozens of designers compete to deliver you the best design possible. And by best I mean that you get to choose your favorite design among a dozen of submissions from a pool of over 315,000 designers.

So if you are design challenged like I am, I highly recommend that you over to 99designs.com/mywifequit. And if you use that link and tell them that Steve from mywifequitherjob.com referred you, your design listing will be bolded, highlighted, given a prominent background and featured before all regular listings so that your request stands out among all of the designers. And in fact this special offer is worth 99 dollars. So if you need a logo, website, T-shirt, business card, or anything designed go to www.99designs.com/mywifequit. Now on to the show.

Welcome to the my wife quite her job podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Welcome to the My wife quit her job podcast. Today I`m honored to have Sam Franklin with me on the pod cast. Now Sam is actually someone I met through Austin Brawner who runs the e- commerce influence podcast, which incidentally is another podcast you should check out? Now Sam runs Greenvelop.com, which is a business that sells digital stationery for weddings, special events, you name it. Now Sam may or may not be aware of this, but sending digital card is actually very popular with first generation agents. So for example my in laws and my mom send digital cards all the time, like it`s all the rage for them.

And you know I`m not sure that my last statement kind of applies to everyone, but clearly these digital invitations are popular because Greenvelope is doing very well. Now, what I really like about Greenvelope.com is the ingenious business model. They don’t have to ship anything physical and as a result his business can truly scale. And what`s even cooler is that Sam totally bootstrapped Greenvelop.com from his college dorm room. Sam is truly an inspiration to us all, so welcome to the show Sam, how are you doing today?

Sam: Hi Steve, I`m well thank you and thanks for having me on the show, I`m excited.

Steve: Yeah, so can you just give us a quick background story. Tell us about the early days and how it all got started in your dorm room.

Sam: Okay, So I guess it actually goes back to just before going to college at Washington University in Saint Luis. I had taken a gap year before school to travel and kind of explore some different business ideas. I knew I always wanted to start my own business and growing up in the Seattle area in the pacific North West, I`ve always been outside on the weekends enjoying kind of the beauty of the Pacific northwest, hiking and rock climbing and fishing. And so I knew that whatever business it was that I was going to start, it had to be something that related to the outdoors or preserving the outdoors. And so fast forward a couple of months later, my family received a wedding invitation in the mail on thick-thick card stock and that’s when it kind of clicked.

We received this invitation, went to the event and shortly afterwards recycled the invitation and it seemed like there was an opportunity for my generation, the younger generation to send a nice correspondence via email. And at the time I had researched it. There was really one player in the space which was eBay that had advertisements across the invitations. And I thought for weddings well this might– people might want to pay a little bit, not have a free service, but in exchange for paying for the service not have any advertisements, and have really traditional templates that look and felt like a real paper invitation.

Steve: Mm-huh.

Sam: So with that I started drawing up specs on big piece of construction paper and then shortly after I went to Wash U where I started developing, and hired my first developer and started putting the idea into motion.

Steve: So I was going to ask you about that specifically, so are you technical in any way?

Sam: Not especially, I’ve always liked technology and computers, but I have done more of the business side of Greenvelope and hired developers from day one to help build my vision.

Steve: So I know for– like when I was in college, I didn’t really have any money. So how did you actually– did you get seed money somehow from your parents either that or from your credit card, how did you kind of afforded a developer early on?

Sam: So it was a combination of I had started a business actually in high school which was pressure washing driveways, and so I was skipping some classes and going out and pressure washing three or four driveways a day, and then delivering Pizza at night and being in high school and living with my folks it was pretty easy to save that money. So– and that was the initial funding, and definitely I didn’t have anyone full time to start and made some project based things that weren`t really expensive to that kind of start building up the initial ideas, and did as much of the design work, on my own.

Initial marketing– I didn’t really have a marketing budget so I relied on press and experimented a little bit with Google ads. So it really– they weren’t a ton of cost. Getting started I was doing everything I could to keep it as efficient as possible.

Steve: So did you use a standard platform like an open source platform or was everything like coded from scratch?

Sam: I looked into using standard platform, but it was– became clear pretty quickly that this was a custom product. That there wasn’t a system in place for where we were sending thousands of emails that were customized, and this whole idea of this spinning envelope animation that would spin around, and open and people could track our SPPs. So it was really a custom experience. So I had to go with– I took it to different firms in the area and it seemed like it wasn’t really a fit for our firm, it was much too expensive. So I went with the approach of just hiring a single contracting to build up the initial version.

Steve: Okay, and if– I don’t know if you remember but how much did you invest early on just to get started with this?

Sam: Yeah, the initial investment was 25,000 dollars and that carried me through, almost the first year of the business.

Steve: Okay. That’s actually not a whole lot of money. Okay. So what are some of the challenges that you were kind of faced, kind of growing this business out of your dorm room? Obviously you were still going to classes and that sort of thing. So how did you kind of just juggle all of these things, I mean it’s almost like a full time job in addition to going to school full time.

Sam: It was really challenging while I was at school. So between classes I was on the phone. After class until midnight, one o’clock I was doing stuff. Up early doing customer support– not much work life balance for the first year or two of the business, and then I eventually took some time off to focus solely on the business when I had hired a few full time people and it was showing a lot of potential.

Steve: Okay, so you were doing all the customer support and everything early on when you first started?

Sam: Yep.

Steve: Wow! That’s crazy. So I noticed on your site that all of your cards look amazing. So would you consider yourself a designer, or did you actually hire designers to design those cards?

Sam: So I actually started doing all the design work as well…

Steve: Wow!

Sam: And I have to admit the collection wasn’t as strong when we were relying on my design skills, but about a year and a half ago I hired a lady full time, Lauren, whose main role was kind of get our design collection spiffed up by going to different designers in the space and having them create designs for us that we could select and then sell on our site and then they would get commission if their design sold. So it was a way to get a variety of designers and a bunch of designs without too much capital upfront.

And for the designers that are selling a lot of their designs, it`s worked out really well for them. So now we have– I think we have about 35 designers now that we go to for designs and every month we`ll have different collections that we will ask them for. So we`ll do destination weddings this month and we`ll do holiday cards pretty soon here. So we kind of have that network of designers that we have built to create those designs and since it`s– we have all the stats on which designs do well, and I`m a big believer in kind of just relying on what– not what I got things, but what people are actually purchasing and what the stats say. And the stats have shown that a lot of my designs now have become obsolete. It’s always a little bit sad but…

Steve: Really, okay.

Sam: A lot of my early designs that I have made, there is all these like new designers that we have. So we are like Sam we go to take down another one of your designs and then, I`m understanding of it.

Steve: Isn’t that kind of a function of how much exposure a certain design gets though, whether it`s actually popular?

Sam: Well certainly but we do different things to randomize certain collections of designs and if – when – if you go into the site now and then I go later on the day it’s going to be a different order. So randomizing and trying to get as accurate data as possible.

Steve: Okay. So early on, so can you go into a little bit more depth about this arrangement you have with your designers. First of all how did you find them? And then exactly how does the arrangement work? Is it there upfront cost or they just give you the designs for free and it`s purely commission based, how does it work exactly?

Sam: So it’s purely commission based. They give us the designs, so we actually require designers to apply with at least five designs. And we need to– I think our limit is now– we have to have at least three designs from a designer that have been selected for them to become part of the site. We have kind of a call to, a call for designers now on the site. So we are getting emails from designers that want to apply. A lot of designers will tell their friends about Greenvelope and then they all apply. But it was definitely a lot more outreach and we are continuing to outreach to new designers. We you know look at different blog posts like top ten designers of the year or for 2014, and then different searching on Google, finding out kind of what designers people are talking about and then just send them an email and reach out to them and see if they are interested.

Steve: Okay, so back when you were small though, what was the incentive for one of these designers to want to join for free?

Sam: We didn’t start the designer program till about a year and a half ago when…

Steve: Okay.

Sam: So at that point there was already enough volume to make it somewhat worthwhile for them.

Steve: Okay, I see. And so I`m just trying to judge whether you’re just like some superman like you did all your own designs. Did that imply that you had like adobe illustrator experience and that you are kind of artistic in that you kind of know what people want in those cards and that sort of thing?

Sam: Yeah, so I watched tutorials online on a site called Linda.com, which is very reasonably priced and you can watch as many tutorials a month as you wanted, so I just watched one– I think it was like a ten hour one for illustrator and ten hour one for photo shop and that gives you really-really the basics of what you need to get going and design cards on your own, so…

Steve: Okay. Well that’s amazing. That takes a lot of initiative to go and just watch the videos, and just say hey I`m going to start designing some really great looking cards that people want to buy.

Sam: Mm-huh. Well I had no Idea of people who would want to buy them, but it was fun and I tried it out in the early stages, but definitely there is people that do this all day and specialize in it that are going to be better than myself there.

Steve: So just curious how many designs did you launch with, like what was your kind of philosophy? Just get the site out there see if you can make some sales at first or did you kind of build up a reasonable size portfolio before you launched?

Sam: I launched probably like 25 designs, they had nice calligraphies, they looked nice, there was really no competitors in the space at the time. So on day one there was– what we did is we had to save the dates for free and the idea was if people kind of had a good experience with save the dates, invested the time making the guest lists in our system, then they would upgrade free invitations. So that was kind of a nice way to get traffic initially and then also a lot of those people we would send them promotions to upgrade to the invitations after they send out their save the dates. So that was a good way to get some initial customers using the product.

Steve: Okay. And so if we could just go back to just when you first launched. How did you get people to your site, actually how did you generate sales early on? Now you just mentioned this sales strategy of giving them free save the dates, but how did you even just get the word out by you site Period?

Sam: Yeah, there is a couple of ways. One is I actually before we did the podcast, I listened to your podcast– the recent one, I think it was Andrea, she had talked about her clothing company that she has done all the press for and gotten 200 or something magazines and that reminded me a lot of how I started and that same process of just finding people’s contact info, using those media databases, blasting a ton of emails out and seeing if people would be interested in covering the story. So we got a ton of press when we launched. It helped to be in college and the dorm room.

Steve: Yes that’s a great story.

Sam: Story– and a little bit controversial too when we first started and I think I have seen the industry change and become more accepting of electronic invitations for weddings since I started. We launched in 2010 but– yeah a lot of people would be like is this really– you know it was kind of a conversational controversial piece as well– the emailing wedding invitations and the etiquette around that. So that was another thing that helped us get press early on.

Steve: So just curious which databases did you use, were they some of the same ones that Andrea mentioned in the previous podcast? Or could you just shed some light on the specific tools that you used to do the outreach.

Sam: Yeah the– my media info was one that she mentioned. I think that was the one she found very helpful as well and that was one that I’ve used in the past and a lot of it is just Googling articles and seeing who wrote them, and then kind of maybe finding them on LinkedIn and trying to find their contact information. So a culmination of kind of organic, what could be uncovered in a Google search and the databases.

Steve: And what did you write in these outreach emails since you weren’t established at all, how did you kind of structure your email or your cold email?

Sam: They were pretty much plain text emails. I had experimented with more kind of graphic based emails and that was never as effective, just something relatively casual in tone and definitely short and it would just be like, “Hi I`m Sam, I just launched this website and we are trying to change how people view electronic invitations by creating really beautiful online experience, here is a link to a sample.” And so it was really that link to the sample and to our website that people would go to and be like oh! I have never seen an envelope spin like this with my name personalized on the front of it. So really showing off that product was something new that the people hadn’t seen.

Steve: Cool so I– you know so my wife and I run an online store, and we’ve been featured in a bunch of magazines, but those magazines actually, some of them rarely– not rarely I should say, but some of them just don’t lead to any sales. So were there particular publications that actually sent you a flood of traffic, and was it just primarily through these publications that you got your early traffic?

Sam: So it was primarily through publications we got traffic. Like you said it`s not necessarily a ton of sales. It depends how targeted– if it was more kind of like a human interest story in the local news, or if it was a story on a wedding blog with a promotion. So the wedding blogs and the very targeted things would lead to sales, but more human interest stories– I think were great to be able to put on the website, interviews and kind of build the brand out, but weren’t as effective for sales. And so another thing we did for sales is Google ad words, which was a great way to get started on day one, be able to get traffic to your site. It was a lot less expensive to bid for ads back then. So we`d pay ten cents per click or something to get someone to view your site and search for email wedding invitations– very targeted, very cheap relatively. It’s not at all the same now, but that was a way to get a bunch of people to our site early on.

Steve: Yeah, I was about to say because adwords for wedding invitations would probably be like an order of a dollar a click today. So do you still use adwords today for your business?

Sam: Yeah, it’s still definitely part of our acquisition channel and just because of the competitive nature to it and the high cost per click like you said a dollar or more, it’s not something that we can rely on as our sole distribution or acquisition channel.

Steve: Okay.

Sam: So we are looking and that’s part of what we have been doing recently is looking into these other acquisition channels, refer a friend program. We have an event planner program now where we actually go and partner with the event planners.

Steve: Okay. How does that work? That’s very interesting because we are in the wedding industry also. So I`m just curious how– and we reach out to wedding planners all the time and these people just buy in bulk from us consistently. I imagine it works the same way for you. So how do you run your program and how do you reach out to event planners?

Sam: So we’ve just started. We have about probably 30 or 40 event planners now that have signed up. They get– when they sign up for our program, we give them a training on the product so that they can share it with their appropriate clients. And we`ve just– since we’ve recently started a lot of them already booked out their clients for quite a while, so we haven’t really seen it really turn into a huge distribution channel yet. But it’s a lot of people that know about it and hopefully when they are kind of next round of clients come in for the next season, that will be kind of on the forefront of their minds. So it`s kind of a new channel that we are exploring, we don’t know a lot about that channel yet. So…

Steve: And it’s just plain outreach, you just went through a list of planners and you just kind of cold called them to see if they would be interested. Is that kind of how you just found them?

Sam: Yeah, so we just looked through the different directories of planners…

Steve: Yeah, okay.

Sam: And we don’t really do as much cold calling or send emails out, kind of mass emails out to these planners. We do the research and find their emails and contact them, and again a simple casual pretty short, shortest key plain text email. Just kind of letting, almost approaching it as here is something that you know we think you should know about. We`re– this is kind of informational tool to add to your tools. It`s not really like you need to sign up for our program this week or anything, it`s more just informational email.

Steve: The reason why I`m kind of emphasizing all these things on this podcast is, you know a lot of people kind of launch their online business and they are kind of a little bit averse to doing the leg work, and they are just kind of waiting for their site to kind of get indexed in the search engines. And what I want people to realize is there is a lot of leg work involved. There is a lot of cold emailing, sometimes there is cold calling involved and it just sounds like you`ve really hustled your way to the top with this business.

So one thing I did want to ask you is what are some of your primary marketing channels? Like the primary drivers of business to your site?

Sam: So the channels that we talked about SCM, Adwords is big, Google search. So we are always working on our search engine optimization. And really referral business and word of mouth has been so big for us, and the reason that most every month we’ve grown is because the viral nature of our product when people send out 1000 or 100 invitations and have a good experience opening it and RSVPing it, that is advertising the product in itself to all the guests of these invitations. And also customer service has always been super important. From the beginning I realized we are working with people’s wedding invitations. You don’t want something to go wrong or if something does go wrong…

Steve: Right.

Sam: You want to able to fix it quickly. And so that’s definitely something that people aren’t used to working with other electronic invitation sites, being able to call someone or be able to get someone an urgent email to someone on a Sunday. The day they send out their wedding invitations if something goes wrong, and so that’s something that we are always kind overly I guess pleasing people in the quickness of response and quality of customer support. And in turn they write good reviews for us on the wedding websites, and they also tell their friends that they had such a good experience with Greenvelope.

So I think that is something a lot of people might not focus on or realize right away, and it’s something you don’t really get instant gratification on. But if you’re building a sustainable business over the long run, customer support is definitely helpful.

Steve: So does that mean that you have people answering phones everyday of the week, or do you have support people?

Sam: We do, now we have full time support, during business hours here in Seattle.

Steve: Okay.

Sam: But if someone– our support philosophy is always like you know we are a small company, we can`t have 24 hours customer support, but we have it during the day if something happens emerging after hours, send us an email, someone will see it and if we need to, we can call you back. But most of the time everything gets handled during the day.

Steve: Mm-huh. Yeah I would imagine it’s not– people probably plan their invitations out way-way in advance right?

Sam: Yeah.

Steve: So, it’s probably not urgent most of the time. So have you tried facebook advertising at all?

Sam: We’ve done a little bit and we haven’t had a ton of success with it. Not to say that it isn’t a good channel and it couldn’t be successful, but we just haven’t I guess really figured out for our purposes how to do that effectively. And it’s something that you know we will continue to try and I know there is opportunity there, but it’s something that we are still in the process of figuring out. I think the promoted poster Facebook kind of forces you now if you want your following to see your post to promote it, so you can promote it for not too much cost. So we do that just that we invest a lot time making a nice blog post, we want our following to see that. So we do a little bit of that but just blanket Facebook banner ads hasn’t – we haven’t found too effective.

Steve: Okay, and then so that implies that you kind of built up a facebook following over time that you market to actively then?

Sam: Yeah, so we put all of our– we have a blog post, so we’ll do things like feature some of our couples, show their maybe custom invitation they designed and photos from their wedding and make it a board that we end up pinning up on our Pinterest. So really like our whole new rebrand of our site that we launched earlier this year was very image focused, and very– we actually, we did the logo, so it’s very simple and clean out kind of going for that more modern aesthetic.

Steve: Site looks great by the way; I was just on it earlier.

Sam: Thank you.

Steve: So what was I going to ask you. Oh yes, so usually the traditional way to design a wedding invitation is– at least when we got married you know you kind of pick an overall design that you like, and then usually there’s someone on the other end who kind of arranges things for you to make it kind of look nice. For your business is that all done on the website meaning like the customer actually designs their invitation directly on the website?

Sam: Yes so…

Steve: Okay.

Sam: Everything can be done without interacting with anyone on our end, there’s no approval process there’s no– the only reason that we talk with the customers is if for some reason they get stuck at some point in the process, or have a question on pricing, they can give us a call but everything can be done on their end. So for example you pick a flower design– we’ll have a pre made one, and template on that design with a matching fonts and colors for that design that you can go in and just add your name in instead of a name– the sample name on the cards. So we give people a foundation to work with and just enter in their details and if they want to go above and beyond and add their own customization they can do that, but we give them a starting point.

Steve: Okay and this is just all graphical, you can just do it directly on the website to modify your invitation?

Sam: Correct.

Steve: Okay. Wow, okay that’s, that’s pretty nice. So do you have people who require a little bit more technical support like, so I was just thinking of my mum, she likes sending out these digital invitations and usually what she does she– I don’t know what she uses actually, but it’s pretty much pre-made and it’s kind of brainless. Do you find yourself answering a lot of technical questions about your site, or is everything pretty straight forward and smooth for the most part?

Sam: It’s definitely a combination. Some people will go through the process, they’ll be our most high paying customers and we’ll never hear from them once, or if someone buying our smallest account like you know every single time they want to change a little font they call you.

Steve: Okay.

Sam: And so that’s just I think the challenge probably that every business has, we want to give everyone great support, and I kind of see it as we have the people on staff to do support, and it all kind of comes down the wash I think giving everyone the same level support. If some people need to call in more, that’s okay and hopefully they’ll have a great experience and tell three friends about it.

Steve: Okay.

Sam: So we have now about three people doing customer support.

Steve: Okay. And that’s their primary role, right? Just supporting customers?

Sam: Yeah, I kind of to keep it a little bit more varied in terms of daily work there’s normally a combination of other projects. If there’s a down time where there are not calls, the customer support agents can work on other projects as well.

Steve: Okay.

Sam: In combination with the support, so kind of a combination and one thing that I was going to mention that’s really helped us reduce the amount of support is we have a knowledge base of these all these frequently asked questions that we make people look through before submitting a ticket.

Steve: Nice.

Sam: So when we implemented that it was– cut support down tremendously and our supports remained relatively constant even though we’ve grown and part of that is that if we keep getting the– I’m still involved in lot of the support too, and overseeing that and so if we keep getting the same question over and over, we’ll put something in the pipeline to make that more clear or put a little like a little notification cue tip describing that color or that font, so people can find out information before having to contact us. So it’s always this balance of we’re growing but were also making the site easier to use, so everybody has less questions.

Steve: Okay and so earlier on you know as soon as you launched kind of how long did it take you for your kind of business to gain traction? I know a lot of people kind of like instant gratification you know get sales right away, but just if you can remember what it was like when you first launched and kind of just describe you know the early days before your business had any traction, how long did it take for things to start picking up, or you became optimistic about your business altogether?

Sam: Definitely it took quite a while, so I’ve been doing this five years now, and I think part of what was helpful for me is I didn’t really have any expectations at first. I remember I was interning at a PR company that was kind of helping me launch this, and I was telling the owner there, sitting down with him as you know we’re launching this week, I mean I’ll be so excited if I’m getting one sale a week, and he was like “one sale a week?” You need to be getting 100 sales a week, that will justify the amount of time and everything you put in this business. And I think as we’ve kind of you know we went from one sale a week to two sales to you know celebrating every time I got a sale. Now we’re at three sales a week to fifty sales a week and just growing from there.

So I think part of this good customer support and the viral nature of the product is that we’ve always seen the growth which is exciting and kind of keeps me kind of I guess raising my hopes and expectations for it. But also like never really being happy with where it’s at, I think that’s something that’s kind of helped me so far is never really being happy with the last sale, like there is so much more that can be done if you know I’m dedicating my life to doing this I’ve got to be doing it to my 100%. And I see so much potential that every day I want to be coming making you know work as many hours as possible, making the business better and growing as much as I can so.

Steve: So you know let’s say after a year, was it already making significant money in your opinion or did it take a little bit longer than that?

Sam: Well I started in 2008 and was kind of launched in 2010. So no money was being made those first couple of years.

Steve: Okay.

Sam: In 2010 the first year that we launched– I think we did and I can show this number because I think it was on entrepreneur article magazine but I think we had 70,000 of business our first year.

Steve: Okay, that’s pretty good. Yeah.

Sam: Which I was pretty excited about and obviously we had a lot of costs, so we weren’t really making– I wasn’t really making that much money but…

Steve: Sure.

Sam: But yeah, so it’s I guess going into it without a lot of expectations, I was constantly pleased but also constantly convinced by our– what could be done and the potential that’s on it to keep growing it.

Steve: Okay, that’s actually a pretty good attitude to have I think. That way it just– you don’t start making decisions strictly based on the money alone, you kind of are able to focus on the long term for your business. So speaking of which, so you mentioned that you know you tried to not remain satisfied with where you at and you’re always constantly trying new things. What are you currently focusing on now in the present date to grow your company?

Sam: Yeah, so we– what we’re really focusing on is going more and more into the business market. We have seen a lot of potential here, actually when we first launched for wedding invitations, businesses were creating wedding accounts and customizing wedding templates for their business events just because they were elegant and they wanted to sell something nice for their business events. They caught their– had good open rates and caught their audiences attention and that kind of sparked– I was like “oh maybe we should be offering business events as well.” So pretty early on we switched– we didn’t switch, but we added business designs and that’s grown to be over 50% of our business now.

Steve: Wow, okay.

Sam: So we’re building out a sales team now, just a couple of weeks ago hired a sales lady whose been in the event planning space for 15 years, and is excited and came onboard and we’re trying now to go and sell more of these kind of corporate accounts.

Steve: So these businesses probably just subscribe to your service altogether, they probably aren’t that price sensitive and then they continue to use your service right? Is that kind of more accurate as opposed to some of the individual customers that you have on the wedding site?

Sam: Exactly, so that’s the beauty of it. The problem with the wedding customers is you know they have a great experience, they use it once but maybe they use a baby announcement in a few years or maybe they’ll use for a birthday party, but there’s not a lot of recurring customer life time value where as these businesses higher price points renew and send out a lot more invitations.

Steve: So that, so you’re just– the way you’re growing is you’re kind of looking for new markets and then this business one is kind of what you’re focusing on, right? One thing I wanted to ask is and I wanted to ask you this earlier was back when my wife and I actually got married, we didn’t even think about sending out digital cards. It was paper, paper, paper from the start and that’s kind of being the tradition when it comes to special events and that sort of thing. So how did you kind of convince customers to go the digital route?

Sam: I think so far at the point that we interact with the customer, they are already convinced because they’re coming from searches like electronic invitations or email my wedding invitations, so at that point they are already looking and there’s no convincing that needs to be done.

Steve: Okay.

Sam: But I guess right now our marketing is pretty focused to, and the point that we are starting to interact with the customer they’ve already made their decision.

Steve: Okay, okay it’s just kind of gotten more accepted over time and people just know that they want to save the environment and just go digital, is essentially what you’re saying, right?

Sam: Yeah save the environment a lot of, it also saves a ton of time and tracking all of those RSVPs and now we have survey questions so you can track new options and it’s really as much of a data management system as it is way to send the invitations out.

Steve: Okay, and this is just kind of a question for me, it’s a little more on the technical side, but you know when you’re managing all these email addresses you know, there’s a lot of emails that never make it to the end users inbox whether it will be put in the spam folder and that sort of thing. How do you guys kind of manage that aspect of your business?

Sam: So that’s always been probably one of the most challenging things since day one is how do we look like we’re sending invitations from someone else and have that actually go into the inbox. And so that’s something that you know the first couple of years of the business we banged our head on a lot, it’s something that we’ve figured out a lot of different little techniques here and there.

Steve: Okay.

Sam: To you know make the content of our emails in a certain way that meets certain spam scores that we set up all these technical hosting things the right way.

Steve: Okay.

Sam: There’s a lot of little things that we do.

Steve: Okay, so what I was getting at was you manage your own emails still, right? You don’t use a third party to manage your emails.

Sam: No, we send them all out with our own servers.

Steve: Okay.

Sam: Which gives us more control and also gives us some advantages in that sense. So that’s a lot of kind of our technology is that emailing hundreds of thousands of emails at once and getting those delivered to now that were moving to corporate spam filters and stuff.

Steve: Let’s say someone wanted to start some sort of digital delivery system, you know maybe not necessarily cards, but if someone wanted to kind of emulate your business, what sort of advice would you give someone today? Would you tell them to go your route which was a fully custom platform, are there kind of other platforms that are already made out there to make this easier? How would things have changed if you were to start today?

Sam: I don’t, I think you have to go fully custom for this type of thing.

Steve: Okay.

Sam: And I think the most important thing that I’ve learned and that I didn’t do very well at the beginning is creating the specifications for the actual what you want your website to be. There are certain times where you want to be short when you might be emailing your press things and there are certain times that you want to be long and that’s creating specifications for developers that will be very clear and everybody’s expectations are the same on both sides; the developers and the person that’s getting this software developed. So I think that’s something that I could’ve done better earlier on is being very clear. If you want to forgot my password thing, put that in the specs, put everything that you can think of in the specs and don’t be afraid of being too detailed because you don’t make it easier throughout the process.

Steve: Actually can we talk about your specs a little bit back when you first designed the site. Was this just like a word document where you specified exactly kind of in a flow chart how things were to be designed, or did you actually lay out the graphics and then just have the developer implement what you want it to look like?

Sam: Sure, so I’ll tell you what I do now which I think…

Steve: Okay.

Sam: Will be helpful for people creating their site and what I did then which wasn’t at all a good way to do it.

Steve: Okay.

Sam: It was like pretty much like one of those big pieces of construction paper and drew like every single page on the site with little arrows on like one giant sheet, like roll that up and took it into a meeting. And then you know I kind of was like oh I didn’t really understand where the designer came in, where the front in developer and where the– I didn’t really understand how the whole process works. So kind of taking that whole thing to one developer, and kind of trusting that they’d make everything work– it didn’t work out so well. So now it’s a very clean process, so one tool that I’d recommend everybody uses that’s creating these specifications it’s called Balsamiq, and it’s a very quick easy way to wireframe up how you want each page of the website to look.

So instead of having to learn illustrator and you know create all these boxes, Balsamiq is a very stripped down version of that that has– you can drag a button on, you can drag a browser window, you can drag check boxes, and you can just lay– they have all the assets that go into creating a website and you can lay everything out and put it in a single page. And then you can create all those pages and save those out. So you have kind of a black and white– this is all the functionality of the site.

Steve: Okay.

Sam: And then find a designer who probably isn’t going to be a developer to make those look pretty, and get the design how you want it to look. And you’re not ready to talk to a developer until everything is designed. Once you have all the designs, then take that to your development team– a company with yeah Word document or Google document or something that has all the different details and how everything is going to function. But I think, I was just so eager to go to a developer before I even knew exactly how everything was going to work, and I think you don’t even need to get a developer involved until you have all the pages of the site specked out and designed. That’s just what I found, so I guess everybody might have different techniques but…

Steve: No, that’s actually pretty accurate. I mean you should know how everything is supposed to– the developer only comes in at the very end when it just comes time to implementation, right?

Sam: Correct.

Steve: Everything should be designed ahead of time, otherwise– because the developer is not a designer, all right?

Sam: And a lot of times the designer is going to be the one that’s going to give feedback that “oh your button might be better here,” and you can kind of work organically in that process before going to a developer, and having a developer develop something and the, the designer comes in and he’s like “oh this doesn’t make sense with the button here,” and then now the developer now you know, you’re paying the developer to go back and change it. It’s just last step of the process is the developer.

Steve: Okay, and then one thing I forgot to ask you about also was conversion optimization. Are you guys constantly running conversion tests in the background for your sites, and what do you kind of focus on testing?

Sam: Yes so something that we didn’t really do early on and it was just kind of just– it’s getting features as many features as we can, that people keep asking for, and staying on top of support. Now that we’ve got the product to kind of more of mature state, it’s how can we optimize and look at our conversion funnel. So it’s something that we started doing in the last six months, and it’s been really exciting because we have this tool called Mixpanel that you can actually look at each step of the funnel.

And the funnel would be someone signs up, they create their first event, they chose a design, they create their card, something like this and you can see where each step of the funnel people are falling off. And then go in and run tests of you know maybe you want to change the signup button to start now, or these little types of tests, and it’s amazing what a little button change or a putting a certified logo in a certain place can change your conversion and having the tools and the data there to see that is really helpful. So now we’re at a point where we’re just kind of trying to optimize our– we can grow our business a lot by just optimizing our current traffic.

Steve: Okay.

Sam: And getting people through that funnel, so Mixpanel has been a really cool great tool.

Steve: Okay, wow and so and that makes– I’ve never used Mixpanel before and that just kind of applicable to any person’s ecommerce websites, they can use this?

Sam: Yeah, so there’s two kind of big ones that are kissmetrics panel and for whatever reason we chose to us Mixpanel and we’ve been really happy with it, but I think kissmetrics is a good tool to look at too and it’s…

Steve: Okay.

Sam: It’s event based tracking which is different from something like Google analytics. Event based tracking is tied to like the life time of a user account. So if someone creates an account with Google analytics and then goes to a different browser, you’ve kind of lost them, because it’s cookie based tracking was my understanding. But then with Mixpanel if someone comes from a Google search, creates an account, then goes to a different account or logs in, every action for that entire account is tied now tied to your analytics. It doesn’t matter if they switch computers or if they come back a year later, it’s all tied to those events that that account takes.

Steve: But they have to be logged in to your server, is that how they track it?

Sam: Or if they’re logged into their account yeah.

Steve: To their account okay, and do you use any heap map tools or any sort of recording platforms to see how visitors are interacting on your site?

Sam: We’ve used Crazyegg for the heap map.

Steve: Okay.

Sam: Tracking before and that’s lead to some interesting insight. So that’s another thing that we’re looking at, and keep kind of checking out every now and then, but the reality is they’re just so many tools.

Steve: Yeah, there’s too many things.

Sam: You just kind of drive yourself crazy. So what I’ve done is kind of every week we have now kind of an optimization goal of the week. So every week I have a timeline of what were going to test that week and implement, and by the end of the week we’ll decide whether it worked. Some worked really great, some we thought would work didn’t work, but having the data is key. And so at the end– so the idea is every week we’re making the site a little bit better.

Steve: Okay, cool and you know I know you kind of started out really early on with your entrepreneurial endeavors. Were you kind of influenced by any mentor or any sort of book or whatever, what kind of put this ginormous entrepreneurial spirit inside of you in such an early age?

Sam: I don’t know, I don’t have– I don’t know, I guess…

Steve: Was it your dad? Was it any sort of book that you read? Anything?

Sam: Well my dad is a doctor and so…

Steve: Okay.

Sam: So, I don’t think it was right there, but he’s been kind of entrepreneurial on his own sense and I kind of I don’t know I like the adventure.

Steve: Okay.

Sam: And kind of the challenge. I don’t know I guess I kind of just fell into it and I like it.

Steve: So were there any books that you kind of read that kind of pushed you one way or another, like how did you learn how to run a business, or was it all just kind of trial and error?

Sam: It was all trial and error, and I read quite a few since I kind of started the business I’ve read books throughout the years. But a lot of it was just kind of learning from doing, which I think is– a lot of people are kind of just scared to take that initial jump, and you know feel it you need to read a ton of books before you try something, and I would kind of argue there are other ways– that give it a try and you’ll learn so much from doing, and you can start with not too much capital. I mean you can do a lot of the stuff yourself to begin with, or maybe partner with a friend that is a developer and you don’t really need a huge budget anymore to start or to try something out and to learn from it. But one book that I really like is called “Delivering Happiness” and written by the founder of Zappos, and it’s all about customer service and company kind of the importance of company culture.

One quote that really stood out is that in his book is that “your personal core values define who you are and the company’s core values ultimately define the company’s character and brand.” For individuals character is destiny, for organizations culture is destiny. And I think that’s so true if you’re creating a company for the long term is that that culture, the way you treat your employees and is so important, because it’s not something that you’re just going to be able to do everything by yourself. You kind of have to put a lot of trust in the people that work with you and create an environment that kind of encourages innovation, and that you know actually cares about what you’re doing and the customers. So those two kind of things customer service and building company culture have been really important to me from day one, and I would say those probably been the most important thing for getting the business to where it is today. And to where we want to go is that customer service to stand out, and different things that we do to create company culture.

Steve: Yeah I mean I completely agree with you especially in the wedding industry, I think since were in the same industry word of mouth is such a big deal. People just naturally talk, and if they have good experience, they tell their friends and before you know it, it kind of just multiplies exponentially. Yeah, so I’ll definitely have my listeners check out that book, I personally have not read it yet, but now it is on my list. So Sam we’ve been already talking for quite a while, I don’t want to take up too much more of your time, but if anyone who is listening has any questions for you or your business is there a place where they can contact you?

Sam: Yeah, absolutely they can send me an email at my work email which is Sam@greenvelope.com.

Steve: Okay, and awesome. I just wanted to thank you a lot for your time and you’ve given out a lot of good nuggets today about how your business works and I really appreciate that. So thanks a lot Sam.

Sam: Thanks so much Steve.

Steve: All right take care.

Sam: Bye, bye.

Steve: Here’s what I like about Sam. He’s got a tremendous drive and the fact that he started his business while in college is really impressive. Plus I really like the fact that he self taught himself adobe illustrator, so he could create his first designs, and in fact he kind of reminded me of how I self taught myself web design in order to create our first online store.

For more information about this episode, go to mywifequitherjob.com/episode38, and once again I just want to thank 99 designs for sponsoring this episode. I know a lot of you listening are waiting on the sidelines and trying to get the courage to start your own online business. I also know a lot of you there run your businesses already and know your website design could be better.

So designing a website is actually not that bad anymore thanks to 99 designs where you can get over 300,000 designers to compete for your design. All you got to do is list your design on their site and within 48 hours you will get dozens of designs submissions to chose from, and from there you can ask for slight tweaks and changes until you are 100% satisfied with the results, everything is 100% satisfaction guaranteed. So go to 99designs.com/mywifequit and get your logo, website, t-shirt, business card, basically whatever you need designed right now. And by using the 99designs.com/mywifequit link and telling them that Steve from mywifequitherjob.com referred you, your design listing will be bolded highlighted and given a prominent background and featured before all the regular listings so that your request stands out among all the designers.

And finally if you enjoyed listening to this episode, please go to iTunes and leave me a review. When you write me a review it not only makes me proud, but it helps keep this podcast up in the ranks so other people can use this information, find the show easily and get awesome business advice. And it’s also the best way to support the show and please tell your friends because the greatest complement that you can give me is to provide a referral to someone else either in person or to share it on the web.

And as an added incentive, I’m always giving away free business consults to one lucky winner every single month. For more information about this contest go to mywifequitherjob.com/contest. And if you are interested in starting your own online business, be sure to sign up for my free six day mini course, where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to mywifequitherjob.com for more information and thanks for listening.

Thanks for listening to the my wife quit her job podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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037: How Erin Chase Attracts Millions Of Readers By Teaching People How To Eat Well On A Budget

Erin Chase

I’m super excited to have my friend Erin Chase on the show today. Erin runs the popular blog 5DollarDinners.com where she teaches others how to eat well on a budget.

What’s cool about Erin is that her site gets the most traffic out of any webmaster that I know. And in this interview, she details how she created her blog from the ground up. Enjoy!

What You’ll Learn

  • How Erin gets an insane amount of traffic to her website
  • How Erin earns money from her website
  • How Erin got 1000 visitors a day in her first month
  • How Erin got a book deal within the first 3 months of starting her blog
  • How Erin got 500K page views a month within 6 months
  • How to use Twitter parties to expand your reach
  • How to run giveaways to grow your blog
  • How Erin gets posts to go crazy viral
  • Why Erin thinks digital products is a more viable long term strategy than affiliate or advertising revenue
  • What traffic sources are working the best for Erin today
  • The secret to boosting your Pinterest account
  • How to get on national television

Sponsors

Other Resources And Books

Transcript

Steve: You are listening to the My Wife Quit Her Job podcast, where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now, this isn’t one of those podcasts where we bring on 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 earlier on to gain traction for their business.

Now, if you enjoy this podcast please leave me a review on iTunes, and enter my podcast contest where I am giving away free one on one business consultations every single month. For more information go to www.mywifequitherjob.com/contest and if you are interested in starting your own online business, be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100k in profits in our first year of business. Go to www.mywifequitherjob.com for more information.

Now, before I begin, I just want to give a quick shout out to these episodes sponsor 99 designs. Now, originally I wasn’t going to take any sponsors at all, but 99 designs caught my eye because I suck at designs, and in fact when I first started my online store back in 2007, the design from my website was terrible and I had absolutely no idea who to turn to. Now first forward to today, 99 designs is a site where you can provide a description of anything that you want designed whether it be a logo, a webpage, a t-shirt, pretty much anything and have dozens of designers compete to deliver you the best design possible. And by best I mean that you get to choose your favorite design among dozens of submissions from a pool of over 315,000 designers.

So, if you are design challenged like I am, I highly recommend that you go over to 99designers.com/mywifequit and if you use that link and tell them that Steve of mywifequitherjob.com referred you, your design listing will be bolded, highlighted, given a prominent background and featured before all regular listings so that your request stands out among all of the designers. And in fact, this special offer is worth 99 dollars. So, if you need a logo, website, t-shirt, business card or anything designed, go to www.99designs.com/mywifequit. Now on to the show.

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

Welcome to the My wife quit her job podcast. Today I’m really happy to have my friend Erin Chase on the show today. Erin and I actually just met at the world domination summit in Portland, Oregon last month and I was thrilled to be able to spend some quality time hanging out with her at the conference. Now, Erin runs the very popular site 5dollardinners.com where she teaches others to how to dine in style on a very reasonable budget of five dollars.

And when I say that her site is popular, I mean that it’s crazy popular. She has over 120,000 Facebook fans, insane traffic to her site and she’s been on good morning America, The View and The Rachael Ray show. Now, I can totally relate to why her site is awesome. I have got two kids on my own, and now that they have kind of grown up a little bit, they are almost like real humans now and real humans actually eat a lot of food. And so, whenever we as a family go out, it costs us like 50 dollars a pop. So, naturally a site like Erin’s makes total sense to anyone that has a family. Now besides running her website, she’s also written several quick books which have sold over 150,000 copies.

Recently she started a new subscription base service called 5 Dollar Meal Plan which sends you daily recipes for meals that costs less than 5 dollars. And oh did I mention that she also has four kids as well, and she consults on the side and she also helps to run a conference called Digital Cool Lab [phonetic]. I have absolutely no idea how she gets everything done and still has time to attend conferences, but I know for a fact that you are going to find her story very inspirational and with that welcome to the show Erin. How are you doing today?

Erin: Wow! Thanks I’m doing awesome with that introduction [laughing]

Steve: You like that ha…

Erin: Yeah, yeah that’s pretty fantastic [laughing]

Steve: So, give us the quick background story and tell us how you came up with the idea for 5 Dollar Dinners in the first place. I kind of read your bio ahead of time and it’s a pretty interesting story actually.

Erin: Yeah, so back in 2008 I was this stay at home mom with two little boys and my husband is a teacher so everybody knows that teachers have you know lowlish salaries. And we were you know going into– going through the summer as everybody wants when all over sudden the gases prices spiked up. They went from what– I don’t know 229 a gallon to four dollars a gallon something crazy. My husband had a pretty decent commute at that time and so the gas– we were already spending quite a bit on gas and we were going– it basically doubled, and so we needed to notch. We were very– we’ve always been very smart with our money, but we didn’t want to run into the road every month because gas price had hiked. We were doing everything we could to save as much as we could at the time.

We had pay as you go cell phones and we had our mortgage, we had a small little ranch house. Our mortgage was finances at the lowest possible rate it could have been at the time. Anyway so we were being very smart but still we were feeling the pinch, you know like a lot of people were and so I challenged myself too since I wasn’t bringing home any money, to spend most of it at the grocery store because that was really the only line under our personal or family budget, that we had any real control over. And so, you know so a combination of meal planning and couponing and just really being smart with how– what I was purchasing, what we got less purchasing at you know things like stocking up on chicken breast, or pork chops or beef were our favorite types of meats when they were on sale, so I dint have to pay for prices in between.

So those kinds of things I started doing, and our grocery bill went from 500 dollars a month for the four of us to 250. So that whole like cut your grocery bill in half thing is totally possible. And so I started sharing just tips and recipes and ideas on my then family blog. And my sister said “Yeah I really could care less what you’re buying at the grocery store, I just going to see pictures of the kids at their swimming lessons, right.” So, I kind of had that at the back of my head and after dinner one night I had shared with Steve my husband that, you know I think I had made a pork chop meal and I cooked some rice to go with it and maybe we grilled it and you know the total of that meal was three dollars 95 cents, for the pork chops plus a little bit of rice, it’s good choice it’s very inexpensive and we probably had a block layer experience– something that would have been on sale. And so I was I doing the dishes after that meal, then this is one of my clearest memories of you know when you have children everything gets kind of fuzzy [laughing]

Steve: Yes, yes absolutely.

Erin: and you have more and it gets fuzzier and fuzzier, anyway another story for another day. And I so clearly remember doing the dishes and my– you know how like on the news sites or near scandal or ticker is running across the screen giving you all the latest updates of you know whatever has happened in the world. Well there was that, but the ticker in my brain was five dollar dinners. And then it was, stop the dishes go Google it and see if anyone else is doing it. Because I knew enough about blogging and websites and I had you know visited quite a few just in my own little personal family blog that we had, and so I knew enough to look around first before I did anything.

And so, there was cheapfamilydinners.blogs.com or something like that was the only thing that I could find in the array of keywords that I had searched, you know around this random subject. And so I started a blog spot and within– that was August 22nd 2008, so coming up on six years– that I think within a month we were seeing 1000 visitors a day and within two months I had earned enough in ad income after the first month I put ads on the site, thinking that I would earn about you know, 10 cents for the month [laughing]. Because you know I didn’t know very much at the time, I didn’t know you could monetize the website or how to do that.

And so, you know at the first month I had ads and the second month of the site I earned enough money to buy our groceries for that week. So, all that much, excuse me. So, it was very eye opening that oh my goodness! This is something here. I think I’ve hit something here, I don’t know what and I don’t know what I am doing [laughing], but I hit something. It’s clearly resonating with people and yeah, that’s how 5 dollar dinners came to be.

Steve: So, if we can go into a little bit more depth down on that first month, how the heck do you pull off 1000 visitors a day in just the first month? I know it took me a very long time with my own blog to achieve that number. Where was the traffic coming from and how did you get it? How did you get the word out?

Erin: I was a very strategic link party hopper [laughing]. I don’t do them anymore, I used to host one for a long time as well. I just was very strategic, I had the same content every week, I would post my meal plan on Sunday, I would post Monday through Friday, what we had for dinner that night. No matter how random it was [laughing] that’s what I would share. And I would share the price breakdown and I think people just thought it was really interesting that one I was doing something sort of crazy– not sort of crazy, it was, it is.

But it was a challenge at the same time, I think and people say “you know that’s actually doable.” So a story on that, I’ve been on The View twice. I was there in May of 2011, again in October 2011.When I went back the second time Elizabeth Hasselbeck when she was still a co-host on the show, walked out of her way to come to where I was and said I want you to know that my brother in-law saw you when you were here before and first of all I was like you remember “you remember that I was here before.”

Steve: Wow! That’s awesome.

Erin: And so she said he thought you were– started by saying crazy, he thought you were off your locker. Well then he started paying closer attention, I guess he was the grocery shopper in the family– paying closer attention to some of the things I had suggested on the show and some of the tips I had given, and then just general prices he was paying and watching sort of sales and cycles and things, and then he decided that I was the most genius person in Tailope [phonetic] to chase his luck. She came out of her way to do that and so I think that, that is you know, the combination of it being a dramatic number that doesn’t seem attainable but it really is if you’re just smart about how you shop and what you’re spending that I think it’s certainly not the recipes.

I didn’t even have photographs when I first started, I didn’t even know how to use my camera. So I think it was more of the oh my goodness, what is she was making, like what should I try to in just simple basics. From we have food allergies from scratch sort of cooking methods and concepts that I think just resonates with people especially when we were going through that. You know I heard word recessions in the news like two weeks after the site started, then everybody starts to panic and so I think just the combination of all those factors is what was driving people. I think I got a lot of word of mouths comments here and there. All my friends, all my cousins, and whoever told me about the site and that kind of thing.

Steve: So you mentioned the word link party, can you kind of describe how that works?

Erin: Yeah. So, a blog generally will host a link party a certain day of the week with a specific team and then you will take your blog posts and act as that name and link it up to it. And depending on the party and who is hosting it and the traffic coming from that website it would drive a lot to your own. So, the two that I participated in back then, I believe one of them is still going on– I don’t think the other one still is. One of them was ‘milk plan Monday’ which is perfect I would just “this is what is planning to make this week and this is what’s on sale this week” and that kind of thing. And then the other one was called ‘works for me Wednesday’ and that one was supposed to carry two different bloggers way back in 2008, 2009 you know John I haven’t seen that around lately. So it could still be going on, I’m not sure. And that one was just sort of tips and tricks on why use reusable dish towels instead of paper towels those kinds of things.

Steve: Okay. So you just basically made friends with these people and then started participating in link parties and that sort of thing and that gave your blog kind of an early jump in the very beginning.

Erin: Yeah, I would say that is what gave the blog that early jump is participating in those and just [Inaudible] [00:13:05] and instantly forming these little pocket of people.

Steve: Okay.

Erin: That I still chat with regularly. Even this week, I was chatting with someone I hadn’t talked to in a little while and all over sudden we’re chatting again. You know just these pocket of people that we sort of all rose together I guess.

Steve: Yeah it’s really awesome how the friends you make blogging kind of become your real friends even if they do not live nearby. At least that’s been my experience.

Erin: Absolutely, I chat daily with several people.

Steve: You are like on fire, like I send email I get a response like that. It’s like you’re on your email like constantly.

Erin: Well I’m not on it constant, I will tell you though that that it’s my to do list, I plod my conscience as my to do list and at present it has 22 emails in it, and I’m sort of freaking out of all that because I like to keep it under ten. So, I just send very quick and going and I rely a lot on my calendar where I get encouraged to do stuff, but if there is something I need to do but I don’t want it in my inbox like linking lights at me– you need to do me– you need to take care of me now, then I’ll throw it over into my calendar and then I’ll get a reminder when it’s time to take care of it. So..

Steve: Yeah, so I heard that you got a book deal within– was it like three months after starting your blog? How does a mere model accomplish this?

Erin: Getting a book deal within three months of starting your blog?

Steve: Yeah did you plan and seek that or did someone just come to you?

Erin: Well, somebody came to me and again my sister, it was like about– I think it was about the same week my sister was like you really should turn this whole blog thing of yours into a book. And I’m like yeah I don’t know anything about that. So I– within that same week got an email from a very small publishing house that I did not end working with, basically saying we would be interested in publishing this cook book, and I’m like I don’t know what that means. The only person at that time that I knew had a cook book deal or knew anything about cook book publishing was Stephanie O’Dea from the “Year of Slow Cooking” website and she was doing her Year of Slow Cooking in 2008 which is the same year I started.

So I sent her an email, I remember I was in Texas visiting my family and I sent her an email and literally, basically saying hey I have all these questions, I know you have a book deal, I’d love to talk to you, choose my sample and if you have time– if not we can chat via email and like within two minutes– talk about writing an email, she calls me you know and I’m like oh hi, okay we can chat about this now.

Steve: Wow.

Erin: So she gave me a rundown, like the whole rundown and she also connected me with her literary agent who obviously understood blogging and book deals and how that you know you have this on a platform and you have this book thing that publishers are happy because you already have some type of instant marketing you know two order here. And so yeah connected with her and she was able to land a book deal within like a week of signing on with her.

Steve: I’m sorry, how did you find this person again?

Erin: It was through– I was using the literary agent as another blogger friend.

Steve: Oh, okay got it, got it and then at that point your blog was nice, but it wasn’t like humongous like it is today, right, so…

Erin: Oh, I didn’t even have a Facebook page when I signed book deals. I think yeah, no.

Steve: But you had your blog, right?

Erin: I did, yeah.

Steve: Usually, traditionally the book publisher expects you to be able to be responsible for some of your sales, right? So how did you approach this when your audience wasn’t humongous or was it already pretty big at the time?

Erin: It was pretty big at the time. I mean I was seeing 400,000 to 500,000 page views a month.

Steve: Okay, yeah that’s pretty big.

Erin: Yeah, It was big enough and I did a fine job of selling them– still do so, it’s you know, it’s…
.
Steve: So within three months you were getting 500,000 page views.

Erin: No I didn’t sign, by the time I actually signed the book deal I was a pro so it had been about six months in this since then.

Steve: But still six months that is crazy. Okay so what was the– so you mentioned link parties, what were the some of your other early strategies to kind of obtain traffic.

Erin: You know honestly, I did a couple of guest posts for other people, but not very many. I did have a pretty decent twitter presence from the beginning back when people were actually using twitter and when twitter was actually growing traffic. So I participated in a lot of twitter parties, and yeah this was before Pinterest, and before my big Facebook page came about, I think it was just really a lot of word of mouth.

Steve: Was Google organic traffic as well or?

Erin: I do, I have always ranked very highly for a lot of search traffic, and the thing about 5 Dollar Dinners too was that it’s a very bouncy website, it always has been. I’ve actually had consultations with several people about why and how to fix it and I don’t think you can. I’ve tried all the right ways to fix it and people want a recipe, they want to know how to cut something, they want to watch a video and they’re gone which is totally fine with me, I am down with that concept. I’ve come to terms with it after six years of fiddling with helping make it stickier, but that is okay. I have an email list that is pretty big and other social media pages that are doing just fine so.

Steve: Yeah it sounds like you got a lot of different ways to get traffic to your site today, and I guess earlier on you focused on twitter link parties and regular link parties just kind of let nature take its course, right?

Erin: Yeah, I really do think the concept. I did work hard, I will not deny that. I did work my tail off getting great content out there, you know being very intentional with when the content went out and I did jump on Facebook page pretty early, and you know build that up through giveaways and other ways to drive traffic and making people engaged in your content…

Steve: Okay.

Erin: I did a lot of those in the beginning, but I really do think that the concept did a lot for us– does a lot for us still today.

Steve: Sure, Sure yeah I can totally see that. So, what are some of the giveaways that you actually did, to kind of boost your thing, boost your traffic a little bit. What were you giving away?

Erin: Any brands. I worked with different kind of brands and companies to give away their products. I did book giveaways for Christmas, I generally under my own pocket would do you know I’ve had many giveaways, and I did a series of a hundred cook book give away, and we’ve done blenders and kitchen aids and generally at the blog’s birthday and holidays I’ll do my own little thank you kind of thing. So that I think helps as well just bringing people to check out your contest and be enter to win, something that’s pretty valuable.

Steve: And they enter in by signing up your newsletter or Facebook like, how do you run the contest?

Erin: I generally offer a couple of options just because some people aren’t on Facebook, a lot of people aren’t on twitter. So I would generally say you can have up to five entries. One would be like the Facebook page, one follow me on Pinterest, another tweet about this give away, another one sign up for email updates. Just something that everybody can pick from.

Steve: Okay. And then do you use any tools to kind of keep track of these contests or you just kind of go through your list and just pick a winner arbitrarily.

Erin: I just do random.org in the comment numbers. I don’t use– I never used any numbers and widgets and different things that you can use, I never use those, I just didn’t know what the mistake.

Steve: Okay. And so, how does the blog actually make money? Like what is the business model and the strategy and how does everything work in terms of revenue?

Erin: So I’m actually in the middle of a big transition.

Steve: Okay.

Erin: So up until now it has been a large portion is at network revenue. So, I work with a third party ad network that runs several ads apart from the site. So, their ads– it’s a premium ad network as far as I know, they’ve the highest payouts of all the ones I’ve researched in right here from online. So, I’m really fortunate to have gotten to work with them.

Steve: Which ad network is that?

Erin: It’s called Federated Media.

Steve: Okay, yeah, okay.

Erin: And, then I have a couple of other ad networks set up as a kind of hassle kind of thing. They don’t serve in adwords, they serve about 70% of the time which is pretty good for the higher CPM as I’ll take that as being pretty good sell rate. And it depends as the holidays get closer it get a lot higher, but at the beginning of the year and certain parts of December it’s a little bad, it’s about 70% range. So, that is probably– it fluctuates by month.

Steve: Are you allowed to reveal the CPM numbers that you are getting approximately for this network.

Erin: No, it varies by month even two.

Steve: Okay, okay.

Erin: It isn’t steady and the company can go up, it can double and then it can back to regular and then it can– it just depends on what ads are running. And then– so that’s probably about 35% of my revenue. Another– it varies by month. I’m just going to throw some awkward numbers.

Steve: Sure.

Erin: Another 25% is probably with sponsored campaigns which is basically working directly with the company. I actually now I’m wrapped by an agency who does all of that for me which is fantastic.

Steve: Nice. I was about to say that can be a lot of work.

Erin: It is a lot of work. And so now they do all the heavy lifting and they just say here is the content, here is what we need for me to do. Here is where you put the photograph, and then we do it which is wonderful, and now actually they actually generally can get a higher payout for me which is also fantastic.

Steve: Did you start out doing it that way, or did you start out doing the sponsors yourself?

Erin: Oh, I did it for myself until last year.

Steve: Oh okay, okay.

Erin: Yeah, for a long time I did it myself. And, you know every sponsored campaign that I have done has been different even for the exact same brand it’s different campaign. So everybody is you know, everybody’s goals are different in what they are trying to achieve and I will you know if it makes sense for me to share, I’ve turned so many down if it’s just not the right fit, if it’s not the right time yeah, so.

Steve: Okay.

Erin: We have, that’s a good chunk of what I need to quite transfer 25%. And then, I do some affiliate marketing with coupons and certain special offers, restaurant coupons and those types of things, which probably brings in– I don’t know 10%. It’s a smaller pack. But I also have mobile ads that are small little portions. You add up all these little pieces and it becomes this little bigger-bigger bubble, so yeah it’s hard to say. And then, so I mentioned we’re in sort of a transition mode. I earlier this year had a post go viral that…

Steve: Is it the Costco post?

Erin: Yes.

Steve: Okay. Go ahead and talk about it.

Erin: Are you going to ask?

Steve: Well I was going to ask anyways, but yeah since you brought it up.

Erin: What I’ll do, I’ll tell the whole story. So the Costco, I am now famous in Costco and I should be in their magazine this coming month too. So in September of 2013, I posted these 20 meals from Costco that you can make for 150 dollars. So it has all the recipes, the Shopping list, how much I paid for everything, and it’s just this plan, you know bulk shopping, what to with all these chicken breasts and all this meat that you buy right, what do you do with all these? So I posted that and I guess it went viral the first week it had 100,000 shares on Facebook within seven days.

Steve: That’s the understatement of the century, go on. Sorry.

Erin: Is it not so but this is why I said that way. Because I went on with my married life, went with the holidays and oh my I should put together a second plan, I will get to it one day. They take a lot of time and energy to put together so I was like, I will get to it one day. So the first weekend of January this year the post saw1.5 million views in a weekend, okay.

Steve: It’s crazy, that is crazy.

Erin: So that’s why I say that 100,000 in a week is not that many, which I know sounds terrible but it’s all relative, right? So, because of that and the way that my hosting agreement– my site actually never went down during that time but I was going to owe them 1500 dollars for the extra traffic. And so, I’m like I can’t– like the ad revenue probably was pretty close to making up for that. It probably would have been if I checked it out, but I kind of went into this “Oh my goodness! How am I going to pay for this and like our personal since I’m bearing the chore with our business finances as well. Have everything planned out and this was not in the budget right, 1500 dollars is…

Steve: Sure.

Erin: Not a small chunk of change. So I panicked and up until then had all of the printibles that came along with the Costco plan negotiation less fees as a free download, probably one of the reasons I went viral anyways. But, I switched them to cost a dollar 49, which I probably should have had them pay from the very beginning, giving me amount of time, the concept of these things.

Steve: Yeah, now I looked at it. It’s beautiful.

Erin: Yeah, it’s in text. So I quickly switched them to a paid model, which went over very well, I didn’t get any complains, and put out the second plan shortly thereafter, maybe within the month of that happening. And then just in June, we put up with the free version of the plan and then in August we put out the slow cooker freezer pack where you everything and then you can toss in the freezer and then drop it in slow cooker and make it. So that will come out in a couple of weeks, I’m actually shopping for that this weekend. So…

Steve: And you only charge us a couple of bucks? You are buck 50 for…

Erin: Mm-huh, Yes.

Steve: I’m being curious, I bet you can charge more and people won’t even think twice, I don’t know.

Erin: I have talked about that with actually a number of different people who are in the online digital products space and currently the concerns system we’ve come up with is that because everybody is looking for the budget, family meal in the deal and I get stories all the time “Oh your site has helped me so much, I just bought the mom food stamps because this-this-this and this and my kid has this” I mean it’s like they’ve had you know very tough situations, and so I feel like if I charge too much then I’m going to alienate– this is probably not the right word, but alienate the people who need it most. And you know people I think can afford a dollar 50. So, I have gone back and forth with on that several times in my own head and with other people and just decided this is the number we are going to stick with, and actually with the set next plan that’s coming out I’m going to have an additional assembling instructions and printable labels and videos and that would be an additional charge. So, that would probably be a total of five dollars for all of that.

Steve: Okay.

Erin: So, I’m trying to mix it up, but since that experience I’ve been trying to be more strategic with digital products and increasing that revenue stream for the site because I think that’s sustainable long term process…

Steve: Okay.

Erin: Verses affiliate marketing and some of those sponsored clause. And ad network has been pretty consistent, I’m not worried about that, but you know just to kind of help offset things like hosting costs that comes out of nowhere [laughing].

Steve: Yeah, so are you going to be keeping all the existing content on your site free or you kind of going to go through…

Erin: Oh yes, absolutely.

Steve: Okay.

Erin: Yep. And then the other thing too is the cost of printables, it’s all there for you for free. You have to go popping around to get all the content, all you can pay a dollar 55 within one place. So it’s kind of this, it’s worked well for me so far, and so I am going to see how it works with these additional add-ons that will cost more and with this next plan that we are going to put out.

Steve: Okay, and you mentioned earlier that you know your traffic sources early on did not include Facebook and Pinterest and that sort of thing, but how’s that kind of changed over time. So what traffic sources actually work the best for you now and what are you putting into place to actually grow your traffic today?

Erin: So I think it’s the same rules and the same concepts of awesome content, now it’s awesome photography because of Pinterest and Facebook and some of our most popular shares on our Facebook page are just those solid photos you know and concept, and the concepts do make a difference as well. We had I think it was slow cooker baked potatoes, baked potatoes and slow cooker, I mean I’ve had this post on my site for years, we re-put it out there, regurgitated it and…

Steve: Sounds yummy regurgitated.

Erin: Regurgitated slow cooker baked potatoes, amazing you have to try them. So we– and it had like 2000 shares or something crazy and so you know it’s like it’s part content, it’s like a great photograph, its part content you know part photography. So now the traffic model or traffic sources are– Pinterest is actually number one over search.

Steve: I can see that.

Erin: I believe the reasons for that is because of the changes that Pinterest has made to its guided search, and the way that it serves searched posts. So that is one thing I think a lot of people now are using Pinterest as their search you know tool because they can see all the visuals instead of reading all the content on a search page. So I think that, that is probably the reasons that I’m seeing more Pinterest traffic than search traffic although that has been just in the last 6 months that that has switched…

Steve: Do you do anything special with Pinterest other than just putting a pin it button on top of all your photos?

Erin: I actually don’t have that on top of all my photos.

Steve: You don’t, okay.

Erin: Nope yeah I’m kind of a stickler for site load in times and whatnot and plug ins and such…

Steve: Okay.

Erin: So I just have a Pinterest share button at the bottom of every post, if you get to the bottom of the post and you like it you’ll share it if you get to the bottom of the post, right? So…

Steve: Right, wow. Okay that’s incredible.

Erin: We had a pretty aggressive Pinterest strategy, I guess it’s what we could call it. By ‘we’ I mean my assistant because she manages all of it.

Steve: Okay.

Erin: We purchase the page and a number of group boards, we reach out to other bloggers and say “hey this is one of our boards, would you like to join our board” you know “can we join yours” you know so were pretty strategic about the group board which is sufficient in pinning to those regularly and keeping our content in front of– some of these group boards have hundreds of thousands of followers so…

Steve: Okay.

Erin: You know keeping your content out there where it’s going to be found, pinning often…

Steve: So you need kind of a strong account to reach out…

Erin: You do.

Steve: Okay.

Erin: Yeah you have to kind of be– you probably need– I say get with people who are your same size basically.

Steve: Okay.

Erin: So if you’re at 8000 or you are at 2000 find other people and like kind of like how we did it in the beginning where were in this together like you find this people and all of a sudden you’re just like woo and you’re just kind of your numbers are growing pretty quickly. We kind of audit other people’s content as well probably close to 50-50, so you know we’re spreading the Pinterest love at the same time we’re…

Steve: Got it.

Erin: Big believer in you know giving back, so and helping. I’ve always been that way with five dollar dinners, any time someone or a blogger wants to guest post as long as it fits you know the content themes, bring it on, I’ll be happy to send as much traffic your way. I’ve always been you know generous in that sense as well too, so I think that helps.

Steve: Sure and your assistant takes care of all this?

Erin: My assistant does all of the Pinterest images, all over Pinterest yes.

Steve: Wow. And what is her name and email address?

Erin: She’s not, she’s not taking new clients yeah, right yeah right.

Steve: Let’s talk a bit about your media. So how does one get on Good Morning America, The View and Rachael Ray?

Erin: Okay you can’t just go do it unless something dramatic and crazy happens to you then you’ll just get thrown on there, right? So you have to practice a lot. I did local media in Dayton, Ohio for which is like you know probably 6000 people watching in the morning, it’s not a huge market.

Steve: Okay.

Erin: So I did that, I did cooking segments for them weekly for a year probably. I just called the news room and said “hey this is what I’m doing, I’d love to come and do a cooking segment,” they’re like “can you be here next week?” I’m like “sure” so how…

Steve: This is a local station?

Erin: Yeah this is the ABC Fox Station in Dayton, Ohio. I had a great relationship with their news director, we’re in the process of planning a number of different things and unfortunately he ended up being sick and doesn’t work there anymore. So still to this day I have a great relationship with BS Dennis, the assistant news director who’s now in Dallas. So I chat with him here and there you know whenever I’m in town I let him know if I’m there, if there’s a spot for me I’ll hop in there. So then the next piece that worked for me was when I– when my books came out, I did several city tours I guess you could call them part for book signings, and part for media. So I did news segments on multiple stations in Atlanta and Minneapolis you know kind of all Chicago, so just practicing you know getting here little sound bites that you know say over and over and how you introduce yourself, and how you do that in two and a half minutes.

Steve: How did you secure those opportunities? Did you have an agent book those for you or did you get those yourself?

Erin: Yeah, so everything that came through the publishing house– everything that came on my book tour was through my publishing house publicist.

Steve: Okay.

Erin: And then after my second book came out, I reached out to my publicist in the publishing house and just said “hey I would love to do more media outside of the books” like the book tours and the book media “do you know anybody who is you know could help me for a reasonable price?” Because PR agencies and publicists can be very expensive.

Steve: Very expensive, yes.

Erin: So I– she connected me with a woman who had just– she took a bi-op from, she was a food segment producer at Good Morning America. She took a biop to stay home with her kids, and went into freelance publicist mode. And so I’ve been working with her since probably 2011.

Steve: Okay.

Erin: And she’s the one who has secured all of these other non-cook book related segments.

Steve: Okay, that’s amazing wow. I want to kind of unroll the onion, so we talked about your book, how did you– I imagine the press that you got from Good Morning America, The View, and Rachael Ray, did those help you sell your book? Was it– did that come first or the book come first?

Erin: The book came first.

Steve: Okay.

Erin: The Good Morning America segment did wonders for the sales and just awareness. I was at– the first time I was on Rachael Ray came the same week that I signed my cook book contract, so that was very early on and that really just helped with audience growth you know hundreds of thousands of people hearing about me millions probably in that instant, right? So that experience…

Steve: So to get to Rachael Ray appearance did you or did the publicist get that too?

Erin: Oh actually I did that, so that’s a fun story. So I think it was within the first month of setting up the site yeah because it was September, so it would’ve been within the first month I heard about this segment with Whoopi Goldberg and Rachael Ray– the two of them talking about fat tax, where I think it was Arkansas or somewhere that was going to implement a tax, if you weighed so much and you didn’t lose so much within nine months– you lose so much weight you were going to get taxed for being fat.

Steve: Okay.

Erin: Right, so they were arguing about whether or not it was more expensive to eat healthy. So this was the segment that the two of them had, I think it was on Rachael Ray’s show. So I went on her website, found her little contact form– like went through the whole toping of the topics list, went through found the one that was most appropriate, you know jumped in there in all caps– I was like I can’t believe this segment would be in Rachael, this is crazy, this is what I’m doing, this is what you need to know boom-boom-boom, and I just laid out like five tips basically. It was essentially a pitch of me not knowing how to write a pitch and I did it in all caps because I was like being dramatic about it because I thought it was the craziest thing that I’d ever seen on television.

And here’s how I can prove you wrong and March, so six months later– almost seven months later the producer calls me out of the blue, I must’ve left my phone number in there, calls me out of the blue, I’m in the kitchen, my heart like starts racing. I’m like “what is going on?” like I completely forgotten did I have even sent that on her website and so “they’re like yeah we’re going to send a crew to your house next week” and I’m like “a crew to my house, what?”

Steve: That’s awesome, that’s incredible.

Erin: That’s actually pretty that’s an amazing like I think part just getting lucky and that was them taking a chance on me. Yes, I had a lot of local media experience, but that was the first time that I had ever done anything at the national level in front of a live audience. That was a little bit more intimidating than I was expecting it to be.

Steve: This is just based on an email, you didn’t even send in like an audition video or anything.

Erin: No.

Steve: They just came?

Erin: Yeah.

Steve: Wow, okay.

Erin: I think you know I chatted with the girl on the phone for 20 minutes probably, so she probably got a good sense of my energy and personality and you know she was asking pretty pointy questions you know, and I may or may not have jumped on the couch right after I got off the phone.

Steve: I can’t see you doing that.

Erin: No, maybe not.

Steve: Wow, okay that’s pretty amazing, so that probably propelled your first book to do really well and then things probably just kind of snowballed after that, right? You got follow on book deals after that and…

Erin: Yep, I had follow and book deals, I had another kids and then I wasn’t in the news very much because when you’re big and pregnant and fat, you don’t want to be on TV. So I had to go– I went through that twice. I think the most pregnant I ever was on the news was seven months, I was like, okay I can’t do this anymore. I was yeah anything, I’m wearing all black, facing directly straight to the cameras, so you can’t see the fat belly– not that it really matters, but pregnancy is a beautiful thing, but when you’re on television it just makes you more self conscious but…

Steve: Sure, I can see that.

Erin: So yeah I kind of went– I’d gone– my media you can actually see like I did a bunch in 2011 because that’s when I was between you know between kids or whatever and then I did some video work for a brand, and then found out I was pregnant with number four and then I did the Ray Ozman show when I was five months pregnant, but I was– I’m really tall, so I can hide a belly for a long time when I’m pregnant. So I was able to hide it pretty well for that segment. So then and then after that I didn’t do any, they wanted me to come back on the show but I was like “I’m sorry I can’t, I’m going to be too pregnant.” So then just in this last year– just this January we did, we started pitching again pretty aggressively and I was on Rachael Ray again this February and then did an island segment in May, so…

Steve: That’s incredible. So let me ask you this Erin, if someone listening to this show wanted to kind of start a site, publish a book or get on TV today, and if you had to start all over again, what advice would you give them and how would you have proceeded if you were to start all over?

Erin: I would not have proceeded any differently, the path that I’ve been on is he path that I’m supposed to be on and the things that happened, happened as they were supposed to and me writing into all caps was you know me writing in all caps to get into the show page or whatever I think that when…

Steve: Let me give an example of what I mean by that question. So for example, link parties today might not be as effective anymore because Google was devaluing those type of link carnival type of things, right? So if you were to start all over today you know how would you have achieved the same viral nature that your blog experienced?

Erin: I think one is going to be the concept.

Steve: Okay.

Erin: You know that we’ve seen blogs in the recent past do crazy things, 100 days of real food with Jason, those like went crazy because It’s 100 days of real food, it’s a very similar challenge you know, seems unattainable but really is attainable. And they break it down for you very similar kind of nature concept at five dollar dinners.

Another one is Simple Green Smoothies, those guys or those girls just blew it out of the water by creating awesome content, beautiful pictures, simple design and they were very strategic with working on instagram. So I think it partly depends on the niche and what your site, your concept is but if you can pick out— there is a girl named Val Warner I think how you say her last name, and she has a fantastic instagram polling. Also she sells these beautiful little journals that she creates and she just has this little heard of people over on instagram.

Steve: Yeah.

Erin: And so I think maybe it’s tumbler, maybe you are really clever and comedic and you can do those little mean photos and sayings and what not and you just have this crazy tumbler presence that you can turn into products or whatever. So I think it partly depends on the niche. For me it was recipes every night of the week and that’s best in a blog format. Obviously that was before all the social networks were really popular. But some people’s Facebook pages like Taylor who is in our community of bloggers and her Facebook page this year I think is close to half a million already and it’s just…

Steve: Crazy.

Erin: Going crazy. And she`s been strategic about it and she is being – if you talk to her she is very you know, analytical about it and she is very strategic for what she is doing and keeping the growth as rapid as it is. She is doing a great job with that, but you know she’s also got a very focused content and theme and niche. So I think a lot of it depends on what your topic is, how you are resonating with people, and how if that makes sense how you connect with them and how you are helping them you know. I think a lot of these sites and using the examples in the more recent past, it’s you know– and me too with five dollar dinners is I`m here to help people.

I would still be doing this if I wasn’t making any more. Maybe not to the same extreme, but I would still be putting out ideas and content as you know as I was able to if I wasn’t doing it as a business you know. But you know at least NJ [phonetic] said they are helping people with eating, making smarter choices with what they are eating. Eating more real food and you know the girls Jadah and Jen from Simple Green Smoothies– they are helping people, they are passionate and want people to be smarter about what they are eating as well. So I think some of these newer sites that have you know– I say newer but they have been around for long too, but the Simple Green Smoothie site is very new, two years. So they you know they just being– and that’s green smoothies– that is all.

Steve: Yeah.

Erin: So it’s just, it`s – but it resonates with people, it`s like I should be making a green smoothie for breakfast. I`m going to make that one that they just put on instagram right now. I`m going to my kitchen right now and I`m doing it right now and then you feel better about yourself. So they come back because they want more recipes for the smoothies. So it’s – yeah I thinks it’s a really roundabout way of answering your question.

Steve: Yeah, I think I can just summarize basically what you are saying is you know if you going to start something you want to start something unique that has a very unique message that actually helps people right?

Erin: Yeah exactly, and you guys are a prime example of that as well. Both with e commerce and you know my wife quit her job site.

Steve: Yeah I think yeah. I didn’t think about it that way, but yeah now that you have said it that way yeah. We were trying to help people you know start their own businesses and kind of get out of some sort of rut that they are in financially. So hey Erin we have been talking believe it or not for quite a while now. I did want you to kind of talk a little bit about your latest project which is kind of five dollar meal plan because I think it’s pretty cool. We are signed up right now, so if you want to kind of just describe what that’s all about and what your future plans are for that, that would be great.

Erin: Yeah, so about four years ago I looked into having a meal plan subscription service built. Like a database centre you know this whole beautiful thing, built by a development company and it was going to cost a lot of money, more capital than I had at the time. And so I kind of put it on the back burner, but it was always– it’s always has been part of the website and always has been a – you know something that I want to help people with and will continue to help people with and decided earlier this year was approached by Jim Weng, who I know you know and he said, I think there is an opportunity here to take your current meal plans and make them better. But we have to do it in a subscription service form, and I`m like funny you should say that because I used to think that and then I looked into it then it was so expensive.

He goes no-no-no, we would do it like this. And then I`m like that’s totally doable yes we should do that. So here is how it looks, we send you an email with your meal plan, you go about your week making all the meals and you are happy because you don’t have to think about the meal planning piece that is – can be very stressful and take a lot of time and energy and focus that you don’t have on a weekend when you maybe should be meal planning or the middle of the week when your dog is vomiting all over your carpet [laugher].

Steve: I saw that posting.

Erin: Which is what happened to me early this week, right? So that is legit true story. So yeah right, it happens, vomit happens.

Steve: I like how you like bring out these disgusting stories when you talk about the food.

Erin: I`m so sorry, on the first interview ever regurgitating spells of sweet potato. No, stop but seriously life happens like kids get sick but how much money does it cost–how much does it cost you to order a pizza?

Steve: Are you asking me that question?

Erin: Well like hypothetically. Like 25 bucks up to the delivery guy, right. So 25 bucks, so my whole thing is that you can you know– the five dollar meal plan is a subscription service that does cost just five dollars a month. It’s really inexpensive, less than any other meal plan subscription service you are going to find out there, and you know that the recipes in there are all done by me. So they are all going to have like my stamp of approval on them which means they are all going to be budget friendly.

Steve: Yes. That is key.

Erin: Yes, which a lot claim to be and actually I spoke with some women this morning or this – at lunch today, and one of them asked me are these like normal recipes like normal stuff? I’m like yes, I don’t buy stuff from– like I don’t buy that. This all like pretty normal pantry staple you know meats, fruits, vegetables, pretty basic easy to make. I have four children. Like I don’t have– I`m not in the kitchen for four hours preparing these meals every day, because who has time for that? So yeah, they have this kind of the five dollar dinner mom’s stamp of approval on them, so you know they are going to be budget friendly.

One of the interesting things that we found in talking to people who were part of our pre launch group was that you know we talked a little bit about, well would you want something that where you build it yourself like you can go in and I want to make this plus this plus this and then it populates a shopping list basically. Which is not out of the realm of possibility, it’s something we could develop in future. But most people said no, I just want it sent to me.

Steve: I hear you, and you know you mentioned that when you first pitched this idea it was too expensive right, but then Jim came along and presumably he pitched a much more economical solution. So what’s that– what’s the platform that you are using for that service?

Erin: We are using email.

Steve: Email? Okay.

Erin: Yes so I had originally kind of had this in my head where you would come in and to this dash board and you would pick categories and build things and it would be very sleek and pretty and easy to use. But again we– but I did not do any testing, I did not do any surveys, I didn’t ask user anything, what they would want to see and I think that’s where in launching a separate product that we’re consulting for and with Jim’s experience in business and online– being an online entrepreneur he understands product launches. We both have the same understanding of a product launch. So we’ve been much more strategic about how we’ve gone about setting it up, and so getting the feedback of no I would just– the majority of it. There were some people that would want to do this one way or the other, but the majority of it was no we just want it sent to us.

Steve: Right, okay.

Erin: We want you to do it all for us, it was were pretty much like okay we are just going to go with a simple email system, and we also have a dashboard where you can download the plans from the website and your dashboard as well.

Steve: Right. Yeah, it’s funny how sometimes the simplest solution ends up working out, you don’t need to pay the big bucks, right?

Erin: Exactly so that’s – you know and at that time when I had first looked into it, it didn’t even occur to me to just set up kind of this like automated email system you know. That wasn’t even like an option, so I think this is a fantastic compromise of you know kind my original idea which wasn’t going to work without money you know investment…

Steve: Sure.

Erin: To what users are wanting you know these days. We – it’s a fast paced society we are living in and people want quick and easy and a meal plan delivered to your inbox is pretty quick and easy.

Steve: Yeah, I’ll be sure to link up that service in the show notes and..

Erin: Thank you.

Steve: Erin if anyone has any questions for you, where can they find you online?

Erin: So you can find me at fivedollardinners.com like I said my inbox is nearly empty all the time, so I will get back to you pretty quickly. I have a contact form on the site, my email is also fivedollardinners@gmail.com which is pretty generic and easy to find as well – I`m easy to find that way too.

Steve: Awesome Erin, hey well, thanks a lot for coming on the show. I learned a lot and your story is just incredible. So thanks a lot for coming on.

Erin: Yeah thank you so much for having me, it’s fun to get to share it and kind of walk that down memory lane.

Steve: Yeah, totally awesome story. Well take care Erin, I will catch you later.

Erin: Thanks, you too.

Steve: I hope you enjoyed that episode. I liked Erin the minute that I met her at the world domination summit because she is so down to earth. And even though her website is crazy successful and she is practically a TV star, she is really easy to talk to and extremely humble. For more information about this episode, go to mywifequitherjob.com/episode37 and once again I just want to thank 99 designs for sponsoring this episode. I know a lot of you listening out there are waiting on the sidelines and trying to get the courage to start your own online business. I also know that a lot of you out there run your businesses already, and know that your website design could be better.

Designing a website doesn’t have to be intimidating thanks to 99 designs where you can get over 300,000 designers to compete for your design. All you got to do is list your design on their site, and within 48 hours you will get dozens of designs submissions to chose from and from there you ask for slight tweaks and changes until you are 100% satisfied with the results. And the best part is that the price is very reasonable and there is 100% satisfaction guarantee.

So go to 99designs.com/mywifequit and get your logo, website, whatever you need designed right now. And by using the 99designs.com/mywifequit link, and telling them that Steve from mywifequitherjob.com referred you, your design listing will be bolded, highlighted and given a prominent background and featured before all the regular listings so that your request stands out among the rest.

If you enjoyed listening to this episode please got to iTunes and leave me a review. When you write me a review it not only makes me proud, but it helps keep this podcast up in the ranks so other people can use this information and find the show more easily on the web to get awesome business advice.

It’s also the best way to support the show and please tell your friends because the greatest complement that you can give me is to provide a referral to someone else either in person or to share it on the web. And as an added incentive I`m also giving away free business consultations to one lucky winner every single month. For more information about this contest go to mywifequitherjob.com/contest. And if you are interested in starting your own online business, be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to my wife quit her job.com for more information and thanks for listening.

Thanks for listening to the my wife quit her job podcast where we are giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.mywifequitherjob.com.

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Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

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

036: How Ryan Moran Created A 7 Figure Ecommerce Business On Amazon In Just 1 Year

Ryan Moran

Today, I had the pleasure of interviewing Ryan Daniel Moran who runs the blog FreedomFastlane.com. And what’s amazing about Ryan is that he was able to create a 7 figure ecommerce business within just one year by selling his own products on Amazon.com.

In this interview, you will not only learn how he did it but he’ll also share many important tips and philosophies on the best way to make money online with ecommerce. Don’t miss this one.

What You’ll Learn

  • Why you should look at longer time horizons for your business.
  • Why it’s better to source your own branded products
  • How Ryan used reddit to do product research
  • How Ryan picks the products to sell online
  • How Ryan built an audience of people interested in his products
  • The key to getting sales on Amazon
  • How long it took for Ryan’s business to gain traction

Sponsors

Other Resources And Books

Transcript

You are listening to the My Wife Quit Her Job podcast, where I bring in successful boot strapped business owners to teach us what strategies are working and what strategies are not. Now this isn’t one of those podcasts where we bring on 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 earlier on to gain traction for their businesses.

Now if you enjoy this podcast please leave me a review on iTunes and enter my podcast contest where I’m giving away free one on one business consultations every single month. For more information go to www.mywifequitherjob.com/contest and if you are interested in starting your own online business, be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com for more information.

Now before I begin I just wanted to give a quick shout out to this episodes sponsor 99 designs. Now originally I wasn’t going to take any sponsors at all but 99 designs caught my eye, because I suck at design. And in fact when I first started my online store back in 2007 the design for my website was terrible, and I had absolutely no idea who to turn to. Now fast forward to today 99 designs is a site where you can provide a description of anything that you want designed whether it be a logo, a webpage, a t-shirt, pretty much anything and have dozens of designers compete to deliver you the best design possible. And by best I mean that you get to choose your favorite design among dozens of submissions from a pool of over 315,000 designers.

So if you are design challenged like I am, I highly recommend that you go over to 99designs.com/mywifequit and if you use that link and tell them that Steve from mywifequitherjob.com referred you, your design listing will be bolded, highlighted, given a prominent background and featured before all regular listings so that your request stands out among all the designers. And in fact this special offer is worth 99 dollars. So if you need a logo, website, t-shirt, business card or anything designed go to www.99designs.com/mywifequit. Now onto the show.

Welcome to the my wife quit her job podcast. We will teach you how to create a business that suites your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here’s your host Steve Chou.

Steve: Welcome to the My Wife Quit Her Job podcast. Today we are going to be talking to Ryan Daniel Moran. Now Ryan initially caught my eye when I saw on his blog the FreedomFastlane.com that he recently started making over 200k per month with his ecommerce business. And what’s cool is that he achieved this fete in just a single year. Now he also runs a couple of other ecommerce businesses that each make around five figures per month as well. One of these businesses is called Zen Active Sports and it sells products for yoga enthusiast, and he also runs a nutrition and supplement company as well. And so given that this guy has actually three successful ecommerce based businesses, I’m actually very eager to hear about his story and how he managed to grow his businesses so successfully in such a short amount of time. So welcome to the show, Ryan how are you doing today man?

Ryan: Hey Steve I’m doing great, thanks so much for having me on.

Steve: Yeah so if you can just give us a brief intro. I don’t know if the audience is actually familiar with you, what do you do? What do you sell? And how exactly do you sell your items?

Ryan: Okay great. So I started as an entrepreneur about eight years ago in 2006 and I was fresh out of high school. I was 18 years old, I had to pay for college somehow, so I was in affiliate marketing for a long time. I started a blog, I started capturing an audience and I really saw that I make good money from that, but I really saw that that wasn’t going to be– it wasn’t wealth generating activity– that was cash flow activity. So I switched over to ecommerce about a year and a half ago because I wanted to build a real business that ran whether I was there or not. I wanted to have something that was real wealth and real cash flow whether I was working at a computer, if I was off Thailand riding scooters around the islands.

Steve: Mm-huh.

Ryan: And so I looked at the opportunities that were available and I saw that ecommerce was that. So a year and a half ago I made a big pivit [phonetic] and I decided to change my existing model over to an ecommerce model and I saw that and– I really believe in business. The fastest way to success is just to look at what channels already exist where buyers are hanging out. So you can cut the profit curve by a tremendous amount if you just go where the buyers are already hanging out and in the 90s and early 2000 that was eBay, if you’re in information products that’s Click bank.

For me who is just starting a new ecommerce business that was Amazon and right now that’s the hot channel and in five years that might be different, but that’s what it was at that time. And so we put our products on Amazon and got really good at that channel and just maximizing that as a channel has been the difference maker between somebody who starts a business and somebody who goes to 200k in a month and 200k a month in a year, because we got really good at that channel, and so that’s where we are now.

My businesses together do about 200k in revenue a month, that doesn’t all go in my pocket– I have partners and employees just like everybody else. But in a year I have a bigger business than I ever had in the six years that I was doing things the previous way that I was doing it. So it was a fantastic switch and you can tell I get really energetic talking about it, and I love this business model.

Steve: So I was just curious, why did you actually transition away from affiliate marketing because that actually caries the same business model, right? You can be anywhere and still be making money.

Ryan: Yeah that’s correct and I believe there’s a really good place for affiliate marketing in anybody’s business. For me you know I never set out to be one of those make money online guys Steve…

Steve: Okay.

Ryan: I didn’t see myself as one of those people, it’s not why I started in the business, that’s not why I was staying in the business and everyone that was in that industry with me, I saw– I had a crystal ball and that was the people that I was around and we all have that. We all can see where you are headed if you just look at the people that you are hanging out with. And the people that I was hanging out with in that world that were not of– they didn’t have the same commitment to making the world a better place that I wanted to have. So the products they were selling weren’t always the best, they were takers rather than givers. They just consumed money rather than created value and I believe in order to be happy and to create wealth, you create value rather than take value, and I just didn’t want to go down that same path and so I decided to make a change.

Steve: Okay and the ecommerce stores have been a lot more lucrative than your affiliate marketing efforts were.

Ryan: Much more lucrative and I’ll tell you I think part of the reason for that success Steve has been, I really believe that the longer vision of success that you can have, the more successful you will be. If you can look ten years into the future, you’ll be more successful than if you look one year into the future. If you look three months into the future I believe that you’ll sabotage your own success because you’ll be coming at it from such a sense of urgency.

So I had already made a decent amount of money, and I was able to look two years into the future, which is about my maximum threshold at that time and see where did I want this business to be in two years. And I think that made the biggest difference as far as planning that business, because I was okay waiting six months for something magical to happen. I was okay putting off taking a paycheck for a year and being able to look that far into the future I think made a big difference. So I really believe that the longer view of success you can have, the more successful you’ll eventually be.

Steve: Okay and that’s a good point a lot of people who read my blog kind of ask me about affiliate marketing verses ecommerce, and what I kind of tell them is exactly what you said. With an ecommerce store you’re kind of establishing yourself as a real company that will grow over time. Affiliate marketing you can do that too but you’re not really selling your own products, so it’s kind of hard to put your name on that exactly.

Ryan: Yeah that’s right and if I could add one more thing, you can do ecommerce without owning your own product. You can sell other people’s products and that’s just fine. I really believe that to build a wealth building business however you should be having your own unique products in the market place that you’re selling through your own channel. Ecommerce stores are great as a channel and you can sell other people’s products through that and I know people who do that and do just fine. I think if you really want to build a wealthy company then you need to be sourcing your own products and selling those through your channels.

Steve: I completely agree– that path is a little bit more difficult, but it’s totally worth it in the end because no one can take that product away from you.

Ryan: Why do you think it’s more difficult?

Steve: Well you’ve got to get the best prices sometimes that involves importing from Asia. A lot of people are afraid of that process, but it’s something that once you go through it once it’s actually not that intimidating, but initially it’s very intimidating to a lot of people.

Ryan: May I offer you a slightly different perspective?

Steve: Sure.

Ryan: Okay so the way that you mentioned my yoga products company Zen Active Sports.

Steve: Yes.

Ryan: And we looked at getting started with this business. Now the reason I started this company actually is I believe in surrounding yourself with people who complement your skills, and I’m a starter and a big picture guy. I’m not a completer or a detail guy.

Steve: Okay.

Ryan: I had a friend and an old friend who had been in touch with me for a long time and he was the opposite of me, and we always wanted to start a business together. And when I decided to pit it and make a change, I called him up and I was like Sean I’m looking to make a change are you interested in a new direction and he was. And we looked at the opportunities that were available and we just saw this wide open market in yoga. Because a lot of people were going to retail route but not a lot of people were going the online route. Now the opportunity was there for us to do the route that we talked about previously which is selling other people’s products on an ecommerce store. We actually thought that it would be easier to just create our own and to sell it through our own channels.

Now I believe from a work perspective it was easier. From the amount of work that it took to sell it, it was easier for us but from a profit perspective at the start it was more of a challenge. So from a cash flow perspective you don’t come out of the gate making money, whereas if you take somebody else’s product you just sell it as an affiliate or an with a markup you keep that 20 bucks or whatever and it goes into your pocket right away. So the cash flow can be higher but from a ease of work perspective we thought it was way easier to create our own product and this is how the process worked. We simply pulled an audience.

We went to Reddit.com, put up a poll about what you wanted to see in your yoga products. And people said they wanted them to be about three quarters– actually a little less than three quarters of an inch thick, they wanted them to be 72 inches, long and they really liked the idea of them being reversible, meaning there was a different pattern on each side. So depending on the type of yoga you are doing, you could flip it over and have a different experience. And we thought that’s interesting. We got all that information just by polling an audience on Reddit, and then we went over to alibaba.com, which just has thousands and thousands of manufacturers and we said okay who can make this? And we just put it out there and somebody bid on it and it was a good fit. We got samples and then we ordered it, and that was all the work that it came down to.

We didn’t have a website, we didn’t have a social media presence, we didn’t have a large budget, although we had one– we had some budget. We had enough to buy some inventory and that was it. The only difficult process that I would agree was “harder” and I’m using quotations with my hands I know you can’t see them, but what was harder was putting them on a boat that’s in the Pacific Ocean and waiting six weeks for it to arrive in Amazon.

Steve: So I guess you haven’t had any horror stories because we import a lot of our goods from Asia as well and we had quality control issues early on. So we’re importing lots of containers of stuff over to the States, and a lot of times you know initially when you approach your vendor, and this is just kind of a personal story we got good samples, right? But when it came time to order in bulk, we had a very bad mix of good and bad stuff and we had to kind of go back and forth with the vendor in order to clear this up. And it was only after establishing a great relationship with our vendor that we finally got quality stuff sent to us, and I was just wondering if you have those quality control issues with your…

Ryan: We’ve had it on a small basis. So we’ve had the shipment arrive and a few of them have tears in them or a few of them are peeling, and that happens. And to be honest with you, we haven’t found a good solution yet except good communication with our supplier, and making sure that they have all their systems in place and…

Steve: Okay.

Ryan: That’s about all we’ve been able to do.

Steve: Okay, so it sounds like you’ve had a pretty smooth experience with importing so far which is great.

Ryan: On the whole yes.

Steve: Okay, and have you actually visited your vendors at all or is it just strictly…

Ryan: We have a– I’ve actually never been to China which kind of disappoints me because I love to travel and I’ve never been to China and what’s wrong with me?

Steve: Actually let’s talk about the yoga mats since you kind of are willing to talk about that in great detail. So how did you actually come up with the idea of even polling someone about yoga?

Ryan: We were looking at opportunities in– well let me back up a bit because I have a supplement company as well and I had started that company first, and I had seen supplements are great from the perspective of the profit margins are high, they’re really easy to white label, and get out there really quickly, and we can talk about that process if you want as well. They’re really easy to get out quickly, but I had a strange suspicion the market was bigger outside of supplements. Because it sounded like there’s a bit of a catch to how much wealth a supplement company could be worth. The cash flow was good, but I wondered about the total wealth potential and I had a suspicion that the market was a lot bigger in something that wasn’t a consumable product.

And I live in Austin Texas and yoga is huge here, and it was just one of those spidey senses where I said I think the market is bigger here, it’s a growing trend, let’s see if we can find some opportunities where we can create profit margins based on what people are ordering. And if you’re doing a business like I just look at what is on a volume perspective, what are people consuming the most and for us that was yoga mats because…

Steve: Okay.

Ryan: People buy when they’re starting. So a lot of people say go after where there’s little competition, I said no I want to go after like the biggest volume. And I’ve stuck with that perspective in my career and it’s treated me well. Where is the most volume, and it’s a lot easier to get the small piece of a big pie and grow from there, than to try and get a big pie or a big piece of a little pie.

Steve: Right.

Ryan: It’s a lot easier, so we decided to just go after the volume and that was yoga mats, and that’s when we just decided okay I have no idea what people will want or what will differentiate us from everyone else. So let’s just ask people who do yoga and that was the idea for the poll.

Steve: So did you actually pre-sell any of these yoga mats before you placed the large order?

Ryan: Yeah that was– well not before we placed the large order no.

Steve: Okay.

Ryan: We did pre-sell it when they were on a boat somewhere, so that we could come out of the gate with sales and we can talk about that if you like because we– I did not want them to arrive at our warehouse and not have sales ready to go.

Steve: Yes.

Ryan: So we did a cool process for that but it was not before we ordered inventory.

Steve: I was just curious– what was the minimum order quality for your first shipment?

Ryan: The minimum order was 100– I think we ordered 250, 200-250.

Steve: Okay, so that’s not a whole lot actually?

Ryan: No it’s not; it was like $4000 worth of inventory.

Steve: So you did that by sea, that’s interesting.

Ryan: Correct, yeah. I envy the people who were able to airlift their product over to the States but the economies of scale just weren’t there for us.

Steve: Okay, okay so let’s talk about this plan where you pre-sold your product…

Ryan: Sure.

Steve: What was the process involved?

Ryan: I believe very strongly in having an audience that you can launch something to. I learned this in my information marketing days where if you have an audience, if you have a channel and I keep using that word, if you have a way to distribute your product out you’ll be way ahead of the competition. So we decided to build up an audience in the easiest and fastest way possible and that was just putting up some– a page on Facebook called I love yoga. We thought let’s get all the yoga people concentrated in one place and we’ll launch to that audience. So we just put up ads to people who listed yoga as one of their interests, sent them to a page called I love yoga, where we had images of people doing yoga, we had memes and videos and inspirational videos that were all about yoga that we knew people would love, and we just got people engaged in this one place.

Now there’s no special magic to Facebook, it was just we wanted to have an audience. You can do that with an email list, you could do that with affiliates, you could do that with any group of people. We just decided to do it on Facebook because we knew it would be really easy to target yoga people on Facebook. So we kept them all in one page called I love yoga, and when it came time for the the mats to be on a boat somewhere, we started just leaking information about what we were so excited about regarding the mats. So we talked about its double side, we talked about how it’s a little bit thicker than the average yoga mat because people complained about mats being too thin. We talked about why we took the extra step to make them environmentally friendly, and we just started leaking them out so the people started to get excited about this.

So when they came ready to go, when they arrived at Amazon we had a list of people who were ready to buy and that made a huge difference as far as momentum, because we came out of the gates with sales and it’s a lot easier to steer something that’s moving and making some cash flow, than it is to get something pushed. It’s like rolling a bolder– its harder to start it than it is to keep it rolling. So when we had those sales come in, and we did a big contest to give away product, to get people excited about it, people were sharing the contest and we got a lot of attention around this yoga mat being released, and it was a very successful way to get that product of the ground.

Steve: So just curious how soon did you start this page before you even decided to place an order for the product?

Ryan: It was about a month– before we placed the order for the product they were almost simultaneous.

Steve: Okay.

Ryan: So we ordered the inventory and then we started building the audience, but it was about four weeks before the product went live that we started the page.

Steve: Okay and so you started this page and you bought Facebook ads that actually drove it to that page for likes– is that how?

Ryan: That’s exactly it. So we sent Facebook traffic to the Facebook page and kept the conversation there because again we didn’t have a website, we were– I was treating this company as though it needed to be boot strapped even though my former businesses have done just fine. I was treating it like a boot strapped business.

Steve: Okay.

Ryan: I was working with a new partner, we had never done business together. So we were kind of still getting to know how each one worked. And so we decided to keep it really simple and do a Facebook campaign to a Facebook page, and build the audience there and launch directly on Facebook with– again with no existing list, no website, no nothing. We just said “what’s the fastest route to get some of these sales,” and we went straight towards that.

Steve: Okay, were you collecting emails on your Facebook page by any chance?

Ryan: We weren’t, if I were to go back and do it again, I would definitely make that change though.

Steve: Okay, and so when it came time for after you– your goods were on its way over with a boat, right? Then you just started posting just on this page, right? Which was distributed to all the people that had liked the page– is that accurate?

Ryan: I didn’t follow that say that again Steve.

Steve: So once it came time for you to start mentioning your product, you just started posting on this page right?

Ryan: That’s correct, yeah.

Steve: Okay, so you started gathering interest in your product but at that time they couldn’t buy, right?

Ryan: Right.

Steve: You know by the time the product came some people might have forgotten about it, right?

Ryan: Well we did it– so we made a first announcement of the product weeks before it was ready.

Steve: Okay.

Ryan: And we could kind of tell when it was going to arrive on our warehouse. So we knew when to time the real push for the product. So we started leaking content about the product, meaning we were still doing inspirational videos and images and all those stuff that people love to share and consume about yoga, while we would mix in the fact that we were about to release and launch a yoga mat. And if you go to Facebook.com/zenactivesports although it’s an old post, they are still up, you can scroll through and find them.

Steve: Okay, cool.

Ryan: But…

Steve: I’ll put that in the show notes.

Ryan: But if you– what we did is we just leaked certain features about the product that we liked leading up to it, and then we announced the contest. Once the product hit the shelves– once it hit our ware house, then we just decided to do a contest of win a free yoga mat. We had a bunch that we could give away and we held this contest in order to get that audience really engaged so they were interested and now they’re really engaged with this contest, and that’s when we started taking sales.

Steve: Okay and how many fans did you have at the time right at launch?

Ryan: When we launched I think it was 5 or 6000, so not many at all.

Steve: Wow! So okay that’s actually a decent amount of investment from a Facebook ad perspective, right? And how many how much did you pay per fan do you remember?

Ryan: It was maybe 13, 14 cents.

Steve: Okay, that’s not bad at all actually.

Ryan: Yeah, a few hundred bucks– maybe less than a thousand dollars to get that audience.

Steve: Okay, and once you got– you mentioned you shipped things to your ware house. Were you stocking these goods or were you using Amazon fulfill buy program?

Ryan: We now use a combination, but when we started it was completely Amazon fulfillment program.

Steve: Okay.

Ryan: So, again I– we were looking right at the profit, where is the fastest route to profit and if you’re starting an ecommerce business or any kind of business I would advise you to ask yourself that question, what is the quickest way to start cash flow coming in and then we’ll adjust later? And for us that was just utilizing the channel of Amazon and the fulfillment of Amazon, because then we could focus on nothing but sales. So what was the simplest route we could take for us to be able to focus only on sales, and from a mental clarity perspective that was a huge plus for us was using Amazon fulfillment, and we could focus completely on building the audience and getting things ready for sale. And so I would always recommend that anyone starting a business ask themselves, what is the simplest and the quickest way to profit because no one ever went broke making a profit.

Steve: So just curious you mentioned that you do a hybrid model; can you explain why you do that?

Ryan: Yeah, so we have– Amazon has those little pain in the rear, which is that if you have an oversized item then you can only hold a certain amount in their inventory and as a result we can only hold that limited supply at our inventory, because our yoga mat is a little bit larger than the average yoga mat. So we’ve qualified for being an oversized item. So we now have our product shipped to a US based warehouse and then we take them in chunks over to the Amazon warehouse. So when we need 500 mats, we order up from our existing warehouse, zip them over to Amazon.

Steve: Okay and can you mention which service you use for this US warehouse?

Ryan: I have no idea– did I mention before that I’m not a detail guy.

Steve: Okay.

Ryan: People laugh at me because they’ll often ask me details about how we did a certain thing and I go let me call Sean and I’ll tell you. So what I’m really good at is setting a strategic direction and my partner would admit that he’s miserable at that. And what I’m– what he’s really good at is figuring out the detail of where inventory is and what the estimated time for its delivery date is, and if you ask me to do that I would rather rip off my pinky toe. So one thing that I’ve learned through this process where I made a change about a year and a half ago is if you’re thinking about starting a business and you’re thinking, maybe I should get a partner the worst partners in the world are people who are just like you. The best partners in the world are people who complement your skills perfectly. We took a Kolbe test Kolbe.com and actually looked at our profile– how do we get things done to see if there was a good fit and it was a perfect fit and it’s been a perfect relationship. But never partner with people who are just like you, if you’re doing the same things and have the same responsibilities, one of you is unnecessary.

Steve: Okay, yeah that’s great advice. I work with my wife and we kind of have complementing skill sets for our business.

Ryan: That’s great.

Steve: So let’s talk about Amazon– the process of getting an arm there now…

Ryan: Sure

Steve: And actually getting some buzz. You mentioned that you drove Facebook traffic to your Amazon listing. How else– were there any other things that you did to improve sales of your Amazon listing?

Ryan: Well we treated Amazon like a channel and I mentioned that word before channel and what I mean by that is where do buyers already hang out, where they already spending money on whatever product or service that you are delivering. And every channel is a little bit different in the sense of how do you get maximum exposure in that channel. And so we just looked at Amazon what is the differentiating factor between people who are lost in obscurity and people who do really-really well, and we discovered it was two things; one it was what you showed up for certain keywords, and number two was reviews.

Steve: Okay.

Ryan: And we did a bunch of research in the Amazon’s algorithm and broke it down as detailed as we possibly could be which drove me crazy, and what me big thinker came in and focused on one thing– came in and realized was that if we focused on one specific thing that we drove home, it would pull up everything else and that one thing was reviews.

Steve: Okay.

Ryan: That’s actually what kicked off the idea to do this launch and this giveaway and this contest was I realized that there was a chicken egg issue, that Amazon’s algorithm needs reviews, it needs sales, but it’s hard to get sales about reviews, but it’s also hard to get– shoot which one did I say first. It’s hard to get one before the other– there’s was chicken egg issue here.

Steve: Right.

Ryan: So I said okay let’s be really aggressive with our review getting process, let’s go in the red if we have to in order to give product away in order to collect a certain amount of reviews, and let’s get really good at that one thing and that will pull up everything else. So we just got really laser focused on collecting reviews which we did by treating our customers amazingly well, by managing negative reviews like they were the life blood of our business, because they are– negative reviews can kill you, and we just– that gave us the idea for the contest of giving away our product in order to collect reviews because we figured that would elevate sales, that would pull sales with it, and that theory turned out to be correct, because once we had 30-50 positive reviews about our product, then other people started buying it and it was a snowball. And when you’re starting out that snowball is hugely important, because every sale is an opportunity for a review and every review brings in two more sales. So you collect those reviews as aggressively as possible because that is what is going to drive your sales. So we just looked at the algorithm, we looked at what drives sales and we got laser focused on reviews because we saw that was the driver behind those two things, and we focused in on that and that gave us the idea for the contest.

Steve: Okay, so does that imply that you gave away between 30 and 50 mats in the beginning?

Ryan: We gave away at least 50 because we knew not 100% of them are going to leave reviews, some of them are going to be jerks and take a free product and not leave a review. I think we gave away about 70 mats– I’m totally estimating but it was 70-80 mats.

Steve: Cool, so and then you kind of just asked them to leave a review but it definitely wasn’t mandatory, right?

Ryan: Well, we can’t show up at their house with a baseball bat and break their windows if they don’t leave a review…

Steve: Sure.

Ryan: And Steve if I could I would, but no we called them– we had a customer service call person call them, we put an auto responder sequence which you can do with Amazon some plug ins that’ll attach to your Amazon account, we just got aggressive with our follow up process.

Steve: Okay and then how did you kind of manage the negative reviews– you mentioned that earlier?

Ryan: Yeah so negative reviews on Amazon will kill you, I don’t know what it’s like on other channels because Amazon I’m mostly focused on, but they’ll just destroy you on Amazon. Just for example last night I was buying a gift for my girlfriend, she has cats that wake her up in the middle of the night when they’re hungry and I was like “sweetie we should get you some automatic cat feeders.” Last night I’m on Amazon and I’m reading– what I’m I doing? I’m a buyer and I’m reading reviews of every cat feeder on the market, and I looked at four and I decided not to buy three of them, because of the negative reviews that were on there and I think we all do that on Amazon, we look for what we are going to buy, we hit the one star reviews and we read those first. So we decided let’s get as few of those as possible by just having amazing customer service. If one of our customer service reps calls them and says “hey how has your experience been– is everything all right?” And they’re like “eh it’s okay.” If it’s less than really good, they’re refunded on the spot. If they leave a negative review or anything less than like a three or four star review, they’re refunded on the spot.

Steve: Okay.

Ryan: We’ll do whatever– we are very aggressive in the sense of we will do whatever it takes to make sure the customer is insanely happy, because in this world of transparency you have to and that’s a really really good thing, because the people who aren’t putting awesome products out there or doing something to make sure their customers are really happy are going to fail and we know that and so we do everything possible. We are very aggressive in customer happiness and let’s be real if somebody is not happy with your product, they’re probably not a fit for your company anyway, they’re not going to become a raving fan of your company. So let’s make it as clean and safe a parting as possible. So we just got really-really obsessed with customer happiness and that’s how we manage our reviews.

Steve: Yeah you know what’s hilarious is that we manage customer service the same way. Anytime someone complains about anything, we just let them keep the product and we also give them a full refund. And that immediately disarms them, especially when they call us really angry, as soon as we mention that you just keep the product we’ll give you a full refund, they instantly become nice and sometimes they become raving fans and…

Ryan: Yeah.

Steve: Start telling their friends about this customer service so…

Ryan: Yeah we’ve had, we had one star reviews turn into five star reviews, because we’ve gone as far as somebody who complains because their mat has a rip in it, okay refunded and a new one is sent to them for free and that’s a one star review that turns into a “Holy Moses, you just knocked my socks off with amazing service,” and that person will defend us to their grave as an awesome company. And that’s actually one of the fastest ways to get really good fans is turn upset people into really happy people.

Steve: Yeah absolutely, so just curious so when you’re selling on Amazon you don’t really have a very strong brand presence, right? You’re essentially competing for this buy box, so in terms of reputation you’re just kind of depending on the reviews that you’re getting, right?

Ryan: Okay, so there’s a little bit of confusion about the buy box.

Steve: Okay.

Ryan: And the buy box is just for products that have multiple people selling the same product.

Steve: Okay.

Ryan: If you’re selling your own product and you’re not selling it as a wholesale supplier to a bunch of different stores, then you own that buy box. Nobody can come in and steal that buy box from you unless they’re poaching your listing, which means that they’re– you’re selling your product for 30 bucks and they’re trying to sell it for 50, and they’re going to buy it from you and dropship to somebody else. But the buy box is only for people who have multiple sellers for the same product. If you have you own unique product then you have no competition from a buy box, you own the buy box because you own the product, you’re the only distributor for that product. Does that make sense Steve?

Steve: It does yeah, so the reason why I asked is maybe there is a little bit of confusion. I thought you imported existing yoga mats from overseas, but these are uniquely designed ones from scratch– is that what you’re saying?

Ryan: So, so what I– what we do– sorry I got to back up here a bit Steve. Our yoga mats were indeed unique that’s true, but originally our plan was to just white label something that was existing. So when we went out to that process and were looking at sources like Alibaba, and we were looking at what suppliers already had in stock, we weren’t all that excited about what they had in stock. So then we decided to make our own unique version, but the process was exactly the same. My supplement business– when I started we looked at a market and we- we looked at what is the market buying? Where is their volume? And we went out and found a supplier and just white labeled something exactly how it is. The only difference was it was a different company selling the exact same product, but since it has a different brand on it, it’s not a buy box competition. It’s our specific product and that is what’s ranking on Amazon and there’s no one else selling that brand, so it has its own buy box.

Steve: Okay.

Ryan: Then we went back and we created our own formula and we have by far the best supplements in the market, that’s hands down the best, and so yes we have our own unique formulas now. But when we started, we were just white labeling something, putting our own label on it and now was its own unique product even though there’s other products that are exactly the same like it. Again that’s not the case now, but when we started the fastest way to cash flow was white labeling something that was existing getting it to Amazon, it has its own unique label…

Steve: Okay.

Ryan: And now it’s unique and you get your own buy box.

Steve: Okay that clears things up because I actually looked on yoga mats on Amazon before this interview and there’s a ton of people selling yoga mats and they all look the same. And so that’s kind of why I was kind of asking you the question of how you make your products stand out. And it sounds like based on gathering a high number of reviews, it makes your product more visible and then people are more likely to see it, click on it, read the reviews and then buy from you.

Ryan: That’s exactly the case, it really comes down to where you rank on Amazon for certain keywords. And Amazon is kind of like Google in the sense of nobody quite knows their mysterious algorithm, but you have some good guesses and the biggest one is conversion rate.

Steve: Okay.

Ryan: Is when somebody sees your listing do they buy, do they see you in the listing, click on you and buy. What’s the biggest determining fact for that? Reviews. What makes people interested in clicking on a product? Reviews. What is the biggest thing that converts them into buyers? Reviews. So that’s why we focus so heavily on reviews because we knew that conversions played a factor in that listing process in the Amazon SEO if you want to call it that. And that exposure really comes from where you rank for those key words, and reviews drive that.

Steve: Okay. So how long did it take before your business actually started gaining some traction because it sounds like you gave away almost a third of your initial inventory, right?

Ryan: Yeah, yeah wow I didn’t even realize that, thank you wow.

Steve: And I know from experience that it can take months and months for something to come over from overseas, right?

Ryan: That’s correct and I can say I’m envious of the people who can airlift things over, I am envious of people who have US based manufacturers. Our economies of scale weren’t there for either of those things, they were all shipped by sea and as a result there are certain setbacks that can happen. Again this is one of those thing why you have to have a long term view of success in order to really be successful, and I would say that it took us– we took our first order on black Friday of 2013. It probably took– its only been probably until this past month that we feel like we have all our systems really dialed in or in the clear as far as what we owe verses what’s on a boat somewhere. I’d say it took at least six months with all our setbacks in order to get everything really dialed in, and feel like we are in the clear now, we are now producing profit on a regular basis.

Steve: Okay.

Ryan: Yeah in other businesses, it’s been a little bit shorter because if you have– like in supplements you have to have a US base supplier because if you order from China you’ll end up with supplements to ground a baby in it.

Steve: Yes.

Ryan: And that’s happened before by the way that’s not just a funny story, it happened.

Steve: Yeah I’ve heard the stories especially in baby formula with some harmful chemical– I can’t remember, but yeah I know what you are saying.

Ryan: Yeah, so I mean actual ground up baby. There was an article that came up that they were– anyway it’s disgusting, but our supplements are– you have to have a US based and since we have a US based supplier and we were just white labeling, the process is a lot faster. You can just ship something in three days, Amazon processes it, everyone’s happy. With ordering from China, it’s a longer process, you can have six weeks of a down time where things are just sitting in the Pacific Ocean. So our process is a little bit longer– we were okay with that because we had a long term vision of success.

Steve: Yeah that’s actually really short, six weeks is short.

Ryan: Really?

Steve: Our lead times are in order of three to four months and then there is transit time.

Ryan: Oh my.

Steve: So every time we order something, we order a crapload and then it just comes and I’m just– I was a little surprised that your minimum order quantity for a custom made product was only in the order of 200 units.

Ryan: You know, do you use Alibaba.com?

Steve: We have yes in the past.

Ryan: We just found that it was– we got people competing against each other, so we– and the biggest thing for us was communication, who’s going to be honest with us? And who’s going to communicate with us regularly? And that was a big determining factor of who we went with was a person who was very quick in their response time, and just keeping that communication line open has been very helpful as far as cutting down lead time, getting things shipped quickly, and getting things to our warehouse.

Steve: Okay. And I heard you mentioned mistakes in that first six months. Would you care to talk about any of the mistakes that you experienced?

Ryan: There’s things that I would do differently, you know I believe– sorry you are conflicting with my language here, because I like to say that there’s not mistakes, there’s just actions that didn’t work.

Steve: Yeah, actually I mean the same thing. We’re talking about the same thing, what is your…

Ryan: I know you do, it’s conflicting with my personal development beliefs here Steve. So I’d say if we had gone back and built a list from the beginning, we’d probably be a lot better off.

Steve: Okay.

Ryan: Meaning a list that we really controlled wasn’t just on Facebook we’d be a lot better off, but again we were just looking towards what is the fastest route to making sales and profit. So I don’t know that I would do it all that differently in that time period, but if we had a list now that we could email, would we be better off today, yeah probably. If we could have started with a product that wasn’t oversized, if I could’ve tweaked the product a bit so we had the same benefits but it wasn’t oversized, that would’ve saved a whole lot of headaches for us as far as inventory management. But at the same time people loved that it’s a bigger yoga mat than what’s average, so was that a mistake, I don’t know.

I think the biggest thing has just been learning how to manage our inventory flow, and we’ve made lots of mistakes as far as when do we order? How much do we order? How quickly do we order? Do we create a second product? These are all things that I would do differently if I would go back, but at the same time it would be hard for me to advice somebody to do it differently because it’s going to be different for every business, and we had no idea what the lead time was going to be in that time period. So one thing that I wish I had done differently that I do advice people to do is, I suggest ordering as much inventory as a one time as you are comfortable doing. The more that you are able to do I think the better off, because inventory for us importing from China has always been something that held us back, always something that delayed our experience. So the more that you can order at one time, I think the better.

Steve: Yes absolutely I would completely agree with that and often times you get a better cut on price too when you order more.

Ryan: That’s absolutely true, yeah.

Steve: So just curious, do you ever plan on creating your own stand alone website for this or are you going to use Amazon for now?

Ryan: We have it now ZenActiveSports.com, we don’t do a whole lot of activity there, we sell some things through a funnel but almost everything comes on Amazon. We really keep the websites for our branding perspective, so when somebody goes and Google’s our company they can see that we are real people.

Steve: I see, because I would imagine that Amazon takes away almost a third of your revenues, right?

Ryan: Well they do, but they match that by sending all of the buyers.

Steve: Right.

Ryan: So…

Steve: Sure.

Ryan: I mean if we were to pay an affiliate, we pay them 50%, right? On a digital product anyway or even if it was just 20% that would eat into our profits a decent amount. So we actually end up paying Amazon less than we pay an affiliate or less than we pay in paper clip traffic to drive into our website to make the sale. So it ends up– I mean the fees look high, but the same time if we were to compare it to any other customer acquisition strategy, it’s very favorable to go with Amazon.

Steve: Okay. Yeah where I was going with it you kind of touched on I was wondering if you actually tried to drive paper clip traffic over to your existing website to see kind of how the profits align compared to Amazon.

Ryan: Yeah that we have not tried just because again we focus really hard on maximizing a channel, and that was Amazon and playing that game so that we have that cash flow to invest in other places.

Steve: Okay, yeah fair enough. So I know a lot of my listeners out there would probably like to try your model, so what advice would you give this people. And you’ve already given a lot of great pieces of advice already, but for someone just starting out what sort of advice would you give if they want to follow your yoga mat model?

Ryan: I would say look at where there is the most volume because that is where the most opportunity is.

Steve: Okay.

Ryan: And then I would– if you’re going overseas, go to Alibaba, put up a job and look at the bids that you get and then order as much inventory as you feel comfortable doing, where there are still profit margins available, and focus really heavily on reviews and customer happiness. If you do those things, and you have a product that people actually want, you can’t do anything but succeed.

Steve: Great advice Ryan. Just curious looking back, what inventory number would you have been comfortable with with your yoga mats in the initial order?

Ryan: I would’ve been comfortable with 500 was the most that we could do with an oversized item. So I would’ve gone right for 500.

Steve: And how did you determine that number. Was it just based on feedback from the Facebook fan page, how do you determine this number?

Ryan: For us that was just a process of analyzing how long do we think it’s going to take to sell these and are we okay waiting to get that money back. And since I wasn’t in any hurry to make a profit, I wanted to build the business, I would’ve just gone for the maximum that Amazon will let me do and with an oversized item that was 500 units.

Steve: Okay, but you knew that these were going to sell right? At the back of your mind based on the research that you had done.

Ryan: Yeah totally especially with us focusing on reviews, we knew that eventually they would sell. I mean worst case scenario is that they would sell slowly.

Steve: Okay yeah. So Ryan you’ve actually given out a lot of good personal development tid bits as well, and so I’m just curious what has influenced you, have there been any books or people or speakers that have kind of really influenced your way of thinking?

Ryan: Yeah I mean what got me on the self development train was going through a really really hard time. So a couple of years ago I went through a really really difficult painful time in my life but I love Jim Rhone, I love Tony Robins, I would recommend– if you’re at home and you’re cooking or cleaning, put on Jim Rhone. Just the idea of continually growing yourself is something that really attracts me. I don’t how people succeed without focusing on developing themselves, I’m not sure how they do that, I’m not sure if that’s possible. So, yeah I’m definitely a Jim Rhone, Tony Robins nerd.

Steve: Okay, sounds good and are there any online services that you use to help your business with selling on Amazon or running your own sites that you can’t live without?

Ryan: Yeah, I get them confused– its either stitch labs or cellar labs. I always get them confused because those two companies, but there’s a service we use that integrates with our Amazon store to grab all of our customer data so that we can follow up with them.

Steve: Okay.

Ryan: And also we are able to make notes. It’s basically a CRM for our Amazon purchases…

Steve: Right.

Ryan: Our Amazon customers and I think that’s cellar labs.

Steve: Cellar labs okay, I’ll put that in the show notes.

Ryan: Cool.

Steve: So Ryan, we’ve been talking for quite a while. Where can people find you online if they have questions?

Ryan: I don’t have an– I have a podcast called freedom fast lane. It’s really-really quickly running up the iTunes store. I don’t have like any– I’ve taken a break from having any products or anything, so I have literally nothing to sell you, I wish I did. My website is FreedomFastlane.com. I keep a really awesome newsletter there and I have a podcast over on iTunes, it’s called freedom fast lane.

Steve: Awesome, hey Ryan thanks a lot for coming on, you shared a lot of great tips and I wish you all the best of success, and I will definitely go and leave your podcast a review as soon as I’m done here.

Ryan: All right, thanks so much Steve.

Steve: All right man thanks a lot Ryan.

I hope you enjoyed that episode. I think it’s pretty darn amazing to be able to generate seven figure revenue in just one year. It just goes to show that Amazon is a pretty amazing market place if you have your own branded products and we’re actually in the process of getting our products listed on Amazon as well, and I’ll keep you posted on our progress. For more information about this episode go to mywifequitherjob.com/episode36 and once again I just want to thank 99 designs for sponsoring this episode. I know a lot of you listening are waiting on the sidelines trying to get the courage to start your own online business, and I also know a lot you out there run your own business already and know that your designs could be better. Designing a website is not that intimidating anymore thanks to 99 designs, where you can get over 300,000 designers to compete for you design.

All you got to do is to list your design on their site and within 48 hours you will get dozens of deigns submissions to choose from and from there you can ask for slight tweaks and changes until you are 100% satisfied with the results. And the best part is that the price is very reasonable and there is 100% satisfaction guarantee. So go to www.99designs.com/mywifequit and get your logo, website, t-shirt, business cards or basically anything you need designed right now. And by using the 99designs.com/mywifequit link, and telling them that Steve from mywifequitherjob.com referred you, your design listing will be bolded, highlighted, given a prominent background, and featured before all regular listing so that your request stands out among all of the other designers. So if you need a logo, website, t-shirt or anything designed, go to 99designs.com/mywifequit.

And then finally, if you enjoyed listening to this podcast, please go to iTunes and leave me a review. When you write me a review it not only make me proud, but it also helps keep this podcast up in the ranks so that other people can use this information, find the show and get awesome business advice. It’s also the best way to support the show and please tell your friends because the greatest complement that you can give me is to provide a referral to someone else either in person or to share it on the web. And as an added incentive, I’m always giving away free business consultations to one lucky winner every single month. For more information about this contest, go to mywifequitherjob.com/contest.

And if you are interested in starting you own online business, be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to mywifequitherjob.com for more information and thanks for listening.

Thanks for listening to the my wife quit her job podcast where we are giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.mywifequitherjob.com.

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Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

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

035: How To Sell Amazon Kindle Ebooks And Make 30K In Under 7 Days With Jonny Andrews

Jonny Andrews

Are you interested in selling your own ebooks on the Amazon Kindle platform? Do you want to make some passive income being an author?

Today, I have Jonny Andrews on the show to teach us how to make money selling ebooks on the Amazon platform. Jonny runs the popular website and podcast AudienceHacker.com and he’s got a ton of experience with launching successful ebooks. In fact in one of his launches, he was able to make over 30K in under 7 days which is crazy!

He reveals all of his tactics and secrets in this episode so check it out!

What You’ll Learn

  • Why you should consider using a pen name when writing an ebook
  • The 3 major things involved in selling a lot of books
  • Is there real money to be made selling ebooks?
  • What does it take to be a successful seller on Kindle if you only have a small audience
  • How to create a reinforcement strategy for your ebooks.
  • The key strategy for selling ebooks when you have nothing
  • What’s a good launch strategy for your ebook
  • How to get visibility on Amazon
  • How to get reviews for your book
  • How to get on the bestseller list
  • Where to get your book cover designed

Sponsors

Other Resources And Books

Transcript

Steve: You are listening to the my wife quit her job podcast, where I bring in successful boot strapped business owners to teach us what strategies are working and what strategies are not. Now this isn’t one of those podcasts where we bring on 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 enter my podcast contest where I’m giving away free one on one business consultations every single month. For more information go to www.mywifequitherjob.com/contest. And if you are interested in starting your own online business, be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com for more information.

Now before I begin I just wanted to give a quick shout out to this episode’s sponsor 99designs. Now, originally I wasn’t going to take any sponsors at all but 99designs caught my eye, because I suck at design. And in fact when I first started my online store back in 2007 the design for my website was terrible and I had absolutely no idea who to turn to. Now fast forward to today 99designs is a site where you can provide a description of anything that you want designed whether it be a logo, a webpage, a t-shirt, pretty much anything and have dozens of designers compete to deliver you the best design possible. And by best I mean you get to choose your favorite design among dozens of submissions from a pool of over 315,000 designers.

So, if you are design challenged like I am, I highly recommend that you go over to 99designs.com/mywifequit and if you use that link and tell them that Steve from mywifequitherjob.com referred you, your design listing will be bolded, highlighted given a prominent background and featured before all regular listings so that your request stands out among all the designers. And in fact this special offer is worth 99 dollars. So if you need a logo, website, t-shirt, business card or anything designed go to www.99designs.com/mywifequit. Now onto the show.

Welcome to the my wife quit her job podcast. We will teach you how to create a business that suites your lifestyle so you can spend more time with your family and focus on doing the things that you love. Here’s your host Steve Chou.

Steve: Welcome to the my wife quit her job podcast. In this episode I’m going to be talking to Jonny Andrews. Now the reason why I decided to bring Jonny on the show is because many of my readers have been asking me about selling their own e-books. Now over the years Jonny has been known as the go-to guy for people who want to become authors and when it comes to wanting to launch a successful e-book. Now he’s written several books and managed to land his own personal book on the kindle home page and lots of sales and suite after that and he’s also helped clients go to over 15,000 books in sales in their first week.

Now hopefully Jonny will be willing to reveal some of his book promotion strategies with us today. I’m thinking about writing a few e-books on the kindle myself just for the exposure. So without further ado welcome Jonny, what’s up man?

Jonny: Hey, how are you doing? Thanks for having me

Steve: I’m doing well man, how are you doing?

Jonny: You know it’s very ,very interesting, long evening, lots of fun and yeah it’s morning dude we are talking and it’s in the morning, so this is great.

Steve: Yeah well, it’s good for you you’ve been up for a couple of hours; I just rolled out of bed myself but…

Jonny: Nice.

Steve: So hey just give us a quick background story, I’m sure a couple of people in my audience probably don’t know who you are. Tell us about your business, how you got started with this whole e-book thing.

Jonny: All right well I mean I will give you– I’ll kind of give you the birds eye version and that kind of stuff. So I have been just absolutely in love with the publishing business and books and literature and literally since I was basically a zygote. And it was like one of those things where you know as I was coming up sort of in this internet marketing industry and doing all sorts of fun things with that, you know after I got married, had my first kid, I was like you know what I think because my business was based all around travel. It was based around– I had to basically blast all over the world going handshaking, baby kissing kind of stuff to meet all these partners to you know go and grow my business like that. It was a very relationship based business and I suddenly realized if I want to be like a husband and a father and be there for the kid when she is growing up. I need to completely re-think everything that I am absolutely doing and I’d shut down my entire business like I’d been doing multiple seven figures and it’s pretty cool, but I was like this business no longer serves me.

And so I kind of you know– I was taking stock really of what I wanted to do I’m like you know I have always loved publishing. I’m like I should be doing this and I mean this is obviously like sort of a paraphrased version just you know to give you kind of an overview, but I decided to apply what I learned inside of internet marketing, you know. So the past couple of years I put in my time to learn how to do things like you know Facebook, Twitter all sorts of different– learn how to work with platforms, social media properties and you know how to buy traffic and how to do all these different kinds of things. I am like what if that will work with books and sure enough it did. So I put out my first book personally like I’d been testing this under scads of pen names because I didn’t peg you know it’s like one of those things you kind of want to make sure you’ve got it before you know hey here I am and everyone goes boohoo and it like okay—

Steve: Is that why you used a pen name? I was just curious.

Jonny: Actually I use pen names for a whole host of reasons but testing is absolutely one of them. I actually recommend that people do that because there are you know there is a fear and this is something that I think a lot of people can get over. There is a distinct and very pulpable fear that a lot of people have about looking foolish when they do stuff. And I’m not going to lie and say that I’m any different, like I’ve had tons of ups and downs, lots of successes, lots of failures and you know I’ve developed myself into the kind the of person that I don’t really worry about that anymore because I just assume that it’s going to happen and then it’s totally cool we can all laugh about it.

Steve: Uh-huh!

Jonny: But that comes with like– it’s one of those things, it’s like I can’t remember the boxes that was always saying the psychotic you know how [inaudible] [00:06:32] something like that where it’s like why did you wait it it’s like I can take more hits or something like that.

Steve: Uh-huh!

Jonny: Sometimes people have to evolve into that kind of human but if they are not there yet, which there is a journey to get there, it sometimes works to put up a mask, to become a different person out there even though it’s really you. And I actually got the idea of doing this many many many years ago when I read a biography on Bono the lead singer of U2 talking about when they put out their Joshua tree album, the people they loved it, they loved it, they loved it. Then they put out “Zooropa” which was totally different, very electronic very experimental for the time and people just ripped them a new one you know and then they took that very personally. And so they put out “Pop” which was I believe the next album. They created caricatures of themselves and they put forth those caricatures, and so they actually had a buffer between themselves who they were at their core and the real world and they were able to kind of like actually turn that into a huge thing that they now do, so it’s a very viable technique.

Steve: Okay sorry I interviewed– I mean I interrupted your entire story, okay so you started writing your books and then what came after that?

Jonny: Basic- I just did I mean it was all about really creating the books but it’s all about finding the market, creating the book and then growing your audience. And I mean those are really if I had to boil it down they could be the three major things and obviously there are little cool tricks and tips and fun little things you can do to be able to get the book in front of more people. I mean Amazon really gets it when it comes to that so they’ve given authors tons of tools for this and it’s funny, I like to hear– it sounds like my grandfather “back in my day we didn’t have those tools.” But literally the first books I ever put out, I had no tricks or tools, I had to just leverage you know existing platforms, so I have internal platform and external. Basically the internal will be like a mailing list that you build.

Steve: Okay.

Jonny: Your external will people that you meet like J.D. Paks and stuff . That’s all I had at the time so I was like let’s just do this, so I went out and we promoted the book and it really did very, very well. So it was cool, I ended up outselling like Dave Ramsey, Suze Orman, Robert Kiyosaki– like all these guys.

Steve: Nice.

Jonny: Yeah it was pretty cool, so I definitely had some fun you know some fun after effects of that but that was— that’s kind of the basic idea.

Steve: So one question I had actually is you know a lot of this kindle books sell for really cheap, so is there real money to be made selling kindle e-books?

Jonny: Well the– to give you an idea, the first book that I– I was with a partner at the time. We put out– he would bring in the people and I would make sure that the launch worked. But what happened was we ended up selling like 15,000 books in the first week and it did, I think we did it I’m going to say 2.99 and upped the price to 3.99 after that first week, but it ended up doing like 50,000 dollars in the– it was like 45-50,000 dollars in the first month. So that was with one book.

Steve: Wow. Nice, okay. So a lot of the listeners in my audience who want to start their own e-books probably don’t have a huge audience. I don’t know if that particular example that you just gave was someone who is already pretty big. But let’s take a step back and let’s talk about it from the perspective of someone who might have a small audience, maybe a small list of like 1-5000 or something like that. What does it take to become a successful author on the kindle?

Jonny: Really that’s a perfect place to start if you can– what it really takes is and this is an important fact I think is decide what market you want to go into because here is one of the big problems that used to exist…

Steve: Okay.

Jonny: Actually it still does all the time. In fact I just had a conversation with somebody the other day who was asking about kindle– a friend of mine you know we hadn’t talked for a couple of years and then he pops up and like hey I’m doing these books. If you go like shotgun style and say like you publish a book on like dog training and then you publish another one on something else, then another thing on something else, it takes the same amount of time to create each one of those books, but they are never going to reinforce each other you know.

Steve: Okay.

Jonny: And that’s a huge thing with the kindle platform is people are looking to get behind an author, they are looking to– like George R.R. Martin I mean for example. I mean come on like people buy his stuff because that’s his stuff like if he put out another kind of book they would probably buy that book too you know. So it’s like you want to build your brand, you want to build yourself as an author and so I call it the umbrella concept and what that is is what’s the big idea? What’s the market and what’s the major pain play?

And then – it’s kind of a funny analogy but if you think about it like an udder with some nipples hanging off of it, it’s like here is your big udder book and then let’s say you are going to go with– what I did you went into personal finance and decided I absolutely did not want to be in that space but like you know I had this book called “How to Finally Live Debt Free and Wealthy” and then that was like the big overall udder concept and then the little nipple concepts were like different ways of like making and saving money and so you can write like a whole series of books around that, and you can feed your audience based on what they are looking for, because that’s what it takes to really do it.

I interviewed a lady– USA today best seller self published author named Quinn Loftis you know. She is just an amazing woman– very, very smart when it came to doing what she was doing, and she literally woke up one day, rolled over the bed, turned to her husband and said, “I think I’m going to start writing books” he’s like “okay,” you know and the next thing you know her – by book five she was building that audience and building that following and by book five I believe it was either five or six– I can’t remember exactly, but she ended up hitting USA today best seller list which is huge especially for a bestselling author who that was not her intention. So it’s like you can definitely make money with it, you can absolutely have this be whatever you want to be. My only advice when it comes to that though is pick who you want to be, so it’s like you know I believe Shakespeare or somebody before him said this above all to thy known self be true. Who are you? Who do you want to be? And then just go act like that person.

Steve: So based on what you said it kind of implies you need to kind of write multiple books in order to gradually build up your author strength so to speak.

Jonny: Yeah pretty much that’s one of the big realities and secrets I guess, you can say. You can absolutely succeed with one book, but this is how I look at it– I’ve seen so many other authors do it. If you’re coming out of nowhere with nothing, you have two options. You can either buy your way in, or you can take a really– you can take time to go promote that one book. Both strategies work you know. You can drive a lot of traffic, build a big list, grow a following and then launch your book , or you can launch your book and use that to make your following. It’s kind of like a podcast you know, you can use a podcast to build a following or if you have a following, you can use that to reinforce your fan base and get a bigger one.

Steve: Okay, so let’s go with the latter for example– let’s say I have nothing. How do I use my book to build an audience?

Jonny: Well what you want to do like I said is first of all you have to identify– this is like the biggest thing ever.

Steve: Okay.

Jonny: Identify who the heck the audience is.

Steve: Okay.

Jonny: You know who do you want to write this book for because if and I see this time and time and time and I’ve talked to people like ridiculously successful people in business who absolutely fall over sideways and start like you know [inaudible] [00:13:41] and rocking back and forth and just crying in the darkness kind of thing, when it’s like who is your person– it’s not hard like just figure out who you are talking to you know is it men women what age? You know what are their wants, needs and desires, hopes, their dreams, their fears? And you create I mean you’ve probably heard this a lot of times you create that avatar, and you write that book just for that person.

So it’s literally the art of excluding other people that you end up becoming– you stack the deck in your favor becoming successful with this. So define your avatar that’s– sit down and write it down and give them a name like I believe Aven Peggy [phonetic] talks about that. You give this person a name, maybe even get your stock photography that looks just like this person, and let’s say you are going to do something like adventure series or something like that and fiction and your ideal reader you decide to call him Rick. Rick is going to be 35 office worker making about 45000 a year, doesn’t get out too much but loves to escape into a good book, really big into video games and e-books and stuff like that where the character has this crazy action sort of sequence. And you literally write this out, know who your audience is and where they are and then you create your book just for this person.

Steve: Okay.

Jonny: What ends like– I’ll give you another example is that there is a website out there by Maryellen Tribby called “Working Moms Only.” That pretty much defines who the audience is, right? Well guess who’s on their list, me and I am not a working mother. So it’s like that’s something to keep in mind is when you basically hone in and target on that one person, you end up attracting people on the periphery also. And that’s what’s really cool about this– you could end up growing your list really well. So if you can do sci-fi, absolutely do sci-fi, you want to do paranormal do paranormal.

Steve: So, okay so let’s assume that we can write a really awesome book that’s very targeted– let’s just assume that. So if I launch on the kindle platform or you know just Amazon in general there is probably going to be a whole lot of other books competing against me, and if I don’t have a built in audience how do I get that book seen by other people?

Jonny: There is a couple of factors; the first one is recognizing that everybody will judge your book by its cover that’s just…

Steve: Okay.

Jonny: That’s just going to happen you know and it’s really kind of hilarious that it’s like oh no no the cover yes it does. The cover is like the most important thing and this is a huge tip to keep in mind is you have to remember the majority of kindle devices out there are not kindle fires, because obviously there are all kinds of funky stuff in the economy right now. The grayscale kindle was way cheaper and so what was it 2011 and 2012 they were moving like 5,000,000 kindles around. This time the majority of these since they weren’t kindle fires because those were like 150 bucks they were the 75 dollar ad supported, grayscales kindles and stuff like that. So it’s like you have to remember your cover has to look amazing in color and in grayscale and it’s real easy to do, you just flip a setting in like whatever preview thing that you are looking at. Make sure you can still see– you get the gist of it because I see this all the time, covers that just don’t look good…

Steve: Okay.

Jonny: On grayscale so you are going to lose a lot of sales by doing that. So if you keep that in mind from the beginning, that’s important. So have an awesome cover– next thing is your title. If you are doing non-fiction, your title should just basically state the outcome either avoid pain or go towards pleasure you know like mine was “How to finally live debt free and wealthy” kind of thing, yeah. And then the next piece is you just have a subtitle. I’m a big fan of this long winded rambling subtitles, I don’t know why. It’s really funny, it’s like wow that’s gigantic and then the last piece and it’s kind of unfortunate this is the last piece, but it is the last piece is then you need a good book, because you can sell– a book will sell based off of its visual merit you know–

Steve: Really? Okay.

Jonny: Oh, absolutely but it’s like if you think about the consumption process you know for a reader; first they see it, then they are going to flip to the back, so you need a good blurb obviously, then they are going to look at the social proof– I mean how many reviews do you have? And then they’re going to look you know and what’s the star ranking? And then they’ll buy it and then they’ll read it. So like having a good book actually doesn’t help you until someone’s already bought it. So the marketing in that regards does in fact come first.

Steve: So let’s talk about getting reviews and then kind of like the launch strategy for example. So do you recommend– I see a lot of books that are just given away for free and then later they start charging for it. What is kind of like a strategy that has worked for you?

Jonny: I’ve done a bunch of different strategies, I’m out there kind of testing stuff constantly. So, one thing that you can do is there is something called KDP select, Kindle Digital Publishing select, and that’s a program where if you are exclusive to Amazon. They will let you go free for 5 days and there is also– every, so it’s every 90 days you get a 5 days of freebies.

Steve: Okay.

Jonny: And that works, so I came up with a technique called pulsing and this was actually something we give you an idea of how well this worked. When this first started happening there was a mother daughter team that was doing cookbooks and they had never produced a book before, they had no platform, they actually had no idea what they were doing, they just literally followed the steps. And what ended up happening was they did this pulse and they– it was like maybe 20,000 downloads or something like that the first day, and so then they showed me the screen shot– there was “Hunger games” on the bestseller list on all of kindle it was “Hunger Games 1”, “Hunger Games 2”, “Hunger Games 3” and then the fourth book was “Special Dinners for Two” which was…

Steve: Wow.

Jonny: They literally blew up, it was crazy and that absolutely can work. What’s happened recently in Amazon is they’ve hidden the free stuff, so don’t expect to get like 20 or 30,000 downloads anymore. But you can achieve really healthy results with like 2000 downloads, and what’s awesome is that there’s like a place called book pub, and you can buy an email blast from them, and they can promote your book. It’s one of those things where they make it kind of difficult to do it, but I would definitely– if someone is going to do something and they are not going to be like– I for example owned ilovevampirenovels.com. It’s similar to book pub but it’s for paranormal stuff.

Steve: Right.

Jonny: And so it’s a fun little site if you are into paranormal, but if you are not then book pub is absolutely where you need to be.

Steve: Well I’ve been forced to watch a twilight movie or two.

Jonny: There you go, there you go. Yeah it’s cool because these book discovery places like– well I’m trying to think of a couple of them. There’s digital book world and different kinds of things like that where you can get the word out about your stuff that way.

Steve: Okay, so these are just third party sites that have large email lists that basically help you promote your book for a fee– is that how it works?

Jonny: Pretty much yeah there is also…

Steve: Okay.

Jonny: [inaudible] [00:20:20] is one of the first ones.

Steve: Okay.

Jonny: And they are fantastic so if you can get mentioned in those things that you are doing a free book, they’ll definitely push you up there you’ll definitely feel the heat from that blast.

Steve: So once you get a couple thousand downloads let’s say– assuming the reviews will start trickling in, will that make your book just naturally rank higher in the Amazon search engine?

Jonny: That’s what funny about this is I’ve railed against so many people about like worrying about the search engine. The reason why is when it comes to books, the kinds of keywords people looking for are not like “how to train your dog” people don’t go to Amazon for that. They go in and they type in Caesar Chavez because by the time you get to Amazon you usually know what you want to buy, you’ve done some research, you go and– the people make selections based off of “also bought” like people who bought this also bought that, you know that strip of similar products underneath every product.

Steve: Yeah.

Jonny: And so that’s really how it works more so than keywords. Keywords can help but it’s the same thing with like Google you never know what keywords are going to help you. So it’s like if you are in the supplement business yeah then you know like superfastawesomeweightlosspill.net, yeah if you can rank for that people are searching for you’ll probably lose some super awesome weight loss pills, but if you’re doing e-book and nobody knows who you are, and also unless you are Steven King I mean at this point if Steven King is listing then absolutely please optimize under your name dude because everyone is looking for you.

Steve: Sure.

Jonny: But if nobody knows who you are it won’t really help you, and so you’ll it’s like you know small businesses and what not who like I hear from them sometimes like “Eh! I’m number one on Google” I’m like great what under what? They are like ” our business name” I’m like wow, I didn’t know you were Coke or Pepsi because that’s what people are looking for you know, they are not looking for you know waltz ABC home repair or something, they are looking for home repair, but anyway hopefully that’s making sense is that…

Steve: So let’s say– you know that cook book example. I would presumably search for like most popular cook book in Amazon, right? And so how did they show up in the search results? Or how did people like find their book in the first place?

Jonny: It’s really through the best seller list and showing up on different kinds of like popular list and stuff like that because that’s– Amazon is all about making money, and so if your book is selling they’re absolutely going to do whatever they can really to help you sell more. And what’s cool is and a lot of the folks that I’ve worked with, they’ve sent these emails of like screenshots of Amazon emails that Amazon is literally like they have the biggest email list on the planet and they’ll email your book, so like people get promoted all the time with that kind of stuff.

Steve: Sounds like a chick in an egg problem though, right?

Jonny: Not necessarily because if you do that thing I was recommending that I said called pulsing, you can actually fire your book up there. It’s a way of like circumventing the glitch in getting started. The other thing I mean you could buy Facebook traffic, you could– the big one to do is to go out there and get reviewed on blogs, especially if you’re fiction. There is two places if you are fiction; GoodReads, absolutely master the heck out of GoodReads and then get a ton of reviews through– GoodReads will get you the reviews and it will get the bloggers to review your book.

Steve: Okay, so let’s talk about that process. How do you approach bloggers to get reviews?

Jonny: The first thing to do is obviously you have to go back to the very first thing I said which is know who your audience is, and then you go and find blogs that are already catering to that audience.

Steve: Okay.

Jonny: And what you then do is you show up and simply see if they have a policy for it, like so if it’s an actual book review blog and this is something that happens more so in fiction like you don’t typically see our book review blogs talking about like the latest weight loss product or something like that, or latest like you know how my wife quit her job podcast kind of thing you know. You don’t typically see a review site just for those things, but if you can’t find a review site that’s also just find out what their policy is and then just reach out and say “hey what’s up I have– you review these books, I have this book, this is awesome”.

One thing that I do a lot of and I have my assistant do this constantly is we go through and we find similar really popular books and we find out whose given those books a really good review on Amazon, and then we just contact them directly and say “hey can we give you a free copy you know you reviewed this, this was awesome really good review, would you mind if we gave you a free copy of our book if you would review it,” and there is people called vine reviewers inside of Amazon and a lot of these people because they got that way because their reviews have been voted as being particularly helpful you know by a lot of people.

Steve: I see.

Jonny: And so these get– a lot of these folks have a following and if they give you a favorable review, then that following is going to see it and wow if this person liked this book then maybe I should buy it you know, and so people do follow them that’s a great way of doing it. The next thing to do like let’s say if you’re a non-fiction– get on podcasts you know and get to out there and just start talking like for example like if I’m– obviously I don’t have a book currently that I’m promoting, I just like to get out there and you know say hey, but no really I’m weird like that it’s just like yeah just do a thing man it’s cool yeah, but like get on podcast that cater to your audience and stuff like that, that is a huge way of driving traffic.

Steve: Now I was going to say I actually get sent maybe a book every couple of weeks to review and sometimes people just send them randomly, sometimes people reach out but I almost never do it, and that’s why I was kind of asking what your technique was for doing it. It sounds like you go out and actually look for people who actually do reviews on a regular basis which is a very good tactic because clearly the pitches that come to me don’t quite work that well, because I have no idea who the person is and it takes me a long time to read a book, I mean I’ve got limited time so–

Jonny: Yeah I mean there is just a whole host of issues with people who do that because I am a fan of stacking the deck in my favor. So I figure all right if someone is a vine reviewer that means that’s what they do, they review things. So the likelihood that they would say yes is dramatically increased. Then the second thing is I don’t just send them the book, I ask them– I reference something that I read of theirs meaning another review. So it’s like “yeah I read your review on this book” whatever that book happened to be– I actually do read the review to make sure that they are not you know weird. Because that’s the one thing you don’t want to approach like everybody that gave it a one star you know out of just four star.

Steve: Sure.

Jonny: Just to let everybody know avoid those people who carry that rage and fury in their heart, you don’t need that in the thing. But like go to four and five star vine reviewers and just say “hey you read this I really liked what you had to say you know it’s very honest and you know definitely had a cool opinion. I was wondering you know, I have a similar book if you have time if you wouldn’t mind taking a look at it, can I send you a free copy?” Don’t just send them the book, that won’t get you anywhere that’s sort of like what they call the assumptive clause– would you like that in red or blue today? Like no don’t do that, it makes everyone feel really smarmy and gross. So just be cool about it, be nice and I have a very strong rule. I call it the 95-5 rule and it is – because I think the 80-20 rule is very true in some circles, but I think it’s been sort of like perverted into this universal thing.

The reality of the 80-20 rule is when you apply it to a situation like this, it just falls apart, it completely collapses. It’s either 95-5 or 99-1 and so this is why you want to know who your audience is and know who is already catering to them, because if you can build a list of say 300 reviewers and 1% of them say yes, you can leverage that so that’s like 3 reviewers out of 300 that are going to say yes. And you know so that’s going to be– you have to accept the fact that if you don’t have a name already you are going to have to put in a little bit of that footwork to get that [inaudible] [00:28:15] but once you do, you can leverage that like crazy you know. And literally all it takes sometimes is one review and you can just say hey this person reviewed, this person reviewed.

Like for example my podcast like that’s how I did it you know to start getting more and more and more guests and stuff like that was I just started talking to people then all of a sudden like there was a day one pretty popular dude came on, it’s like great I can put that in the retailer, yeah we interviewed this person, and this person, and this person. And just like just accept the fact that it’s going to you know one foot in front of the other, you probably won’t– I legitimately can tell, you there is no real such thing as an overnight success. I really prefer the whole seven or ten year overnight success thing, but with the online stuff you can do it very very quickly in comparison to what it used to be, you just have to accept the fact that if you publish a book and you wake up tomorrow you probably not going to be rich you know.

Steve: Sure.

Jonny: You just have to be just put forward the effort in a consistent direction and you’ll be all good.

Steve: So in regards to just getting reviews one of the questions I had was you know how many reviews– so first of all you know a couple of things that you said kind of confused me a little bit but you said search doesn’t really matter, right? So how do reviews actually help? If someone actually lands on your listing, sees the review and wants to buy the book, right? But do reviews contribute to the visibility in those other columns that you mentioned on Amazon?

Jonny: Not like how on iTunes or stuff like where the reviews actually will lean- will help elevate your status like with podcast and stuff it’s not just raw downloads, it’s also people who come in and leave you favor or leave you reviews that is not the case in Amazon that I’ve seen at least.

Steve: Okay.

Jonny: Because one book– the first book we did I actually created sort of a system– we got 2300 reviews in a month, it was crazy.

Steve: Wow. That’s crazy. Okay.

Jonny: It was actually really fun, then we lost them all because I’d failed to notice a small change in their terms of service and I was like “Oh!man” oh well let’s say it worked.

Steve: Just curious what was that change just…?

Jonny: Exactly what you want to make sure that you do is you can bribe someone to leave a review as long as you only bribe them with your book and what we did was we bribed them with free cooking videos. We said you could leave a review even if it was a negative one we were still going to give you the videos and so just thank you for helping us get the word out. And unfortunately that– they changed their terms of service after the book had launched and I had nothing to do with it so it was just one of those Oh! Man, but now we have like 400 reviews or something like that. And so it’s definitely coming back, but yeah one point in time we had like 2300 reviews, it was insane but now all you can do is like after people buy your book, you always want to building a list of those buyers and so you always want to give them, offer them something for free to click on your link and go to your list and once they are on your list you can say “hey if you love my book please leave me a review” you know and you can’t really go past that, I don’t recommend you do that.

Steve: Okay, So I was just curious so how do reviews help exactly? Outside of the actual you know click to buy once they’ve actually seen your listing already, does it affect visibility is what am asking?

Jonny: It does in the fact that if you have a bunch of really positive reviews people are going to naturally grab and take more toward that they kind of – once somebody is on your listing, they make all the difference, but in terms of getting people to your listing that’s kind of all up to you.

Steve: Okay, okay that’s what I was getting at. So basically you don’t want to depend on Amazon for that service. You need to do your own leg work, develop your own audience outside or use some of this services that you’ve just recommended to get your book instant exposure.

Jonny: Right, I would definitely say it’s an end, not at all like you want to have a strategic marketing plan that you implement every day, because you want to think about this you don’t have any control over what Amazon is going to do. And so this is why I say don’t rely on that publishing platform to be the thing for your success, like you always want to take the action that you control like you can control if you set your book to free and then go and tell all of these discovery sites about it. You can absolutely do that, but what you cannot control is if they are going to pick up your book or not you know just take the actions that you have power over and do it consistently, and what ends up happening then is that you know you’ll start seeing your book moving up the charts and that’s what you want to do is really get on the bestseller list because that’s where the eyeballs live. And so some of those bestsellers lists– and this might come as a shock to some folks, you only need maybe five sales. So like call up your mom and dad.

Steve: Really?

Jonny: Oh. Yeah. Like if you I call it leveling down– like if you go like you click on the bestseller list for just the over the kindle store and you are going to see some huge names like thousands of sales a day are happening with that, but then as you look at those lists you can start clicking down. Like, I mean getting to the Amazon top 100 takes about 2500 sales on a single day to get in there.

Steve: Okay.

Jonny: So the top 100 is definitely awesome, but that should not be your first goal if you’re brand new and just starting out. Your first goal should be get onto like a tiny little best seller list like way down at the bottom there where it only takes maybe five sales to kind of like get you know inch you up. And then what starts happening is that you start getting a low level visibility from the natural traffic that exists there, and if you’ve done a good job on your cover, you’ve done a good job you know writing that book for your audience, people who want your book are probably going to start seeing “Oh! That looks nice,” and click and buy.

Next thing you know you get another sale, then another sale, then another sale and the way that it works is basically you are selling a lot of books– you are a bestseller because you are selling a lot of books and you are selling a lot of books because you are a best seller. And it’s just sort of is there is this awesome self fulfilling thing. And that’s what happens with “Special dinners for two” is they– I was teaching this you know even then I was just find a list that you can get on that doesn’t take that many sales to get there, and then you’ll start seeing more stuff. So once you are on there, you can start leveraging and you can legitimately call yourself a bestselling author at that point.

Steve: I see so it’s like a little snowball. You pick a category that’s easy to rank for, you get sales that way and just gradually build up, pick larger categories and just kind of go from there over time.

Jonny: Yeah because Amazon it’s– then I call it leveling up where it’s like you know you are going to eventually in the small category you’ll hit number one and that means you’ve already crusted into the category above it so that it comes from. So I mean I want everybody listening, I would encourage you just to sort of watch this phenomenon happening is if you go into the kindle store– not on the actual device, that’s a total different ball game, but just on Amazon in general and if you look from a bestseller list not just– you actually have to click the link that says bestseller list, and you see that you know all these things that you have kindle stores and fiction, non-fiction they’ve all those sub categories and all those other categories lead to more categories. And so the keyword to that regard in a lot of ways will help you get ranked in those sub categories you can’t just choose on the back end of your dashboard, that’s what the keywords are for.

Steve: So how do you find these categories that are easy to rank for?

Jonny: Look at this- you want to look at the Amazon sales ranking of a book, and so the numbers that I like to tell people to shoot for is if you can rank in the top 20 of a low hanging category and be roughly better than 50– it’s like golf, so the smaller the number the better and if you can rank say between 10,000 and 50,000 you’re good to go that’s a good place to start and what that means is, if you can sell 5 books you are probably going to hit 50,000 especially if you do it in one day.

Steve: Okay, so basically the strategy is I go into these categories, look for the bestsellers that are already on this list in the ball park of 10-50,000 and then choose that category.

Jonny: Yeah, that would be I mean…

Steve: Okay.

Jonny: Provided that category is relevant to your book.

Steve: Yeah, yeah of course the common sense always applies.

Jonny: Absolutely. Exactly like you know you could get something– you could write a personal finance book and find out that you know expecting mothers have a wide opening in their best seller category [Laughter] that’s not going to help you very much unless your personal finance book is for expecting mothers. So that’s another way to do it is you could actually cross categorize like there is one technique that we did with that [inaudible] [00:36:23] book. We had– we took a like a paleo diet book, but we crossed it with a cook book and so it was how to Paleo thing with all the cool research and stuff like that. But then also we had a ton of recipes in there, and so we were able to then get two extremely hot categories like that way and it made perfect sense to then put them in there.

Steve: So how many categories are you allowed to target?

Jonny: You can pick two in Amazon but the cool thing is if you use the right keywords they’ll give you more, and so let me give you an example like I have a couple of pen names I do in the paranormal romance genre and so I would do– oh dude I love it, it’s…

Steve: Paranormal romance okay, sorry go on.

Jonny: Yeah so like there’s like a bunch of different vampire genres you can’t really– you can’t just click that thing and say “put me here” and so what you do instead is you put the keywords in there and so Amazon will see that and go “oh then this person must belong here.” So it’s like I do like vampire romance, paranormal romance, new adult, that kind of thing, that sort of the new young adult kind of genres and you put them in there and all of a sudden you are going to be even find yourself ranking in there. It used to be you had to email support and say hey please give me these categories– now they just need the keywords. So, that’s where the keywords become very helpful.

Steve: Can you comment on just like paper books verses e-books these days?

Jonny: Yeah totally my take on this is be in as many formats as possible because you don’t know how people want to consume you. And it’s– one thing that we saw was you know we went live with the e-book and here where we talk about the crazy uphill battle like “back when I was a kid” you know it’s you back away back to 2012 before people– they were millions and millions of that knew they had a kindle app on their android phone, we actually had to teach people how to consume the product which is a huge pain in the butt, you don’t want to be in there. Where you are like here’s how you download the book, you want people who already know how to do it. Paper gives that– the ability to do that to use a service called create space which Amazon bought and so that’s a print on demand service. So this costs you like 30 bucks.

Steve: Okay.

Jonny: To do this and I always– I have this weird ritual where it’s like when I put out a new book and its awesome because I have my paranormal vampire stuff sitting on a stack on the desk next to me, and I’ll literally order them and I’ll walk around and just hold this because I– I don’t know maybe this means something to everyone listening or not but like it’s kind of cool to see something that you created show up in real life you know it’s like this is the thing that used to be a thought in my mind and now its sitting here in front of me.

Steve: No I can totally relate and if there is still book stores around that’d be even cooler.

Jonny: Absolutely because then you could then do something with that totally, but that’s the thing it’s like if you read the industry news which I do because that’s kind of important to be at least slightly informed to what’s going on– the print still dominates. It really does, it’s rapidly losing ground but at this moment in time and it doesn’t hurt you at all to have that print book, it’s only going to increase your sales, you know and same thing with an audio. I mean I would pay the ten grand to get like Samuel Jackson to read my book or something that would be hilarious. I won’t but I mean you could for like two hundred bucks get someone with an extremely good speaking voice to read your book for you, and get it in audio too because then you have a whole new audience that listens to audio books, and its cool. I would absolutely do print in fact I do, I insist that all of the books I do are going to be in print.

Steve: What about the audio format?

Jonny: That is not as much- it is a nice perk, I have not and this is just my experience and I have not done my fiction in audio yet so I can’t speak to this.

Steve: Okay.

Jonny: But I work with a bunch of authors who have and they say that it is worth it but, the audio books you know let’s say for example I think we are still in the top five on some sub category somewhere, so we sell a lot of books every month for that [Inaudible] [00:40:33] fuel because that has a good buoyancy point liquid floats on the best seller list, and so a lot of people are still seeing it so it sells really well than it does in paperback as well as digital. The audio book really is only like an extra $100, $140 a month may be.

Steve: Okay.

Jonny: It’s not– so it’s not like astronomically huge but the other thing it does lend, it lends kind of a credibility if you will to it “oh wow this person went so far as to do the digital, the physical and the audio” and then also we have lots of reviews, it’s like okay cool this is a legit book. There’s so many people that are self published now, that you want to do whatever you can to just look better than them, you don’t necessarily need to be better just look better.

Steve: That makes sense. So where can you find services that will do one, the book cover for you and then two the audio portion for you?

Jonny: You know what’s funny I don’t recommend going to typical like cover designers like if somebody advertises themselves as a book cover designer just add a zero on to whatever you think you are going to pay like it’s crazy. So what I do is I’ll go to a place like the warrior forum, in fact like…

Steve: Really?

Jonny: Oh yeah, I met a guy in the warrior forum who has done all of my covers and they are really cool and here is something I like to have that sort of get your expectation in line with reality sort of thing. You are not going to see these people as immediately being like the greatest people to do your covers, but if you can see in their art and in web like typically in the warrior forum they are designing websites and like these really cheesy e-book covers .You want to have a good e-book cover you don’t want a three dimensional e-book cover because that looks ridiculous. But you want that flat two D thing.

Steve: Okay.

Jonny: And so what you want to do is expect to have to train them and you want to give them good examples. Like I want my cover to look like this and give them examples of stuff that you like that you are inspired by, and see who can get closest. So like kind of maybe get a couple of people pin them together, but I don’t spend on a– so I always get the physical cover you know. Because you can chop off the front cover and there’s your digital, it’s no big deal but do the physical cover and I won’t pay more than say like 50 bucks.

Steve: Really, Okay?

Jonny: And I mean my covers look awesome like it’s ridiculous I was at a traffic and conversion summit a couple of years ago when I first started to get into the paranormal romance under my female pet name– is quite hilarious. I know it’s funny I love doing this stuff it’s just like let’s sit and find out what happens, but I was showing everybody the cover they were like blown away by this stuff and I literally had spent 35 dollars.

Steve: Wow. Okay.

Jonny: It looked better than most things you see on the shelf.

Steve: So you have never used a service like 99designs or…

Jonny: Oh no I have. I just spent so much money I just decided it wasn’t worth it for me, but I do the foot work first and this I think it’s a big one because you want to develop a relationship with somebody who can do this stuff consistently. Like if somebody just needs like nine fixes is not that tough, and I spent I want to say like almost 500 dollars when I was thinking about re-doing my how to live debt free and wealthy book, because I was actually having an editor look at it because I did not by the way– oh everybody listening, dude get an editor.

Steve: Okay.

Jonny: I will just tell you right now I wrote this book a couple of days, and I cannot splice together a sentence with a comma to save my life. And so everyone like that read it was like “Wow that’s really great info, holy crap man could you please learn sentence structure.” And I probably should have done that, but I just hurled it into being because I wanted to see what would happen. So yes please get an editor because like all– the majority in negative reviews like this guy needs comma help, like end the sentence not a paragraph like that kind of thing.
So yeah please have an editor because that will ding you significantly out there because people are looking for that, they want to have a good well formatted book which and it’s easy to do now. You can take a word document and do it– it’s real simple, but get an editor. You can expect to pay may be like on the low end a penny a word and you can Google these folks, just find a good– you typically want a line editor that’s the kind of person who is going to go through. He’s probably going to make a lot of the changes for you, but will also leave comments as to why they made those changes. You can kind of go back and fix them if you need to.

Steve: And what is your policy on like ghost writing versus writing your own books– you have any tips there?

Jonny: Yeah totally the biggest tip I can tell you is never– like I use oDesk for almost everything now.

Steve: Really?

Jonny: oDesk is freaking amazing.

Steve: For writing now?

Jonny: Yeah, sometimes like if I have a genre I want to try out and I don’t have time to do it, I’m going to absolutely go get someone to write that for me. And what I recommend with ghost writers when you are posting your job, do not ask them to write a book because let me tell you why. When you say the word book, it automatically triggers this visualization in people’s heads of like some way fish clove smoking dude sitting outside of a coffee shop like hammering away on his freaking novel you know that kind of thing. So, it’s like this epic amount of work that you just don’t need to do, where as if you call it a report then what happens is most of these people are college educated and they all wrote reports and the way that they did it was they waited until the day before it was due and then they wrote it. You know it, it’s like it conjures up a completely differently thing and I promise you, you’ll pay so much less if you have to get it ghost written.

The other reason to do ghost writing is stuff like there is there is nothing– for most people there is nothing worse than the bushing cursor of death on a blank white page– like that is soul murder for so many people that I just recommend hiring someone to get you over the hump. And what I’ve done before in nonfiction and fiction is that I have had someone ghost write the stuff and I just go through and literally re-write the entire thing completely myself.
And so like I work with them on the outline and so I know exactly what this book is supposed to be, and then may be the first draft comes out and it’s kind of crappy, which is to be expected it’s the first draft. And then I will just go through and overhaul the thing myself then the relationship switches where they become more of like sort of a second set of eyes and an editor on it in a lot of ways rather than the initial writer. But it does absolutely get– it helps me get over the hump and that might be a technique that helps you and your listeners.

Steve: I see, so that is like a psychological tactic so you have them kind of fill in the outline like the meat then you just go and you edit the meat so to speak.

Jonny: Absolutely, yeah.

Steve: Okay.

Jonny: I have done that like I said with fiction and nonfiction.

Steve: Okay. All right, yeah those are good tips, I actually have this book this 400 page book that I wrote a long time ago as part of this course I saw on e-commerce and I’ve just been giving it away. I’ve been considering just putting it on the Amazon platform and see how it goes, what is the typical length of a book you would expect to see on the kindle platform?

Jonny: That is the craziest question ever because the answer is as long as it needs to be. I had the first book that I put out was probably under 50 pages and I sold it for $3 everyone seemed almost no returns. Like people were very happy with it– other books are you know these huge works of literature so it’s like a George R.R Martin book that’s going to be like 85 gazillion pages, but that’s what the audience wants. You write it for what the audience wants, so if you are doing a business book, I would highly recommend keeping it 200 pages maybe.

Steve: Okay.

Jonny: Because if you think about the audience that’s reading that, they don’t have time to sit there and digest.

Steve: That’s what I was kind of getting at.

Jonny: Exactly, so it’s like you write for your audience. So if you are doing fiction you need to be longer because I have done stuff before in fiction as an experiment where I was like okay let’s see what happens if I put these shorts. And they are not well received because they are shorts and so if you are going to use shorts use them– those can be like they call it in a grocery store the low slider. And this is a conversation I have constantly with a lot of fiction writers because that first book because of most fiction writers write their own stuff– that first book can take like 10 years to create for them. It’s like this huge like life achievement and the current advice is to give that book away for free and its sort of crushing. They are like I took like a third of my life to create this thing at least I would like to see enough money to maybe buy a sandwich, you know is that okay you know asking the universe is this okay? So what I recommend is yes sell that book, but maybe do a couple of short stories that like walk you up to that book, you know and give those shorts away for free.

Steve: That is good advice.

Jonny: And I mean like I said that’s just my particular twelve sense on the subject at that, but you know 200 pages is a great length. Some of my fiction is pushing like 360, but that’s because its fiction. But the majority of the nonfiction we do is going to be 225 to 250 may be capping out around 275, if you wanted to look good in like standard paperback size.

Steve: Sure.

Jonny: If it gets too small you can’t put like your title on the spine and that just looks amateur.

Steve: And so in terms of pricing you have any tips there?

Jonny: Yeah don’t get sucked into the race to the bottom. That was a– oh men, it just killed me, it’s like all these poor fiction authors who– actually it wasn’t just the fiction, it’s kind of everybody was sort of in this race to the bottom of the pricing heap, and it just was ridiculous you know. That was the old and it kind of felt like that was the only thing they had going for them against the major publishers which was not true. Just have a good book and sell it for what you want. I honestly do not recommend pricing in a digital copy above 499.

Steve: Okay.

Jonny: That’s an opinion, that’s not like a fact but I do know that there is like a small group of people that if they see a digital book at 10$ they are going to leave like a one star review.

Steve: Is that true in nonfiction as well?

Jonny: Yeah, absolutely.

Steve: Okay.

Jonny: And I– you know it’s not that I am a big fan of trolling, but I do agree with their philosophy. That, that is a digital book, there is absolutely no reason to price it at that, there’s no– it’s not like you are warehousing ones and zeros really. It’s like you don’t have a pallet of air. It’s a digital book like five bucks is fine but I think that is an even value exchange. For whatever your doing because if you are doing nonfiction usually that book is the gate way drug to the rest of your echo system, like hey read my book now get my $50,000 coaching program or something like that. Which is great if I had a $50,000 coaching program, you could buy it but I. So you can use that, you definitely want to sell it for what it’s worth. The other thing remember I was saying publishing a series. I usually recommend low barrier to entry on the first book, and so I usually enough call it the crack dealer model where you give the first one like 99 cents, and then the next one is going to be like 399 or 299 and then the rest in the series are going to be between 399 and 499.

Steve: And then you can leave cliff hangers at the end of each one?

Jonny: Exactly, yes. Psychologically drag their beaten bodies to the next one. Buy it because you know you do it faster– totally it works beautifully and especially if you have really awesome books, then everyone like gleefully consumes it and that’s the other reason you want to like build a brand around you, or your pet name, or your book series or whatever it is you are doing because, people want to– they want to buy more of your stuff .That’s the coolest thing about like selling on Amazon that’s not a place where people are going to not buy things. They are there because that’s store, it’s not like it’s masquerading as something else. So if they are looking at your stuff ,they are like 80% sold on buying it already. So give them more options, give them as many options as you can.

Steve: That’s great advice. Hey Jonny I don’t want to take up too much more of your time. I know you do have a course right, we kind of like talked about it before the interview started. Did you want to talk about that and tell the audience where they can reach you if they have questions?

Jonny: Yeah, totally if you guys are all cool and down with this stuff I have a podcast called audience hacker and its literally for the group I called author entrepreneurs which are basically folks who have businesses and understand the value of using a book to build their authority, their credibility to be able to build their list and get more eyeballs on their products– same thing with the fiction stuff too. But I interview lots of folks on that and we kind of get to like how to grow your platform because that’s what makes– that’s what is ultimately going to make yourself blow up out there is to build a platform, to have that audience that you can go to and say “hey what do you want to hear from me” and they tell you and then you give it to them and they love you for it.

So I have a training course, it’s a free webinar actually probably by the time this thing goes live it might just be a video, but it’s training called “How to sell 10,000 books in seven days even if you don’t have a book written.” And so you can go to audiencehacker.com/free to get that, so that’s some free training and if you like that obviously then feel free to buy my stuff. But I’m a big fan of like let me give you a bunch of cool things first, use them and then make some money and then you can buy more of my stuff, like I think that’s a wonderfully symbiotic relationship, like use my stuff, totally blow yourself up with it and then maybe you will come back and buy more, and that seems to really work out really well.

Steve: That’s the model I use with my stuff too and it works very well.

Jonny: Absolutely, it’s a good time.

Steve: Hey Jonny, well thanks a lot for coming on the show. I know I learnt a lot and that– this interview might have actually pushed me over the edge and I might try the whole e-book publishing myself.

Jonny: You should, its fun.

Steve: Nice man, well hey thanks a lot for coming on.

Jonny: Indeed thanks for having me.

Steve: All right man Take care.

I hope you enjoyed that episode based on the e-mails that I’ve been receiving, I know a lot of you are interested in selling your own e-books and Jonny is clearly the expert in this area and e-books are a great way to build an audience, or reinforce an existing one and talking with Jonny has made me want to give it a shot. For more information about this episode go to mywifequitherjob.com/episode35 and once again I want to thank 99designs for sponsoring this episode. I know a lot of you listening are waiting on the sidelines and trying to get the courage to start your own online business, and I also know a lot you out there run your own business already and know your website design could be better. Designing a website is not that intimidating anymore thanks to 99designs where you can get over 300,000 designers to compete for you design.

All you got to do is to list your design on their site and within 48 hours you will get dozens of design submissions to choose from and from there you can ask for slight tweaks and changes until you are 100% satisfied with the results. And the best part is that the price is very reasonable and there is 100% satisfaction guarantee. So if you need a logo, a website or in this case an e-book cover, go to 99designs.com/mywifequit and tell them that Steve from mywifequitherjob.com sent you.

And finally if you enjoyed listening to this episode, please go to iTunes and leave me a review. When you write me a review it not only make me proud, but it helps keep this podcast up in the ranks so other people can use this information, find the show very easily and get awesome business advice from my guests. It’s also the best way to support the show and please tell your friends because the greatest complement that you can give me is to provide a referral to someone else either in person or to share it on the web. And as an added incentive I’m also giving away free business consults to one lucky winner every single month. For more information on this contest, go to mywifequitherjob.com/contest.
And if you are interested in starting you own online business, be sure to sign up for my free six day mini course where I show you how my wife and I manage to make over 100k in profit in our first year of business .Go to www.mywifequitherjob.com for more information and thanks for listening.

Thanks for listening to the my wife quit her job podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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034: How To Run A Chinese Factory And Import Products From China With Hoe Lui

Hoe Lui

Hoe Lui is someone I have known for a very long time. In fact, he was one of the guys that helped me out early on by guiding me through my first Canton Fair. What’s super cool about Hoe is that he owns and runs his own Chinese factory, Kloanz.com, which makes bobble heads for professional sports teams.

Now you’ve probably read a lot of articles on how to deal with Chinese vendors and how to navigate the cultural differences in China but as far as I know, no one has ever interviewed an actual Chinese factory owner.

So I’m thrilled to have Hoe on the show today and he’s going to teach us how importing from China works as an insider. Enjoy!

What You’ll Learn

  • Why Hoe decided to start a factory
  • How to vet a Chinese factory
  • How to ensure quality from factory to factory
  • How Hoe got his first customers
  • Why Hoe doesn’t list his business on Alibaba
  • What the payment terms are for Hoe’s company
  • What he sets his minimum order quantity at
  • How to get your products tested and how much does it cost
  • How to go about finding Chinese factories to source your products
  • The best way to find quality vendors when you don’t live in Asia
  • What’s the best way to approach a vendor to make sure you get what you want
  • How to perform quality control with your products

Sponsors

Other Resources And Books

Transcript

You are listening to the My Wife Quit Her Job podcast, where I bring in successful boot strapped business owners to teach us what strategies are working and what strategies are not. Now this isn’t one of those podcasts where we bring on 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 enter my podcast contest, where I’m giving away free one on one-business consultations every single month.

For more information go to www.mywifequitherjob.com/contest. And if you are interested in starting your own online business, be sure to sign up for my free six day mini-course where I show you how my wife and I managed to make over a hundred thousand in profit in our first year of business. Go to www.mywifequitherjob.com for more information.

Now before I begin, I just want to give a quick shout out to this episode’s sponsor 99designs. Now originally, I wasn’t going to take any sponsors at all, but 99designs caught my eye because, well I suck at design. And in fact, when I first started my online store back in 2007, the design for my website was terrible, and I had absolutely no idea who to turn to. Now first forward to the day 99designs is a site where you can provide a description of anything that you want designed whether it be a logo, web page, a t-shirt– pretty much anything and have dozens of designers compete to deliver you the best design possible. And by best I mean that you get to choose your favorite design among dozens of submissions from a pool of over 315,000 designers.

So, if you are design challenged like I am, I highly recommend that you go over to 99designs.com/mywifequit, and if you use that link and tell them that Steve from mywifequitherjob.com referred you, your design listing will be bolded, highlighted, given a prominent background and featured before all regular listings so that your request stands out among all of the designers. And in fact this special offer is worth $99, so if you need a logo, website, t-shirt, business card, or anything designed, go to www.99designs.com/mywifequit. Now on to the show.

Welcome to the My Wife Quit Her Job podcast. We will teach you how to create a business that suites 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: Steve: Welcome to the My Wife Quit Her Job podcast. Today, I have my friend Hoe Lui on the show. Now Hoe is actually the cousin of my best friend, and what’s cool about Hoe is that he runs his own factory in China. Now if you read e-commerce blogs, you’ve probably seen a bunch of articles on how to import goods from Asia or how to interact with Chinese vendors, but as far as a I know I’ve never seen an interview from an actual Chinese factory or himself. So that’s why I’m really excited to have Hoe on the show today.

Now Hoe runs the business Kloanz.com, where he makes bobble heads for sports teams among other items. Now chances are if you’ve seen a high quality bobble head of a baseball star or a sports star, it was made by his company. And before we begin, I thought I just throw out some random facts about Hoe since I do know the guy personally. The guy loves baseball and back when he was younger, he once played every single position in a single game. He used to star in commercials and his favorite teenage band was Color Me Badd, and his favorite song was “All for love”. And with that welcome to the show hoe.

Hoe: [Laughter] That’s nice, okay, oh that’s good, I recalled my [Inaudible] [00:03:54]

Steve: Well I and Eddy met up by the way, let’s go on live to everyone. So man hey, give us the background story, what you do and how you started Kloanz.com.

Hoe: So I was in LA and then I had an opportunity to go to Hong Kong back in the 90s, and then basically– so I started my company out there. And we decided– well first we didn’t have the factory, so we started to do different figurines and things like that [Inaudible] [00:04:19] recent type items. And then we kind of stumbled on one of the factories and we started investing a little bit more, and then and so we basically controlled all the production. And so then we started you know when the bobble heads came about– that was the really maze bobble head back in the day when the [Inaudible] [00:04:39] were giants. That was the first one that came out, and then everyone started you know jumping on the button [Inaudible] [00:04:45]. So we started making them.

Steve: So how does that work, so let’s say I wanted– when you first started out you had nothing. How did you get your first business, or how did you get anything made in the first place?

Hoe: Oh I mean I worked for a buying office so I mean you’re asking how I learned the business, so you know when you make something I mean like say for a bobble head I mean a lot of it is– I mean when you’re ordering from China you need to have quantity.

Steve: Okay.

Hoe: So you can’t have them– you can’t be ordering– you know some people will take 500 pieces or you know a few hundred pieces but it is just as much wrapped into 500 pieces as they do to 10, 000. So a lot of smaller factories do take smaller orders but the problem is when you do it, you still have the same cost for shipping. I mean when you have– there is minimum charges for shipping and everything and the ship that’s less than the container load, it’s not packed in a full container from the factory and delivered to the US or whatever your destination is there is a lot of breakage and everything. So, there’s lot of those different factors, so for us for example like on our bubble we try to have a minimum of about 3000 pieces.

Steve: Okay, so what’s involved in making one of these– you have to have a mold, is that correct?

Hoe: So, we take photos I mean normally the teams will give us some photos, we try to get the front and then the two profiles or whatever expression that they want to have. And we basically sculpt it out of clay. And so it’s just– a lot of people are doing it with about 3D imaging and everything, but we find that doing it by hand– it takes a little longer but you can get the nuts and little crannies and all the little details and the kind of the character I think of each piece. So for us we’ve doing this so long that it makes a lot of difference, I mean we don’t do caricatures, we do more I mean really how the player looks. So, it’s kind of I think ours has an element of being very realistic.

Steve: So, does that mean you have actually sculptists and artists on your staff to create these things?

Hoe: Yeah, we have sculptors and then we have a full art department, and the art department basically gives the sculptors all the information and gives them comments. They basically you know plot out lines on the face and then just kind of they can see if the eyes are uneven and so it’s quite– it’s pretty intensive. It takes about three weeks to a month just sculpt the piece.

Steve: Okay, wow.

Hoe: once you sculpt that piece and basically it looks like you know mud that’s been sculpted and then you just send it out to the buyers and you show that sculpt next to the photo of the player and then you just– so then they can see at least the proportions and everything are correct. And then once they approve that, then we go into sampling and that takes a few days. So we make the mold from we pour some silicon over the mud and then make a soft mold from it and then we pour this ,ester poly resin material into it, then we make this kind of– it’s almost like a clay material that is white and then you paint it, then you put all the colors on it.

Steve: Everything is hand painted then?

Hoe: Yeah, I mean the first one we get , we do a paint master– we paint it up and then we send it to the buyer and let them approve it or make changes, and then once that’s done, then we do– then they approve it then we do production molds on it and then you just basically– yeah you are left with all these heads and bodies and then you have a roll of– it could be– you know 20 people could be could be filling. We have about 350 people at our factory.

Steve: Crazy, okay. So, people in the US who are just listening to this, they are probably going to be really shocked. So how do you actually start a factory? Do you just rent out a place and just start hiring people and– I mean where do you find the people that work in your factory?

Hoe: Well, I mean it’s definitely a lot more difficult now than I mean the people would say well China has got– it’s the most populous nation in the world. But it’s still– a lot of people have lots of different options now in China, and so they are making a lot more money. So it’s hard to get factory workers, but eventually I mean it’s kind of like the US– you put out ads in the newspaper and you get workers, but how do you start a factory? Most of the time because how are you are a US citizen, so you want to have– you need to have a Chinese partner someone who’s local.

Steve: Okay.

Hoe: So [Inaudible] [00:09:24] because there a lot of things that they have to do that’s may be not how we normally do it in the States, or you know…

Steve: Give me an example that of that actually.

Hoe: Well, just things that would be kind of on the edge of legality maybe.

Steve: [Laughter] Okay.

Hoe: So, those things that happen so those things happen and then you can’t refuse it, you have to do it otherwise you have lots of problems with exporting out of China. I mean with customs– customs can take stuff out of China and not let it go, and we’ve had that situation for like a month ago.

Steve: So how do you find this partner in China?

Hoe: For me it was– we had some business with them before, so when– then we had some opportunities from our business we just felt like okay we would like to invest in the factory and try to build it. They were at that point I mean it was a small factory so felt like we had a chance to grow it.

Steve: Okay, and why did you decide that you needed a factory, why not just take orders and then contract it out and find people to make it for you? Why did you want to own the factory?

Hoe: Well at that time I mean you know things change if you ask me whether or not I would have done that, I probably would not you know what I mean.

Steve: Okay.

Hoe: And I mean I would be very honest, it’s not something that is for the faint of heart. It’s not– I think right now I would probably not do the same thing again but what it does provide us is some credibility. The eyes of buyers I mean people basically they think that– people would still think “oh! You are the factory, you are cheapest” that is not the case I mean I think you are in this business you know, it’s not always cheapest when you are going directly to a factory. Some other people can have other relationships; they could be a different quality level.

So like at this point I would probably say that I wouldn’t recommend it because there are so many things that you know the learning curve is so great, and it’s not like oh I did it once, it’s the same thing again if I started another. It would be a whole different set of circumstances and the things that I would probably concentrate more on the sales part of it and developing side, I think that’s where we are headed at to because we can’t manufacture everything say for example a team that we work with, they’re not just ordering bobble heads they want backpacks, they want caps, jerseys, plush items like their mascot. So you can’t possibly make everything at your own factory.

Steve: So what do you guys do about that, you just manufacture the bobble heads yourself and then find other people to make the other stuff?

Hoe: Yeah.

Steve: Okay.

Hoe: And then for us our biggest competitive advantage is having an art department, a full art department that understands what’s your taste and my artist– my staff have been with me for over ten years. So it allows us to– when we go into our teams for example go into say the Gold State Warriors, I can come up with ideas that– and drawings that will look pretty close to the final sample. Like it’s not going to be– it’ll be designed from a manufacturing point of view so it’s something that can be, that really looks like how it will look you know when they give it up to the clients.

Steve: That probably gives you a big advantage over some of the other Chinese factories, right? Because you have this western– because you are from the US essentially right?

Hoe: Obviously, I mean that’s– so people are– we are not the only bobble head makers out there, so there are other people out there. They get photos from the importer who is selling to the team, they get photos from them– their factory and then they just give it to their sculptor who doesn’t know baseball, who doesn’t know basketball, who doesn’t know any of their sports.

So they just sculpt from– we have their pictures, they are just– so they are not like 3D images that we get. So they don’t know the player, so at least for us when we are doing a baseball pose or something like that, we can suggest poses and everything that are really– that look like the player, like it’s a basketball pose or it’s a baseball swing you know. So those little details I think just because of our sports background I think that helps out a lot. And you see other people when they do like the warriors [Inaudible] [00:14:06] and they look like it is really a stick figure. So it’s kind of like you know something that people do that based on price and everything, but for us keep to our standards and make sure it’s you know I play basketball, I play baseball, so I want to make sure it looks right.

Steve: So you mentioned like in any given factory the prices could be completely different even if they are getting manufactured, but given that the quality is the same what would be some of the different factors involved in the prices that you might get from a factory in China?

Hoe: Oh no the quality will probably not be the same.

Steve: Okay.

Hoe: There is the different like say if it’s a backpack it could be the thickness, it could be the sowing, it could be how they are manufacturing it, whether or not they are doing it under the one roof or they are contracting it all out. And so sometimes those things– it works out but sometimes it’s like oh when you have a problem then that’s when you know whether or not that factory is going to be you know satisfying their product, because a lot of them– I mean for us in our business, once we get an order I mean that state that it’s given like they say December 16 they are going to give this out you know and so we work around that to make sure that it’s delivered on time.

Steve: Okay.

Hoe: We can’t basically a week before tell the team “oh! Sorry can you cancel that order?” Factories do that you know some factories, so for me it’s all about when you pick other factories you want to be able to do your diligence, make sure that they’ve done stuff and that you can sleep at night. I mean it’s a sleep factor for me it’s like I don’t want to give an order to someone and be constantly micromanaging it you know.

Steve: Right. Incidentally that knockoff North face jacket I bought when I visited you guys last fell apart as soon as I came home but that’s a different story. Okay, so how do you vet a factory like let’s say I want to get something made, let’s say I want a bobble head made and I’m like first of all are you guys on Alibaba at all?

Hoe: No we aren’t.

Steve: You aren’t, okay so how do you get business in the first place?

Hoe: For us we are dealing directly with the teams.

Steve: How did you get that first team?

Hoe: When I came back in ’06, started the US side of the business because I already had my Hong Kong China site. So I started the business over here, I mean we’re over in Northern California and so I just kind of called the Sacramento kings and they wanted to see me okay, cool.

Steve: You just called the Sacramento kings?

Hoe: Yeah, I mean you just physically I mean some people you can’t get a hold of them you know but you kind of its old school and you hopefully if you get– for me it’s all about if I can sit down with the team– the client and I explain if they give a fair shake for anybody who does– for their vendors then I think I can explain to them our competitive advantage and once they realize that then they can go like “oh! Why do I want to buy from someone else who is buying from me you know what I mean? So I do have clients who sell to the same teams who I make their stuff but it’s through that client.

Steve: Okay.

Hoe: So it’s a little bit of a sticky situation but it is what it is you try that.

Steve: So everything that you’ve got so it started out by you cold calling teams to get the initial business and then after that it became a game of referrals. Is that accurate?

Hoe: Yeah. At first I mean still I tried to do some cold calls you know I don’t want– you don’t want to rest on– I feel like we have some momentum, I want to keep on calling people. So now we have some teams that will vouch for us which is very rare in this business. You know the buyers will go out on a limb to actually recommend you to someone because that’s still on their reputation online.

Steve: So I’m just curious how come you don’t list yourself on places like Alibaba?

Hoe: Because you know there is a lot of…

Steve: Noise or.

Hoe: Pardon me?

Steve: Is it– would you get a lot of riff raff contacting you? Is that one of the reasons or…

Hoe: Yeah, there is a lot of just general inquiries and we are just trying to you know work lean and lean right? So we can’t be replying to everyone, it’s just really difficult. We can’t hire enough people to handle that amount of inquiry.

Steve: Okay.

Hoe: And so everyone basically when you are on Alibaba, everyone is just talking about price. We’ve never been about that I mean we– I tell everyone we are not the cheapest I mean in whatever we do because we have a lot of people managing this stuff and people who speak English as a first language not just myself. I have people on my staff who are from the States you know who kind of get our business so that when I’m out here in the states meeting with teams, I can just kind of forward their e-mails back to my staff back in Hong Kong and China and they can kind of follow up on everything.

Steve: Okay.

Hoe: Why I mean Alibaba because I think it’s more effective for me to go and you know– this next week I’ll be going to three teams in four days.

Steve: Wow! Okay.

Hoe: It’s more effective, I just kind of hold up an NBA team that I have been wanting to contact for a while and they said okay lets meet up since I’m going to be in that area, I mean wanting to see the baseball team, so and then I had a couple of people call those teams up for me to kind of say why don’t you try working with them– working with us. So that’s when it helps to have a fairly unique name that’s Hoe.

Steve: That’s true.

Hoe: I mean they go all right we’re going contact Hoe, you know it’s like… [Laughter]

Steve: So you mentioned that you guys are pretty lean, so what are kind of some of your policies in terms of like the minimum order quantities, the turnaround times the payment terms and that sort of thing?

Hoe: We try to keep it around 3,000 pieces.

Steve: 3,000 pieces, okay.

Hoe: And it depends if it’s like a plastic item when you have a stainless steel mold that you are going to have to invest 8,000 to 10,000 dollars on, then the minimum is going to be 20,000 pieces because you can’t advertise it over a small amount of pieces, it’s just not going to make sense, right? So if it is some things like plastic maybe 20,000 pieces and some other so– some poly resin items like our bobble heads maybe 3,000 pieces and it really depends sometimes on the imprint like so if we are doing the like a jersey or something you have to imprint something maybe that needs 5,000 pieces. So it really depends case by case, we don’t have anything in stock everything is custom.

Steve: Made to order.

Hoe: Yeah, so…

Steve: Okay. And so if someone asks for samples I guess in the case of bobble heads you would always give them a sample anyways based on the prototype?

Hoe: Yeah, I mean we basically like if it’s a customer or I mean we have a sample charge and everything so…

Steve: Okay, and typically that sample is delivered– it’s a custom sample right?

Hoe: Yeah. Or sometimes people don’t want to pay a few hundred bucks or 500 dollars to make something, so then they get something okay here is a seven inch bobble head, here is the type of quality that we make. So it’s like when they see a professional sports team they are like “Oh, okay”. So these people buy from us, so then they kind of there is some kind of credibility right there built in.

Steve: Okay, and what are the typical payment terms? Do people pay you in full or is there an upfront payment and then you get the rest later? How is the payment terms work?

Hoe: First its 50% deposit.

Steve: Okay.

Hoe: And 50% before it ships out of China.

Steve: Okay. And how does it work, so let’s say it ships and it gets damaged is just everything insured? How does the quality control work?

Hoe: It depends, if we are doing the importing on it we have insurance for it, some of the stuff when it gets– how do we quality control it. We normally we will put together quality speck sheet and work out with the client like okay what’s good and what’s bad and then you go by established– it’s called AQL acceptable quality level standards. And so they have numbers basically out of the 10,000 you pick out 300 pieces out of that, here is your majors, minus. What are the majors and the minors, you figure that out with your client. So it’s kind of it’s all pretty standard.

Steve: Okay.

Hoe: We can get testing I mean we’ll do all the testing for the lead, some of the CPSIA, the consumer product safety…

Steve: Yes, Yes okay.

Hoe: We do that basically if it’s a toy you do the toy test and depending on the age grading, that’s how you develop stuff as well. Okay, does this have to be all age grade you know it depends on the client like if it’s an import that we’re selling to Kraft foods, well we did before a few million pieces of an item, so you work with a testing lab and so all of our stuff is tested.

Steve: Are you guys in charge of that or the end customer in charge of that?

Hoe: We normally help them do it I mean we’re using pretty well known testing labs.

Steve: Okay.

Hoe: So sometimes if the client is big enough they have their own rates with a particular testing lab, then we use that.

Steve: So let’s say you are making some sort of kid’s toy, how much does the testing and certification actually cost?

Hoe: Well that stuff can cost anywhere from 800 to 1500 to 2000 dollars.

Steve: Per item?

Hoe: Yeah.

Steve: Wow. Okay.

Hoe: Because, the toy tests are a little bit, I mean it’s more intense as you can imagine right?

Steve: Sure.

Hoe: So some of the other stuff like our backpacks is lead testing I would say you know or they test it phthalate, right? So they test the zippers and things like that. So it varies, toy testing is pretty much the most expensive as it is the most intense right?

Steve: So let me ask you this, let’s say the team wants bobble heads but they want something else that you don’t make, right? So what’s the process that you go for to find someone to make that item? So let’s say it was for like blankets or something and that’s something that you don’t do and you actually don’t know anyone off hand that makes that, how would you go about finding someone to do that?

Hoe: There are trade shows in China; I mean the Canton fair I think you’ve been over there as well.

Steve: Yep.

Hoe: So you go over there and check it out, I mean we do that just for our own market research just to see what people are putting out there. And so that’s something– you can go on Alibaba but it’s just a reference point more or less okay. When you go to the Canton fair it’s just a reference point and once we start talking with them then we have– I have people from my China office go to the factory and check them out, because a lot of times they are not the factory themselves, it’s an export company that reps those factories. Sometimes those factories don’t have proper licenses to export. And so you kind of want to deal with some of the exporters who know the ins and outs about taking goods out of China because you don’t want suddenly oh all the goods are done oh well it’s got stuck because they can’t– they didn’t know how to fill out the forms.

Steve: All right.

Hoe: So they filled it out wrong and people do that, oh they filled up the weight a few tons more than it should have been or something already less you know and that really if the China government– if the customs, if they had a bad day that day and they wanted to mess with you they can mess with you.

Steve: So, What happens if let’s say you are in the US and you couldn’t make the canton fair, how would you actually find companies and kind of vet them? What would you do?

Hoe: More difficult, I mean that’s bas– well that’s kind of what our competitors, they have advantages I mean even when we are still in Hong Kong and China, even for us when we are here on the ground trying to go visit people, bad things do happen. So you can imagine if you did it from the States, it is you are at a big disadvantage. And what you want to do, is you want to ask around in the states, you probably want to go through like say Hong Kong trade development council.

Steve: Okay.

Hoe: People that are you know so they are out of Hong Kong and maybe they have a list of vendors. You can do that. You know you can work with importers in the states.

Steve: Do they have a website saying this is the Hong Kong trade development council. Is that what you’ve just said?

Hoe: Yes.

Steve: Okay.

Hoe: Yeah. You can look that up TDC it’s called. So and then I think on small orders, what you should always probably do is, you buy from people in the States first I mean the ASIS suppliers. So once you start getting some of the orders, getting a list of business first I mean you don’t want– people a lot of times they just go on Alibaba and they look at these prices and are like “wow look at how much we can save”, well then they order a bunch more than they wouldn’t have if they did it from the States at half the price because they felt oh I have– it’s so much cheaper, I can buy so much more and then they end up with a lot of inventory that they have to close out.

People always you know they have– when they first see pricing from overseas they are like “wow it’s so much cheaper than in the States” but sometimes there is a reason for that, you know. So what you probably want to do is you know try and have less margin at first and try to buy less quantities so you don’t have that much inventory and once you get to a certain level where you go okay, well 5,000, 10,000 pieces you can sell, let’s try and start you know talking with some people you know because a lot of these companies out of the States, they will help you do direct import orders as well.

Steve: Are there any companies that you work with that you can recommend?

Hoe: No, but I think you can I mean because there are some of them are our clients right?

Steve: Okay.

Hoe: But I mean you can go online a lot and then they have you know they are pretty big, you know some of the big importers they basically they buy you know 20,000, 50,000 of t-shirts, hats, blanks and then they have the ability to imprint them right? So I mean those are I think the safer options you may not make as much but at least you can find out whether or not you have a business.

Steve: So your recommendation would be to just try and do stuff in the US first until you get sufficient quantity and then you go overseas to you know once you know for sure that’s stuff is going to sell?

Hoe: Yeah because I think that you know I mean you know I always think that people should just sell, you’ve got to stay here and just sell you know and like if– because then you’ll spend so much time you know on Skype, on the phone at three in the morning you know talking with overseas you know talking with factories and the other thing is the language barrier right? And Chinese people tend to say “Yes, Okay” you know verses in the states the questions are always like “Yes or No? Can you do this yes or no?”

Well then in China people will be like “well yes we think we can, but you know but there may be some difficulties” then for us we would say “well but you can do it right? Yes we can but there is still a lot of difficulties” you know but [laughter]. They are operating a bit it’s like I told you that there’s lot of difficulties with it but people don’t get it right? People don’t get it, people think oh but you said you did it– you can do it. But the culture is not such worried, they’ll go they’ll refuse an order right?

Steve: So these are the general inclination of an overseas vendor is to just say yes with caveats essentially. So let me ask you this, so what’s the best way to approach an Asian vendor to make sure that you are going to get what you want?

Hoe: You definitely want to find out like who they are and see if they can tell you some of the people they are working with you know. Sometimes they won’t tell you but I mean you know you can still find out. There are also certain websites that if they are shipping stuff to the States, you can find out– you can type in their company name and find out who they are selling to because all the bill of ratings, I don’t know if you know.

Steve: Yeah, it’s all public knowledge.

Hoe: Yeah, it’s all public. So it’s in those websites like pencheva [phonetic], commons mother, import genius or something like that you can find out like where this factory is, if they were the shipper right? If they were the people– if they were the company that was on the documents right? So you can find out that so and then I mean is there any sure far way. Okay we have our offices in Hong Kong and China and there is no sure far way you know there is a reason why things are made in China okay, or in these countries that are– I mean the infrastructure is not great, there are certain things that happen, when it’s all perfect we are going to be moving to…

Steve: Some other country.

Hoe: Kazakhstan.

Steve: Right [Laughter]. So when you send your people out to the factory what are you looking for?

Hoe: We are looking for decent people, we are looking for– I mean really I’ve been in this business for over 20 years and it’s kind of like you get what you pay for, you know and sometimes it’s like wow okay now I know why they made it so cheap. It’s like and it’s pulling teeth so you just kind of see how they are, what’s their standard. Because sometimes you think okay- I mean I had a conversation a few years ago it was like I had to send a piece of white paper to tell them what white was you know what’s white color? I’m like snow white you know snow in China is really kind of yellowish.

[Laughter] I mean like what is white? And it was like this kind of conversation over white obviously and I ended having to send like that piece of paper is like yellow. I mean so when you have these kind of– and that’s just one thing but it’s just kind of– you just have to you know at first I think it’s best to work with other companies, there is a reason why you know there are trading companies out there. Sometimes there are the big trading companies out of Hong Kong, I mean that’s what Reebok and a lot of these companies they work with big trading companies in Hong Kong.
And you can look up you know you can look up biggest trading companies in the world and there are a lot of people– there’s a lot of big companies out there, they have full infrastructure up there. I mean you’ll pay for it, but it’s just at the beginning stages sometimes it’s okay to do that you know. I mean if the order is not that big and you can afford wasting a few thousand dollars like 10,000 dollars, then you can go for it, but it’s like you know it’s okay when I mean sometimes and most of the times it would work out, but then sometimes there are those things that “oh my god I didn’t cross those T’s or dot those I’s” you know it comes back and bites you.

Steve: I mean I got a story there one time we were just kind of haggling over the price because they were raising these prices up on us for some of our handkerchiefs and we ended up haggling down and they conceited a little too easily and when we finally got our shipment the fabric was just paper thin, and we ended up not being able to sell these things. So, how do you kind of mitigate like how do you deal with quality like it’s hard to specify in words right? So when you are going and let’s say a team wants to order backpacks or what not, how do you know the quality that you are going to get? Like how do you make sure that the quality is perfect?

Hoe: What’s the samples made up of? The sample is normally made from fabric that is normally existing there at the factory, okay. So that verses when the material is finally there delivered and then they start cutting it that could be a big difference.

Steve: Okay.

Hoe: Because maybe they get the material of that fabric and then it’s thinner but nobody picks up on it. So for us we go in and we check on the fabric when it comes in. So we are there when they are cutting it. When we first get the samples we make sure that once the mass production fabric is there we get some samples made up right away, we want to compare– make sure that its okay you know make sure the gauge is correct, make sure the weight is correct of the material.

Steve: Okay so what you are saying is I just want to retaliate this for the people listening. Your sample is not necessarily going to be representative of the final product right? So it’s important for you to ask the vendor to give you a sample of the final raw materials before they begin, is that…

Hoe: Yeah.

Steve: Wow okay, so back to your business so right now you don’t advertise on Alibaba, you have a website but does the website actually generate a lot of business for you?

Hoe: Not really, we need to redo it I mean it’s some old technology so you know so my Iphone doesn’t really show it up pretty well. So we do need that’s one of our focuses in the coming months to kind of redo it a little bit. It just serves as just a place for people to go to kind of check out the press area simply because we put up some of the press that we’ve gotten and some of the– like I did a segment on the Dodger TV show.

Steve: That’s pretty sweet.

Hoe: It was kind of cool, we went out there and we showed them how to balance on baits and it was where Mani Ramirez was playing and we turned it around very quickly and so they wanted to show the whole production process from beginning to end and so it was kind of cool. So it kind of gives us credibility too, so I’m sitting there on the dodger’s tee network.

Steve: Yeah, that’s awesome.

Hoe: So it was kind of cool you know it was a first experience and I know now that I need to script that next time I kind of went out limp on it. I did a great job editing and so we came out pretty funny I mean, so the website doesn’t do much. It’s just kind of it’s for people to see kind of some of the other work that we do.

Steve: Okay, and so it’s primarily just direct sales you going around visiting these people face to face and then negotiating deals with sports teams.

Hoe: That’s the bulk part of our business I mean what we try to do also is we do two trade shows a year in Hong Kong so kind of works. My belief is that we want to try to keep expanding what we do and stretching ourselves not just doing sports teams or corporate companies, we try to do our own retail products, We’re doing– we have our own sculptures and artists, so we try to use those assets and try to create product lines that– so that when we do these shows, when we exhibit there we show a product that is retail ready. So then we were fortunate enough to kind of create couple of different lines, one of which is I’ve got to get this line which is like 12 inch garden gnomes essentially but a company retailer out of Australia picked it up and we’ve been doing it the past three years and quite a decent quantity I mean they are like out of 30-40 dollar retail so it’s…

Steve: Nice.

Hoe: It’s pretty cool and even though those orders aren’t that big but it’s nice to kind of come up with an idea and then someone buys it. So we have duty shows to try to be proactive about it, do they pay for themselves these shows? Not always, but for me it’s kind of like the proper way of doing the business right? If you are in the business you want to kind of you know be creative, thinker.

Steve: So you make the product ahead of time and then you display it at the show to see if anyone likes it, is that…?

Hoe: It’s pretty old school right?

Steve: Yeah, it is.

Hoe: It’s just sometimes okay we try to do something that we like you know and then it is nice when they order it because it’s just kind of like they order it and we basically…

Steve: They’ve validated your idea essentially.

Hoe: We created and made the boxes so it’s kind of we just put their name distributed by that particular company. So we pick up orders from Australia, the UK, Germany, Italy. So it’s kind of nice I don’t mean in the states it’s still has the largest demographic, you know similar demographic and everything so those are the biggest orders still.

Steve: So what are these two trade shows that you go to?

Hoe: We exhibit in October which is the Canton fair which is in Hong Kong it’s in Wan Chai over the convention centre and then the TDC show which is in April which is a gifts and premium show.

Steve: Okay, I’ll definitely link those up in the show notes, cool. And are these shows open to the public?

Hoe: Not, I mean you have to have a business I guess you can’t just walk in. Because nobody has stock, so it’s not like a show in the States where you can go in there and buy then you can buy individual things people have it you know [Inaudible] [00:40:08].

Steve: Okay and these are much smaller in scale than the Canton fair, right?

Hoe: A little bit smaller.

Steve: Okay.

Hoe: But I think it’s more creativity. Canton fair– there’s a lot of I mean it gets overwhelming the first time you go there it is literally you know…

Steve: I didn’t even get through a single building actually.

Hoe: The buildings are not like so popular; I mean it’s like six floors on each one.

Steve: Yeah.

Hoe: It’s just crazy and that’s when you realize okay the prices can go everywhere you know depending on where they are making it and they are really like you go experience something– you thought everything was going to be good and then they come back and it’s like wow you like it.

Steve: Yeah.

Hoe: I mean you have to be– when you are doing importing you have to kind of be willing to spend the money for FedEx for samples even though it seems like okay I got to pay 100 dollars for this package for just a couple of slotches [phonetic] of a material, you should do it, right. You realize now like I should’ve done that, I should have gotten many orders, I should have got you know….

Steve: Oh yeah, we’ve learned our lesson, we actually even use FedEx for some of our shipments like if we need something immediately we just send like a 100 pound package over by air. It’s more expensive but we’ll get it faster.

Hoe: A lot of times you just– you want to make your clients happy right?

Steve: Yeah. Absolutely, so I wanted to kind of give you a hypothetical here. So let’s say I want to make a plastic widget and I’m coming to you, what do you need from like what materials do I need to provide to you in order to make this process smooth? Like if I’m your customer.

Hoe: Oh we’ll just find out where we try to sell it to. So if it’s a kid’s item, it’s a toy item then we figure out like you know how we can get to measure in trongstan [phonetic] here in Hong Kong and China or we can do it a lot of times if you just have a rough idea a lot more say try to get the handmade sample or try to get more information done locally in the States because then its more efficient.

Steve: So get the engineering drawings done like where would I go to get that done?

Hoe: There are companies in the States that do this.

Steve: Okay.

Hoe: I mean it costs more money but a lot of the times you want to be close by to those engineers so you can tell them no don’t do it like this, do it like this, I want it like this. So that just makes the process a lot faster. And you can do it in China, I’ve seen it done, but it’s much more frustrating. I mean you give some engineering drawings to someone overseas, then once they draw it all up and they give it back to you, you’re “Oh no I didn’t want it like that” that’s just took three weeks of your life then you have to do it again another three weeks.

Steve: But you guys offer that service right?

Hoe: We do, we do.

Steve: Okay, and that’s just like an upright cost like if I was coming to you and I wanted a Steve Chou bobble head?

Hoe: I mean yeah, for like a bobble head yeah we would just– that wouldn’t be as much I mean when you are talking about plastic then you’re talking about engineering drawings for your bobble head and you would just go ahead and give us the photos, what’s you pose, what do you want to do, what do you want to put on base? Then we’ll draw it up real quick just a rough sketch of how it would look, how you like it cool, okay then we sculpt from the actual photos all your expression, get it all done, it all takes about three weeks to a month, get you the mud sculpt…

Steve: Has money changed hands at this point during the design phase though?

Hoe: Yeah. Basically you’d say I want a thousand pieces of these to send to my– you know 1,000 best friends.

Steve: [laughter] Okay.

Hoe: I think that’s when my cousin finds out Hoe has got 1,000 best friends.

Steve: No, they’d go like hotcakes man, trust me.

Hoe: Yeah, then so we give you a quote and say it’s going to be six dollars and that’s delivered to you and then the sculpt fee is 300 dollars or something like that then you pay for that 300 dollars first and then we start the process. So money does exchange hands and since we are a US company you just send a cheque to My US Company, well we do it like that.

Steve: I see. Okay and in terms of and this is just for the benefit of the listeners here I guess–when you’re doing deals with other companies is it traditional to just wire them the money? Or do some of these factories take credit card or PayPal or what not?

Hoe: Most factories will need a wire.

Steve: A wire transfer, okay.

Hoe: Wire transfer, I mean that’s why and then which is a scary concept when you’re sending money to China.

Steve: Yes.

Hoe: So, which I’ve learned through so we’ve had situations where we wired money to someone and then they said “oh we didn’t get it” and then they end up someone hacked into their e-mail and changed– hacked into their email so that person that hacked into their email just made a new email– there was an M in the email address. He m became an R and then N and so when you looked at it closely you go like “oh! its different” but you could not tell just by glancing at it. So we ended up like– and the problem was that email had our whole conversation on it, previous ones, so it looked like it was real.

Steve: So you are saying someone was pretending to be that vendor and then they gave you their bank account and…

Hoe: Oh you know we need– can you send it to this bank account through a different you know for whatever reason and then it looks the same because you still have the whole history and the conversation is still there right? And M if you type in an R and then N, it looks like an M. Okay even when we went to the police in Hong Kong to report it because it’s clear case of fraud they said they didn’t know what was different. I said “look at it the r and n” so those things definitely do happen and it’s like you know…

Steve: And you can’t get your money back right, once it’s wired its gone right?

Hoe: I mean even so, the Hong Kong police was like “well we’ll report this but our counterparts in China they don’t really answer” [laughter]. And so if it was sent to Hong Kong you could really follow up the police officer will say you could follow up, you just call the bank oh hey look this is a clear case of fraud, you can get your money back. So there is some benefits still of Hong Kong and being out here and that’s why I still have importers that work with us because they trust us even if they know the factory they’d give it to us and say, okay we can afford this and then we’ll tell them oaky this is okay yes, or we need more money because it is far away, we have to fly there, its time. So they’d rather send money to us– Hong Kong, so because there is at least someone that they can trust, right.

Steve: So what’s the recourse in case someone gets shipped a bunch of stuff and they are not happy with it from Asia. Let’s say you shipped a bunch of bobble heads, they got to the US and then they didn’t like it. What– can you describe what happens after that, what’s the process?

Hoe: The process is if I sold– a company in the US bought some say bobble heads from someone in China, or someone in Hong Kong– they shipped over, they don’t like it, it really depends on how the relationship is with that factory.

Steve: Okay.

Hoe: Because there is really hardly any recourse on anything I mean you know you can sue people, it’s really difficult to sue people overseas. So that’s why for us when we deal with a team, the team could say we don’t like all this– all this stuff came in and it was– didn’t look good. Then we would have to redo it or do whatever the team tells us that they need to get done.

Steve: Okay.

Hoe: Whether it will be a credit I mean– and in the end it’s whether or not is that business worth it for you to do that right? If it’s not then you just say okay but the recourse of getting stuff unless you are with a big factory and you are ordering millions of pieces, then you have some recourse but when you are a small company it’s a free for all, right.

Steve: Okay, yeah so it’s all based on relationship is basically what you are saying.

Hoe: If the factory thinks that they are going to get a lot more business from you, then maybe you have a lot more leverage.

Steve: Okay, cool Hoe. So in terms of your company, so you mainly only deal with kind of larger businesses so I had this feeling that after people listen to this podcast and people might be contacting you if they want something plastic made, I don’t know if that’s going to happen, but what are some ways that people can actually contact you if they have any questions about importing or trade shows or what not or if they want to source anything, is there any way to contact you?

Hoe: Yeah I mean you can go to our website, it’s just kloanz.com and our e-mail address is info@kloanz.com. Speaking of e-mail I mean just ask some questions, I’m always you know depending on time– people call us all the time when they have a product idea. So I kind of give them I mean sometimes it’s through us, sometimes it’s not or if it’s something that I’m interested in then I like to get involved and I’ll tell them and then– or I just kind of show which way to go at least.

Steve: Okay, and what is your specialty?

Hoe: I started with the plastic injection, the poly resin, [Inaudible] [00:49:50] figurines, we do a lot of plush items like stuffed toys.

Steve: Okay, I didn’t know that.

Hoe: And we do I mean because a lot of the teams they do inflatables, so we do a lot of stuff for restaurants, fast food restaurants in California so they…

Steve: Inflatables they have, huh interesting, nothing.

Hoe: Yeah, I mean all kinds of inflatables, I mean when star wars came out with their second trilogy, we did a lot of these glow in the dark swords for our local hot dog chain.

Steve: Okay.

Hoe: So pretty much anything that is made in China at least we have some experience in.

Steve: Okay. But mainly you specialize in plastics essentially right?

Hoe: Yeah. Plastics, poly resin.

Steve: Cool, anyway Hoe I want to be respectful of your time so thanks a lot for coming on the show, really appreciate it. I learned a lot and a lot of the stuff you said was kind of eye opening for me too even though I’ve been importing from China for like the last seven years. So, thanks a lot for coming on the show.

Hoe: Thanks for having me.

Steve: All right man, take care.

Hoe: All right.

Steve: I hope you enjoyed that episode. Hoe is actually one of those guys that was instrumental in showing me the ropes the first time I went to the Canton fair in China. And what I like about him is that he’s a hustler, he is constantly on the road drumming up new business and he runs his Chinese factory with integrity, with an emphasis on quality and customer service.
Now for more information about this episode go to mywifequitherjob.com/episode34. And once again I just like to thank 99designs for sponsoring this episode, I know a lot of you listening are waiting on the sidelines and trying to get the courage to start your own online business.

I also know a lot of you out there run your own businesses already and know that your website design could be better. Now designing a website is not intimidating any more thanks to 99designs where you can get over 300,000 designers to compete for your design. All you’ve got to do is list your design on their site and within 48 hours you’ll get dozens of designs submissions to choose from, and from there you can ask for slight tweaks and changes until you are 100% satisfied with the results, and the best part is that the price is very reasonable and there is 100% satisfaction guarantee. So if you need a logo, a website, t-shirt, business card or anything designed whatsoever go to 99designs.com/mywifequit and tell them that Steve from mywifequitherjob.com sent you.

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

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033: How Josh Dorkin Built A Real Estate Investing Social Network With Over 200,000 Members

Josh Dorkin

I’m very pleased to have my friend Josh Dorkin on the show today. Now Josh runs BiggerPockets.com which is one of the most popular real estate investing sites on the Internet.

The numbers for his site are really crazy. He’s got over 200,000 members with many of them paying a monthly fee. His forum boasts over 850,000 posts. He has 35+ writers on staff, runs a top 25 business podcast on iTunes and a successful publishing company as well.

Needless to say, Josh is easily one of the most successful Internet entrepreneurs that I know and I’m really happy to have him on today to share the secrets to his success. Enjoy the show!

What You’ll Learn

  • How Josh created one of the most popular real estate sites on the net
  • How Josh started a successful forum from scratch
  • How Josh got early visitors onto his site
  • The strategy Josh used to build up traffic by engaging in other forums
  • Why Josh modeled his site after Yahoo early on.
  • How Josh started a blog that catapulted the growth of his site
  • Why Josh believes in constantly differentiating his revenue stream
  • How Josh coped with being slapped by Google
  • How BiggerPockets.com makes money
  • Josh’s philosophy on real estate investment

Sponsors

Other Resources And Books

Transcript

You are listening to the My Wife Quit Her Job podcast, where I bring in successful boot strapped business owners to teach us what strategies are working and what strategies are not. Now this isn’t one of those podcasts where we bring on 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. If you enjoy this podcast please leave me a review on iTunes and enter my podcast contest, where I’m giving away free one on one-business consultations every single month.

For more information go to www.mywifequitherjob.com/contest. And if you are interested in starting your own online business, be sure to sign up for my free six day mini-course where I show you how my wife and I managed to make over a hundred thousand in profit in our first year of business. Go to www.mywifequitherjob.com for more information.

Now before I begin, I just want to give a quick shout out to this episode’s sponsor 99designs. Originally, I wasn’t going to take any sponsors at all, but 99designs actually caught my eye because, well I suck at design. In fact, when I first started my online store back in 2007, the design for my website was terrible, and I had no idea who to turn to for help.

So what is 99designs? 99designs is a site where you can provide a description of anything that you want designed whether it be a logo, a web page a t-shirt, pretty much anything, and have dozens of designers compete to deliver you the best design. And by best, I mean that you actually get to choose your favorite among the bunch. When I first started making websites, I was completely clueless and I had no idea how to find a great designer, but thanks to 99designs, you can instantly have access to over 315,000 graphic designers who are competing to help you.

So, if you are design challenged like I am, I highly recommend that you go over to 99designs.com/mywifequit, and if you use that link and tell them that Steve from mywifequitherjob.com referred you, you will receive a special power pack of additional services for free. In fact, by signing up through 99designs.com/mywifequit, your design listing will be bolded, highlighted, given a prominent background in feature before all regular listings, so your request stands out among all the designers. So if you need a logo, a website, t-shirt, business card, or anything designed at all, go to www.99designs.com/mywifequit, and tell them that Steve from mywifequitherjob.com sent you. Now on to the show.

Welcome to the My Wife Quit Her Job podcast. We will teach you how to create a business that suites 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 a very special guest on the show, Josh Dorkin. Now like many of my other guests, Josh is actually also someone who I met at the financial blogging conference the first year that I went, and to be honest, had I known who I was chatting with at the time, I might have been a little bit more sheepish, but here is how we met. Now I randomly strolled into a room and just sat down to chat, and here is Josh kind of sitting back in his chair and bursting on one of my Asian buddies Viet Do.

Josh: [Chuckles]

Steve: Incidentally, Viet is another person I’m going to have on the show later on, but anyway, when I saw Josh, was ragging on Viet big time I decided to sit down and enjoin Josh in the burstage, and after that we actually started talking a bit. And it was only later that I realized that he was the brains behind BiggerPockets.com, perhaps the biggest real estate blog out there period. Now, it’s actually much more than a blog. I would call it a gigantic resource platform for real estate. Bigger pockets boasts over 180,000 members, 550,000 monthly unique visitors, a forum with over 850,000 posts, tens of thousands of articles, the site is just ridiculous. Bigger Pockets is easily the most respected online real estate information platform out there and I’m just really happy to have Josh with me on the show today. And so Josh welcome to the show, really happy to have you man.

Josh: Thanks man, thanks man yeah I’m glad you brought out all the burstage in the introduction that’s awesome.

Steve: Well see I liked you right away because you are bursting on him ironically. He was not doing too good of a job at defending himself either so.

Josh: Yeah, that’s Viet man. That’s how he rolls. For those of you guys who will have the pleasure of listening to him down the line, he is an amazing guy and he is awesome. He is one of my favorite people on the Thinkon group so to speak and we were just having fun, but yeah, I’m glad you walked in so I could burst on you or something.

Steve: I don’t think we are at that level yet but maybe after this interview, perhaps.

Josh: Nice, yeah.

Steve: Give us a quick background story. Tell us about how Bigger Pockets got started. I kind of want to go to the very beginning when you were like a total nobody.

Josh: Okay, I’m still a total nobody, but yeah listen– long story short I was doing all sorts of random stuff for employment and I had built websites for fun. Previously I had a real estate license previously and sold real estate as an agent– didn’t love that very much, but what happened, I was teaching high school at the time in southern California and one day my brother calls me and says hey Josh I just bought some property. I said, oh yeah tell me about it.

And he is like I bought this multi families and it’s doing great and I’m making all this money and I was like, oh okay, money that sounds good, let’s do it. What do I need to do, what are you asking of me? He said well why don’t you come down and pick up some property yourself. I said, yeah, okay cool. So I hoped on a plane, flew out and like yeah, I could figure this out. So I looked at dozens of properties and found one that I liked and bought it. I knew nothing, I literally…

Steve: Just like that, it’s like buying candy from like the supermarket.

Josh: I’m not that loaded. I was looking in an area that was not that expensive. I bought a four family property for, I think it was a hundred, it’s either 90 or 105,000, and I had a fourplex. And I was like all right, cool I got a fourplex, now what? And so I didn’t know what I was doing. I’m a person who thinks of himself as fairly smart and I thought I had it figured out. So I quickly realized that there is more to real estate investing than kind of the basics, you know what I mean. You can analyze numbers; you can crunch numbers and pick up a property but then what?

So kind of cutting to the chase I had hired some management to take care of my property and that was a big pain in the neck and that led to problems and I ended up firing the property manager finding another one, firing, finding another, firing, finding another, get ripped off by them on ward and onward. Ultimately, I found myself in a position where I realized I needed to know a lot more, and I needed somewhere to go to.

So, I had a problem which was I getting screwed left and right, I was making bad decisions left and right, and the solution wasn’t really out there for me at least. So the landscape back then was, to learn about real estate investing you can go to the book store and buy books, you could go online and find some material, or you can go on the television late night TV and buy some get rich quick course. The New Yorker in me doesn’t look highly upon the get rich quick stuff, you know the both domino as we say, hopefully I can say both domino on your show even twice.

Steve: I’m going to edit this afterwards, so you know I’m only going to filter out the good things that you say about me.

Josh: Nice. Yeah so, you know there is the bad guys, not necessarily all bad but they are the guys whose job it is to just sell you until you are broke. And then there is really nothing else at this time. And all the websites that existed were all kind of filters for those same the late night TV guys. So there was really no independent body where you can go and find anything about investing. I said okay, that’s crazy, I’m going to create a site where I can get answers to my own questions. And so I did and I put together a forum and a bunch of resources I found useful and had a website, and there was nobody on it. And that was the beginning. The next steps I had to figure out how to get people.

Steve: So the forum wasn’t the first thing that you added right.

Josh: It was– I created– it was pretty close in time, I mean it’s almost ten years now but I created a bunch of directories of resources that I thought were helpful and then I launched the forum. And the forum at that point was me. It was me and myself and you know again I had to figure out how do build a community? Where do I get answers to these questions that I have?

Steve: Yeah, so I was going to ask you about this later on but since we are talking about forums right now. How do you start a forum right, a lot of people try it and as soon as it’s like a ghost town, it’s not going to attract anyone and they won’t come back, right, how do you seed a forum without traffic?

Josh: If you ask me, hey would you start a forum with me, let’s go create a site on this, I would say no way, not going to happen. I have no interest in it. It takes a long time, it’s a lot of work, and you know, like you said if it’s a ghost town you are in trouble. So the key was, you know first of this was a hobby side at first. This was not a business for a long time.

Steve: Okay.

Josh: I was making money from it because I put on some AdSense on but by no means, it was like you know getting a lot of traffic. So what I did to get people on was like word of mouth. I would talk to other investors that I would run across whether it was just locally or I would go on answer sites. So instead of– I thought it’s kind of shady to go on your competitor site and to talk about your product even ten years ago before people were really concerned about that, I just didn’t want to do it. So I would go on financial sites primarily and I participate and I would always create a signature, and the signature was Bigger Pockets real estate investing community.

And so when I would jump on and I would be able to answer some questions about real estate investing at that time. So I would answer the questions and I would have my signature and low and below people would drizzle in through the link in the signature and come to the site. So that was where the first you know few hundred people that we got on the site came from. It was just me you know I wasn’t pitching it, I was not selling it, I was not promoting it, I was just participating, connecting, engaging on other communities and having that signature at the bottom got people to notice. They saw that I provided value and they wanted to come check it out.

Steve: Interesting. So the forum, were you posting a lot yourself in the beginning?

Josh: Our forum?

Steve: Yeah.

Josh: Well, yeah because I had questions. So I was posting questions.

Steve: Okay.

Josh: Yeah, I wanted answers to my questions. That was why I started the site. I was not creating a place to help other people; this was a place to help me.

Steve: [Laughter] Okay.

Josh: This was 1000% selfish. My goal was help me become better at what I’m doing. And inevitably what happened was over time, I realized that some of the questions that were coming, I could easily answer so I was answering those. And little by little, I was like wait a second, there is more here. It can’t just be me and selfish me, there is other people who are getting value. So let’s keep going at this, let’s see what we can do here. And so again it was a hobby side, it was making me money, I was teaching high school, I was making some side cash, and mostly kind of plowing it back in, ultimately hiring a developer at some point and kind of handing of the dirty work so to speak…

Steve: Okay.

Josh: To somebody else, I mean, this is again this is almost ten years ago, so my space was hot right. I see my space, I’m like, wow social network. We have to do that. So it went from forum to social network, the forum always kind of stated the hub and the blogs were kind of being born right around then so I created a blog. I didn’t know what I was doing. I would like check out this cool article and then I would cite a paragraph from The New York Times or you know I think this is garbage and I would cite an article from Steve Chou, or whatever it was, you know, and yeah you caught that good.

Steve: [Laughter] You got me mixed up with Viet actually. We look alike.

Josh: No, I’m not going there man, don’t try it. So little by little, we just added pieces to the puzzle. We added the profiles and the blog and then we added a property directory and some other stuff and you know, it just got bigger and bigger and you know I hired more folks and little by little, we got to the point where we are today and you know I’m happy to talk about all the interesting parts.

To me I really see the site to day as; we’ve got community as one component. That’s kind of like the forums, the interaction and the blogs, and really the vibe that kind of flows from us the content side where we’ve got again the forums, there is a ton of content I mean 850, 000 posts those are enough to read for a lifetime. The Bigger Pockets blog which went from me just as the blogger, now we have around 35 people who write for us every week. We have the podcast, Bigger Pockets podcast which is a Brad and Tuner my co-host and I weekly interviewing upstart and sophisticated investors in real estate and then we’ve got some tools, we’ve got kind of like a tools division so to speak where we are launching some other cool products down the line.

And then we have a publishing company we launched a publishing company and we have two books right now, we’ve got a third that’s going to come out next month or so. One of those books has been a top ten real estate book on amazon since pretty much launch. We are like the only non-traditional publishing house that’s been on the top ten.

Steve: That’s awesome man. That’s incredible. So you know outside of your forums, your signature, and your email, like how did you get traffic to your site early on? Like I’m more interested in like the very beginning right, because you are well established now, but I kind of want to hear your struggles early on and how it just kind of built up and what the logical progression was and what you did gradually over time to build it to the site that it is today.

Josh: Sure, and don’t be fooled anybody listening, there are struggles every single day. Whether it was day one to today there is always going to be a struggle at least in my mind at least I see it that way right. Because I don’t ever want to feel comfortable, I don’t ever want to feel like we are where we are inevitably going to be, because then I’m comfortable and I’m not pushing myself to improve and build up. And you know ultimately my goal is to build this into something amazing you know and continue. So to your question on how we built it up, so really it started with the forum posting.

The directory started to get traffic. This was before we were talking about SEO. I mean this was pre SEO, SEO. It existed but nobody– there wasn’t– I don’t think there was a language to discuss it, there was no magcuts, there was no communiqués about how do you rank. It was just, you know there were a couple of websites forums, webmaster forums, I remember a site called like webmaster world, I used to frequent that, a digital point forums some of the others. Also I had my signature on those when I participated and again I asked questions, I answered questions, engaged, some people actually seemed to be interested in real estate so they would come over, so we got some traffic from that.

The directories that we built, they weren’t really any like it. So when people would come across them they would say this is great and they would link to them. And we didn’t have the Facebook or twitter shares or all that stuff then, it was just linkage. And so I was doing link building. I was contacting people and saying hey I just built this cool site and this directory, you know check it out, let me know what you think. And if you like, it you know I would love if you would point a link to us. It was just hard work and outrange.

Steve: Okay. And what is it? This is a directory of real estate agents.

Josh: I had a directory of banks that offer these free listings on their site. I offered you know a directory of tools that were calculators or property management. Whatever it was, we had just kind of all these vertical directories that made sense within the niche. Stuff that I would be interested in, hey, I remember I came across that cool site you know instead of just trying to keep track of it, I would just put it on this little hand correlated directory.

Steve: Okay. So you are like a Yahoo kind of, for real estate?

Josh: Well that was exactly what I modeled it off of. I remember Yahoo being the greatest site since sliced bread, it was the biggest and the best in the very beginning, and I was like I got a model of this somehow. So doing the directory thing made sense for me, and it worked. It started to bring us traffic little by little. Some of those people would come to the forums and they participate, and then inevitably because we got all those links, the search algorithms, we started to kind of do better and better. There was some paid stuff I think early on Yahoo directory, I don’t remember if we were paying in the very beginning, but we made it on to their, and I think it was like the, what was it called? The open directory to remember.

Steve: Yeah, yeah DMOZ, yeah.

Josh: DMOZ. You know, some of those– I didn’t really pay for anything else, so I just wanted to focus on the ones I thought were the most credible. But yeah, little by little it was just that plus a lot of time and organic growth.

Steve: Okay. And then when did the blog kind of come into play?

Josh: The blog is probably eight years old as well, eight and a half. The blog has been around. And the blogs started to drive a fair amount of traffic because the blogs you know the word press was fabulous as SEO. And so the content that I was writing was picking up juice so to speak, and there was a core group of real estate bloggers back then. They weren’t thousands and thousands; they were, you know, we all knew each other. They were 20 or 30 maybe. Kind of like the Thinkon kind group, the original one.

It was really small. We all knew each other, we all linked to each other, we all commented on each other’s sites, and we all pointed to each other, and all we all helped each other out. And little by little, we all kind of grew together which was really nice to have that community of folks to kind of help out. And now there a lot, I mean those people high ups at zeros and truly, I mean those guys are running the show at a lot of these big companies.

Steve: Wow, that crazy. I’m just trying to get an idea of how your site actually makes money. I know you have a crap load of traffic right?

Josh: Yeah.

Steve: But how do you actually take that into paying customers?

Josh: Sure, so we are not– fundamentally we are not an E-commerce site. Fundamentally, we are not a community. We are kind of a blend of a lot of different models which were somewhat intentional.

Steve: Okay.

Josh: So you know my biggest is that one funnel is going to shut off. And if that one funnel shuts off, I’m screwed right. What’s the biggest funnel, what’s the funnel that we all think about? It’s Google right, I mean we all say Google is our god, Google feeds us, Google takes care of our families. If you are in the internet world, you are, you know you really owe a lot to Google, and my thought was, well okay, Google is this primary. What if Google comes after me and Google doesn’t like what I do, because they did that.

Because I got slapped by like the first Google slap back in the day, years and years ago, the pre pad or the pre whatever the heck they call it these days. I got slapped because I was using a company called text link ads, and I was buying text links. And I was putting them on the site. And Google created this policy saying, you couldn’t have these paid links. And I was like well sure. I’m making few hundred bucks off text links why would I– forget it. So I lose a little bit of Google, who cares? And turns out that was a really bad decision. I went from like PR6, PR7 on some pages got down to like PR2 and 3.

Steve: Wow, okay.

Josh: The site lost a ton of steam, a ton of traffic. I disavowed all the text link ads– not that the service was bad, I loved the service, but because I realized that Google controlled me. And so I did that and lost all that on that revenue, but it was fine we made up for it eventually, but in terms of the different streams I wanted to have just different kind of revenues streams and I thought it would be interesting because I saw these product lines in the real estate investing space and said why wouldn’t anyone want to have it in one place. Why would they not want to have a great blog that they I could go to, a good community, they could go to, tools, resources, directories all that in one, especially if we can create a brand that they trust.

And so my goal from the beginning when I decided this isn’t a hobby site anymore, this is going to be a business credibility. I want to go 1000% for credibility, we are not going to allow shady stuff, we are not going to allow, you know, we created really strict rules and we were really hardcore and a lot of people got pissed off, but it allowed us to kind of establish that brand amongst people who weren’t just the marketers trying to take advantage of people but it was individuals who were trying to help one another and they loved it.

Steve: So by rules you mean you prevented like some the marketers from just openly advertising on your site.

Josh: Exactly, yeah so that or you know going on people’s profile and sending you know, we had it, like the first version of our profiles had a wall like on Facebook. Not a Facebook wall like a my space wall, so I could go on your profile Steve and you know I could leave comments below and those glittery stars and all that stuff we used to have. We didn’t have all that fancy stuff, but you know, so what the marketers were doing, was they were going on and they would start spamming people on their profiles. And we are like okay, we got to stop that every time that they would do something we would realize, oh no we got to put a stop to this because the average Joe who we were in business for, was getting pissed off.

And the marketers, you know I don’t have a problem with marketers as long as they follow our rules. If you interact, if you share, if you engage and you are not spamming, cool. Come hang out, make money. We have a lot of marketers to make a lot of money of our business, off of our platform, but they do it within our rules and within our guidelines. The folks who kind of violate that we have an issue with. But to your question, your question was on how we make money. The answer is we have– AdSense was really the very first way to make money. I remember that first like you know 12 cents cheque that I got, and so AdSense, other ad networks. I mean we tried them all with chedekas [phonetic] and you know we have kind of toyed through, pretty much all the major ones.

Steve: Which ones are working for you the best?

Josh: AdSense, nobody comes close.

Steve: Okay.

Josh: So we have got the networks, I do direct ad sales as well, so you know, folks would come and buy inventory from us directly. We have a newsletter that goes out twice a week to 70,000 or so and that’s, you know we are selling that inventory on directly on the podcast and of course direct on the site as well, so we’ve got that. We have paid memberships which we added a few years ago, so we have two tiers of memberships and the idea behind those was, you know first of all the idea with Bigger Pockets was let’s democratize information. Okay, we don’t want all the information to be controlled by one, you know a dozen or two dozen of the gurus, we wanted it to be open and available for anybody.

So once we created paid accounts, we couldn’t put content behind a fire wall, a pay wall because that would violate our own state out of what we wanted to do. So, now if we did that, we probably would be making a heck lot of more money than we are, but I thought it was important that we keep it open. So the paid memberships allowed advertising– right now the only way to advertise is actually through a paid membership. So a marketer would need to get a paid account to promote. You get access to tools like our calculator and things like that. And then kind of like a LinkedIn mix, where you know on LinkedIn if you get a paid account you can search for people better, you can narrow them down by zip code and ranges and…

Steve: I see.

Josh: So you’ve got abilities like that. There is a whole sweet of things that you get. We’ve got a discount program, a perks program so we have partners like Transunion that will provide discounts to our members on some of their product lines for being a paid member. You know, we just kind of use the scale that we’ve developed to negotiate deals for our users, for those folks who are going to pay an upgrade.

Steve: So even a free member can have access to the entire library of information on the forum right.

Josh: 100%.

Steve: Wow, that’s crazy. So what percentage of people actually pay for the membership then?

Josh: I refuse to answer that.

Steve: You refuse to, okay, all right. I was just curious thought I could slip that by you but…

Josh: [Inaudible 00:27:36], I will not be answering, but you know we’ve got thousands of paid members and there is a ton of value that comes with it. There really is and all our paid members love it, I mean these guys, we actually did a survey. Here is something crazy, we did a survey about a month ago. We were curious; we said okay, we’ve got these guys on Bigger Pockets. These are all people who want to learn how to be real estate investors or who are active, you know we’ve got guys who’ve never done anything to people with thousands of properties and thousands of deals. What’s the difference between our paid members– you know two paid levels and our free way for users. So, we did a survey and I’m going to chop the numbers but I’ll estimate. I believe our pro users profit last year in 2013 from real estate activity were somewhere on the scale of 90,000 dollars for our pro users.

Steve: Per person?

Josh: Per person.

Steve: Really?

Josh: The profit– now again this is only based upon those who answered, we had hundreds of people take the survey. The profit for non-pros who answered was right around 20,000.

Steve: So these are just people who are using your site as their marketing channel. And there you are telling me that they’ve made 90,000?

Josh: Well so this is what’s happened. It is not through Bigger Pockets, it’s just they’ve made 90,000. They make on average that’s kind of, what they have made right. So here is kind of what happened? Bigger Pockets started as this place where people get together and share information. What happened over time was, the people who engaged and connected and gave back to other people who helped out started to build reputations for themselves. They became– people got to know them as credible folks right, these guys give up their time, their energy, they share really good information, they are helpful when somebody has a question. Hey help mean analyze this deal, or I’m about to do this, what should I do, everybody starts to see it.

So the community is starting to figure out who are the leaders in the community. Well then what happened was this, little by little those people were being– other people were attracted to them. And they were like, you know what, you are a credible guy, you know everything about flipping houses, I’ve got a deal I need some help with, you want to go into this with me? I’d love to partner with you. So now, these guys are in bed and they partnering and working together. Or hey I need some money, or hey listen I’ve got a couple of hundred thousand dollars, I know you are working on a bunch of projects, can I lend you some money and finance your next project.

So organically, these people are getting together and doing business together. And that’s the greatest thing today that most people don’t know about Bigger Pockets is, if you are active and you are interacting and you are engaging in forums in the community and helping other people out, it’s going to increase the likelihood that you are going to do business. It’s amazing, it’s amazing. And it just happened because people developed the sense of trust and other people are like “oh, I know that guy, I want to work with that guy.” And they connect with the social network and they start chatting online, and they start chatting in real life, and they do real business together. And hundreds of millions of dollars is done through Bigger Pockets now.

Steve: That’s awesome. So have you found yourself doing any deals? Do you do real estate anymore?

Josh: I do not.

Steve: [Chuckles] Okay.

Josh: I do not by virtue that, you know and is it an excuse? Yes, is it a legitimate excuse? Absolutely, when the market tanked, I unloaded the last of my property and at that point, I was so busy with the business. I was working a hundred hours a week. I couldn’t do anything else. I just– It was impossible. So, I’m sitting around waiting, I’m watching and I’m like, oh man I wish I can get some time but it’s hard. Now I’ve got a business, I got a lot employees, I’ve got a staff, this is my primary focus. We definitely encourage people to get out there, you know if they are working a job, to get out there and do real estate, but by virtue of my time constraints, I can’t do it personally.

I’m certainly looking forward to the day that I could go start picking up some properties, and the beauty is this. Listen, I’m the host of our podcast right? I get to interview active successful real estate investors every single week and every single time I do it, I learn something new, and I get excited about a new strategies. So for me, I’m a student just like everybody else. Now I’ve been learning by about ten years of being a master of all this stuff, but you know I’m just as much a student as anyone else.

Steve: So you mentioned that, to switch gears a little bit, you mentioned that you’ve been trying to Google proof your site right.

Josh: Yeah.

Steve: So this is what is going on in my mind right now. You got hit like panda or something a couple of years ago and then there is this huge real estate crush right?

Josh: Yeah.

Steve: So I would have expected that your business would have tanked during that crash especially with the combination of the two, so how did you kind of overcome that?

Josh: So, I think the beauty of the model is this, and I think this applies in some business, this applies in the stock market, and it applies in real estate. You can make money in any market in the stock market. You just have to know what you are doing. If you are a short seller in the stock market, you can make money when the market is getting killed. If you are long, you can make money when the market is going up. But you can also lose as a short seller when the market is going down and you can lose bad as a long investor when the market is going up.

So as a stocker, you don’t have control of your own destiny. You are kind of at the will of the market and you are at the will of the CEO who is you know doing lines of coke you know one day and gets busted and suddenly the stock tanks right? With real estate, the nice thing about it is, you can make money in any market, in any location, regardless of what’s happening. You just have to know what you are doing. So you know, if I buy property say I buy a house, you are in the Bay area so say I buy a house in the Bay area, and I buy it such that it’s cash flow positive, which is kind of tough in the Bay area.

Steve: It’s impossible.

Josh: Yeah. You have got to invest at a distance. But let’s go hypothetical and say I can buy a property in the Bay area and cash be cash flow positive, right? Well if the market tanks am I still making my rent.

Steve: Possibly.

Josh: If I have got a tenant in there am I still making my rent?

Steve: Yeah if you got your tenant in there.

Josh: Yeah, so if lose your tenant, you know the key with real estate is you are the master of your destiny right, if you pay too much when you get in, yeah you can find yourself in trouble. The key is to find properties– at least let’s take it back. The key in my mind is to only buy properties that you can get a significant discount from. I would never buy an income property in the Bay area unless I could get a ridiculous discount. Not because I think the market is going to tank, but just for insurance.

I’m not an appreciation guy. There are appreciation folks; they are called gamblers in my book. Now there is people who bet on smart appreciation, they are building or buying in the way of development, I think that’s intelligent. But you know there is still a risk that you know it’s going to hit the fan. But if you buy in like a solid blue color neighborhood, you are not going to see huge market fluctuations like you would in other hot markets so to speak, right?

So if you look for good solid markets that are sustainable they may not make a lot of appreciation but there is stability, there is job improvement, there is some kind of growth or stable economy, you are going to be pretty well of as long as you can buy at a decent price. So that’s kind of my thought is, focus on that, instead of you know really kneeling on appreciation and other kind of bets.

Steve: I see. You know in the Bay area here especially, it’s always an appreciation play.

Josh: Yeah.

Steve: There is no such thing as– and the properties have just increased in value ridiculously. I think this is the only part of the US where that the case pretty much. So what you’re saying is you know what you guys promote, is that…

Josh: And I didn’t– I just realized I didn’t even answer your question.

Steve: I don’t remember what my question was.

Josh: I just remembered it, so your question was, well the market got hit, what– I’m surprised you guys didn’t get nailed to the floor. I mean I think you wrote my eulogy right here on the podcast, you’re like why aren’t you dead and out of business right. That was really nice of you by the way, I appreciate that.

Steve: Yeah well, you overcame it clearly, so I was just giving a little nugget here so you can tell your turn around story.

Josh: Yeah, tell that to the audience. So the beauty of the real estate investing market is when the market is great, every one jumps in. So everyone is jumping on Bigger Pockets, hey how do I make a buck, how do I make money, what do I do? When the market is getting slammed, the people who own property are coming on saying, oh what do I do? You know my equity business is shrinking, I’m in trouble, I’m losing tenants, I don’t know what to do. And the guys who have cash are saying, oh you know, this is a good opportunity to jump in while other people are bleeding. So essentially, we serve kind of all sides. You know make money when the market is up, make money when the market is down so, you know through all the bad markets, we’ve been fine.

Steve: I guess that makes sense and in fact your site probably does better when there is extreme condition, right? Whether it’s really hard or really bad.

Josh: You know, I don’t know in tracking it over the years I think it’s just kind of a consistent, steady, nice flat line, pretty good growth regardless.

Steve: So today, would you say that Google traffic is not one of your top traffic sources, is most of it direct at this point?

Josh: It’s not a hundred percent direct. It’s not fifty percent direct yet. Google is definitely very important to us, but we’ve expanded our reach, right. The podcast has definitely been really a great provider of users, You Tube.

Steve: So let’s talk about podcasting since I just started mine relatively recently, so how do you kind of measure the effect of the podcast on your business?

Josh: That’s tough, that’s tough. I could tell you how I do it, first obviously we care about listener growth, so we know that if our listenership is growing our brand is– our audience is growing and our brand is growing, it’s another place– it’s another market place right? So I look at these kind of market places, iTunes is a market place, Google is a market place, Amazon is a market place, You Tube is a market place, you know any where we can produce content is a market place. So, we measure success from the podcast one from grown listenership, two by seeing people introduce themselves in our community and saying that they found us through the podcast.

Steve: Okay.

Josh: So we know that we are reaching new folks because these are people that are just flat out telling us. If we were not getting that, we’d probably have to do more surveying and survey the users and saying hey guys, how did you find us, was it the podcast, was it Google, whatever it was. But because we’ve got this vibrant community, and people jump on and introduce themselves typically they will jump in and tell us how they came on.

Steve: Okay that makes sense. Yeah, I mean for my podcast I have already seen a lot of people hop on to my email list and the first thing they do is, they hit reply and say hey I found you through the podcast so I was just curious, it’s not really easy to make that correlation at least initially yeah.

Josh: It’s not, you know, I love podcasting. I think– we just put out our 71st show, we’ve done a show a week for 75 weeks and it does get pretty– it gets exhausting a little tedious after– 75 is old, it’s a lot of work. But it’s rewarding in that every time we put out our show notes, seeing the commentary. When the users introduce themselves and say hey listen the show is really helping me out with my business, I appreciate everything you guys do, that to me is the measure. You know, we know that– because you know Bigger Pockets to me is really more than just a site. Bigger Pockets is kind of a vision of creating a community of people who help one another to be successful in real estate.

And so for me, I wanted to become a verb one day, you know I wanted to be– I want people to be just being good to each other in real estate through Bigger Pockets you know whatever that means. And I think it plays itself out similarly in that through our platform all these people locally have started to come together. So there is now these local groups of people who through Bigger Pockets are linking up. In San Francisco we had a meeting with like 150 people, New York there was like 150 people last week. We’ve got like DeMorein and Miami and Tampa and Austin and Dallas and Denver. I mean these are users who are saying you know what, I want to connect live with other people, let’s use this platform to create some get togethers and do it, and they are. And they are doing business, they are linking up, they’re helping each other they are mentoring one another, it’s amazing, I mean it’s just out of my hands at this point and it’s unbelievable.

Steve: It sounds like you need to start a conference.

Josh: You know what, don’t pressure me man. We did a conference– I actually did a conference this year, in two and a half months I planned a conference. We had about 275 people in attendance on the first conference and by the way sorry about the beeping, they are doing construction across the street and I can’t filter it out so.

Steve: That’s okay.

Josh: Yeah, we had 275 people, we had 30 speakers. It was– we had like 15 sponsors it was a monster success, everybody wanted us to do it again and I planned the whole thing by myself and almost killed myself.

Steve: Crazy.

Josh: So the next year when I was going to do it, we were having another kid and I was like yeah I don’t need the pressure this year. We’ve had so much going on, I don’t need the pressure. And of course not a day goes by where people on the site are like, Josh where is the conference, when is it going to happen? We want another one and I know it would a) be a good place for people to get together and b) it would probably make us some money and c) it would help us build our brand. It’s coming at some point– I just, you know, there is a lot happening man.

Steve: I just had PT on the show recently actually and he was just telling me how much work it was so I can imagine.

Josh: It is rough. I just came from a show last week. It was a national apartment association show here in Denver. They had 7800 attendees to the show.

Steve: Good Lord.

Josh: I use like a fraction of the hallway of the convention Centre they had the entirety of the convention Centre. They had like a monster staff this thing, and then you know they had a huge vendor floor with hundreds of sponsors. I mean, you know I did the math– they made tens and tens of millions of dollars without fail. They had to have, and you know which is fabulous. Good for them, good for everybody there, there was tons of business I got done and I sit and I attend shows like that I’m like oh man; I got to get on the ball.

Steve: You know, I don’t think you do it for money reasons parse, right. It’s got to be for the love of getting people together and that sort of thing. So, hey Josh, I don’t want to take up too much of your time but I thought that I would ask you, you know early on you mentioned that you started all this as a hobby, but was there any sort of book or site or person that kind of just pushed you in this direction of starting your own monster site?

Josh: You know, so what I did was, I found this time machine, I travelled ahead, and I found this awesome site called mywifequitherjob.com. And I read through it, and I was so– it’s crazy, I was inspired, absolutely inspired by this guy Steve, and said you know what, let me go back and start a site where I can make some money, and so I birthed Bigger Pockets.

Steve: Nice man, nice. And you know if weren’t sarcastic…

Josh: [Laughter].

Steve: So no books, you guy do you read or anything?

Josh: I’ll tell you. The inspiration, really the early influences were, there was webmaster forums. Guys like Shoe Money very early on John Chao very on, they were kind of the first money guys in the online space that I was familiar with. Wil Wheaton as the you know OG blogger, you know those guys kind of influenced me and taught me to look at things a little differently from hobby to business so to speak. But it was still a hobby site. You know when Darren Rawse started to put pro blogger together early on– I love that site. I mean I had my own blog about blogging and it was called time for blogging and so I was doing that stuff years and years ago.

Today I study guys like Pip Lejure [phonetic] and the conversion guys and whatever you know. He will have to fly overseas and yell at me. Pep Lejure who is phenomenon, you know there is a ton of people that I study. I really– you know for me if I feel like I’m done learning then I failed. So you know, whether it’s looking at a site, like I’m looking at your site right now as we talk here, and I’m looking at your design and your finals and you know the different way of organizing your writing styles, that kind of stuff. I just study pretty much everything I look at.

And I’m trying to take a piece of information from everything and I recommend anyone listening to do the same thing. You know I think people are so quick to say oh well I’m an internet marketer, I have to go and study from internet marketers. That’s not true. You can study and learn from anybody and everybody. Look at who is successful, you know Google, Google is hugely successful. What are they doing that I can take away. Facebook what are they doing that I can take away. Yahoo and so on. So I kind of get little things from pretty much anywhere I go. And I recommend everybody to do that.

Steve: Cool, well that’s great advice Josh and I just want to thank you for making fun of me and coming on the show you know how it is.

Josh: I didn’t really make fun, I mean if want me to make fun…

Steve: Well yeah, we are not done talking, as soon as I hit the stop button right. But yeah, so is there a place where people can find you if they have any questions?

Josh: Sure, and I hope really quickly I hope you know anyone listening. I was trying to think about the listener and provide some value. I didn’t really want it to be all about me telling my story, but hopefully I told it in a way that people can learn something. And if you do have questions, jump on the show notes of the show, I don’t know what the show number this will be, but Steve will probably have it somewhere in there.

Steve: We’ll see if I publish this episode.

Josh: It may not make it, if I do make it, then ask me questions in the show notes, otherwise biggerpockets.com and I’m on Facebook, twitter, G plus, LinkedIn. LinkedIn I only connect with people I know that’s why Steve and I have not yet connected there. But you know yeah just find me online, I’m out there, hard to miss.

Steve: All right, right on man. Well thanks for coming on the show.

Josh: Hey, thanks man, it’s been a pleasure.

Steve: All right, take care.

All right, I hope you enjoyed that episode because Josh is a really down to earth guy, and if you did not know any better you would have no idea that he runs one of the most popular real estate investing forums and websites in the world. And what I like about him is that he is both a dreamer and a hustler. He is actually a pretty fun guy to be around too. For more information about this episode go to mywifequitherjob.com/episode33, and once again I want thank 99designs for sponsoring this episode.

I know a lot of you listening are waiting on the sidelines and trying to get the courage to start your own online business and I know design is just one of those mental barriers. I know a lot of you out there also run your own businesses already, and know that your website design could be better. Designing a website is not intimidating anymore thanks to 99designs where you can get over 300,000 designers to compete for your design. All you have to do is list your design on their site, and within 48 hours, you will get dozens of design submission to choose from. And from there you can ask for slight tweaks and changes until you are 100% satisfied with the results.

And the best part is that the price is very reasonable and there is a hundred percent satisfaction guarantee. So go to www.99designs.com/mywifequit and get your logo, website, t-shirt business card or basically anything you need designed right now. And by using the 99designs.com/mywifequit link and telling them that Steve from mywifequitherjob.com referred you, your design listing will be bolded highlighted, given a prominent background, and featured before all regular listings so that your request stands out among all the other designers. So if you need a logo, website, t-shirt, business card or anything designed, go to www.99designs.com/mywifequit, and tell them that I sent you.

And finally, if you enjoyed listening to this podcast, please go to iTunes and leave me a review. when you write me a review, it not only makes me feel proud but it helps keep this podcast up in the ranks, so other people can use this information, find the show more easily and get awesome business advice from my guests. It’s also the best way to support the show and please tell you friends because the greatest compliment that you can give me is to provide a referral to someone else either in person or to share it on the web.

And as an added incentive, I’m always giving away free business consultations to one lucky winner every single month. For more information go to mywifequitherjob.com/contest, and if you are interested in starting your own online business, be sure to sign up for my free 6 day mini-course where I show you how my wife and I managed to make over one 100,000 in profit, in our first year of business. Go to www.mywifequitherjob.com for more information and thanks for listening.

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

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Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

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

032: How Jessica Rhodes Leveraged Her Pinterest Skills And Started 2 Successful Businesses

Jessica Rhodes

Jessica Rhodes owns 2 thriving business service companies, EntrepreneurSupportServices.com and InterviewConnections.com where she helps businesses with Pinterest and podcasting.

Jessica is a Pinterest expert and she reveals many useful tips on how to market your business using Pinterest in this episode along with many helpful tools that she uses to streamline the process. In addition, she provides some meaningful advice on how to network with others and how she acts as a matchmaker for podcast interviewers and interviewees.

What You’ll Learn

  • How Jessica got her first client doing Pinterest
  • How Jessica gradually expanded her customer base through referrals
  • Why you don’t really need a website to start a business
  • How to create a powerful Pinterest account
  • How to use Pinterest to get your online store on the map
  • How often do you have to pin your images
  • What the ideal image dimensions are for Pinterest
  • How to create an infographic
  • How to structure your pins correctly
  • How Jessica connects podcast interviewers to podcast interviewees
  • Tips on how to network and connect with other people
  • What conferences Jessica recommends
  • What’s the best software for Pinterest

Other Resources And Books

Transcript

You are listening to My Wife Quit Her Job podcast where I bring in successful, bootstrapped business owners, to teach us what strategies are working and what strategies are not. Now this isn’t one of these podcasts where we bring on 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. If you enjoy this podcast please leave me a review on iTunes and enter my podcast contest where I’m giving away free one on one business consultations every single month.

For more information go to www.mywifequitherjob.com/contest, and if you are interested in starting your own online business be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business. Go to www.mywifequitherjob.com for more information. Now onto the show.

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

Steve: Welcome to the My Wife Quit Her Job podcast. In this episode I’m going to be talking to Jessica Rhodes. Now I actually met Jessica when she reached out and emailed me out of the blue, and what I often do when I get an email is I usually check out that person’s website or business if I find them interesting. And Jessica’s story immediately struck me because quite frankly, I have a soft spot for people who quit their jobs to start a business, in order to spend more time with family.

Now Jessica owns two businesses, Entrepreneur Support Services and Interview Connections. Now, ESS for sure is a virtual assistance from but her main service is interview connections where she works with podcasters to find and book guests for interview shows. And so when I heard about this I was like aah, wait a second I run an interview based podcast, I need people to interview for my podcast and Jessica sounds like she runs a business that’s in high demand.

Now this woman also is a Pinterest expert, so we’ll be talking about Pinterest a little bit today, and she does infographics and she has a wide allay of talents and I brought Jessica on today to talk about how to start a business that kind of relies heavily on networking and being able to connect people to one another incidentally which are skills that are very necessary for success in any business for that matter. So Jessica welcome to the show and really happy to have you here.

Jessica: Oh Steve I was so excited to be here. When I first saw your podcast up there I knew it no worthy my wife quit her job, I thought my husband can say my wife quit her job because that’s exactly what I did when I had my baby because just like you said I ran my business so that I can be at home. So I was so– I’m like thrilled to be on your show today.

Steve: Yes however the domains is already taken if you were thinking about starting that blog. So, I’m actually really interested in hearing about your background story because it kind of parallels my own in away. So tell me how you got started with your business and I really want to hear about what was going on through your head especially when you became pregnant.

Jessica: Yeah, definitely. So well what I did before I started my business is totally different than what I do now in some ways and in some ways it’s very similar. So just to give you back I’m 26 years old and when I was 19 in college I got a job in a non profit going door to door raising money. So– and I did that for the next six years. I worked kind of my way up and became a manager pretty quickly and then when I graduated college, I became director of my own staff and that’s what brought me here to Rhode island.

So, I did that for a few years and it was a position that I really loved, I really loved the organization. I was an activist at heart fighting for clean water and clean air and the money– I was really never motivated by a lot of money and anyone that works in non profit knows that you don’t do it for the money. But you know I’m married and when my husband and I decided that we wanted to start thinking about having kids, I knew that I want to be a stay at home mum.

My mum was a stay at home mum, my husband’s dad was actually a stay at home dad. So we both had when we grew up a parent that was at home with us and this was really, really important to me. Now my husband also works in a non profit, so we in no way were able to buy a house and support a family with just one salary, a non-profit salary at that. So I actually had a conversation with my parents– I’m really close with my mum and my dad and told them that I want to be a stay at home mum. And just to keep in mind when I got pregnant I didn’t have– I didn’t know what my plan was going to be, so I kind of threw myself into it and made myself figure it out.

Steve: So you didn’t have a plan when you quit?

Jessica: No, well yeah– no I didn’t.

Steve: Wow, okay all right.

Jessica: Yeah I got pregnant in the summer in June, I told my boss that I would be leaving. I told him when I was three months pregnant, so I said in six months I’m leaving and at that time I did not know what I was going to do.

Steve: Okay.

Jessica: But I am like I guess just very optimistic and knew that I would figure it out. I am thankful that I never had really hard times in my life, I mean we never had a lot of money growing up but I never went without food or a house, so I just kind of blissfully assumed everything would work out. And it’s kind of like I guess that is the entrepreneurial bug I have it’s like starting a business it’s like jump– I saw a crew once, so it’s like jumping up a cliff and then building the parachute as you are going down and that’s kind of like what it was.

And my dad is actually– he’s a business coach, he is an entrepreneur that works out of a home office. So he is the person that told me what a virtual assistant was. I had no idea what it was, the only term I knew of VA was you know [Inaudible] [00:06:01] interference. I had no idea that this whole industry even existed. I had no idea there was this whole network of people that were creating great revenue online working from home and creating a lifestyle. I thought the only people that were rich were people that worked their way up in corporate.

So, I mean it was– I mean my eyes were just opened up dramatically when I learned about this whole industry and this whole business world. So my dad taught me how to be a virtual assistant, he brought me on as one of his VA just so like to get started, get my feet wet. I got s new computer just like to start doing some admin work. When I had my son– my son was born in March– my last day at my job was two days before he was born.

Steve: Wow, that’s crazy.

Jessica: I worked up until the end, I was doing part time virtual assistant work for my dad’s business while I was pregnant, so just to kind of start getting used to it and then when my son was born I had two weeks where I recovered from giving birth. And then I got back into work two weeks later and that’s when I just started really ramping up my business, and I took on my first client outside of my father a couple of months later and it’s just kind of the rest is history I guess.

Steve: So a couple of questions for you. So, first of all how did you get that first client and then how did you kind of steer your services kind of towards Pinterest?

Jessica: Sure, okay great question. So, my dad introduced me to– so my dad as my technically my first client, I was doing really great work for his Pinterest account. Now he told me upfront, you know I’m going to take you on because you’re my daughter and I think you will be a really good asset to my team but I’m only going to keep you if you are adding value. So I knew that my dad is an old fashioned guy, he was not just going to keep me on just to be nice.

So I knew I had to do really good work, so I took a whole Pinterest course, I worked on his Pinterest marketing, brought his Pinterest following from a few hundred to over a thousand, created tons of pins and just really made a name for myself there and he has a pretty big following. So obviously being his daughter but also being somebody that was adding a lot of value to his business. He posted on Facebook that I started my business and that I’m doing really good work with Pinterest.

A friend of his Jason Silverman is the CEO of Powerful Words Character Development which is a business providing character education systems to after school activity centers like [Inaudible] [00:08:31] and dance and gymnastics. And so when he saw my dad post about how he added– he had somebody doing some Pinterest work Jason reached out to me, and set up a phone call and I talked to him about what I can do for him and he said all right I’m going to give you a shot. And Jason has actually never left, he is still my client today and we’ve done really great work with his Pinterest account. And so fro along time every client I got were just referrals.

Steve: Okay.

Jessica: Just my clients, you know dad telling his friends about me, them hiring me and then telling other people. So it’s all referral based. I got my website a few months into my business but I mean I probably had like two people visiting it a month and one of them was probably my mum. So the website was really not…

Steve: I know how that feels.

Jessica: So the web– when people say you need a website– well you don’t really need a website. It’s helpful but the referral is the most powerful way to get clients and so that’s really how I built my business early on.

Steve: Okay, so let’s talk about the Pinterest work that you do. So what do you do to actually expense someone’s account, because I know my audience is very interested in the way Pinterest works, and how to create a really powerful Pinterest account?

Jessica: yes Steve, this is definitely something that your audience– I assume most of your audience are in e-commerce and have products and image based businesses. Well, Pinterest is the account that they want to be on because it’s an image based platform. It’s also– the difference between Pinterest and platforms like– any other platform, Facebook, Twitter [Inaudible] [00:10:05] I guess instagram is more similar but there is not really direct messaging back and forth between users. You can comment on pins but people really go on Pinterest to find things that they are interested in, so you can look for things about kids, things– people go to Pinterest basically to find things that they want to buy. I mean, I go to Pinterest and I look at the home décor section, and I look at things that I want to buy if they look nice.

And so it’s all about images and it’s all content. Now, over 80% of the content on Pinterest meaning the pins are re-pins, so if you can be that 20% that is adding new content to Pinterest meaning you uploaded image and then link it to you website or whatever that image should be linked to, you are adding content and then the magical thing about Pinterest is that thousands and millions of people then take that pin and they re-pin it on their boards, and then all their followers see it and they re-pin it on their boards the name.

I met my client Jason, now we’ve been going for over an year now that we’ve been working on his Pinterest account and we love going in there you know 70 notifications of all these people ripping in his infographics and ripping in his pins. And so it’s very powerful if you add– and you want to make sure that you are creating pins and graphics that are eye catching. So, couple of things, some writer downers here that you want to think about when you’re making pins is a pin that’s going to be eye catching, so a graphic that’s you know a high quality photo, something like a stack photo or– and something with text. So we’re using text overlay or call to action.

So you just have a photo of a woman sitting at the desk, well at first thing you have no idea what that’s about. But if you add text overlay with something like PicMonkey.com or any type of photo shop, you can have a caption that says “how to become a virtual assistant”. But the woman sitting at the desk, people look at that immediately and when I click through to learn how to become a virtual assistant. So that shows one example of how adding text to an image is going to grab more attention, and tell people exactly what they can find behind that pin.

Steve: Okay, let’s say I’m a brand new shop owner, because I would understand that Pinterest is probably a little bit different for someone where you’re actually guiding them to a product, what would your strategy be for like a brand new store on Pinterest?

Jessica: Right, on Pinterest you want to think about what kind of boards you have. So give me an example Steve, like what kind of shop, what kind of products are we talking about?

Steve: Okay, so let’s– I’m in the wedding industry. So let’s say wedding related products.

Jessica: Oh my gosh, perfect guinea to be on Pinterest. So, okay wedding industry. Are you selling like wedding shoes, wedding accessories, I guess all of the above?

Steve: Wedding accessories. We are actually heavily on Pinterest, so I’m just happy that you’re speaking what your strategy would be, so we’re so hectious [phonetic] actually, so a little [Inaudible] [00:13:01] handkerchiefs where you can put the bridegroom in on the wedding day.

Jessica: Yeah, so you want to have all different kinds of boards just about weddings, you know the wedding day, really photos of people with the handkerchiefs on the wedding day. You want to have boards also not just about your product, I mean obviously you want a lot of your pins linking back to your store, your website but you also want to be built to gap your profile with just images that your target audience is going to be interested in.

So just re-pinning images from other wedding websites through having a board about wedding dresses or about shoes, may be a board with to do verse about what to do leading up to the wedding. So your whole page is for– and I’m sure you got this down part, sounds like you’re already doing more of Pinterest, but just to give the listeners an idea, you want to think about everything that your product could be related to, so what we do with– one example with my client Jason– his clients are martial arts school owners. So they provide services and graphics for kids who want to take martial arts classes.

Well they can also have a board on their Pinterest page with– that will link to products and services that have to do with martial arts, but maybe not something that they personally offer, so it’s kind of like a referral partnership there. So just think about everything that your target audience is interested in and you want to be that go to Pinterest page that they look at to get inspiration, to get product ideas and to get tips and things like that.

Steve: So once you have kind of like the basis for your boards laid out, how often do you actually have to pin new items and what’s– how do you kind of break it down between the amount of pins that you actually pin that lead to your website versus re-pins of other people’s stuff?

Jessica: Well the burden cut a lot of different tips and it kind of depends on what your pins are, so I’ve heard people that 80-90% of their pins are their own products and they go back to their own website, and I think that’s fine as long as your pins are actually something that your followers want to be seeing, but I think it’s really important to– so I think the 80-20 rule really applies here well you know 80% especially if you’re on there as a business, as a store you know 80% being your own pins, and then 10-20% being re-pins from other Pinterest users.

Steve: Okay, interesting. My wife actually runs our Pinterest account, I don’t really touch it, so I’m kind of speaking as if– you know I’m learning stuff here myself. So my wife has actually taken the opposite approach, 20% of our stuff that she pins and then 80% other people’s stuff so.

Jessica: Pretty good, so there is no hard and fast rule.

Steve: Okay and I was just curious what’s the distinction between a business Pinterest account versus a regular Pinterest account?

Jessica: So, there’s really no difference to somebody that’s– I can look at two Pinterest pages and I would have no idea one was a business page or one was a personal page. Now the way it changes but last time I checked which is not that long ago, the only difference is as a business account– if you have a Pinterest page as a business account, you can enable the activate– this is the word I’m looking for– activate the analytics feature, and that will if you verify your website which means you click verify when you’re in the settings I believe and then you put that code into your website.

I usually have a web person do this for I’m not the most techie individual but verify your page it’s pretty common– they give you step by step directions. You verify that, it gives you a little check mark next to your website and then that kind of connects your Pinterest page to your website so they can tell you what pins are being re-pinned the most, how many clicks through to your website you’re getting. So, that’s where you want to have a business page is so that you can activate those analytic features because as a personal user you don’t care, how many click throughs to each website.

Steve: Sure, yeah.

Jessica: So that’s the main difference but it’s but it doesn’t really look any different from the users’ perspective unless of course you actually use the business name and a business logo but you could do that with a personal page too.

Steve: Okay, cool. So you know, I know for a fact that you told me early on when we were chatting the you actually create graphics also for your clients. So what are some tips on– you do infographics, what are some of tips on kind of formulating the image that you want to post online?

Jessica: Sure, so I mentioned over either with pins you know first of all let’s talk about the size requirements so on Pinterest, I’m on the main feed 600 pixels wide is as wide as you want to go. Now if you do 800 to maybe 1000, they’ll resize it but they are preventing larger than that they’ll tell you error and it won’t show up. So 600 pixels wide is what you want and then infinite however long I don’t– last I checked there was not really a limit to how long it can be. If it’s super long like 300 pixels long, what they’ll do is they will crop it so on the main Pinterest feed it’ll say expand pin, they won’t show it all right there.

But this is exactly why infographics are really useful and powerful on Pinterest is because they take up more [Inaudible] [00:18:18] on that main feed. Now I really pulled it an infographic that’s very long and they can take up lots of space may not get as much attention as very well done 600 by 600 pixels square pin. So there’s you obviously have the key to see a big picture, it has to be good.

Infographics are really powerful because people go on Pinterest to find inspiration, to find tips, to find things that are of interest to them. I mean specifically in the wedding industry, if you have an infographic with the top ten that brides need to do on the day before they get married– I’m totally just making this up as I go but– and then it’s a cool you know it has images, it has text, it’s a colorful background and that information is right there, people are drawn to it more.

So, those are really effective, now you make infographics– there are a lot of great sites that give you kind of templates. So, when I first started out I was using Picto Chart. Now PictoChart.com has a free version where you can– they give you templates and you scan and insert the text that you want to be using, they give lots of cool designs so it’s really blended easy for someone that has no graphic design background. The free version will have the Picto Chart logo at the bottom. Either you quickly upgrade it to the pay version because you don’t want to be creating infographics for clients and having Picto Chart on the logo.

Steve: Sure, yeah absolutely.

Jessica: and so that’s good but now I use a graphic designer so they are all custom made and they look a lot more professional you know because if you use Picto Chart you are going to start seeing them on Pinterest, you can tell that was used on Picto Chart, I recognize that theme.

Steve: I see.

Jessica: So that’s something to think about. I mean it’s really only the train die and somebody who also makes infographics is probably going to recognize that, but I think the best thing in graphic design software works with infographics is custom built is going to make you stand out as really professional service or professional company.

Steve: So what software do you use?

Jessica: So I have a graphic designer that uses adobe illustrator.

Steve: Okay so she actually draws.

Jessica: Yeah, she creates them from scratch, so it’s pretty awesome.

Steve: So any tips on what you would write in the description of the pin?

Jessica: Cool, so there are two schools of thought with the description. Number one of descriptions that are much longer get more attention in the pins, so if you’re just browsing the Pinterest feed, there is a rule on description that I’ve heard that more people would be attracted to reading what it’s all about. But a shorter description that is very to the point will come up more in search results. So, I’ll give you an example– I made an infographic for my client and it was about– it had business success tips from a book that he wrote, and the pin description was just business success, just those two words. Well when you search business success which are probably very common– that’s commonly searched, it was the top and it might still be I haven’t checked in a while but it’s the top infographic in that search.

So when you really– when you make your pin description something that you think people will be searching for exactly, then it’s going to come up in search results, so it’s a really powerful way to optimize your pins. But on the other hand you also want to be having a lot of hash tags. It’s important to also have the UR for where you are linking your pin to in the pin description. So not only people can– not only can they click on the pin to get to your website but they can also click on the description– on the URL within the description. So there’s a couple of different ways that you can go about it.

Steve: Okay, all right great you know I wanted to talk about your other businesses too but yeah thanks so much for that Pinterest overview and the tips, I’m sure that my listeners will find valuable. So let’s talk about interview connections because I’m quite interested in that as well. So how does the business work exactly and how do you– because this is kind of chicken and egg problem right. Any business that connects people to one another– you either have to know a lot of people in order to attract the clients or you need a lot of clients that are looking for interviewees where you can attract people in your database. So how does it work?

Jessica: Great so that’s just as Steve I mean hit the nail on the head, you either need a big database or you need to know a lot of people, there needs to be a need. So I didn’t launch interview connections until I was booking podcasts for individual clients for several months building up my database and making sure there was a need in the market place. So one of the– I mentioned where I had a couple of clients early on in my virtual assistant business.

One of the services I was offering to them was I was getting them booked on other shows, so just like I reached out to you Steve and I said “oh my client would be a great fit for you”. I was doing that as one of the first tasks that I did for my clients and when I was doing that a year and a half ago, podcasting was so kind of getting big, drummy do biz wasn’t [Inaudible] [00:23:09] you know it was still kind of getting popular, and podcasters started asking me who I was because they said well whenever I book an interview I reach out to the guest directly or the guest directly makes a connection with the podcaster and they just– there was nobody in between making the connection.

So after I had a lot of people ask me about what I did and kind of inquire about my services, I just realized that there is an opportunity here you know nobody else is doing this, podcasting is becoming really popular, there are a lot of entrepreneurs who want to be interviewed because it’s a great way to get exposure, it’s a great way to make connections and build relationships. Podcasters need guest and they don’t– you know because I like to really focus on podcasters that are small business centers that use the podcast as part of the content marketing platform.

And I do work with some podcasters who want their podcasts to be their main source of revenue but I focus more on the entrepreneurs who use their podcasts as just like their blog or their videos and they– and those individuals don’t want their podcasts take up all their time. It’s a way to market their business but it’s not something that they want to be spending a lot of time on, so by obviously hiring a virtual assistant like myself who specializes in booking guest interviews, that was a really good fit.

So once I figured out there was need in the market place, I worked with my dad who is my business coach and his web team. We got the website up and going, launched it under insanely Mobley because I had no idea what people were going to be paying for it, so my first levels were $47 a month and $77 a month. Today they are 197 and 297 because when people are paying for it you keep raising the prices till you get resistance.

And so that’s just what I’ve done over the past years, I just keep improving the service and every interview I book, it’s a new connection that I’ve made and a new relationship that I’ve made I mean since meeting you Steve we’ve booked a couple guests on your show, and I think I’ve booked you on some shows. So that shows the power of– and I’m so– do that because that not only helps you get more exposure but it helps my– you know my clients need people to interview.

So I have just really gone crazy with building a database, I’ve got a ginormous group of spreadsheet with people that are great guests. And you know like I mentioned in the beginning of the interview, what I did before this was go door to door so I’m just a natural kind of doing this cold course.

Steve: Yeah and first of all I really appreciate the connections that you’ve made for me and then I thought I just point out to my listeners kind of something that you did in your email that kind of caught my attention. When you actually pitched me for one of your clients, you actually mentioned someone that I knew who actually knew your client and usually I get a lot of these pitches for interviews ever since I started my podcast, and I tend to ignore them.

But the reason I paid attention to yours is because you mentioned Billy Murphy, and then immediately I reached out to Billy and said hey do you know this guy and then Billy said yeah, you he just moved in my building what not. And so that’s kind of what spurred me to action.

Jessica: Exactly, that’s something that I teach all the time Steve to my clients is you have to– this is all about building relationships and when a cold email comes there or a cold call comes in and you have no connection to the person well you know maybe they are a great guest but it’s kind of a crap shoe, you don’t know. And so I do, I like to look for people that we have in common because I knew that if you ask Billy Murphy what he thought of Brian, he will say Brian is a great guy and successful, he would be a good guest. So adding that credibility factor and just finding that common ground it just shows how connected we all are, we just have to find those connections.

Steve: Yeah, incidentally that’s another topic I kind of want to go into, so how do you network with people and do you kind of have any tips to share on how you meet people and kind of expand your network?

Jessica: So I really have invested in life events, I try to go to at least once a quarter, so four times a year an out of the life event and just meeting people face to face is such a powerful way to build relationships. Now you can obviously you’re going to get a larger quantity of connections when you’re online, but then going to life events and making those connections deeper relationships is super powerful. And when I’m at those life events I make a point to just– when I meet people focus on what they do.

Now I have– I went to New Media Expo and I met a ton of people, obviously it was tons of podcasters and they wanted to mob in big connections, but every interaction I make sure even if they stop by saying what do you do, I always try to table immediately “so tell me what you do first” because if I’m going to tell them about my business or what services I offer, that needs to be tailored to their needs you know. Like I mentioned somebody who is a small business owner and they need somebody to help them find guest interviews to have a weekly podcast to help market their current business, is a very different client than somebody that comes to me and wants a daily podcast to make sponsorship revenue.

So different conversations I need to have with each person, so what I make sure I do is that I always ask the other person about them “tell me about yourself, tell me about your business”. People who are talking about themselves– I mean if you want someone to like you, just talk about them.

Steve: So you are a good listener.

Jessica: Yeah, I mean definitely I mean I like to think so, I don’t know if my husband would tell you that, but that is– if I had one tip for building relationships and networking, is just focus on the other person, just focus on building relationships, don’t be too hungry for– you know I met somebody I don’t even remember their name, so I won’t pull them under the bus, but it was just– it was at the New Media Expo and they just– I couldn’t leave the room because they just kept talking and talking and talking about their business, and I was so just bored to tears and just felt like it was just the worst conversation and I’m like stop talking about yourself. I mean I don’t– personally care anyway to ask about your business and now you’re just going on and on and on and on. So just really focus on the other person, if they want they want to know anything about you, they will ask specifically, and then you can answer the questions.

Steve: Yeah, I mean I’ve been to conferences myself where people are just kind of hand you their business cards left and right.

Jessica: Yeah.

Steve: Usually, well unless I’ve actually had a good conversation I usually kind of shack the business cards in the trash.

Jessica: Exactly and I feel part of that because I think there are some very shy and you’ve heard of people that go to conferences because they are trying without the comfort zone but they don’t have the confidence to walk up and just have conversations, so I have people just kind of like “here’s my business” card and I’m like all right man, I mean I don’t know what to say I don’t have any reason to keep your card. But, yeah just having those conversations first and then willing fully ending that conversation and hand over the business card, if you feel like it’s going to go somewhere with them.

Steve: You know what’s funny is if I’ve had a good conversation I really don’t need a business card, I already fully remember that person and I’ll look them up later.

Jessica: Exactly.

Steve: So which conferences do you go to and which do you recommend specifically for businesses?

Jessica: Sure, well I go to Glazer Kennedy Insiders Circle, are you familiar with GKIC?

Steve: No, I’m not.

Jessica: Okay, it’s a marketing organization, really old school, direct sales, direct marketing, drop response marketing. So I go to their info summit every fall and that’s the conference all about information marketing and you know marketing in general and then I go to their super conference which is on the spring, and that’s kind of a bigger more general marketing conference. Dan Kennedy is the co-founder of that organization and he has since sold that but he comes back and speaks there and Dan Kennedy is– he’s kind of this like old, like kind of Massachusetts state guys, I’ll use that’s perfect– it gives off someone that whole difference that probably but he is absolutely the most brilliant marketing mind I’ve ever met.

Read all his no bias business books, they are– I mean they are the reason that I have been successful in my business. That and my business coach, but my business coach my dad had learned basically everything he knows from Dan Kennedy. So I always go to the GKIC conferences because you always going to get straight off business marketing information. And then New Media Expo is definitely a conference that I go to because those are my people podcaster, bloggers, all my marketing types and then I’m going to podcast movement, I’m actually moderating a panel of podcast movement, the section on how to promote your podcast, I am going to be moderating a panel what we are going to talk about you know social media and different ways to get your podcaster locally and so I’ll go into that.

And then the last one is dream business academy. Now dream business academy is my coach’s life event that he does twice a year, and it’s a seminar with about 30 to 50 entrepreneurs and it’s all about how to create a million dollar platform on a shoe string budget, and I speak there about how to get interviewed and how to build your business with interviews and media exposure.

Steve: Okay, so that last conference sounds very intimate, it’s only a handful of people.

Jessica: Right, exactly it’s more intimate and the main difference– all these conferences have a different appeal. Now podcast– in podcast conferences you are not going to get any pitching, there’s you know– it’s not like all big name speakers, obviously there are well known speakers in our industry there but it’s more about tons of just content and no sales, you know no sales pitches and so I really love, it’s a lot of networking, relationship building with your target audience.

Now the GKIC conferences you’ll get a lot of pitching, a lot of big marketing folks that give you, you know a half hour content and 20 minutes of pitching their products– your program– so probably the only thing I don’t like as much about these conferences but the value in there is you can learn a lot just by watching their pitches because you want to know how to make– you know you can just learn about sales just by watching them do their pitches so…

Steve: Okay.

Jessica: That is so and you can meet some really, really well known celebrity entrepreneur at these events like I met Dan Kennedy, I met Lisa Sasevich at the last one, so it’s a good place to go to meet people but what I love about dream business academy is in a much more intimate experience, there is a live master mind and master minding is just such a powerful way to build your business because you get this direct face to face feedback from other entrepreneurs.

Steve: Okay, I’ll have to link up all those shows, I’ve actually haven’t been to any of them. I plan on going to New Media Expo one of these years but you know yeah those are definitely good conferences and I’m definitely going to check out. So, I want to switch gears a little bit and kind of talk about the very beginning when you kind of first started out, you just quit your job, you had no idea what the heck was going on, how long did it take you before your business gained traction and I understand your dad was a huge part of that but what are some of the key mistakes early on that you want to pass on to my listeners so they don’t make the same mistakes?

Jessica: So, yeah it took a while before it gained traction. Now anyone who has quit their job and started a business, you know there is a long period where you really need that kind of, that safety net, that savings I mean I will be very clear I used– I still use you know credit cards and you know we have a big savings account that we pretty much diminished into the first few months of the business, I mean it’s really, really hard and you know we only have two years in, I’m doing pretty well but personally we’re still we’re still working and we’re still getting up to where we want to go in the business.

And so I would say like I remember I guess March was when March 2013 is when I was like full time with my business and then that summer I remember actually being on vacation– a family vacation and my husband and I were having a conversation. It was very, very challenging and I know that I’m sure everyone looks in especially if you are married with kids and you’re starting a business and you’re trying to make it work if– especially if your spouse is not an entrepreneur and they are supporting you but it’s still kind of like “listen, you need to start making more money”. I mean I just had so much optimism and believe and faith in my business that I’ll be successful, but it wasn’t quite successful at that point.

I was still like not making a lot of money and just kind of you know I probably had like I don’t know couple thousand dollars a month coming in but that’s really not that much and yeah so it was just– it was very, very challenging looking my spouse in the face and just saying like I don’t make much money now but I will, I will just keep believing in me and he’s like that’s one more credit card we’re using to buy [Inaudible] [00:35:38]. Definitely it is a test there, but I forget it was no question, I guess it took a while before things started getting– getting safe.

Steve: Okay, yeah you know it’s funny I actually forgot my original question also. It was something along the lines of mistakes that you made early on.

Jessica: Oh great, mistakes that I’ve made. So, I can’t– like I don’t have any huge business fix because quite honestly I’ve been in business under two years, so I know like there is a lot of great interviews so I’ve heard of people abuse ginormous business failures and I haven’t quite undergone something that has been like hugely traumatic. I just had a lot of little lessons along the way like I– the big– the most clear one that actually I use in certain simple and another interview where they asked me is I tried to– when I started investing in virtual assistances, I have a team of virtual assistants I mentioned I’ve got designers and people on my team that help me now with a lot of that work.

I basically tried to save money by getting really cheap on Elance, and that kind of bit me in the but a lot because I wasn’t delivering really low quality work to my clients and it was a problem. It was a ginormous problem, I have very understanding clients and we would fix it right away and I had other people to turn to who could fix it but just a lesson if you are going to use a virtual assistant, don’t try to get someone who is very cheap because you think you’re going to save money because I can tell you, I guarantee you, if you get someone that’s really cheap more times than not they’re going to cost you more in frustration and mistakes that you need to fix. It is worth it to invest in a virtual assistant and a designer who cost a little more money but is not going to have to fix mistakes and you know produce work that’s going to be bad.

Steve: Okay, yeah that’s good advice I mean I think we’ve all been bitten by that bug. I’m a pretty cheap guy and I usually try to skimp on stuff but just over time I’ve learned that it’s just not worth my time.

Jessica: Yeah and I do have really affordable graphic designers, you just have to find them. Like I have people in the Philippines and some other countries overseas that really do great work and they are not very much money at all, but if they are– you know you really got to find them, you really got to search.

Steve: So, where did you find those people?

Jessica: I still found them on Elance.

Steve: So it’s just a longer vetting process I guess.

Jessica: Yeah, exactly and be very clear about what you’re looking for, have a very clear job description and just Tim Ferriss skimps a lot in his tips in his book ‘The 4-Hour work week’. He has a whole section where he talks about how to work with overseas virtual assistants, be very clear about your deadlines, due dates you know what– because of the very long time zone difference what a due date to you just saying the date might be like different for them because there’s like 12 to 15 hours time difference. So just being super, super clear on what you need.

Steve: Okay, and one thing I also want to ask you is I notice with your booking is that you’re kind of extremely hands on with your business and interview booking, and I was just curious what your plans on for scaling that because it is a lot of hands on work.

Jessica: Yeah, Steve oh my gosh we could just have a whole coaching session here if you want, with you coaching me maybe. Now that is exactly what I’m at right now Steve is I have gone to the point where I have been able to outsource a lot of my business in terms of the designs and with interview connections they are in different parts, so there’s actually finding the guests and securing the interviews and then they are– we confirm the recordings, we get the graphics made.

So after the guest interviews are booked and secured, there is a lot of work that’s done after that in terms of just making sure the interviews are scheduled, making sure we get their bio and their [Inaudible] [00:39:28] and all that. So I have a virtual assistant team that takes care of all that, but it’s still me that actually is the brains of finding the guests and that’s really where I’m at right now is I can handle it all, but I know there’s going to come a point where I am going to need to have somebody else who can help me find guests because that really is my challenge right now, is that I obviously I have a guest data base where I look for ideas.

But most of the time if I– you know with my clients when they request an interview, when they need a guest I just think about it first because I just– I really have a good memory and I think if that person is really good here– so that’s really bad, the challenge is I will need to have somebody on my team who also is very connected in the online, mostly online marketing, but connected in the entrepreneurship world tabs and scales, some sales experience. So if you are that person feel free to reach out to me.

Steve: Just curious also and this is just really for my own knowledge, how do you actually vet the people that are coming to you. So for example you won’t want to necessarily book someone who’s not very interesting to someone who is looking for really high quality people?

Jessica: Sure, yeah so with my podcasting clients, I have to fill out podcast details form. They tell me who their audience is, I want to know who your abettor is, so I’ve had some clients or potential clients talk to me and I say who is your abettor and they have no clue, I say well come back to me when you know because I can’t book you guests if I don’t know who your ideal audience is. So that’s really important to know, I want to know what your goals of the podcast now. If your goal is to connect with potential clients, people are really kind of on your level.

Like Steve, you’re show is just such a perfect example because you were so clear that you were not just bring on these big celebrity entrepreneurs to talk about their wild successes. You really talk about the bootstrapped entrepreneurs which I seriously absolutely love. That really stands out to me because it’s very clear to me who you’re trying to target and with your– you know I know you have training, coaching programs on how to start a store– I mean every single guest that you have on is probably an ideal target client for your programs.

So, your model is just like really, really well done. So that’s a really good thing I mean, so knowing what your goals are, knowing what kinds of people that you want to interview, I mean I have some clients that want to interview people with as big audience as possible, so I try to find guests that have– you know I look at their portfolio, their social media following, how big they are.

But I also have to understand that if the client is just starting their podcast, they’ve got two people listening, big celebrity entrepreneurs are not going to be on that show. So I have to– part of my challenge is as their interview connections podcast booker, I have to help them set clear expectations is that you know I can help you get a really great guest but just because you hire me doesn’t mean I’m going to get you Michael Jordan.

Steve: Okay, yeah that’s what I was getting at actually. Okay, cool and you know we are kind of coming on 40 minutes and I don’t want to take up too much of your time but you mentioned like a whole bunch of services during this interview. In terms of the ones that are specifically focused on expanding your own business, what online services do you use fro you business that you just can’t live without?

Jessica: I love this question, okay I love Base camp. Base camp is what I use for– I would literally interview connections would crumble without it. And Base Camp is amazing, I just, I really love it. Also Robo Form, if you don’t have a Robo Form with something similar. What Robo Form does is it saves all of your user names and passwords, say for example you are going through a website you’re logging in for the first time, Robo Form will capture that information so you never have to remember any passwords or usernames. It’s amazing, it just types it in for you– I could not live without that software. So those are good two and obviously I use Skype, I’m not Skype in Gmail all day long. I know I need to not be on emails as much as I am but I say I’m not perfect.

Steve: Do you usually use specific tools to help Pinterest at all, just curious?

Jessica: Yeah– no good point Viral Tag.

Steve: Viral Tag?

Jessica: Viral Tag is something you definitely want to be using because it schedules your pins.

Steve: Okay.

Jessica: So, with Pinterest and I can’t prevent it to mention that there are times of day that are best to be adding your pins to Pinterest because more people are using it. So Monday through Friday, 8:00 to 1:00 AM Eastern time is the best time to pinning because everyone sits on their couch with their laptop browsing Pinterest at that time. And also Saturdays are great to be pinning.

Steve: Interesting, okay so everyone is doing it after work essentially.

Jessica: Yeah, I mean obviously like if your target audience is someone that’s going to be on during the day, then you could obviously adjust that and you don’t want to totally miss out on people that are on other times. You’re going to switch it up, the verdict’s kind of the all cross the board know static is that Pinterest has the most traffic at those times. So simply, simply you don’t want to be pinning at the night. Use Viral Tag and schedule your pins, so I got the point early on in my business I was on pretty much Pinterest all the time pinning for my clients but now I can schedule the pins and not have to worry about it for a few days.

Steve: Okay so you schedule on multiple days in advance?

Jessica: Yeah you can schedule I mean you can upload tons of pins and just schedule them out, you can set dates and times they go up.

Steve: okay, that is cool. I’ll definitely have to check it out, I’m pretty sure my wife is not using that service right now. She actually just enjoys the pinning process.

Jessica: I know and that’s the other thing, like if you just like being on Pinterest then do it, if that’s the one thing that you are doing definitely do it, but if you’re a busy entrepreneur, that you have a lot of things on your plate, you don’t actually have time to be on Pinterest all the time, it is a very useful service. They’ve got monthly rates and then you know you can pay like 200 for the year and save a couple of bucks.

Steve: Okay, so it’s really inexpensive for the service.

Jessica: Yeah, it’s not that bad, for me it was worth it because of the time I would save.

Steve: Okay, well hey Jessica thanks a lot for coming on the show. If anyone wants to find you online where can they contact you?

Jessica: Sure, so my blog is EntrpreneurSupportServices.com and I have a cool new web TV show video podcaster InterviewConnections.tv.

Steve: Okay, cool I have to check that out. I didn’t find that earlier, and you know once again just my own little pitch for her if you are looking for guests to interview or the other way around, I highly suggest that you go check out her site which is InterviewConnections.com.

Jessica: Thank you so much.

Steve: Well hey thanks a lot Jessica; it was a pleasure talking to you.

Jessica: You too, thanks.

Steve: Like I said earlier I really admire Jessica for her great and her work ethic. She reservedly wants to spend more time with her family, so she quit her job cold turkey so she could start a business and that’s definitely not for the faint of heart. And she basically hassled her way to the top, became an expert in Pinterest and various other business related disciplines. Now personally I know that I learnt about Pinterest from this interview.

For more information about this episode go to mywifequiteherjob.com/episode32 and if you enjoyed listening to this episode, please go to iTunes and leave me a review. When you write me a review, it not only makes me feel proud but it helps keep this podcast up in the ranks so other people can use this information, find the show more easily, and get awesome business advice.

It’s also the best way to support the show and please tell your friends because the greatest complement that you can give me is to provide a referral to someone else either in person or to share it on the web. Now as an added incentive I’m also giving away free business consults to one lucky winner every single month. For more information go to mywifequitherjob.com/contest. And if you are interested in starting your own online business be sure to sign up for my free six day mini-course where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com for more information and thanks for listening.

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

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031: How Bob Lotich Replaced His Entire Day Job Income In 9 Months By Blogging

Bob Lotich

Bob Lotich and I actually go way back to the year 2009 when we both started blogging at roughly the same time. Bob runs the extremely popular blog ChristianPf.com where he makes a very healthy income writing about faith and personal finance.

In this interview, he shares a bunch of his secrets on how he makes money and how he fully leverages various social media sources to generate traffic for his site. He’s also written an incredibly detailed book that teaches others how to blog as a profession.

What You’ll Learn

  • How Bob turned his entire life around after being deep in debt
  • How Bob supplanted his day job salary within 9 months
  • What Bob’s 3 main revenue streams are
  • How Bob gets traffic to his site
  • How Bob gets guest post opportunities
  • What the long term strategy is for ChristianPf.com
  • How Bob leverages his content to generate affiliate revenue
  • Which revenue source works the best for Bob
  • How Bob diversifies his traffic sources
  • How to grow your Facebook fan base
  • How Bob leverages Pinterest to get traffic
  • How Bob runs his email newsletter

Other Resources And Books

Transcript

You are listening to My Wife Quit Her Job podcast where I bring in successful, bootstrapped business owners, to teach us what strategies are working and what strategies are not. Now this isn’t one of these podcasts where we bring on 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. If you enjoy this podcast, please leave me a review on iTunes and enter my podcast contest where I’m giving away free one on one business consultations every single month.

For more information go to www.mywifequitherjob.com/contest and if you are interested in starting your own online business be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business. Go to www.mywifequitherjob.com for more information. Now onto the show.

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

Steve: Welcome to the My Wife Quit Her Job podcast. Today I’m thrilled to have a good friend of mine on the show Bob Lotich. Now if you don’t know who Bob is, he blogs at ChristianPf.com, which is a very popular personal finance blog tagging towards Christians. And Bob probably doesn’t know about this, but one of the posts he wrote about making money blogging from like three or four years ago was actually one of the inspirations for me monetizing my blog in the first place. Anyways Bob’s site is really quite remarkable; he’s got a really large email list at over 50K. He’s gotten around 22 million visitors total since 2007 you know, and quite honestly his blog gets way more traffic than mine, and he’s also written several books, he offers free courses that helps others become financially secure. So without further ado welcome to the shoe Bob, how are you today man?

Bob: I’m doing great and I’m really excited to hear what you just said about reading that article, so that’s really exciting.

Steve: You know I actually went to look to look for it last night and I couldn’t find. It was just this monster post on how you made money online with AdSence a long time ago. I don’t know if you remember which one I’m talking about?

Bob: yeah, I mean I haven’t written much about blogging on the site, so I know exactly which one you’re talking about. Yeah, it’s ChristianPf4/blogging.

Steve: Okay, I’m going to find it. Okay, yeah because I know you’ve kind of organized your materials in lots of different categories for ease of finding but for some reason I couldn’t find that post last night.

Bob: Sorry.

Steve: Anyways, okay yeah seems like you know a lot of successful personal finance bloggers I know kind of started out heavily in debt before getting themselves together. Did you kind of come from a wealthy background or did you have financial hardships in the beginning prior to starting this online business of yours, and how did you kind of come up with the idea for starting ChristianPf in the first place?

Bob: All right, let’s tackle those one by one. So, first of no, not at all wealthy, had a lot of debt myself, and I found myself in a situation where I was like 20 years old, 20, 21, somewhere there, and I had moved out of town. I moved down to Florida just kind of just I don’t know– go hang out, do whatever and I ended up spending all my money wrecking up, basically maxed out my single credit card and I always laugh about how I was naive enough to think that I could only have one credit card.

So, that was my saving grace that I really believed I could only have one credit card. So I ended up max up my credit card. It just kind of brought me to this point where I realized I got to make a change, and so for me that was kind of the impetus behind the whole thing. And from that point I just started you know reading other personal finance blogs, reading magazines, reading books, everything I got my hands on just trying to figure out how to improve my own finances and my own financial life.

And so that was kind of my phase that I was going through and that kind of led into ultimately starting ChristianPf, because I was learning about all this, then I was also finding out all these things in the Bible said about money which I thought was fascinating that this old book had some relevant and timely information. And so then I just kind of combined the two into a ChristianPf where we just kind of focused on money management, but kind of geared and focused towards Christians, you know looking at some of the Biblical aspects of things and things like that.

Steve: So was your motivation for starting ChristianPf to make money in the beginning or was it to compile information, was it more for yourself?

Bob: You know I forget a little bit, it’s like I knew I remember I had read ProBlogger, Darren Rowse’s site and I knew that there were a couple of people out in the world who were making a full time living. I knew there were a few more who were making some money, so it was kind of in the back of my brain, but at the same time I knew it was a little bit long shot. But for me mostly I was just so fueled by this topic, and I was just excited about it and so I just saw it as an outlet, as a way to just kind of communicate with others and you know when they say that the best way to learn is by teaching, and so just by me talking about it and kind of writing about a lot of the things I was going through, it helped make it more sound in my own life. So, I think that was the main motivation, I think there was a little bit of man if I can make a few hundred dollars a month from this, it would be awesome, but that’s pretty much where I was.

Steve: So were you working full time when you started ChristianPf?

Bob: Yeah, I was working at– I worked in the banking industry for a while then I switched over to a brokerage firm and did that for I guess about five years I was there.

Steve: Okay, so you started it while you were working and then you eventually quit I would imagine?

Bob: Yeah, well I got laid off. So you know I had a plan, you know once the blog was up for a while, I had this kind of longer term goal. It’s like all right I want to be able to get this thing up to my– to surpass the income I’m making from my day job and I saw this is like probably three year goal, and I got laid off about a year into that phase.

Steve: Okay.

Bob: So anyway, so my wife and I talked about it, we prayed about it, we looked at our bank account, we looked how much money we had saved up, we looked at the severance package I was going to get and anyway I just– I went with it. I didn’t get a job after I get laid off and I focused full time on ChristianPf, and within about nine months, we were able to get it up to the point where it surpassed a day job.

Steve: Wow, that’s awesome. Okay so– but it was already making money before you got laid off kind of right?

Bob: Yeah, I was making a little bit but definitely not enough to pay the mortgage or anything, so it was no catch.

Steve: Okay, we will have to definitely talk about that growth. So, before we get into that you know how does ChristianPf make its money primarily?

Bob: We have about three main revenue streams, so AdSence being the cost per click is a big portion still, it’s always been a big percentage for us. And then we also run another CPM network and so we’ve been on ads and things like that generate some income. And we increasingly been doing more with affiliate marketing and finding great products that we like and talking about them on the side, so that’s become another big stream as well. And the books are increasingly as I write more and more becoming a bigger portion of the income as well.

Steve: Okay and so you mentioned– actually which affiliate networks for the banners do you actually use, just curious?

Bob: Well I don’t– just to be clear I don’t use, I generally don’t use any affiliate banners but my further CPM networks. The CPM network I’m working with right now is my bank tracker, but affiliate networks has a ton of them I mean CJ and Linkshare and I don’t know [Inaudible] [00:08:28] I guess there are a million of them that I use.

Steve: Okay, and so you mentioned that you grew your site to full time income essentially in nine months. So, this is back when your site was much younger. So how did you actually gain traffic to your site early on, basically when you weren’t getting that much traffic?

Bob: Yeah, for me a lot of it was guest posting. I mean so much and this is what I’m always recommending in a blogger’s, you know and [Inaudible] [00:08:53] came out a few months ago and said something about guest posting, it’s dead, it’s– you know and his point was, it’s become a spammy tactic and that’s absolutely true. I get emails every single day from all kinds of spammy companies wanting to guest post on my site and I turn them down.

But legitimate good guest post, which Mattes [phonetic] specifically says are fine really I think is a great way still to build an audience and build blogs and that was a really big part of my growing my traffic. And so I found any site I could write on. Some of them were blogs, some of them were article sites, I mean any place I could write and get an article in front of some eye balls, that’s what I was doing and that really helped– that really made a big difference in getting a lot of traffic, in helping grow my audience.

Steve: Okay, so you primarily attribute to guest posting and then of course the quality of the content. I still remember that blogging article, it was probably like 3000 words or something I remember but it was very well written.

Bob: 8000.

Steve: Was it 8000, shows how long it’s been since I’ve seen it but yeah that was one monster article that actually inspired me. So, in general for the guest posts have you been just making friends in the finance blogging industry in order to get those opportunities, or how have you actually gotten those guest post opportunities?

Bob: Yeah, that’s another thing that back then you know we’re talking 2008 there, it’s five six years ago. It was a lot easier you could pretty much email anybody and say ‘hey I’ll write you a good article’ and they be ‘all right, okay I’ll put it up.’ And now because it has become more spammy and so many people– so many companies trying to do it, it does really help to have a connection and to know the person who you are emailing. So anyway so yeah I mean I do think that’s a rule they help and now that’s pretty much all I do. It’s like if I send a premium article to a random blogger who I don’t know, they rarely get accepted, and so the best way to fix that is just to connect with that other blogger and get to know them and offer something and give something upfront. Be of benefit first and it just seems like things work a little bit better that way.

Steve: Yeah so just as an aside for the listener’s, Bob and I actually have gone back quite a ways in terms of just blogging, but we recently met in person the last couple of years at the financial blogging conference. And incidentally that is how Bob and I kind of got in touch with this podcast interview. He has a new book coming out, he just kind of reached out and of course since I’d met him a couple of times in the past, by all means I wanted to interview him and have him on the show, so just as an aside.

So you know Bob, hey you had a bunch of books that you’ve written, I’ve actually looked at your Amazon account and you’ve been quite prolific. And you’ve also created a bunch of these free courses for people in dead end– you write a lot of posts for the blog. What is kind of the master plan, I know that’s kind of a vague question here but I know you know there been a whole lot of people– blogging has become really popular and there’s more and more people entering the blogging space, making it kind of more and more saturated as time goes on. So are you still focusing all your energies on the blog or you are kind of branching out more to these posts, free courses, are you thinking about starting a podcast, you know what’s the long term strategy for ChristianPf as a business?

Bob: You know essentially what we’re trying to do is– I guess where my goal has been how to transition is I just want to help the readers in whatever I can do to help them reach their goals. And it took me a long time to realize that the blog by itself was not helping a lot of them reach their goals, and once I realized that, that’s when I started creating these courses and so we have like you mentioned a couple of free email courses that people would sign up for, and then it takes them through a series of articles, and it’s– they are just articles that were from the site but they are packaged together in a way that it seems to offer a lot more benefit than when they are just kind of randomly coming at you in the newsletter or you know via the blog every other day.

So that’s kind of the reason that we’ve shifted in what we are trying to do, I mean it’s the same with the books. So as far as the big master plan, I’m just going to keep doing whatever I can do to help the audience in whatever that’d going to help people learn best. You mentioned podcasts, it’s funny I started a podcast like five years ago and we did– I don’t know five or six episodes or something and we haven’t done anything with it since and now I see you and a whole bunch of other guys really getting into the podcast thing, so it’s kind of my wheel spinning away but anyway, kind of tent hitch. But yeah, as a far as the big master plan it’s just focused on the audience and whatever we can do to help them in whatever that’s going to be.

Steve: Okay, did you have a paid course or were these all just kind of free courses?

Bob: These are all free courses right now and part of how we off set the work and time invested in the whole thing is throughout the courses, there are different affiliate products that are mentioned and so they generate some revenue, and that just helps offset some of the costs of doing it.

Steve: Okay, so in terms of how ChristianPf actually makes money, which strategy is actually been the most effective. So we’ve talked about cost per click, we’ve talked about CPM banners and we’ve talked about kind of affiliate offers and selling eBooks. So, which one has worked out the best for you and which one is most lucrative?

Bob: I mean it’s kind of a dynamic thing you know it does shift year to year depending on what’s going on with Google and other things in the industry and things like that. But I mean we’ve always been heavily– our revenue is always been heavily weighted in Google AdSence, so that’s always been a really big portion of our income. Now, that said, I’ve always been fighting and working to diversify that as much as possible and minimize that.

Historically I’ve just had way too much dependence on Google. In general I’m really excited about Google because I wouldn’t be able to do what I’m doing, I would never have been able to do this if it weren’t for Google but still I want to diversify as much possible. So AdSence has always been a big, big chunk. Affiliate revenue has gradually increased over the last few years and so now at this point, the affiliate revenue is probably 50%, AdSence is may be 25% both since somewhere in the [Inaudible] [00:15:38].

Steve: And where do the books kind of fit into this revenue model?

Bob: I don’t know, we’re there probably 5-10% somewhere in there right now.

Steve: Okay, so this is– to the books is that something that you’re trying to grow in the future, or you’re trying to focus more on affiliate revenue?

Bob: It’s both, I mean I’m not trying to just completely focus on one or the other, I mean the blog’s going to continue with I think 2000 articles on the site now, and we’re trying to make the most out of the articles that we already have there, but we’re going to continue to publish and create helpful stuff. The books– I actually enjoy the process of creating the books and writing and publishing the books and it’s like I said, it’s just another way to get a lot of information out. There a lot of people who won’t read a blog but who will read a book and who want to be able to carry it with them or and so we need to serve those readers. And so honestly– and so the revenue, I mean we have been making a little bit from the books, but even if we weren’t I would still probably be doing it just because it helps the readers so much.

Steve: Okay and you find that you are able to drive some of the people who are reading your books back to your blog?

Bob: That’s a tricky thing to measure; I wish I had a better way of tracking that. I’m experimenting with some stuff, one of my– actually my last book I just launched last week we’re– I put a– I basically created a new URL that I’m going to be sending people from, so pretty much the only way people are going to be able to find that URL is via the book, so it’s going to give me a good idea of how much traffic we are generating from it.

Steve: Okay.

Bob: But that’s kind of my first attempt at trying to track this, so.

Steve: Okay, and so we’ve been talking a lot about traffic and I know you know Google is kind of been in a flax for the last two or three years I would say, and you’ve kind of mentioned that first a vacation, and at least with my blog I find that the majority of people clicking on AdSence ads are coming from search, so how have you kind of diversified your traffic sources?

Bob: Well for me it’s been a big– I just didn’t care about social media traffic at for really the whole time. I mean I was doing so well with Google and I was getting me so much traffic from them that I just didn’t pay attention to social media, and in about a year and a half ago or something, Google began to pull back a bit as far the traffic we were getting from them and it just kind of forced me to go out and figure out how to start getting some social media traffic. And anyway so we have been focusing a lot of energy in the last I don’t know nine months or so on Facebook and maybe the last three months or so on Pinterest and that yielded pretty good results so far.

Steve: Okay so yeah let’s talk about Facebook, I know you’ve had a lot of success in growing your fan base tremendously. So you know any tips on how to build up your Facebook fan base, and how did you manage to grow it so quickly? So I think you have like almost 40k funs at this point?

Bob: Yeah, October of last year, October of 2013, we had about 13,000 Facebook fans and that took us about five years to get those 13,000 fans and which I was like fired, I was happy to have 13,000 Facebook fans but I knew we could do better, I knew we could grow it, I knew there were other people out there who wanted to be fans and so we did put all our energy into it. And so one of the things– the big kind of revolutionary thing that I think made the most difference for us was we stopped only posting our articles. So for the longest time that’s all we did, was we just whatever article went up that day we would post it on Facebook and be done.

And you know I sat and thought about it and I was like this is just kind of selfish, it’s like all I’m doing is telling people here is what I just did, here’s what we just did, go look at it and I’m not giving this audience what they want. And we came to discover that our audience was interested in a lot of different things, and so e began sharing quotes– encouraging quotes and we’d share Bible verses that are specific to finances or whatever. We would ask engaging questions and try to get them there, we would share funny videos or whatever it was, and so some of the stuff was you know wildly off topic, but it was still stuff the people really enjoyed.

And so if the audience enjoyed it, even if it’s off topic, why not share with them. And that has made a really, really big difference for us. So we made that shift and began probably maybe one out of every seven, eight posts was about one of our articles and everything else was just stuff for the readers, just stuff for them to enjoy and that really helped us grow pretty quick.

Steve: Okay, so I would imagine though that you know this involves posting more frequently, so how do you kind of manage your time with respect to managing your different social media outlets like Facebook?

Bob: Buffer, buffer is all awesome, I absolutely love it.

Steve: So how many posts would you say that you buffer up, do you like buffer up a month’s worth, a week’s worth, a day’s worth, how do you kind of handle your social media?

Bob: It is always at least a week you know when I’m doing really well and have a big chunk of time to devote to it, and my wife helps me with this as well. She’s pretty heavily involved in our Facebook page and a Pinterest app. When I get a big chance, we’ll get out two or three weeks out ahead, but we’re always at least a week out.

Steve: So how do you decide what you are going to post there, so if you are not posting your own articles the majority of the time, what sort of topics do you focus on?

Bob: well, we just started experimenting, because I didn’t know it was going to work. I didn’t know if quote was going to do well, I didn’t know if something funny was going to do well, I didn’t know if a video would do well or you know what. So we just started trying different stuff and you know the Facebook kind of analytics is pretty good, you can see what’s working and you can see how many times it’s shared and liked and whatever else.
And so we just tried a bunch of stuff and just kind of evaluated that, and then started focusing more on the things that were working. And so for us it was a lot of quotes, it was a lot of Bible verses and you know funny stuff, and figuring all that out it takes a good amount of time and we had some mistakes and we had some things that were just complete flops that we thought were going to be success. But you just do it, do it and do and hone it and hone it and you get better and better at it.

Steve: Okay, so one thing also I was going to ask you, was in regards to Facebook when you are posting your posts, do you actually post from your old library or do you just post your new posts, how do you kind of work your own stuff in there?

Bob: Yeah, that’s a really good point. We do both actually because so much of our content is ever green, you know an article that was posted three years ago that’s just as relevant now, it’s like it’s a great opportunity to share something like that on Facebook. So, what we did is a lot of those posts don’t have good graphics, so we kind of recreated a new graphic for it just to make sure– did a look over to make sure it’s okay, it’s updated enough. You know we would post some of those older articles on Facebook as well as the newest stuff, and that really, really helped because a lot of those older articles that were really popular and really good, the Facebook audience may never them, so they should be shared. And a lot of those were some of our best traffic generators from Facebook.

Steve: Okay, and do you find that you are doing the same thing with twitter as well because it’s kind of a similar medium?

Bob: It is, twitter I– my kind of approach with this and a lot of aspects in my business is I try to find out one or two things that are working and focus all my energy on that. I mean twitter I focus no energy on.

Steve: Okay.

Bob: It’s on of the things that we– I don’t know we’ve seven or 8000 followers and we just get like next to no traffic from it and probably because I’ve never used it well and I never spend enough time to figure out how to do it well. I’m not very engaged, I’m not very active on it and the audience obviously knows that. So, we have a twitter account and so people who do follow us and want to see our latest article that’s for those in, that’s it.

Steve: Okay, so you don’t do the same thing, as you do with Facebook where you are constantly posting older twits and post older stuff and that sort of thing?

Bob: well, we are in a little bit and the only reason that we are is because of buffer and all I have to do is press an extra button and it goes to twitter as well. So we are doing some of that but the energy behind in creating and engage twitter audience is never been present.

Steve: Okay before we kind of got started with this interview, you also mentioned Pinterest, so how have you actually leveraged Pinterest for personal finance because traditionally we use it a lot for our online store because our products are just naturally suited to it you know but I wouldn’t necessarily think of personal finance being related to Pinterest if you understand what I’m asking.

Bob: No absolutely and it’s funny I mean I’ve had a ton of people tell me ‘oh you shouldn’t waste your time on Pinterest, you’re never going to get any traffic from them. It is when the girls just want to see clothes and cookies and whatever else’, and while there is some truth to that, there is a ton of– it’s just– I just had the stat the other day. The number of pins– the total number of pins that had been pinned on Pinterest I think has doubled like in the last six months, like something just astronomical like that where it’s exploding you know. It’s still on its exponential curve where it’s growing so fast and we have enough– I mean there’re definitely some articles that will never the light of day I mean wherever.

Some of the benefits have a self directed allay or something, it’s like I don’t ever expect to gain any pins on that, but there are enough articles that I think we can make work that clearly some people are pinning and we’re just trying to leverage those as best as we can. And so I know we’re not a fashion company or we’re not a food blogger or anything like that, so we probably won’t be able to get the amount of traffic that they get. But like we’ve talked about I’m just trying to diversify those traffic streams as best possible, and I want to milk it for all we can get out of it.

Steve: So, just curious which one of your finance posts have done the best on Pinterest?

Bob: Well, the interesting thing about Pinterest is when you get pinned by somebody who has a huge, huge following then it’ll get pinned by a whole bunch of other people, so it goes in its kind of viral waves, and so ironically– I mean it may be it isn’t that ironic I don’t know, anyway the best article that we’ve had so far with the most pins is an article about how to pay up your mortgage early you know which that makes a little bit of sense to me, I could see some people being interested in that, but what shocked me was that the graphic was just terrible.

I mean just terrible chissy stack photo and in tiny you know it’s like 100 pixels by 100 pixels or something, and that’s what somebody pinned and then hundreds of other people pinned it and so ultimately it’s led to I want to say it’s like well into the five figures of pins and– so anyway it’s sent us a lot of traffic. So that one has done the best, there’s another one about– that we wrote about some legit work from home jobs– it’s done pretty well. Any kind of idea Y thing like I mean that works pretty well as well.

Steve: So did you do anything to get these pins or were they just kind of random?

Bob: Well, what I’ve learned about Pinterest is there is a random aspect of it but what you and I and any other blogger or really anybody with a website can do to help facilitate it, is to create an engaging graphic for anything that we want to get pinned. And I’ve noticed that the more I’ve done that, I’ve gone back to a lot of older articles and just created better graphics for them, I’ve layered to text on them just so they– others stand alone kind of almost like a business card for that post, and in taking that approach and getting a lot more of– a lot better graphics for these posts, it just sets them up to succeed.

And so a lot of Pinterest users really only want to pin good looking stuff because it’ kind of– for them it’s almost like an accessory you know just like wearing a nice pair of jeans, it’s I want my boards to look nice, and I want there to be good looking pins on there. So, anything you do to help them really, really works and so– anyway that’s made a big difference for us. Now that said, as soon as you do that, that doesn’t mean anything is going to change because you still those people to come to your post to pin it, in which that aspect of it I mean seems a little bit random to me unless you yourself have a pretty big following that you can send stuff out, and anyway I don’t know. I’m not going to talk forever on this but…

Steve: yeah, yeah do you have a big following is basically what I was getting and how important was that in developing your Pinterest traffic?

Bob: well we don’t and that’s what’s really interesting to me, like we have 2500 fans on Pinterst right now, but our traffic– our traffic has gone up at least four times from Pinterest just over the last two months, and the main thing we did was just create better graphics for all these already popular articles. So, it didn’t come from us growing our Pinterest audience which really surprised me and we’re trying to that as well, but really even if you don’t have a Pinterest page for your blog or your website, even if you just create better graphics, you are going to get more Pinterest traffic.

Steve: Okay, you know one thing I actually forgot to ask you about Facebook was kind of how you’re leveraging that traffic for your blog as well. You mentioned that the majority of posts aren’t going to your blog, so what is your master plan with your Facebook account?

Bob: Well, that’s something– so my first goal was to grow the audience and then– and as I was growing it you know I was seeing a little bit of traffic increase but nothing that was making me excited, and then probably within the last month or two, I’ve been experimenting some more and we’ve really, really upped our traffic and interestingly and this works out really well, the same type of thing works really well. Just really good graphic and so we’ve been publishing our posts and using some kind of captivating graphics or something like that, and it’s really helped a lot.

And we’re you know not to get too technical but basically when we were posting the creating the post on Facebook to link back to our article, we post it as an image, and then we include the link in there, and then maybe I’ll say one line about it you know and or something like that. But the important thing that I’m seeing is that we’re posting the graphic as an image instead of as a post. So, by contrast if you just dump any URL on the Facebook you know what you’re writing about, what you’re talking about right now, it creates its own thing and it’s smaller and it doesn’t seem to get nearly as much engagement for us.

Steve: So, let’s get technical for a little bit because I’m actually curious about this. So I’ve seen different strategies, so some people post the graphic and then the link and the description. Some people post just the graphic and then they put the link in the comments because I think Facebook kind of downgrades any sort of post with a link in it. What have you found?

Bob: I honestly haven’t heard that, so what we’ve always done is the passing you mentioned where we post the graphic and then the link is in the description, but I’m definitely going to try that out yeah because I haven’t heard that and that would be awesome if that just come through.

Steve: I was just curious if you had tried some of those things because yeah I have noticed that my Facebook fan page– they basically downgraded the amount of reach that a post gets, at least for mine, I don’t know if you’ve experienced the same thing.

Bob: Oh yeah absolutely.

Steve: Okay and so has that kind of diminished your efforts at all on Facebook like I know when I saw that happening I was like okay why am I focusing my efforts on Facebook if it’s not returning.

Bob: Yeah, well it’s funny because for us right as we were going up Facebook was pulling down the reach, so they just like kind of crossed to where I didn’t see big drop, so I think it was like in December they made a big change and our Facebook– our fan base was growing a bit at that point and we were getting more traffic from it, so I didn’t see much change throughout the whole thing, but I guess had they not changed I would have– we would be getting a lot more traffic.

Steve: yeah, so let’s switch gears a little bit and talk about your latest creation Pro-Blogging secrets, so great book by the way. I just bought it and I left a review for you.

Bob: Thank you.

Steve: My main question regarding just blogging and I’m sure a lot of the listeners want to know this. It seems like the blogger sphere is kind of getting really saturated these days, do you– and we kind of touched upon this earlier in the interview, but do you think blogging alone is enough and kind of if you were to start your blog brand new today, what would you have to do to get it to the same point as where ChristianPf is now?

Bob: Okay first question, it is getting saturated I mean there are– I just read a stat the other day there are over 60 million WordPress blogs out there, and that’s just WordPress, I mean WordPress is the biggest I already slipped it. Yeah there is a lot of blogs, but I really don’t– I don’t see it as a zero some thing you know I don’t see it as a pie and we each have our own slice of the pie, it’s just kind of like– to me it’s like if you are sitting in a room, we’re not going to run out of oxygen, you know what I mean?

Steve: Yeah.

Bob: And I kind of feel that way about blogging, I think there’s plenty of room still for all of us. I think the most important thing is for people to find you know and here’s all time but find your own unique thing, your thing that sets you apart, your thing that you’re really good at, the thing you’re excited about, the thing you’re passionate about, and when your competitive advantage in all that. I mean what do you know that most people don’t know, and what kind of insight can you share about this that most people can’t.

I’m sure there will be some other people who can, but that’s okay but you know it’s okay to be similar to a few but you don’t want to be similar to 10,000, and that’s where I think some bloggers get themselves in trouble in when they are really just kind of adding to the noise when they are basically just doing exactly the same thing as 10,000 other blogs. So you got to find some way to set yourself apart and be able to be different.

Steve: You know we touched upon some of the different mediums as well. Do you think that blogging by itself is kind of enough if you have a unique voice and that sort of thing or do you feel like today since there are so many blogs like even if you pick anything, you probably will find you know hundreds of blogs in that same niche, and often times even if your content is really awesome it’s– you still have to get it out there. So what are some of the strategies early on if you’re just starting today, what would you focus on?

Bob: Wait, okay you asked me another question before that?

Steve: I’m just bombarding you with questions, I apologize. These are just all stream of consciousness by the way, I don’t have any of these written down so let’s actually go with that because what I’m trying to get at is if you’re going to start today how would you actually get the word out about your– let’s say your content is really awesome and that’s a given, how do you get it out there?

Bob: You know for me, okay so here– I’m just excited about the things that are working for me right now. So anyway Pinterest I’m absolutely thrilled about because we just watch our traffic month over month increase pretty dramatically by using really good images. Now obviously we have a platform that we’re jumping off of so it’s making it a lot easier to kind of get the momentum going. But if I were starting over again today I would start a blog, I would get five– probably five really good articles specific to my niche really, really helpful stuff.

And I would go out and try to connect with other people on the niche, other people in maybe somewhat related niches and find places where I can guest post, and just find any place I can go right and get a link back to the site and not even necessarily for SEO purposes, but to get that traffic like that’s what I think I would do right now if I was starting over. Beyond that I would– something else to say because I say this all the time because I– if there is anything I regret, it’s that I didn’t start building email lists at the beginning.

Steve: Okay, sure.

Bob: It took me years to get serious about building an email list and so anyway that’s the other thing I would start doing. Every single person who comes to my site, I want them to at least think about joining my email newsletter. I don’t want them to leave my site not knowing it was an option. So anyway those two things I would spend a lot of energy on and you know to be honest it’s– most blogs it’s a slow build, it’s the overnight successes I mean are just pretty stinking rare and if you’re getting into this you can’t count on that, you got assume it’s just going to be a long slow thing and be excited about having you know a hundred visits to your blog the first month. Then if you get 150 the next month, great we have some progress you know and just use that progress as momentum to keep you going, and as long as it’s going up month over month you’re doing great.

Steve: Okay and you know one thing I actually forgot to ask you about is you mentioned email marketing. How do you actually run your email list? Do you have a bunch of auto responder sequences, do you blast out every article to your audience, how do you kind of run it?

Bob: We have few different things going on, so we have a daily newsletter which is the biggest portion of our list total and then we have a weekly newsletter. The weekly one sends out once a week, then the daily one sends out every time we post. Beyond that we have the people– once people sign up for the courses they are automatically part of our weekly list, so they will get an article from us every week, and so just depends. So basically the people you’ve signed up for daily will get whatever we post sent out to them, the people who sign up for weekly will get that as far as all the email courses– those are all set up on overall responders, so it’s very automated and pretty simple ones that their niche or work is done setting it up.

Steve: Okay and in terms of the weekly guides, are all those on the auto responder or do you just kind of– how do you pick one article that goes out for the week as opposed to your daily guides?

Bob: Well, this is essentially in auto responder. It’s an all assessed driven thing, so it just sends whatever like a summary email with the three articles or four articles that were posted that week with a summary of each one of them.

Steve: Okay and then the daily one is just is each individual article in its entirety or?

Bob: Well it used to be and I’ve since changed, I mean created teasers out of them, so we send a graphic and then little teaser linking to the article itself. I used to have a whole article in there and I decided I’m going to try this and see what happens if I just put a teaser in. And we did that and instantly we are getting thousands more visits every time we sent out something out and I’m like why did I not do it sooner. And I was waiting for the response; I want to see if anybody was upset, I didn’t get a single email from anyone complaining about it so.

Steve: Okay and you know at least for me I find that whenever I said out a blast I tend to sometimes shed subscribers right and so for the daily guides I was just curious what your unsubscribe rate is versus the weekly guides.

Bob: I don’t know like the overall unsubscribe for it I mean all I know is that we were gaining more everyday than we were losing, so that’s all I’m excited about. I mean it’s considerably more, we are gaining a lot more. I want to say on the daily one, we probably lose around two, three, four, something like that each time we send out one and each day I think we’re picking up about 30 for that list so.

Steve: Okay cool and then so whenever you have like a book launch or what not you kind of just blast it out and let everyone know you have another Amazon book out right?

Bob: Yeah, yeah.

Steve: Okay, cool well Bob so we’ve been talking for like around 40 minutes and I don’t want to take up too much of your time plus I have to get to work. But you know if– so let’s talk about your book and if you can provide email address or twitter account where people can reach you if they want to ask you questions, that’d be great.

Bob: Sure email address is bob@christianpf.com and the book you mentioned is ‘Pro-Blogging secrets’ that’s what it’s called. I just launched it about a week or two ago. Essentially it was a follow up just quick story, the article you read that I told you was a ChristianPf4/blogging that bigger that big article, the 8000 word article I got started on a whole book thing because I decide I’m going to turn this into a kindle book just to give another way for people to download it and– in any way I thought I could just list it on Amazon for free and it turned out Amazon said no you have to charge 99 cents bla bla bla.

So anyway so I headed up there and I still even at 99 cents they had to turn down people downloading it. So anyway so this book now is a follow up to that and so I go into a lot more kind of specific techniques and things that I’ve used over the years to grow our audience and to increase earnings, and I get really, really specific lots of how to step by step things. Really a lot of this stuff is just the secret source I feel like I’ve learned and just kind of want to share with people so.

Steve: Yeah just for the listeners we’ve only scratched the surface regarding what’s inside this book so I highly recommend that you guys all go and pick it up. So hey Bob thanks a lot for your time.

Bob: It was my pleasure

Steve: It’s a pleasure talking to you, you know normally we only see each other once a year, but Thinkon is coming up so hope to hang out with you there some more yeah. Okay man take care Bob.

Bob: All right, thanks Steve see you.

I’ve known Bob for quite a while now, and I really love his story. Basically he was stuck in a major rut financially, decided to take action and turned his life completely around. Now today his blog gets an insane amount of traffic and his brand new book is very well written and full of useful strategies on how to grow your readership, so I highly recommend that you go check it out in the show notes.

So for more information about this episode go to mywifequiteherjob.com/episode31 and if you enjoyed listening to this episode, please go to iTunes and leave me a review. When you write me a review, it not only make me feel proud but it helps keep this podcast up in the ranks so other people can use this information, find the show very easily, and get awesome business advice from my guests.

It’s also the best way to support the show and please tell your friends because the greatest complement that you can give me is to provide a referral to someone else either in person or to share it on the web. Now as an added incentive I’m also giving away free business consultations to one lucky winner every single month. For more information go to mywifequitherjob.com/contest. And if you are interested in starting your own online business be sure to sign up for my free six day mini-course where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com for more information and thanks for listening.

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

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Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

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

030: How My Student Brandon Created A Profitable Online Store Selling Backyard Games

Brandon Reinders

It always makes me really happy when I see one of my students successfully making money online. Today, I have Brandon Reinders on the show.

What’s interesting about Brandon is that he asked me a few questions early on in the class and then I didn’t hear from him again until he had launched his store. And what’s even cooler is that Brandon did all of this without any prior knowledge or experience on how to start an online store. Enjoy the interview!

What You’ll Learn

  • How much money Brandon spent to start his online store
  • Why he chose an open source shopping cart instead of going fully hosted
  • How Brandon sources his products to sell
  • How Brandon chose his niche
  • How Brandon made his first sale
  • How Brandon advertises his shop online
  • How hard was it for him to make his first sale and what allowed him to take that leap of faith
  • What Brandon’s main challenges were in launching his store
  • How Brandon handles customer support while working a full time job

Other Resources

Transcript

You’re listening to the My Wife Quit Her Job podcast, where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now, this isn’t one of those podcasts where I bring on 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’ve used early on to gain traction for their businesses. Now today, I have the pleasure of having one of the students in my Create a Profitable Online Store course on the show, to give a real life account of what it’s like to start an online store from scratch without any experience whatsoever. But before we begin, I just wanted to share a testimonial from Meredith, who won the free business consult for this month.

She said, “Transitioning to e-commerce from B2B wholesale has been quite an adjustment for me. Although I’ve been in business for nine years I’ve been feeling extremely overwhelmed with all the steps involved in trying to build a successful website. The feedback Steve gave me during the one on one consultation was such valuable information that it really cleared up a lot of points for me and established a guide as to what steps I needed to take next. I appreciate him for taking the time out to give such thoughtful insight and also for sharing his wealth of knowledge so openly.”

Now, if you enjoy this podcast please go to iTunes and leave me a review and if you want your own business consult, please enter my podcast contest, where I’m actually giving away free one on one business consults every single month. For more information go to mywifequitherjob.com/contest and if you are interested in starting your own online business, be sure to sign up for my free six-day mini-course, where I show you how mywife and I managed to make over 100K in profit in our first year of business. Go to www.mywifequitherjob.com for more information, now on to the show.

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

Steve: Welcome to the mywifequitherjob podcast. Today I’m really happy to have another one of my students in my Create a Profitable Online Store course on the show, Brandon Reinders. Now, if you recall a couple of weeks ago I had a different student on the show Sandy Donavan, but what’s interesting about today’s episode is that Brandon took an entirely different path. Whereas Sandy decided that she didn’t want to bother with an open source shopping cart and instead went with a fully hosted solution and Shopify, Brandon decided to embrace open source and ultimately went with open cart which is completely free.

Now, here’s what’s also cool about Brandon, I literally exchanged like three e-mails with the guy to discuss his niche and I have to admit when he first came to me with his niche, I was very skeptical because I had no clue what he was trying to sell. But what I found is that obscure niches tend to be– tend to often be the ones to go into, and after running the numbers I quickly realized that his niche was a winner. Now, after I gave him the go-ahead, he pretty much disappeared and then came back with a store that was making sales. Now, currently he’s doing about four figures a month with his online store BackyardWasherToss.com which sells high end Washer Toss sets and since that one went well, he’s actually launching another store called ThePolishHorseshoes.com which just recently got its first sale as well.
So, since I actually haven’t spoken to Brandon that much, I’m actually as curious as the rest of you, you know, for this interview so welcome to the show Brandon how are you doing?

Brandon: I’m doing well. Thanks for having me on.

Steve: Yes, so how did you come up with this niche for Backyard Washer Toss games for your online store?

Brandon: Well, just going through the normal process through the course of finding a niche, I know for me personally it’s kind of important to find something that I was personally interested in. I know, I’m sure you can attest to that, I mean, doing something that you’re interested in isn’t technically required, but I thought that would be important for me, just to keep myself interested and trying to get it started so, I’m definitely interested in, you know, outdoor you know games, you know, things I could play with my friends or family, I like barbecues, camping stuff like that, so definitely a lot of games like you know cornhole also known as like bag toss [indiscernible] [00:04:29], Washer Toss things like that. And the issue with those is a lot of times it’s really hard to find a good, well you know high quality well-made game especially in like the big lock stores like Wall Mart or whatever. So, with my dad– he isn’t really, I want to say handy guy himself you know, he sees something that he doesn’t think is well made, he can– no, he’s just like, oh I can just make this something better myself.
So, we actually went ahead and you know, just made a few Washer Toss sets on our own and gave it to our friends and family and stuff and they really liked them and so that’s kind of where– it went from there.

Steve: So, you actually grew up playing these games, you know, with your friends and family and that’s basically how you got the idea. You went out and you looked to actually buy these sets and you couldn’t find any, is that kind of how it got started?

Brandon: Yeah, pretty much like I said I don’t know if you’ve seen them in like Wall Mart or whatever, but they mostly you know – if you see something that’s really cheap like 20 or 30 bucks for a set and really just like you know, cheap plastic or cheap wood you know, the stuff that breaks really easily so, that was always really frustrating me personally wasting money you know, you play it once or twice then it breaks so, that’s kind of where we got started you know, just building our own and people really liked them and that’s where we started.

Steve: Okay.

Brandon: Started our own line.

Steve: Yes, so everything out there was pretty cheap and you actually sell high-end sets right?

Brandon: Yeah.

Steve: Okay. So, you wouldn’t describe yourself as a technical person would you? You know like a web developer or anything like that right?

Brandon: No, not at all.

Steve: So, what would you describe as some of the most difficult parts about getting started with your online store?

Brandon: [chuckles] About starting, pretty much everything. Then in even just following like your course videos, I’d have to watch the same video like three or four times just to make sure I installed something correctly. And then you know, just going through installing themes and plug ins and the opt card install, I couldn’t do a clean installation the first time, I always run into issues. So I was always you know, like I said before I wasn’t contacting you per say, but I was contacting the developers of the themes and plugins every single time I tried to install something.

Steve: So, just curious, you know I also suggested you know, fully hosted platforms to certain students, can you just kind of walk me through your decision making process, you know, why you decided to go with open source as opposed to going with something a lot simpler and that could get you up and running right away?

Brandon: Yeah. Two main reasons is, I’m kind of a control freak and I’m very cheap so…

Steve: [chuckles]

Brandon: That’s pretty much why I decided to go with the open source route. I mean, I knew going in was going to be really difficult since I had no prior web develop experience, so that’s where your videos really came in handy, but yeah I knew that I was not going to be happy going through something like Shopify or you know, Big Commerce or something like that because I knew– I just knew right away that my website needed to be exactly the way I wanted it and I didn’t want to have to you know, pay or rely on some you know, third party web developer to do all that stuff for me.

Steve: So, are there any specific features that are in your cart that actually isn’t supported by shop online? In other words is there anything kind of custom on your side right now?

Brandon: Not really. When I first started out, I did have a feature with the Washer Toss sets that allowed you to you know, choose the color option for you the paint on the carpet and it’d automatically change the display of what you selected, you know like a picture, so that you can get a preview of that but other than that no. I actually took that feature down.

Steve: Oh, okay.

Brandon: But nothing else really, my own customized.

Steve: Okay. So, how much– I was just curious, how much did it cost you to actually start your store then?

Brandon: Total, is probably a little over 6000 dollars. That’s just because you know, since we’re building on the other products that sells just the economies of scale – just– it takes so much you know, yet just having about so much money into the materials just to make it.

Steve: Oh, okay. So [chuckles] I meant like just for the website part.

Brandon: Oh, the website? Okay.

Steve: Yeah.

Brandon: The website, you know a couple of 100 bucks at most.

Steve: Couple of 100 bucks?

Brandon: Yeah. I don’t know how many plugins I had installed but yeah actually, not more than a couple of 100 bucks.

Steve: Okay. And then how much does it cost to kind of just maintain your store from month to month?

Brandon: Not that much. I really just have the– honestly the hosting fees and pretty much– that’s pretty much it you know, just to [indiscernible] [00:09:35] hosting stuff up and after sales it’s all back and that kind of stuff. You know, around 50 bucks a month maybe?

Steve: 50 bucks a month, and just curious, are you using a shared hosting account? I can’t remember which web post you ultimately decided.

Brandon: Yeah, yeah. I went through Blue Host.

Steve: Okay, Blue Host, okay. And then you’re taking credit cards through pay pal or?

Brandon: Yeah.

Steve: Okay, through pay pal. Okay, so yeah, it’s probably under 50 bucks in a month to maintain your shop. Okay, so let’s talk about, you know, how you actually obtaining these products, so you’re making everything yourself? So, how does that process kind of work? Is it all your dad or? [chuckles]

Brandon: Pretty much. Yeah, with the Washer Toss, yeah that’s pretty much all him. The– actually the original plan was to just have him do the finishing stuff and we actually have like the frames of each set made by like a finish carpenter. And we actually did find somebody local who was willing to do that now– it’s actually a carpenter here in town, and he and the son were working together and you know, we showed him what we wanted him to make and all that and you know, we’re good to go and then we placed our order with them, and then it was actually his son that was supposed to make the frames for us and right after we placed the order, he decided to move to Florida, like just okay.

Steve: [chuckles]

Brandon: So, because of that his you know, the regular carpenter, he allowed us– my dad to use his shop, all of his tools and what not to actually make the frames themselves and then he could finish it off as well so, the plan wasn’t for him to do everything himself, but it’s just kind of the way things worked out you know, he’s doing it all now, which actually works out well so I don’t have to pay somebody else to do some of the work.

Steve: I was just curious though like you know; let’s say sales like start blowing up, let’s say you get featured on some media say, and all of a sudden you got thousands of orders, is there kind of like a plan?

Brandon: [chuckles] Yeah, just try to pump them out as much as we can. There’s unfortunately, I mean we – the good thing is you know, since it’s kind of seasonal, we did try to stock up here through you know, this past winter and spring you know, to get ready for the summer so, yeah I don’t know what you’d consider.

Steve: [chuckles]

Brandon: But, I guess that would be a good problem to have but…

Steve: Yes, it would.

Brandon: But, yeah, unfortunately we just have to you know, just sell what we can and go from there.

Steve: Yes, so when you first started I imagine you were kind of pretty nervous about launching your store, can you kind of describe some of the things that you did that just kind of validate your niche before you actually started investing a lot of money into building these sets and that sort of thing?

Brandon: Yeah, well pretty much it was just the normal stuff that you taught in the course, just going through you know, key words, search numbers, you know all of that and like I said, we did get a little bit of validation just from a few people that we made sets for at the time. They really enjoyed, they really thought they were high quality, really well made you know, all that kind of stuff, so the only bad thing– the only thing that I was concerned about is, a fact from a few friends that we knew, majority of the people around let’s say you know, who live in the Mid-west, Washer Toss wasn’t really well known.

Steve: Mm-hm.

Brandon: It’s more of a Southern, you know southern part of the states so, that was the only thing I was concerned about, not a lot of people knew about it, but I just kind of had to trust my instincts with the search numbers you were telling me.

Steve: Okay. And how did you actually make your first sale?

Brandon: Just kind of damn luck, like for about a week when we got our first sale, I believe it was a just an organic search sale that we got from what I recall, so like I said we had only been about a week so probably I’m like the sixth page in results or something like that so, I don’t know how the heck they found us, because like I said it wasn’t through an ad or anything but, yeah.

Steve: Okay. Wow, that’s amazing. Okay, so you weren’t advertising or anything when you first launched, you were just letting it go organically?

Brandon: Yeah.

Steve: Okay, and so, have you tried anything else since then to market your site or has it just been kind of organic for your Washer Toss game?

Brandon: Yeah. Shortly after that I did start the I would say the Google ads and the Google Shopping ads. We did try a little bit with the Facebook ad but they really weren’t that successful.

Steve: Mm-hm.

Brandon: I think that’s just you know, the product of the niche itself, it’s really not that well known, it’s kind of like say, kind of nichy.

Steve: Right.

Brandon: So, I don’t know if that had something to do with it but we just had you know more work with just from you know, Google ads.

Steve: Okay. So you’re just buying these search ads or are you in the display ads, which form of Google advertising, are you using?

Brandon: Both, yeah the regular ads and the display ads.

Steve: Okay. So, which one has been working the best for you? Just curious.

Brandon: Definitely, the display ads.

Steve: The display– the search ads or the display ads?

Brandon: Yeah, maybe I confuse there– yeah, like the– see like display like Google Shopping.

Steve: Oh, okay, okay.

Brandon: Yeah.

Steve: You’re right, great. So, the product listing ads.

Brandon: Yeah.

Steve: So those are working then?

Brandon: Yeah.

Steve: Okay.

Brandon: Yeah.

Steve: Are you also doing the search ads as well or?

Brandon: Yeah.

Steve: Okay. And they’re both converting for you at a rate where you’re actually making money on your ads, is that pretty accurate?

Brandon: Yes.

Steve: Okay. Yes, so there’s actually a lot of– I sent out a recent survey, just telling my readers and there are actually a lot of people on the sidelines who actually are just kind of curious how hard it was for you to actually just kind of make your first sale and just start making money. Is there any sort of advice or is there anything that you did to kind of push yourself to just take that leap, launch a store and invest all that money into your shop? And what advice would you give people just starting out?

Brandon: Just starting out? Well, if you’re going to do it, just go ahead and do it. Just jump right in. Definitely with online, in most cases– excluding mine, it’s more work and actually in most cases you don’t have to invest that much to start out. The only thing that I can really say is, try to keep the moment from going, just try to do something each day to– whether it will be you know, install a plug in or contacting potential vendors, something like that. What I found is you know, if I don’t do something one day then it’s easier to not do something three days and it turns into a week and then two weeks and then also you’d– you’re becoming complacent not making any progress so, that was the biggest help for me. Just try to you know keep making some sort of progress, little by little, every single day till the shop’s up and running.

Steve: Okay. So, these are some of the questions that I’ve been getting from my readers at the blog and you know, since you’re kind of in the heart of the trenches, I thought I would ask you some of these questions that people are curious about. So, number one, you know, how hard was it to put up the site? Can you kind of describe the process and the process that you went through to just get the site up since you decided to go the open source shop. So, yeah a lot of people have been asking about going open source or fully hosting and…

Brandon: Yeah, I’m sorry. Yeah, I think I touched that a little bit earlier. It was definitely really hard for me just because I had no prior experience before, but yeah like I said, it definitely worth it.

Steve: So how much time did it take you? Let’s start with that.

Brandon: Like well, from when I started to when I actually went live, we went about 14 months total, but there was some time off in there between where I didn’t really work on anything because of personal issues but so…

Steve: Okay.

Brandon: Really it’s probably between like four to six months total work.

Steve: Okay. And this is from scratch like knowing nothing it would have taken you about four to six months, is this what you’re saying?

Brandon: Yeah, yeah, from just signing up, for your course to actually going live.

Steve: Okay. And what were some of the big pieces in that process for you?

Brandon: For me? Trying to balance, not only building the website but also trying to set up a manufacturing process at the same time. That was really difficult to juggle both of those, so like I said the biggest thing was just trying to organize what, you know just prioritize everything that I needed to do next to move forward and so, you know whether it’d be getting supplies or you know, getting the set up and running, stuff like that, that was really important to prioritize.

Steve: So, from a pure website perspective though, I was just curious about what your experience was, so you installed open cart onto your site, what were some of the other steps that you had to go through to make it exactly how you wanted it to look?

Brandon: Definitely, first starting out I installed a lot of different plug ins and a lot of them didn’t quite mesh with each other right away, so it was a lot of going back and forth between developers of the theme and the plug ins to try get everything matched up you know, make it look the way I wanted it to.

Steve: So, where did you get your theme from?

Brandon: It’s called selegance, I believe it’s on theme forest.

Steve: Okay, and did you have to edit that theme significantly or was the theme just kind of out of the box what you were looking for?

Brandon: Yeah, it’s pretty much what I was looking for, out of the box you know, thankfully it was probably 95% to all the way there, it was just
moving a few things around.

Steve: Okay. And did you do that yourself or did you hire someone to move things around for you?

Brandon: No, no. Thankfully you know the theme developer was very patient with me, he actually did most of that himself for me.

Steve: Okay. Did you pay him? Or did he just kind of…

Brandon: No, yeah once I paid for the theme and he did that free.

Steve: Okay. How much did you pay for your theme? Just curious.

Brandon: I believe it’s you know, 20 or 30 dollars.

Steve: Wow! Okay, that’s really inexpensive. In terms of your plugins, were they free plugins or did you have to pay for those?

Brandon: No, I paid for those. That’s probably where most of my costs came from, you know installing all those. So, just stuff like you know, like a Mail Chimp plug in, you know that might be like 15 bucks to you know something like PayPal plug in, you know that was like another 30 bucks, stuff like that.

Steve: Mm-hm.

Brandon: You know, five or six of those can really add up.

Steve: Okay. And you know, after that just all the finishing touches regarding you know making the site look the way you wanted that was just kind of all done by the theme developer? Like for example, your logo on the upper left, did you put that in yourself or?

Brandon: Yap, I designed the logo myself but yeah, I did most of that. I was able to do all of that myself but you know like I said, just you know specifically install like a specific plug in, you know, something might not be aligned right or you know, something like that, that was something where I’d have to contact them for.

Steve: Okay. Yeah, I was just trying to get an idea of how much you could do by yourself versus having to contact someone else to do the work for you. So, what are some of the things that you did yourself with open cart?

Brandon: Well, after a while I’m sure they got sick of me contacting them all the time. So just looking out you know after– because they’ll send you the file back that you install where you want it corrected, so I was able to actually go into the files themselves and see what changes they made and I just kind of picked up on what they were doing from then on. So as I got further along I was contacting them less and less as I had learned more about how to change things myself.

Steve: Okay. So, did you end up learning HTML or PHP or anything like that?

Brandon: Not really. I mean, I can go in there and recognize things but yeah, as far as like actually learning that stuff no, not really.

Steve: Okay. Okay, I was just curious because that’s actually one of the advantages of going open source and I was just wondering if you had taken advantage of that. Okay, so another concern that a lot of people have when they’re first deciding whether to start a business is how hard it was to find your niche. So, how long did it take you? And describe your process.

Brandon: Well, really a little over let’s say a month, probably around six weeks I’d say it took me to find it. I actually– before I knew going in that it had to be something that I enjoyed you know myself. So, I kind of knew that you know back to outside, a lot of games, stuff like that, that was something I kind of wanted to go in, and I did find you know, three or four that I was kind of interested in. It’s just that based on the numbers and the competition that I found throughout the process I thought that you know Washer Toss was the way to go and started out.

Steve: Okay. And then, in terms of marketing, which forms of marketing have worked the best for you and were there any ones that were just bums? Like you mentioned Facebook didn’t work out for you and you’ve used Google. Have you tried anything else outside of those?

Brandon: No, not really. Next step is part – that’s part of my weakest things that I haven’t really done too much of that. The next thing is you know try to work on some e-mail campaigns, that being building up by the e-mail list obviously you know, throughout this past nine months or so.

Steve: Mm-hm.

Brandon: So, that’s probably going to be my next thing but I really haven’t done too much advertising outside of Google.

Steve: Just curious, how do you obtain your e-mail list? Is it just people who’ve purchased your products or do you have other ways of gathering e-mail addresses?

Brandon: Yap. Through the orders and then actually have a little thing on each page like if you enter on your e-mail, you get added to the list and…

Steve: Okay. Are they incentivized in any way or?

Brandon: Yes but I actually haven’t had too many people sign up for those specifically, so I haven’t really like– I mean, I have it on there, like you’ll get like a discount code, but really nobody has actually signed up for those yet.

Steve: Okay, so in terms of– I noticed you’re on the first page of Google for several of your search terms, have you actually done anything to get there? Have you been building links and that sort of thing? I’m just curious.

Brandon: Actually, yeah. Now you mention it, yeah, we did build some links. Actually it got as high as three or four for a lot of them, but recently I actually got a lot of– from spending low quality back links, so I’ve actually been dealing with that for the last few weeks so– but it’s really more of there are a few Washer Toss forms that the person links to, yeah that’s pretty much it.

Steve: Okay. So with the most part, just by nature of choosing your niche you just naturally started ranking for a lot of your key word terms, is that it? –

Brandon: Yeah.

Steve: Okay, okay. Yeah, that’s good to know. So, the next question I want to ask you kind of relates to just your experiences. Is there anything related to your experience or you just kind of made a big mistake? And you know, what sort of obstacles did you face since you’re just kind of new to this whole thing still in my opinion? What are some of the obstacles that you went through and how did you overcome them?

Brandon: Well, the biggest obstacle for me was something you know just being brand new to everything, setting up the website myself and you know, setting up like the whole manufacturing process as well as at the same time. So that’s probably the biggest thing. The other thing was, you know, first starting out with five we were a little too ambitious as far as the production was concerned. Because when we first started, we offered that you cannot customize each set with like 20 different colors for carpet and you know the painting. Just from a production stand point, that was just not feasible so, we had to scale that down quite a bit so, just offering a few different you know, colors of carpet and no painting options now. But, that was probably the biggest thing.

Steve: So, let’s talk about your manufacturing process since we haven’t really touched on that. So, an order comes through and they order a set from you, are these just pre-made or do you just kind of make them on demand?

Brandon: Yeah. Yeah, at first they were made on demand- so like I said they customized it and say they are like red paints and you know black carpet, we’d actually go ahead and make that and get them all in like three to five business days, but now since we’ve kind of scaled that down quite a bit we are able to pre-make them which definitely makes things a whole lot easier.

Steve: Okay. And are you doing this while working a full time job or?

Brandon: Yes.

Steve: Oh, okay.

Brandon: Both.

Steve: Yeah.

Brandon: Both myself and my dad, both work full time jobs.

Steve: Oh, okay. So, that brings up a whole another series of questions, and so how do you handle customer support?

Brandon: Actually, it’s really quite easy. That’s one of the pleasant surprises that I found is that not too many phone calls or e-mails throughout the day. It’s mostly just orders that I can take care of at the end of you know once I’m done for my regular job, so you know the customer service has been really easy, I would say I won’t get more than one or two phone calls and e-mails total per week.

Steve: Let’s say you get a phone call, how do you deal with that during the day?

Brandon: If I’m not down like a break or lunch or anything, well the phone have a forwarding service like you know, so all the calls go straight to my cell phone.

Steve: Mm-hm.

Brandon: So, if I’m not able to answer it, then they’re just– they’re able to leave a message or I do on the other messages where they can just send us an e-mail also but then the next opportunity that I get, I give them a call back.

Steve: Okay. And have you had any returns or troublesome customers thus far?

Brandon: No, that’s the other great thing. I’ve only had one total– one return total so far so…

Steve: Okay.

Brandon: From all the feedback that we’ve received has been great you know, with our products which so definitely something we’re proud of.

Steve: Okay. And just, how many hours would you say that you actually spend a week on this business then?

Brandon: Yeah, just the day to day you know, just normal week, probably around anywhere between 10 and 20 hours total.

Steve: 10 and 20 hours? And how is that time allocated?

Brandon: It’s mostly during the week, just pro– you know, processing orders each day, that’s probably no more than an hour total each day.

Steve: Okay.

Brandon: And then, there might be some other stuff or just managing inventory like contacting supplier during the day or you know, then trying to you know arrange for the delivered or pick up you know for us– one of us to pick them up or stuff like that during the day. Then during the weekend for me, I might just do some maintenance on the website or you know stuff like that, that’s the majority of the time actually about 10 hours or so.

Steve: Okay. And then materials, are you sourcing those locally or?

Brandon: Yeah. Both locally and online you know as far as the wooden stuff, that’s pretty much through the carpenter you know the finish carpenter that we go through– that we work on this shop and yeah. But the other stuff like the washers we found a supplier online that produces them for us and then we actually take them to a local powder coater here, that powder coats into all the different colors.

Steve: Okay, and then the inventory, you just kind of store in your place then?

Brandon: Order.

Steve: Okay. And let’s talk a little bit about your newest shop that you just launched, which is Polish Horse Shoes. So, what made you decide to launch yet another shop instead of just kind of selling these on the same site?
Brandon: Yeah. Well, the biggest thing for me is, you know just as far as…

Steve: Yeah.

Brandon: Being able to rank up higher in Google, I just thought that it would be a lot easier to do with two separate shops…

Steve: Mm-hm.

Brandon: But as far as starting this one, we actually got interested in Polished Horse Shoes is you know, I just went camping with my friends one weekend and as we had you know the usual stocks you know, self specks for you know, games like Corn Hole, Wash Toss and all of that and then somebody brought this Polish Horse Shoes game and everybody wanted to play that, nobody else touched all the other games so…

Steve: [chuckles]

Brandon: So that’s what you know– originally I picked my interest about it and just going through the again like the normal process of you know, seeing if it’s a niche worth going into, I felt it worked out well and you know the manufacturing process definitely a whole lot easier. If I had to do it again, I wish I would have done the Polish Horse Shoes first because it’s like a million times easier than making Washer Toss sets, but yeah that’s pretty much how we got started with that.

Steve: Okay, so was your friend’s set kind of chippy? Is that why you wanted to make it better or a higher end set or?

Brandon: Yeah, yeah. It’s pretty much the same process you know as the Washer Toss. The stuff that you find in the stores is really not really high quality and again that’s something we thought we could do better.

Steve: Okay. And I’m just really curious, since you had already gone through the entire process with Back Yard Washer Toss already, how long did it take you to put up your new set and get everything set up?

Brandon: I– yeah from when I first started the– just studying the niche to going live was like about two months.

Steve: Two months? Okay. And how much was that in split between vetting the niche versus getting the website up?

Brandon: It’s hard to say. Actually, majority time is just begun setting up the manufacturing process so.

Steve: Okay.

Brandon: Yeah. So, that was probably about, let’s say about 75% of the time spent.

Steve: Okay, what about the website?

Brandon: The website– that was– I used the same themes and you know plugins and all of that so, it was really not that hard at all.

Steve: Okay.

Brandon: Yeah, I could have broken down; I’d probably get it down within like three weeks.

Steve: Three weeks? Okay, and so it’s just a matter of taking your photos again and just kind of…

Brandon: Yeah.

Steve: Changing the colors around and the logo and that sort of thing right?

Brandon: Yeah.

Steve: Okay. Did you find yourself having to contact any developers this time around or?

Brandon: No. That’s a– I’m very proud of that, I did this [laughter]

Steve: [laughter]

Brandon: I didn’t have to contact anybody else. I learned from all my mistakes from the first time around so…

Steve: Okay and then this time around also the expenses– what were the incremental expenses of running another shop? Is it on the same account or did you start a new account or?

Brandon: Yeah, I did that. Yeah, a whole new account, through Blue Host and all of that so yeah, that’s pretty much it. Like I said, I was able to use pretty much all these you know, same plugins and themes for that from my first site so…

Steve: Okay. That’s awesome. So, things have been just really smooth in terms of this second site?

Brandon: Mm-hm.

Steve: And you got your first sale recently so congratulations on that. How did you get that first sale?

Brandon: That was through a– like Google products search ads so.

Steve: Okay.

Brandon: Definitely, happy that I got one so quickly you know again, we’ve only been open for about a week before we got that first sale so…

Steve: That’s awesome. And you mentioned you know, just manufacturing this product is just so much easier right?

Brandon: Yeah.

Steve: So, let’s see, your dad’s probably– does your dad need to get involved in this at all or?

Brandon: No. This is actually all me pretty much. I do have a secret friend who you know helps me a little bit when I need it, but this yeah, this is just pretty much all me from [indiscernible] [00:33:11].

Steve: That’s great. So, I did have one more question– oh yes, yes, so I noticed you know I was looking at your site and I was looking at the pricing…

Brandon: Mm-hm.

Steve: And I noticed for your Washer Toss sets, they’re actually– since they’re high end and they are more expensive so kind of how– when you’re buying like a product listing ad you just see these little tiny pictures with the price tags on them right? So how did you kind of position yourself and how did you know that people were willing to pay a lot more money for these high end sets as opposed to the cheapy ones that are in the store?

Brandon: Yap, yeah. So, based on what the experiences I had and from what I’ve heard from other people they’ve had similar experiences just you know they’ve got one of those cheap sets you know like Wall Mart or something and they are really disappointed in it. So, I really thought that a higher end– higher priced product would be a whole lot better. So yeah, just basically from my own experience as well or those other people from what they said, I thought that would be the way to go.

Steve: And how did you kind of arrive at your price point?

Brandon: Just basically, obviously well, where we were as far as costs were concerned and then just looking at the competition and obviously didn’t want to be the cheapest, but also you know we didn’t want to be the most expensive one as well.

Steve: Okay. Okay, so you kind of just based on the materials cost?

Brandon: Yeah.

Steve: Were you– okay and then you came up with a reasonable mark up and then just went with it right?

Brandon: Yeah.

Steve: Have you played around with the price at all or have you just kind of kept them kind of constant over the last nine months or so?

Brandon: I’ve raised them a little bit mainly just because you know costs of materials increased here recently.

Steve: Okay.

Brandon: Other than that, no we haven’t really played around.

Steve: Okay. And what about shipping, what carrier do you use and how do you handle that so these things are kind of heavy right?

Brandon: Yeah.

Steve: Yeah. So we go through EPS and just talking to local EPS web designers they actually like those really heavy, dense packages so shipping is not really that bad obviously, you know they’re really big so the average is probably around 20 bucks an order but you know as far as weight is concerned, it’s really not that big of a deal.

Steve: Okay and do you kind of roll that in the cost, or do you actually charge 20 dollars for shipping during check out?

Brandon: Yap, yeah. I’m actually playing around with that with Polish Horse Shoes, now that you’ve mentioned it yeah. For the Washer Toss, we are not– that is a separate cost, but we’re just trying to see how that’s going to work just trying different things with the Polish Horse Shoes, offering the free shipping, now I’m just kind of working on that a little bit with the regular price.

Steve: Okay, cool. Well Brandon you know, we’ve been chatting for like 35 minutes, I was just wondering if I could just get your overall opinion on that, just the whole experience and just how you felt about starting your own business.

Brandon: Yeah. It’s definitely a little bit overwhelming at first, like I said, I think for me you know, it’s more because just having to set up both the website and the manufacturing at the same time, but other than that overwhelmingly positive. One of the obviously, one of the biggest things that I’ve done on my own, so definitely happy with the whole experience, definitely have learned a lot about myself, definitely taught myself a lot of new skills that I can apply, not only to new potential businesses going forward but also you know like, regularly just job skills that helps me with my regular job as well, so definitely a positive experience.

Steve: Cool and if anyone out there has any questions for you, is there an e-mail address or twitter account where people can just kind of ask you questions if they have any?

Brandon: Yeah. You can actually contact me through my store e-mails, that’s customer.service@backyardwashertoss.com and customer.service@thepolishhorseshoes.com

Steve: Okay, great. One thing I did forget to ask you – just this question just came into my mind, do you have some sort of blog, and are you marketing yourself with content in any way for your Washer Toss game site?

Brandon: A little bit. We do have a blog set up, just have a few posts in there, just basic stuff. Stuff like, whether you should make your own game or you know buy your own, stuff like that, you know different rules and things like that. But yeah, not really too much you know.

Steve: Okay. That’s amazing that customers are just finding you organically and you know, just mostly based on what you chose as your niche, I think that’s awesome.

Brandon: Yeah.

Steve: All right Brandon. Well, thanks a lot for coming on the show. Like, I learned a lot and I’m glad I actually got to talk to you by voice instead of you know, you go off on your own and coming back with an awesome store, it’s actually good to hear the entire process that you went through, so thanks for coming on.

Brandon: All right, you’re welcome. Thanks for having me on.

Steve: All right, take care Brandon.

Brandon: Thank you.

Steve: So there you have it. Up until this point, I’ve had three students from my Create a Profitable Online Store course on the show, and they have all taken completely different paths. Now, Sandy who I had earlier on the show did not want to deal with the technical side at all, so she went with the fully hosted route. And then guys like Brandon and Sean were very successful going with an open source shopping cart. Now, what’s cool about Brandon is that, he’s not technical at all; never run a business before, and now he has two successful online stores.
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Thanks for listening to the My Wife Quit Her Job podcast, where we are giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.mywifequiteherjob.com.

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Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

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

029: How Lars Hundley Created A 7 Figure Online Store Selling Gardening Supplies

Lars Hundley

I’ve known Lars Hundley for quite some time and what I like about the guy is that he has a tremendous amount of experience with every aspect of running an ecommerce store.

He’s been running his own business, CleanAirGardening.com for over a decade and he’s extremely open about all of his experiences including both his successes and his failures. In this podcast, he reveals the ecommerce strategies that have worked the best for his store so be sure to check it out!

Also, make sure you check out his post on How I Made A Million Dollars By Reading An Article In The Wall Street Journal

What You’ll Learn

  • How Lars got started in the clean air gardening niche
  • Why he transitioned from dropshipping to carrying inventory to using a fulfillment house to purchasing a gigantic warehouse facility.
  • Which traffic sources convert the best for his store
  • Lars’ unique way of handling customer service
  • How to create your own product overseas
  • How he sells on Amazon.com in conjunction with his own online store
  • How he managed to secure an exclusive deal with one of his suppliers

Other Resources And Books

Transcript

Steve: You are listening to My Wife Quit Her Job podcast where I bring in successful, bootstrapped business owners, to teach us what strategies are working and what strategies are not. Now this isn’t one of these podcasts where we bring on 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. If you enjoy this podcast, please leave me a review on iTunes and enter my podcast contest where I’m giving away free one on one business consultations every single month.

For more information go to www.mywifequitherjob.com/contest and if you are interested in starting your own online business be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business. Go to www.mywifequitherjob.com for more information. Now onto the show.

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

Steve: Welcome to the My Wife Quit Her Job podcast, today I’m happy to have Lars Hundley on the show. Now Lars is actually someone who I’ve kind of known for quite a while and he’s been known to look side on me in the shadows of my blog. Anyway Lars runs CleanAirGardening.com. Actually Lars owns a whole bunch of sites but the ones that we are going to be talking about today is CleanAirGardening.com which is a shop that sells lawn and gardening equipment with a spin. Everything he sells is environmentally friendly. Now that’s all fine and good but the real reason I brought Lars in today is because he’s got quite an interesting back story and he’s pretty much done everything when it comes to e-commerce.

He’s imported from overseas, he’s created his own products, he’s drop shipped, he’s sourced domestically, he’s used the fulfillment service, he’s sold on Amazon, you name it and he’s done it before. Now, he’s also started some pretty random businesses over the years. I don’t know if we’ll have time to talk about those, but I’m very curious to learn from this guy so welcome to the show Lars, how are you doing today?

Lars: Hey, thanks for having me I’m excited to be here.

Steve: Yeah so I know you’ve got a whole bunch of websites but can you just give us a quick background story and kind of have the path that you took to arrive at starting CleanAirGardeninig.com.

Lars: Sure, you know I’ve always been super into the internet and in the 90s, I was working actually as a magazine editor and during that job and then I went off to work for an internet company that was building websites for other businesses and I was their PR guy and we were building websites for other businesses and I was looking at them and all these companies were succeeding and I was thinking, man, you know, I wish I could build something for myself and do this because this seems like something to do and it turns out I got fired from that job because I’m not a very good employee. It turns out, so I – I was renting a house at that time and I had to mow my own lawn and I went to like– it was in the rows of home depot one of the big back stores and I was looking for the absolute cheapest lawn mower to mow my own lawn, and I noticed hidden away in the corner, was one of those old fashioned push little mowers, like the kind without a motor.

Steve: Yeah like the ones on the front stands right?

Lars: Yeah and so I was like, I didn’t even realize that they made those things anymore and so I bought one and I took it home and I mowed my lawn with it and it worked, and it worked pretty well. I thought man, nobody even knows about these things and I thought, hey this could be my idea and so I actually– I started searching around and I found– it turns out I was living in Border Colorado, and it turned out there was a guy importing these really nice German made push motor mower that sort of like the [inaudible] [00:04:12] of the push mowers and he was right up in Fort Collins which was only about 45 minutes away and I call them on the phone and I didn’t even have my website yet and I was like, hey you know I was thinking about building a web and the guy was actually positive about it because most people if you called some guy and you didn’t have a website yet, they would like of course treat you like whatever you don’t have any website why would I really want to talk to you.

Steve: But what year was this Lars?

Lars: This was 1998 though.

Steve: Okay long time ago.

Lars: Yeah long time ago. So I literally drove to the guy’s house and I loaded my car full of lawn mowers and I think I had– you could fit about 12 lawn mowers and of all though and wrote the guy a cheque and took them back to my house and kept them in the house and I couldn’t even accept credit cards at that time. I was taking orders over the phone because you know in 1998 it was harder to get a merchant account to sell online and this is before like there was like not even all transactions were secure. People were like doing it where you’d like post a form and they would send you an email you know, all kinds of crazy stuff like that was going on but I didn’t have a merchant account so I just had my phone number which was the cell phone on my webpage that I built with like clearance…

Steve: Clearance Works Yeah, yeah.

Lars: Yeah, one of those. It was like a one page website and people called me on the phone, I would order it and I would ship it COD by UPS and then I would get payment like you know a week and a half later.

Steve: Aha.

Lars: And that was how I sold for the first you know maybe three months and I was making a little bit of money and I was like, wow, you know and then I discovered Yahoo store that you know it was a really easy to build store and they accepted you know secure transactions and then I was able to get a merchant account and then when I turn on the merchant account it really started to take off and I’m more like you, you know you still have your day job right?

Steve: I do yes.

Lars: Well I kept my day job for the first almost two years I was in business. Until I literary got so busy that I couldn’t do it anymore but the work started sort of pouring in as soon as people could order online and– but that’s where I started with, with just one push lawn mower and then I expanded into other eco-friendly stuff because that’s what I was interested in and things like compost bins and rain barrels to collect rain water for your garden, gardening tools like organic fertilizers and things like that and it just sort of grew from there and I was actually in Inc Magazines in the Inc 5000 puzzle scrolling companies like three times in I think 2009, 2010…

Steve: That’s awesome Lars.

Lars: Yeah it’s been fun.

Steve: So just curious you know back when you had the just one page website how did you get people to learn on that site?

Lars: You know, this was pre Google and the– in fact you know pre Google was a much happier time because there was Auto Vista, there was Hot Box, there was…

Steve: And Yahoo right?

Lars: There was Yahoo and traffic came like from all three sources. It was about one third, one third, one third you know where you got traffic from different places and really you would just appear on the search engines and you know I think I probably did link building back then but not really because nobody even knew that links were valuable other than…

Steve: Yeah.

Lars: A direct source of traffic that– you didn’t build links because it made you rank better in the search engines, but you know the search engines source to sort of found you there. I think I got a least at– and this was when it was free to still be listed in Yahoo’s directory. So I was listed in Yahoo’s directory and I got traffic that way and you know people just found me because there really weren’t that many other sites that were selling push lawn mowers. So I think one of the secrets I had a niche product that was hard to find in many places and many cities and so people would search for it online and so that was sort of the natural way that sort of built my business is that I was selling unusual things that were hard to find locally.

Steve: Okay and then how has that kind of evolved over the last, wow, like 15 years I guess more longer than that. Yeah, how do you get your– how do you get people onto your shop now today?

Lars: You know I still depend heavily on organic search.

Steve: Okay.

Lars: Because a lot of my stuff is not super high margin and like I’ll give you an example, rain barrels– rain barrels used to be like a big cash cow for me and then gasoline got super expensive and UPS rates and that extrates [phonetic] they went crazy for oversize products and rain barrels basically like a big barrel of air and so when you measure it, it doesn’t weigh much when you pick it up empty, it’s you know it’s a 25 pound thing, but when you measure it they ship it by the 150 pound rate because it takes so much space in their trucks. And so suddenly and I don’t know that I used to pay you know 25 dollars to ship it can cost you like 95 dollars to ship a rain barrel now and so that category is sort of gotten where it doesn’t make a lot of financial sense to buy a rain barrel online like it did and so that’s not as popular for me anymore.

You know things change overtime but I would say– back to how I get my traffic. Most of it is still organic like a little bit adwords not really much, I’ve got an email list of all my customers that’s probably you know with adding new customers then people always subscribe over time. I think I’ve got maybe 25,000 people on my email list and so…

Steve: Mm-huh, that’s good size.

Lars: And so I’ll send out emails. I use [Inaudible] [00:10:03] contact as my email servers and a little bit of social media you know but frankly my Facebook fun page for Clean Air Gardening I don’t think I’ve posted anything to it in probably more than a year. It has not been– I’ve never found social media to be super useful in that aspect. Although I do have like a Face book page for vegetable gardening, it’s just a generic page for vegetable gardening fan.

Steve: Aha.

Lars: And that one has 207,000 fans and I get huge response from that one, but basically I use it for information purposes. People don’t want to buy things when they are on Facebook, so I use that to sort you know keep people understand and that’s something I sort of do on aside for fun but I’ve not figured out a way to make money with ecommerce using Facebook at all.

Steve: So I’m just curios here, you have all this informational sites I remember you telling me, so do you actually steer people from there to your online store as well?

Lars: Well it’s funny, that has changed recently too, I originally built all those sites a long time ago, it was sort of in the early days of Google, like the early 2000, so a lot of them are more than a decade old and what I thought as an idea was well I’m making information on the site about how to grow tomatoes, how to grow cucumbers, how to grow beans like you know all the popular things, just how to grow vegetables in general. And so I ended up building all these sites about different aspects of gardening and lawn care and that sought of drove in my idea of customer and then I would link back through the Clean Air Gardening and drive traffic to my site that way, and then over time it turned out that certainly those links became valuable with Google you know where certainly that was making my SEO go crazy on Clean Air Gardening and that was ranking for all this stuff, but recently Google– they gave me a penalty for all these sites even though they’ve existed forever, it’s no secret that they were related to Clean Air Gardening, but I had too much anchor text on them or something and Google got mad and they gave me a penalty and I had to remove all the links, and that ended my penalty and so my site has come back in Google thankfully, but so now I’m sort of I have these sites, but I’m afraid to link back to my e-commerce site anymore because I don’t know if I should create the links again and no follow them or if I should not link at all, you know Google is like the one big mystery now about what they are going to punish you for and so I’m sort of…

Steve: I find that really odd because all these sites are completely related to your shop, it’s not that they are just random links, so yeah Google has just changed so much in like the last two or three years to the point where I don’t know, I’m just waiting for that kind of dust to settle a little bit because it seems like random sites are getting penalized left and right. I’m sure you not just linking for the sake of linking, everything you link I imagine is relevant right, to your shop.

Lars: Right, I think maybe the issue was it was a little bit too much anchor text because I may have over done that a little bit back in the day when it was– like it was only in the last two to three years that Google has gotten angry about too much anchor text and oh you can’t do– like before it just used to be a regular technique, it didn’t become grey hat or black hat or anything, they just changed their mind and [Inaudible] [00:13:35] on it, but what I have done in the meantime actually I’ve gone through it and I’ve added Google authorship to all those sites and claim them so that you know it’s like to tell Google hey no these are really mine and this is really me and so– but I don’t know it’s frustrating dealing with Google and depending on organic traffic, so that’s been a frustration for me.

Steve: Okay and so, given that Google– you are trying to depend less on Google, how have you made yourself a little more Google proof?

Lars: Well, you know having an email list is great although Google is trying to I think get a piece of that and make sure that, that’s not very valuable anymore too, you know the way they added tabs to Gmail and everybody has a Gmail account, I definitely saw a drop in response rates and open rates after they throw everything over in the promotions tab and that’s been frustrating. It’s like you know because your email list is yours, you know they are your customers, you’re communicating directly with these people and you know there is an unsubscribe mechanism on my newsletter, like all you have to do is click unsubscribe, they don’t want to hear from me anymore. It’s not like I’m sending out spam, I’m sending out a newsletter that theoretically people wanted to see because then why would they not have signed up for it if they didn’t want to hear from me. And so it frustrates me that they are making it hard to reach your own customers with email which is supposedly a neutral service that you know– so I don’t know. I love and hate Google.

Steve: Yeah, so here is a little tip Lars that’s kind of worked for me. If you can get them to somehow reply to one of your emails, that will instantly white list them in their inbox and they won’t be– and your emails won’t show up in the promotion folder anymore. So if you can just somehow ask a question in some of your initial emails and have them respond, that will improve your open rates and prevent that email from getting bucketed so to speak.

Lars: That’s a great idea.

Steve: Okay, so let’s talk about you have all these methods of sourcing your products, right and so can we just kind of talk about that and what’s worked the best for you like you mentioned you manufactured your own product, you drop ship and all that stuff, can you just comment on how all those different models are working for you.

Lars: Yeah you know the way I do things has sort of evolved over the years. I started out working out of my own house and I drop shipped most things to begin with, well actually I bought those lawn mowers in the beginning, and then I drop shipped them for a little bit after that and so drop shipping was my model for awhile and then it became an issue of customer service where people don’t drop ship your order fast enough and then your customers are complaining and they don’t know where the order is and you don’t know where it is either because the manufacture won’t tell you the tracking number.

And so from there I sought of went to– I found a fulfillment service which you know a fulfillment service is basically a warehouse where you ship all your stuff to this warehouse and they store it for you and when you get an order you email them and they put a label on your thing and send it for you and that way if you’re working out of your house or something like that, you don’t have to own a ware house or rent a warehouse or have an employee who is packing orders. They do it all for you and on a small scale that works pretty well up to a certain point, but what happened was I was growing really fast and suddenly I was looking at my bills for my fulfillment service, my warehouse service and I was paying like in the gardening season because gardening is a seasonal business.

So I do most of my business between like March and June is like the peak of when everybody buys everything and I certainly realized I’m getting like 30,000 dollar bills from this fulfillment service and I started thinking man you know with bills like that maybe I should buy a warehouse. And what I ended up doing I purchased a warehouse and that’s where I work now, I work out of a 15,000 square foot warehouse and I keep…

Steve: That’s huge.

Lars: I keep a lot of stuff here in the warehouse. That’s the way it sort of developed is that it sort of naturally developed that way from drop shipping to using fulfillment service to then it became more effective for me to actually have a warehouse and keep it myself. And I still– there are some products like larger products that we sell that it still makes more sense to drop ship them than to ship it to our warehouse and then re-ship it to the customer. So I still do drop ship a few products, but in general we like to ship everything ourselves because we can get everything out usually the same day when an order comes in, and so it provides a little better kind of customer service.

Steve: So can you comment on like just a different– the margin differences between drop shipping and then using a fulfillment service versus shipping stuff out yourself, I don’t know if you can– you don’t have to give exact numbers but just like the relative percentages in terms of profits.

Lars: That actually is another reason that I’ve sort of gone away from drop shipping except for very specific circumstances because the issue with drop shipping is that your margins are poor. You might only get a 10% margin or something on some item that you are drop shipping and if you get one returned well that’s wiped out the profits of ten orders. And so drop shipping it works for some people, but it does not really work that well for me anymore and so fulfillment services can work great for a limited number of products, but the issue with fulfillment services is they charge per the amount of square footage you take up in their warehouse, so every month they are charging you by how many square feet that you taking up, and then they also charge you every time they touch something.

So every time an item comes into their warehouse they are charging you an incoming fee, and then every time they ship something out for you they are charging you a fulfillment fee. And so to a certain extent if you are not that big yet it can be cheaper than running a warehouse and having a lease and all that stuff, but then when it gets to a certain tipping point then certainly it becomes less effective and more expensive.

Steve: Just curious, when you were using that fulfillment house, what percentage would you say your revenue was devoted to paying off the inventory guys?

Lars: It was not great, it was not a large amount as a percentage, but I would say like for example, it was costing me about eight to ten dollars per item having shipped out of there. Which, if you’re doing small items that you know they were not really expensive, then that would eat up most of your profit, but what I was shipping out mostly was things like push lawn mowers, which was like a $200 item, so it wasn’t that big of a deal. And then also I was using their negotiated UPS rate, which was a better UPS rate than mine anyway. So that made up a little bit for some of that eight to ten dollars per unit of touching the thing, plus there’s a little bit of expense of storing it, but what I was trying to do was minimize my storage time by just having enough stuff in there for like you know, you get 60 days’ worth of stuff so you don’t end up storing something in there for a year or you’re just paying to have it sit there.

Steve: Yeah I would imagine it’s kind of challenging, because there’s– inevitably there’s going to be stuff that doesn’t sell, right? So if you have to pay each time they have to move something or ship something back to you then it can probably add up I would imagine.

Lars: Yeah, and you know, one of the biggest challenges of a seasonal business like I have, is okay like let’s say lawn mowers, like this blown lawn mower – that’s the German-made push mower that I started out with, it turned out over time that I actually took over and became the US importer of that product and so now I am the US importer and wholesale supplier for everybody else in the country that sells that mower as well. So that’s a seasonal item, right? And it sells between March and June because that’s when everybody buys their lawn mower. Well, if I’m going to sell for example one of my peak years for that mower was something like eight containers. And there’s about 1,000 mowers per container so let’s just say about 8,000 of those lawn mowers. Well, you can imagine what it would cost me, because I had to buy them in advance, and have them all at my warehouse by March, so that I could then sell them through by the end of June. And so it was a huge capital requirement where I would have to borrow a lot of money, because it was literally so much that I couldn’t just do it out of cash flow anymore. Because when you’re on that scale and so you borrow a lot of money, and then sell them all down and then pay off your line of credit at the end of the summer, and then do it all over again.

And the worst part is, that you’re borrowing all this money in January, when nobody is buying any gardening stuff, and you got no cash flow, and it just always gives you a stomach ache to borrow the money, thinking ‘oh no’ you know, but it’s almost like– it’s like being a farmer I guess you know.

Steve: Yeah, yeah.

Lars: So that was– the worst part about being a seasonal business is that you really have to sort of plan all your purchases and be careful, because if you buy something and you buy too much of it and then you got a dud, then what do you do? Because, once it’s not sold during the spring, well you’re stuck with it for a whole another year because it’s sure not going to sell in the winter if it didn’t sell in the spring.

Steve: Right, so but I would imagine that you don’t buy large quantities unless you’re pretty confident it’s going to sell, right I would imagine. Like these mowers – you wouldn’t buy 8000 of them if you didn’t think they were going to sell. So I would imagine you’re a little bit more conservative in your purchases, right?

Lars: Absolutely. Although, when– the exception to that would be though that we’ve also sort of had things manufactured for us, and you sort of have to take a little bit of a chance for that, because there’s minimum order quantities when you have something manufactured, and you don’t know for sure that it’s going to sell, because you’ve never sold it before. And so I have that sort of a risky way to do it, but fortunately I haven’t been stuck with too many duds doing that.

Steve: Let’s talk about the manufacturing process, how did you find someone to manufacture your goods for you?

Lars: What I have manufactured is a compost bin. It’s called the spin bin, and it’s a tumbling compost bin. And the reason why I decided to have one manufactured is because we’d been selling other people’s compost bins, and we actually imported one for a while from Australia, and that product is no longer available to us. And we sort of saw that that was the direction it was going, that we were going to– that it wasn’t going to be available anymore, and so we thought ‘well, maybe we should make our own’ because, I’m interested in composting, and so we sort of sketched it out, and then we found a guy at a local company that’s plastics– his injection molding company, where they make injection molded plastics, and they have a guy on staff that all he does is make card drawings to make your mold for your product.

Mostly, they make their own stuff, but they allowed us to, you know, to pay by the hour and use this guy to make help make our card drawing. And so he made our card drawing, and then they helped us from there. This was a local company here in Dallas, and then they helped us get our mold manufactured because the biggest expense when you’re getting a plastic product manufactured is making the mold, because the mold is made out of solid steel. And since this was a compost bin, it’s huge like, the parts of it are huge, so it requires a giant hunk of steel. It’s like it’s heavier than a car, our mold.

Steve: Really? Wow, okay.

Lars: And it ended up costing– the mold is actually two molds, because there’s one mold for the lid, and one mold for the piece that turns into four pieces that are assembled together that make the composter. And it was something like $80,000 to make the mold for this compost bin, but we felt– at the time we were selling so many composters that I was sure about the design because, you know, we designed it, and I felt confident that it was going to work, but it was a big risk, because it was a lot of money. We took it, and then we actually– the mold we ended up getting made in China, because there’s tool makers in China that will make your mold. They take the card drawing that the guy– the local guy made, and they make that giant hunk of steel that then based on the card drawing, that’s going to make– punch out each part of your compost bin, and then they ship the mold to us in the United States in a container, and then we have that mold at the manufacturer here in Dallas and then we get it manufactured here locally, because it turns out getting things made out of plastic– injection-molded plastic is pretty much a commodity. It’s based sort of a lot on the price of the oil because plastic is like a petroleum-based product or something like that, and so it doesn’t matter if a machine is stamping them out here or it’s stamping them out in China, it’s about the same cost, and we really wanted to get it made here in the USA– that was important to us to do if we could, and we were able to.

And so we get that product molded here in the USA, and then it’s molded– it’s a place about 15 miles from here. They make them, and then they send a truckload of them over to our warehouse at a time, and then we store them here and then as the orders come in, we ship them out from here.

Steve: So how did you find the mold guys in China? Just curious.

Lars: Well, we were lucky on that, because, since we were working with this injection molding company, they had already done business with this company, and so they knew that they were legitimate. And because, when you start just looking around on Alibaba or something like that, it’s tough if you don’t know if you’ve got somebody reputable. But they had worked with them in the past, and they had made good molds and– because we did have it priced out to have the mold made here in the USA, but it was like incredibly more expensive. And the mold turned out great, there was no problem with it, so it was– they were good.

Steve: So in a way just listening to what you’ve told me, you kind of already knew that these were going to sell, it was a pretty safe bet, right? Some guy– some other one of your companies is going in the direction of not selling their compost bins, and you know they’ll sell like hot cakes, so by designing something using the principles that you know since you compost all the time, it was a really safe bet I think – at least that’s what it sounds like to me.

Lars: Yeah, I wouldn’t have taken a risk that big for just a completely unknown product that I didn’t know how well it was selling, and you know we forecast out how long it would take us to pay off the mold, and our forecast turned out to be fairly accurate too. And so, it was a calculated risk.

Steve: Okay. So I wanted to talk a little bit about marketing. So I know you’ve tried a bunch of different things in that regard. So if you could just comment and I’m just going to pick a couple of things here; you mentioned you hired a publicist in the past, you’ve been in magazines, you’ve had your own catalogue, you’ve been on TV and radio. What has kind of worked the best for you and what has not worked for you?

Lars: Well, you know, originally I thought the reason that you wanted to have me on the show is because you did like a request on this ecommerce forum asking for people, like the mistakes they’ve made, and then everybody chimed in the mistakes that they’ve made and my answer had so many mistakes that you couldn’t even include me in your blog post because there were so many mistakes that it would have just hogged the whole blog post. And so I figured maybe the reason you wanted me on your podcast was because it was going to be a podcast about how ‘look you can make this many mistakes, and be this big of a moron, and still remain in business for 15 years.’ I figured that was the real reason that you wanted me to be on the podcast.

I’ve done all kind of ways to market, and what I started out with you know my background is in journalism, and I have a master’s degree in international journalism, and I was a magazine editor before I sort of moved on to the internet. And so when I first started out, I was writing all my own product descriptions, because I was a writer, and I was doing my own PR, and I was just doing, you know, a little bit of basic PR and sending out a few press releases. I got picked up some places and some pretty big ones. I got– Inc. magazine wrote about me once when I was still working out of my house, and they did like an article about me, and then I was…

Steve: How did you get that? You put out press releases using a press-release service, or?

Lars: No, I was actually– I was putting it in the mail and sending them out myself. And so, I was sort of taking a real specific approach to it since my background was in journalism. I sort of knew what editors wanted to see when they see a press release, and so I’d sort of approached it that way, and I was getting good results. And so– in fact the Inc. magazine thing, the way I got that was somebody– it’s so long ago, it’s more than 10 years ago, and somebody let me know that Inc. Magazine was doing a thing about people working out of their house, or something like that, and so I sent an email to the writer, because they were looking for people, and I pitched them and they went for it and that’s how I got included in the article. And once I was in Inc. Magazine, that led to a lot of other coverage because the way it works with the media is, a lot of them are just reading other media, and they see like if you appear in the New York Times, then suddenly the other Dallas Morning News, it’s like ‘Hey, well this guy is from Dallas, let’s write about him too.’ And sort of press coverage leads to more press coverage a lot, and so– and also at the time, eco friendly stuff was really hot, like right now it’s not as hot, but you know like that was when Al Gore’s movie came out and you know…

Steve: [laughs]

Lars: Everybody was interested in that, and so it was a really pitch, and so I was picking up a lot of coverage but it was funny because after that I thought well, I’ve had really good luck with this, I’m going to use a PR service. And I’m just going to hire somebody to do it, because then they’ll spend all their time doing it, and I’ll get even more coverage. But it was a total failure. It turned out that, you know the personal touch that I was doing it and also the aspect that I as the business owner was reaching out myself, I think was a lot more effective at getting coverage than some PR person doing it for you. And so I spent a ton of money on that, doing it for a year, and got like no return, it was a complete failure and I regret– I wish I had that money back.

Steve: Okay. What about television and radio, you said you’ve been on some television spots. Were they– did they work out for you? And how did you get those spots?

Lars: Well, a lot of those sort of landed in my lap, like for example you know I had some products on the Today Show and also on Good Morning America. And what happened was that some– one of the show’s segment producers was looking for– they were going to do a segment on like eco-friendly stuff for your yard. And so they were lining up a bunch of different products for the guy to talk about, and basically, they found me with some kind of a search-engine search, and they were like ‘Hey’ you know and we talked and I suggested a product and they were like, ‘Okay, great. Send it to us.’ And so I overnighted a product and it ended up on the Today Show and then I got a bunch of traffic that day. It didn’t really convert really well into sales, but it was great because after that, it’s a lot of awareness you know– you were on the Today Show?

Steve: Yeah, I had the– we got a lot of sales from that, that’s why I was curious what your experience was.

Lars: Mine was a segment where they had products from probably– it’s probably seven different products, that were all in a category, and mine was– it was a compost bin actually, for the Today Show, and I think I probably sold maybe 20 compost bins or something over a period of two days after that, so it was not like a– but it was a big price point item, and it wasn’t– that wasn’t my specific audience. And so no, the TV shows have not been huge for me.

And then radio, I’ve done– in fact, there’s a radio show that’s relatively famous here in Texas, it’s called the Neil Sperry gardening show. And this guy has been doing that show for decades. He’s an older guy– this is actually a radio advertizing story and not a radio PR story, but I decided, ‘Ah, I know what I’ll do is I’ll sponsor Neil Sperry and then I can sell much stuff to Texas gardeners and it’ll be great.’ And so, this was in the early 2000’s, and what I realized after spending a lot of money sponsoring his show for six weeks, is that only old people listen to the Neil Sperry gardening show.

Steve: [laughs]

Lars: And none of them buy anything on the internet, and the only time people listen to radio mostly is when they are in their car or something where they’re nowhere near their computer anyway. And so I think I got zero sales from sponsoring the Neil Sperry show and it was– that was one of my biggest marketing failures. So I sort of learnt my lesson on, you don’t want to just start spending money on advertizing and writing big checks, because you never know if it’s going to work. It’s better to test small.

Steve: So what has worked the best for you? Just curious.

Lars: You know, I would say adwords has worked well you know it’s measurable although adwords has not worked so well for me in the gardening niche because it’s a relatively low margin business and I’ve got high shipping costs so it’s a little bit difficult. But adword has worked for me doing PR personally for myself has worked for me as far as marketing. Having my own my own email list has been effective for me to drive sales. Those have been pretty successful methods for me.

Steve: So Lars I was actually trying to lead you to the next topic which is Amazon. I know you have strong opinions on Amazon and you do sell some of your products on there. So how do you kind of – how do you kind of sell on the Amazon versus on your own site? How do you kind of incorporate all that stuff together?

Lars: Amazon is sort of my ultimate frenemy [phonetic] and I feel like you know I’m an Amazon prime member and I’ll be honest I look on Amazon when I’m going to buy stuff and I hate myself for it, because you know as a competitor to Amazon you know I detest Amazon, but as a consumer I enjoy buying from them and I like prime because you think oh there is a prime thing, I know I’m going to get it in two days. I don’t have to think about it and I order it. But I also use Amazon as a sales champ and so specifically I don’t have all my products listed on Amazon. I list a few things and I use Amazon in a specific way.

Like with some products you know just products that I sell as an ecommerce retailer I don’t sell that on the retailer, I don’t sell that on the Amazon because you are competing for the buy button with all these other ecommerce retailers or you are competing with– for the buy button with Amazon itself and you know so your margins just quickly evaporate because you know you’ve got a product say that it cost you 75 dollars and somebody is selling it for 100 dollars on Amazon well then that means they are paying 15% to Amazon for the privilege of selling it there and they still have to ship it.

And so what did all your profit go? You know like you’ve sold something but you haven’t made any money. But so the way we use Amazon is we use it to liquidate data inventory because– so like if we bought a product and it hasn’t sold for us and it has been sitting here at the warehouse, then we can sell it cheap and we can usually recoup either make a tiny profit on it or only lose a little bit of money and we get it out our ware house as opposed to having just stand inventory that’s just – it’s just cash that’s tied up in the inventory that doesn’t sell at all that you know that fills up your warehouse and it’s not going to sell.

And so that’s one way that we sort of use Amazons is to give out our dead inventory but also one way that you can use Amazon profitably is if you have a product that you have an exclusive on, and for example that brown push lawn mower whether you as importer of that product and so we import it and for a while we were selling to Amazon at whole sale and they would buy and they would say okay we want to place some order for 100 lawn mowers and then you put them on palettes and Amazon as the truck come pick up and it goes to the Amazon warehouse and then Amazon will sell it indirectly.

But then we realized that well it’s more profitable for us to not sell to Amazon, but instead to sell on Amazon and you can either sell on Amazon using fulfilled by Amazon where you’re packing it up and shipping it to Amazon and then whenever Amazon or whenever you get an order on Amazon, Amazon is shipping out the order for you and they charge you a fulfillment cost and storage cost you know so you can control your profits by sort of calculating in advance what your fulfillment costs are going to be.

And the advantage to that is that then it will appear as an Amazon prime item and so people that like to get their items overnight or in two days all the Amazon prime members love to buy stuff that’s marked time and so that’s a good reason to use fulfilled by Amazon. But then we also sell stuff on Amazon where we’re shipping it from our own warehouse and so you will get the buy button for a thing and then if you are– if you spend a lot of time on Amazon you could see that some stuff is sold directly from– you are buying it from Amazon and some of it you are buying it from an Amazon seller and that’s– I am an Amazon seller.

So I’m doing that weird combination of selling wholesale to Amazon, selling on Amazon, selling fulfill by Amazon and we sort of calculate out with all our products so which one makes the most financial sense for it’s going to maximize the number of sales versus the amount of profit and all that, then we sort of tweak it that way. And the safest thing with Amazon is to have an exclusive product because then you are not just constantly competing to get the buy button by lowering your price, and lowering your price, and lowering your price because that is a race to the bottom because your cash cow product is somebody else’s loss later or somebody else’s clearance item.

And it’s really frustrating to see a product that’s been profitable for year for years suddenly become unprofitable because now it’s going on Amazon. You look at the price on Amazon and let’s say your whole sale cost and you think well how is somebody possibly making money on that? But– and you don’t know and you can’t figure it out and it must be because they are just liquidating because I liquidate products on Amazon I guess some probably punishing some poor guy that’s trying to sell at full price someplace else.

Steve: Right, so just curious, how did you get that exclusive deal? Is that just a pure relationship thing that you build over the years with that company?

Lars: Yeah, the way it happened actually it was overtime I became the biggest blown dealer and what happened was that the old US importer did something that made blown mad. They started to manufacture their own lawn mower and blown got angry about that and cut them off and so that became my opportunity because it turns out also that I was a German major as undergraduate and so I speak German.
So I immediately got on the phone and called them, and sent them faxes and said hey you know I don’t know if you guys know or not but I’m your biggest blown dealer in the US and I have been all along and I would like to go ahead and take over this importing thing if its available and they were like well yeah, it turns out it is available. And so I had borrowed some money and I knew approximately what I could sell just knowing my own sales and knowing that I was the biggest dealer. And so I placed an order and got into it that way, so that one sort of fell into my lap. And one of my other products that I imported also sort of fell into my lap the same way while I was buying it from a guy and then he sort of ran into financial problems and didn’t pay the supplier he had imported the thing and so they wouldn’t sell to him anymore.

And I realized he was not admitting to anybody why he couldn’t get it and I couldn’t figure out what the problem was, and I realized what had happened and they said oh yeah we’re not selling to that guy anymore, we are looking for an importer and so I started importing that one too. So it’s sort of been an opportunistic kind of thing. And then other products once I got the opportunity with my first two, then you sort of know what to look for and once you’ve had experience with it, then it’s easier to sort of talk somebody into it if you find a product sort of overseas. Because I have also been to trade shows overseas like there is a big gardening show in Germany and I went over there, I met with people looking for people– looking for cool European things to import, and you can meet people at trade shows and its sort of work out exclusives that way is another thing you can do.

Steve: Okay, interesting. So one thing I kind of ask everyone is you know if you were to start all over again, what path would you have taken? Let’s say you wanted to go into this gardening niche again, how would you– what advice would you give to someone who is just starting out?

Lars: You know, my advice is almost to do exactly the opposite of what I do because I have got a shiny object syndrome where I’m constantly doing different stuff and all my efforts are diffused. I’m doing a little bit of this, a little bit of that and hop from this to that and maybe it’s just because I’m way too ADD. But I feel like if you are going to go into anything the idea is, if you are going to get the most success is to find one product or one product category and just really focus on it and be the person that knows the most about that product line or wherever it is that you are interested in and focus on one thing and don’t try to do everything at once. And maybe only focus on one traffic source. Don’t try to like oh I’m going to do my email, I’m going to build an email list and build a social media following and do all that. You diffuse all your efforts and then you are only selling two things a week and it never takes off.

Focus I think would be the thing that I would do differently and really I guess sort of that’s what I did. I started out by chance, I had one product which was one push miller and that’s all I was doing and I think maybe that was why I succeeded and it sort of built from there. And I would say isn’t that sort of what you have done too? I mean you started out with one thing and then you ended up with a blog teaching other people and now you’ve got a podcast and you sort of– you didn’t do that all at once, you started with one thing at a time. Didn’t you?

Steve: Yeah absolutely, in fact we only stated out with one product category just like you did and we just graduated and have expanded over time. That’s great advice Lars. We’ve already been talking for about 50 minutes, so thanks a lot for your time. If anyone has any questions for you, is there a place where they can reach you?

Lars: Yeah

Steve: Or you are unreachable [Laughter].

Lars: Well, I’m kind of unreachable, but Clean Air Gardening is my website and my email address is just lars@cleanairgardening.com.

Steve: Actually one last question, you have this interesting concept of how you do customer support. You want to just comment on that and just talk about the tradeoffs that you’ve experienced before we go?

Lars: Well I [laughs].

Steve: You don’t have to if you don’t want to, I can cut this whole segment out.

Lars: Well no like I detest talking on the phone and so for the longest time we were answering the phone all time, but I will tell you we have all our phones go straight to voicemail now and we just return phone calls because you could spend all day talking on the phone and I call it reverse show-rooming where people will go to home depot and they can’t get any help about– you know they’ve got a question about a compost bin and there is like a guy with an orange vest who doesn’t know anything about it because there is 200,000 products in there. So they call us on the phone and they want to talk about compost bins for 30 minutes and they go ‘okay where can I buy this locally’ and we get reverse show roomed all the time. And so I finally decided you know I hate talking on the phone and so now we return promising voicemails and we just don’t answer the phone and it’s like ring through the voicemail, we just call people back.

Steve: And as far as you know it hasn’t really affected your top line at all as far as you can tell.

Lars: Well you know my theory is, you can’t call Amazon on the phone and place an order, so you can’t call me on the phone and place an order either. And I hope that it hasn’t affected my top line, but I’m willing to give a little bit of top line away in order to have a little bit happier life in exchange, because it’s something that’s completely unenjoyable to me to talk on the telephone and so I have minimized that.

Steve: Yeah and it was tough getting you on the podcast too Lars, let me tell you [chuckle].

Lars: It’s true, the first time we traded emails you said something about having a conversation and I immediately shyed away because I just don’t like– I’m better by email than I am in real life.

Steve: So Lars where can I buy your compost bins locally speaking of which– [Laughter]. All right man well thanks a lot for being on the show Lars, I really appreciate you coming on, I think this is great.

Lars: All right thanks for inviting me.

Steve: All right, take care, bye.

Here is why I admire Lars; first of all he is a really down to earth, and a humble guy even though he runs many successful E-commerce stores. Clean Air Gardening is just one of many businesses that he started and owns. The other thing I like about Lars is that the guy is an open book and very open about all his successes and failures. He’s pretty much tried everything and he’s willing to share his experiences. For more information about this episode go to mywifequiteherjob.com/episode29 and if you enjoyed listening to this episode, please go to iTunes and leave me a review. When you write me a review, it not only make me feel proud but it helps keep this podcast up in the ranks so other people can use this information to find the show easily, and get awesome business advice from my guests.

It also the best way to support the show and please tell your friends because the greatest complement you can give me is to provide a referral to someone else either in person or to share it on the web. Now as an added incentive I’m also giving away free business consultations to one lucky winner every single month. For more information go to mywifequitherjob.com/contest. And if you are interested in starting your own online business be sure to sign up for my free six day mini-course where I show you how my wife and I managed to make over 100k profit in our first year of business. Go to www.mywifequitherjob.com for more information and thanks for listening

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

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If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

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028: How Viet Do Created A 6 Figure Business Selling Coupons And Online Deals

Viet Do

Today I’m thrilled to have my buddy Viet Do on the show. Viet runs DealZon.com which is a daily deals and coupon site that caters to the gaming industry.

Running a coupon site is a business model that we haven’t yet covered on the podcast so I’m very anxious to learn how the business model works and how Viet makes his money. Enjoy the show!

What You’ll Learn

  • How Viet obtains deals to list on his site
  • Why he chose to focus on gaming for his coupon site
  • Learn the economics of selling coupons online
  • How merchants transmit their daily deals
  • How Viet manages the multitude of deals and expiring coupons
  • The intricacies of running a profitable deal site
  • How Viet gets traffic to his website.
  • How Viet gets people to sign up for their email list
  • How Viet gets exclusive deals for his site

Other Resources And Books

Transcript

Steve: You are listening to the Mywifequiteherjob podcast, where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now, this isn’t one of those podcasts where I bring on famous Entrepreneurs simply to celebrate their success, instead I have them take us back to the beginning, and dwell deeply into the exact strategies they used earlier on to gain traction for their businesses.

Now before we begin, I just wanted to share a quote from Ken Schneider who was the winner of a free E-commerce consult. Here’s what Ken had to say: It is very apparent to me, that Steve has built a wealth of the E-commerce information in a way of offering ideas and needed insight that are very encouraging. After discussing an array of different ideas and possible options, he was able to provide me with the tools and information that would help me find my own niche online and for Steve’s help and information, I am most grateful. Now, if you would like a free E-commerce consult from myself, enter my free podcast contest, where I’m giving away free one on one business consultations every single month.

For more information about this consult go to www.mywifequiteherjob.com/contest. And if you are interested in starting your own online business, be sure to sign up for my free six-day mini-course where I show you how my wife and I manage to make over 100K in profit in our first year of business; go to www.mywifequiteherjob.com for more information, now onto the show.
Welcome to the, mywifequiteherjob podcast. We will teach you how to create a business that suites your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here’s your host, Steve Chou!

Steve: Welcome to the mywifequiteherjob podcast. Today, I’m thrilled to have a friend of mine on the show, Viet Do. Now, I met Viet at Fincon and I know, I know I meet a lot of people at Fincon, which is why you should go. Anyways, you know Viet runs Dealzon.com which is a coupon sight for electronics and gadgets. Now, have you ever wondered how sites like TechBargains, FatWallet and other coupon based sites stay in business? Well, Viet does very well with Dealzon and hopefully today we’ll learn exactly how Dealzon works and how it makes its money. So, just a quick note about Viet; he’s probably one of the nicest guys you’ll ever meet and his deal sight is a business model that we actually haven’t covered yet in this podcast. So, welcome to the show Viet, really glad to have you.

Viet: Hey Steve, yeah, thanks a lot for having me on the programme. I hope I can shed some light on – for those people that might be interested to the field or the kind of like how coupon sites work and maybe give them some insights on how the industry works.

Steve: Yes, so, give us a brief description of your specific coupon site and exactly which products you focus on, and how you make money online.

Viet: Yea sure! So, Dealzon.com is very much a deal site– a deal aggregate site for gamers and techies, and that’s our focus. We– you won’t find like you know, Wall mart deals in terms of like, you know, groceries and what not or like target deals on any of that kind of stuff here, so you’re not going to find shoes or clothing, that’s very rarely, when I start giving away free shoes then I guess we don’t have a choice, we had to like, let people know about this right? But we mostly focus on technologies and gaming. And we have a very core set of users that pretty much just care about these so, mostly the people that visit our sites are gamers and then –

Steve: Okay –

Viet: They rate our stuff. So, if they are a gamer, they want to buy games and maybe like a computer hardware that relates to the game right, to learn the game faster. So, how DealZon works is pretty simple as any other of those deal sites that you mentioned actually.

Steve: Just pretend that none of the listeners know anything about how anything works.

Viet: Okay.

Steve: So…

Viet: Okay, that might be a good way to go with them. So, I mean, if you come to DealZon, you’ll see a list of the best deals of the day right, and if you’re a gamer, you can see right around on the first page – oh, okay, well, this game is on sale today. So, the front page will basically show you what’s hot for the day. Now, if you want to drill it down a little more, there’ll be different categories and you can go to different categories with the type of products that you’re interested in. So, as mentioned, we’re mostly focused on gaming and technology so gaming and laptops is kind of what we focus on lately.

Steve: Okay and bottom line I when someone clicks on your link and makes a purchase, you get a cut of that transaction.

Viet: Yes.

Steve: Is that correct?

Viet: Exactly.

Steve: Okay.

Viet: So this a commission based model, it’s basically lichen – an affiliate lichen, so you know, we use very typical networks such as commission junction, link share and various other networks.

Steve: So, but is that for physical products primarily then?

Viet: it’s half-half actually. So, these days, in terms of gaming – and especially if you’re not into the norm of it and I know that different industries are like this; it’s actually a lot of digital products now, so you know, well, these days when you buy a game, it could just be a CD key of a game key that you receive, and you plug into your like a DRM platform – you know, a digital rights management platform – and you’re going to receive the game that way. And you know, since it’s a digital product, you know, is actually a very little hassle involved for everyone involved, where you pay the money and you get your keys and you get the game and that’s it, and you know, there’s no shipping time or whatever right, so –

Steve: Okay.

Viet: It’s actually a pretty good way to go to– about getting a game these days, and it’s expanding lately, yeah.

Steve: Are the pay outs higher for those type of deals as opposed to the physical products because –

Viet: Yeah, I don’t think so, it’s typically higher. It’s not necessary like 2X or whatever, or like 3X or whatever, just, but by virtue of the merchant not having to store anything beyond like a digital code right, that they can e-mail out right away through the system. They’re just more willing to- there’s just more margin and leeways there, in terms of a commission split.

Steve: So, can you give us an idea of what some of the commissions look like on a physical product verses you know, a code for example?

Viet: Yeah, sure! I’m going to be very general here, in the sense that you know, some of our stuff there’s you know, different rates, so for those that aren’t familiar with affiliate models, what you make them the bulk of your money, is how you negotiate these rates with merchants actually…

Steve: Okay.

Viet: And maybe we’ll talk more about it in a little bit, but– so let’s say for physical stuff, something you can buy at BestLife.com or Walmart.com in chance of the TV or a laptop or computer. The commission rate is actually pretty low; it’s like 1-2% –

Steve: Okay –

Viet: Maybe as high as 3% if you have like the right volume and the right, you know like the right partnership going– deal going on here so, but it’s usually about 2% – I want to say and lower. Surprisingly some other sites like let’s say, a pretty big retailer, Newegg. Newegg is based in California and they mostly sell computer electronics. They can get-they can start as low as 0.5% or 0.25%…

Steve: That is really low!

Viet: That is very low so you’re really not going to make that much money there unless you’re established, you have volume and you’ve been doing well with them for a long time, right-

Steve: Okay.

Viet: So, in that sense there’s a sum bared of entry you know, because once you get in there are-you list this deals great, someone bought like a 100$ thing, but you’re only getting like 0.5% all of that right, that’s like nothing –

Steve: Yeah, that’s like nothing.

Viet: Right, so that’s tough right. Conversely, so physical products want a cheaper set right, usually. For digital products, I want to say you know, maybe anywhere– actually it might be actually 2X now, so think about so 4-5 %, I want to say…

Steve: Okay.

Viet: And then maybe…

Steve: All right.

Viet: Maybe, for some very lucrative, high margin stuff, let’s say there’s something like, like a 100$ special, super limited edition game you know, so the margins might be a little bit higher where they’ll give you some as high as 8%.

Steve: Okay, so the margins aren’t still as high as for something I might push on my say like web services where the pay-out is much higher.

Viet: Right. It very much is a volume game for deals and coupon site, where each have to make it up in terms of volume – you have to make your site, your usability, the information you present as easy as possible to convert these sales you get these commissions.

Steve: Okay.

Viet: So –

Steve: Okay.

Viet: So you can’t rely on like two or maybe a 10 or 20 sales per month right, we’re doing around about like thousands of transactions on a monthly basis or even on a daily basis, right, so-

Steve: Okay.

Viet: Yeah.

Steve: So when someone buys something through you, you don’t have to provide any sort of support or anything like that?

Viet: Right. I think that’s the beauty of most affiliate and [Indiscernible] [00:08:36] business, so I mean, obviously we have to give some kind of support if the transactions or the deals we listed fell through in the sense that – oh, we show a coupon like this and it doesn’t work, you know, so we need to tell them– oh, did the coupon expire or is there a new coupon, or is there a different better deal, you know so –

Steve: Okay.

Viet: So there’s some amount of support, but after they buy you know, the products, obviously everything else is on the merchant, right –

Steve: Okay.

Viet: So –

Steve: So, there’s a lot of these tech deal sites out there, how the heck do you differentiate yourself and compete with the rest of them?

Viet: Yeah, I mean that’s a good question, I mean, that’s something we constantly think about on a daily basis too actually [chuckles]. So, I hope to see like some comments where you guys can give us tips to – I’ll be honest – that’s pretty funny that I’m asking that, but [chuckles]. But, how we kind of differentiate ourselves is, what I imagine is, straight from the start, we focus on what we do good at – what we do well at, actually, which is gamers, right—we focus on it, we have a cool audience of gamers, we kind of know what they like, we get a pretty good feel of what they like in terms of products, so we serve that particular niche.

So, instead of doing like all these different types of coupons for everything under the sun, we focus on what we do well at, and we try to provide a better service in that sense of better updated deals, more timely updates, stuff that you might actually, not so– I’m pretty confident that some of the games that we list, maybe it’s only going to give us like 10 sales, and these are pennies on our dollars, but these aren’t stuff that other sites will focus on whatsoever like, you won’t find it there on these other deal sites. So, the comprehensiveness for a gamer, in the sense that, if I’m a gamer and I want to make sure I don’t miss the hot deals, then I can go to Dealzon and I can pretty be– rest assured that maybe I’ll catch like 90% of the deals.

Steve: I see so by focusing on something you actually will probably get the deals listed first because the other sites don’t care as much and then as a result gamers will learn this overtime and then come to you first.

Viet: Right, exactly, I mean that’s basically our hope and I think it’s been doing pretty well actually.

Steve: So okay yeah. So there’s a couple of questions I have now. So one; how do you actually get the deals on your site?

Viet: Yeah, so it’s actually very similar format all across the board. It’s a very chaotic thing in terms of the coupon space in the sense that you know there’s 1000s of merchants and there’s 1000s of deals right hunches of 1000s of deals even. Most of the merchants actually– you will be surprised a lot of that stuff deals is in virtual edition now, they plaster our email and no kidding. An email with the list of the top deals for up to the week. So it’s like a feed of emails– you open your inbox it’s like a hunches of emails coming in. Now obviously a lot of the better networks still have a API where they a certain theme where they’ll send out like you know the data, but a lot of them is unnecessary human because some– You can already exactly see the data and then copy and paste to your site basically. You need to able to manipulate this second data essentially.

Steve: Okay.

Viet: So there’s actually a lot of work involved in that, and I think there’s actually a few services that– so because the work looked so much because actually a few services that we don’t actually this but they make the transition easier. So they grab all the fin and all the different coupons for you and then they break it down in like a CSV file for you or what not, based on how you want to export and I think what’s this service called. Let me think, it’s not [Inaudible] [00:12:12]– I think coupon to me, so.

Steve: Okay.

Viet: So that’s one of the services, you know.

Steve: So let me just try to rearrange what you just said, so you’re saying some people email out the deals–

Viet: Yeah so, the merchants would– most merchants, the large merchants don’t have like an account manager of some sort, right and they’ll have like weekly deals right. So they’ll be like hey this is what we are trying to promote on our store– on our online stores this week. Take a look at the list of our deals. And it could be any kind of format it could be just plain text email format, it could be attach excel file, you know could be just a bunch of bullet points, could be a strayed out HTML files encoding of the deal in question right.

Steve: Okay and how do you get that on to your site is that then manual then?

Viet: Yeah, so there is quite a bit of manual work involved but we build our own tool. There’s actually– so I’m not in the coupon safe spacing internet buying. I’m pretty sure there are word press plug-ins that make your life a lot easier to get e-step in but at some point you’ll still need a manual, human editor involved to like either copy and paste or make sense of these data you know like here’s some because some bit of words that come in might not– might truncate a little bit, might not that you know just spread properly. So we build our own tool we have our own platform that grabs all these feeds, whether it’s email or data you know straight from the API or our feed or X amount feed from the merchant and it’s mostly XML feed actually.

Steve: Okay.

Viet: Yeah and you know we make sense of this data on our back editor, human editor kind of adviser and properly in all that great stuff.

Steve: So what you are saying you’ll receive list of these deals in all sorts of different formats depending on the person – depending on the business and then you have tools in the backend that kind of code in all these information?

Viet: Yup, exactly so in that sense yeah there’s definitely a lot of work and then that’s kind of why we focus on what we do while we’re out too because if you expand too much more retailers it just really becomes like a major headache right?

Steve: Yeah, by the way.

Viet: And then I think for those people that aren’t aware like you know Slickdeals which is one of the larger you know deal website right, they have a massive community forum you know they have the human resources and the human you know the mob power – the social power right there in terms of users pushing up– posting audio’s in different deals on their message board right?

Steve: Mm-huh.

Viet: But even – even having all those community they still have like analogue 10, 20, 30 editors, you know working on posting deals and that’s quite a bit, right? So…

Steve: Yeah, that’s crazy and that can be fun and it’s kind of manual, right?

Viet: Right, right yeah. I won’t necessarily call it fun, but you know it really depends on how you take a look at it you know our editors and myself included, we try to– maybe that’s so much these days but we try to be able make it a game out of there like say, who can post you know the best deal the fastest in that sense right.

Steve: Okay.

Viet: So you know if there’s got very hot game coming out and we know everyone wants this game, you know we would love to be the first to find this deal and post it everywhere you know, in terms of our own site…

Steve: Sure.

Viet: On our day Face book feed or you know our Tweeter feed or what not, right.

Steve: Aha.

Viet: So.

Steve: So on the flip side also there’s a bunch of deals that expire everyday too. So how do the heck do you know when to take these things off and that stuff?

Viet: Right, so that’s half– that’s so another [inaudible] [00:15:31] right in there too like a lot of this is actually manual, but most of these thankfully the merchants themselves will let you know the expiration day in advance, so–

Steve: Okay.

Viet: We just simply send them on our backend and it’ll automatically expire mostly, and if we don’t capture you know usually a user we’ll comment and let us know that hey this deal is expired, then we know we just go out– head out there and expire that deal.

Steve: Okay, so certain services like I use commission junction you mentioned that earlier…

Viet: Sure.

Steve: And they actually have an API where you can just grab everything kind of automatically into your platform with a little bit of programming.

Viet: Yeah.

Steve: Do you guys have a preference or do you just kind of go with where the deals are at?

Viet: We kind of go with where the deals are at actually, but we definitely do utilize that you know obviously you want to make the manual work load as low as possible. So if you have the resources you get a developer to you know work out your own– what does your own platform of grabbing these things in properly to fit your– to fulfill your needs, that’s way better right than doing it manual, but on other times the ones that already make money is actually stuff that’s happening in right traditionally in email actually you know where a manager– a store manager might have– and a fully account manager actually let me correct myself– will be very in tune with what we need or what those were with our audience and they gave us a head start hey this deal is happening next week if you have some details in the email right.

Steve: I see.

Viet: We just watch out for that deal you know and yeah we can of course we can always grab it automatically whenever you know from the API or from XML deal but that’s always depending on like you know whenever we set these automatic data grab to happen right, so we very well might miss that X– the actual hour where the deal goes live right.

Steve: Aha.

Viet: So a lot of the more exclusives or the deal that people actually deal one actually happens lot in email so.

Steve: Interesting email, wow that’s horrible.

Viet: Yeah that’s horrible actually. When you even think about it and you know there’s pros and cons in there you have the good communication channel with – and you work with these people and you do good large volume with them. So there is a need for the– an open communication channel but there’s– I won’t be surprised you know if there is a better service in the next few you know whenever actually to make the job easier and you know the space is right for some sort of disruption that’s for sure.

Steve: Okay, so what you – what I’m trying to gleam off you know is, you know essentially all the sites have access to the same coupons essentially right?

Viet: Yeah, I mean you’re not going to really get like all these unique stuff I’ll be honest. If you find like a deal site you like and you use allegory you know, hey more power to you keep using, you don’t really need to come to DealZon and that sounds so bad actually.

Steve: Yeah.

Viet: But I feel like you know a lot of times unless, unless all you care about is gaming. So yeah you should actually come to us.

Steve: So I mean so each, each text like kind of has its own focus right because you said it’s kind of manual. You kind of have to pick and choose what you want to focus on right?

Viet: Sure, sure that’s for me. So but you definitely want see some of those the same stuff on most sites but the difference is may be what they highlight isn’t what’s the hottest latest right now. A lot of these stuff especially front page is very much click carried and right by the editors, right.

Steve: Right.

Viet: And some of these actually might be paid place material too and which we can talk about in a little bit–

Steve: Yeah.

Viet: So and you know so you needed to juggle between like hey is this guy really –is this really a good deal or is it just something that’s pushing you to sell because it gets in the most commission right?

Steve: Right, right okay.

Viet: So, and so it’s mostly that I think and I think because of human automatic coration [phonetic], if you start you know agreeing with what the editor puts on and chances are that’s a great deal then yes you should be comfortable with that site in the sense that they are pushing stuff that they know people like and want and not just because what’s you know shows the bottom line or converts better or what not right.

Steve: Okay, okay so that kind of actually leads to my next my question is, which is you know how do you actually get people to come to your coupon site in the first place right?

Viet: Yeah so I mean obviously marketing is like such a broad and you know broad discipline right but how we did it initially and this is actually quite a while ago, I want to say like three years back, is we started like you know so for any kind of hot products and this is kind of go back to email once again. We just email blogs these new steps you know on like called latest products to like tracking gadget size like tracking gadget blog basically news blogs–

Steve: Like in gadget?

Viet: Yeah exactly, you know like hey you know may be the latest Mark book Pro just slashed the price by 100 bucks and that’s actually very rare for Apple products, right?

Steve: Right.

Viet: And you know stuff like that basically and then you slowly and surely you build some links you know you send some else – some good new steps and you build an audience that way. And another method that we kind of use is we partner with a few different sites and if they have the right community and then if the fit is good, we post regular deals on their site and if in terms of – in the format of a blog post or a news stead or and stuff like that and that’s how we kind of like funnel trafficking sometimes.

Steve: What do they get in return for the blog?

Viet: You know the page views you know they – sometimes we have very rarely do we have like revenue share agreements you know and then when we have that obviously we have to disclose it carefully. So that works out when it fits with in terms of the community and audience right. We do this with may be like with individual sites, where, maybe some guy runs a gaming blog, right, and he knows that people like these kind of deal posts, and it helps support the website, helps support the community, you know, so it’s a win-win for everyone involved.

Steve: I see. But let’s say, I run a really popular gaming site; why wouldn’t I just put my own coupon codes on there?

Viet: Yeah, I think you should, actually, but we go back to all those hassle, all those manual stuff you know, you really have to be on the know, in terms of like what’s going on this week and what’s going on next week, to properly do something like this, I feel. So, I think, if you run a gaming blog, you should definitely do this, or use DealZon, basically, and we will be happy to help you out, and work out an arrangement that makes sense. But yes, I think, if you run a gaming blog, and your only revenue source is like the very typical display ads and stuff like that, you should start considering an affiliated model; there’s certain ways you can do this balance without coming across as if trying to sell all these games to visitors, right?

Steve: Right.

Viet: Because this really is a value in the sense that, hey you know, ‘buy this game because it’s cheap– I mean, we’re not telling you to buy it, but we’re telling you what is cheap right now, whether you buy or not it’s up to you, right?

Steve: Uh-huh.

Viet: So there’s some actually a value in terms of that service.

Steve: Okay. The other thing I did notice, when I went to your site, was you actually do advertizing also. And when I saw that, I was somewhat conflicted because, shouldn’t the goal be to have someone click on your affiliate link and buy something?

Viet: Yeah, actually, you are correct about that; for a very long time, DealZon had zero display ads. You can make the argument that the entire site’s being advertised now, because every click will generate a commission sale for us, right?

Steve: Sure, sure.

Viet: But, yes, for a long time, we don’t have any display ads, but we actually test this, a little bit. It didn’t really hurt conversion one way or another, and it’s just basically more money in the revenue so that we can keep the servers up and what not, so…

Steve: I see. So you just add them on, just to see if it’s going to affect your affiliate revenue; it didn’t affect it, brought in more money, so you decided to keep it on.

Viet: Yeah, we kept it on. We can probably do with two more banners– I mean, two three banners, to be safe, but at some point, you’re it’s just you’re clouding your site with a bunch of banners, so we’re okay with just one. And here’s the thing about this– and this is a tip for anyone that runs anything– any similar or is interested in affiliate space; When you have inventory, in the sense of like banner ads, or whatever slots, when you create inventory, that gives you the ability to sell these slots to advertisers, when the right time comes along– you know that might be a seasonal thing. I mean, in holiday seasons, all the merchants have the right budgets to work with, like promotions, so if your site’s the right fit, they might throw you a bone, give you a little bit more money, just to put a banner on your site to your [indiscernible][00:23:55] and you know whatever the heck that you might be getting from, whatever display network you use, you know whether it’s something like adsense or whatever else, right. So, by the virtue of having a banner, it gives you the ability, in the future to sell that slot, does that kind of make sense? So…

Steve: Yeah so, sell it privately to an advertiser.

Viet: Right, exactly. You know if you never have that in the first place, it’ll be a hard pitch to tell people, ‘hey, I’ll put you here’, while you didn’t have that before, so…

Steve: Okay, so what percent– is the breakdown heavily skewed towards affiliate revenue, or what’s the breakdown, between advertizing…

Viet: Oh yeah, by far, by far. The advertizing is just there really, because it pays for the server bills I want to say, so it’s not– it’s not exactly like zero dollars, but it’s also not something that we really stress about or focus on a lot, so…

Steve: Okay, so in terms of getting traffic, you mentioned working with other bloggers; are there any other traffic sources that you use?

Viet: Yeah. So, eventually, you know, we still get plenty of Google traffic – we try to rely less on Google these days, in the sense that we don’t really bother with optimizing that much anymore, in terms of SEO. If we have Google traffic, great, it’s because we have the right information and the right value, if not, whatever, right?

Steve: So, by information sorry– is this your blog post, or are these the deal pages themselves?

Viet: Both, actually, but mostly the deal pages themselves. We try to provide as much information as we can on a deal post, especially on the hot stuff — on the stuff that’s trending. So if there’s like a super old laptop, you know, two years old, obviously you’re not going to find the latest information there, right, because at this point, no one is going to buy that kind of particular laptop anymore. But for the latest stuff, yeah, I think so, we might have like hey more information on a particular computer model, hey maybe you should buy X over this because of these features, so stuff like that, basically.

Steve: So do you guys have that sort of content on your site where you’re comparing different items, and that sort of thing, or…

Viet: It’s mostly in the edited notes; we have a lot of it back in the days, but, like I said, we try to rely less on Google in a sense, so we only provide those information that is useful to our users. I suppose you can make the argument that what’s good for the users is good for Google too, but that’s always a bonus in the sense that I mean, there’s a lot of sites that bounce just a lot of key words in content, and by the virtue of their domain authority, they will rank for it, right?

Steve: Sure.

Viet: The coupon space is kind of iffy that way in the sense that sometimes and I’m sure a lot of users will know this– they search for a particular coupon in the other site, and there’s really no coupon!

Steve: It happens to me all the time, it’s very annoying.

Viet: It’s very annoying! We try to stray away from that as much as possible. Yeah, it makes us a little bit less money, but I’m a little bit more happy about it – I sleep a little bit better at night, you know. Yeah some people can say that you’re throwing away money, but if the coupon doesn’t exist, we say so; it’s expired. You can still click through it if you want to, you know, if you want to check if there’s something new, but there’s no coupon, so that’s that.

Steve: Okay. And I would imagine you don’t do any paid advertising, because the price just doesn’t work out economically, right?

Viet: I think it does, actually, but we don’t do that. I’m not sure if I’m giving too much information in that sense, but [Inaudible] [00:27:03] pretty much all of our revenue in a sense, is very much organic, it’s very much the users on DealZon, and some portion of it for our partner blogs.

Steve: How would pay traffic work? I mean, you’re paying an amount that seems like it’s a lot higher than your affiliate products.

Viet: It’s tough, right? I mean we’ve dabbled in it, and I can see it can work, but I’m not a PPC expert in the sense that, I can’t juggle that on a daily basis, and it’s very much average where you have to make sure whatever you bid is obviously a lot less than the commission you get. And it actually does still work well; you’d be surprised like how some of these large retailers just don’t do a good job advertising their own products or their own stores. So, there’s still a lot of space for the middle man, in a sense, the whole system still works. Instead of having their own internal team, they just pay it out by the affiliate model that way. So it’s kind of funny, I think going to change in the future, especially– if I run any one of these– If I’m like the business guy, or the revenue guy at one of these larger companies, I will think strongly about having my own PPC team to do the– and they do have them, don’t get me wrong, but between them and the affiliates, it’s an interesting space where you’re just throwing a lot of money, to try to break even, or to try to make like, the actual dollar out of your 50 cents spent– ask them.

Steve: Sure, sure. Do you guys do a lot of email marketing?

Viet: Lightly. We have our email list that’s fairly large, in a sense that I’m planning to trim it down to the guys that don’t really open our emails anymore, to save our costs. We do email marketing, we send out daily emails, and we’re starting to do a better job segmenting these. Some people actually only want to see video game deals, some people only want to see computer deals, some people only want to see HD TV deals. We find that that helps conversion a little bit more. So if you can segment it and if you have the volume that justifies it, you should definitely do it. And, hopefully the whatever email service provider that you sign up for has the segment ability.

Steve: How do you get people to sign up for your email list?

Viet: I think it’s very similar to what a lot of sites employ, so you know, there will be a pop up overlay, telling you to sign up. We try to be less– we try to balance between being annoying about sign-up and trying to make sure we convert these sign-ups, because if you’re just having a side-bar box, I’ll be honest, a lot of people aren’t going to see this thing, right?

Steve: Right.

Viet: The conversion difference there is like astronomic– could be something like 0.1% versus 3%, so that’s a big difference.

Steve: So I see. I would imagine that your sign-up rate would be kind of high– everyone wants to get good deals on stuff, right? I would imagine it’s pretty attractive.

Viet: Yeah, I can make the argument that’s okay. I really don’t know what it looks like on the other sites, I try to take a look at what the industry averages, but it’s kind of hard to guess that right in terms of…

Steve: Sure. Yes.

Viet: But you know I think when you do an overlay like this, if you provide good value, you should– for a long time we actually were very hesitant in having an overlay pop-up for email grab. But after a while we– again, just like the banner ad, we did an epic test; it didn’t affect the sales, and it didn’t affect any other noticeable matrix, so we kept it on. And, to be honest, when we axed it out, we still ended up cooking we don’t bother you for quite a good amount of time too, so…

Steve: Yeah, I know from my site I mean the pop-up is what actually converts the best.

Viet: Okay yeah, exactly.

Steve: Okay so, towards the beginning of the interview, you mentioned that sometimes you can get exclusive deals from affiliates, and it’s all about negotiation. So how does all that work, exactly?

Viet: Yeah, so I mean this is very much about chicken and [indiscernible][00:30:59] right, in the sense that, an exclusive is great – you get like an exclusive that people can only come to your site to get it, right or it might leak out get it elsewhere, but mostly people will come to your site to get this exclusive deal. But if you don’t– in order to get the exclusive, you need to have the right volume, to start negotiating with these partners, right and to introduce these merchants. You can see the dilemma here, in the sense that if you don’t get the exclusives, you won’t have the volume, and if you don’t have the volume, you won’t get the exclusives.

Steve: Right.

Viet: So I would definitely start– for anyone that’s inc. like a region space– my recommendation is basically just ask outright. Ask them hey what kind of volume we need to get to get some kind of exclusive deal or something that might be– and to be fair some of these exclusives are not exclusive in a sense that they will not happen again but it will be fogging you for that time period basically. Does that kind of make sense?

Steve: Okay, yeah. So how does an exclusive deal work exactly? Is it the pair on hire or is it just by virtue of you being exclusive that’s good enough?

Viet: Oh no I think it depends on how what the — it’s very much merchant dependent so sometimes he has to pay as you higher sometimes they give you a better deal like a better percentage coupon, right.

Steve: I see.

Viet: So you know it converts even better because why use this other coupon this other site if this coupon gives you 25% versus 25% this other side right?

Steve: Right.

Viet: So there is a lot of that– and sometimes it makes them both, sometimes it’s just simply this deal is only offered through this site at during this time frame through this link.

Steve: So walk me through this; let’s say you gain an exclusive, what’s your first course of action. So you email your list, do you also still reach out to bloggers about your deals?

Viet: Yeah definitely. If we manage to snuck an exclusive we want to promote as much as possible simply because we are hoping that’s the best deal right?

Steve: Right.

Viet: So yeah the first course of action is actually you should get your own site, you blast out to the people that convert the best which is usually your email people and sometimes your social people. You know maybe for some people the measures are– it is that’s where your audience lives. And you actually basically mention the full cause of the action and then we blast it out to your partners and then finally you want to blast out to the rest of them. So I think anyone in any kind of space should always have an excel sheet or whatever of regular people to email blast things to and on top of like the new tips sites you know TipsAtWhatever.com right, in whatever industry and category you are in. So that whenever you have something interesting and note worthy you can always rely on the list to get at least a few mentions of whatever you know exclusives or promotions that you have at the time right.

Steve: So what are your top traffic sites right now?– sources of traffic.

Viet: I think I will be mum on that in a sense that…

Steve: Okay no that’s fine.

Viet: Okay yeah, but to be honest most of our traffic is still coming from DealZon actually. We have a very healthy amount of users on DealZon and in terms of revenue numbers a good chunk of it is still coming from DealZon too. So like I said we are doing a very decent job theses days of diversifying our traffic source and income source. Three years ago, I want to say, Google would bring about like 50% of our traffic right, and 70% of our revenue. That’s actually quite a big chunk right.

Steve: Wow.

Viet: Just because it converts better. These days we make way more than we did before and Google is like what, 20% of our traffic visit and, maybe exactly the same amount, 20% of our revenue too. So at some point you already want to move away from a Google mentality and I think you definitely mention this a lot of times you know whether in your podcast or in blog post right.

Steve: Yes.

Viet: Two thirds and you know and email list is one such great revenue source right. These are people that opt in the people that already want the information right. So if you can build a channel like where no one else can mess with, I want to say that’s a good comfortable spot to be at.

Steve: Okay, so if there is someone out there who wanted to start their own coupon site how would you suggest they start. So one thing I forgot to ask you about is that actually what platform you run your site on?

Viet: So we actually– we built our own site. It’s on rails, we’ve been on rails. We built our own platform essentially. We have our own backend and our own frontend. This is actually more household than it’s worth–. Well, okay I think it’s working for us for our own usage but this goes to your question if you are starting a coupon site today, you know to make your life easier you should really just get a word press blog and there are various amounts of coupon plug-ins. I haven’t been keeping up to date on them but I know there’s obviously two, three pretty decent coupon plug-ins and coupon site templates that you can use right. And then really you should just find a specific niche that you do very well at right, and that you are very familiar with, that you are an expert at instead of trying to cover everything under the sun, you know try to cover that one thing that you can do a good job at providing information at. So that’s kind of where I’ll start.

Steve: Okay and then in terms of — you guys have a blog too right. So what use has the blog been in terms of…?

Viet: So for us we’re actually doing not too good of a job in terms of a blog, when you have a blog you really should update it regularly in a sense of like you don’t have to write every day. I’m not a believer in that but you should write consistently like let’s say if you are going to do a post per week, you should do a post per week on x day right–

Steve: Okay.

Viet: And for a blog you already want to do it so you supplement information in terms of deals that you’re– So for the coupons site I feel like the best way to do that is that you do price comparison or price prediction stuff like that basically.

Steve: Okay and one thing I also forgot to ask you is what was the source of your inspiration for even deciding to do a coupon site as opposed to some of the other business models out there?

Viet: So I think there is a lot of different things but I don’t think was ever marrying into the idea of like starting a coupon site and actually I did not start this. There is a different partner that left since then actually but I decided to join DealZon because I thought it’s interesting and there’s all things I can bring to the table in terms of the categories that we are focused on at the time and that was my expertise and this goes back to what I mentioned about how if you have expertise in terms of a particular category you know, I’m a gamer I’m a computer user, I know my computers very well maybe I know less these days than before because I don’t have time to read about this stuff anymore but if you are more comfortable to talk about a particular product and you enjoy talking about that particular product, it’s just a lot easier to try and sell those products too right.

Steve: Yes.

Viet: So it’s mostly that I think and you know I think at a time, you know, it’s kind of like- this goes to what we had mentioned earlier- if you search for coupon you run to your site and it’s just bunch of links but there is no coupon to be found, that’s annoying right. We wanted to try a little bit better than that basically.

Steve: Okay and so you do this full time?

Viet: Yeah I do this full time.

Steve: So were there– what was your source of your inspiration? Was there any books that kind of gave you the inspiration to say,” Look I want to start my own site and run my own business”?

Viet: I will be frank, not really. I think I am one of those few that started their own site back in the 90s right, and they would just miss the bow in terms of like becoming like one of those dotcom millionaires so I– but then we learn a lot in the process and we enjoy working online building websites, interacting with users and readers. So I think it‘s essentially that really verses like any one book or any one particular thing.

Steve: And are there any resources or services out there that you can’t live without with your site?

Viet: Yeah, so let me think about this of the top of my head. I think because we build our own platform a lot of the tools that we need, I have my developer build out the stuff but then there is definitely a few services obviously. We are hosting Heroku, so without Heroku obviously it’s– we used to have our own hosting services our own– and then the system that main portion is very much of a headache right–

Steve: Yes.

Viet: So that did obviously allocated to Heroku now, so that’s good. So we can’t live without Heroku. I guess you can argue that mailchimp is essential for us too in the sense that without mailchimp we don’t have an email list, I mean there is a lot of services out there but we are comfortable with mailchimp so we are sticking with them

Steve: Okay.

Viet: And I guess you know definitely that there are free other networks you know without them obviously that won’t work too right. You know without Commission Junction, without link share, you know, without these larger networks it gets a little bit tough right. So–

Steve: Okay, cool so Viet we’ve already been talking for quite awhile, where can people find you online if they have questions?

Viet: So if you head to dealzon.com there is contact form there but just email me at viet@dealzone.com and I’ll be honest, I mean I don’t mind giving up that, I think it’s a public email actually so yeah viet@dealzon.com and if you have random questions like this I will try to take some time out to try and answer them as best as I can.

Steve: Awesome well thanks a lot for coming on the show Viet.

Viet: Yeah, no problem I will talk to you later Steve.

Steve: All right talk to you later, have a good day.

Hope you found that podcast episode interesting. Now I for one have always wondered what it was like to run a coupon business online and at least at the back of my mind I always pictured a very hands off site that made money on auto pilot by automatically grabbing deals from a feed and displaying them online and as it turns out it’s not that simple and I probably should have known better. Now Viet shared some very useful tips on how to get traffic to a coupon website and I’m very thankful for his candor and revealing how his business works. For more information about this episode go to MyWifeQuitHerJob.com/episode 28 and if you enjoyed listening to this podcast please got to iTunes and leave me a review.

When you write me a review it not only makes me feel proud but also helps keeps this podcast up in the ranks so other people can use this information, find the show more easily and get awesome business advice from my guests. It’s also the best way to support the show and please tell your friends because the greatest compliment you can give me is to provide a referral to someone else either in person or to share it on the web. Now as an added incentive, I’m also giving away free business consultations to one lucky winner every single month. For more information about this please go to mywifequitherjob.com/contest and if you are interested in starting your own online business be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywife quitherjob.com for more information and thanks for listening.

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

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027: Andreea Ayers On How To Create A 6 Figure T-Shirt Business And Get Featured In 200 Magazines

Andreea Ayers

I’m really happy to have Andreea Ayers on the show today. Out of all of the possible products to try to sell online, selling t-shirts is probably one of the hardest. But Andreea managed to take her t-shirt business to over 6 figures in profit by being extremely focused and by leveraging publicity.

Today, Andreea runs the popular site LaunchGrowJoy.com where she teaches other people how to run a successful online wholesale business.

What You’ll Learn

  • How Andreea sourced her first products and found her first vendors
  • How Andreea started designing her own shirts without any knowledge
  • How Andreea tested her market before placing a bulk order overseas
  • How Andreea convinced her first store to carry her products
  • Why Andreea decided to sell her products wholesale as opposed to retail
  • What it’s like to be a wholesaler and how to run a wholesale business
  • How Andreea got her products featured in over 200 magazines
  • How Andreea used Facebook to promote her products
  • How Andreea used Pinterest to promote her site

Other Resources And Books

Transcript

You are listening to the My Wife Quit Her Job podcast ,where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now this isn’t one of those podcast where we bring on 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.

If you enjoy this podcast please leave me a review on iTunes and enter my podcast contest where I’m giving away free one on one business consultations every single month. For more information go to www.mywifequitherjob.com/contest and if you are interested in starting your own online business, be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com for more information. Now onto the show.

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

Steve: Welcome to the My Wife Quite Her Job podcast. Today I have Andreea Ayers with us on the show. Now I did not know Andreea at all until she randomly emailed me one day and I’m so happy that she did because it opened my eyes to a brand new blogger/ecommerce entrepreneurial that I did not know about. Andreea runs launchgrowjoy.com a blog where she helps entrepreneurs sell their own consumer products via wholesale and publicity. So here is what stood out about Andreea for me, out of all the business ideas that I get pitched about on my blog I tend to discourage people from going to extremely saturated niches like selling t-shirts for example, but Andreea not only successfully started her own t-shirt business, Tees For Change, but she also managed to grow this business to six figures. Then she started another business in a highly competitive niche selling organic soap and she was doing pretty well too until she decided to shut it down. Now today Andreea helps other entrepreneurs get their products featured in magazines and in the press and she is also very knowledgeable about Pinterest, and with that I am very happy to have on the show.

Andreea: Thank you so much Steve I’m so exited to be here talking to you today and to your listeners.

Steve: Yeah really glad to have you. So Andreea I’m very curious, how did you come up with selling t-shirts, and what was so special about your t-shirts such that you managed to get celebrities to wear them?

Andreea: So I launched my t-shirt business in 2007 and the reason I launched it is because my husband and I were moving from– I grew up in New York City so we were moving from New York City to Boulder, Colorado and it just happened that I was also four months pregnant at the time and I always had sort of a side business in addition to my corporate job. So, I’ve worked in corporate America for companies like Mackenzie and City bank, Starwood hotels near Kenversity and a whole bunch of other places and when I moved to boulder I –, my goal was to get a job so that we sort of have more stability and have health insurance and all of those other things that come with getting a good job and I landed here started going on interviews and it was really really hard for me to get a job, and obviously part of it had to do with the fact that I was pregnant and I was starting to show, and part of it also I think had to do with the fact that I didn’t really want that job whatever the job it was going to be because I knew I would probably be quitting after my son was born a few months later.

So I thought about turning that part time entrepreneurial thing that I’ve been doing for quite a few years into a fulltime gig, so I thought alright so what do I love to do, what do I know how to do and what can I do to turn this into a business. So I had a couple of different ideas but one that really stuck out with me was the idea of launching a t-shirt line. Now I did not know anything about ecommerce or fashion or even how to start t-shirts but I had a pretty good marketing background. So I knew that no matter what product I would launch that I would hope that I could make it successful. So I ended up doing this t-shirts line and part of my passion was to use eco-friendly materials and eco-friendly inks so one of the things that I think made my t-shirts stand out, and remember this was in 2007 when it wasn’t as easy to find eco friendly clothing and eco products so that definitely made my brand stand out.

The other thing that I think made my t-shirts really successful was that I decided to really get specific about what niche I was going to focus on, and when I first started I honestly had no idea about getting really specific and narrowing down your audience. I really thought I could just sell the t-shirts to any one and I would be a millionaire in a year because everybody buys t-shirts right. So once I realized that it was kind of impossible to market with a non existing budget to everyone, I decided to again think about what I love to do and what kind of communities I wanted to be involved in, and that’s when I decided to focus on yoga studio owners and women who do yoga. So whenever I would design a t-shirt most of my ideas I made sure that they would appeal to some one who does yoga and I think it took me a couple of months to find that niche but once I really narrowed down on that that’s when my sales started to really take off because I was really speaking to women who do yoga and I’m someone who does yoga. So I sort of already knew what that market was like because I was my own customer in a sense. So it just made it a lot easier.

Steve: So can you just describe to me what eco friendly t-shirts really mean because t-shirts are traditionally made out of 100% cotton right?

Andreea: Yes but what happens is that cotton uses a lot of pesticides and it’s very, very toxic to produce, so what I decided to do is that I decided to use organic cotton in my t-shirts and there are no pesticides used on organic cotton and also I decided to experiment with t-shirts that were made out bamboo so that’s definitely – yeah so it was a mixture of bamboo and organic cotton and in addition I also decided to have my t-shirts printed with non toxic inks, because all of the inks that you see on the t-shirts they are highly toxic, they give off a lot of fumes there are not made from very environmentally friendly materials. So it was the material itself on the shirts. It was the ink that I used and then also my hand tags were printed on recycled and recyclable paper as well. So it was the combination of all of those things that made it eco friendly.

Steve: Okay I see so you actually kind of caught that movement sort of in the beginning because that was when back then I don’t think there were that many clothing stores that were doing that sort of thing. Today you can find those all over the place I believe.

Andreea: Yes, that’s true I caught it right at the beginning and I remember I had such a hard time finding an eco friendly t-shirt manufacturer because there was hardly anyone who was doing it. So it was definitely a hard process for me to find sourcing but once I sold it in 2011, then I mean every t shirt brand had an eco friendly line so it was definitely a lot more widespread. So I do feel lucky that I sort of got there in the beginning right as it was starting.

Steve: It’s never luck. So just curious can we talk about the sourcing aspect a little bit. So where did you actually get these products sourced from?

Andreea: Sure, so I initially went to American Apparel because they were one of the few that would do eco friendly t-shirt so I got– I ended up buying into their organic line but I found out their cut and the material wasn’t quite what someone who does yoga would be interested in because usually yoga clothing is more light more, it’s more airy, it’s more stretchy and usually it’s not made just out of cotton right. It usually has some sort of spandex or Lycra or some other material that makes it a little softer and a little stretchy. So I found out that the American apparel t-shirts weren’t really selling that well for me just because it wasn’t in line with what my audience wanted and then I ended up going with another company called Alternative Apparel and they had really nice organic cotton line that was just super soft.

The cut was really nice. It was definitely really feminine and what my audience was into and then about two years after I started using their t-shirts, I realized that there were a ton of other companies that were sort of my competitors and they were all buying the same t-shirts that I was buying from Alternative Apparel except they were printing them with different designs. So that’s when I decided to branch out into finding my own manufacturer and get my own t-shirts custom made. So I did a lot of online research and found this company out in Turkey who was working with bamboo and I loved their cuts and I ended up actually working with a broker in the UK who sort of facilitated everything. So I never actually had direct contact with this company in Turkey, but it was my broker in the UK who would facilitate all of my orders all of the shipping and all of that. So by the time I sold the business I did have my own custom made t-shirts that no other brand had. So that was definitely helpful to increase my sales.

Steve: Okay let’s take a step back, so how did you find that broker in the UK?

Andreea: I actually went online. I goggled and I found a whole bunch of companies I was looking for eco friendly. So I would type in things like organic cotton t-shirt blanks or organic cotton t-shirts manufacturers or apparel manufacturers that are sustainable. So I would make a list. I had a spread sheet where I would put in all of them and then I would reach out to them via email and I would say hey this is what I am interested in. What are your minimums? Can you send me samples, what are your shipping times? What are your production times? And then based on the answers that they gave me plus cost obviously because that was a huge thing. Based on that and then the samples that I got, I decided to go with the t shirt that I thought would sell the best. So it was really just googling things and making a list of companies that were making t-shirt blanks.

Steve: So did you – you mentioned that you designed your own t-shirts, did you mean just the designs that went on the shirts or the shirt themselves – like the fit?

Andreea: So it was both. Well I didn’t actually design the shirt but the manufacturer made the shirts specifically just for my company. So they gave me different choices, different patterns to choose from. Different colors and they basically said here is what we have available. We can go with what we have available– we could go with what we have available and customize it specifically for you with your logo, with your own colors or you can totally design your own but I think for me because I didn’t have a design background and I didn’t quite know where to go to find someone to design patterns I decided to go with one of the cuts that they had already made but I had so may to chose from that it was super easy and then I picked my own colour as well. So that’s how that happened.

Steve: Okay, so I know for us we do quite a bit of importing and what were the minimum order quantities and how did you kind of– Did you know that these t shirts were going to move before you placed the bulk order? How did you kind of proceed with that?

Andreea: Well yes I think by that time I definitely knew that they would move because I had quite a few retailers in place. I think I had about 150 retailers at this time and they all would email me and ask,”hey are you coming out with a new line are you — do you have anything new, what can we buy that’s new, and I realized that if I had my products in stores they would always going to want stuff that was new. So I knew that they would sell and plus based on my previous sales history as well because at that point I was getting steady orders. I was moving through quite a lot of t-shirts which definitely wasn’t the case when I started but by that point two years in– and plus I had set up events that I was going to do so I was doing some trade shows and selling t-shirts directly to through the trade shows and I was also starting to get a lot of press. So I did invest the minimum– I think the minimum quantities was I want to say at least 5000 t-shirts to start with and it was probably something like120 of each size, of each colour, of each style if that makes sense. So I put together a whole bunch of colors and styles and made– met their minimum of 5000 t shirts.

Steve: Okay and how much was the outlay. How is the cost per t-shirt back then?

Andreea: Back then it was around anywhere from like 4.67 to the long sleeves were maybe closer to eight dollars. It was like something closer from five to eight I would say.

Steve: Okay so if I was to summarize you had already had sales using your US vender–

Andreea: Yes.

Steve: And you were already working with your stores and boutiques and then once you got to a certain point you decided just make your own in Turkey and by then you already had a customer base and you knew that you could move these. So the minimum quantity wasn’t that big of a deal.

Andreea: Exactly, yes and I already had the funds in place to do it. I mean I did have to get out a line of credit at some point to pay for some of these but I knew that they would sell very quickly and what I would also do is that I would also try to pre sell so I would reach out to my wholesalers or my retailers and I would say hey this is what’s coming, are you interested and that gave me a good indication too of whether or not my t-shirts were going to sell because if I see my retailers get super excited and they be like “oh my God I can’t wait until you get these t-shirts in, let me know and here’s my order,” then I knew that I was going to sell them, plus I started building my online sales as well through publicity. So that really helped also.

Steve: Okay so let’s talk about that. How did you get the first store to carry your products?

Andreea: So the first store was actually a yoga studio. So what I did as soon as I decided that I wanted to be focused on working with yoga studios and women who do yoga, I went and got a copy of yoga journal magazine and in the magazine they have a directory of yoga studios in the US. So I made a spreadsheet, I sat there and copied and pasted all of there email addresses. They also gave you the owners’ name who owned the yoga studio. So that was really helpful because I could actually personalize my emails to them and after I — I think I think they had about 300 yoga studios in the print directory and then I realized that they also had an online directory that had even more yoga studios, so I basically went through their online directory, copied down their email addresses and studio names and the owners name and I started emailing them one by one and telling them about the T-shirt line, telling them that it was eco friendly.

And I think the other thing that really helped me was that I also decided to plant a tree for every shirt that I sold, and that’s another thing that made me really stand out and it made my brand a little more unique. So when I would reach out to these yoga studios, I would tell them that the T-shirts were eco friendly, that we would plant a tree for every shirt that I sold, that they were printed with non toxic inks, and that their purchase would really make a difference. And I think that really helped to make me stand out a little bit more, plus the designs on the T-shirts were something that was really in line with the Yoga community, so I think all of that combined really helps. So that’s how I was able to get, I think maybe my first like ten to twenty stores, and then it sort of grew from there.

Steve: So the Yoga studio itself sold their own apparel, and that was– they had a little store to go along with the Yoga studio – is that correct?

Andreea: Yes, exactly. So they– some of the Yoga studios have their own brand, some carry other brands, but a lot of Yoga studios have a little boutique inside the studio, and it’s a way for them to make extra money.

Steve: Okay. This sounds a lot like Lulu Evan; it sounds like you were doing this before they even got started. We’ll get to that – I have a lot of questions. So, you’re getting your first initial orders– so first of all, first question I have is; how come you decided to go wholesale as opposed to just your own online store?

Andreea: I was actually doing both at the same time, so I– the reason I decided to focus mostly on wholesale in the beginning is because it was more of a straight path than trying to sell online, because, I knew that I wanted to target Yoga studio owners, and I already had all of their contact information, but then once I saw that they were coming back and reordering and there was more interest, I thought, ‘wow, I think I’m onto something here’ and, yes I was definitely selling at lower margins than I would online, but the orders were more steady, they were ordering a few hundred dollars worth of items at the same time, and they would keep coming back over and over again. So, in a way, once I got one account, it was sort of easy to grow that into re-orders. Whereas with online sales, you know some people would buy a T-shirt for themselves, and then come back and buy another one as a gift, but it wasn’t a case where they would buy month after month because there’s only so many T-shirts you could get that are a certain style. So, in the beginning, about 85% of my revenue came from selling to stores, and by the time I sold my company four years later, it was about 65-35%.

Steve: Okay. So how did you dance around the pricing with– so how did you prevent yourself from competing directly with your wholesalers– not your wholesalers– your end boutiques.

Andreea: The thing with T-shirts is that people really love to try them on, and they love—they want to see how a T-shirt fits so, in some ways I feel like my– the fact that I had my own online store was actually really helpful for the boutiques because I would list all of them on my website as well, and I would constantly throughout my site encourage people to go visit their local store so they can try on the T-shirts…

Steve: Okay.

Andreea: And then every time that I would get a press mention, I would also email the boutique owners and let them know that there was a huge press mention that just came through let’s say Red Book magazine – and ask them if they wanted to stock up because I knew that people– whenever I would get a huge press mention, a lot of people would rather go to the store first, and try the T-shirts on, rather than buy directly through my site. So I don’t necessarily think I competed with them, but I think, in a way, I really helped to increase awareness of their store as well.

Steve: Okay. So in a way, your online store was meant to drive more traffic to your retailers as opposed to– the main intention wasn’t to just make online sales for yourself per se.

Andreea: Exactly. Yes and I think almost always if someone came to my site, and they saw that I had a local store, then they would almost always go to the local store instead of buying through my site, but the people who lived in cities where I didn’t have any local stores, then they obviously didn’t have a choice, so they would buy through my site directly.

Steve: Okay. So, if you can give us a brief overview about how you ran your wholesale business – so what were the minimum order quantities and what were some of the terms that you instilled when you were working with retailers?

Andreea: Sure. So my minimum order quantities; I started out with a minimum of twelve shirts, and then I realized that that was kind of too little, because I started speaking with other people that were selling wholesale, and I started going to trade shows, and they said that the more varied of a product line that someone has in their store, the more likely your products are to sell. Because if someone sees, let’s say someone goes to a store and they have ten T-shirts to choose from as opposed to four – they’re more likely to buy because they have more choice. So I was advised to increase my minimums to– instead of twelve T-shirts to increase it to $150 minimum, and that was a lot more that twelve T-shirts, so that’s how I was able to do that.

My other terms were that I didn’t accept any returns on wholesale, and that’s because I was going through launching new lines all the time, so if someone came back a year later to return T-shirts, for example, those were already off of my website, I had sort of moved on and there was not much that I could do with them so I made it clear from the beginning that I wasn’t going to take returns especially from wholesalers. And I think that’s pretty much the name of the game when it comes to wholesale – unless you’re working with a huge store where it’s like a whole foods or Bloomingdale’s or something like that where you do have to be a lot more flexible and possibly accept returns – but I worked with smaller retailers specifically for that reason; because I knew they were used to not having to return stuff. But when I was selling my T-shirts to my retail customers on my website, then I definitely took returns.
Steve: So what were the markups – was it just like a 2X markup from your wholesale and then the retails would mark that up 2X again?
Andreea: Exactly, it was exactly that. And then when I started to work with sales reps, I marked it up a little more. But at that same time I was able to lower my costs, so especially when I went with the 5,000 T-shirts from– in one order. So I was able to keep my prices somewhat consistent because my manufacturing costs had gone down.

Steve: Okay. And so I imagine you were getting a whole bunch of T-shirts shipped to you; did you have some sort of warehouse or…

Andreea: So I started out with having everything at my apartment at first, and I bought some shelves, and had everything on the shelves and I did all of the shipping and packing myself, actually, for the first two years. And then, at that time I was pregnant with my second child and we needed an extra room in our house, and plus I was starting to get more busy and I was spending so much of my time packing or shipping, that I didn’t really have time to market or do any of the sales. So that’s when I really decided; all right, if I really want to continue with this volume, I have to get a fulfillment house. So I ended up getting a fulfillment house and it was really interesting because, with the fulfillment house – the way that happened is that – I was featured in a local business magazine – and this was when I first launched my business – and there was a fulfillment house here in Colorado who worked specifically with smaller business women and entrepreneurs.

So she reached out to me about maybe six months after I started my business and she said, ‘I have a fulfillment house, we work exactly with entrepreneurs like you, if you ever have a need for a fulfillment house, let me know; I would love to work with you.’ And I didn’t really have a need for that until about two years. So I had kept her contact info on file, and when I was really ready – after two years I said ‘all right, now I’m ready, I’m about to have my second baby, I’m getting a ton more orders, I’m running out of room in my apartment; can we start working together?’ and she was super excited and it was actually in a way I think it’s what saved my business and what allowed me to really grow it. Because, I think, if I had been still packing and shipping myself with a second child, I don’t think I would have had much time for any of that, so, yes.

Steve: I don’t know how you did it with a single child, to be honest–

Andreea: He slept a lot during that first year, so that was really helpful, and my husband helped a lot too, so – he was staying at home with our kid, or with our son, when I was working, and so on, so we were able to sort of work out a schedule where I can work – my husband was in grad school at the time, so he had a little more flexibility– he wasn’t gone all day working, so I think that that was another thing that, I wouldn’t have been able to do it if he had a full-time job.

Steve: Okay. So how did using a fulfillment house affect your margins?

Andreea: So, it definitely affected my margins a little bit, but I looked at it as an investment and it was really a good investment, because I couldn’t spend five hours a day packing and shipping, or I couldn’t spend five hours a day reaching out, doing press, trying to get mentions, getting my shirts to sell a breeze [phonetics] and all of that, so, it did cut into my margins a little bit, but it also happened to be sort of at the same time where I was able to lower my costs by a dollar or so. So that I think that was really helpful. And I think the other thing was the T-shirts – which wasn’t the case with my soap business – was that the T-shirts are so light to ship and it was under a dollar at that time postage prices weren’t as high as they are now. So it was under a dollar to ship one T-shirt and I was charging $4.95 to ship so part of that cost went into my fulfillment houses. So in a way it kind of paid for itself, but when I would do let’s say free shipping incentive or something like that, then obviously I would have to pay for the cost of that myself, but usually my shipping fee paid for my fulfillment houses.

Steve: Okay. I was just curious what the terms were with your fulfillment house at the time…

Andreea: It was a pretty easy. She was really flexible, I think, because she worked with a lot of smaller entrepreneurs, so it wasn’t a case where I had to have a minimum amount of orders or anything like that, she wasn’t charging any monthly storage fee – I know that, a lot of fulfillment houses, you have to have crazy minimums, you have to pay storage fees, you have to pay extra charges per package and if you do any sort of inserts you had to pay more, but this one was really straight out, it was a flat fee per package and then for whole sale orders it was sort of a sliding scale based on the amount.

Steve: Okay. So maybe you’ll have to give me the name of that fulfillment house so we can link it up…

Andreea: Of course! I’ve been recommending that fulfillment house ever since I started working with them, and it’s amazing – it totally transformed my business.

Steve: Okay. That’s good to know. So let’s go to the heart of the matter and what I’ve wanted to know since the beginning. How did you create buzz around your products, and how did you get it featured in over 200 magazines, newspapers and TV shows?

Andreea: Sure. So that was something that I didn’t even really know existed when I started, I thought that only big brands get to be featured in national magazines, right, because you see all of the big brands and they have huge budgets so I thought ‘okay, that’s never going to happen for me’ so I started small – I started with blogs. And I was reading a blog one day, and the blog was all about being happy and living the happy life and how to create happiness in your life, and one of my popular T-shirts at that time was a T-shirt that said ‘Choose Happiness’ on it, and I thought ‘there’s a blog about happiness, I have a T-shirt all about happiness – maybe I can reach out to them and ask them if they want to feature my T-shirt.’ I had no idea how any of this worked, but I emailed them and said ‘hey, I just found your blog; I love it, I just launched a T-shirt line and I think my T-shirt would be really appealing to your audience who’s all about finding happiness, and, would you be interested in featuring it?’

And they wrote back to me right away and they said ‘Oh, we love your branding; can you send us a sample? We’ll try it out and we’ll write about it.’ And that’s when I realized ‘So I have to send out samples – it doesn’t quite work for me just to send them photos,’ because I thought, ‘why would they need to see a sample right, I could just send them a photo, they can post the photo up on the site and I don’t have to really invest into shipping and all of that.’ But I realized that that’s not how it works, so I ended up sending them a sample, and they loved the T-shit, they wrote about it, and I started seeing traffic come from that blog and I thought ‘maybe I could do this with Yoga blogs, maybe I could do it with some mom bloggers, because they do product reviews all the time, and I was personally reading a lot of mom blogs at that time because I was just newly pregnant, and then had a baby. So it sort of organically grew, and I realized that that was such a great way to get traffic back to my site and get sales, and also to grow my email list as well.

I started to learn more about publicity and how it works, and I started working with a PR company. They actually approached me and I decided to– it was a huge investment for me at the time – it was $2,000 per month, and I had to commit to at least three months of using them. But they are the ones who sort of introduced me to working with magazines. They were able to get me a few magazine mentions, and then after that three month contract was over, I thought ‘maybe I can try to continue this and do it on my own, so I started reading blogs about PR, reading books, listening to interviews, attending online PR courses and events and webinars, and I sort of started to just do it on my own. I started sending out emails, learned about editorial calendars and how magazines– they work on like a three to six month schedule, and, let’s say in July is when they’re working on their November or December issues.

So I sort of started working backwards and planned my launches in accordance with the magazines’ calendars – so that way I can pitch for mother’s day gifts, or I ended up launching a T-shirt that was all about breast cancer awareness and donating part of my profits to breast cancer awareness and almost every magazine in their October issue because that’s when breast cancer awareness month is. Almost every Magazine has a roundup of products that are either pink or that give back to breast cancer awareness. So I decided to create a T-shirt that was specifically for that cause, so that’s how I was actually able to do it and I realized how much I loved doing it, and I started to focus a lot of my efforts on doing this on a monthly basis. So it was a slow and steady raise, but it definitely helped for me to have steady press mentions every month.

Steve: So walk me through this. So how did you find out who to contact and how did you contact them? What did you write in that first initial approach email?

Andreea: Sure, so at first I started with using a service like helper reporter out I’m, sure you’re familiar with it.
Steve: Okay.

Andreea: And I was able to specially more round like Mother’s Day gifts or holiday gifts and that’s how I was able to start out one way that was really inexpensive and then I learned about media databases. So there are places like Cission media database, or MyMediaInfo.com I think there’s Vocus and a couple of other databases where you compared annual fee and get access to contact information and editorial calendars for magazines. So I ended up paying that annual fee and I think when I first did it, it was around 3400 dollars a year which was a huge investment for me, but the way I looked at is that, all right 3400 dollars for a year is a lot less expensive than 2000 dollars per month.

So if I want to keep this publicity thing going that might be a good investment for me. So I ended up investing and I tried out all of the different media databases. I tried out Cission and Vocus and MyMediaInfo and I think a couple of other ones and then finally decided on Cission which was my favorite one, and they also had editorial calendars. So you go in there and see for example what Oprah Magazine is working on for this month and who the contact person is. So that was really helpful. Again I learned all of the other things that they were working on and I would email the person who was working on it and tell them why I thought my T-shirts would make a great gift for Mother’s Day or during the April issue a lot of them write about eco-friendly products because April is Earth Day, and they want to self celebrate Earth Day with eco-friendly products.

So I was able to find almost every month a theme that my T-shirts could fit in and by that time I ended up having a men’s line as well. So for Father’s Day I would pitch – pitch my T-shirts and I also started reaching out to Men’s Magazines. I also ended up launching a baby and kids line and reaching out to some of the kids and Parenting Magazines as well. So having a more varied product line, really helped me to get all of these placements across different types of magazines. But before I had a database, I would really go to Barnes & Noble, look at a magazine, see what they are working on and sometimes they would – sometimes the magazines have like a product roundup in the beginning of the magazine and it says there who put that page together and so I would just look.

I would Google that magazine and see if I could find their email – the email address of that editor or that writer and if I couldn’t find that online I really would just call them. To call up the magazine their editorials office and say hey I wanted to reach out to this person would you mind giving me their email address, and sometimes they would give me their email address, sometimes they would say, all of our email addresses are the same you can just do first name that last name@– I don’t know–timeink.com or something like. So I started to write all of those things down but– and that’s what I did at first before I learned about this database but once I heard about the database and decided to invest in it, it was really as simple as logging in, finding the person’s name and getting their email address from there.

Steve: Okay, so was that your primary means of advertising your company? Did you use any of the paper click services? Did you ever buy advertising on blogs? Used PLA’s and that sort of thing or…?

Andreea: Oh yeah. I did buy some Ads on blog’s that I thought were relevant and some of them were more like an eco-friendly blog and the other thing that I did is that I also had an affiliate program so I used – I signed up with sherrysales.com.

Steve: Okay.

Andreea: And set up and affiliate program and I think I was paying maybe 15% or 20% and I reached out to a lot of bloggers that way as well. So it was more of an incentive for them to feature me because they would get a free T-shirt plus they would get a commission for any sales that came through to their site as well and…

Steve: Okay.

Andreea: So I did some affiliate marketing and then I also that’s when Facebook and Twitter were starting out. I didn’t know anything about Pinterest back then although I know if I – if I knew about Pinterest I’m sure it would have been a really great avenue for me as well, but I was using social media and then I also knew about the importance of building your own newsletter as well. So I would– every time I would go to events I would have a signup sheet where people could enter and let’s say win a T-shirt and then I would– they would– that’s how they could get on my email list and I also had an email list on my website as well. So those combined were definitely how I was able to get most f my online sales.

Steve: Okay, so if you were to start all over again which avenues would you start with and how would you prioritize them?

Andreea: I think definitely publicity would be the first one that I would start with and the thing about publicity is that it’s more of a long term process just because especially the magazines work with that really Longley times. So when I started my sale business, it was sort of a way for me to start over again and I went right out and really launched with publicity. So I reached out to blogs that I thought were a really great fit and the great thing about working with blogs is that it’s a lot more, or it happens a lot quicker than it does with a magazine, so you can approach a blog today and in a week you could have a feature on the blog. So it was a lot more faster, it was– traffic would start coming in right away from those blogs mentions, and then the long view was the publicity and I launched my soap business in July.

So that was the perfect time to reach out for holiday gift guide. So when the holidays came around I already had all these press mentions. So I think if I were to do it all over again definitely publicity would be the first thing that I would do, and that includes blogs and magazines and then I think social media is the other thing. So, I have experimented with Facebook ads for my soap business and for LaunchGrowJoy.com and I didn’t know about Face book ads with my T-shirt business but I think if I knew about it back then, that’s another thing that I definitely would have done because you can get so targeted and so specific, and you can grow your list really quickly, you can advertise during specific times for example like Mother’s Day or holiday gifts, or eco-friendly products and so on. So, I think those three things and then obviously constantly to be growing my email list and to focus on that would be another thing that I would recommend and that I would focus a lot of my time on.

Steve: So I was just curious. Did you use Face book to help promote your soap business at all or?

Andreea: I did yes, yes. So Facebook– I took out some ads, I did a contest, I worked with bloggers through Facebook as well and yeah – and I saw a quite great return on that.

Steve: So just curious since I’ve been doubling with Facebook ads as well. How did you structure your ads and what did your landing page look like?

Andreea: Sure, so I decided with Facebook to actually to do a contest, so I set up an app on Face book. I used a service called Funpageology.com, and they allow you to– I mean it’s a more to some of the other ones like I think Wildfireapp maybe they’ve changed their name I can’t remember, but you basically just build an app on Face book and when I would set up my ads people would go directly to that app on Face book and when would have– I ended up recording a video. It was super quick I think under a minute and I encouraged people to enter their name and email address and win a year’s worth of soap and I– right who doesn’t want to win a year’s worth of soap.

So I ended up getting a lot email addresses that way and a lot of buzz around that and then people would share it, but the thing that I did with the Facebook ads is that, I structured it so that I could reach out to not only other soap companies that I thought were my competitors, but also other companies that had similar products because all of my soaps had again inspirational words on them just like my T-shirts.

Steve: Mm-huh.

Andreea: So I reached out or I targeted – like inspirational jewelry companies which there are so many out there. I targeted other soap businesses– there’s a lot of like inspirational journals and mugs and candles and inspirational gifts. So I targeted a lot of those audiences as well and plus some eco-friendly bloggers and mom bloggers and all of that. So I think the reason I had success with my soap business and the Facebook ad is because I really targeted to specific audiences who liked all of these other companies and I assumed that if they like this company then they probably would like my soaps as well.
Steve: Okay, so the whole point of that was to get email addresses which you then would market to directly once they were on your list?

Andreea: Exactly.

Steve: Okay.

Andreea: Yup, mm-huh, exactly.

Steve: Yeah that’s what I was actually getting at when I asked you that question because a lot of people they buy Facebook ads and they just point it at their store and that traditionally doesn’t work very well.

Andreea: It’s right, that’s true, you have– mm-huh.

Steve: Okay so also on your website you they always say that you teach a course on Pinterest. So I was just wondering how you use Pinterest for your businesses as well.

Andreea: Sure, so it’s really interesting because with Pinterest I sort of discovered it by accident and I was looking at my Google analytics one day and I think Pinterest was like the third or fourth refer on my website and I thought how much this Pinterest thing I’ve never been on it. let me go check it out and then when I went on it I was kind of confused because I thought okay, I’m seeing mostly products for women here and I have LaunchGrowJoy which – where I teach people how to market their businesses so how do the two tie in together? And then I Goggled you know how do you know what has been pinned from your site and all of these things.

So I found out what articles people were pinning and I think the reason I was having success with Pinterest is that with some of my articles I created little graphics that had the title of the article in it, so that way when someone came to my site and they would see my articles that– and they were relevant to them they would actually pin my image that was on my site. And the other thing that I did too with Pinterest is that I– when I first launched LaunchGrowJoy I ended up interviewing a lot of entrepreneurs, and a lot of those entrepreneurs would pin their own articles from my site to their Pinterest board which I had no idea they were doing that I think that went for a year before I even really knew that they were doing that and then it slowly started to gain traction.

And then I decided to open up an account and really get more– have a plan around Pinterest, so I ended up launching this infographic and it had nothing to do with like product or fashion, but it was an infographic titled 30 ways to promote your blog post and it was targeted towards entrepreneurs that had a blog, and I was giving them ideas on how they can get their content out there rather than having to write more, that they would have to promote more and get a lot more over it. So, that infographic was crazily enough reap end over 50,000 times now which is crazy and I still you know I don’t spend that much time on Pinterest anymore now although I still like I still pin all of my articles that I write or any other let’s say now that I’m talking to you when your podcast goes live if you post it on your site, I’ll pin it to my Pinterest board as well.

So I still do things like that every time I have a guest post or an interview, or I write my own post on site as well. But it’s not as you know obviously that doesn’t get rip end 50,000 times but for some reason this infographic people just loved it and I still get so much traffic and I think still now my– so much of my traffic comes from Pinterest even more so than Facebook and I spend so much more time on Face book. So once I really realized the power of Pinterest, and I started to get really specific and I started to talk to other entrepreneurs who were having success about it, I realized that I probably this is a great tool for any entrepreneur that has a product. So I started teaching entrepreneurs how to do it, and that’s when I decided to create my own Pinterest course as well.

Steve: Okay, so did you use Pinterest at all for your soap business or?

Andreea: I did yes and I was getting the turn of traffic from Pinterest. It was my top-refer outside of Google…

Steve: Really, wow.

Andreea: From my Pinterest as well, yes. Mm-huh.

Steve: So what are some of your strategies on getting people to pin your soaps?

Andreea: Sure, so some of my strategies is that I also did a contest on Pinterest just like I did on Face book and I was able to– now that I had built the list, I was able to reach out to list and ask them to pin their favorite soaps. I also– the other thing that I did that worked really well is that I had my designer create quotes. So I did some research, made a list of like my top 200 favorites quotes, and I had my designer create these little images that reflected my– the branding that I had on my soaps and put one of each quote on these– it was like maybe like a 400 by 400 image and every day or a couple of times a day I would pin one of those images and that image had my URL the SoapsToLiveBy.com URL at the bottom and I would link it back to my site.

So I started pinning these things a couple of times a day and quotes are spread like crazy on Pinterest, and people would see that quote they would love it, they would re-pin it and a lot of times people clicked through to see where that quote leads and then they would land on my soap page and sometimes I would link for example if I had a quote about hope and I had a soap that said hope on it, then I would link from that code directly to my hope soap and that helps.

Steve: Yes.

Andreea: Yeah I mean it really, really helps. So a lot of times they weren’t even pinning my soaps, they were pining or and re-pinning these quotes that my designer had created and I would just upload on a daily basis.

Steve: Okay.

Andreea: Yeah.

Steve: That’s a good idea. So how did the contest work? How did you know who’s been pinning your stuff and how did you announce the winner and that sort of thing?

Andreea: So with the contest I– well on Facebook I had all of their email addresses so I just randomly picked the winner, but on Pinterest I asked people to tag and I think it was like a soaps to live by tag, and then I would see who tagged their photos with that and then just pick a random person to win from there. But Pinterest was a little easier because you could do this hash tag thing and that really, really helped and sometimes I would ask people to leave a comment. So another way you can structure a contest is to have people– so I put a photo of all of my soaps on one board, and then I would ask people to say which one of the soaps was their favorite and they could just leave a comment in the comment section, but then the other requirement was for them to also follow my boards.

Steve: Okay.

Andreea: So that was easy because all of the comments were right there.

Steve: Right and so you draw traffic to Pinterest and Face book pages through your email list as well for this contest initially right?

Andreea: Yes and I also had it at times on my home page of my soap business.

Steve: Okay, these are all great ideas.

Andreea: Yeah, I mean they worked really, really well and by the time I was doing this for a few months with the soap business I was starting to see some of those press mentions in magazines, so then traffic started to grow from there as well and I didn’t have to spend as much on doing Facebook ads.

Steve: Okay, well great we’ve already been talking for 50 minutes, it actually blew by. I don’t want to take up too much more of your time, but a couple of questions I ask everyone, you seem to be a very driven person. Were there any books or publications that kind of influenced you in any way to take on this world of entrepreneurship?

Andreea: I mean I love reading books especially business books, so I mean I’ve read everything from– like one of my first books that I remember, it was called “The Attractor Factor” and it was by Joe Vitale and it was basically a book about how you can have anything you want if you just go out and start working towards it. So I think that really inspired me because instead of like waiting for someone to hand me a job or to hand me a promotion or a raise, I realized that wow I could really do my own thing here and build my own future.
So I think that was one of the earliest books that really, really influenced me in terms of deciding to launch my own business, and then obviously I read things like “The 4-hour Work Week” and “The E-myth” and all of those kinds of books as well that I think every entrepreneur reads at some point. And then one other thing that I wanted to mention I think Entrepreneurial magazine was huge for me as well and just reading stories from other entrepreneurs, and learning about different ways that people have success as an entrepreneur was really inspiring and I mean I still continue to read Entrepreneur magazine and Fast Company and all of those business magazines as well.

Steve: Okay great, and so Andreea where can we– where can people find you online if they want to contact you?

Andreea: They can find me at lauchgrowjoy.com.

Steve: Okay and you mentioned earlier that you started a podcast; you want to tell us about where we can find the podcast as well.

Andreea: Sure, so that podcast is on iTunes and if you search for launch grow joy that should definitely come up and I love doing the podcast. I think it’s such a great way to connect with my audience on a much more intimate level, so I’ve been having a lot of fun with that.

Steve: Okay, great. I know I will be going to check it out right after this interview. So, thanks a lot Andreea, thanks a lot for coming on the4 show.

Andreea: Great. Thanks so much Steve; it’s been fun talking to you.

Steve: Okay. Take care.

Isn’t Andreea cool? After this interview ended, Andreea and I spoke for another half an hour, and she really is an amazing person. Even with two kids, she still manages to go full steam into her various businesses, she’s willing to try new things and she’s constantly learning. Now, when she didn’t know anything about making clothing, she picked it up; when she knew nothing about publicity, she figured it out. In fact, her interview gave me some great ideas on how to promote my own online store via publicity and Pinterest.
For more information about this episode, go to mywifequitherjob.com/episode 27, and if you enjoyed listening to this podcast, please go to iTunes and leave me a review. When you write me a review, it not only makes me feel proud, but it helps keep this podcast up in the ranks, so other people can use this information, find the show more easily and get awesome business advice from my guests. It’s also the best way to support the show, and please tell your friends, because the greatest complement you can give me is to provide a referral to someone else either in person, or just share it on the web. And as an added incentive, I’m also giving away free business consultations to one lucky winner every single month. For more information about this contest, go to mywifequitherjob.com/contest, and if you are interested in starting your own online business, be sure to sign up for my free six-day mini-course, where I show you how my wife and I managed to make over 100K in profit, in our first year of business; go to www.mywifequitherjob.com for more information, and thanks for listening.

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

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